SMBC GROUP
ANNUAL REPORT
2020
YEAR ENDED MARCH 31, 2020
S
M
B
C
G
R
O
U
P
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
0
Printed in Japan
SMBC Group has devoted its best efforts
to contribute to the sound development of society,
mainly via its financial services.
To clearly reflect this stance,
in April 2020 Our Mission was revised to include the statement
“We contribute to a sustainable society by addressing environmental and social issues.”
At this time, we also put forth the new Vision of being
“a trusted global solution provider committed to the growth of
our customers and advancement of society”
while revising the “Five Values” that represent the values
we aim to share with all SMBC Group members.
In accordance with the revisions to Our Group Mission, Vision, and Values,
we will continue to fulfill our social mission by further building upon a variety of
initiatives that are not limited to financial services.
MISSION
VISION
FIVE VALUES
We aim to maximize our shareholders’ value through the continuous growth of our business.
We grow and prosper together with our customers,
by providing services of greater value to them.
We create a work environment that encourages and
rewards diligent and highly-motivated employees.
We contribute to a sustainable society by addressing environmental and social issues.
A trusted global solution provider committed to the growth of
our customers and advancement of society
INTEGRITY
As a professional, always act with sincerity and a high ethical standard.
CUSTOMER FIRST
Always look at it from the customer’s point of view, and provide value based on their individual needs.
PROACTIVE & INNOVATIVE
Embrace new ideas and perspectives, don’t be deterred by failure.
SPEED & QUALITY
Differentiate ourselves through the speed and quality of our decision-making and service delivery.
TEAM “SMBC GROUP”
Respect and leverage the knowledge and diverse talent of our global organization, as a team.
MISSION & VISION & FIVE VALUES SMBC Group has devoted its best efforts
to contribute to the sound development of society,
mainly via its financial services.
To clearly reflect this stance,
in April 2020 Our Mission was revised to include the statement
“We contribute to a sustainable society by addressing environmental and social issues.”
At this time, we also put forth the new Vision of being
“a trusted global solution provider committed to the growth of
our customers and advancement of society”
while revising the “Five Values” that represent the values
we aim to share with all SMBC Group members.
In accordance with the revisions to Our Group Mission, Vision, and Values,
we will continue to fulfill our social mission by further building upon a variety of
initiatives that are not limited to financial services.
MISSION
VISION
FIVE VALUES
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.
We contribute to a sustainable society by addressing environmental and social issues.
A trusted global solution provider committed to the growth of
our customers and advancement of society
INTEGRITY
As a professional, always act with sincerity and a high ethical standard.
CUSTOMER FIRST
Always look at it from the customer’s point of view, and provide value based on their individual needs.
PROACTIVE & INNOVATIVE
Embrace new ideas and perspectives, don’t be deterred by failure.
SPEED & QUALITY
Differentiate ourselves through the speed and quality of our decision-making and service delivery.
TEAM “SMBC GROUP”
Respect and leverage the knowledge and diverse talent of our global organization, as a team.
SMBC GROUP ANNUAL REPORT 2020 001
MISSION & VISION & FIVE VALUES Editorial Policy
SMBC GROUP REPORT 2020 is designed to convey financial and non-financial information
successfully implement our business strategy through our subsidiaries, affiliates and alliance
about the overall picture, business strategy, and corporate infrastructure of SMBC Group. It has
partners; and exposure to new risks as we expand the scope of our business. Given these and
been compiled with reference to the International Integrated Reporting Framework issued by
other risks and uncertainties, you should not place undue reliance on forward-looking state-
the International Integrated Reporting Council (IIRC) in December 2013.
ments, which speak only as of the date of this document. We undertake no obligation to update
The appendix in the back of this report contains more detailed information on the
or revise any forward looking statements.
Group. Additional information on Sustainability activities can be found on the Company’s cor-
Please refer to our most recent disclosure documents such as our annual report on
porate website.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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 uncer-
tainties that may affect our financial condition and our operating results, and investors’
This document contains “forward-looking statements” (as defined in the U.S. Private
decisions.
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 opera-
tions. In many cases but not all, these statements contain words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “may,” “plan,” “probability,” “risk,” “project,” “should,” “seek,”
“target,” “will” and similar expressions. Such forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and actual results may differ from
those expressed in or implied by such forward-looking statements contained or deemed to be
contained herein. The risks and uncertainties which may affect future performance include:
deterioration of Japanese and global economic conditions and financial markets; declines in
the value of our securities portfolio; incurrence of significant credit-related costs; our ability to
Scope of Report
Period covered:
FY2019 (April 2019 to March 2020)
Some subsequent information is also included.
Organizations covered:
Sumitomo Mitsui Financial Group and its subsidiaries and affiliates
Published
August 2020
002 SMBC GROUP ANNUAL REPORT 2020
CONTENTS
About SMBC Group
004 SMBC Group’s Response to COVID-19
006 History of SMBC Group
008 Financial Highlights
009 ESG Highlights
012 SMBC Group’s Value Creation Process
To Our Stakeholders
014 Message from the Group CEO
026
Core Policy of the new Medium-Term Management Plan
028
Break the Mold
030 Message from the Group CFO
036
The Impact of COVID-19
038 Round-Table Discussion with Outside Directors
Business Strategies for Creating Value
044 Group Structure
046 Retail Business Unit
050 Wholesale Business Unit
054 Global Business Unit
058 Global Markets Business Unit
Corporate Infrastructure Supporting Value Creation
064 Corporate Governance
072
SMBC Group Global Advisors
074
Sumitomo Mitsui Financial Group Directors
“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
078 Sustainability Management
084 Customer-Oriented Initiatives
087
Internal Audit
088 Risk Management
092 Compliance
094 Human Resources Strategy
098
IT Strategies
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.
100 Communication with Stakeholders
102 Financial Review
SMBC GROUP ANNUAL REPORT 2020 003
S P E C I A L F E A T U R E
SMBC Group’s
Response to COVID-19
Considering the significant impact on people's lives and the economy
caused by COVID-19, SMBC Group strive to ensure the health and
safety of our customers and employees. Furthermore, SMBC Group will
support our customers through financial services and be committed to
contributing to the medical industry and society overall.
https://www.smfg.co.jp/english/covid_19/
SMBC Group has established a page on its website detailing
its response to COVID-19. Please refer to this page for more
information.
Customers
Support Customers Through Financial Services
Employees
Prevention of the Spread of Infection and Initiatives
SMBC Group, as a financial institution which is a part of the
for Continuous Business Operation
social infrastructure, will fulfill its responsibility by continuing to
In order to continue providing our services as a social
provide services such as financing and payment. To this end,
infrastructure while preventing the spread of infection,
with extensive safety precautions in place, SMBC is continuing
ensuring the health of our employees as well as their
the operation of all branches and ATMs while also enhancing
families, and safety and security of our customers, we are
its online services to allow customers to perform transactions
implementing various initiatives all over the world.
without having to visit a branch. In April 2020, the number of
To prevent the spread through droplet infection, we have
individual customers performing Internet banking services
installed acrylic boards at our branches. Our call centers
was 36% higher than in the same month of the previous fiscal
and operational offices has been making efforts to keep
year. We are also supporting the urgent financial needs of
conducting business operation by separating staffs into two
customers by offering loan programs with special interest rates
or more teams. In addition, apart from those who need to
and customer reliefs such as relaxing conditions of existing
work at their office for smooth operations, we are enabling
loans. In addition, we have established investment funds to
most of the staffs to telework or stand by at home. We are
support medical ventures and implemented a short-pitch
also giving consideration to the health of our employees and
contest designed to offer support for the promotional activities
their families through measures such as encouraging our
of ventures. Meanwhile, we also launched the support program
employees who need to take care of their children to work
for SMEs, which provides partial funding support for telework-
at home via telework or to obtain special leave, and also
related services. In this manner, SMBC Group is implementing
established a health consultation counter.
various initiatives to address the social issues that have arisen
as a reaction to COVID-19.
004 SMBC GROUP ANNUAL REPORT 2020
About SMBC Group SMBC Group’s
Response to COVID-19
Community and Society
Contributing to the Community and Society
SMBC Group donated a total of 1.5 billion yen to fund
Supporting the Promotion of Cultural Activities and the Arts
measures for combating COVID-19, and we engaged in other
The spread of this disease has various effects on cultural
support activities together with customers.
and artistic activities that are indispensable to a prosperous
Supporting Medical Research and Activities
society. As part of our support to the promotion of culture
and arts, SMBC Group donated 100 million yen to the
SMBC Group donated 500 million yen to the Center for iPS
"Association of Japanese Symphony Orchestras" to support
Cell Research and Application， Kyoto University (CiRA),
37 orchestral organizations across Japan. SMBC Group will
to support research on the behavior and characteristics
work with these organizations to promote projects to comfort
of COVID-19 and other newly discovered viruses, in order
and encourage people through music.
SMBC at HOME Project
The SMBC at HOME Project is a project in which customers are invited to join us
in contributing to society. Through this project, we will make donations toward
COVID-19 in an amount based on the number of individual and corporate
customers that performed applicable transactions using SMBC’s Internet
banking service.
to help develop effective means of treating these viruses.
These donations were used to fund large-scale epidemiologic
studies pertaining to COVID-19 advanced by the Center
for iPS Cell Research and Application together with
municipalities, hospitals, and research institutions.
Enhancing Medical Care and Education in Emerging Countries
As part of our efforts to support the enhancement of medical
and educational systems in emerging market economies,
SMBC Group donated 100 million yen to the Japan
Committee for UNICEF. The donation will be used to support
a number of worthy causes, such as enhancing the medical
system in Indonesia, where our Group company PT Bank
BTPN Tbk has operations.
Response to SMBC Group’s Donations to the Center for iPS Cell Research and Application, Kyoto University (CiRA)
Pursuing a Safe and Quick End to the COVID-19 Pandemic
The COVID-19 pandemic continues to disrupt our lives, and we all pray that a vaccine or another
effective treatment will be developed as soon as possible. However, such breakthroughs require time,
and we therefore have to prepare for a drawn-out battle with this virus.
In the midst of this battle, SMBC Group graciously offered to donate equipment to CiRA. This
most-generous action enabled us to quickly commence a number of research ventures together with
prefectural governments and research institutions, and I am incredibly grateful for this kindness. We
are encouraged by the dedicated efforts of SMBC Group and various other companies and individuals
looking to do what they can today to help bring about a safe and quick end to the COVID-19 pandemic.
Understanding the behavior and characteristics of a virus is imperative to developing treatments.
We are working together with other institutions to contribute to the development of treatments by
means of research using iPS cells.
Let us all come together to protect ourselves, our loved ones, and our society.
Director, CiRA
Shinya Yamanaka
SMBC GROUP ANNUAL REPORT 2020 005
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation 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.
Expansion of
Business Domain
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
Expansion of Regional
Coverage
Operating
Environment
Japan
Global
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
Disposal of
non-performing
Loans conducted
• Lift the ban
of securities
intermediary
• Zero interest rate policy
rescinded by the Bank of Japan
• Firewall regulations
between banking and
securities alleviated
• 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
006 SMBC GROUP ANNUAL REPORT 2020
About SMBC Group 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 a wholly
owned subsidiary
Became an equity-
method affiliate
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
2020
2016
2017
ACLEDA Bank
(Cambodia)
SMBC Rail Services
(United States)
Bank BTPN
(Indonesia)
SMBC Aviation Capital
(Ireland / former RBS Aerospace)
Became an equity-
method affiliate
TT
International
(U.K.)
Became a consolidated
subsidiary
Merged with PT Bank
Sumitomo Mitsui Indonesia
in February 2019
• 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
• Consumption tax rate raised to 10%
• 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
• COVID-19 pandemic begins
• U.K. withdraws from the
European Union
• Trade friction between the
United States and China erupts
SMBC GROUP ANNUAL REPORT 2020 007
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation Financial Highlights
Profit attributable to owners of parent
(Billions of yen)
1,000
500
0
703.9
’15
’16
’17
’18
’19
(FY)
Return on equity (ROE)
Calculated using stockholders’ equity as the denominator
Accreditation
(%)
10
5
0
7.6
%
’15
’16
’17
’18
’19
(FY)
ESG Highlights
Profit attributable to owners of parent exceeded the target of ¥700 billion in FY2019 despite
the negative impact of COVID-19 pandemic. This was mainly due to the increase in gains on
sales of bonds with the decline of overseas interest rates, low credit costs that continued
until the third quarter of the fiscal year under review, and a reduction in tax burden.
We were able to reach our Medium-Term Management Plan target for ROE of 7-8% due to
the steady progress of the plan, which led to higher-than-expected profit attributable to
owners of parent.
Overhead ratio (OHR)
Common Equity Tier 1 capital ratio (CET1 ratio)
Basel III fully-loaded basis
(%)
80
60
0
62.8
%
62.0 %
(excl. impact of reorganization)
’15
’16
’17
’18
’19
(FY)
(%)
20
15
0
15.55
%
’16/3
’17/3
’18/3
’19/3
’20/3
Support for initiatives in Japan and overseas
OHR remained nearly flat compared with FY2016 after excluding the impacts of group
reorganizations. This was mainly due to continued overseas expenditures including
regulatory compliance costs, offsetting cost reduction through group-wide cost control
initiatives.
CET1 ratio is still greatly exceeding the required level, while it decreased YoY by 0.82%. This
decrease was mainly due to an increase in risk-weighted asset through allocating capital in
overseas business and providing financial support to customers, as well as a decrease in net
unrealized gains on other securities as a result of stock price decline caused by COVID-19
pandemic.
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).
Dividend per share of common stock
(Yen)
200
100
0
190
Credit ratings (As of June 30, 2020)
Holding company
SMBC
Long-term
Short-term Long-term
Short-term
Moody’s
S&P
Fitch
R&I
JCR
A1
A-
A
A+
AA-
P-1
—
F1
—
—
A1
A
A
AA-
AA
P-1
A-1
F1
a-1+
J-1+
’15
’16
’17
’18
’19
(FY)
We increased dividend per share for FY2019 to ¥190, ¥10 higher than FY2018 and our
initial forecast as we exceeded our target for profit attributable to owners of parent because
of the steady progress in the Medium-Term Management Plan and took steps towards
achieving a dividend payout ratio of 40%.
008 SMBC GROUP ANNUAL REPORT 2020
About SMBC Group Financial Highlights
ESG Highlights
Profit attributable to owners of parent
Return on equity (ROE)
Accreditation
Calculated using stockholders’ equity as the denominator
703.9
7.6
%
’15
’16
’17
’18
’19
(FY)
’15
’16
’17
’18
’19
(FY)
Profit attributable to owners of parent exceeded the target of ¥700 billion in FY2019 despite
We were able to reach our Medium-Term Management Plan target for ROE of 7-8% due to
the negative impact of COVID-19 pandemic. This was mainly due to the increase in gains on
the steady progress of the plan, which led to higher-than-expected profit attributable to
sales of bonds with the decline of overseas interest rates, low credit costs that continued
owners of parent.
until the third quarter of the fiscal year under review, and a reduction in tax burden.
Overhead ratio (OHR)
Common Equity Tier 1 capital ratio (CET1 ratio)
Basel III fully-loaded basis
15.55
%
62.8
%
62.0 %
(excl. impact of reorganization)
Garnered solid reputation for our investor engagement
and other IR activities
SMBC Nikko Securities and SMBC were selected as
financial institutions engaged in ESG financing
Recognized as a company practicing Competitive IT
Strategy to improve corporate value
The Securities Analysts Association of Japan
Japan Investor Relations Association
MOE
METI
Tokyo Stock Exchange
Selected five times in the Nadeshiko Brand
selection of listed companies excelling at
empowering female employees
METI
Tokyo Stock Exchange
Acquired Top Gold Rating in PRIDE index
evaluation for LGBT-related initiatives
Selected four times as company exercising
superior health and productivity management
work with Pride
METI
Recognized as company that stands on
the forefront of sustainable growth by
heightening productivity through
workstyle reforms
Nikkei
’15
’16
’17
’18
’19
(FY)
’16/3
’17/3
’18/3
’19/3
’20/3
Support for initiatives in Japan and overseas
OHR remained nearly flat compared with FY2016 after excluding the impacts of group
CET1 ratio is still greatly exceeding the required level, while it decreased YoY by 0.82%. This
reorganizations. This was mainly due to continued overseas expenditures including
decrease was mainly due to an increase in risk-weighted asset through allocating capital in
regulatory compliance costs, offsetting cost reduction through group-wide cost control
overseas business and providing financial support to customers, as well as a decrease in net
initiatives.
unrealized gains on other securities as a result of stock price decline caused by COVID-19
pandemic.
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).
(%)
10
5
0
(%)
20
15
0
(Billions of yen)
1,000
500
0
(%)
80
60
0
(Yen)
200
100
0
Dividend per share of common stock
190
’15
’16
’17
’18
’19
(FY)
We increased dividend per share for FY2019 to ¥190, ¥10 higher than FY2018 and our
initial forecast as we exceeded our target for profit attributable to owners of parent because
of the steady progress in the Medium-Term Management Plan and took steps towards
achieving a dividend payout ratio of 40%.
SMBC GROUP ANNUAL REPORT 2020 009
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation ESG Highlights
Environment
See page 080 for more information.
Social
See page 082, 095 for more information.
Project finance for
overseas renewable energy projects
Total CO2 Emissions (per m2)
Annual CO2 reduction
17,643
thousand t-CO2
Hydropower Biomass Solar power Wind power
68
projects
97
thousand t-CO2
per thousand m2
(t-CO2)
150
100
50
0
’16
’17
’18
’19
(FY)
Note: The figure for FY2019 is a preliminary figure.
Rate of employees taking parental leave
(male)
Ratio of female managers
100
%
Target:
Maintain rate of 100%
every year
15.3
%
FY2025
target: 20%
(%)
100
50
0
(%)
20
15
10
5
0
’17
’18
’19
(FY)
’18/3
’19/3
’20/3
’26/3
Note: Figures are for SMBC.
Ratio of GM positions
with locally hired employees
Paid leave acquisition rate
35
%
74.7
%
(%)
40
30
0
’17/4
’18/4
’19/4
’20/4
(%)
100
75
50
25
0
FY2025
target: 85% or more
’17
’18
’19
’25
(FY)
Note: Figures are for SMBC and overseas bases of major affiliates.
010 SMBC GROUP ANNUAL REPORT 2020
Corporate Governance System
Ratio of Outside Directors
47
%
Governance
See page 064 for more information.
Outside
directors
Internal,
non-executive directors
Inside
directors
Outside
expert
Chairman
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
Audit Dept.
* The Audit Committee holds the right to consent personal affairs of
Chief Audit Executive.
Reporting line
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, 2020).
(%)
50
25
0
Number of directors
15
Non-executive
directors
10
%67
Outside
directors
’14/6
’15/6
’16/6
’17/6
’18/6
’19/6
’20/6
Company with Auditors
Company with Three Committees
Composition of the Board of Directors
Internal directors
(executive)
Internal directors
(non-executive)
5
3
Areas of Expertise
of Outside Directors
Management
Finance / accounting
Law
Diplomacy
3
1
2
1
Composition
of the Board
of Directors
7
%47
About SMBC Group ESG Highlights
Environment
See page 080 for more information.
Social
See page 082, 095 for more information.
Rate of employees taking parental leave
Ratio of female managers
(male)
100
%
Target:
Maintain rate of 100%
every year
15.3
%
FY2025
target: 20%
Project finance for
overseas renewable energy projects
Total CO2 Emissions (per m2)
Annual CO2 reduction
17,643
thousand t-CO2
Hydropower Biomass Solar power Wind power
97
(t-CO2)
150
thousand t-CO2
per thousand m2
68
projects
’16
’17
’18
’19
(FY)
Note: The figure for FY2019 is a preliminary figure.
(%)
100
50
0
(%)
40
30
0
’17
’18
’19
(FY)
’18/3
’19/3
’20/3
’26/3
Note: Figures are for SMBC.
Ratio of GM positions
with locally hired employees
Paid leave acquisition rate
35
%
74.7
%
FY2025
target: 85% or more
’17/4
’18/4
’19/4
’20/4
’17
’18
’19
’25
(FY)
Note: Figures are for SMBC and overseas bases of major affiliates.
100
50
0
(%)
20
15
10
5
0
(%)
100
75
50
25
0
Governance
See page 064 for more information.
Corporate Governance System
Ratio of Outside Directors
Outside
directors
Internal,
non-executive directors
Inside
directors
Outside
expert
Chairman
Board of Directors
Focus on supervision of executive officers’
and directors’ execution of duties
Internal Committees
(%)
50
25
0
47
%
’14/6
’15/6
’16/6
’17/6
’18/6
’19/6
’20/6
Company with Auditors
Company with Three Committees
Composition of the Board of Directors
Nomination
Committee
Compensation
Committee
Audit
Committee*
Risk Committee
(Optional)
Management Committee
Business execution decisions
Departments
Audit Dept.
* The Audit Committee holds the right to consent personal affairs of
Chief Audit Executive.
Reporting line
Number of directors
15
Non-executive
directors
10
%67
Outside
directors
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, 2020).
Internal directors
(executive)
5
Internal directors
(non-executive)
3
Composition
of the Board
of Directors
Areas of Expertise
of Outside Directors
Management
Finance / accounting
Law
Diplomacy
3
1
2
1
7
%47
SMBC GROUP ANNUAL REPORT 2020 011
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation SMBC Group’s Value Creation Process
SMBC Group’s Value Creation Cycle
Definition of Sustainability
Creating a society in which today’s generation can enjoy
economic prosperity and well-being, and pass it on to future generations
④
Outcomes
Impacts on stakeholders derived
from our business activities
Climate Change
Demographic Changes
Geopolitical Risks
Changes in Consumer Behavior
③
Outputs
Services and products supplied
through our business activities
⑤ Impacts
Changes in stakeholders
inspired by value created by
SMBC Group
Business Activities /
Models
②
Business activities emphasizing
three Materiality
(“Environment,” “Community,”
and “Next Generation)
財務資本
人的資本
社会的資本
知的資本
①
Inputs
SMBC Group’s intangible assets
⑥ Value Cycle
Beyond the impacts, value
returns to stakeholders by
improving SMBC Group’s
corporate value, as well as
enhancing intangible assets that
are a source of SMBC Group’s
corporate value
012 SMBC GROUP ANNUAL REPORT 2020
IMPACT
Society / Customers
Society / Customers
Shareholders
Sustainability management is the practice of continuously
enriching the soil (an intangible asset) that we have inherited
from the past and which is the origin of our corporate value.
Creation of a society in
which everyone can live with peace of mind
Preservation of
a healthy
environment
Fostering of people
and industries that will
shape the future
Outcomes
Cash settlements
Wealth management
Financial inclusion
Renewable energy projects
Green bond underwriting
Employees
Employees
New business
development
Digital transformations
Financial literacy
education
Outputs
SMBC Group’s Business Activities
Creation and intermediation of value
Business Units
Retail
Wholesale
Global
Global Markets
Five Values
Five Values
Integrity
Customer First
Proactive & Innovative
Speed ＆ Quality
Team “SMBC Group”
Three Priority Issues
Environment
Community
Next Generation
Human Capital
On-the-ground capabilities
(diverse and highly
specialized human resources)
Financial Capital
Intellectual Capital
History and brand
Speed
Spirit of innovation
Social and Relationship Capital
Domestic and international network
Group strength
Solid customer base
Inputs
Compliance
Risk management
Corporate governance
About SMBC Group SMBC Group’s Value Creation Cycle
Definition of Sustainability
Creating a society in which today’s generation can enjoy
economic prosperity and well-being, and pass it on to future generations
④
Outcomes
Impacts on stakeholders derived
from our business activities
Climate Change
Demographic Changes
Geopolitical Risks
Changes in Consumer Behavior
Creation of a society in
which everyone can live with peace of mind
Preservation of
a healthy
environment
Fostering of people
and industries that will
shape the future
Outcomes
③
Outputs
Services and products supplied
through our business activities
⑤ Impacts
Changes in stakeholders
inspired by value created by
SMBC Group
Business Activities /
②
Models
Business activities emphasizing
three Materiality
(“Environment,” “Community,”
and “Next Generation)
⑥ Value Cycle
Beyond the impacts, value
returns to stakeholders by
improving SMBC Group’s
corporate value, as well as
enhancing intangible assets that
are a source of SMBC Group’s
人的資本
社会的資本
corporate value
財務資本
知的資本
①
Inputs
SMBC Group’s intangible assets
Cash settlements
Wealth management
Financial inclusion
Renewable energy projects
Green bond underwriting
Employees
Employees
IMPACT
Society / Customers
Society / Customers
Shareholders
SMBC Group’s Business Activities
Creation and intermediation of value
Business Units
Retail
Wholesale
Global
Global Markets
Five Values
Five Values
Integrity
Customer First
Proactive & Innovative
Speed ＆ Quality
Team “SMBC Group”
Three Priority Issues
Environment
Community
Next Generation
New business
development
Digital transformations
Financial literacy
education
Outputs
Sustainability management is the practice of continuously
enriching the soil (an intangible asset) that we have inherited
from the past and which is the origin of our corporate value.
Human Capital
On-the-ground capabilities
(diverse and highly
specialized human resources)
Financial Capital
Intellectual Capital
History and brand
Speed
Spirit of innovation
Social and Relationship Capital
Domestic and international network
Group strength
Solid customer base
Inputs
Compliance
Risk management
Corporate governance
SMBC GROUP ANNUAL REPORT 2020 013
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation MESSAGE FROM THE GROUP CEO
MESSAGE FROM THE GROUP CEO
Building the Path
to our Future
Jun Ohta
Director President and Group CEO
Overcoming the “Unexpected”
Our world is undergoing fundamental change. We have seen COVID-19
spread to all corners of the globe in what seemed like the blink of an eye,
and the virus continues to wreak havoc on an unprecedented scale. No one
could have possibly foreseen the scale of disruption COVID-19 would have on
our lives at the beginning of the year. “Unexpected” is a fitting description of
COVID-19 and its global impact. However, I feel that circumstances described
as “unexpected” have increased over the past few years. Natural disasters
of a scale previously occurring only once in a 100 years are occurring on a
seemingly annual basis. The results of the 2016 United States presidential
election and the United Kingdom European membership referendum
overturned prior expectations.
While it is easy to merely dismiss these events as unexpected, we need
014 SMBC GROUP ANNUAL REPORT 2020
P 004
SMBC Group’s Response to
COVID-19
To Our Stakeholders to ask ourselves if they really were. Before the COVID-19 pandemic, humanity
battled and defeated numerous new infectious diseases, such as cholera,
smallpox, and SARS. Thus, the speed and scope at which COVID-19 has
spread can be viewed as a negative aspect of globalization, an ideal that
we have all benefited from, coming to rise. Similarly, global warming lies
behind the intensification of natural disasters, and the rise of populism has
its roots in the fact that frameworks, such as democracy, which served as the
foundations of economic growth in the post-war era have become outdated in
their current format. The point I am trying to illustrate is that the events which
we have witnessed over the past few years would most likely have occurred in
some form or format eventually. In order to realize sustainable growth, SMBC
Group must strive to become a more sophisticated organization, capable of
SMBC GROUP ANNUAL REPORT 2020 015
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation MESSAGE FROM THE GROUP CEO
evolving our business model constantly so that we can continue to prosper
even when the business environment undergoes rapid and extensive change
due to a black swan event.
Business leaders must be able to accurately
identify medium- to long-term trends by keeping
calm and viewing matters from a bird’s-eye view,
even though the world may be in the midst of
major upheaval.
However, we must keep in mind that overreacting to these risks or
allowing our awareness of them to become distorted could cause us to
misread how the world is changing or what our business vision should be.
The COVID-19 pandemic is said to have sparked a fundamental change in
peoples’ values, but I believe that it is during times such as these that we
must take a long and careful look at what we change and what we keep
untouched. The further acceleration of digitalization to realize “Society
5.0” is the key example of how our world will change. For example, we are
seeing an increasing number of customers using online transactions as part
of their efforts to prevent the further spread of COVID-19. The number of
SMBC’s customers engaging in online transactions increased by 36% year-
on-year and digital contracts concluded using services provided by SMBC
CLOUDSIGN experienced a dramatic 10-fold month-on-month increase
following the Government of Japan declaring a state of emergency in April
2020. I expect for online transactions to continue gaining popularity even
after COVID-19 is brought fully under control given its superiority in terms
of convenience and cost-efficiency, not to mention that the benefits of
those services will increase given the ripple effect of additional users. On
the other hand, lifestyles, habits, and family and work-related values that
have developed over hundreds, if not thousands, of years will not be so
easily changed. For example, is it possible to provide optimal solutions that
address customer needs without engaging in face-to-face communication?
Is it possible to pass-on SMBC Group’s corporate culture to junior employees
or ensure their proper professional development without person-to-person
interaction? Such concerns require serious and in-depth consideration.
Business leaders must be able to accurately identify medium- to long-term
trends by keeping calm and viewing matters from a bird’s-eye view, even
though the world may be in the midst of major upheaval.
016 SMBC GROUP ANNUAL REPORT 2020
To Our Stakeholders Steering a Supertanker
Innovation is the key to successfully overcome changes in the current
business environment, as innovation is what allows for the creation of a strong
yet flexible organization that continuously evolves its business model. People
often associate the term innovation with the image of a genius experiencing
an epiphany and discovering a new concept or vision. However, this is not
always the case. In order to pursue sustainable growth, it is crucial to develop
a corporate culture which encourages all employees to be unafraid of failure
and continue attempting to create new business opportunities so that small
improvements are realized throughout SMBC Group.
For this reason, ever since I was appointed Group CEO in April 2019,
I have urged employees to “Break the Mold” and proactively pursue new
challenges without being bound by precedent or fixed ideas. I have assigned
management resources to employees who have stepped forward and
established new companies for them to lead. So far, nine companies have
been established in such a manner, and I will continue to encourage in-house
business ventures as part of my CEO production project. The introduction
of a free dress code policy which received considerable media attention
was also aimed at changing the mindset of employees. I want to establish
a transparent and encouraging corporate culture that allows employees to
freely pursue their dreams and aspirations.
Making this vision a reality however is by no means an easy task. There
will be employees who hesitate, fearing their careers could still be negatively
impacted even though the Group CEO’s message is to be unafraid of failure,
and many people will view change as an inconvenience rather than as an
opportunity. Therefore, I will continue to encourage employees who are
pursuing new challenges by repeating my message and building a track
record of successful inhouse business ventures. Even when employees are
not successful in their efforts, I will not blame them. Rather, I will praise them
for their bravery and determination.
SMBC Group is made up of one hundred thousand employees who are
located throughout the world. So, in terms of size, you could say that SMBC
Group is like a supertanker. When you attempt to change the direction of such
a large vessel, those changes may appear to be slow and gradual. However,
once the correct direction has been set and we begin the journey towards our
goals, I promise you that the momentum we witness will be phenomenal.
Becoming a Global Solutions Provider
So where should we direct our supertanker? In April 2020, we established
SMBC Group’s new vision: “A trusted global solution provider committed to
the growth of our customers and advancement of society.”
P 028
Break the Mold
SMBC GROUP ANNUAL REPORT 2020 017
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation MESSAGE FROM THE GROUP CEO
This new vision reflects our commitment to realizing the sustainable
growth of SMBC Group by providing top tier solutions on a global basis,
not only by further honing our capabilities in the financial sector, but also
expanding into non-financial sectors so that we can better address the needs
and issues of customers and of society.
There are three key themes that we must adhere to in order to realize
this vision.
Data Oriented
The first theme is data oriented.
Information and data are very valuable assets which are not represented
in a company’s balance sheet, and businesses around the world, not
only those in the financial sector, are striving to monetize these assets.
Going forward, how well a company can monetize information assets and
incorporate them into its P/L will be the key to success. In addition to
accumulating a vast volume of payment and credit information through our
various business lines which include banking, securities, and consumer
finance, SMBC Group also possesses top tier capabilities in personal data
protection and online security, two issues which must be addressed before
utilizing data.
For example, Sumitomo Mitsui Card released “stera” a payment platform
that provides all the necessary functions to facilitate cashless payment
transactions. At the same time, it released “Custella” a service which supports
clients in planning management strategies, developing new products, and
creating new marketing strategies by using AI to analyze the payment data
that is accumulated via the platform. If we can further develop such services,
it will allow us to engage in a variety of new “data +α” businesses, for example
personnel data trust banking, advertising, and personalized marketing that
targets individual customers.
Building Platforms
The second theme is to build platforms.
Through bank deposits and payment services we have established
relationships with corporate and individual customers both in and outside of
Japan. By leveraging this robust customer base that is based on many years
of mutual trust, SMBC Group can build platforms which provide a variety of
services with its capabilities in the financial sector.
I am not concerned about the principle of self-sufficiency in our efforts
to enhance our platforms. In the unbundling of financial functions, I think
that it is only natural that players from outside the financial sector take over
some of those functions. I view companies from outside the financial sector,
018 SMBC GROUP ANNUAL REPORT 2020
To Our Stakeholders not only as rivals with whom we engage in healthy competition, but also as
partners whose capabilities complement ours and vice-versa. For example,
SMBC Group recently established Plari Town, Inc., a digital platform that
supports the digitalization of mid-tier companies and SMEs, and we are
working to swiftly enhance the value of the platform by including various
services provided by external partners. We will strive to create an ecosystem
that creates business opportunities involving not only SMBC Group and our
customers, but also between customers themselves, by collecting various
information as a result of our platform securing an ever growing customer
base.
Solutions Provider
The third theme is to become a solutions provider.
Customer needs are becoming increasingly diverse and sophisticated,
and SMBC Group must become our customers’ most trusted business partner
who can provide solutions to a wide range of issues. Let us take Japan’s
aging society as an example. When a financial institution considers potential
measures to address the needs of an aging society, a common approach is
to consider the types of financial products, with the focus being on existing
products, that can be used to build customers’ post-retirement asset portfolios.
We need to break-out of this outdated method of thinking. The concerns of
elderly customers are not limited to building-up their post-retirement assets,
they include a range of issues, such as nursing and health care, the passing on
of assets to the next generation, and relations with family members. We cannot
allow ourselves to view potential solutions based on the narrow perspective
of wealth management products and loans. Rather, we must identify all the
issues that our customers are facing and work with companies from outside
the financial sector to provide solutions which add true value.
Concepts Behind the New Medium-Term
Management Plan
We launched a new Medium-Term Management Plan in FY2020 to take the
first step to realize this vision and begin our journey to build the future of the
financial sector. The preparation of the new Medium-Term Management Plan
included more than one year of deliberations in an all team’s effort including
mid- and junior-level employees. While the impact of the COVID-19 pandemic
was certainly not part of the deliberation process, the new Medium-Term
Management Plan was prepared based on the understanding that our
business environment would be challenging with irreversible structural
changes, such as climate change, our shrinking mother market, and the rise
P 053
Corporate Service Digital Platform
P 052
Group-Based Comprehensive
Solutions
P 026
Core Policy of the new Medium-
Term Management Plan
SMBC GROUP ANNUAL REPORT 2020 019
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation MESSAGE FROM THE GROUP CEO
of geopolitical risks as demonstrated by the US-China trade war. I am fully
confident that the Plan contains well thought-out strategies which will allow
us to overcome any adversities we may face and realize further growth. This
is why we will proceed without any doubt or hesitation, even though we are
facing many challenges, both foreseen and unforeseen.
We established the following three core policies as part of the Medium-
Term Management Plan: Transformation, Growth, and Quality.
First, so that we may emerge victorious from this challenging business
environment, we will devote our utmost efforts to continue restructuring
our business model and cost structure. In the previous Medium-Term
Management Plan, we concentrated on enhancing productivity by
establishing Discipline and Focus as core policies. In the new Medium-Term
Management Plan, we took these policies one step further to “Transformation”,
and we will increase profit by engaging in the fundamental transformation
and streamlining of our business model.
For example, for cost control our goal is to realize cost reductions of
¥100 billion, double our target for the previous Medium-Term Management
Plan, by reforming domestic businesses, reorganizing our domestic retail
branches, and integrating group operations. In addition, we will continue to
reduce unprofitable assets and strategic shareholdings as part of our efforts
to optimize risk-weighted asset management.
On the other hand, while we were still in the process of accumulating
capital in the previous Medium-Term Management Plan, we have now
reached our CET1 ratio target which will allow us to utilize capital and other
management resources in the New Medium-Term Management Plan. As
such, we will decisively allocate capital to business sectors for which medium-
to long-term growth can be expected.
For example, in our inorganic strategy, while being disciplined we will
use surplus capital to proactively pursue opportunities to acquire businesses
and portfolios with high capital and asset efficiencies, in addition to business
platforms to realize medium- to long-term growth. In addition, ¥100 billion
has been allocated as “CEO Budget” for IT related investments. This
framework will allow for agile investments to be made in businesses, such as
digital-related enterprises and cashless payments, that are deemed to have
potential for significant future growth.
Quality is the core policy that applies to our management base. We
will work tirelessly to strengthen our management base so that we may
meet the expectations of our stakeholders as a global financial group, for
example accelerating sustainability management, realizing human resource
management that allows for personnel to realize their full potential, and
further enhancing our Risk Appetite Framework to promote appropriate risk
taking.
Presently, on a core earnings basis our bottom-line is approximately
¥640 billion. In the previous Medium-Term Management Plan, our bottom-
020 SMBC GROUP ANNUAL REPORT 2020
To Our Stakeholders line exceeded ¥700 billion for all three years due to reversal of provisions from
large borrowers and gains from the sale of strategic shareholdings. However,
I am by no means satisfied with this profit level. In the new Medium-Term
Management Plan, through our seven key strategies we will strive to increase
consolidated net business profit by ¥100 billion and realize a core earnings
bottom-line of more than ¥700 billion in the final year.
Seven Key Strategies
We will focus on our seven key strategies to realize our goal of raising our
profit level on a core earnings basis. I will introduce two key strategies which
I feel best characterize the core policies of Transformation and Growth as the
heads of our respective business units will discuss the details of their specific
strategies in the later sections of this report.
Pursue Sustainable Growth of Wealth Management Business
Given Japan’s declining population, in order to realize sustainable growth
of our retail business we need to focus management resources on growth
areas while simultaneously enhancing efficiencies. In regard to enhancing
efficiencies, we are reforming our cost structure while preserving, if not
improving, the customer experience by further developing non-face-to-face
channels, for example online services, and improving the productivity of
face-to-face transactions by reorganizing our domestic retail branches. For
high-net-worth customers possessing minimum assets of ¥2 billion, we have
consolidated our banking, securities, and trust banking services under the
new brand SMBC Private Wealth. In addition to wealth management products
which reflect our unique strengths, SMBC Private Wealth offers customers a
comprehensive line-up of solutions including business succession consulting,
trust banking, and concierge services. For mass affluent customers we will
engage in personalized marketing by analyzing their transaction data so that
our proposals fit their preferences and lifestyles. Through these efforts we will
grow our top line revenues while lowering the break-even point of our wealth
management business.
Expand our Franchise in Asia
Under our Multi-franchise strategy, we have devised and implemented
initiatives based upon a time span of ten, twenty years in order to build a
second and third SMBC Group in Asia’s developing economies. Indonesia,
a key market in our Multi-franchise strategy, is expected to see its economy
grow at a slower rate due to the COVID-19 pandemic. However, there are
three commitments we made when we were formulating our strategy. First
is to become a full-line financial services provider in the target market,
second is that the franchise would have a strong home-market focus with
P 044
Group Structure
P 048
Wealth Management Business
P 056
Expand our Franchise in Asia
SMBC GROUP ANNUAL REPORT 2020 021
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation MESSAGE FROM THE GROUP CEO
its foundations firmly embedded in the local economy, and third is that we
would not retreat even when faced with changes in the business environment.
When we experience a sudden downturn in the economy, such as our current
situation, companies often consider the possibility of exiting foreign markets
given that such circumstances lead to a renewed focus on their respective
mother markets. However, it is not possible to grow together with developing
markets if we take such an approach. As such, we will not retreat, even in
times of economic downturn, and we will construct a robust business base by
establishing firm relationship with markets, such as Indonesia, where GDP is
expected to grow over the medium- to long-term. Going forward, in addition
to expanding our Multi-franchise strategy to India and the Philippines, we
will enhance the overseas presence of our securities, leasing, and consumer
finance businesses so that we can reach the next stage of growth and
development as a full-line financial services provider.
To our Stakeholders
I will now share my commitment to our stakeholders, which extends beyond
the term of the new Medium-Term Management Plan.
Supporting our Customers’ Future
Our first and foremost focus is to support customers who are suffering from
the adverse effects of COVID-19. As part of our efforts to provide undisrupted
financial services that are indispensable to our customers’ everyday lives,
we have kept open all SMBC branches by taking necessary safety measures.
In addition, we have taken a flexible approach in order to support the cash
flow needs of individual and corporate customers, for example introducing
loans with special interest rates and extending repayment schedules. SMBC
Group will fulfill its responsibility as part of society’s infrastructure so that our
customers and society itself can return to normal at the earliest possible date.
“Data oriented” “Build Platforms” and “Solutions Provider” have been
established as the key themes which SMBC Group will pursue. These themes
were decided following a careful analysis of what the future role of financial
institutions will be based on the future direction we envisioned our customers
pursuing. I want SMBC Group to become a proactive solutions provider that
is consistently prepared to extend optimal support to customers once they
decide upon a course of action.
022 SMBC GROUP ANNUAL REPORT 2020
P 084
Customer-Oriented Initiatives
To Our Stakeholders P 094
Human Resources Strategy
Creating a Work Environment Where Employees can Pursue
Their Dreams with Confidence and Ambition
First, I would like to express my sincere appreciation to all of our employees
who are working tirelessly to ensure that SMBC Group is able to continue
offering undisrupted financial services which are indispensable to our
customers’ lives amidst the havoc caused by COVID-19. I have a responsibility
to protect the health and wellbeing of all of our one hundred thousand
SMBC Group employees, and failing this responsibility will have serious
repercussions, including the possibility that we may no longer be able to
provide a full range of financial services. Management will continue to
extend the maximum level of support to employees, such as the thorough
implementation of infection preventive measures at branch offices and
carrying out initiatives aimed at ensuring employees’ physical and mental
wellbeing, so that they are able to carry-out their responsibilities with
confidence and peace of mind.
In addition to the above, I want to create a work environment where
employees can pursue their dreams with confidence and ambition. When
establishing HR frameworks, for example to enhance employee engagement
or to support employees in challenging themselves, we cannot forget that
establishing frameworks is not the goal. Frameworks are merely tools to
help us achieve our true objectives. In order to transform SMBC Group into
a vibrant and energetic organization, in addition to building the corporate
culture which I have just shared with you, we are also developing an
internal SNS system. The goal is for SMBC Group employees, irrespective
of their assigned country or department, to communicate daily and offer
encouragement when a colleague puts forth a new idea. The focus must be
on what we can do rather than what we cannot. I want to create a workplace
in which innovation is a natural result of employees carrying out their duties
with a sense of fun and purpose, even under the challenging business
environment we are currently facing.
Building a Sustainable Society with our Customers
SMBC Group defines sustainability as: “Creating a society in which today’s
P 078
generation can enjoy economic prosperity and well-being and pass it on to
Sustainability Management
future generations.” In recent years, we are seeing environmental and social
issues, for example climate change due to global warming and human rights
violations resulting from the establishment of international supply chains,
on a global scale. Given this backdrop, the expectations placed on financial
institutions to address such developments are extremely high given our
business allows us to act as a hub connecting various industries.
In April 2020, we launched the SMBC Group Statement on Sustainability
(“the Statement”) and established SMBC Group GREEN×GLOBE 2030, a ten
year plan that extends to 2030 through which we will realize the objectives
of the Statement, so that we may remedy social issues through our business
and further enhance our SDG-related initiatives. Specifically speaking, for
SMBC GROUP ANNUAL REPORT 2020 023
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation MESSAGE FROM THE GROUP CEO
environmental goals a target of �10 trillion has been set for Green Finance
and a 30% reduction in SMBC’s CO2 emissions, while for social goals we will
hold financial literacy education sessions for 1.5 million participants aimed
at realizing financial inclusion and expand retail financial services in Asia’s
emerging market economies. Furthermore, for governance goals, we will
tirelessly pursue the enhancement of our corporate governance and risk
governance capabilities as they are the foundations upon which sustainability
management is built.
However, there is a limit on what we at SMBC Group can accomplish
by ourselves. What is important is that we create a sizeable, cohesive
movement by involving retail and corporate customers. SMBC Group recently
launched GREEN×GLOBE Partners, a community platform that aims to solve
environmental and social issues. Through the platform, SMBC Group will
work with customers to realize a sustainable society by hosting seminars and
facilitating the exchange of information concerning the environment and
society, assisting participants in connecting with each other, and initiating
projects that contribute to solving social issues.
Maximizing Shareholder Value from both Financial and non-
Financial Perspectives
Under the previous Medium-Term Management Plan, we launched
initiatives aimed at enhancing shareholder returns. We realized a dividend
increase of ¥40 over the three years covered under the previous Medium-
Term Management Plan and increased our dividend payout ratio from 30%
to 37%. We also completed share buybacks totaling ¥170 billion. There
is no change to our commitment to enhancing shareholder returns in the
new Medium-Term Management Plan. Dividends will remain our principal
approach to shareholder returns, and we will also continue our flexible
approach to share buybacks. While we are currently facing a challenging
business environment due to the COVID-19 pandemic, we will steadily
carry-out the business strategies established under the new Medium-Term
Management Plan and over the next three years we will strive to grow our
bottom line and realize a dividend payout ratio of 40%.
In addition to enhancing the quantitative and financial returns which
I have just shared, I am fully aware that enhancing the long-term non-
financial value of SMBC Group is equally as important to our shareholders.
We will enhance the non-financial corporate value of SMBC Group by
focusing on adding value to customers via the three key themes and ESG-
related initiatives aimed at realizing a sustainable society. We will continue to
proactively disclose both financial and non-financial information so that we
can minimize any differences in the information available to our shareholders
and SMBC Group, and decrease the cost of shareholder’s equity in order to
realize the sustainable growth of shareholder value.
024 SMBC GROUP ANNUAL REPORT 2020
To Our Stakeholders Building the Path to our Future
The Daoist text Liezi from China’s Warring States era contains the fable “The Foolish
Old Man Removes the Mountains,” and its message is one of my favorite mottos.
Once upon a time in China there was an old man called Yu Gong who lived at the foot
of two very high mountains. As the two mountains were a hindrance to Yu Gong and
travelers passing by his house, Yu Gong one day decided to level the mountains. Yu
Gong’s neighbors mocked him, saying that he was a fool and that he would never
accomplish the task during his lifetime. Yu Gong, however, replied that upon his death
his son would carry on the task, who then would be succeeded by his grandson, and
that the mountains would eventually be leveled if Yu Gong’s family never gave-up.
Upon hearing this, the heavens approved of Yu Gong’s determination and moved
the two mountains. The fable illustrates that perseverance will eventually allow us to
accomplish any task, regardless of its size.
We are witnessing the contraction of the global economy and irreversible
structural changes. Although we must operate under a very challenging business
environment, I have no doubt that by tirelessly working towards the realization of
our vision, we too can move mountains and build the path to a bright future for the
financial sector. I would like to ask for the continued support and understanding of
all our stakeholders as I will stand at the forefront of our efforts to lead SMBC Group
to new levels of growth and prosperity, with each and every one of our employees
devoting their utmost efforts to accomplish this goal.
SMBC GROUP ANNUAL REPORT 2020 025
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation Core Policy of
the new Medium-Term Management Plan
The new three-year Medium-Term Management Plan began in FY2020.
We will pursue major reform of our business model and explore new businesses to overcome the dynamic change of the
business environment. Thereby, we will aim to provide solutions for the challenges faced by our customers and society and
pursue sustainable growth in order to further enhance our corporate value.
We have established three core policies in order to take an important step towards the realization of our new Vision of becom-
ing “A trusted global solution provider committed to the growth of our customers and advancement of society.”
Vision
A trusted global solution provider committed to
the growth of our customers and advancement of society
Business strategies – Transformation & Growth –
We will reform existing business models and cost structure to overcome intense competition and
create new value for future growth.
Previous Plan
New Medium-Term Management Plan
Discipline
Focus
Improve efficiency
Increase profit by drastic optimization
and remodeling businesses
Invest for future growth
Core Policy
Accumulate capital
Use capital for organic growth
Use capital for inorganic growth
Business
strategy
Management
base
Financial Targets
Transform existing businesses
Seek new growth opportunities
Elevate quality in all aspects
As in the previous plan, we have set three targets regarding profitability, efficiency, and financial soundness.
We have changed the metric from ROE to ROCET1 for profitability and from OHR to base expenses for efficiency.
Please see page 031 for the Message from the Group CFO.
Profitability
Efficiency
Financial soundness
Maximize profitability
by increasing bottom-line profit
and disciplined capital management
Reduce cost
while investing for growth
Secure ample level of capital
on a post-Basel III reforms basis
ROCET1 ≥8.5%
Target for FY2022
Base expenses
< FY2019 results
CET1 ratio c.10%
Changed to CET1 in line with CET1 ratio target
Purse both cost reduction and
growth investment
Post-Basel III reforms basis (excl.OCI)
FY2019 results
026 SMBC GROUP ANNUAL REPORT 2020
Seven Key strategies
Management base – Quality –
Transformation
Transform existing
businesses
Pursue sustainable growth of
wealth management business
As a global financial institution, we will continue working
toward enhancement of our management base to meet
the expectations of our stakeholders.
1
2
3
4
5
6
7
Improve productivity and strengthen
solutions in the domestic wholesale business
Enhance overseas CIB business to
improve asset / capital efficiency
Hold the number one position
in payment business
Enhance asset-light business on a global basis
Expand franchise and strengthen
digital banking in Asia
Develop digital solutions for corporate clients
Growth
Seek new growth
opportunities
Elevate quality in all aspects
ESG
Resource
management
Business
management
•Contribute to realize a
•Sophisticate HR
sustainable society
•Enhance corporate
governance suitable
for a global bank
management to motivate
employees
•Build flexible and robust
IT/cyber infrastructure
•Enforce sound risk-taking
•Pursue efficient and
scientific management
9.5%9.8%JPY 1,530 bn(vs. FY2016 +JPY 70 bn)To Our Stakeholders Core Policy of
the new Medium-Term Management Plan
The new three-year Medium-Term Management Plan began in FY2020.
We will pursue major reform of our business model and explore new businesses to overcome the dynamic change of the
business environment. Thereby, we will aim to provide solutions for the challenges faced by our customers and society and
pursue sustainable growth in order to further enhance our corporate value.
We have established three core policies in order to take an important step towards the realization of our new Vision of becom-
ing “A trusted global solution provider committed to the growth of our customers and advancement of society.”
A trusted global solution provider committed to
the growth of our customers and advancement of society
Vision
Core Policy
Business
strategy
Management
base
Financial Targets
Transform existing businesses
Seek new growth opportunities
Elevate quality in all aspects
As in the previous plan, we have set three targets regarding profitability, efficiency, and financial soundness.
We have changed the metric from ROE to ROCET1 for profitability and from OHR to base expenses for efficiency.
Please see page 031 for the Message from the Group CFO.
Profitability
Efficiency
Financial soundness
Maximize profitability
Reduce cost
by increasing bottom-line profit
while investing for growth
Secure ample level of capital
on a post-Basel III reforms basis
and disciplined capital management
ROCET1 ≥8.5%
CET1 ratio c.10%
Changed to CET1 in line with CET1 ratio target
Purse both cost reduction and
Post-Basel III reforms basis (excl.OCI)
Target for FY2022
Base expenses
< FY2019 results
growth investment
FY2019 results
Business strategies – Transformation & Growth –
We will reform existing business models and cost structure to overcome intense competition and
create new value for future growth.
Previous Plan
New Medium-Term Management Plan
Discipline
Focus
Improve efficiency
Increase profit by drastic optimization
and remodeling businesses
Invest for future growth
Accumulate capital
Use capital for organic growth
Use capital for inorganic growth
Seven Key strategies
Management base – Quality –
Transformation
Transform existing
businesses
Growth
Seek new growth
opportunities
1
2
3
4
5
6
7
Pursue sustainable growth of
wealth management business
Improve productivity and strengthen
solutions in the domestic wholesale business
Enhance overseas CIB business to
improve asset / capital efficiency
Hold the number one position
in payment business
Enhance asset-light business on a global basis
Expand franchise and strengthen
digital banking in Asia
Develop digital solutions for corporate clients
As a global financial institution, we will continue working
toward enhancement of our management base to meet
the expectations of our stakeholders.
Elevate quality in all aspects
ESG
Resource
management
•Contribute to realize a
sustainable society
•Enhance corporate
governance suitable
for a global bank
•Sophisticate HR
management to motivate
employees
•Build flexible and robust
IT/cyber infrastructure
Business
management
•Enforce sound risk-taking
•Pursue efficient and
scientific management
SMBC GROUP ANNUAL REPORT 2020 027
9.5%9.8%JPY 1,530 bn(vs. FY2016 +JPY 70 bn)To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation S P E C I A L F E A T U R E
Ever since I was appointed Group CEO in April
2019, I have urged employees to “Break the Mold.”
The message behind the slogan is that I want our
employees to proactively pursue new challenges
in this rapidly changing business environment
without being bound by precedent, fixed ideas,
or organizational boundaries. I would like to take
this opportunity to share a few examples of how
employees responded to this message.
Break the Mold
Selecting a Free Workstyle
A free dress code policy was introduced in FY2019 as
part of efforts to develop a corporate culture in which
employees could pursue new challenges without being
bound by precedent or convention. We received generally
favorable feedback, such as “I felt that our corporate
culture is changing” and “I was able to carry-out my
responsibilities with a positive attitude” in our employee
surveys. The policy also received positive feedback from
the media, saying that it softened our conservative image.
We also introduced frameworks allowing employees to
telecommute or adopt flexible work schedules. I hope
that providing employees with the flexibility to shape their
working lives based on their lifestyle and professional
responsibilities, without being bound by strict rules
governing where or when they work, will allow them to
produce a steady stream of new ideas that are unrestricted
by fixed ideas.
Our
Challenge
028 SMBC GROUP ANNUAL REPORT 2020
To Our Stakeholders Self-Development of RPA Tools
SMBC Group has been promoting the use of Robotic
Process Automation (“RPA”) since FY2017. The purpose of
introducing RPA is to free employees from routine tasks so
that they can focus on high-value added tasks. While many
companies have also introduced RPA, what makes our
RPA efforts stand out is that we provide our employees with
the training necessary to develop RPA tools themselves.
Specifically, we established a comprehensive training
program that not only includes classroom learning, but
also provides one-on-one support to employees interested
in developing RPA tools. Employees now play a critical role
in pushing forward work style reform as they are further
automating tasks and operations after experiencing
firsthand the benefits of using self-developed RPA tools to
enhance efficiency.
Participants
Approx.
Automated (hours)
Approx.
1,200 120k
Producing new CEOs
I am producing new CEOs from our employees in order to
support them in breaking through the confinements placed
upon them by the expected norms and precedents of the
financial sector so that they could pursue new challenges.
Through this project I have proactively allocated funds
and human resources to employees who have come up
with interesting new ideas that I feel could develop into
new growth areas for SMBC Group, with the said individual
assigned to lead the new in-house business venture.
Nine companies have been established so far, with the
establishment of SMBC CLOUDSIGN drawing particular
attention given its CEO is still in his 30s. Mr. Hideki
Mishima, the CEO of SMBC CLOUDSIGN, was a mid-
career hire who joined SMBC in 2018 and was originally
responsible for overseeing our digital innovation center,
“hoops link tokyo”. The initial vision for SMBC CLOUDSIGN
was born from discussions between Mr. Mishima and
representatives from bengo4.com at a hoops link tokyo
event, and Mr. Mishima was named the CEO of SMBC
CLOUDSIGN after successfully pitching the vision to SMBC
Group’s top management team. I will continue to extend
the maximum level of support to motivated, proactive
employees, such as Mr. Mishima.
Feedback from RPA Training Participants:
Members of my department are often required to travel for work,
and the calculation of monthly travel expenses had become a
time-consuming burden. Thus, I developed an RPA tool which
automatically calculates employees’ travel expenses. As of today,
I have developed ten RPA tools, and I feel that I have been able
to contribute to the streamlining of my department’s operations.
My experience with RPA led me to develop an interest in
programming, and I earned a certificate in JAVA through self-
study. Going forward, I want
to challenge myself by taking
on new responsibilities where
I can leverage my programing
skills.
Satoe Umezawa
Business Promotion Group
Sustainable Business Promotion Dept.
Planning Dept., Wholesale Banking
Unit
Becoming a Role Model as CEO of
the new in-house business venture:
Discussions with my General Manager was the first step in my
journey to becoming the CEO of SMBC CLOUDSIGN. I strongly
believed that the project should be led by someone who was the
most passionate about the new business, and I conveyed this
to him. An employee directly approaching his or her superior
as I did is unthinkable in the conservative culture of Japanese
banks, and I feel that the company taking the time to listen to
me and actually appointing me as CEO shows how seriously
SMBC Group views the topic of self-reformation. Furthermore,
the establishment of SMBC CLOUDSIGN was made possible
due to the generous support I received from various internal
departments. SMBC Group is an organization where employees
who are pursuing new challenges or are thinking about pursuing
new challenges can count on receiving the full support of their
colleagues and supervisors. The importance of telecommuting is
rapidly increasing given the current environment, and our digital
contract services are receiving much interest as the last piece
of digital technology that makes telecommuting a truly viable
workstyle. I take great pride in leading a business that has the
potential to make a positive impact on society, and I will do my
best so that I can become a role model as the CEO of the new in-
house business venture.
Hideki Mishima
President & CEO
SMBC CLOUDSIGN, Inc.
SMBC GROUP ANNUAL REPORT 2020 029
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation MESSAGE FROM THE GROUP CFO
We will leverage our robust capital base to support
our customers affected by COVID-19 while further
enhancing shareholder returns and investing for growth
Last year, the first year I was responsible for both the Group CFO and CSO roles, was the year we worked on creating the new
Medium-Term Management Plan (“the New Plan”).
In last year’s message, I shared my belief that in the context of management, financial and business strategies are two sides
of the same coin, and I witnessed firsthand the benefits of the current management framework as I was able to consistently
plan and verify initiatives from the perspectives of the Group CFO and CSO, positions that are responsible for SMBC Group’s
financial and business strategies.
We have now entered the execution phase of the New Plan, and I will continue to leverage our management framework’s
strengths to ensure the New Plan’s strategies are carried out in a comprehensive and speedy manner.
Toru Nakashima
Group CFO
Director Senior Managing Corporate Executive Officer
030 SMBC GROUP ANNUAL REPORT 2020
To Our Stakeholders Further Enhancing Efficiencies
For financial targets, ROE, OHR, and CET1 ratio were
selected as the metrics for profitability, efficiency, and
SMBC Group strives to conduct a resilient, first class group
financial soundness. Although we were unable to reach our
management by focusing on enhancing our capital, asset,
FY2019 OHR target due to COVID-19 reducing our topline
and cost efficiencies.
revenues, we were able to reach our targets for ROE and
optimize our Group structure and improve capital and assets
7.8%*
8.2%
7.6%
7-8%
CET1 ratio.
The Previous Plan’s Financial Targets
ROE*
8.8%
FY2016
FY2017
FY2018
FY2019
Target
* Excluding special factors, such as the effects of implementing the consolidated corporate-
tax system
OHR
62.1%
60.9%
60.3%
62.8%
vs. FY2016
(1)%
FY2016
FY2017
FY2018
FY2019
Target
62.0%
(excl. impact of reorganization)
CET1 ratio
8.3%
10.3%
9.8%
10%
9.5%
Mar.17
Mar.18
Mar.19
Mar.20
Target
• Review of the Previous Plan
In the previous Medium-Term Management Plan (“the
Previous Plan”), SMBC Group categorized its business
portfolio into four quadrants based on our competitive
advantage and future potential. Through this categorization
we swiftly reorganized our Group’s businesses in order to
efficiencies.
For the “Transform” and “Enhance” quadrants we
deconsolidated the Kansai regional banks and SMFL
in order to enhance capital and asset efficiencies by
reducing our risk weighted assets. On the other hand, for
our asset management business, which is positioned in
the “Build” quadrant given its potential for future growth
combined with our current lack of competitive advantage,
we started proactively allocating management resources
to build up our overseas presence, as illustrated by our
acquisition of TT International and our investment in Ares
Management.
Improved capital and asset efficiency through
group reorganization
Grow
Merged SMBC Nikko
and SMBC Friend
e
g
a
t
n
a
v
d
a
e
v
i
t
i
t
e
p
m
o
C
Enhance
Deconsolidated SMFL
RWA
JPY (3) tn*1
Deconsolidated
Kansai regional banks
RWA
JPY (4) tn*1
Made JNB a consolidated subsidiary
of Yahoo
Lowered ownership stake
in POCKET CARD
Transform
Made SMCC a wholly
owned subsidiary
Bottom-line
JPY+10 bn*2
* Post-Basel III reforms basis
Merged BTPN
and SMBCI
Bottom-line
JPY+10 bn*2
Merged SMAM and Daiwa SB
Acquired TT International
Acquired stake in Ares Management
• The New Plan’s Financial Targets
In the New Plan there is no change to our commitment
to conducting business management with the focus on
enhancing efficiencies. As Mr. Ohta stated in the Group CEO
Message, through our core policy of Transformation, we
Build
will increase profit by drastic optimization and remodeling
businesses, while at the same time leveraging our capital
base to pursue further growth through our core policy of
*1 Post Basel III reforms basis
Business growth
*2 Calculated the impact from the change of ownership ratio (excl. one-time impact)
Growth.
SMBC GROUP ANNUAL REPORT 2020 031
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation
MESSAGE FROM THE GROUP CFO
As in the Previous Plan, we have set three metrics of
strengthening our overseas businesses and IT systems.
profitability, efficiency, and financial soundness as financial
Although we expect expenses related to overseas
targets. However, for profitability we changed the metric from
businesses and IT systems to increase by a little under
ROE to ROCET1, while for efficiency we changed the metric
�100 billion during the New Plan, we will further enhance
from OHR to controlling base expenses.
cost control measures so that there is no increase in base
A target of 8.5% or higher has been set for ROCET1.
expenses. Specifically, we will cut costs by �100 billion, a
ROCET1 is calculated using CET1 as the denominator with
figure that is double the Previous Plan’s achievement, through
CET1 being a valuable metric that we use in determining
the three key initiatives: reform of domestic businesses, retail
financial soundness. The ROE target of 7-8% set under
branch reorganization, and integration of Group operations.
the Previous Plan is currently equivalent to an ROCET1 of
8-9%. As such, our new target reflects practically raising the
minimum level by 0.5%.
Change in base expenses for coming three years
As for efficiency, we introduced a new concept, “base
(JPY bn)
expenses,” in order to achieve a balanced approach to cost
control and investment for growth. Our goal is to realize base
expenses that are lower than FY2019 levels. I will explain the
definition of base expenses further below.
As for financial soundness, consistent with the Previous
Plan, we aim to secure a CET1 ratio of c.10% on a post-Basel
III reforms basis and excluding unrealized gains on securities.
Profitability
(ROCET1)
Efficiency
(Base Expenses)
Financial Soundness
(CET1 Ratio)
FY2022 Targets
≥8.5%
< FY2019 results
c. 10%
FY2019 Results
9.5%
�1,530 billion
(vs FY2016 +�70 billion)
9.8%
• Cost Control
Base expenses, our new efficiency metric, is comprised of
1
(50)
100
Overseas business
Strategic areas
System cost
2
(25)
3
(25)
JPY (100) bn
Previous plan
JPY (54) bn
Reform of domestic businesses
Retail branch reorganization
Integration of group operations
1
2
3
1.5 tn
FY2019
Our Basic Capital Policy Remains
Unchanged
G&A expenses net of expenses related to investments for
In the New Plan, we will continue to take a balanced approach
future growth, revenue linked variable costs, and one-off
to securing financial soundness, enhancing shareholder
expenses. This new metric was introduced in response to
returns, and investing for growth.
feedback during the Previous Plan that cost management
based on OHR tends to fall into a shrinking equilibrium
and leads to a lack of investment for growth. This change is
by no means an attempt to loosen controls on cost. Given
that approximately 90% of G&A expenses fall under base
expenses, we believe that it is fully possible to enhance
efficiency by carefully controlling base expenses.
In the Previous Plan, we succeeded in reducing costs
by �54 billion, exceeding our target of �50 billion, through
the following key initiatives: business reforms to improve
Shareholder returns
Dividends in principal
+ flexible share buybacks
• Progressive dividends
• Achieve dividend payout
ratio of 40% by Mar. 23
Sustainable growth of
shareholder value
ROCET1 target
≥ 8.5%
Investment for growth
Investment criteria
• Fits with our strategy
• ROCET1 ≥ 8.5% after
synergies
• Risk is manageable
Financial soundness
CET1 ratio target :
c.10%
efficiency, retail branch reorganization, and reorganization
of Group companies. However, base expenses rose by �70
• Securing Financial Soundness
We were able to reach our CET1 ratio target of c.10% as a
billion over the same period due to expenses related to
result of accumulating capital over the course of the Previous
032 SMBC GROUP ANNUAL REPORT 2020
To Our Stakeholders Plan. The CET1 ratio target was calculated taking into account
three years covered under the New Plan and further increase
the impact of the Basel III reforms which will gradually take
our dividends so that we realize a 40% dividend payout ratio
place from 2023 to 2028 and excludes unrealized gains on
based on these figures.
securities. Also, based on the Basel III fully-loaded basis,
We decided not to announce share buybacks in May
which is currently required by regulators, our CET1 ratio as of
2020. We recognize our share price is currently at a very low
the end of FY2019 was 15.5%, greatly exceeding the required
level and understand that there are expectations for share
level of 8%.
buybacks from investors. However, at this time, we have
Our financial soundness can be a formidable
concluded that we must focus on providing financial support
competitive advantage during times of crisis, such as the
to our customers and that more time is required to assess the
one we are currently facing. First, we will provide financial
real impact of COVID-19.
support to customers both in and outside of Japan who are
being affected by COVID-19. As such, risk weighted assets
Shareholder returns
are expected to exceed our original target for FY2020, the
first year of the New Plan, by �5 trillion which equals a 0.5%
Dividend (JPY bn)
Share buybacks (JPY bn)
decrease in our CET1 ratio. Therefore, for the foreseeable
DPS
future we will manage our CET1 ratio at c.9.5%, 0.5% less
than the target set under the New Plan, in order to reflect the
impact of COVID-19 associated loans.
It is this robust capital base that will allow us to
proactively enhance shareholder returns and pursue
attractive growth opportunities.
• Further Enhancing Shareholder Returns
In the Previous Plan, we increased dividends throughout
all three years (a total of �40 per share) while carrying out
share buybacks totaling �170 billion. In the New Plan there
is no change to our shareholder return policy of dividends
being our principal approach while conducting flexible share
buybacks. We will continue to pursue a progressive dividend
policy, meaning that we will at least maintain, if not increase,
dividend payments, and aim to achieve a dividend payout
ratio of 40% by FY2022.
CAGR: +8.2%
180
170
190
190
150
150
140
100
70
120
120
260.1
260.1
251.2
239.8
211.5
211.5
169.2
169.2
197.4
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020E
Dividend payout ratio (%)
21
20
26
33
30
33
Total payout ratio (%)
-
-
-
-
-
-
35
44
37
51
65
-
• Investing for Growth
Unlike the Previous Plan during which we focused on capital
We increased our dividends for FY2019 by �10 to �190
accumulation, given that we have reached our CET1 Ratio
per share as we exceeded our �700 billion target for profit
target, the New Plan represents a new stage in which we
attributable to owners of parent and took steps towards
leverage our capital base to pursue growth opportunities.
achieving a dividend payout ratio of 40%. For FY2020, we
While asset efficiency will remain a key focus and we
will maintain our dividend payout of ¥190 per share based
will continue reducing unprofitable assets and strategic
on our progressive dividend policy despite a significant
shareholdings, we will allocate capital to increase risk
reduction in forecasted net income, which will raise our
weighted assets to growth areas. As illustrated in the below
dividend payout ratio to 65%. Please be assured however,
chart, over the three years covered by the New Plan we will
that we will by no means view this as reaching our target
allocate a net of ¥500 billion of capital and increase risk
dividend payout ratio of 40%. While we must continue to
weighted assets by a net of ¥5 trillion through our seven key
operate in a challenging business environment, we will aim
strategies.
to increase profit attributable to owners of parent during the
We expect that risk weighted assets associated with
SMBC GROUP ANNUAL REPORT 2020 033
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation MESSAGE FROM THE GROUP CFO
COVID-19 related loans will be fully repaid by the end of
business, securities business, trust banking, and digital
FY2022 and therefore have no impact on the New Plan’s
businesses.
targets.
SMBC Group purchased the aircraft leasing businesses
We will pursue inorganic growth through strategic
of a European bank (currently SMBC Aviation Capital)
M&A while maintaining financial soundness and disciplined
following the Financial crisis, and the current market
investment criteria. There will be no change in the focus of
environment may bring opportunities to acquire quality assets
our investments: “assets that promptly raise our ROCET1”
at discounted prices. Of course, any investment will be made
and “investments for the future.” The former refers to areas
following our disciplined investment criteria.
in which SMBC Group possesses global strengths, with past
The chart below shows the use of capital for FY2019 and
examples being investments in aircraft leasing, middle-
FY2020. As for FY2020, the forecast of profit attributable to
market LBO, and asset management businesses. The latter
owners of parent is �400 billion. �260 billion will be allocated
refers to investments in the Asian commercial banking
to dividends and we will extend loans to our overseas and
Changes in Risk-Weighted Assets during the New Plan
(JPY tn)
Improve asset efficiency
Allocate resources to strategic areas
(3)
Global CIB
(4)
Payment
+0.5
(5)
Asset-light
business
+0.4
(6)
Asia
+0.2
+3.7
(1)
Wealth
management
(2)
Domestic
corporate
+2.4
COVID-19
related loans
(1.6)
Unprofitable
assets
(0.4)
Strategic
shareholdings
87
1.0
+4.0
•Mortgage loans
•Unprofitable assets
(domestic SME, overseas products)
(7)
Digital
Others
COVID-19
related loans
+ JPY 5 tn
Required CET1：
+ JPY 500 bn
FY2019
Use of Capital in FY2019 and FY2020
(JPY bn)
10.3%
703.9
Impact on
CET1 ratio
+0.9%
(0.3)%
260
(0.3)%
280
Overseas 220
Domestic 60
(0.1)%
100
(0.1)%
100
Reorganization of SMCC 50
60
Asset management
(0.1)%
110
(0.5)%
400
260
9.8%
FY2022
target
9-10%
CET1 ratio
Mar. 19
Net
income
Dividends
Organic
COVID-19
related loans
Share
buybacks
In-organic
Others
CET1 ratio
Mar. 20
Net
income
Dividends
COVID-19
related loans
Others
CET1 ratio
Mar. 21
FY2019
FY2020
034 SMBC GROUP ANNUAL REPORT 2020
To Our Stakeholders domestic customers who are suffering from the adverse
During FY2019, in addition to individual and small
effects of COVID-19. Then we will consider how to best deploy
meetings led by senior management with investors and IR
our remaining capital.
• Reducing Strategic Shareholdings
Over a five-year period starting October 2015, we set a
day presentations by the heads of our respective business
units, we also held seminars regarding our cashless payment
strategy given the strong interest in our efforts in this area. I
believe that incorporating the views and opinions we receive
plan to reduce our strategic shareholdings by �500 billion
in such meetings allowed us to prepare a higher quality
(book value basis). As of March 2020, six months before
Medium-Term Management Plan and capital policy.
our deadline, we succeeded in reducing our strategic
Furthermore, in April 2019 SMBC Group become the
shareholdings by �480 billion, in addition to obtaining
first global financial institution to calculate and release
customers’ consent to sell another �70 billion worth of
the financial impact of climate change in response to
strategic shareholdings. As such, we are highly confident that
recommendations made by the Task Force on Climate-
we will reach our target.
Related Financial Disclosures (“TCFD”). Initially, only
We have established a new reduction plan in which we
physical risks related to climate change were calculated and
will reduce strategic shareholdings by �300 billion over a five
disclosed. However, we tirelessly worked to enhance our
year period starting April 2020 together with the launch of the
analytical capabilities, and in February 2020 we disclosed the
New Plan.
transition risks associated with climate change.
While we have made steady progress in reducing
I am very happy that such efforts have received proper
our strategic shareholdings, the pace of reductions going
recognition, with SMBC Group being selected for the top
forward will be slower than the previous reduction plan, as
award in the banking category of the 2019 Award for
the remaining stocks include those of customers who are not
Corporate Disclosure presented by the Securities Analysts
open to the idea of having SMBC Group reduce our ownership
Association of Japan and the 2019 Best IR Award presented
of their shares. However, there has been no change in our
by the Japan Investor Relations Association.
policy to reduce strategic shareholdings over the medium- to
long-term, and we will continue to work hard to reduce them.
Book value of domestic listed stocks (JPY tn)
Ratio of stocks to CET1*
28%
16%
Results
JPY 479 bn
(4.5 years)
Target
6.1
1.8
JPY 300 bn
(5 years)
10%
Next Medium-Term
Management Plan
1.0
1.3
Apr. 01
Sep. 15
Mar. 20
Mar. 25
Previous reduction plan
New reduction plan
* Excludes net unrealized gains on other securities
Further Enhancing Communication with
our Shareholders
A different approach to investor communication
is required due to COVID-19. For example, our FY2020
Investors Meeting was conducted online and individual
investor meetings are being conducted either online or via
teleconference. However, it is during times such as these that
as Group CFO I must safeguard the continuation of high-quality
and timely communication. We will ensure any changes to our
business environment or earnings forecasts due to COVID 19
are disclosed in a timely manner. Furthermore, we will place an
even greater focus on disclosing non-financial and ESG-related
information. For the first time in our history, on June 2020 we
held an ESG-themed investor meeting.
SMBC Group will continue to proactively disclose
Creating opportunities to engage in constructive discussions
information that is useful to our stakeholders and incorporate
with investors and analysts is one of my key responsibilities as
these measures into our efforts to realize sustainable growth
Group CFO.
and increase corporate value.
SMBC GROUP ANNUAL REPORT 2020 035
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation The Impact of
COVID-19
As stated in the Group CEO Message, the New
Medium-Term Management Plan’s (“the New
Plan”) goal is to realize sustainable growth in a
challenging business environment, and we have not
made any changes to the New Plan’s framework in
response to COVID-19. However, I will touch upon
some key points given that COVID-19 will have a
big impact on our FY2020 financial results.
Impact on FY2020 Earnings
Excluding some countries and territories, the number of
new COVID-19 cases has peaked-out, although we expect
Credit Cost
Our FY2020 forecast for credit cost is ¥450 billion on a
consolidated basis, of which ¥290 billion is for SMBC, 60%
for Japanese corporations and 40% for non-Japanese
corporations. As for Japanese corporations, half is for large
corporates and the other half is for medium-sized corporations
and SMEs. As for non-Japanese corporations, we expect
increased costs in the leisure industry such as hotels and
casinos, oil and gas, and LBOs. As for Group companies other
than SMBC, we expect credit cost of ¥160 billion, a ￥40 billion
increase from FY2019, centering on retail Group companies
(SMBC Consumer Finance, Sumitomo Mitsui Card Company).
While this represents a substantial increase in credit
new infections to continue for the remainder of the year.
cost, we are not expecting the situation to deteriorate further
Therefore, although the global economy is expected to
than what we experienced during the Financial crisis in 2008.
bottom out in the second half of the year, we expect that
Although the decline in GDP is expected to exceed that of
negative fallout from the virus will last throughout FY2020.
the Financial crisis, we do not forecast credit cost to increase
As such, we made major revisions to the various targets
as much. This is the result of the financial sector’s increased
that had been originally established for the New Plan’s
resilience due to more stringent international financial
first year. The revised business targets we announced in
May 2020 are as follows. However, we will not hesitate to
regulations requiring financial firms to set aside greater
amounts of capital, in addition to our improved asset quality
make further changes to our plans and goals, even during
due to domestic companies’ increased internal reserves.
the year, if material changes in our business environment
require such adjustments.
(JPY bn)
FY2020 target
Consolidated Net Business
Profit
Credit Cost
Profit attributable to
owners of parent
Before
COVID-19
1,140
190
710
Revised
970
450
400
Impact of
COVID-19
(170)
+260
(310)
(JPY bn)
500
250
0
Other group companies
SMBC
+279.4
170.6
121.0
49.6
FY2019
450
160
290
Retail
120
Others
Japanese
60%
Non-
Japanese
40%
FY2020
036 SMBC GROUP ANNUAL REPORT 2020
To Our Stakeholders Aircraft Leasing Business
Exposure to the Natural Resources Sector
Our aircraft leasing business conducted by SMBC Aviation
Our natural resource-related exposure is currently ¥7.3
Capital represents a business area in which SMBC Group has
trillion, which is equivalent to 5.6% of our consolidated total
a competitive advantage. However, the cash flow of airlines
exposure, and 90% of our obligors have high internal ratings.
is deteriorating due to worldwide restrictions on travel, and
In addition, we have a diversified portfolio by business area
some airlines are finding it difficult to pay leasing fees. Once
and geographic location. Moreover, by taking a cautious
airlines fail to pay leasing fees, leasing companies take action,
approach, we have reduced exposure of non-Japanese
for example repossessing aircrafts and re-leasing them to
upstream and service transactions that are vulnerable to oil
other airlines. In this case, if the leasing fees are reduced,
prices, which make them relatively risky. Therefore, we do
leasing companies record impairment losses on leasing
not expect a significant increase of credit cost in this sector.
assets due to the reduction of future cash flow. However, we
However, considering the recent sharp decline in oil prices
do not expect SMBC Aviation Capital to record significant
and revisions of demand–supply forecasts, we recorded
impairment losses considering its highly liquid portfolio. The
some forward-looking provisions in FY2019 and expect a
majority of the aircraft assets they own are young narrow
certain level of associated credit cost in FY2020.
body aircrafts whose price volatility is low.
Therefore, although a short-term decline in profit is
inevitable, bottom-line profit for FY2020 is expected to
decline only by 30 to 40% YoY. As SMBC Aviation Capital
is our equity method affiliate, the negative impact on our
consolidated bottom line profit, based on our ownership
share, is expected to be less than ¥10 billion.
Upstream (E&P)
Midstream (storage / transportation)
Highly liquid portfolio
B737MAX
Wide Body(A350, B787)
Aircraft Assets
USD 13 bn
Exposure to
natural resources
JPY 7.3 tn
5.6% of total exposure
Downstream
Integrated oil & gas
Service
Others (mining)
Narrow Body
Over
80%
Non-Japanese
Mar.16
Upstream (E&P)
24%
Service
7%
(ratio to non-Japanese exposure to natural
resources)
(JPY tn)
1.3
1.5
1.7
1.6
0.3
1.0
Mar.20
16%
4%
SMBC GROUP ANNUAL REPORT 2020 037
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation
⇩
⇩
DISCUSSION
Round-Table Discussion with
Outside Directors
Group CFO Toru Nakashima asked Katsuyoshi Shinbo and Eriko Sakurai, both outside directors of Sumitomo Mitsui Financial
Group, and Sonosuke Kadonaga, an outside director of Sumitomo Mitsui Banking Corporation, for their thoughts about the
new Medium-Term Management Plan (“the New Plan”) which was announced in May 2020.
Nakashima Thank you for taking part in today’s round-table
discussion. First, I am going to ask everyone for your thoughts
opportunity to provide input which in turn led to robust
discussions. I believe this represents the changing corporate
regarding the New Plan. Ms. Sakurai, would you be kind
culture of SMBC Group.
enough to start things off?
Sakurai I was also involved in discussions during the
formulation of the previous Medium-Term Management
Shinbo I agree. I also feel that during the formulation of the
New Plan, significant time was spent discussing what the
right balance is when attempting to address the needs and
Plan (“the Previous Plan”) so I will begin by touching upon
expectations of SMBC Group’s shareholders, customers,
the differences that I felt in comparing the two. First, I
employees, and society. If we take financial targets as an
was impressed by the New Plan’s formulation process. In
example, a situation must not arise in which customers are
comparison to the Previous Plan, the involvement of outside
negatively impacted due to employees having to pursue
directors in discussions began much earlier. In addition, the
unrealistic targets. Having said this, careful attention must
documents that were used in those discussions were at the
also be paid to shareholders’ expectations and genuine
draft stage with some pages still being blank. Being able to
efforts must be made to meet those expectations. I believe
engage in discussions at the early stages of the respective
that fair, achievable financial targets have been set as a result
strategies and goals provided outside directors with ample
of the senior management team having developed a common
038 SMBC GROUP ANNUAL REPORT 2020
To Our Stakeholders Top left:
Katsuyoshi Shinbo
Outside Director, Sumitomo Mitsui Financial Group
Bottom left:
Eriko Sakurai
Outside Director, Sumitomo Mitsui Financial Group
Top right:
Sonosuke Kadonaga
Outside Director, Sumitomo Mitsui Banking Corporation
Bottom right:
Toru Nakashima
Group CFO and Senior Managing Corporate Executive Officer,
Sumitomo Mitsui Financial Group
The round-table discussion was held via a web-based conference.
understanding by engaging in in-depth discussions regarding
the conclusion of a basic agreement in April 2020 with SBI
what the right balance is.
Group concerning a strategic capital and business alliance
reflects SMBC Group’s commitment to taking the necessary
Kadonaga There are three main points that I would like
to share. First, the topic of financial targets just came up
measures to ensure its growth and development beyond the
New Plan.
and in addition to setting quantitative targets I stressed the
importance of setting qualitative goals as well. What sort of
corporate group do we want to become by the end of the New
Sakurai In comparison to the Previous Plan’s formulation
process, I feel the discussions had evolved, not only in
Plan? For example, what sort of value will SMBC Group add to
terms of quantity, but also quality. Our involvement in the
customers’ business operations? Where does SMBC Group
formulation of the New Plan began at the stage where the
want to stand in the financial sector given its competitors in
ideas and theories which would later act as the building
the global and domestic markets? The reason for this being
blocks for individual initiatives were still being addressed, for
that employees are the ones who take the heaviest burden
example the future vision for SMBC Group and the corporate
in the execution of plans and initiatives, and qualitative goals
values that act as the basis of the Group’s business as
are a valuable tool to boost employee motivation.
Messrs. Shinbo and Kadonaga pointed out. As a result, the
My second point is that while further efforts to optimize
discussions that followed had a level of depth which was not
cost structures must be undertaken as market conditions
present in earlier discussions. In addition, by using advance
surrounding the financial sector are becoming even more
briefings to address specific matters pertaining to individual
challenging, SMBC Group must also clarify where it will
initiatives and the Group CxOs themselves presenting
allocate capital including investments. My third point deals
material and conducting Q&A sessions during Board
with SMBC Group’s future business model. In other words,
meetings, discussions from a high vantage point were made
what kind of business model will SMBC Group strive to
possible. I also feel that in-depth discussions for each section
create given that levels of past growth can no longer be
of the New Plan’s growth investments were made possible by
realized through its traditional bank-centric model. Although
holding study sessions on SMBC Group’s capital policy and
identifying a solution to this predicament is by no means an
creating the opportunity for the Board to reach a consensus.
easy task, we engaged in discussions from the standpoint of
how and where management resources, such as capital and
personnel, should be allocated in SMBC Group’s efforts to
establish its future business model.
Nakashima Obtaining input from our outside directors at
the earliest possible stage was one of our key focus points
during the New Plan’s formulation. We also worked to further
enhance the quality of our discussions by not limiting them
Shinbo I agree that very active discussions regarding the
future of SMBC Group beyond the three years covered
to Board meetings, but also expanding them to include
advance briefings and study sessions. For example, in the
under the New Plan took place. As I have been involved
study sessions covering SMBC Group’s capital policy, for the
in the securities industry in my capacity as a lawyer, in
first time ever we organized a meeting between our outside
connection to growth strategies of SMBC Group’s securities
directors and investors/analysts. Mr. Shinbo highlighted
business I offered my thoughts on the topics of digitalization,
the importance of viewing matters from a shareholder’s
winning young customers, and strengthening the overseas
perspective earlier and this is a mindset that all of us at SMBC
presence. While there is no direct connection, I believe that
Group share. I felt the meeting was an excellent opportunity
SMBC GROUP ANNUAL REPORT 2020 039
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation DISCUSSION
Round-Table Discussion with
Outside Directors
for our outside directors to also share in this mentality.
initiative and apply an overly rigid approach to their execution.
As you can see, the New Plan has incorporated much of
The New Plan recognizes that the future is not fixed. It
the input we received from our outside directors, and I would
takes into consideration that events which result in material
like to take this opportunity to thank you all once again. Would
changes to the business environment, for example the
anyone like to add anything else?
Kadonaga Ms. Sakurai touched upon the concept of
corporate values earlier, and I think very highly of the
COVID-19 pandemic, will occur and the New Plan shows the
broad vision which SMBC Group will work towards through its
various initiatives that have been prepared in a manner which
allows for sufficient flexibility in their execution. As a result,
fact that “Integrity” was added to the Five Values, a set of
shared beliefs and behavioral guidelines for all SMBC Group
the initiatives’ varying levels of importance have been made
clear.
employees, in line with the formulation of the New Plan. As
the Five Values were already firmly embedded in the SMBC
Group mindset, I believe that introducing change to those
Kadonaga A phrase that I often use is: “do more better.” It
means that even within the same framework, a little more
values was a challenge. However, I believe that adding
effort can lead to a substantial improvement. However, I
“Integrity” to the Five Values will prove to be beneficial to
believe that it is important that everyone goes one step ahead
SMBC Group’s shareholders and investors considering
of this mindset when carrying out the New Plan. Especially
the increased attention being directed to ESG-themed
in terms of building SMBC Group’s future business model,
investments, by bringing together the Group’s employees,
frank and open discussions must continue, taking into
and helping attract talented personnel. This is a point that I
consideration factors such as how consumer behavior and
have repeatedly raised from the discussion phase of the New
society will change in the post-COVID-19 world.
Plan.
Shinbo I was also of the opinion that “Integrity” should
be added to the Five Values. For example, in recent years
Sakurai Digitalization is expected to further accelerate in the
post-COVID-19 world. The fact that SMBC Group was able to
launch initiatives aimed at winning the key digital points of
corporate fiduciary duty has drawn increasing interest and
various value chains prior to the commencement of this trend
SMBC Group established the Basic Policy for Customer-
will prove to be very beneficial given SMBC Group’s standing
Oriented Business Conduct as part of its efforts to ensure that
as a leading company in the cashless payment sector.
it was in compliance with its fiduciary duty. However, SMBC
Group employees most likely viewed the concept of SMBC
Group’s fiduciary duty strictly within the context of marketing
Nakashima Various opportunities, such as Board meetings,
will be used to conduct discussions concerning what
financial products. By incorporating “Integrity” into SMBC
SMBC Group’s business will look like in the post-COVID-19
Group’s Five Values, a set of values which forms the basis of
world with a range of counterparties, including our outside
the Group’s business conduct, a clear message was sent to
directors.
all SMBC Group employees that the concept of “Integrity”
To bring today’s discussion to a close, could you kindly
applies to all aspects of their actions, in short, that SMBC
share with us how, as an outside director, you will draw upon
Group must possess and act according to a strict code of
your personal experiences to contribute to enhancing SMBC
ethics.
Group’s corporate value?
Sakurai From the standpoint of preparing the New Plan’s
strategies, being able to discuss SMBC Group’s future vision
Sakurai I am reminded on a regular basis that for the concept
of an outside director to properly function, a company’s
was very valuable. Given the reality that the current business
Board must be comprised of a number of outside directors
environment is undergoing sudden and substantial change,
who have different backgrounds and areas of expertise. As
it is not realistic to focus on determining the details of each
such, I will leverage the experience that I have accumulated
040 SMBC GROUP ANNUAL REPORT 2020
To Our Stakeholders over the many years I have spent at a global corporation,
on realizing opportunities which will allow me to witness
experience which I continue to accumulate today, to help
employees’ honest thoughts and concerns.
enhance SMBC Group’s corporate value. There are a number
My second role is to point out instances where I feel
of differences in the mentality of Western and Japanese
that deliberations undertaken by the Board are becoming
firms. For example, Japanese firms view accountability as
short-sighted or narrow-minded. For example, if too much
being identical to responsibility, while in the West they are
focus is being directed towards SMBC Group’s direct
treated as two separate concepts. In the West, accountability
competitors, I attempt to expand the scope of the discussion
refers to the responsibility of an individual to explain a
while introducing applicable cases experienced by other
particular outcome and great importance is placed on who
is accountable. As such, this point must be clarified if a
companies.
My third role is to act as a catalyst for the candid
business is going to successfully operate in the West. This was
exchange of views and discussions. I feel that substantial
one of the perspectives from which I provided advice during
progress has been made in this regard compared to when
the introduction of the CxO framework.
I joined SMBC’s Board of Directors three years ago as an
Furthermore, a duty of an outside director is to represent
outside director, and I will continue doing my best to carry-
the company’s various stakeholders, so I pay careful attention
out this role.
to ensure my comments and questions during Board
meetings are made from the standpoint of SMBC Group’s
shareholders and customers. As such, in addition to regularly
Shinbo I believe that my input regarding legal matters is
expected given that I am a lawyer. Having said this, I have
checking the share price and reading analyst reports, I visit
made a conscious effort to refrain from dealing with the
an SMBC branch or use smartphone apps to understand
specific details regarding legal matters as I believe that is
SMBC Group from a customer’s perspective.
the responsibility of a corporate lawyer and not of an outside
As a member of the Nomination Committee, I am
director. Of course, I firmly believe that it is very important
entrusted with the heavy responsibility of assisting in the
that I put forward my honest opinion without any compromise
selection of SMBC Group’s leaders. To ensure that this
regarding issues which I feel contain significant risk for
process does not become arbitrary, committee members
SMBC Group. Lawyers need to establish a close relationship
have established a number of common evaluation criteria.
with clients but must take care not to lose their objectivity. I
When I interview candidates for leadership positions, I add
believe that using this objectivity to convey tough feedback
integrity and inclusion to the evaluation criteria so that
when needed is the role expected of me. This also applies
leaders fitting of SMBC Group are selected.
to my responsibilities as a member of the Remuneration
Kadonaga My career as a management consultant spans
more than 30 years. In addition, from 2012 I have served
Committee, and I do not hesitate to voice my concerns when I
feel that an irregularity exists with the existing compensation
framework.
as an outside director of Kao Corporation. Based on such
The final role of an outside director, and this applies to
experience, I believe I have the following three key roles.
situations when the company itself is going down an incorrect
My first role is to check whether the senior management
path, for example pursuing unattainable goals or strategies
team is pushing forward SMBC Group’s various strategies
involving too much risk, is to support individuals who are
based on an accurate understanding of the circumstances
attempting to correct the direction the company is pursuing
the Group’s employees are being placed under and whether
and stand with them against the senior management team.
the goals of those strategies have been determined in a
reasonable, rational manner. You can say that this makes
me an overseer of suitability, a role which I believe to be of
Nakashima Thank you very much for your valuable opinions
today. I look forward to receiving your frank, continuous input.
considerable significance. As such, I place great importance
SMBC GROUP ANNUAL REPORT 2020 041
To Our StakeholdersAbout SMBC GroupBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value Creation 042 SMBC GROUP ANNUAL REPORT 2020
Business Strategies for Creating Value Business Strategies for Creating Value
044 Group Structure
046 Retail Business Unit
050 Wholesale Business Unit
054 Global Business Unit
058 Global Markets Business Unit
SMBC GROUP ANNUAL REPORT 2020 043
To Our StakeholdersBusiness Strategies for Creating ValueAbout SMBC GroupCorporate Infrastructure Supporting Value Creation 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
Business
Units
Retail
Wholesale
Global
Global Markets
Banking
Leasing
Securities
Credit Cards and Consumer Finance
Other Business
Sumitomo Mitsui
Banking Corporation
SMBC Trust Bank
Sumitomo Mitsui
Finance and Leasing
SMBC Nikko
Securities
Sumitomo Mitsui
Card Company
SMBC
Japan Research
Sumitomo Mitsui DS Asset
Consumer Finance
Institute
Management
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
Head Office (CxO System)
CFO
Chief Financial Officer
CSO
Chief Strategy Officer
CRO
Chief Risk Officer
CCO
Chief Compliance Officer
044 SMBC GROUP ANNUAL REPORT 2020
Business Strategies for Creating Value Net Business Profit by Business Unit in FY2019
Retail
Wholesale
Global
Global Markets
234.5
¥
billion
409.2
¥
billion
371.2
¥
billion
¥
398.8
billion
17 %
29%
26%
28 %
Banking
Leasing
Securities
Credit Cards and Consumer Finance
Other Business
Sumitomo Mitsui
Banking Corporation
SMBC Trust Bank
Sumitomo Mitsui
Finance and Leasing
SMBC Nikko
Securities
Sumitomo Mitsui
Card Company
SMBC
Consumer Finance
Japan Research
Institute
Sumitomo Mitsui DS Asset
Management
Business
Units
Retail
Wholesale
Global
Global Markets
Head Office (CxO System)
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
CHRO
Chief Human Resources Officer
CIO
Chief Information Officer
CDIO
Chief Digital Innovation Officer
CAE
Chief Audit Executive
SMBC GROUP ANNUAL REPORT 2020 045
To Our StakeholdersBusiness Strategies for Creating ValueAbout SMBC GroupCorporate Infrastructure Supporting Value Creation Retail Business Unit
W e are witnessing significant opportunities for
expanding markets in the domestic retail banking
field, including the overarching trend of shifting from
savings to asset holding, the upcoming era in which
people consistently live to be 100, the spread of cashless
payments, and increasing digitalization.
Against this backdrop, we are striving to become
the most trusted and No. 1 Japanese retail finance
business. To this end, the Retail Business Unit was swift
to begin reforming its business models through means
such as transitioning to a customer-oriented wealth
management business and embracing cashless payments
and digitalization. In our wealth management, payment
service, and financing businesses, we are steadily growing
balances of stock-based assets, sales handled, and
consumer loans. Meanwhile, branch reorganizations
Retail Business
Unit
The top-class companies in banking, securities, credit card,
are enabling us to realize improvements in customer
and consumer finance industries that comprise the Retail
Business Unit are enhancing intra-Group coordination to
convenience alongside reductions in costs. External
institutions hold in high regard SMBC Group’s customer-
oriented business operations as well as the smartphone
address the financial needs of all individual customers,
applications of SMBC and Sumitomo Mitsui Card
striving to develop the most trusted and No. 1 Japanese
retail finance business.
Senior Managing Executive Officer
Head of Retail Business Unit
Naoki Tamura
Company, indicating a gradual increase in our ability to
achieve ongoing growth.
Under the new Medium-Term Management
Plan, the Retail Business Unit aims to establish the
most sustainable retail finance business in Japan. In
our primary businesses, we are proactively allocating
resources to growth markets, such as the cashless
payment and consumer finance markets as well as those
serving wealthy large-scale clients, as we seek to enhance
the services we supply to customers and otherwise bolster
competitiveness. At the same time, we are pursuing
higher levels of efficiency in the branch reorganizations
and administrative and middle- and back-office function
consolidation efforts implemented previously. By
drastically reforming our business processes through
these efforts, we aim to further improve customer
convenience while cutting costs. We are also endeavoring
to develop new businesses utilizing digital technologies
and IT in order to create new earnings opportunities amid
intensifying competition, thereby realizing ongoing growth
for the entire Retail Business Unit.
046 SMBC GROUP ANNUAL REPORT 2020
Business Strategies for Creating Value Contribution to Consolidated Net Business Profit
234.5 billion
¥
17%
FY2019
FY2019
Increase
(Decrease)*1
Gross profit (JPY bn)
1,257.7
Expenses (JPY bn)
1,025.2
(9.6)
+4.5
(Overhead ratio)
81.5%
+1.0%
Net business profit
(JPY bn)
ROE*2
RwA (JPY tn)
234.5
(13.9)
7.2%
12.3
(0.5)%
(0.4)
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figures exclude provision for losses on interest repayments, etc.
SMBC GROUP ANNUAL REPORT 2020 047
To Our StakeholdersBusiness Strategies for Creating ValueAbout SMBC GroupCorporate Infrastructure Supporting Value Creation
Retail Business Unit
Priority Strategy
1
Sustainable Growth in Wealth Management Business
In the Retail Business Unit, we revise resource allocations based on
the growth potential of specific market segments. In regard to high-
net-worth customers, we are strengthening sales capabilities through
the consolidation of Group banking, trust, and securities services
and appointing dedicated staff to increase our share of transactions
from business owners and other wealthy large-scale clients. These
efforts are part of our drive to promote the new SMBC Private Wealth
service brand. Meanwhile, our approach toward the mass affluent
segment, which is seeing growth in demand for asset building
services, entails transitioning to highly productive sales approaches
and models through digital and remote services promising significant
convenience to customers, in order to efficiently capture a share of
this vast, unexplored market. By expanding our balance of stock-
based assets and radically increasing efficiency, we will achieve
sustainable growth in wealth management business.
Priority Strategy
2
Balance of Stock-Based Assets
(JPY tn)
Impacts of
COVID-19 pandemic
+ 3 trillion
18.1
12.4
13.5
20
10
0
’16
’19
’22
(FY)
Pursuit of No. 1 Position in Payment Service Business
In our payment service business, we are committed to achieving
growth that outpaces that of the market by accelerating cashless
payment strategies and improving the convenience of our services for
both business operators and users alike. For business operators, we
have rolled out our stera next-generation cashless payment platform
and are working to grow our share among affiliated merchants. For
users, we aim to deliver convenient and beneficial services through
means such as the enhancement of application services and the
utilization of the Group’s shared V Point loyalty point system.
In the consumer finance field, a driver behind our growth,
we are steadily addressing financing needs, which are rising in
conjunction with the growth of cashless payment services. We also
seek to approach the new customer segments born out of changes in
the working population.
Sales Handled
(JPY tn)
Consumer Loan Balance
(JPY bn)
40
30
20
10
0
CAGR +16%
+10
trillion
20.3
14.5
2,000
+100
billion
1,800
1,758.3
1,791.6
1,600
0
’16
’19
’22
(FY)
’17/3
’20/3
’23/3
048 SMBC GROUP ANNUAL REPORT 2020
Business Strategies for Creating Value Priority Strategy
3
Online Merges with Offline Strategy
Points of contact with customers are rapidly shifting toward the
Internet. In light of this trend, the Retail Business Unit is transitioning
away from its prior business processes focused on face-to-face
interactions to adopt business models oriented toward online
interactions.
Part of this undertaking is streamlining work processes
through extensive application of digital and remote technologies,
which includes bolstering our artificial intelligence targeting and
digital tools. We are also augmenting digital and remote channels
in businesses that provide services to customers and coordinating
these channels with face-to-face consulting in order to improve
customer convenience in both online and offline settings.
Furthermore, improvements to the convenience of digital
Number of “SMBC Direct” Users*
(Thousands of people)
8,000
8,000
6,400
4,000
3,700
products and services will be pursued by linking Group applications
0
and otherwise utilizing Group infrastructure, expertise, and resources.
’16
’19
’22
(FY)
* Number of customers who have logged in SMBC Direct at least once every six months
Response to
the COVID-19
Pandemic
T he various measures being implemented to fight the
COVID-19 pandemic are having a massive impact on
people’s everyday lives. Moreover, we realize that financing,
payment, and other services provided by financial institutions
support people’s lives and are a part of social infrastructure. We
therefore see the ongoing provision of these services as our top
priority in the midst of this crisis.
In addition to keeping the branches of SMBC and other
companies operating, we are taking steps to support customers
COVID
19
RESPONSE
based on their individual needs. For example, SMBC Group companies offer financial products specifically for
customers who have been impacted by the pandemic. We are also bolstering our online services to enable
customers to perform various transactions without actually visiting one of our branches. Other efforts include
supplying Internet banking and credit card applications and conducting donation campaigns in which donations
are made to healthcare professionals based on Internet banking transaction amounts.
SMBC GROUP ANNUAL REPORT 2020 049
To Our StakeholdersBusiness Strategies for Creating ValueAbout SMBC GroupCorporate Infrastructure Supporting Value Creation Wholesale 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
Senior Managing
Executive Officer
Co-Head of Wholesale Business Unit
Gotaro Michihiro
Kimio Matsuura
050 SMBC GROUP ANNUAL REPORT 2020
F aced with Japan’s negative interest rate policy and a
continuously challenging operating environment, the
Wholesale Business Unit mustered the collective strength
of SMBC to deliver sophisticated solutions and carry out
operations with an extensive focus on profitability. It was
thereby able to maintain high levels of return on equity.
During the period of the previous Medium-Term
Management Plan, we achieved gains on loans for the first
time in 10 years due to our allocation of funds to financing
corporate acquisitions and other high-value-added
applications. In addition, we were No. 1 in terms of the
number of M&A advisory deals for the third consecutive
year, and steady growth was seen in the number of initial
public offerings in which we were the lead underwriter.
These successes indicate that we have effectively
established group-wide systems for delivering solutions
for improving the corporate value of our customers.
The new Medium-Term Management Plan calls
on the Wholesale Business Unit to fully leverage the
strength that is its group-based comprehensive solutions
capability to furnish solutions to the social issues and
difficult management issues of customers seen as social
structures and customers’ businesses transform during
and after the COVID-19 pandemic. Capitalizing on this
strength, we will pursue an unprecedented degree of
coordination between domestic and overseas bases
and Group companies and boldly allocate management
resources to growth fields.
The Wholesale Business Unit has also been
promoting digitalization through collaboration with
customers. Together with Toyota Motor Corporation, we
launched TOYOTA Wallet. We engaged in co-creation
with Komatsu Ltd. and other major companies. Moreover,
we launched the Biz-Create online business matching
service in addition to establishing the SMBC CLOUDSIGN
cloud-based electronic contract service. These are just
some of our unique initiatives in the digitalization field.
Going forward, we will continue to implement initiatives
for creating new businesses from the perspectives of
customers.
Also in the future, we will further improve our
strengths, including our keen ability to make proposals,
speed, and pioneering spirit, to provide high-value-added
solutions to customers and thereby contribute to the
growth of customers and of the Japanese economy.
Business Strategies for Creating Value Contribution to Consolidated Net Business Profit
409.2 29
billion
%
¥
FY2019
FY2019
Increase
(Decrease)*1
Gross profit (JPY bn)
Expenses (JPY bn)
641.5
284.4
(6.7)
(2.2)
(Overhead ratio)
44.3%
+0.1%
Net business profit
(JPY bn)
409.2
(0.9)
ROE*2
11.6%
(0.7)%
RwA (JPY tn)
17.4
+0.5
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figures exclude medium- to long-term foreign currency funding costs.
SMBC GROUP ANNUAL REPORT 2020 051
To Our StakeholdersBusiness Strategies for Creating ValueAbout SMBC GroupCorporate Infrastructure Supporting Value Creation Wholesale Business Unit
Priority Strategy
1
Group-Based Comprehensive Solutions
To bolster responsiveness to change in growth fields, a number of
SMBC
organizations were set up in the Wholesale Business Unit. Specifically,
these organizations were the Financial Solutions Division, which
SMBC
Nikko
Growing area
specializes in financial products; the Sustainable Business Promotion
Global M&A
Corporate restructuring
Department, which focuses on environmental, social, and governance
(ESG) issues and the United Nations Sustainable Development Goals
(SDGs); and the Corporate Digital Solution Department. By uniting
our front-office service, financial product, and solutions organizations
in addressing customers’ various issues and needs, the Wholesale
Business Unit will provide group-based comprehensive solutions.
In addition, we are developing systems for delivering swift
and high-quality proposals to large corporations active on the
global stage. As part of this process, we are enhancing our group-
based competitive edge in response to increasingly complex and
sophisticated management issues pertaining to such matters as
business portfolio revision and global M&A activities.
In Japan, corporate bankruptcies are on the rise, stimulating an
increase in corporate restructuring needs. SMBC Group was a step
ahead of the competition in developing a corporate restructuring
business foundation to cater to these needs. On this front, we
established SMBC Capital Partners Co., Ltd., a dedicated corporate
restructuring support company, in February 2020, and this company
is planning equity investments to the tune of ¥60.0 billion during the
period of the new Medium-Term Management Plan. The Wholesale
Business Unit views initiatives for improving the corporate value of
customers and ensuring their business continuity as part of its value
chain, and we will advance our corporate restructuring business on a
group-wide basis accordingly.
SMBC
Trust
Growing company
PE / LBO
Infrastructure
Investors business
SMFL
Settlement
Succession
Real estate
Sustainability
Digital
SMCC
SMBC VC
Reconstruction
Bankrupt
company
Corporate
reconstruction
investment
FA
(Sponsor selection)
Exit finance
DIP finance
Corporate
reconstruction
consulting
Real estate
brokerage
Initial public
offerings
SMBC Group
052 SMBC GROUP ANNUAL REPORT 2020
Business Strategies for Creating Value Priority Strategy
2
Corporate Digital Solutions
The Corporate Digital Solution Department was established in
FY2020 to support customers’ digitalization and new business
creation efforts. For example, we aim to supply highly convenient
digital services by increasingly linking the robotic process
automation, electronic contract, and other digital services of Group
companies.
Robotic
process
automation
Business
process
outsourcing
Electronic
contracts
Reinforcement of
digital services
Furthermore, we established Plari Town, Inc., a corporate digital
Biometrics
Settlement
platform operator, in May 2020. Utilizing this company’s platform, we
will accelerate our corporate digital marketing efforts and deliver a
diverse range of financial and non-financial services, including those
of external partners, as we advance initiatives for creating new value.
Digital
platform
Transform your business with us
Response to
the COVID-19
Pandemic
I n response to the COVID-19 pandemic, the Wholesale
Business Unit turned its attention to supporting customers
in continuing their business activities and providing easy
access to funding. To this end, we are conducting financing
Electronic Contract
Service Use
(Cases)
+ 80
%
1,981
and other initiatives utilizing the support funds set up
through a special operation of the Bank of Japan as well as
the systems of credit guarantee companies and municipal
governments. We are also flexibly revising financing
1,101
COVID
19
RESPONSE
procedures and assessment processes. Other efforts include
ʼ19/4
ʼ20/4
enhancing our lineup of online services to offer payment and financing processing services through Internet
banking schemes as well as business-matching services and cloud-based electronic contract services. Going
forward, we will continue to fight the COVID-19 pandemic so that we can keep providing the services people rely on
as a part of social infrastructure. At the same time, we aim to utilize digital technologies in our sales activities to an
even greater degree.
SMBC GROUP ANNUAL REPORT 2020 053
To Our StakeholdersBusiness Strategies for Creating ValueAbout SMBC GroupCorporate Infrastructure Supporting Value Creation Global Business Unit
Global Business
Unit
The Global Business Unit supports the global business
operations of domestic and overseas customers by
leveraging SMBC Group’s extensive global network and
products and services in which we possess strengths.
Deputy President and Executive Officer
Head of Global Business Unit
Masahiko Oshima
054 SMBC GROUP ANNUAL REPORT 2020
T he Global Business Unit faced a difficult business
environment over the course of the previous
Medium-Term Management Plan due to factors such
as US-China trade friction and the United Kingdom’s
decision to leave the European Union. Amidst such
adversity, we carried out various measures which
produced steady results, permitting us to maintain upward
trends in gross profit and net business profit. Specifically,
we further enhanced collaborations between SMBC and
SMBC Nikko Securities, advanced asset-turnover-based
businesses, and expanded our product line-up in areas
where we possess top-tier capabilities, such as aircraft
leasing and project finance.
Addressing customer needs will remain at the
heart of our operations under the new Medium-Term
Management Plan as we leverage SMBC Group’s
strengths to provide optimal solutions so that we can grow
together with customers as a global financial group.
To this end, we will expand our overseas securities
businesses and further enhance the competitiveness of
products, such as sustainable finance, and combine them
with the unique strengths SMBC Group has developed
over the years to deliver solutions that are tailor made to
address customers’ business issues and the issues facing
society. This will allow us to shift toward a business model
that is not overly dependent on expanding our balance
sheet by deepening customers’ trust in SMBC Group,
accelerating efforts to promote cross-selling and enhance
our standing as customers’ trusted business partner, and
improving our profitability and efficiency.
At the same time, we will focus on augmenting our
earnings capacity through the expansion of operations in
Asia and other growth markets. By deploying our Multi-
Franchise Strategy, we aim to incorporate the growth
of the Asian market while aggressively pursuing new
growth opportunities, such as acquisitions geared toward
obtaining new business platforms for the future.
Through such initiatives, we will boost the earnings
capacity of both Group companies and investees, generate
synergies, and heighten the Group’s overall strength.
In addition, we will take measures to reinforce business
platforms for supporting sustainable growth through
means such as reinforcing corporate governance systems,
diligently streamlining operational structures, and ensuring
the stable procurement of foreign currencies.
Business Strategies for Creating Value Contribution to Consolidated Net Business Profit
371.2
¥
billion
26
%
FY2019
FY2019
Increase
(Decrease)*1
Gross profit (JPY bn)
Expenses (JPY bn)
667.1
350.6
+26.2
+19.7
(Overhead ratio)
52.6%
+1.0%
Net business profit
(JPY bn)
ROE*2
RwA (JPY tn)
371.2
+3.3
8.1%
21.4
(1.6)%
+2.1
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figures exclude medium- to long-term foreign currency funding costs.
SMBC GROUP ANNUAL REPORT 2020 055
To Our StakeholdersBusiness Strategies for Creating ValueAbout SMBC GroupCorporate Infrastructure Supporting Value Creation Global Business Unit
Priority Strategy
1
Initiatives to Improve Profitability
The Global Business Unit is looking to enhance its corporate
investment banking business, which merges its banking business
with its securities business. To this end, we will fully capitalize on
Group strengths, such as our product/sector expertise and global
network, in order to bolster our ability to provide integrated, group-
wide solutions. Furthermore, we will develop multi-faceted business
relationships by addressing customers’ business issues, as well
climate change and other social issues, through our expertise in
areas such as sustainable finance, M&A advisory, and payment
services.
We will also pursue initiatives aimed at improving profitability
that do not require us to significantly expand our balance sheet.
Efforts to this end will aim to increase efficiency in terms of both
capital and assets, for example by adopting a rigorous focus on
profitability and strengthening our asset-turnover-based businesses’
focus on customers’ investment needs.
Priority Strategy
2
Global network
Sector expertise
Japanese
customer base
Pursue cross-selling
opportunities
by Leveraging
our strengths
Banking business
M&A advisory
Green finance
Loans, deposits,
payments
Product capabilities
Securities business
Address investors’ asset management needs
Improve profitability without overly depending
on expanding our balance sheet
Expansion in Asia, Other Growth Markets, and New Business Areas
Gross Profit in Indonesia
Looking to expand its operations in growth markets, the Global
(USD mn)
Business Unit is directing efforts toward Asia and other new business
areas.
In Indonesia, we are strengthening our business foundations
and developing financial service franchises centered on PT Bank
Tabungan Pensiunan Nasional Tbk (“BTPN”). We will enhance
our foundations for medium- to long-term growth by developing
relationships with mid-tier companies through intra-Group
collaborations, in addition to augmenting our digital banking
operations. The Global Business Unit is also expanding operations
in countries such as India, the Philippines, and Vietnam, while also
engaging in digital technology-related projects in Asia with the aim of
capturing the region’s growth.
Another area of focus is the acquisition of business platforms in
new growth markets, such as asset management.
1,200
1,000
800
600
400
200
0
056 SMBC GROUP ANNUAL REPORT 2020
BTPN
(profit booked based
on a 40% equity stake)
PT Bank Sumitomo
Mitsui Indonesia
Merger
100% of profit booked
+ 15
%
’15
’16
’17
’18
’19
’22
(FY)
Business Strategies for Creating Value Priority Strategy
3
Establishing Business Foundations That Meet the Needs
of a Global Bank
Our global operations are becoming more complex due to the increasing
speed at which the environment changes, for example market
fluctuations, geopolitical risks, and the heightening expectations of
regulatory authorities. To support such operations, the Global Business
Unit is prioritizing the allocation of resources to the reinforcement of its
corporate governance and risk management systems.
Furthermore, we will continue to diligently streamline our
Market fluctuations
Political/Geopolitical risks
Regulatory requirements
Proactive response to market fluctuations and
overseas regulatory requirements
Enhancement of
corporate governance
Diversification of foreign
currency procurement sources
operations by revising business promotion frameworks and
Response to credit risk
consolidating administrative functions so that we may secure resources
that can be allocated to priority fields and generate surplus funds
Generate resources by diligently streamlining operations
that can be invested in new businesses. For foreign currency funding,
without which the sustainable growth of our overseas businesses
cannot be realized, the focus will be on cost and stability as we diversify
procurement sources and enhance the quality of deposits, which
includes growing our share of the highly sticky deposits of non-financial
firms.
Response to
the COVID-19
Pandemic
T he Global Business Unit has established a COVID-19
response fund that extends credit at favorable rates
in order to support the cash flow needs of customers
impacted by the COVID-19 pandemic and to support
customers whose businesses contribute to efforts aimed
at preventing the virus from further spreading. We are also
contributing to the enhancement of the healthcare and
education systems of emerging market economies. As one
facet of these efforts, we have made donations to the Japan
© UNICEF/UNI329169/Ijazah
COVID
19
RESPONSE
Committee for UNICEF and other public organizations to support the development of healthcare systems and
vaccines.
We will devote our utmost efforts to support customers’ economic activities by maintaining the scope and
quality of our global operations so that we are able to continue addressing their financial needs, regardless of the
challenging overseas environment resulting from lockdowns and other factors.
SMBC GROUP ANNUAL REPORT 2020 057
To Our StakeholdersBusiness Strategies for Creating ValueAbout SMBC GroupCorporate Infrastructure Supporting Value Creation Global Markets Business Unit
T he Global Markets Business Unit is committed
to analyzing the various phenomena that occur
throughout the world based on the “3Is” of insight,
imagination, and intelligence in order to forecast the
market trends that will emerge in the future. We adopt this
approach based on the belief that it will create significant
value in our efforts to manage SMBC Group’s investment
portfolio and provide solutions to customers as market
professionals.
We also position the enhancement of our foreign
currency funding capabilities as a priority strategy. We are
therefore expanding the range of investors and funding
methods we utilize with the goal of providing reliable
support for SMBC Group’s overseas operations.
When formulating the new Medium-Term
Management Plan, the Global Markets Business Unit
instituted a massive restructuring of its organization from
a medium- to long-term perspective based on irreversible
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
changes in the operating environment, such as the
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
Masamichi Koike
prolongation of the low interest-rates seen around the
world and the advancement of technologies. The goal
of this restructuring was to further evolve our risk-taking
processes, which represent the unit’s core business, while
continuously heightening our ability to provide solutions to
customers.
The current market environment is ripe with
uncertainty, resulting in a rising sense of opaqueness. In
the face of such volatility, we will reevaluate markets from
an earnest perspective and, as market risk professionals,
exercise our commitment to supplying customers with
high levels of value.
Customer needs are becoming increasingly diverse,
as indicated by the advancement of the digitalization trend
and the growing interest in social issues. We therefore
aim to effectively address these diversifying needs and
contribute to the growth of customers and SMBC Group.
058 SMBC GROUP ANNUAL REPORT 2020
Business Strategies for Creating Value Contribution to Consolidated Net Business Profit
398.8
¥
billion
28
%
FY2019
FY2019
Increase
(Decrease)*1
Gross profit (JPY bn)
421.6
+60.6
Expenses (JPY bn)
56.2
+2.6
(Overhead ratio)
13.3%
(1.5)%
Net business profit
(JPY bn)
ROE*2
RwA (JPY tn)
398.8
+59.9
45.9%
+13.3%
5.3
+0.4
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figures exclude IRRBB (Interest-Rate Risk in the Banking Book).
SMBC GROUP ANNUAL REPORT 2020 059
To Our StakeholdersBusiness Strategies for Creating ValueAbout SMBC GroupCorporate Infrastructure Supporting Value Creation
Global Markets Business Unit
Priority Strategy
1
Flexible Portfolio Management in Response to Market Changes
At the Global Markets Business Unit, we are constantly collecting
and analyzing new information to fuel discussions and facilitate the
formulation of various scenario projects. We thereby develop the
capabilities to forecast the market trend in order to optimize our risk/
return ratio. The dynamic and flexible operations of SMBC Group
founded on proactive observation of market fluctuations are one of
its strengths.
Looking ahead, it can be anticipated that globally low interest
rates and technological progress will continue. In this environment,
we will continue to manage assets in developed and other countries
while exploring new revenue sources through means such as
branching out into the bonds of emerging countries and other
investment products and employing investment methods that take
advantage of technologies.
Turning point of
trend
Carefully-crafted
risk control
Bonds
Equities
Dynamic portfolio
rebalancing
Turning point of
trend
Priority Strategy
2
Enhancement of Solutions Provided through Marketable Financial
Overseas Sales and Trading Amounts
Products
The Global Markets Business Unit is expanding its product lineup
and enhancing coordination between domestic and overseas product
sales teams in order to respond to customers’ risk hedging and
investment needs.
In addition to heightening product provision capabilities
in response to the diversification and growing sophistication of
customer needs, we will focus on offering tailor-made solutions based
on risks associated with customer transactions and balance sheets.
We will also develop systems for coordinating and providing these
solutions on a global basis in the pursuit of further growth.
Meanwhile, the popularization of electronic transactions has
created a pressing need for improving platform convenience and
pricing capabilities. Accordingly, another focus will be cultivating
Quants.
(JPY bn)
120
80
40
0
060 SMBC GROUP ANNUAL REPORT 2020
Impacts of
COVID-19 pandemic
+25%
100.3
74.2
’16
’19
’22
(FY)
Business Strategies for Creating Value Priority Strategy
3
Strengthening of Foreign Currency Funding Capabilities
We seek to expand our investor base and diversify funding methods.
Initiatives toward this purpose have included issuing Japan’s first
covered bonds along with regular foreign currency bonds and
utilizing cross-currency repo transactions*. At the same time, we have
been taking advantage of the favorable funding environment to raise
Diversification of Funding Sources
First in Japan | Covered bonds
•Aaa rating •Low funding cost under stressed market
Senior
Covered
Subordinated
funding in a manner that is suited to the market environment through
(USD bn)
means such as increasing medium- to long-term currency swaps.
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.
* Cross-currency repo transactions are forms of foreign currency funding backed by
government bonds, etc.
20
15
10
5
0
’15
’16
’17
’18
’19
(FY)
Response to
the COVID-19
Pandemic
T o support customers amid the COVID-19 pandemic, we are building systems to enable
them to perform transactions with peace of mind without fear of missing out on the ideal
timing. Specifically, we are proactively utilizing electronic transactions to make it possible for
transactions to be performed anywhere. We are also staggering staff and shifts and spreading
employees across multiple bases. Securing staff for services that can have a particularly large
impact on customers, such as funding and market transactions, is being prioritized.
COVID
19
RESPONSE
SMBC GROUP ANNUAL REPORT 2020 061
To Our StakeholdersBusiness Strategies for Creating ValueAbout SMBC GroupCorporate Infrastructure Supporting Value Creation 062 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation Corporate Infrastructure Supporting
Value Creation
064 Corporate Governance
072 SMBC Group Global Advisors
074 Sumitomo Mitsui Financial Group Directors
078 Sustainability Management
084 Customer-Oriented Initiatives
087
Internal Audit
088 Risk Management
092 Compliance
094 Human Resources Strategy
098
IT Strategies
100 Communication with Stakeholders
102 Financial Review
SMBC GROUP ANNUAL REPORT 2020 063
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group
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.”
064 SMBC GROUP ANNUAL REPORT 2020
Initiatives for Improving Corporate Governance
2002
•Establishment of Sumitomo Mitsui Financial Group
•Voluntary establishment of Nominating Committee, Compensation
Committee, and Risk Committee as internal committees of the Board
of Directors
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
•Listing of shares on the New York Stock Exchange in order to improve
2010
transparency of financial reporting, increase convenience for
investors, and diversify fund procurement methods
2014 •Appointment of independent directors and independent auditors
based on stipulations of the Tokyo Stock Exchange
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
•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
2017
•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
2019
•Transition to the Company with Audit and Supervisory Committee
structure by core subsidiaries SMBC and SMBC Nikko Securities
•Decrease in the number of directors from 17 to 15 and increase in the
ratio of outside directors to 47%
2020 •Appointment of an outside director as the chairman of the Risk
Committee
Sumitomo Mitsui Financial Group’s Corporate
Governance System
In addition to fulfilling our responsibilities to stakeholders,
Corporate Governance System
which we consider to be “Our Mission,” SMBC Group has set
forth a Vision for our medium- to long-term goals and Five
Values as the core values to be shared by all executives and
employees, and will seek to make the Vision and Five Values
known as guiding principles for the group by all its directors
and employees. Also, the “SMFG Corporate Governance
Guideline,” a guideline for corporate governance, has been
Outside
directors
Internal,
non-executive directors
Inside
directors
Outside
expert
Chairman
Board of Directors
Focus on supervision of executive officers’ and directors’ execution of duties
Internal Committees
formulated and disclosed. We are promoting awareness and
Nomination Committee
Compensation
Committee
Audit Committee*
Risk Committee
(Optional)
Management Committee
Business execution decisions
Departments
Audit Dept.
* The Audit Committee holds the right to consent personal affairs
of Chief Audit Executive.
Reporting line
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.
Through the implementation of effective corporate
governance systems, we aim to prevent scandals and other
forms of corporate misconduct while also achieving ongoing
growth and medium- to long-term improvements in corporate
value. 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.
SMBC GROUP ANNUAL REPORT 2020 065
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Corporate Infrastructure Supporting Value Creation
Corporate Governance
Board of Directors
Role of the Board of Directors
The Board of Directors of the Company is primarily
directors 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
responsible for making decisions on the matters that are
two directors, and more than one-third of all directors should
within its legally mandated scope of authority, such as basic
be outside directors designated as independent directors
management policies, as well as for overseeing the exercise
based on the stipulations of the Tokyo Stock Exchange.
of duties of executive officers and directors. Authority for
As of June 26, 2020, the Board of Directors was
execution decisions other than those legally required to be
comprised of 15 directors. Ten of the 15 directors did not
made by the Board of Directors will, in principle, be delegated
have business execution responsibilities at the Company or
to executive officers. The purpose for this delegation is to
its subsidiaries, with seven of these 10 directors being outside
enhance the oversight function of the Board of Directors and
directors. The chairman of Sumitomo Mitsui Financial Group,
to expedite the exercise of duties.
who does not have business execution responsibilities, served
The Board of Directors works toward the realization of
as the chairman of the Board of Directors. This membership
“Our Mission” and the long-term growth of corporate value
ensures an objective stance toward supervising the exercise
and the common interests of the shareholders. Any action
of duties by executive officers and directors.
that may impede those objectives will be addressed with
Outside directors serve as chairmen and members of
impartial decisions and response measures.
the Company’s legally mandated and voluntarily established
Furthermore, the Board of Directors is responsible
committees when necessary, outside directors will request
for establishing an environment that supports appropriate
reports on compliance, risk management, or other matters
risk taking by executive officers. It will develop a system for
from the relevant divisions in order to promote appropriate
ensuring the appropriateness of SMBC Group’s business
coordination and supervision.
Number of directors
15
Non-executive
directors
10
%67
Outside
directors
Composition
of the Board
of Directors
7
%47
Internal directors
(executive)
5
Internal directors
(non-executive)
3
Areas of Expertise
of Outside Directors
Management
Finance / accounting
Law
Diplomacy
3
1
2
1
operations pursuant 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 oversight 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.
Composition of the Board of Directors
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
066 SMBC GROUP ANNUAL REPORT 2020
Internal Committees
Nomination Committee
The Nomination Committee is responsible for preparing
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
proposals regarding the appointment and dismissal
of the content of proposals for election, dismissal, or non-
of directors to be submitted to the general meeting of
reelection of the accounting auditor to be submitted to the
shareholders. This committee also deliberates on matters
general meeting of shareholders. Committee members
regarding personnel decisions pertaining to officers of
are appointed by this committee to perform audits of the
the Company and major subsidiaries and the selection of
operations and assets of the Company and its subsidiaries.
successors to the presidents of the Company and of core
The Audit Committee is comprised of two internal directors
subsidiaries. The Nomination Committee comprises one
and three outside directors. An outside director has been
internal director and five outside directors. In order to ensure
appointed to serve as the chairman of this committee in order
transparency in deliberations on officer personnel decisions,
to guarantee the objectivity of audits and independence from
an outside director has been appointed to serve as the
business execution. In principle, at least one member of this
committee is to possess specialized expertise in finance.
chairman of this committee.
Compensation Committee
The Compensation Committee is responsible for
Risk Committee
The Risk Committee is responsible for deliberation on matters
deciding policies for determining the compensation of
relating to environmental and risk awareness, the operation
executive officers and directors of the Company as well as
of the Risk Appetite Framework, and the implementation of
compensation amounts of individual executive officers and
risk management systems as well as other important matters
directors of the Company based on those policies. In addition,
pertaining to risk management and reporting to the Board of
this committee deliberates on the policies for determining the
Directors on these matters. The Risk Committee is comprised
compensation of the executive officers of major subsidiaries
of one internal director, two outside directors, and two outside
and the compensation amounts of individual executive
experts.
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
Masayuki Matsumoto
Outside director
Arthur M. Mitchell
Outside director
Shozo Yamazaki
Masaharu Kohno
Outside director
Outside director
Yoshinobu Tsutsui
Outside director
Katsuyoshi Shinbo
Outside director
Eriko Sakurai
Takeshi Kunibe
Jun Ohta
Toru Nakashima
Atsuhiko Inoue
Toru Mikami
Outside director
Chairman of the Board
Director
President
Director
Senior Managing Corporate
Executive Officer
Director
Director
Hirohide Yamaguchi*1
Outside expert
Tatsuo Yamasaki*2
Outside expert
Nomination Committee
(1 inside director,
5 outside directors)
Attendance at 4/5 meetings
Compensation Committee
(2 inside directors,
4 outside directors)
Audit Committee
(2 inside directors,
3 outside directors)
Risk Committee
(1 inside director, 2 outside directors,
and 2 outside experts)
⃝ Attendance at 15/15 meetings
Attendance at 5/5 meetings
⃝
Attendance at 6/6 meetings
⃝： Chairman ⃝： Member
Attendance at 5/5 meetings
Attendance at 5/5 meetings
Attendance at 5/5 meetings
Attendance at 5/5 meetings
⃝
⃝
⃝
⃝
⃝
⃝ Attendance at 15/15 meetings ⃝
Attendance at 4/4 meetings
⃝
Attendance at 4/4 meetings
Attendance at 5/6 meetings
Attendance at 6/6 meetings
⃝ Attendance at 15/15 meetings
Attendance at 6/6 meetings
Attendance at 6/6 meetings
Attendance at 6/6 meetings
⃝ Attendance at 12/12 meetings
⃝ Attendance at 15/15 meetings
⃝
Attendance at 4/4 meetings
⃝
⃝
Attendance at 4/4 meetings
Attendance at 4/4 meetings
SMBC GROUP ANNUAL REPORT 2020 067
*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
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Corporate Governance
Support Systems for Outside Directors
Meetings Only Attended by Outside Directors
The Company recognizes that outside directors require an in-
As described in the “SMFG Corporate Governance
depth understanding of the Group’s business operations and
Guideline,” outside directors may hold meetings that only
business activities. Accordingly, we endeavor to continually
outside directors may attend to serve as forums for building
supply outside directors with the information and insight
consensus and exchanging information with regard to matters
on business activities that are necessary to supervise
pertaining to corporate governance and businesses from an
management while also providing the opportunities needed
independent and objective standpoint. At recent meetings,
to fulfill their roles.
outside directors engaged in brisk exchanges of opinions
Initiatives to support directors in FY2019 included the
aimed at better exercising their functions.
following.
responsibility
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
· Participation in meetings of general managers of core Group
· Informal exchanges of opinion with internal officers by area of
· Explanatory forums on Board of Directors’ meeting agenda
items· Study sessions for outside directors led by external lecturers
· Small meetings with institutional investors to provide
· Training through SMBC Academy training website for
on topics such as corporate governance and financial
regulations
opportunities for understanding the perspectives of
stakeholders
items prior to Board meetings to assist in understanding of
employees
Discussions between Outside Directors and Investors and
Analysts
In formulating the Medium-Term Management Plan that
began in FY2020, we arranged discussions between outside
directors and investors and analysts to enable these directors
to receive direct input from the market. At the meetings, in-
depth discussions were carried out centered on such high-
interest topics as capital measures and the reduction of
strategic holdings. This input was used in developing the
Medium-Term Management Plan as well as capital measures
and strategic holdings reduction plans.
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
3
Donations
4
Major
Shareholder
• 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.
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.
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).
5
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 6 of the “SMFG Corporate Governance Guideline” for more information.
https://www.smfg.co.jp/english/aboutus/pdf/cg_guideline_e.pdf
068 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation Evaluation of the Board of Directors’ Effectiveness
The “SMFG Corporate Governance Guideline” contains provisions 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 determine whether or
not it is executing its duties in line with the guideline, and the results of these analyses and
evaluations are disclosed.
In FY2019, the evaluation focused on the three areas described 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 2020,
and interviews of internal directors were conducted thereafter. The primary subject of
interviews with internal directors was their expectations 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 whether 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.
Overview of Results of Evaluation of the Board of Directors’ Effectiveness
Targets
Improvement
proposals
PDCA
Cycle
Implementation
(1 year)
Effectiveness
evaluation
Role 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.” In FY2019, the Board of Directors took part
in discussions that carefully incorporated the input of outside
directors on important themes pertaining to the Medium-Term
Management Plan at an early stage in its development.
· Based on the executive-side discussions of the Management
Committee, 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.
· It is important for the Board of Directors to fulfill its role based
on the changes in the operating environment to occur during
and after the COVID-19 pandemic and supported by mutual
understanding among inside and outside directors.
Proceedings of the Board of Directors and Support Systems for
Outside 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 those in the previous fiscal year due to clear identification
of priority proposals and swift conclusion of discussions by
the chairman of the Board as well as other improvements to
proceedings.
· 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. In FY2019, the newly introduced informal
exchanges of opinion with internal officers helped foster mutual
understanding between outside directors and internal officers
and thereby contributed to livelier discussions at meetings of
the Board of Directors.
· It is desirable for the Company to continue arranging informal
exchanges of opinion between outside directors and internal
officers to better utilize the insight of outside directors and
contribute to more frank discussions.
Composition of the Board of Directors
· As of March 31, 2020, the Board of Directors consisted of 15
directors, seven of which were outside directors. Accordingly,
outside directors represented over 40% of all directors.
SMBC GROUP ANNUAL REPORT 2020 069
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Corporate Governance
Compensation Program
To facilitate the fulfillment of Our Mission and the realization
We also introduced the malus (forfeiture) of restricted
of Our Vision, SMBC Group’s medium- to long-term vision, we
stock and the claw-back of vested stock allocated to the
developed compensation program for Directors, Corporate
Executives under the Plans to restrain excessive risk-taking
Executive Officers and Executive Officers (the “Executives”)
and foster a prudent risk culture expected of a financial
and introduced Stock Compensation Plans as a part of
institution.
Executives compensation programs, for the purpose of:
Providing appropriately functioning incentives for Executives, strengthening
1
linkage with our short-, medium-, and long-term performance, and
Further aligning the interests of Executives with those of shareholders,
2
by increasing the weight of stock compensation and enhancing the
shareholding of our Executives.
Executives 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%
Compensation determined based on
SMFG’s medium-term performance, etc. (0%–150%)
Standard levels × SMFG’s medium-term performance, etc.
[Performance Indices]
Category
Performance Indices
Stock Compensation Plan I
Financial
Targets
ROCET1
Base expenses
CET1 ratio
Gross profit
• Restricted stock
Shareholder Value
Total shareholder return
Profit attributable to owners of parent
Qualitative
Customer satisfaction surveys, ESG initiatives, etc.
Stock Compensation Plan III
(Promotion reward plan)
• Restricted stock
* Variable compensation is capped at a maximum of 100% of total base salary
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
v
a
r
i
a
b
l
e
c
o
m
p
e
n
s
a
t
i
o
n
:
4
0
%
*
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
%
Providing more
appropriate
incentives for
executives
Further aligning
the interests of
Executives
with those of
shareholders
070 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation
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
Wholesale Business Unit, the Global 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.
SMBC GROUP ANNUAL REPORT 2020 071
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Corporate Governance
SMBC Group
Global Advisors
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.
At the SMBC Group Global Advisory Meeting in
November 2019, five SMBC Group Global Advisors and
members of the Management Committee participated in
lively discussions regarding the outlook for the business
environment and growth strategies that should be recognized
when formulating the new Medium-Term Management
Plan. In particular, with regard to the business trends in
the financial services sector, various opinions were raised
concerning sentiments pertaining to recent international
financial regulations and what strategies should be
implemented in the future.
In addition, discussions were held with outside directors
regarding the development of a global governance system.
SMBC Group has appointed Global Advisors to provide
Furthermore, brisk exchanges of opinion took place on topics
advice to it on global business and on political and economic
SMBC Group should consider in its global business, such as
issues in the Americas, EMEA and Asia. At SMBC Group
how to respond to the U.S.–China trade friction, geopolitical
Global Advisory Meetings, advisors inform the Management
risks, and rapid digitalization.
Committee of trends and developments in the financial sector
By proactively utilizing recommendations and advice
and the political and economic environments of respective
from SMBC Group Global Advisors, SMBC Group aims to
regions. Global Advisors also provide regular insight with
realize its Vision to be “a trusted global solution provider
respect to political and economic issues related to the
committed to the growth of our customers and advancement
formulation of strategies and key risks faced by SMBC Group.
of society” through the enhancement of Group management.
072 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation Dr. Andreas Dombret
Dr. Robert D. Hormats
Andrew N.Liveris
2010–2018 A member of the Executive Board, Deutsche
2020–Present Managing Director, Tiedemann Advisors
2017–2018 Executive Chairman, DowDuPont Inc.
Bundesbank
2005–2009 Vice Chairman Europe, Bank of America
2013–2020 Vice Chairman, Kissinger Associates
2006–2017 Chairman and CEO, The Dow Chemical Company
Cesar V. Purisima
Sir David Wright
Joseph Yam
2010–2016 Secretary of Finance of the Republic of the
2003–2017 Vice Chairman, Barclays
2017–Present A member of the Executive Council, Hong Kong SAR
Philippines
2004–2005 Secretary of Trade and Industry of the Republic
of the Philippines
1996–1999 British Ambassador to Japan
1993–2009 Chief Executive of the Hong Kong Monetary
Authority
SMBC GROUP ANNUAL REPORT 2020 073
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group
Corporate Governance
Sumitomo Mitsui Financial Group Directors
(As of June 26, 2020)
Chairman of the Board
Director
President (Representative Corporate
Executive Officer)
Group CEO
Director
President of SMBC
Director Senior Managing Corporate
Executive Officer
Group CRO
Director and Senior Managing
Executive Officer of SMBC
Takeshi Kunibe
Jun Ohta
Makoto Takashima
Haruyuki Nagata
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)
1982 Joined Sumitomo Bank
2009 Executive Officer of SMBC
2012 Managing Executive Officer of SMBC
2013 Managing Executive Officer of the
1982 Joined Sumitomo Bank
2009 Executive Officer of SMBC
2012 Managing Executive Officer
of SMBC
Company
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)
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
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)
074 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation
Director Senior Managing Corporate
Executive Officer
Group CFO, Group CSO
Director and Senior Managing
Executive Officer of SMBC
Director
Director of SMBC
Director
Director
Representative Director, Chairman of
SMBC Nikko
Toru Nakashima
Atsuhiko Inoue
Toru Mikami
Yoshihiko Shimizu
1986 Joined Sumitomo Bank
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)
1981 Joined Sumitomo Bank
2008 Executive Officer of SMBC
2011 Managing Executive Officer of SMBC
2014 Senior Managing Executive Officer of
1984 Joined Sumitomo Bank
2006 General Manager of Legal
Department of SMBC
2013 Co-General Manager of General
1978 Joined Sumitomo Bank
2004 Executive Officer of SMBC
2008 Managing Executive Officer of SMBC
2010 Director and Senior Managing Executive
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)
Affairs Department of the Company
Officer of SMBC
2015 Senior Manager of Head Office
of SMBC
Standing Corporate Auditor of the
Company
2012 Director and Deputy President of SMBC
2014 Director and Deputy Chairman of SMBC
2015 Resigned as Director of SMBC
2015 Advisor of SMBC Nikko Securities Inc.
2017 Director of the Company (to
(“SMBC Nikko”)
present)
2015 Representative Director, Deputy President
of SMBC Nikko
2016 Representative Director, President & CEO
of SMBC Nikko
2020 Representative Director, Chairman of
SMBC Nikko (to present)
SMBC GROUP ANNUAL REPORT 2020 075
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group
Corporate Governance
Sumitomo Mitsui Financial Group Directors
(As of June 26, 2020)
Director
Special Advisor of Central
Japan Railway Company
Director
Attorney at law, admitted in New
York, the U.S.A. and Foreign
Attorney in Japan
Director
Certified public accountant
Director
Former diplomat
Masayuki Matsumoto
Arthur M. Mitchell
Shozo Yamazaki
Masaharu Kohno
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
1976 Registered as an attorney at law,
1970 Joined Tohmatsu Awoki & Co.
1973 Joined Ministry of Foreign Affairs
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)
(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)
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)
076 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation
Director
Chairman of Nippon Life Insurance
Company
Director
Attorney at law
Director
Chairperson and CEO of
Dow Toray Co., Ltd
Yoshinobu Tsutsui
Katsuyoshi Shinbo
Eriko Sakurai
1977 Joined Nippon Life Insurance Company
2004 Director of Nippon Life Insurance
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
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)
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)
Note: Mr. Matsumoto, Mr. Mitchell, Mr. Yamazaki, Mr. Kohno, Mr. Tsutsui, Mr. Shinbo and Ms. Sakurai satisfy the requirements for an “outside
director” under the Companies Act.
Please see page 139 for information on SMBC's Board of Directors, Directors, Members of the Audit and Supervisory
Committee and Executive Officers.
SMBC GROUP ANNUAL REPORT 2020 077
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group
Realizing a Sustainable Society
SMBC Group revised Our Mission to include the statement
“We contribute to a sustainable society by addressing
environmental and social issues.” This change was made to
clearly indicate the Group’s stance toward making even larger
contributions to the healthy development of society.
In conjunction with the revision of Our Mission, we
established the SMBC Group Statement on Sustainability
to indicate our basic stance toward contributing to the
realization of a sustainable society along with “SMBC
Group GREEN×GLOBE 2030,” a 10-year plan that extends
to 2030. This statement and plan will guide us in pursuing
sustainability.
Past
Dedication to Sustainability Seen
in Predecessors of Mitsui and Sumitomo
Recognition of Current Conditions
Present
and Our Role
2020–2030
Society We Aim to Achieve
Inheriting the dedication to sustainability that has been a part of
the Mitsui and Sumitomo traditions for 400 years,
SMBC Group will contribute to the realization of sustainability
based on its three priority issues (materiality),
“environment” as a corporate citizen that protects the green earth,
as well as on “community” and “next generation” as a member of society.
• Innovation of business practice • Important developer of financial infrastructure
Predecessor
of Mitsui
Uki-e Suruga-cho gofukuya zu
(Mitsui Bunko Collection)
• Technological innovation in copper smelting • Afforestation activities for the beautification of mountains
Predecessor
of Sumitomo
Left: Besshi Copper Mine in 1881 (Sumitomo Historical Archives Collection)
Right: Current Besshi Copper Mine (Sumitomo Forestry Co., Ltd. Collection)
SMBC Group GREEN×GLOBE 2030
Key Pillars of the Plan
1. Sustainability initiatives that are directed toward our
customers/society.
2. Internal initiatives that contribute to
Sustainability management.
3. Enhance engagement with investors.
Example Targets
Green finance
10 trillion
¥
Reduction of CO2 emissions
30
% reduction
(SMBC vs. FY2018)
Development of communities related to
environmental and social issues
Provision of financial literacy education
Aggregate total to 1.5 million people
Priority Issues
(Materiality)
Environment
Foundation of the society
we aim to achieve
Community
Social safety net
to help the society
we aim to achieve
work smoothly
Next
Generation
Presence that makes society
better and passes it on
to future generations
Definition of Sustainability
Creating a society in which today’s
generation can enjoy economic prosperity
and well-being,
and pass it on to future generations
Sustainable
Society
Sustainability
Management
Our Approach
Currently, we are facing various social issues on a global
scale, and there is thus a need for a united effort between
governments, companies, and people to work toward the
realization of a sustainable society.
On this front, SMBC Group has established the Corporate
Sustainability Committee, which is chaired by the Group CEO.
Under the strong commitment of top management, SMBC
Group is promoting sustainability management.
078 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation SMBC Group Statement on Sustainability
Throughout its 400-year history,
SMBC Group has continuously upheld its commitment to sustainability.
We hereby declare that we will drive forward
our efforts to make sustainability a reality.
Past
Dedication to Sustainability Seen
in Predecessors of Mitsui and Sumitomo
Present
Recognition of Current Conditions
and Our Role
2020–2030
Society We Aim to Achieve
Inheriting the dedication to sustainability that has been a part of
the Mitsui and Sumitomo traditions for 400 years,
SMBC Group will contribute to the realization of sustainability
based on its three priority issues (materiality),
“environment” as a corporate citizen that protects the green earth,
as well as on “community” and “next generation” as a member of society.
• Innovation of business practice • Important developer of financial infrastructure
Uki-e Suruga-cho gofukuya zu
(Mitsui Bunko Collection)
• Technological innovation in copper smelting • Afforestation activities for the beautification of mountains
Predecessor
of Mitsui
Predecessor
of Sumitomo
Left: Besshi Copper Mine in 1881 (Sumitomo Historical Archives Collection)
Right: Current Besshi Copper Mine (Sumitomo Forestry Co., Ltd. Collection)
SMBC Group GREEN×GLOBE 2030
Key Pillars of the Plan
1. Sustainability initiatives that are directed toward our
customers/society.
2. Internal initiatives that contribute to
Sustainability management.
3. Enhance engagement with investors.
Example Targets
Green finance
10 trillion
¥
Reduction of CO2 emissions
30
% reduction
(SMBC vs. FY2018)
Development of communities related to
environmental and social issues
Provision of financial literacy education
Aggregate total to 1.5 million people
Priority Issues
(Materiality)
Environment
Foundation of the society
we aim to achieve
Community
Social safety net
to help the society
we aim to achieve
work smoothly
Next
Generation
Presence that makes society
better and passes it on
to future generations
Definition of Sustainability
Creating a society in which today’s
generation can enjoy economic prosperity
and well-being,
and pass it on to future generations
Sustainable
Society
SMBC GROUP ANNUAL REPORT 2020 079
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Sustainability Management
Environment
Environmental Initiatives
The global environment is an important asset that is shared by all of humanity, regardless of region or age, and a healthy environment is
prerequisite to the realization of a sustainable society. SMBC Group is earnestly engaging with climate change and various other environmental
issues. By helping resolve such issues through our business, we aim to ensure that we can pass on a healthy environment to future generations.
Target: Green Finance Amount
10trillion (by FY2029)
�
Tenpoku Wind Farm
Photograph provided by Eurus Energy Holdings Corporation
Sustainable Finance
SMBC Group is committed to the resolution of environmental and social issues through
its business. One initiative for addressing financial issues is the provision of green
finance specifically designed for environment-related initiatives. We have set the target
of investing ¥10 trillion through green finance over the decade leading up to FY2029.
For example, we are helping promote 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 companies 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, the new Sustainable Business Promotion Department established
within the Wholesale Business Unit and the SDGs Finance Department inside of SMBC
Nikko Securities’ Capital Markets Division are working to address environmental and
social issues through finance together with customers.
ESG-Minded Financing Policies
SMBC Group has disclosed financing policies for businesses and sectors with a high
risk of significantly impacting the environment or society. Major subsidiaries (SMBC,
SMBC Trust Bank, Sumitomo Mitsui Finance and Leasing, and SMBC Nikko Securities)
are introducing these policies according to their business.
Going forward, we will continue to engage with customers and various other
stakeholders while constantly considering the need to revise our financing policies as
necessitated by the operating environment.
Businesses and Sectors for Which Policies Have Been Disclosed
• Coal-fired power generation • Hydroelectric generation • Oil and gas • Coal mining
• Tobacco manufacturing • Natural conservation areas • Palm oil plantation development • Deforestation
• Manufacturing of cluster bombs and other weapons of destruction
For more information, please refer to Sumitomo Mitsui Financial Group’s corporate website.
https://www.smfg.co.jp/english/sustainability/materiality/environment/risk/
080 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation Response to Climate Change (Announcement of Support for TCFD)
SMBC Group announced its support of the Task Force on Climate-related Financial
Disclosures (TCFD) in December 2017, and we are performing climate change scenario
analyses and working together with customers to address the issues caused by 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. We
are planning to release a TCFD report (scheduled for August 2020) while making efforts
to enhance our disclosure of information.
Target: Coal-Fired Power Generation Loans
Outstanding balance of
0 (by FY2040)
�
For more information on initiatives regarding the recommendations of the TCFD, please refer to Sumitomo Mitsui Financial Group’s corporate website.
https://www.smfg.co.jp/english/sustainability/materiality/environment/climate/
Category
Initiatives
Governance
•Establishment of Group environmental policies
•Reflection of climate change response measures in management strategies via the Corporate Sustainability Committee
•Reports on climate change risks at the Risk Committee, a committee positioned within the Board of Directors, and the
Management Committee
Physical Risks
•Analyses of anticipated water damage-associated credit-related expenses to be incurred in SMBC’s domestic operations
under the Representative Concentration Pathways (RCP) 2.6 scenario (2°C scenario) and RCP 8.5 scenario (4°C scenario);
aggregate costs of ¥30.0 billion–¥40.0 billion to be incurred leading up to FY2050
Strategy
Transition Risks
•Analyses of credit-related costs to be incurred in energy, power, and other sectors by SMBC and overseas subsidiaries under
the International Energy Agency’s Sustainable Development Scenario; increase in annual costs of ¥2.0 billion–¥10.0 billion
to be seen leading up to FY2050
•Estimated carbon-related asset (power, energy, etc.) exposure ratio: 6.9% of all loans*1
Opportunities
•Total financing of renewable energy projects of ¥630.0 billion achieved in FY2019
•Issuance of bonds based on the guidelines of the International Capital Market Association and the Ministry of the
Environment, Government of Japan
Risk Management
•Climate change risks positioned among Top Risks and stress test impact analyses conducted
•Disclosure of financing policies for sectors with high climate change impacts (coal-fired power generation, oil and gas, coal
mining, etc.)
•Assessment of social and environmental risks based on the Equator Principles
Metrics and Targets
•Total of �10 trillion in green financing to be conducted from FY2020 to FY2029
•CO2 emissions volumes of SMBC to be reduced by 30% from FY2018 by FY2029
•Outstanding coal-fired thermal power generation loans to be reduced to zero by FY2040 (applicable to project finance*2)
*1 Excludes loans for renewable energy projects to provide a more accurate picture of transition risk exposure
*2 Excludes projects entailing technologies pertaining to carbon recycling and other projects that contribute to the realization of a low-carbon society
SMBC GROUP ANNUAL REPORT 2020 081
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Sustainability Management
Social
Community
As people live and the economy advances, communities to form connections between proponents in these areas and thereby encourage mutual
support and enable each other to act in peace of mind are needed. SMBC Group continues to contribute to communities and society and to fulfill
our social responsibility as an entity that acts as a member of these communities.
GREEN×GLOBE Partners
The various environmental and social issues we face on a global scale are so massive
that it is impossible for them to be resolved by one individual person or company.
However, if people, companies, government agencies, and academic institutions can
team up, united under a shared sense of conviction, we can take effective steps toward
the resolution of these issues.
Based on this ambition, SMBC Group established GREEN×GLOBE Partners, a
community for encouraging a wider range of people and companies to actively work
together to resolve environmental and social issues.
SMBC Group aims to help contribute to resolve social and environmental
issues together with customers through initiatives such as broadcasting a variety of
meaningful information arising out of its collective insight.
Website screenshot
Contributions to Communities and Societies Impacted by the COVID-19 Pandemic
SMBC Group has declared it intent to donate ¥1.5 billion to various organizations to
help realize its desire for every customer, community, and society impacted by the
COVID-19 pandemic to be able to go back to living healthily and with peace of mind as
quickly as possible. In addition, we instated a matching gift scheme in which donations
from Group officers and employees for supporting NPOs combating the pandemic are
matched by the Company.
Recipients of these donations will include medical institutions and related
organizations fighting to combat the spread of the virus and working to create an
© UNICEF/UNI329169/Ijazah
effective treatment and organizations helping develop medical systems in emerging
nations. In addition, we are conducting donations to support culture and the arts given
the difficulty of maintaining operations as groups in this field are forced to refrain from
holding events. These donations to culture and the arts are founded on our belief that
mental health is important in these uncertain times.
By supporting communities and society as a whole, we aim to help shape an
empowered world in which everyone can live with peace of mind.
New Japan Philharmonic
082 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation Next Generation
Ensuring the sustainability of our society and economy amid the changing social environment will require the cultivation of human resources who
can support society with the necessary knowledge and technologies. SMBC Group is promoting sustainability by fostering the next-generation
human resources and industries that will shape the society of the future together with us.
Financial Literacy Education
Capitalizing on its insight and expertise as a comprehensive financial group to
contribute to society, SMBC Group is providing financial literacy education. We aim to
supply such education to 1.5 million people by FY2029.
SMBC Consumer Finance has been holding PROMISE Financial and Economic
Educational Seminars at its 17 Customer Service Plazas nationwide since FY2011. The
aggregate number of participants in these seminars surpassed 1 million in FY2019.
SMBC Consumer Finance is also expanding the educational programs it provides
in response to the diversifying needs of participants. For example, it is coordinating
with other Group companies to offer education on cashless payments and wealth
management.
By providing financial literacy education to a wide range of age groups, from
children to adults, SMBC Group will help build a society in which people can live with
peace of mind by acquiring accurate knowledge pertaining to finances.
New Business Support Programs
To support next-generation businesses, SMBC Group is advancing the “Mirai” program.
Through this program, we solicit business plans from people aspiring to commercialize
some new idea or technology. A wide range of opportunities are provided to individuals
whose plans passed the judging process, including business development support from
advisors, networking assistance, and financial aid.
By offering such support to start-ups and people looking to launch enterprises, we
aim to form ties between companies and investors and thereby stimulate their growth
and innovation and contribute to the development of next-generation industries.
By supporting communities and society as a whole, we aim to help shape an
Target:
Financial Literacy Education Program Participants
1.5
million (by FY2029)
Educational materials used in seminars
empowered world in which everyone can live with peace of mind.
“Mirai” program pitch contest
SMBC GROUP ANNUAL REPORT 2020 083
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Corporate Infrastructure Supporting Value Creation
Customer-Oriented
Initiatives
Our Approach
SMBC Group companies are united in their efforts for
customer experience (CX) 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.”
084 SMBC GROUP ANNUAL REPORT 2020
CX Improvement System
We have established the CX Improvement Subcommittee as
well as the CX Improvement Committee, through which we
are advancing initiatives, reinforcing management systems,
and promoting Group coordination related to customer-
oriented business conduct.
Outside experts are invited to serve as advisors at
meetings of the CX Improvement Subcommittee, where
information is exchanged on how to fully entrench a
customer-oriented mindset. Meanwhile, the CX Improvement
Committee, which shares members with the Group
Management Committee, deliberates on concrete measures
based on reports from the CX Improvement Subcommittee.
Incorporation of Customer Feedback into Management
Holding Company (Sumitomo Mitsui Financial Group)
CX Improvement Committee
Instruct
Report
CX Improvement Subcommittee
Verify
Report / Share
Group Companies
Information gathering
Analysis
Feedback
Improvement activities
Customer
Declaration of Compliance with ISO 10002
SMBC, SMBC Nikko Securities, 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.
Customer-Oriented Business Initiative
Based on the Principles for Customer-Oriented Business
Conduct (a guideline on fiduciary duties) released by the
Basic Policy for Customer-Oriented Business Conduct in
the Retail Business Unit
Based on the Sumitomo Mitsui Financial Group’s Basic Policy
Financial Services Agency, SMBC Group* formulated its
for Customer-Oriented Business Conduct, the Retail Business
Basic Policy for Customer-Oriented Business Conduct and
Unit shall adhere to the following conduct policies in offering
the Basic Policy for Customer-Oriented Business Conduct in
service as a retail company that is responsible for providing
the Retail Business Unit.
wealth management and asset building services for individual
Basic Policy for Customer-Oriented Business Conduct (Excerpt)
SMBC Group’s Customer-Oriented Business Conduct
As one part of “Our Mission,” it is stated that “We grow and
prosper together with our customers, by providing services of
greater value to them.” Based on the spirit of this mission, we
have defined our Five Values, a list of five key words that includes
“Customer First” (always think based on a customer-oriented
perspective and provide value based on the individual needs
of customers), shared by all the executives and employees of
SMBC Group.
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 129–130.
customers.
In accordance with these policies, the Retail Business
Unit shall implement a plan-do–check-act (PDCA) cycle
that entails 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.
SMBC GROUP ANNUAL REPORT 2020 085
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Customer-Oriented Initiatives
Disclosed Indicators
Increase in balance of investment assets
1
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
8 Amount of investment trusts and automatic foreign currency deposits
9 Tsumitate Nisa account numbers, balances, and ratio of new users
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 balance amounts
15 Risks and returns of investment trusts with top-ranking balance amounts
16 Acquisition status of FP qualifications
Performance with Regard to Disclosed Indicators
Increase in Balance of Investment Assets (Indicator 1)
In FY2019, the total balance of investment assets for SMBC,
Number of customers using wealth management products
(Indicator 2)
We continue to increase the number of customers using
wealth management products by working to accurately
address customers’ needs related to protecting or building
assets.
Number of customers using wealth management products (left axis)
Number of customers commencing new transactions (right axis)
(Tens of thousands of people)
(Tens of thousands of people)
30
20
10
0
’16/3
’17/3
’18/3
’19/3
’20/3
Number of investment trust and automatic foreign currency deposit
accounts (Indicator 7)
To respond to the needs of customers seeking to begin
400
350
300
250
SMBC Nikko Securities, and SMBC Trust Bank continued to
acquiring assets, we have been aggressively proposing
grow due in part to the continuation of customer-oriented
investment trust products that allow for small-sum
initiatives focused on medium- to long-term diversified
investments as well as time-dispersed investments in
investment.
automatic foreign currency deposits. As a result, steady
growth has been achieved in the number of investment trust
and automatic foreign currency deposit accounts.
Increase in balance of investment assets (since Apr. 2013, aggregated, left axis)
Increase in balance of investment assets (year-on-year, right axis)
Number of investment trust and automatic foreign currency deposit accounts
Of which, customers under 50
(JPY bn)
+8,000
+6,000
+4,000
+2,000
+0
(JPY bn)
+1,800
(Tens of thousands of accounts)
30
+1,200
20
+600
+0
10
0
’15
’16
’17
’18
’19
(FY)
’15
’16
’17
’18
’19
(FY)
Note: Figures represent the combined total for the Retail Banking Unit of SMBC and the Retail
Note: Automatic foreign currency deposit transactions were commenced in April 2015.
(Private) of SMBC Nikko Securities.
086 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation
Overview of the Group’s Internal Audit Framework
The Department has been established under the Audit Committee and is independent
from business units, compliance unit 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
Chief Audit Executive
Audit Dept.
Group Companies
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.
Note: The Audit Committee holds the right to consent personal affairs of Chief Audit Executive.
Enhancement and Effectiveness of Internal Audit
The Department has adopted auditing methods in accordance with the Institute of
Internal Auditors (IIA) standards,* conducts risk-based audits, and expands the same
approach to Group companies. To implement effective and efficient internal 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 assurance 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)).
SMBC GROUP ANNUAL REPORT 2020 087
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group 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.
088 SMBC GROUP ANNUAL REPORT 2020
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
requirements 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 functions 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.
Risk Appetite Framework Positioning
Environment/Risk View
Top Risks
Risk Register
KRE (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*1
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
Risk Appetite Framework Positioning
Environment/Risk View
Top Risks
Risk Register
KRE (Key Risk Events)
Risk Appetite
Framework
Stress Testing
Two pivots of
our business
management
Business
Strategy
Risk Appetite Composition
Categories
Top Risks
SMBC Group identifies risks that threaten to significantly
Soundness
Profitability
Liquidity
Credit
impact management as Top Risks.
Market
Operational
Conduct*1
The selection of Top Risks involves comprehensive
Established for each category
screening of risk factors, evaluation of each risk scenario’s
Risk Appetite Statement
Risk Appetite Measures
possibility of occurrence and potential impact on
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
*1 Conduct Risk: Conduct risk is the risk that our conduct negatively affects
customers, market integrity, effective competition, public interest, and SMBC
Group’s stakeholders, through acts that violate laws and regulations or social
norms.
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 formulating business
strategies and management policies. These risk appetites
are set based on Top Risks that threaten to significantly
impact management and on risk analyses (stress testing) 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. For example,
overall risk capital*2 has been selected as an indicator for
risk appetite, which displays the soundness of SMBC Group.
Overall risk capital is the aggregate of the risk capital amounts
for each risk category. Management standards have been set
management, and discussion 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.
Volatile financial and economic environment
Intensification of the international political confrontation
Decline in Japan’s social vitality
Ideological and religious conflicts
Pandemics
Large-scale earthquakes
Top Risks
Ceased operation of information systems due to cyber attacks
Climate change
Industry structure changes stemming from technological progress
Legal or compliance-related incidents
Materialization of risks impeding implementation of strategies (lack
of human resources, etc.)
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 113 for Top Risks.
Stress Testing
At SMBC Group, we use stress testing to analyze and
for the upper limit for overall risk capital based on group-wide
comprehend the impact on SMBC Group’s businesses of
management constitution. Overalll risk capital levels are thus
changes in economic or market conditions, in order to plan
monitored throughout the course of each fiscal year to clearly
and execute forward-looking business strategies.
indicate risk-taking capacity and promote the sound taking of
In our stress testing, we prepare multiple risk scenarios
risks.
including macroeconomic variables such as GDP, stock
In addition, specific risk appetite indicators have been
prices, interest rates, and foreign exchange rates based on
set for credit risk, market risk, liquidity risk, and other risk
the aforementioned Top Risks, discussions with experts and
categories to facilitate appropriate management based on a
related departments.
quantitative understanding of risk appetite.
When developing business strategies, we set out
*2 Risk capital: The amount of capital required to cover the theoretical
maximum potential loss arising from risks of business operations.
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.
SMBC GROUP ANNUAL REPORT 2020 089
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Risk Management
During a fiscal year, we will undertake stress testing
their business, and these risks are reflected in business
on a flexible basis to assess the potential impact on our
strategies after they have been evaluated and the adequacy
business and to take the appropriate response in case a
serious risk event occurs. For example, stress tests have
been conducted with regard to the intensifying trade conflict
between the US and China, and the COVID-19 pandemic to
Key Risk Events
of measures for controlling them has been verified.
Key Risk Events (KRE), external events that indicate the
verify the soundness of SMBC Group’s capital and confirm
increased threat of risks, have been identified to ascertain the
the appropriate actions to be taken.
symptoms of the potential risks. KRE are utilized to analyze
In addition, we conduct detailed stress testing for
and assess how likely similar cases will occur in SMBC Group
individual risks such as credit risk, market risk, and liquidity
and what effects such similar cases will have on SMBC Group,
risk, so as to decide and review risk-taking strategies.
and to enhance our risk management system.
We are also in line with the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD).
As part of our efforts in this regard, we have included climate-
related risk*3 in our Top Risks, and scenario analyses on
physical and transition risks have been conducted to estimate
Risk Management System
Based on the recognition of the importance of risk
management, the group-wide basic policies for risk
management are determined by the Management Committee
the potential credit-related expenses.
before being authorized by the Board of Directors in order
*3 Climate-related risk: Natural disasters resulting from extreme weather
(physical risks) and carbon-related stranded assets due to the transition to a
low-carbon society (transition risks) and so forth.
Please see page 081 for information on our approach to
climate change.
Risk Register
A risk register is formulated by each business unit for the
to have top management play an active role in the risk
management process.
In accordance with these basic policies for risk
management, 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
purpose of realizing more sophisticated risk governance and
effectiveness of these systems.
enhancing business units’ risk ownership. In formulating
Furthermore, SMBC Group is strengthening group-wide
these registers, business units communicate with risk
risk management systems through the Group CRO Committee
management departments to identify the risks present in
and the Global CRO Committee.
Response to
the COVID-19
Pandemic
S MBC Group has considered pandemics as one of Top Risks. In response to the COVID-19
pandemic, we quickly recognized the increase in liquidity risk with the framework which
we were regularly utilizing to detect a sign of change.
Accordingly, we held Extraordinary ALM committee and closely shared the related
information among the relevant divisions. After various verifications, we enacted a policy of
meeting the customers funding needs as much as we can.
Furthermore, stress testing was used to quantitatively assess the adequacy of capital
and liquidity levels based on the potential for the prolongation of the pandemic. It was thereby
reaffirmed that the Group is able to guarantee financial soundness even under high-stress
circumstances.
Meanwhile, the trend toward teleworking and other changes in workstyles prompted by
the pandemic bring with them concern for cyber attack risks. We are combating these risks by
strengthening security precautions and implementing measures that thoroughly enforce key
information management considerations.
Various measures are carried out after such verifications and countermeasures are
discussed by Executive Committee and Risk Committee.
COVID
19
RESPONSE
090 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation SMBC Group’s Risk Management System
Holding Company (Sumitomo Mitsui Financial Group)
External Audit
Audit Dept.
Board of Directors
Risk Committee
Audit Committee
Management Committee
Group CRO
Risk Management Committee
ALM Committee
Credit Risk Committee
Group CRO Committee
Global CRO Committee
Departments Responsible for Risk Management
Group Companies
Definition of SMBC Group’s Three Lines of Defense
The Basel Committee on Banking Supervision’s “Corporate
three lines of defense with the aim of achieving more effective
governance principles for banks” recommends “three lines of
and stronger risk management and compliance systems
defense” as a framework for risk management and
through the clarification of roles and responsibilities.
governance. Based on this framework, we have defined our
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 compli-
ance
• 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 effective-
ness 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.
SMBC GROUP ANNUAL REPORT 2020 091
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Corporate Infrastructure Supporting Value Creation
Compliance
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 entrench such practices into our
operations as we aim to become a truly outstanding
global group.
092 SMBC GROUP ANNUAL REPORT 2020
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
operations on a group-wide and global basis. 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
comprehensively 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 from the perspective of group-based
management. 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.
From the perspective of global-based management,
compliance departments for major overseas offices have
been reorganized within the Compliance Unit, which
facilitated to develop an integrated group-based compliance
management framework for overseas offices.
Compliance Systems at SMBC Group
Holding Company (Sumitomo Mitsui Financial Group)
Board of Directors
Audit Committee
Group Management Committee
Audit Dept.
Compliance Committee
Group CCO
Compliance Dept.
Group Companies
Initiatives for Supporting Healthy Risk Taking and
Appropriate Risk Management
In order for companies to coexist with society and develop
sustainable growth, it is crucial to take an appropriate amount
of risks and to maintain appropriate risk management,
including compliance. In particular, financial institutions
Response to Anti-Social Forces
SMBC Group has established a basic policy stipulating that all
should emphasize compliance and risk management,
Group companies must unite in establishing and maintaining
considering its public mission and the heaviness of the social
a system that ensures that the Group does not have any
responsibility.
connection with anti-social forces or related individuals.
Based on this recognition, management positions the
Specifically, the Group strives to ensure that no
strengthening of compliance and risk management as a key
business transactions are made with anti-social forces or
issue in enabling SMBC Group to fulfill its public mission and
individuals. Contractual documents or terms and conditions
social responsibilities. SMBC Group is therefore devoted to
state the exclusion of anti-social forces from any business
improving its systems in these areas in order to become a
relationship. In the event that it is discovered subsequent
truly outstanding global group.
to the commencement of a deal or trading relationship that
To this end, SMBC Group has defined the Principles
the opposite party belongs to or is affiliated with an anti-
of Action on Compliance and Risk to serve as guidelines for
social force, we undertake appropriate remedial action by
executives and employees in practicing compliance and
contacting outside professionals specializing in such matters.
risk management. Continuous reviews are carried out to
improve compliance with these guidelines and to ensure their
effectiveness.
Anti-Money Laundering (AML) and Countering the
Financing of Terrorism (CFT)
SMBC Group recognizes the importance of preventing money
laundering and terrorist financing (ML/TF), and therefore,
Basic Policy for Anti-Social Forces
1. Completely sever any connections or relations from antisocial 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.
undertake every effort to prevent ourselves and employees,
from engaging in, and/or assistance to, the commission of
Customer Information Management
SMBC Group has established Group policies that set forth
ML/TF.
guidelines for the entire Group regarding proper protection
SMBC Group strictly complies with AML/CFT regulations
and use of customer information. All Group companies
by establishing a Group policy and implementing effective
adhere to these policies in developing frameworks for
internal control systems in each of the Group companies to
managing customer information.
ensure that our operations are sound and appropriate. The
SMBC and its Group companies establish and disclose
Group Policy and systems are implemented in accordance with
privacy policies for their measures regarding the proper
the requirements of the relevant international organizations
protection and use of customer information and customer
(e.g., the United Nations and the Financial Action Task Force
numbers. Appropriate frameworks are established based on
Recommendations) and the laws/regulations of relevant
these policies.
countries including Japan in which the Group has operations
(e.g., U.S. “Office of Foreign Assets Control Regulations”).
Agreement with Federal Reserve Bank of New York
In April 2019, SMBC entered into a written agreement with the Federal Reserve
Anti-Bribery and Corruption
The SMFG Group Policies for Anti-Bribery Compliance
and Ethics have been established to prevent business
entertainment and the provision or receipt of anything of
Bank of New York (the “Reserve Bank”) to improve its New York Branch’s
value that violate laws, regulations or social practices and
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.
Furthermore, SMBC is working to improve compliance on a global basis
while taking other necessary actions based on the written agreement with the
Federal Reserve Bank of New York.
customs. Group companies have developed frameworks to
prevent bribery and corruption based on these policies.
SMBC GROUP ANNUAL REPORT 2020 093
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Human Resources Strategy Underpinning Group
Management Strategies
Human Resource Medium-Term Management Plan
To establish a robust platform to realize SMBC Group’s medium- to
long-term vision, we have established the Human Resource Medium-
Term Management Plan, with the following three pillars.
(1) Resource Management
Strategic Allotment of Human Resources across Group Companies
and Divisions
(2) Seamless Platform
Realization of True Diversity and Inclusion
(3) Employee Engagement
Measures to Enable All Employees to Fully Exercise Their Potential
(1) Resource Management
Strategic Allotment of Human Resources across Group Companies
and Divisions
SMBC Group promotes business transformation and the streamlining
of its business processes through business model reforms, branch
reorganizations, and group-wide integration of operations. At the
same time, we will be more proactive in reallocating human resources
on a group-wide basis to strategic fields and areas as designated in
the seven key strategies of the new Medium-Term Management Plan.
By realizing efficient operations and proactive human resource
management across Group companies, we aim to reduce the
quantity of work to enable natural attrition of domestic workforce by
6,500 people over the new Medium-Term Management Plan period,
an increase from the reduction of 4,900 people achieved in the
previous Medium-Term Management Plan.
(2) Seamless Platform
Realization of True Diversity and Inclusion
We aim to alleviate the “seven disparities” to enhance optimal
allotment of human resources across Group companies and divisions.
Workstyle/
Lifestyle
Entity
Skill Set
Location of
Hire
Age
Gender
Recruitment
Human Resources
Strategy
Our Approach
One overarching social trend is the change in relationship
between companies and employees and there are more
alterations and diversifications in employees’ attitudes toward
work.
SMBC Group has approximately 100,000 employees around
the world. We aim to improve both employee motivation and
corporate productivity in order to effectively implement the
Group’s management strategies.
We envisage to be a bank with the best talent pool by fostering
talent capable of continuous growth and encouraging
employees to tackle ambitious challenges.
094 SMBC GROUP ANNUAL REPORT 2020
Corporate Infrastructure Supporting Value Creation 1. Entity Disparity
Group-Wide Human Resources Strategy Based on Business Necessities
SMBC Group is establishing frameworks to accelerate inter-
Group company secondments, enhance coordination in
recruiting activities, and establish human resource systems
to facilitate Group collaborations.
In addition, we intend to cater to business necessities
across entities through the use of human resource systems.
Such necessities include realization of better coordination
between SMBC, SMBC Nikko Securities, and SMBC Trust
Bank to promote “SMBC Private Wealth” business targeted
for high-net-worth customers, and the integration of head
office functions of Sumitomo Mitsui Card Company and
SMBC Consumer Finance, both responsible for our payment
service business.
2. Skill Set Disparity
Reeducation Opportunities to Support New Challenges
SMBC Group encourages employees to take part in
spontaneous learning opportunities, such as voluntary
applications and career planning programs, through
proactive disclosure of information related to human resource
measures.
Furthermore, we are expanding training prior to
assuming new positions and enhancing follow-up frameworks
to support employees pursuing new challenges across Group
companies or divisions, regardless of their current position or
employee category.
Revision of HR Management Framework
Amid rising demand for motivation, environments conducive
to growth, and social meaningfulness for the Company, we
revised our HR Management Framework in January 2020
with the new slogan, “Be a Challenger”. The new framework is
intended to enable and encourage our employees to work more
energetically and maximize their performance.
HR Management Framework
Fair
Integration of
employee categories
Challenge
Integration of
job bands
Chance
Enrichment of
a lifelong career
Integration of Employee Categories
Employee categories have been integrated to allow employees to
assume higher responsibilities based on their ambitions and skills.
Integration of Job Bands
Job bands have been integrated to enable fairer evaluations and
compensation based on levels of contributions, and to realize
early promotions by decoupling them from seniority.
Extension of Retirement Age
The retirement age has been extended to 65. Furthermore,
the evaluation framework has been revised and the voluntary
application system has been expanded to allow employees to
tackle diverse challenges on a life-long basis.
3. Age Disparity
Create an Environment which Allows Employees to Tackle Challenges
and Succeed, Regardless of Age or Seniority
We envisage to promote individuals to senior positions, such
as executive positions at Group companies, regardless of age
or length of career, as evidenced in SMBC CLOUDSIGN Inc.’s
case where the president assumed the position in his 30s. At
the same time, we encourage and support senior employees
to contribute continuously, by offering recurrent training
and establishing a dual career support system that provides
flexible work options for employees older than 60.
4. Recruitment Disparity
Focus on Mid-Career Hiring
As our business domains change, we are enhancing mid-
career hiring to acquire talent with diverse skills and
backgrounds. In this regard, we have substantially expanded
the business areas and positions for mid-career individuals
in order to recruit diverse talent including candidates for
management positions. Furthermore, we are enhancing
support provided to mid-career hires by both the Human
Resources Department and the assigned departments, to
ensure early settlement and active contributions.
5. Gender Disparity
Enhancement of Diversity at Decision-Making Levels
SMBC Group is devoting efforts to fostering female
management candidates by increasing hiring of women and
offering them strategic career development support shortly
after they join the organization. To ensure appointments and
promotions are determined based on individuals’ skills and
competencies, unconscious bias training has been made
compulsory for management and members of the Human
Resources Department.
Furthermore, in support of the LGBT community and
other sexual minorities, we are offering employee education
and supporting the development of networks of sexual
minority allies* through aid and donations for external events.
Targets for FY2025
Ratio of female managers
Number of female executive officers
20%
20
15.3% in FY2019
13 in FY2019
SMBC GROUP ANNUAL REPORT 2020 095
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Human Resources Strategy
The Company has also expanded its employee welfare and
benefit to include same-sex partners and set up helpdesks to
support members of sexual minorities.
* An ally is someone who understands and supports members of the LGBT community and
other sexual minorities, despite not belonging to such a group himself/herself, and who
makes this stance clear.
6. Location of Hire Disparity
Establishment of Talent Development and Management Frameworks to
Support Growing Overseas Businesses
SMBC Group advances its operations in more than 40
countries and regions worldwide, and these overseas
businesses are driving the growth of the Group. To support
these businesses, we are developing talent management
frameworks to enable optimal assignments and promotions,
regardless of their location of hire. Based on the SMBC
Global Management Competency model, we established
standardized talent review framework. We are also developing
a database to enable centralized management of talent
information on overseas employees.
For talent development, we offer various training
programs for employees from offices around the globe,
including leadership training for management-level
employees delivered in partnership with The Wharton School
of the University of Pennsylvania in the United States. Another
area of focus is personnel exchanges, promoted through
programs such as the Global Japan Program, under which,
employees from overseas offices are assigned to departments
in Japan for up to one year. Approximately 1,700 employees
have participated in these programs to date.
7. Workstyle and Lifestyle Disparity
Fostering of Workplaces That Allows Diverse Workstyles to Realize
Maximum Performance
SMBC Group is enhancing training programs and support
frameworks to foster corporate cultures supportive of all
employees’ willingness to work, regardless of their physical
or mental restrictions due to life events (marriage, childcare,
nursing care, etc.) or illness or disability.
• Workstyle Reforms
We are actively adopting systems that allow for flexibility in
working hours and work locations, such as flextime, staggered
working hours, and telework systems. Infrastructure to enable
these systems, such as teleworking terminals and satellite
offices, is also being put in place.
Furthermore, to prevent excessive working hours, we
are introducing monitoring and interval systems to ensure
due compliance with relevant laws and improve working
096 SMBC GROUP ANNUAL REPORT 2020
environments. Working hour-related targets have been set for
paid leave acquisition rates (target of 85% in FY2025) and for
work efficiency through the implementation of robotic process
automation.
• Health and Productivity Management
To ensure our employees’ physical and mental health, we are
maintaining good work environments by offering stress checks,
preventive measures for mental health, support for employees
returning from long absence, and consultation desks. To
enhance health awareness, we also offer reimbursement for
expenses associated with quitting smoking and encourage the
taking of regular health examinations.
In addition, Group companies have formulated a
“Statement on Health Management” and are accelerating their
initiatives under the leadership of the Chief Health Officer.
Diversity and Inclusion Initiatives
Workplace Environment Development Aimed at Encouraging Efforts of a
Diverse Workforce
SMBC Group is promoting “Diversity and Inclusion” as a growth
strategy itself. The Group has formulated its “Diversity and
Inclusion Statement” as a core philosophy to promote initiatives
to encourage active contributions of a diverse workforce,
establishing a work environment that enables all employees
to fully exercise their capabilities and skills. Under the new
Medium-Term Management Plan, we aim to alleviate the
aforementioned seven disparities in order to truly realize the
spirit of diversity and inclusion.
To accelerate diversity and inclusion initiatives through a
concerted group-wide effort, SMBC Group has established
the SMFG Diversity and Inclusion Department, holding regular
discussions at meetings of the Board of Directors and the
Management Committee. Furthermore, we are regularly hosting
the SMFG Diversity and Inclusion Committee, chaired by the
Group CEO.
Message on Diversity and Inclusion from the Group CEO
https://www.smfg.co.jp/english/sustainability/materiality/diversity/top-message/
Text of Diversity and Inclusion Statement and information on diversity and inclusion
promotion system
https://www.smfg.co.jp/english/sustainability/materiality/diversity/statement/
Corporate Infrastructure Supporting Value Creation (3) Employee Engagement
Measures to Enable All Employees to Fully Exercise Their Potential
1. Talent Development Strategy
SMBC Group has established the SMFG Learning and
Development Institute to spearhead its group-wide talent
development activities, in addition to developmental
initiatives each Group company is advancing based on
respective business environments. The Learning and
Development Institute implements development programs
for cultivating group-wide perspectives and fostering a
sense of solidarity. Meanwhile, we are actively implementing
joint programs with graduate schools and cross-Group job
rotations to develop management candidates. Furthermore,
we have established the “Digital University” and are
expanding its range of courses to foster planning and
development capabilities for transforming businesses with
digital technologies.
SMBC, the core subsidiary of SMFG, is advancing the
following initiatives.
• Human Resources Vision
SMBC has formulated its Human Resources Vision to serve as
a long-term strategy for human resource development amid
a volatile competitive climate. It is also shifting from Human
Resources Department-driven development models to more
business-oriented, self-controlled development models that
support the growth of individuals based on self-disciplined
tasks. SMBC supports the challenges of its employees,
regardless of position or seniority.
• Enhancement of Experiential Learning
SMBC is taking steps to enhance on-the-job training. Such
steps include frameworks through which new employees
receive guidance from more experienced employees
(“anchor” system) along with one-on-one feedback. For
management, we offer SMBC Management Review, a multi-
source feedback, to enable development through enhanced
self-recognition.
• Self-Disciplined Career Support
Voluntary application systems for training, jobs, and posts
are provided as frameworks for supporting self-driven career
development and to enhance specialized skills. In addition,
the annual SMBC Job Forum provides a platform to gain
understanding of the business of each department, thereby
enhancing the effectiveness of voluntary application systems.
Voluntary application systems are also available for
dispatches to domestic and overseas graduate schools and
other external educational institutions. Furthermore, SMBC
has introduced a system that allows employees to take leave
to attend graduate schools (career planning leave system)
and a system that offers financial support for paying tuition
fees for employees attending graduate schools or seeking
to acquire qualifications while continuing to work normally
(career planning support system),
2. Corporate Culture
SMBC Group seeks to foster a sense of emotional safety in
its corporate culture that allows employees to be frank and
genuine in communication. For this reason, we have a free
dress code, enabling employees to wear what they please
to work, and encourage employees to refer to each other
without titles. In addition, we are examining the possibility of
introducing an internal social media service as a digital tool
for transmitting information about individuals, management,
and organizations to better link people and organizations.
Meanwhile, engagement surveys are instituted to track
levels of employee engagement and facilitate self-driven
improvements by organizations. Employee awareness surveys
are also conducted to develop an understanding of the levels of
desire for coordination and solidarity among Group employees.
These surveys have found that the average level of satisfaction
among employees is at the high level of around 70%.
Engagement survey (wevox)
3. Concentration on Appealing Work
Drastic and continuous improvements to the efficiency of
routine tasks are being pursued to heighten productivity
and to create an environment that gives rise to appealing
work and allows employees to concentrate on performing
high-value-added work. In addition to promoting robotic
process automation, instituting paperless work practices and
drastically revising meeting procedures, we are soliciting and
implementing work-streamlining ideas from the perspectives
of employees.
Furthermore, competitions in which employees can
volunteer to participate and present their ideas are being held
at various companies as divisions investigate possible new
business models.
SMBC GROUP ANNUAL REPORT 2020 097
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Corporate Infrastructure Supporting Value Creation
IT Strategies
Our Approach
Currently, the operating environment is trending toward
hybrid solutions, whether it comes to the maturing
domestic market or growing overseas markets, the
expansion of opportunities to utilize digital technologies,
the reinforcement of security measures, the need for digital
innovation and digital transformations, the importance of
existing IT fields that now represent a majority of sales,
or system ownership and use. In this environment, we
will advance IT strategies with a focus on supporting both
management and operations.
098 SMBC GROUP ANNUAL REPORT 2020
IT Investment Strategies
Under the new Medium-Term Management Plan, the budget
for IT investments was increased to ¥500.0 billion, a rise
from the ¥440.0 billion budget under the previous Medium-
Term Management Plan, with the aim of fueling future
growth. By effectively controlling investments in existing IT
areas via efficient management, we will secure a significantly
larger budget for strategic investments in areas such as
digitalization. Specifically, we have secured a CEO budget
of ¥100.0 billion to be used for flexible investments in
areas in which the Group CEO expects growth in the future.
With this budget, SMBC Group will promote digitalization,
reinforce management foundations, and implement business
strategies.
Increased IT Investments for Future Growth
(JPY bn)
440
500
CEO budget of
flexible investments
100 for
Previous Medium-Term
Management Plan
New Medium-Term
Management Plan
Digitalization
The Digital Solution Division has been established to promote
business model reforms and the creation of new value for
customers through digitalization. In addition, the Digital
Strategy Department and the Corporate Digital Solution
Department have been set up within the Digital Solution
Division. The Digital Strategy Department is responsible for
the allocation of digital technology-related budget resources,
the drafting and implementation of digitalization strategies,
and the development of new businesses. Meanwhile, the
Corporate Digital Solution Department is tasked with the
co-creation of businesses with major companies and the
planning and implementation of digital solutions.
Reformation and Reconstruction of Core Infrastructure
Supporting Future Businesses
SMBC Group is developing core infrastructure with an eye
toward the next decade based on the three perspectives
of flexibility, sustainability, and efficiency with the aim
of adapting to the medium- to long-term changes in the
business environment and in customer needs.
1 Flexibility
Development of foundations for connectivity with external and internal
systems to allow for the adjustment and augmentation of flexible functions
2 Sustainability
Taking of precautions for avoiding development of systems with overly
complicated structures and excessive customization
3 Efficiency
Examination of measures for streamlining system structures and
standardizing systems within the Group
Development of Human Resources for Supporting
Sustainable Growth in a Digital Society
Accelerating digitalization at SMBC Group and contributing
to customers and society require all employees, not just those
in divisions dedicated to IT, to possess a digital-oriented
mindset and basic IT knowledge. At SMBC Group, the Digital
University has been established within core IT Group company
The Japan Research Institute, Limited, as an internal training
institution for promoting IT adoption and digitalization. The
Digital University provides training for all employees on digital
IT literacy and on IT adoption measures applicable to actual
work.
We are also devoted to fostering human resources with
specialized skills. For this purpose, we offer a unique menu of
training programs including training based on the operations
of specific Group companies, curricula employing the
expertise gained from project case studies, and cutting-edge
technology workshops.
Cyber Security
Cyber attacks are becoming ever-more serious and
sophisticated. 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
Declaration of Cyber Security Management.
Seeking to facilitate management-led measures for
fortifying response frameworks, the general manager of the
System Security Planning Department has been appointed
as the Chief Information Security Officer (CISO). Positioned
under the Group CIO and the Group Chief Risk Officer (CRO),
SMBC Group’s Cyber Security Governance System
the CISO has professional expertise regarding measures
in this area, and steps have been taken to clarify the roles
and responsibilities of the CISO. Furthermore, we have
established a computer security incident response team
(CSIRT) and a security operation center (SOC), and analyses
are performed on information regarding threats and observed
cases 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 meetings 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 Security Planning
Department, which possesses dedicated cyber security
functions. To ensure preparedness for cyber incidents, the
CSIRT coordinates 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 pertinent 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 Financials ISAC Japan (Japanese equivalent of the FS-ISAC)
Government, law enforcement agencies
Group CIO
Group CRO
Board of Directors / Management Committee
National center of
Incident readiness and
Strategy for Cybersecurity
Metropolitan Police
Department
etc.
ISAC, industry bodies
FS-ISAC
Financials ISAC
CEPTOAR-Council
etc.
Security vendors, experts etc.
Corporate staff
IT Planning Dept.
Corporate Planning Dept.
Public Relations Dept.
General Affairs Dept.
Risk Planning Dept.
CISO (Chief Information Security Officer)
System Security Planning Dept.
SMBC Group SOC (security operation center)
Group companies and offices in Japan / overseas
SMBC Group CSIRT
(Computer Security Incident Response Team)
SMBC GROUP ANNUAL REPORT 2020 099
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group Stakeholders of SMBC Group
Customers
P 084
The environment
and society
Shareholders and
the market
Employees
Stakeholder Type
Example Communication Activities
Customers
In-branch questionnaires, Customer satisfaction surveys, Call centers
Shareholders and the
market
Employees
The environment
and society
General meeting of shareholders, Investors meetings, One on one
meetings
Opinion exchange meetings with top management, Employee surveys
Support for initiatives in Japan and overseas, Volunteer activities of
employees
Engagement with the Environment and Society
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 post-
disaster restoration activities and clean-up activities in
various regions. In addition, employees coordinate with NPOs
through pro bono activities to help contribute to the resolution
of social issues.
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.”
100 SMBC GROUP ANNUAL REPORT 2020
Clean-up activity at Suma Beach in Hyogo
Prefecture
Running event aimed at fostering exchanges
with the community
Corporate Infrastructure Supporting Value Creation Engagement with Shareholders and the Market
Engagement with Employees
SMBC Group recognizes that appropriate disclosure of
Management implements various initiatives to engage with
corporate and management information must form the
employees and foster mutual understanding.
foundation of our efforts to realize one of the statements posted
For example, when formulating the new Medium-
in “Our Mission”: “We aim to maximize our shareholders’
Term Management Plan, a number of discussions were held
value through the continuous growth of our business.” For this
regarding the new business areas to be targeted by SMBC
reason, we are taking steps to facilitate accurate understanding
Group. Junior employees from Group companies participated
of our management strategies and financial position through
in these discussions, and the ideas and opinions that arose
investor meetings after announcements of financial results,
from these discussions were compiled to be used as advice
conferences, one-on-one meetings, large meetings for
for management. In the end, this input was incorporated
individual investors, and other activities. These efforts have
into the policies and measures of the new Medium-Term
been highly evaluated, resulting in the Company winning the
Management Plan.
2019 Award for Excellence in Corporate Disclosure (ranked
In addition, SMBC Group companies hold town hall
No. 1 in the banking industry) from the Securities Analysts
meetings as venues for direct communication between
Association of Japan as well as the 2019 Best IR Award from
management and frontline employees. In FY2020, these
the Japan Investor Relations Association.
town hall meetings were conducted via video messages from
Even faced with the COVID-19 pandemic, we
members of management explaining their thoughts regarding
endeavored to prevent declines in the quality of disclosure.
management policies and strategies to employees. This
As one effort for this purpose, the May 2020 investors briefing
precaution was taken out of consideration for the COVID-19
was conducted in the form of a video presentation by the
pandemic.
Group CEO broadcast via the Internet and the question and
In addition, SMBC holds the “SMBC Pitch Contest,”
answer session was carried out via teleconference.
which provides opportunities for all domestic and overseas
employees to present their business ideas directly to top
management. Business ideas that have won previous
contests have since been transformed into new products and
services.
Investors briefing video presentation
Large meeting for individual investors
The 18th Ordinary General Meeting of
Shareholders
Award for Excellence in Corporate Disclosure
award ceremony
Discussion on formulation of the new Medium-Term Management Plan
Activities in FY2019
General meeting of shareholders
Participants: 478*
IR meetings for institutional investors and analysts
11 meetings
One-on-one meetings with institutional investors and
analysts
Conferences held by securities companies
Large meetings for individual investors
308 meetings
3 conferences
5 meetings
* Including 371 viewers of simultaneous Internet broadcast
Video message to employees (SMBC Nikko Securities)
SMBC GROUP ANNUAL REPORT 2020 101
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group 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)
102 SMBC GROUP ANNUAL REPORT 2020
2016
2017
2018
2019
2020
(Billions of yen)
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
2,768.6
1,276.6
1,088.1
403.9
1,739.6
62.8%
56.1
1,203.8
1,192.3
1,085.0
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
170.6
49.6
80.5
(62.8)
932.1
(43.4)
167.7
17.1
703.9
186,585.8
197,791.6
199,049.1
203,659.1
219,863.5
75,066.1
25,264.4
80,237.3
24,631.8
72,945.9
25,712.7
77,979.2
82,517.6
24,338.0
27,128.8
176,138.2
186,557.3
187,436.2
192,207.5
209,078.6
110,668.8
117,830.2
116,477.5
122,325.0
127,042.2
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
10,180.4
11,451.6
10,784.9
9,054.4
5,992.2
1,713.9
678.5
9,354.3
6,336.3
1,365.7
62.9
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%
18.75%
16.63%
15.55%
190
37.0%
7.6%
16,759
112.62
18,909
112.19
21,454
106.25
21,206
111.00
18,917
108.81
Corporate Infrastructure Supporting Value Creation
Consolidated Performance Summary
Consolidated Net Business Profit
Consolidated gross profit decreased by ¥77.6 billion
year-on-year to ¥2,768.6 billion. This decrease was
Impacts from the COVID-19 Pandemic
(Approximations, billions of yen)
primarily results of the impacts of group reorganizations
Consolidated net business profit
and the COVID-19 pandemic, which outweighed the
Total credit cost
increase in gains on sales of bonds with the decline of
Gains (losses) on stocks
overseas interest rates.
Extraordinary gains (losses)
General and administrative expenses increased by
Profit attributable to owners of parent
(50.0)
+40.0
(23.0)
(40.0)
(110.0)
¥24.6 billion year-on-year to ¥1,739.6 billion, following
the continued overseas expenditure.
As a result, consolidated net business profit
decreased by ¥107.2 billion year-on-year to ¥1,085.0
billion. Excluding the impacts of reorganizations and
the COVID-19 pandemic, it reached the same level as
FY2018.
Profit Attributable to Owners of Parent
Total credit cost increased by ¥60.4 billion year-on-year
to ¥170.6 billion, due to the absence of gains on reversal
of reserves for large obligors recorded in FY2018 and the
record of reserve for possible loan losses arising from the
COVID-19 pandemic.
As a result, ordinary profit decreased by ¥203.2
billion year-on-year to ¥932.1 billion.
In addition, profit attributable to owners of parent
decreased by ¥22.8 billion year-on-year to ¥703.9
billion, because impairment losses on goodwill of SMBC
Trust Bank Ltd.’s business, PRESTIA, were recognized,
whereas the absence of tax costs at Sumitomo Mitsui
Card Company, Limited, which joined in the consolidated
corporate-tax system recorded last year, but exceeded
the disclosed target of ¥700.0 billion.
Financial Impacts of Group Reorganization*
(Approximations, billions of yen)
Consolidated gross profit
(70.0)
General and administrative
expenses
Equity in gains (losses) of
affiliates
(16.0)
(7.0)
Consolidated net
business profit
(61.0)
Non-controlling interests
(7.0)
Profit attributable to owners of
parent
+31.0
* The combined impact of the deconsolidation of Kansai Urban Banking
Corporation, THE MINATO BANK, LTD. and Sumitomo Mitsui Finance and Leasing
Company, Limited, which are current equity method affiliates; the consolidation of
PT Bank Tabungan Pensiunan Nasional Tbk; the conversion of Sumitomo Mitsui
Card Company, Limited into a wholly owned subsidiary; the merger of two asset
management companies; and the deconsolidation of SMM Auto Finance, Inc.
Performance of Major Group Companies
(Left: FY2019 performance; Right: Year-on-year comparison)
(Billions of yen)
SMBC
SMBC Trust
Gross profit
1,412.0
+16.4
808.1
604.0
(3.5)
+19.9
49.5
48.6
0.9
Expenses
Net business
profit
Net income
Gross profit
Expenses
Net business
profit
Net income
Gross profit
Expenses
Net business
profit
Net income
Gross profit
Expenses
Net business
profit
Net income
(0.3)
(3.2)
+2.8
(29.0)
+11.8
+22.8
(11.0)
+84.9*3
317.4
(160.0)*1
(32.8)
SMBC Nikko*2
SMCC
320.1
271.8
48.3
35.2
(3.0)
(4.3)
+1.2
+4.1
420.0
328.1
92.4
38.2
SMBCCF
SMDAM*5
50%
35.1
32.0
3.1
0.9
+9.3
+14.1
(4.7)
(4.3)
274.4
113.9
160.5
90.1
+5.9
+3.0
+2.9
+45.1*4
SMFL*6
50%
183.0
84.7
101.1
61.2
(2.5)
(3.6)
+1.9
(18.8)
Ratio of Ownership by SMFG
*1 Attributable to recording of provision for investment loss for The Bank of East Asia, Limited
(approx. ¥120.0 billion)
*2 Excludes profit from overseas equity method affiliates of SMBC Nikko Securities Inc.
(consolidated subsidiaries of SMFG)
*3 Due to the absence of tax costs by becoming a wholly owned subsidiary recorded last year
*4 Attributable to an increase in tax effect accounting
*5 Year-on-year comparison excludes FY2018 profit of Daiwa SB Investments Ltd.
*6 Figures are on a managerial accounting basis
SMBC GROUP ANNUAL REPORT 2020 103
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group
Financial Review
Consolidated Balance Sheet Summary
Domestic Loan-to-Deposit Spread
FY2019
（%）
FY2018
Loans and Bills Discounted (SMBC non-consolidated)
Loans and bills discounted increased by ¥3,785.6 billion
year-on-year to ¥80,187.4 billion due to an increase in
overseas loans.
Balance of Loan
(Trillions of yen)
1Q
2Q
3Q
4Q
Yearly
average
Yearly
average
0.92
0.90
0.90
0.89
0.91
0.94
0.00
0.00
0.00
0.00
0.00
0.92
0.90
0.90
0.89
0.91
0.00
0.94
Interest earned on
loans and bills
discounted
Interest paid on
deposits, etc.
Loan-to-deposit
spread
Securities
75.6
21.1
73.9
20.7
76.4
22.4
80.2
25.6
69.3
19.2
Other securities increased by ¥2,848.7 billion year-on-year to
¥26,649.2 billion due to an increase in the amount of foreign
bonds held by SMBC. Net unrealized gains on other securities
decreased by ¥429.0 billion year-on-year to ¥1,892.3 billion
50.1
54.5
53.2
54.0
54.6
mainly because of lower stock prices.
100
50
0
120
60
0
’16/3
’17/3
’18/3
’19/3
’20/3
Domestic offices (excluding Japan offshore banking accounts)
Overseas offices and Japan offshore banking accounts
Deposits (SMBC non-consolidated)
Deposits increased by ¥3,882.2 billion year-on-year to
¥119,973.3 billion. This increase was mainly due to increases
in both individual and corporate deposits in Japan.
Balance of Deposit
(Trillions of yen)
105.6
110.2
98.8
39.8
44.1
47.6
50.2
53.1
42.3
43.6
45.3
47.1
49.1
’16/3
’17/3
’18/3
’19/3
’20/3
Individuals (domestic)
Corporates (domestic)
Others
Domestic Loan-to-Deposit Spread (SMBC non-consolidated)
In FY2019, domestic loan-to-deposit spread decreased by
0.03% year-on-year to 0.91% primarily as a result of a decline
of loan spreads. After the second quarter, the decrease in
domestic loan-to-deposit spread has been limited to 0.01%,
and this downward trend appears to be bottoming out.
104 SMBC GROUP ANNUAL REPORT 2020
116.1
120.0
The balance of NPLs based on the Financial Reconstruction
NPLs Based on the Financial Reconstruction Act
Unrealized Gains (Losses) on Other Securities
(Billions of yen)
Balance
Net unrealized gains (losses)
March 31, 2020
YoY
March 31, 2020
YoY
Stocks
Bonds
Others
2,736.8
(749.8)
1,269.6
(633.4)
10,067.4
+1,083.7
13,845.0
+2,514.8
21.5
601.2
(38.8)
+243.2
Total
26,649.2
+2,848.7
1,892.3
(429.0)
Act decreased by ¥44.9 billion year-on-year to ¥650.3 billion,
and the NPL ratio declined by 0.08% to 0.68%, remaining at
a low level.
Balance of NPLs Based on the Financial
Reconstruction Act and NPL Ratio
(Billions of yen)
1,500
1,000
500
0
992.7
927.7
622.6
1.15
0.78
567.7
1.00
0.65
672.3
695.2
650.3
436.3
0.78
0.51
476.5
0.76
0.54
428.6
0.68
0.46
’16/3
’17/3
’18/3
’19/3
’20/3
Balance:
Consolidated
SMBC non-consolidated
Ratio:
Consolidated
SMBC non-consolidated
(%)
6
4
2
0
Corporate Infrastructure Supporting Value Creation Capital
Capital
Shareholder Returns
The Company increased the dividend per common share
Common equity Tier 1 capital decreased by ¥73.3 billion
for FY2019 to ¥190, which is ¥10 higher year-on-year and
year-on-year due to a decrease in net unrealized gains on
than the original forecast. This increase was mainly due
other securities.
to exceeding the disclosed target for Profit attributable to
owners of parent of ¥700.0 billion for FY2019 and taking
Risk-Weighted Assets
steps towards achieving a payout ratio of 40% under the new
Risk-weighted assets increased by ¥2,656.3 billion year-on-
Medium-Term Management Plan.
year, due to an increase in overseas loans.
Ordinary Dividend per Share of Common Stock
(Yen)
Capital Ratio
The common equity Tier 1 capital ratio was 15.55% and the
total capital ratio was 18.75%. In addition, the external TLAC
ratio reached its required level on both the risk-weighted
asset basis and the leverage exposure basis.
200
150
100
50
0
150
150
170
180
190
’15
’16
’17
’18
’19
(FY)
Dividend Payout Ratio
32.7%
29.9%
32.7%
34.6%
37.0%
(Reference)
Total payout ratio
51.2%
Total Capital Ratio (BIS guidelines)
2019 (A)
2018 (B)
Common equity Tier 1 capital
9,581.3
9,654.5
Additional Tier 1 capital
668.6
1,072.7
Tier 1 capital
Tier 2 capital
Total capital
10,249.9
10,727.2
1,302.1
1,513.3
11,552.0
12,240.5
(Billions of yen)
Increase
(decrease)
(A–B)
(73.3)
(404.1)
(477.3)
(211.2)
(688.5)
Risk-weighted assets
61,599.1
58,942.8
+2,656.3
Common equity Tier 1 capital ratio
Tier 1 ratio
Total capital ratio
15.55%
16.63%
18.75%
16.37%
18.19%
20.76%
(0.82)%
(1.56)%
(2.01)%
Leverage Ratio
Leverage ratio
External TLAC Ratio
4.31%
4.88%
(0.57)%
Risk-weighted asset basis
25.96%
26.90%
Leverage exposure basis
7.64%
8.19%
(0.94)%
(0.55)%
SMBC GROUP ANNUAL REPORT 2020 105
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group
SMBC Group Supports the Olympic and Paralympic Games Tokyo 2020.
Initiatives for Generating Interest
in theOlympic and Paralympic Games Tokyo 2020
Contributions to Paralympic Sports
in Preparation for the Tokyo 2020 Paralympic Games
SMBC Group is holding events across Japan with the aim
SMBC Group employs 20 para-athletes, three of whom joined
of generating interest in the Olympic and Paralympic
in FY2020. These athletes take part in sports workshops
Games Tokyo 2020. For example, an event for SMBC Group
and join panels in employee training sessions to promote
employees and their family members was arranged in
increased recognition regarding Paralympic sports and foster
Olympic Stadium, which will be a principal venue for Tokyo
a more inclusive society. In addition, SMBC has sponsored a
2020 Games. SMBC, on a standalone basis, is helping
television program on Japanese para-athletes. SMBC Group
with performances in the Olympic Concert 2020 Premium
para-athletes took part in events arranged by this program,
Sound Series of concerts arranged by the Japanese Olympic
in which they visited schools to give students a chance to
Committee. A portion of the revenues from these concerts is
experience their sports and promote understanding regarding
being donated to the organizations fostering future athletes in
paralympic sports and people with disabilities.
the areas where concerts are held.
Together with these employees, SMBC Group is
SMBC Group remains united in its ongoing commitment
contributing to the spread of paralympic sports leading up to
to ensuring the success of the Olympic and Paralympic
the Tokyo 2020 Paralympic Games.
Games Tokyo 2020.
Sumitomo Mitsui Financial Group is the Gold Partner (Banking Category) of the Olympic and Paralympic Games Tokyo 2020.
106 SMBC GROUP ANNUAL REPORT 2020
Appendix I
CONTENTS
Group Companies .......................................... 108
Corporate Data ............................................... 137
Risk Management ........................................... 113
Sumitomo Mitsui Financial Group, Inc.
Internal Reporting Systems and
Hotline for Inappropriate Accounting
and Auditing Activities .................................... 128
Basic Policy for Customer-Oriented
Business Conduct ........................................... 129
Support for Mid-Sized
Corporations and SMEs,
Vitalization of Local Regions in Japan ............ 131
Employees ....................................................... 133
Main Work-Life Balance Support System ........ 136
Directors and Executive Officers ................ 137
Sumitomo Mitsui Financial Group
Organization ............................................... 138
Sumitomo Mitsui Banking Corporation
Board of Directors, Directors, Members of
the Audit and Supervisory Committee and
Executive Officers ........................................ 139
SMBC Organization .................................... 142
Principal Subsidiaries and Affiliates ................ 144
Principal Domestic Subsidiaries ................. 144
Principal Overseas Subsidiaries ................. 145
Principal Affiliates ........................................ 146
International Directory .................................... 147
107
SMBC GROUP ANNUAL REPORT 2020
Group Companies (as of March 31, 2020)
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.
• We contribute to a sustainable
society by addressing environmental
and social issues.
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
President: Jun Ohta
Capital: ¥2,339.9 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, 2020)
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)
2020
Billions of yen
2018
2019
2017
932�0
For the Year:
Ordinary income �������� ¥ 5,314�3 ¥ 5,735�3 ¥ 5,764�1 ¥ 5,133�2
Ordinary profit���������
1,005�8
Profit attributable to
owners of parent �����
At Year-End:
Net assets �������������� ¥ 10,784�9 ¥ 11,451�6 ¥ 11,612�8 ¥ 11,234�2
Total assets ������������ 219,863�5 203,659�1 199,049�1 197,791�6
1,164�1
1,135�3
726�6
734�3
703�8
706�5
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: 27,957
Number of branches and other business locations:
1,938*
In Japan:
Branches:
515
(Including 47 specialized deposit account branches)
350
Sub-branches:
1
Banking agencies:
1,072
Automated service centers:
45
19
22
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:
108
Credit Ratings (as of June 30, 2020)
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)
2020
Billions of yen
2018
2019
2017
For the Year:
Ordinary income ������� ¥ 3,469�0 ¥ 3,369�8 ¥ 3,117�0 ¥ 3,014�4
829�4
Ordinary profit ��������
Net income �������������
543�1
At Year-End:
Net assets �������������� ¥ 8,368�3 ¥ 8,986�7 ¥ 9,090�4 ¥ 8,908�1
Total assets ������������ 206,089�6 190,690�2 182,727�4 180,946�6
894�5
617�4
932�7
627�5
770�4
517�7
SMBC GROUP ANNUAL REPORT 2020
www.smbctb.co.jp/en
Company Name: SMBC Trust Bank Ltd.
Business Profile: Commercial banking and
Trust Banking
Establishment: February 25, 1986
Head Office: 1-3-1, Nishi-Shimbashi,
Minato-ku, Tokyo
President and CEO: Kozo Ogino
Number of Employees: 2,112
Number of branches: In Japan: 55
(Including Internet Branch, and Sub-Branches,
and Foreign Exchange Counters)
Financial Information (Years ended March 31)
For the Year:
Ordinary income �������
Ordinary profit (loss) ��
Net income (loss) ������
At Year-End:
Total assets ��������������
2020
Billions of yen
2018
2019
2017
¥ 61�0
1�0
(32�7)
¥ 61�9
(2�4)
(3�7)
¥ 50�6
(7�1)
(5�7)
¥ 39�9
(15�8)
(4�1)
¥3,423�3
¥3,273�6
¥3,064�4
¥2,710�8
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: 3,357
www.smfl.co.jp/english/
Credit Ratings (as of June 30, 2020)
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)
2020
Billions of yen
2018
2019
2017
For the Year:
Leasing transaction
volume ���������������������
Operating revenue �����
Operating profit ���������
Ordinary profit�����������
Profit attributable to
owners of parent �������
At Year-End:
Total assets ��������������
¥2,489�2
1,513�7
89�4
90�3
¥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�8
89�0
90�4
61�2
80�0
54�5
50�4
¥6,378�7
¥5,812�6
¥5,660�6
¥5,601�6
Formerly Societe Generale Private Banking,
SMBC Trust Bank Ltd. joined SMBC Group in
October 2013. We then made a fresh start
following the integration of the retail banking
operations of Citibank Japan Ltd. under the
new PRESTIA brand in November 2015.
SMBC Trust Bank is carrying out full-
fledged initiatives, including developing joint
branches with SMBC and SMBC Nikko
Securities, to deliver comprehensive SMBC
Group financial services on a one-stop basis.
As a trust bank with strengths in the fields
of “foreign currency”, “real estate” and “trusts”,
we provide finely tuned support with tailor-
made products and solutions for customer
asset management, administration, and asset
succession needs for the upcoming era of
100-year life.
Sumitomo Mitsui Finance and Leasing
(“SMFL”) is a leading Japanese leasing com-
pany. SMFL provides financial solutions and
services that aid customers in their capital
expenditures and sales activities by taking
advantage of its abundant experience and
past performance results accumulated over
the years. In the constantly growing global
market, SMFL supports customers’ overseas
expansion efforts and also develops an
unparalleled aircraft leasing business and
other transportation field businesses.
Guided by the new Medium-Term Manage-
ment Plan, which was launched in April 2020,
SMFL is developing sophisticated services
in response to changes in society while fur-
ther broadening its business scope. SMFL is
also accelerating its initiatives in areas such
as green energy, digital technologies, and
local communities so as to continue being a
chosen business partner for future genera-
tions through contributions to the sustainable
development of society.
109
SMBC GROUP ANNUAL REPORT 2020 Ever since our foundation in 1918 as Kawa-
shimaya Shoten, SMBC Nikko Securities Inc.
has over the past 100 years been supported
by many clients and we have grown together
with our clients.
Since October 2009, when we joined
Sumitomo Mitsui Financial Group, we have
been redoubling our efforts to further
improve our ability to assist our clients, both
individual and corporate clients, and to
enhance our capabilities as an integrated
securities company.
Our vision remains to grow with our clients
and be their trusted advisor. “Share the
Future” is our brand slogan and, as a firm of
financial professionals, we will strive to act in
the best interests of our clients by leveraging
our track record of managing diverse risks
and delivering innovative financial services.
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.
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: Yuichiro Kondo
Number of Employees: 9,926
(Appointed on April 1, 2020)
www.smbcnikko.co.jp/en
Credit Ratings (as of June 30, 2020)
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)
2020
Billions of yen
2018
2019
2017
For the Year:
Operating revenue ����� ¥ 378�0 ¥ 344�6 ¥ 376�0 ¥ 334�4
69�0
Operating income������
70�5
Ordinary profit�����������
Net income ���������������
39�4
At Year-End:
Total assets �������������� ¥12,090�0 ¥10,753�1 ¥10,541�4 ¥11,536�9
38�6
42�1
28�0
84�8
87�4
57�7
39�0
42�6
32�1
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, 2020)
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: 2,650
2020
Billions of yen
2018
2019
2017
For the Year:
Revenue from credit
card operations ��������� ¥20,527�8 ¥18,004�6 ¥16,083�3 ¥14,507�7
418�6
Operating revenue �����
52�3
Operating profit ���������
52�3
Ordinary profit�����������
Net income (loss) ������
46�8
At Year-End:
Total assets
436�2
54�6
54�4
30�7
465�5
62�4
62�7
(46�7)
480�8
50�5
50�8
38�2
Sumitomo Mitsui
Card Company ������� ¥ 2,257�2 ¥ 1,933�3 ¥ 1,698�2 ¥ 1,500�7
Cedyna ����������������� ¥ 2,052�2 ¥ 2,128�7 ¥ 2,115�0 ¥ 2,112�5
5,042
4,479
4,238
4,715
Number of
cardholders (in tens
of thousands) ������������
Notes:
1� To reflect the integrated management of Sumitomo Mitsui Card
Company and Cedyna, the above figures for revenue from credit
card operations, operating revenue, operating profit, ordinary
profit, net income (loss), and number of cardholders use internal
management figures arrived at through the simple addition of the
consolidated figures for both companies� (Consolidated figures
for Sumitomo Mitsui Card Company do not include consolidated
figures for Cedyna�)
110
2� From FY2018, revenue from credit card operations includes
e-money transactions�
3� From FY2017, number of cardholders includes the number of
debit cardholders�
SMBC GROUP ANNUAL REPORT 2020
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: 3,084
www.smbc-fs.co.jp/
(Japanese only)
Notes:
1� To reflect the integrated management of Cedyna and Sumitomo
Mitsui Card Company, financial information for both companies is
displayed in the latter’s section on the previous page�
2� Cedyna and SMBC Finance Service Co�, Ltd�, were merged on
July 1, 2020�
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
Number of Employees: 2,241
Cooperation:
SHOCHIKU Co., Ltd.,
Kabuki-za Co., Ltd.
Credit Rating (as of June 30, 2020)
R&I
Long-term Short-term
A+
—
Financial Information (Years ended March 31)
For the Year:
Operating revenue �����
Operating profit ����������
Ordinary profit�����������
Net income ���������������
At Year-End:
Total assets ��������������
2020
¥ 199�8
41�4
42�9
78�6
Billions of yen
2018
2019
¥196�4
23�6
32�0
35�9
¥192�2
15�4
15�7
8�9
2017
¥186�2
51�6
51�8
100�8
¥1,011�3
¥959�9
¥939�3
¥925�8
Cedyna Financial Corporation was formed in
April 2009 through the merger of OMC Card,
Inc., Central Finance Co., Ltd., and QUOQ Inc.
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 capitalizing on
the transaction base, expertise, credibility, and
other strengths it has accumulated to date
and integrating its credit card, installment, and
payment solution businesses.
Since its establishment in 1962, with the orig-
inal goal of striving to become the leading
provider of innovative financial services for
individual consumers, Promise Co., Ltd., cur-
rently known as SMBC Consumer Finance Co.,
Ltd., has been offering consumer financial
services to promptly meet the diverse funding
needs of our customers while keeping pace
with changing lifestyle patterns by developing
safe, convenient personal loan products and
building the infrastructure for dealing with
customer inquiries and loan applications.
As an expert in the consumer finance
business, SMBC Consumer Finance aspires
to be the most trusted global consumer
finance company by providing consistent
and sincere services to our customers.
111
SMBC GROUP ANNUAL REPORT 2020 The Japan Research Institute, Limited (“JRI”)
is a comprehensive information services
company with IT solutions, consulting, and
think-tank functions.
Under the fundamental philosophy of “cre-
ating new value for the client,” JRI offers
concrete proposals for identifying and
resolving issues with a company along with
support for enacting those proposals.
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 analy-
sis on Japan and other countries and policy
recommendation to business incubation.
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 ser-
vices that meet specific needs of its diverse
client base composed of Japanese and
non-Japanese institutional (pension funds,
financial institutions, etc.) and individual inves-
tors. The company’s vision is to become the
best asset management firm for better Qual-
ity of Life of our clients and all the other
stake holders.
www.jri.co.jp/english/
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: Katsunori Tanizaki
Number of Employees: 2,665
Financial Information (Years ended March 31)
For the Year:
Operating revenue �����
Operating profit ���������
Ordinary profit�����������
Net income ���������������
At Year-End:
Total assets ��������������
2020
¥143�2
2�9
2�8
0�9
Billions of yen
2018
2019
¥138�4
3�6
3�4
2�6
¥136�5
2�8
2�5
1�7
2017
¥132�9
2�2
2�0
1�5
¥100�8
¥104�9
¥103�4
¥103�2
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: 1-17-1 Toranomon, Minato-ku, Tokyo
President and CEO: Takashi Saruta
(Appointed on April 1, 2020)
Number of Employees: 1,008
Financial Information (Years ended March 31)
Sumitomo Mitsui Asset Management
2020
2019
Sumitomo
Mitsui Asset
Management
Daiwa SB
Investments
Billions of yen
2018
Sumitomo
Mitsui Asset
Management
2017
Daiwa SB
Investments
Sumitomo
Mitsui Asset
Management
Daiwa SB
Investments
For the Year:
Operating revenue ���������
Operating profit �������������
Ordinary profit���������������
Net income �������������������
At Year-End:
Total assets ������������������
¥ 65�5
1�5
2�2
0�6
¥133�6
¥46�9
6�0
6�0
4�1
¥48�9
¥28�7
4�4
4�5
2�9
¥38�6
¥46�5
7�3
7�4
4�9
¥53�8
¥31�5
6�8
6�8
4�7
¥39�3
¥39�1
4�5
4�6
3�5
¥46�5
¥32�5
6�9
6�9
4�8
¥35�8
112
SMBC GROUP ANNUAL REPORT 2020
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
Conduct risk
Operational risk is the possibility of losses arising from inadequate or failed internal
processes, people, and systems or from external events (see page 123 for information
on risk categories and the departments in charge).
Corporate Risk
Management Department
Conduct risk is the risk that our conduct negatively affects customers, market integrity,
effective competition, public interest, and the SMBC Group’s stakeholders through acts
that violate laws and regulations or social norms.
Corporate Risk
Management Department
Compliance Department
Top Risks
Top Risks, risks that threaten to significantly impact management, recognized by SMBC Group are listed in the table below (see page 89 for
information on methods of utilizing Top Risks).
Volatile financial and economic
environment
Intensification of the international
political confrontation
• Serious global economic slowdown and accompanying disruption in financial markets
Top Risks
• Slowdown in the global economy following intensification of conflict between the United States
and China
Decline in Japan’s social vitality
• Diminished growth potential in Japanese economy due to population decline, etc.
Ideological and religious conflicts
• Increased geopolitical risks associated with tensions in the Korean peninsula and the Middle East, etc.
Pandemics
• Impacts on business continuity due to spread of infectious disease among employees
Large-scale earthquakes
• Impacts on business continuity due to widespread damage to employees and branches
Ceased operation of information
systems due to cyber attacks
• Impacts on business continuity due to major system failures
Climate change
• Changes in competitive environment for SMBC Group and business partners due to industry
structure changes
Industry structure changes stemming
from technological progress
• Changes in competitive environment for SMBC Group and business partners due to emergence of
new technologies, etc.
Legal or compliance-related incidents • Government penalties due to insufficient measures for Anti-Money Laundering/Combating the
Materialization of risks impeding
implementation of strategies
(lack of human resources, etc.)
Financing of Terrorism, etc.
• Difficulty securing human resources in strategic fields
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.
113
SMBC GROUP ANNUAL REPORT 2020
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 and
opinions of directors, members of upper management, specialists,
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.
114
SMBC GROUP ANNUAL REPORT 2020
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
¥61,599.1 billion as of March 31, 2020, up ¥2,656.3 billion from
and basic operating concepts, policies, and standards for credit
March 31, 2019. The main factors behind the increase in risk-
operations, in accordance with our business mission and rules of
weighted assets was an increase in our corporate credit exposure.
conduct. SMBC Group is promoting the understanding of and strict
■ Risk-Weighted Assets as of March 31, 2020
adherence to its Group credit policy among all its managers and
employees. By fostering a culture of appropriate levels of risk-taking
(Trillions of yen)
and providing high-value-added financial services, SMBC Group
Credit risk
Market risk
Operational risk
Total
March 31,
2019
March 31,
2020
Increase
(decrease)
53.0
2.3
3.6
58.9
55.1
2.5
3.9
61.5
+2.1
+0.2
+0.3
+2.6
■ Risk Assets of Individual Business Units
aims to enhance shareholder value and play a key contributory role
in the community.
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
(Trillions of yen)
credit risk. This department drafts and administers credit risk regu-
Retail Business Unit
Wholesale Business Unit
Global Business Unit
12.0
17.4
21.4
Global Markets Business Unit 5.3
SMBC Group
Credit risk
Market risk
Operational risk
55.1
2.5
3.9
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.
lations, including the Group credit policies, manages non-performing
loans (NPLs), and performs other aspects of credit portfolio manage-
ment. We have also established the Credit Risk Committee to serve
as a body for deliberating on matters related to group-wide credit
portfolios.
At SMBC, the core bank of SMBC Group, the Credit &
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.
The credit department in charge, in cooperation with branches,
conducts credit risk assessments and manages credit portfolios
within each credit department’s jurisdiction. The credit approval
authority is determined based on the credit amount and internal
grades, while credit departments focus on the analysis and manage-
ment of customers and transactions with relatively high credit risk.
The Credit Administration Department is responsible for handling
NPLs of borrowers classified as potentially bankrupt or lower, and
115
SMBC GROUP ANNUAL REPORT 2020
draws up plans for their workouts, including write-offs. It works to
3. Credit Risk Management Methods
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
the results directly to the Audit and Supervisory Committee and the
Management Committee.
SMBC has established the Credit Risk Committee as a con-
sultative body to round out its oversight system for undertaking
flexible and efficient control of credit risks, and ensuring the overall
soundness of the bank’s loan operations.
■SMBC’s Domestic Obligor Grading System
Obligor Grade
Definition
(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 is domiciled overseas, internal ratings for credit are made
after taking into consideration country rank, which represents an
assessment of the credit quality of each country, based on its polit-
ical and economic situation as well as its current account balance
and external debt. The borrower categories used in self-assessment
are consistent with the obligor grade categories.
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 depending on the situation
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 any changes in economic trends or business environment
Currently no problem with debt repayment, but it is highly likely that this could change in cases
of significant changes in economic trends or business environment
1
2
3
4
5
6
7
8
9
Close monitoring is required due to problems in meeting loan terms and conditions,
sluggish/unstable business, or financial problems
Borrowers
Requiring Caution
(Borrowers Requiring Caution identified as Substandard Borrowers)
Substandard Borrowers
Substandard Loans
Currently not bankrupt, but experiencing business difficulties, making insufficient
progress in restructuring, and highly likely to go bankrupt
Though not yet legally or formally bankrupt, has serious business difficulties and rehabilitation
is unlikely; thus, effectively bankrupt
Potentially
Bankrupt Borrowers
Virtually
Bankrupt Borrowers
Bankrupt
Borrowers
Doubtful
Assets
Bankrupt and
Quasi-Bankrupt
Assets
10
Legally or formally bankrupt
116
SMBC GROUP ANNUAL REPORT 2020
Obligor grades and facility grades are reviewed once a year, and
whenever necessary, such as when there are changes in the credit
(2) Framework for Managing Individual Loans
SMBC Group strives to maintain a sound portfolio through appro-
situation. There are also grading systems for loans to individuals and
priate credit assessments and monitoring conducted over credit
project finance and other structured finance tailored according to
periods. The following framework is used for managing individual
the risk characteristics of these types of assets.
loans at SMBC, the core bank of SMBC Group.
The Credit & Investment Planning Department centrally man-
(a) Credit Assessment
ages the internal rating systems and properly designs, operates,
At SMBC, credit assessment of corporate loans involves a variety
supervises, and validates the grading models. It validates the grad-
of financial analyses, including cash flow, to predict an enterprise’s
ing models and systems of main assets following the procedures
capability of loan repayment and its growth prospects. These quan-
manual (including those for statistical validation) once a year to
titative measures, when combined with qualitative analyses of indus-
ensure their effectiveness and suitability and submits reports with
trial trends, the enterprise’s R&D capabilities, the competitiveness
this regard. SMBC, the core bank of SMBC Group, employs a total
of its products or services, and its management caliber, result in a
of 22 grading models for corporate, specialized lending, and retail
comprehensive credit assessment. The loan application is analyzed
applications. For details on internal rating methods, please refer to
in terms of the intended utilization of the funds and the repayment
Appendix II.
(b) Quantification of Credit Risk
schedule. Thus, SMBC is able to arrive at an accurate and fair credit
decision based on an objective examination of all relevant factors.
Credit risk quantification refers to the process of estimating the
Increasing the understandability to customers of loan conditions
degree of credit risk of a portfolio or individual loan taking into
and approval standards for specific borrowing purposes and loan
account not just the obligor’s Probability of Default (PD) but also the
categories is a part of SMBC’s ongoing review of lending practices,
concentration of risk in a specific customer or industry and the loss
which includes the revision of loan contract forms with the chief aim
impact of fluctuations in the value of collateral, such as real estate
of clarifying lending conditions utilizing financial covenants.
and securities.
To respond proactively and promptly to customers’ funding
Specifically, first, the PD by grade, Loss Given Default (LGD),
needs—particularly those of SMEs—we employ a standardized
credit quality correlation among obligors, and other parameter
credit risk assessment process for SMEs that uses a credit-scoring
values are estimated using historical data of obligors and facilities
model. With this process, we are building a regime for efficiently
stored in a database to calculate the credit risk. Then, based on
marketing our Business Select Loan and other SME loans.
these parameters, we run a simulation of simultaneous default using
In the field of housing loans for individuals, we employ a credit
the Monte Carlo method to calculate our maximum loss exposure to
assessment model based on credit data amassed and analyzed
the estimated amount of the maximum losses that may be incurred.
by SMBC over many years. This model enables our loan officers
Based on these quantitative results, we allocate risk capital.
to efficiently make rational decisions on housing loan applications
Risk quantification is also executed for purposes such as to
and to reply to the customers without delay. It also facilitates the
determine the portfolio’s risk concentration, or to simulate economic
effective management of credit risk as well as the flexible setting of
movements (stress tests), and the results are used for making
interest rates.
optimal decisions across the whole range of business operations,
We also provide loans to individuals who rent out properties
including formulating business plans and providing a standard
such as apartments. The loan applications are subjected to a
against which individual credit applications are assessed. For details
precise credit risk assessment process utilizing a risk assessment
on internal rating methods, please refer to Appendix II.
model that factors in the projected revenue from the rental business.
We also provide advice to such customers on how to revise their
business plans.
117
SMBC GROUP ANNUAL REPORT 2020
(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 the acceptable level of capital, we set upper
Non-Performing Loans Disclosure
limits for overall risk capital based on the risk appetite and portfolio
(a) Self-Assessment
plan of each business unit and monitor credit risk capital as a break-
Self-assessment is a preparatory task for ensuring SMBC Group’s
down of overall risk capital.
(b) Controlling Concentration Risk
asset quality and calculating the appropriate level of write-offs and
provisions. Each asset is assessed individually for its security and
As the equity capital of SMBC Group may be materially impaired in
collectibility. Depending on the borrower’s current situation, the
the event that the credit concentration risk becomes apparent, we
borrower is assigned to one of five categories: Normal Borrowers,
implement measures to manage credit toward industrial sectors with
Borrowers Requiring Caution, Potentially Bankrupt Borrowers,
excessive risk concentration and introduce large exposure limit lines
Virtually Bankrupt Borrowers, and Bankrupt Borrowers. Based on
and conduct intensive loan review for obligors with large exposure.
the borrower’s category, claims on the borrower are classified into
To manage country risk, we also have credit limit guidelines
Classification I, II, III, and IV assets according to their default and
based on each country’s creditworthiness.
impairment risk levels, taking into account such factors as collateral
and guarantees.
■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
118
SMBC GROUP ANNUAL REPORT 2020
Self-assessment is the latter stage of the obligor grading pro-
cess for determining the borrower’s ability to fulfill debt obligations,
and the obligor grade criteria are consistent with the categories
used in self-assessment. As part of our efforts to bolster risk man-
SMBC’s Standards for Write-Offs and Provisions
Self-Assessment
Borrower Categories
Standards for Write-Offs and
Provisions
agement throughout SMBC Group, consolidated subsidiaries carry
Normal Borrowers
out self-assessment in substantially the same manner.
Borrower Categories, Defined
Borrowers Requiring Caution
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
Potentially Bankrupt Borrowers
Asset Classifications, Defined
Classification I
Classification II
Classification III
Assets not classified under Classifications II, III, or IV
Assets perceived to have an above-average risk of
uncollectibility
Assets for which final collection or asset value is very
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-
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�
Virtually Bankrupt / Bankrupt
Borrowers
General Reserve
Notes
Specific Reserve
Provisions made in accordance with general inherent default
risk of loans, unrelated to specific individual loans or other
claims
Provisions made for claims that have been found uncollectible
in part or in total (individually evaluated claims)
offs can be made either in the form of loss recognition by offsetting
Discounted Cash Flow Method
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.
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.
Forward-Looking Provisions
SMBC records general reserves in amounts deemed necessary
through comprehensive judgments to prepare for future losses
in accordance with forecasts for specific portfolios with a high
likelihood of occurrence and that cannot be reflected in past
performance or in the borrower categories of specific companies
based on recent operating environment and risk trends.
119
SMBC GROUP ANNUAL REPORT 2020
(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, 2020, please refer to page 344.
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 controlling amounts of value
1. Basic Approach to Market and Liquidity Risk
at risk (VaR), losses, and risk capital based on consideration for
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
the Group’s shareholders’ equity and other principal indicators of
the Group’s financial position and management resources and for
business policies pertaining to market transactions.
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.
120
SMBC GROUP ANNUAL REPORT 2020
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 2019. 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 2019.
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, 2020
September 30, 2019
Fiscal 2019
Maximum
Minimum
Average
(Billions of yen)
March 31, 2019
Sumitomo Mitsui Financial Group
(consolidated)
Interest rates
Foreign exchange
Equities, commodities, etc.
SMBC (consolidated)
SMBC (non-consolidated)
16.2
12.6
9.5
5.0
6.4
3.5
17.7
10.2
6.2
7.8
7.7
2.9
22.4
13.7
10.6
14.1
10.2
5.7
13.8
9.2
4.4
4.2
6.2
2.1
16.7
10.6
6.2
7.7
7.3
3.0
16.4
10.5
5.1
7.7
6.6
2.5
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, 2020
September 30, 2019
Fiscal 2019
Maximum
Minimum
Average
(Billions of yen)
March 31, 2019
Sumitomo Mitsui Financial Group
(consolidated)
Interest rates
Equities, etc.
SMBC (consolidated)
SMBC (non-consolidated)
50.5
46.2
15.4
49.6
41.7
47.1
44.1
18.9
46.4
39.1
52.4
47.6
30.2
51.5
43.7
36.5
33.6
10.8
35.6
29.0
45.1
41.5
20.4
44.3
37.1
44.8
38.2
19.8
43.9
35.8
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.
121
SMBC GROUP ANNUAL REPORT 2020
(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 management and moni-
and-loss movement simulations that enable us to forecast probable
tored on a daily basis.
maximum losses. The appropriateness of the internal model is later
SMBC Group conducts ongoing measures for mitigating stock
verified through back-testing.
price fluctuation risks with the aim of securing the financial base
However, as back-testing cannot take into account major
necessary to sufficiently exercise intermediary functions, even under
market fluctuations that have not actually occurred historically, we
high-stress environments that create substantial declines in stock
supplement this method with the use of stress testing.
prices. Specifically, we have been reducing balances of stocks held
This internal model employed by SMBC Group undergoes
for strategic purposes based on a five-year reduction plan launched
regular auditing by an independent auditing firm to ensure that it
on September 30, 2015. As this plan is expected to be completed,
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 2019 can be found
on page 307.
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 2018
There have been no changes in the model from fiscal 2018.
(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.
122
a new five-year reduction plan was launched on March 31, 2020,
to promote ongoing reductions. Under this new plan, we will seek
to reduce the balance of stocks held for strategic purposes* by
¥300.0 billion.
* Refers to book value of Group holdings of stocks listed in Japan
■ Composition, by Industry, of Listed Equity Portfolio
(%)
25
20
15
10
5
0
i
F
s
h
e
r
i
e
s
/
F
a
r
m
n
g
i
/
F
o
r
e
s
t
r
y
i
M
n
n
g
i
C
o
n
s
t
r
u
c
t
i
o
n
F
o
o
d
P
r
o
d
u
c
t
s
T
e
x
t
i
l
e
s
P
u
p
l
/
P
a
p
e
r
C
h
e
m
c
a
s
l
i
P
h
a
r
m
a
c
e
u
t
i
c
a
s
l
P
e
t
r
o
e
u
m
l
/
C
o
a
l
R
u
b
b
e
r
P
r
o
d
u
c
t
s
S
t
e
e
l
l
G
a
s
s
/
i
M
n
e
r
a
s
l
M
a
c
h
n
e
r
y
i
M
e
t
a
l
P
r
o
d
u
c
t
s
N
o
n
f
e
r
r
o
u
s
M
e
t
a
s
l
l
E
e
c
t
r
i
c
M
a
c
h
n
e
r
y
i
T
r
a
n
s
p
o
r
t
M
a
c
h
n
e
r
y
i
i
i
P
r
e
c
s
o
n
M
a
c
h
n
e
r
y
i
(March 31, 2020)
SMBC Group’s Portfolio
TOPIX
Nikkei 225
l
W
h
o
e
s
a
e
l
A
i
r
T
r
a
n
s
p
o
r
t
M
a
r
i
n
e
T
r
a
n
s
p
o
r
t
O
v
e
r
l
a
n
d
T
r
a
n
s
p
o
r
t
O
t
h
e
r
P
r
o
d
u
c
t
s
l
E
e
c
t
r
i
c
i
t
y
/
G
a
s
U
t
i
l
i
t
i
e
s
W
a
r
e
h
o
u
s
n
g
i
i
/
D
s
t
r
i
b
u
t
i
o
n
l
T
e
e
c
o
m
m
u
n
c
a
t
i
o
n
s
i
S
e
r
v
c
e
s
i
R
e
a
l
E
s
t
a
t
e
O
t
h
e
r
i
F
n
a
n
c
a
i
l
R
e
t
a
i
l
B
a
n
k
n
g
i
I
n
s
u
r
a
n
c
e
S
e
c
u
r
i
t
i
e
s
/
C
o
m
m
o
d
i
t
y
/
F
u
t
u
r
e
s
T
r
a
d
n
g
i
(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 liquid-
ity regulation; periods set for which it will be possible to maintain
SMBC GROUP ANNUAL REPORT 2020
funding levels even under stress due to deposit outflow or other
factors; and the ratio that stable funding covers loans.
(2) Fundamental Principles for Operational Risk Management
We have set forth the policies on Operational Risk Management to
The tolerated levels of risk are set based on account funding
define the basic rules to be observed in the conduct of operational
status, cash management planning, economic environments, and
risk management across the entire Group. Under these policies, we
other factors, and measures are monitored on a daily or monthly
have been working to enhance the operational risk management
basis in order to limit reliance on short-term funding and appropri-
framework across the whole Group by establishing an effective sys-
ately manage liquidity.
tem for identifying, assessing, controlling, and monitoring material
As a framework to complement the Risk Appetite Measures,
operational risks as well as a system for addressing risks that have
upper limits are set in place on both a Group company basis and
materialized and implementing emergency response measures.
an individual branch basis with regard to funding gaps, which is
Based on the framework of the Basel Capital Accord, we have been
defined as a maturity mismatch between the source of funds and
continuously pursuing sophisticated quantification of operational
use of funds.
risks and advanced group-wide management.
Furthermore, contingency plans are established in preparation
for emergency situations. These plans contain information on chains
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
management, and these decisions are authorized by the Board of
Directors. In addition, the Corporate Risk Management Department
1. Basic Approach to Operational Risk Management
oversees the overall management of operational risks and works
(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
system risk, covers legal risk, human resources risk, reputational
risk, and tangible asset risk, and third party 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 pro-
cess management.
Risk Category
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
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).
System Security 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.
Compliance 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
Third party risk
The risk of loss arising from damage due to negative incidents caused by third parties who have business
relationship with SMBC Group.
Corporate Risk Management
Department
123
SMBC GROUP ANNUAL REPORT 2020
mitigation plans will be developed and the implementation status
Specifically, a model to which internal loss data and scenario
of such risk mitigation plans will be monitored by the Corporate
analysis results are input has been introduced to calculate the oper-
Risk Management Department. Furthermore, operational risks are
ational risk equivalent amount and risk asset amounts. In addition,
quantified and quantitatively managed by utilizing the collected
steps are taken to ensure the objectivity, accuracy, and comprehen-
internal loss data and scenarios.
siveness of scenario evaluations by utilizing external loss data and
Regular reports are issued to the Group CRO on internal loss
Business Environment and Internal Control Factors in verification
data, KRI, scenario risk severity information, and the status of risk
processes.
mitigation to ensure the effectiveness of risk management mea-
The quantification model produces the distribution of loss
sures. Moreover, our independent Internal Audit Department con-
frequency and loss severity based on the internal loss data and
ducts periodic internal audits to verify that the Group’s operational
scenario analysis results, and it also produces the loss distribution
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
equivalent amount. The approach has been utilized for the manage-
ment of operational risks since then.
■ 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
of the seven event types set forth by the Basel Capital Accord and
of tangible asset damages arising from earthquakes. However, in
Internal Loss Data
Data
input
Distribution of Loss Frequency
Calculation of Operational Risk Equivalent Amount Using Quantification Model
(
f
r
e
q
u
e
n
c
y
)
P
r
o
b
a
b
i
l
i
t
y
o
f
o
c
c
u
r
r
e
n
c
e
0.20
0.15
0.10
0.05
0
0
(
f
r
e
q
u
e
n
c
y
)
P
r
o
b
a
b
i
l
i
t
y
o
f
o
c
c
u
r
r
e
n
c
e
0.30
0.25
0.20
0.15
0.10
0.05
0
0
5
10
15
20
25
30
Number of incidents / year
Distribution of Loss Severity
2
4
6
8
10
Loss per incident
Aggregated Loss Distribution
Frequency x Severity
(
f
r
e
q
u
e
n
c
y
)
P
r
o
b
a
b
i
l
i
t
y
o
f
o
c
c
u
r
r
e
n
c
e
0.4
0.3
0.2
0.1
0
99.9%
Aggregated annual loss amount
External Loss Data
Verifi-
cation
Scenario
Analysis
Results
Business Environment and
Internal Control Factors
124
SMBC GROUP ANNUAL REPORT 2020
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
post-measurement.
growing more sophisticated and diverse, and the threat of cyber
Meanwhile, the operational risk equivalent amounts of other
risks to financial institutions is becoming more serious. In response
Group companies that do not apply the AMA are calculated
to the growing threat of cyber risks, SMBC Group is enhancing
according to the Basic Indicator Approach (BIA), and the opera-
its response measures while utilizing third-party assessments to
tional risk equivalent amounts for Sumitomo Mitsui Financial Group
objectively evaluate its response systems and compiling threat-
consolidated basis and SMBC consolidated basis are calculated by
specific contingency plans based on assessment results. To ensure
consolidating such amounts calculated based on the BIA with the
preparedness for a wide range of cyber attacks, we are augmenting
operational risk equivalent amount calculated based on the AMA.
our prior program of cyber attack response drills and training with
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
strategy taking into account advances in IT, minimizing system risk
by updating policies and procedures, including a security policy and
more sophisticated practical-application drills, which incorporate the
fundamental elements* for cyber risk management by the financial
sector released by the G7 Cyber Expert Group in October 2018.
We will continue to reinforce response measures to cyber risks
going forward, with specific plans including drills to prepare for
instances of multiple simultaneous attacks.
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 have been prepared with
regard to items requiring compliance at the time of introduction,
technology-specific risks, and items for periodic monitoring. By
entrenching an emphasis on security throughout the organization,
we are working 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
assessments. 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. In addition, we are
preparing for unforeseeable circumstances through the creation of
contingency plans and the implementation of system failure drills.
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.
* As defined in G-7 Fundamental Elements for Threat-led Penetration Testing
125
SMBC GROUP ANNUAL REPORT 2020
Conduct Risk
1. Basic Approach to Conduct Risk Management
(1) Definition of Conduct Risk
Conduct risk is the risk that our conduct negatively affects custom-
Department and the Compliance Department oversee the overall
management of conduct risks and promote basic conduct risk
management policies, frameworks, and measures. In addition,
these bodies report on circumstances pertaining to conduct risk
management to the Audit Committee and Risk Committee and
ers, market integrity, effective competition, public interests, and the
discuss these circumstances to ensure the effectiveness of conduct
SMBC Group’s stakeholders, through acts that violate laws and
risk management. Furthermore, the Internal Audit Unit verifies and
regulations or social norms.
evaluates the conduct risk management system.
(2) Fundamental Principles of Conduct Risk Management
SMBC Group’s fundamental stance is that its business is not
to negatively affect customers, market integrity, effective compe-
tition, public interests, and stakeholders. Efforts are being made
to improve group-wide conduct risk management. Focuses of
these efforts include preemptively identifying phenomena with the
potential to cause significant deterioration in the trust of the Group
and preventing the materialization of serious management risks by
being keenly responsive to environmental changes.
3. Conduct Risk Management Methodology
SMBC Group mitigates and controls conduct risk by having
business units identify and assess the major risks present in
their business and establish measures for controlling these risks
using the risk register framework. Meanwhile, risk management
departments verify the appropriateness of the risks identified and
assessed by business units and their control measures based
on the KRE and KRI. Through this process of verification, these
departments maintain close communication with business units
2. Conduct Risk Management System
Based on the group-wide basic policies for risk management,
with regard to matters such as the need to add risks or revisit
assessments while checking and monitoring activities in order to
SMBC Group has developed a conduct risk management system.
improve the effectiveness of conduct risk management efforts.
The Management Committee makes decisions on basic policies for
conduct risk management, and these decisions are authorized by
the Board of Directors. In addition, the Corporate Risk Management
126
SMBC GROUP ANNUAL REPORT 2020 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.
127
SMBC GROUP ANNUAL REPORT 2020 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 resolution
agency under the Banking Act, and the Trust Companies
Association of Japan, a Designated Dispute Resolution
Organization under the Trust Business Act and Act on Provision,
etc. of Trust Business by Financial Institutions and the specified
non-profit organization of “Financial Instruments Mediation
Assistance Center,” one of 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
128
SMBC GROUP ANNUAL REPORT 2020 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 recurrence 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 Experience (CX) 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 CX Improvement Committee, which comprises officers sitting on
Conduct
the Group Management Committee, holds regular discussions on
As one part of “Our Mission,” it is stated that “We grow and prosper
customer-oriented business conduct.
together with our customers, by providing services of greater value
We are convinced that the ongoing quest to provide quality
to them.” Based on the spirit of this mission, we have defined our
products and services based on customer needs and desires will
Five Values, a list of five key words that includes “Customer First”
contribute to economic growth and subsequently growth for SMBC
(always think based on a customer-oriented perspective and provide
Group. Everyone at SMBC Group will carry out their duties in an
value based on the individual needs of customers), shared by all the
earnest and just manner while exercising a high degree of special-
executives and employees of SMBC Group. SMBC Group continues
ized knowledge and good business ethics. SMBC Group will never
to push forward with various initiatives to actualize these values.
let up in its efforts to ensure that it always thinks and acts based on
Sumitomo Mitsui Financial Group is fully aware of the severity
a customer-oriented perspective in the truest sense as it strives to
of the government penalties imposed on SMBC in April 2006 in
generate the greatest profits for its customers.
Five Values
Customer First
Always look at it from
the customer’s point of view,
and provide value based on
their individual needs.
Speed &
Quality
Differentiate ourselves
through the speed
and quality of our
decision- making
and service delivery.
Integrity
As a professional,
always act with
sincerity and a high
ethical standard.
Proactive &
Innovative
Embrace new ideas
and perspectives,
don’t be deterred
by failure.
Team
“SMBC Group”
Respect and leverage the
knowledge and diverse talent
of our global organization,
as a team.
129
SMBC GROUP ANNUAL REPORT 2020
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 External experts* are invited to meetings of the CX 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.
130
SMBC GROUP ANNUAL REPORT 2020
Support for Mid-Sized Corporations and SMEs,
Vitalization of Local Regions in Japan
Services for Corporations
Through the Area Corporate Office, SMBC provides services to
mid-sized corporations and SME clients. The Area Corporate Office
Collaboration with Local Credit Guarantee
Corporations
SMBC offers Business Select Loans, a loan service that offers
has in place a system for providing specialized services utilizing the
un secured and unguaranteed financing, and also provides jointly
networks of SMBC Group companies to address customers’ funding
guaranteed loans and support for using prefectural financing systems
needs, wide-ranging financial needs, and management issues. We
in Japan through collaboration with local credit guarantee corpora-
are also supporting customers’ business continuity through funding
tions, enabling it to meet the funding needs of customers impacted
assistance via means such as setting up a special fund specifically for
by the COVID-19 pandemic.
mid-sized corporations and SME clients impacted by the COVID-19
pandemic.
Credit Guarantee Corporation
Name
Going forward, we will continue to fulfill our social responsibility
as a financial institution by providing support based on the custom-
Credit Guarantee Corporation of Tokyo
er’s standpoint.
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
Corporate
Office
• Area Main
Offices
• Branches,
etc.
Affiliation
• Departments
of the
head office
Affiliation
• External
organizations
• External experts /
professionals
Affiliation
SMBC Group Companies
131
SMBC GROUP ANNUAL REPORT 2020 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 second phase.
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 contribu-
eration involves links with external experts / professionals *1 and
tions to regional revitalization from various angles based on specific
external organizations*2 to provide support in drawing up plans for
issues and needs of individual local government entities and regions
improvement and advice in such areas as cost cutting and asset
across Japan. By coordinating with local government entities, regional
sales.
financial institutions, and private-sector companies, we provide a wide
For clients that have suffered damage in natural disasters or have
variety of support services. For example, we leverage the functions
been impacted by the COVID-19 pandemic, we propose optimal
of SMBC Group companies to help enhance regional infra structure,
solutions and support the implementation of rebuilding lives and
attract domestic and overseas tourists, promote tourism by utiliz-
business.
ing historic cultural heritage sites, accomplish the United Nations
*1 SMBC Consulting, certified tax accountants, certified public accountants,
Sustainable Development Goals, and increase popularity of regional
etc.
*2 Council supporting revitalization of SMEs, Regional Economy Vitalization
Corporation of Japan, etc.
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”
132
SMBC GROUP ANNUAL REPORT 2020
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*2
Ratio of employees with
disabilities (% of total)*3
2018
2019
2020
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�
26,457
12,021
45.44%
14,436
54.56%
37 yrs 9 mos�
40 yrs 3 mos�
35 yrs 8 mos�
13 yrs 11 mos�
16 yrs 0 mos�
12 yrs 1 mos�
696
804
824
2.38%
2.47%
2.65%
*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 Retroactive revisions have been made to previous fiscal years due to change in definition�
*3 As of March 1 of respective years
April 1
2020
Number of new hires
622
Number of newly employed female graduates
201
Ratio of newly employed females to total new employees 46.3% 40.3% 32.3%
2019
667
269
2018
803
372
Fiscal
Number of employees taking parental leave
Number of career hires
2019
2018
2017
2,948
2,370
2,217
<223> <316> <838>
25
32
16
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
2018
2019
2020
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�
2,084
987
47.36%
1,097
52.64%
44 yrs 3 mos�
46 yrs 3 mos�
42 yrs 5 mos�
9 yrs 0 mos�
7 yrs 9 mos�
10 yrs 1 mos�
90
95
84
1.96%
2.51%
2.31%
*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, 2020�
April 1
2020
Number of new hires
52
Number of newly employed female graduates
16
Ratio of newly employed females to total new employees 51.9% 40.9% 30.8%
2019
44
18
2018
54
28
Sumitomo Mitsui Finance and Leasing
March 31
Number of employees*1
2019
2018
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions*2
Ratio of employees with
disabilities (% of total)*3
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�
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�
2020
2,448
1,590
64.95%
858
35.05%
42 yrs 2 mos�
43 yrs 8 mos�
39 yrs 2 mos�
15 yrs 0 mos�
16 yrs 3 mos�
12 yrs 6 mos�
19
36
38
2.18%
2.05%
1.80%
*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
2020
Number of new hires
81
Number of newly employed female graduates
33
Ratio of newly employed females to total new employees*4 50.0% 56.6% 40.7%
2019
76
43
2018
56
28
Fiscal
Number of employees taking parental leave
Number of career hires
2017
69
<35>
7
2018
44
<17>
16
2019
48
<9>
18
SMBC Nikko Securities
March 31
Number of employees*1
2018
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service*2
Male
Female
Number of women in
managerial positions
Ratio of employees with
disabilities (% of total)*3
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�
2019
2020
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�
10,187
6,330
62.14%
3,857
37.86%
41 yrs 4 mos�
42 yrs 5 mos�
39 yrs 7 mos�
13 yrs 3 mos�
13 yrs 4 mos�
13 yrs 2 mos�
166
171
178
2.16%
2.38%
2.49%
*1 Excluding employees seconded to other companies, executive officers, part-time employees,
dispatched employees, locally hired employees (LH) at overseas branches
*2 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�
*3 As of March 31 of respective years
April 1
2020
Number of new hires
341
Number of newly employed female graduates
118
Ratio of newly employed females to total new employees 37.6% 35.1% 34.6%
2019
325
114
2018
354
133
Fiscal
Number of employees taking parental leave
Number of career hires
2017
94
<1>
35
2018
95
<33>
28
2019
117
<25>
25
Fiscal
Number of employees taking parental leave
Number of career hires
Note: The merger with SMBC Friend Securities was conducted in January 2018�
2017
399
<62>
89
2018
409
2019
446
<64> <101>
56
59
133
SMBC GROUP ANNUAL REPORT 2020 Sumitomo Mitsui Card
March 31
Number of employees*1
2018
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions*2
Ratio of employees with
disabilities (% of total)*3
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�
2019
2020
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�
2,533
1,159
45.76%
1,374
54.24%
39 yrs 11 mos�
41 yrs 9 mos�
38 yrs 4 mos�
15 yrs 3 mos�
16 yrs 3 mos�
14 yrs 5 mos�
5
17
23
2.32%
2.45%
2.68%
SMBC Consumer Finance
March 31
2018
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
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�
2019
2020
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�
2,475
1,454
58.75%
1,021
41.25%
41 yrs 8 mos�
43 yrs 1 mos�
39 yrs 7 mos�
16 yrs 1 mos�
18 yrs 1 mos�
13 yrs 2 mos�
112
118
126
2.32%
2.43%
3.00%
*1 The number of full-time employees� This excludes directors, consultants, advisors, part-time
employees, specialist contract employees, and affiliated company employees (including employees
seconded from other companies and organizations)�
*2 Retroactive revisions have been made to previous fiscal years due to change in definition�
Total of number of managers ranked section manager or above (division managers, group
managers, and area work L rank managers)
*3 Computed based on single month of March
April 1
2020
Number of new hires
78
Number of newly employed female graduates
36
Ratio of newly employed females to total new employees 60.9% 51.9% 46.2%
2019
54
28
2018
69
42
Fiscal
Number of employees taking parental leave
Number of career hires
2017
187
<29>
22
2018
202
<33>
16
2019
218
<36>
48
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
2018
2019
2020
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�
3,252
1,820
55.97%
1,432
44.03%
43 yrs 5 mos�
45 yrs 6 mos�
40 yrs 11 mos�
19 yrs 0 mos�
21 yrs 1 mos�
16 yrs 3 mos�
75
88
94
2.39%
2.32%
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
2020
Number of new hires
53
Number of newly employed female graduates
32
Ratio of newly employed females to total new employees 63.3% 49.0% 60.4%
2019
51
25
2018
60
38
Fiscal
Number of employees taking parental leave*3
Number of career hires
*3 Including employees on short-term childcare leave�
Note: Cedyna Financial Corporation and SMBC Finance Service Co�, Ltd�, were merged on July 1, 2020�
2019
135
<35>
0
2018
180
<32>
0
2017
136
<3>
0
*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 As of March 31 of respective years
April 1
2020
Number of new hires
57
Number of newly employed female graduates
37
Ratio of newly employed females to total new employees 43.6% 50.0% 64.9%
2019
48
24
2018
55
24
Fiscal
Number of employees taking parental leave*3
Number of career hires
*3 Retroactive revisions have been made to previous fiscal years due to change in definition�
2018
58
<3>
1
2017
59
<3>
1
2019
85
<7>
0
Japan Research Institute
March 31
2018
Number of employees*1
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Ratio of employees with
disabilities (% of total)*2
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�
2019
2020
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�
2,510
1,841
73.35%
669
26.65%
41 yrs 1 mos�
41 yrs 8 mos�
39 yrs 3 mos�
12 yrs 10 mos�
13 yrs 3 mos�
11 yrs 8 mos�
2.40%
2.27%
2.23%
*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 As of March 31 of respective years
April 1
2020
Number of new hires
119
Number of newly employed female graduates*3
35
Ratio of newly employed females to total new employees 30.5% 27.3% 29.4%
*3 Including only Sogoshoku employees� Ippanshoku employees are excluded�
2019
110
30
2018
105
32
Fiscal
Number of employees taking parental leave
Number of career hires*4
*4 Excluding employees of temporary employment agencies converted to direct employees and former
2019
84
<35>
60
2018
75
<30>
46
2017
64
<21>
33
134
bank employees transferred to the company
SMBC GROUP ANNUAL REPORT 2020
Sumitomo Mitsui DS Asset Management
March 31
Number of employees*1
2018
2019
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions
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�
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�
2020
845
614
72.66%
231
27.34%
45 yrs 11 mos�
47 yrs 5 mos�
42 yrs 0 mos�
15 yrs 3 mos�
16 yrs 6 mos�
11 yrs 8 mos�
10
9
11
*1 The number of full-time employees� This excludes directors, dispatched employees, and locally
hired employees at overseas branches�
Note: Figures for March 31, 2018 and 2019, include those for the former Sumitomo Mitsui Asset
Management Company, Limited�
April 1
2020
Number of new hires
12
Number of newly employed female graduates
6
Ratio of newly employed females to total new employees 45.5% 40.0% 50.0%
Note: Figures for April 2018 and April 2019 include those for the former Sumitomo Mitsui Asset
2019
15
6
2018
11
5
Management Company, Limited�
Fiscal
Number of employees taking parental leave
Number of career hires
Note: Figures for fiscal 2017 and fiscal 2018 include those for the former Sumitomo Mitsui Asset
2019
19
<8>
2
2018
10
<0>
15
2017
11
<1>
32
Management Company, Limited�
Note: In April 2019, Sumitomo Mitsui DS Asset Management Company, Limited, was formed
through the merger of Sumitomo Mitsui Asset Management Company, Limited, and Daiwa SB
Investments Ltd�
135
SMBC GROUP ANNUAL REPORT 2020 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)
Applicable for caring for sick
children as well as for school
events and other reasons
Shorter
working hours
Employees can choose
shorter working hours for
each day or fewer days
worked per week, both
applicable until March 31 of
the 6th grade
SMBC
Restrictions
on overtime
Until March 31 of
the 6th grade
Exemption from
late-night work
Until March 31 of
the 6th grade
SMBC Trust
Bank
1 year or maximum of 18
months in case of inability
to place in daycare center
Up to 26 months if other
conditions are met
Until March 31 of the 6th
grade (10 days per annum per
child; 20 days for two or more
children)
Employees can work
shortened hours equivalent
to working a minimum of 6
hours per day until March
31 of the 6th grade
Until March 31 of
the 6th grade
Until March 31 of
the 6th grade
• Short-term childcare leave
• Work relocations
• Primary Work Location Registration
system
• Work Location of Choice system
• Childcare subsidies
• Leave for nursing care
• Shorter working hours allowed
for nursing care
• Nursing care leave system
• Career design leave system
• Flextime system
• Flexibility in the work place
• Paternity leave (3 days)
• Leave for nursing care
Other principal systems
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
• Work relocations
• System for rehiring former
• System for rehiring former
employees
• Special leave for childbirth
• Carryover leave (infertility treatment)
• Half day leave
• Flexibility in the work place
• Telework
• Staggered working hours
• Dual-Career Support system
for side work
• Shorter working hours allowed
for nursing care
• Family care time off
• Family support leave
• Short-term childcare leave
• Annual leave in hour increments
• Staggered working hours
• Nursing care leave system
• Flextime system
• Flexibility in the work place
• Life support leave system
• Childcare subsidies
• Work-from-Home Policy
• Half-day paid leave
• Hourly paid leave
• Amortized Holiday Reserving Policy
• Side business
• Long-Term Self Development Leave
Policy a�k�a� “Challenge Leave”
• Three-day and four-day workweeks
• Shorter working hours for nursing
care
• Rehiring former employees
• Telework
• Flextime system
• Health-purpose or anniversary leave
• Short-term childcare leave
• Leave for nursing care
• Shorter working hours allowed
for nursing care
• Nursing care and sick child care
leave system (by the hour)
• System for rehiring former
employees
• Childcare leave (2 days)
• School-visiting day (2 days a year)
• Rehiring of former employees who
quit for childcare or care-giving
reasons
• Paternity leave (3 days)
• Rollover of unused paid vacation
• Nursing care leave
• Adjustment of work start and
end times
• Days off for nursing care
• Special leave for childbirth
• Paid leave for initial 15 days
of childcare
• Half day leave
• Leave system for receiving
treatment while working
• Career design leave system
• Annual leave in hour increments
• Flextime system
• Daycare subsidies
• Celebratory gifts for birth of
3rd child
• Leave for accompanying spouse
undergoing job relocation
employees
• Short-term childcare leave
• Leave for nursing care
• Shorter working hours allowed
for nursing care
• Half day leave
• 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
• Work relocations
• Staggered working hours
• Half-day paid leave
• Special leave for childbirth
• Childcare subsidies
• Nursing care leave, days off
for nursing care
• Work relocations
• Staggered working hours
• Half-day paid leave
• Special leave for childbirth
• Maternity leave
• Maternity work system
• Area-limited employment system
• 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 for supporting return-to-work
after childcare leave
• Childcare subsidies
• Telecommuting
• Flextime system
• Nursing care leave
• Shorter working hours
(for nursing care, etc�)
• Time off and shorter working hours
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)
Employees can choose
to reduce daily working
hours by 30, 60, or 90
minutes or reduce the
number of days worked a
week until March 31 of
child’s 3rd-grade year
Until March 31 of
the 3rd grade
Until March 31 of
the 3rd grade
Until 3 years of age
Until 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)
Employees can choose to
work 6, 6�5, 7, or 7�5 hours
a day until March 31 of
6th grade
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
Sumitomo
Mitsui Finance
and Leasing
SMBC Nikko
Securities
Sumitomo
Mitsui Card
Cedyna
SMBC
Consumer
Finance
Japan
Research
Institute
Sumitomo
Mitsui DS Asset
Management
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
• Leave for childbirth by spouse
• Leave for taking care of sick
children
• Annual leave in half-day increments
• Telecommuting
• Leave for nursing care
• Shorter working hours allowed
for nursing care
• Job return system
• Lifestyle enriching leave
• Paid leave for initial 15 days
of childcare
Note: Cedyna Financial Corporation and SMBC Finance Service Co�, Ltd�, were merged on July 1, 2020�
136
SMBC GROUP ANNUAL REPORT 2020 Corporate Data
Sumitomo Mitsui Financial Group, Inc.
■ Directors and Executive Officers (as of June 30, 2020)
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., Risk Management Dept.,
Americas Division, Credit & Investment Planning Dept.
Toru Nakashima
Group CFO and Group CSO
Public Relations Dept., Corporate Planning Dept.,
Business Development Dept., Financial Accounting Dept., Digital
Strategy Dept.
Directors
Atsuhiko Inoue
Toru Mikami
Yoshihiko Shimizu
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 Global Business Unit
Toshikazu Yaku
Group CHRO
General Affairs Dept., Human Resources Dept.,
Quality Management Dept., Administrative Services Dept.
Senior Managing Executive Officers
Katsunori Tanizaki
Group CDIO
Digital Solution Division
Digital Strategy Dept.
Naoki Tamura
Head of Retail Business Unit
Kimio Matsuura
Co-Head of Wholesale Business Unit
Tetsuro Imaeda
Group CCO
Compliance Dept.
Fumiharu Kozuka
Group CAE
Audit Dept.
Masamichi Koike
Head of Global Markets Business Unit
Shoji Masuda
Group CIO
IT Planning Dept., System Security Planning Dept.,
Data Management Dept., Operations Planning Dept.
(1) Mr. Matsumoto, Mr. Mitchell, Mr. Yamazaki, Mr. Kohno, Mr. Tsutsui,
Mr. Shinbo and Ms. Sakurai satisfy the requirements for an “outside
director” under the Companies Act.
DEPUTY CHAIRMAN
Manabu Narita
Toshihiro Isshiki
Deputy Head of Retail Business Unit (Wealth Management
Business Division)
Transaction Business Planning Dept.
Ryuji Nishisaki
Deputy Head of Global Business Unit
Iwao Kawaharada
Deputy Head of Wholesale Business Unit
Toru Sawada
Credit & Investment Planning Dept.
Teiko Kudo
Deputy Head of Wholesale Business Unit (Financial Solutions
Dept., Sustainable Business Promotion Dept., Planning Dept.,
Wholesale Business Unit), Deputy Head of Global Business Unit
Managing Executive Officers
CHOW Ying Hoong
Co-Head of Asia Pacific Division
Naoya Ishida
Wholesale Business Unit
Takashi Aiki
Group Deputy CIO and Group Deputy CDIO
Nobuyuki Kawabata
Global Business Unit
Business Development Dept.
Hitoshi Ishii
Deputy Head of Wholesale Business Unit
Kazuhiro Notsu
Group Deputy CFO
Hitoshi Minami
Deputy Head of Global Business Unit
Masayoshi Furusho
Group Deputy CHRO
Takaki Ono
Wholesale Business Unit
Yoshihiro Hyakutome
Head of Americas Division
Takashi Yamashita
Deputy Head of Retail Business Unit
Hideo Goto
Retail Business Unit
Toshihiro Sato
Deputy Head of Global Markets Business Unit
Takeshi Omoto
Group Deputy CIO
Tadaaki Komori
Deputy Head of Wholesale Business Unit
Hironari Shoji
Wholesale Business Unit
Eiichi Sekiguchi
Wholesale Business Unit
Kenichi Hida
Deputy Head of Retail Business Unit
Yusuke Hirako
Wholesale Business Unit, Retail Business Unit
Olympic and Paralympic Dept., Corporate Planning Dept.
Muneo Kanamaru
Wholesale Business Unit
Airo Shibuya
Head of Digital Solution Division
Shinya Inose
Group Deputy CCO
Hiroshi Irie
Head of East Asia Division
Yoshiaki Kageyama
Co-Head of Asia Pacific Division
Nobu Sakamoto
Deputy Head of Retail Business Unit
Head of Wealth Management Business Division
Hideki Sakamoto
Deputy Head of Wholesale Business Unit
Keiichiro Nakamura
Head of Europe, Middle East and Africa Division
Yuichi Nishimura
Deputy Head of Americas Division
Fumihiko Ito
General Manager, Corporate Planning Dept.
Hirofumi Otsuka
General Manager, Planning Dept., Global Business Unit
Takashi Kobayashi
General Manager, Human Resources Dept.
Rie Asayama
Retail Business Unit
Quality Management Dept.
Yukiko Yoritaka
Human Resources Dept.
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.
Takanori Kato
Wholesale Business Unit (Planning Dept., Wholesale Business Unit)
Isaac Deutsch
Deputy Head of Americas Division
Hideyuki Omokawa
Business Development Dept.
Akio Isowa
General Manager, Transaction Business Planning Dept.
Tomoaki Nakayama
Digital Strategy 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
Shinsuke Ushijima
Group Deputy CSO
Teruya Sugino
Group Deputy CRO
Tetsuro Yoshino
Group Deputy CAE
General Manager, Audit Dept.
Terumasa Takahashi
General Manager, Planning Dept., Retail Business Unit
Tatsuya Okumura
General Manager, Quality Management Dept.
Hideki Takamatsu
General Manager, Operations Planning Dept.
Hideki Tahara
General Manager, Public Relations Dept.
Akio Uemura
General Manager, Planning Dept., Retail Business Unit
Kenji Kawabata
General Manager, Credit & Investment Planning Dept.
Hideo Kawafune
General Manager, Planning Dept., Europe, Middle East and Africa
Division
Akihiro Kawara
General Manager, Planning Dept., Global Markets Business Unit
Carl Adams
Deputy Head of Americas Division
[REFERENCE]
Group CxO/Head of Business Units
(as of June 30, 2020)
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 Global Business Unit
Masahiko Oshima
Head of Global Markets
Business Unit
Masamichi Koike
Group CxO
Group CEO
Jun Ohta
Group CFO and Group CSO
Toru Nakashima
Group CRO
Haruyuki Nagata
Group CCO
Tetsuro Imaeda
Group CHRO
Toshikazu Yaku
Group CIO
Shoji Masuda
Group CDIO
Katsunori Tanizaki
Group CAE
Fumiharu Kozuka
137
SMBC GROUP ANNUAL REPORT 2020 Sumitomo Mitsui Financial Group Organization (as of June 30, 2020)
Public Relations Dept.
Corporate Planning Dept.
Investor Relations Dept.
Corporate Sustainability Dept.
Olympic and Paralympic Dept.
Productivity Management Dept.
Retail Business Unit
Planning Dept., Retail Business Unit
Planning Dept., Wealth Management
Business Division
Retail Marketing Dept.
Business Development Dept.
Card Loan Dept.
Retail IT Strategy Dept.
Financial Accounting Dept.
Tax Planning Dept.
Equity Portfolio Management Dept.
IT Planning Dept.
Board of
Directors
Nomination
Committee
Shareholders’
Meeting
Compensation
Committee
Audit
Committee
Risk
Committee
Group
Management
Committee
Audit
Committee
Office
System Security Planning Dept.
Wholesale Business Unit
General Affairs Dept.
Legal Dept.
Human Resources Dept.
Planning Dept., Wholesale Business Unit
Financial Solutions Dept.
Sustainable Business Promotion Dept.
Learning and Development Institute
Corporate Digital Solution Dept.
Diversity and Inclusion Dept.
Global Human Resources Dept.
*2
*1
Quality Management Dept.
Global Business Unit
Digital Strategy Dept.
*1
Silicon Valley Digital Innovation Lab.
Data Management Dept.
Planning Dept., Global Business Unit
Global Portfolio Strategy Dept.,
Global Business Unit
Asia Growing Markets Dept.
Corporate Risk Management Dept.
Risk Management Information Dept.
Americas Division
Planning Dept.,
Americas Division
Europe, Middle East
and Africa Division
Asia Pacific Division
Planning Dept.,
Europe, Middle East
and Africa Division
Planning Dept.,
Asia Pacific Division
East Asia Division
Planning Dept.,
East Asia Division
Global Markets Business Unit
Planning Dept., Global Markets Business Unit
Risk Management Dept.,
Americas Division
Credit & Investment Planning Dept.
Compliance Dept.
Anti Money Laundering &
Financial Crime Prevention Dept.
Compliance Dept., Americas Division
Administrative Services Dept.
Secretariat
Corporate Real Estate
Management Dept.
Cost Control Dept.
Operations Planning Dept.
Audit Dept.
T
r
a
n
s
a
c
t
i
o
n
B
u
s
i
n
e
s
s
P
a
n
n
n
g
D
e
p
t
.
i
l
138
*1 Belongs to Digital Solution Division.
*2 Belongs to Wealth Management Business Division.
SMBC GROUP ANNUAL REPORT 2020
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) Mr. Takahashi, Mr. Kadonaga, Mr. Oka and Ms. Kuboyama satisfy the requirements for
an “outside director” under the Companies Act.
(as of June 30, 2020)
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 Global Banking Unit
Toshikazu Yaku*
General Affairs Dept., Human Resources Dept.,
Retail Human Resources Dept., Human Resources Development Dept.,
Quality Management Dept., Administrative Services Dept.
Director and Senior Managing Executive Officers
Haruyuki Nagata*
Corporate Risk Management Dept., Risk Management Depts.,
Americas Division, Europe, Middle East and Africa Division and Asia,
Credit & Investment Planning Dept., Credit Depts.,
Americas Division, Europe, Middle East and Africa Division, Asia Pacific
Division and East Asia Division, Global Credit Dept.
Human Resources Dept., Retail Human Resources Dept., Human Resources
Development Dept.
Keiji Kakumoto*
Deputy Head of Wholesale Banking Unit (in charge of West Japan)
Located at Osaka
Toru Nakashima*
Public Relations Dept., Corporate Planning Dept.,
Business Development Dept., Financial Accounting Dept.,
Digital Strategy Dept.
Tetsuro Imaeda*
Compliance Dept.
Shoji Masuda*
IT Planning Dept., System Security Planning Dept.,
Data Management Dept., Operations Planning 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.
139
SMBC GROUP ANNUAL REPORT 2020 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
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. II, IX, X and XI)
Hiroshi Irie
Head of East Asia Division and
Chairman of Sumitomo Mitsui Banking Corporation (China) Limited
Hiroyuki Kamimoto
Head of Corporate Advisory Division and Deputy Head of Financial
Solutions Division
Kenji Hirao
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. I, IV, VI and VII)
Takeshi Mikami
Internal Audit Dept., Credit Review Dept.
Masatsugu Kojima
Deputy Head of Wholesale Banking Unit
Airo Shibuya
Head of Digital Solution Division
Ryoichi Tanaka
Deputy Head of Corporate Advisory Division
Yoshiaki Kageyama
Co-Head of The Asia Pacific Division
Keiichiro Nakamura
Head of Europe, Middle East and Africa Division and CEO of Sumitomo Mitsui
Banking Corporation Europe Limited
Yuichi Nishimura
Deputy Head of The Americas Division
Fumihiko Ito
General Manager, Corporate Planning Dept.
Katsufumi Uchida
Deputy Head of Europe, Middle East and Africa Division
Hirofumi Otsuka
General Manager, Planning Dept., Global Banking Unit
Takashi Kobayashi
General Manager, Human Resources Dept.
Rajeev Kannan
Deputy Head of The Asia Pacific Division and General Manager,
Corporate Banking Dept., Asia Pacific Division
DEPUTY CHAIRMAN
Manabu Narita
EXECUTIVE OFFICERS
Senior Managing Executive Officers
Katsunori Tanizaki
Digital Solution Division
Digital Strategy Dept.
Kimio Matsuura
Co-Head of Wholesale Banking Unit
Naoki Tamura
Head of Retail Banking Unit
Ryuji Nishisaki
Deputy Head of Global Banking Unit
Toshihiro Isshiki
Private Advisory Division,
Transaction Business Division
Iwao Kawaharada
Deputy Head of Wholesale Banking Unit
Head of Corporate Banking Division
Toru Sawada
Credit & Investment Planning Dept.
Deputy Head of Wholesale Banking Unit
(Corporate Credit Dept., Credit Administration Dept., Trust Services Dept.)
Corporate Research Dept.
Teiko Kudo
Deputy Head of Wholesale Banking Unit (Financial Solutions Dept.,
Sustainable Business Promotion Dept., Planning Dept.,
Wholesale Banking Unit)
Head of Financial Solutions Division
Corporate Advisory Division
Deputy Head of Global Banking Unit
Masamichi Koike
Head of Treasury Unit
Managing Executive Officers
Nobuyuki Kawabata
Deputy Head of Global Banking Unit
Business Development Dept.
CHOW Ying Hoong
Co-Head of The Asia Pacific Division
Muneo Kanamaru
Deputy Head of Wholesale Banking Unit (in charge of East Japan)
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Dept. XII)
Yusuke Hirako
Deputy Head of Wholesale Banking Unit, Deputy Head of Retail Banking Unit
Olympic and Paralympic Dept., Corporate Planning Dept.
Takashi Arima
Osaka Corporate Banking Division
(Osaka Corporate Banking Depts. I, II and III)
Hiroyoshi Korosue
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. III, V and VIII)
Takaki Ono
Deputy Head of Wholesale Banking Unit (in charge of West Japan)
Kotaro Hagiwara
Nagoya Corporate Banking Division (Nagoya Corporate Banking Dept.)
Head of Nagoya Middle Market Banking Division
140
SMBC GROUP ANNUAL REPORT 2020 Executive Officers
Stanislas Roger
Deputy Head of Europe, Middle East and Africa Division
Rie Asayama
Deputy Head of Retail Banking Unit
Quality Management Dept.
Isaac Deutsch
Deputy Head of The Americas Division
John Ferreira
(Executive Officer without portfolio)
Yukiko Yoritaka
Human Resources Dept.
Antony Yates
President of SMBC Nikko Capital Markets Limited
Shuji Yabe
Deputy Head of The Americas Division and Chairman of SMBC Nikko
Securities America, Inc.
Nobuaki Nakamura
General Manager, Planning Dept., Treasury Unit
Fumito Yoshioka
Head of Higashinihon Daiyon Middle Market Banking Division
Alan Krouk
Deputy Head of Global Banking Unit
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
Yoshiyuki Gono
General Manager, Corporate Risk Management Dept.
Takanori Kato
General Manager, Planning Dept., Wholesale Banking Unit
Takafumi Tsuji
Deputy Head of Financial Solutions Division
Akihiro Yasuda
Head of Higashinihon Daisan Middle Market Banking Division
James Fenner
General Manager, Specialised Products Dept., Europe, Middle East and
Africa Division
Takayuki Inoue
Credit Depts., Americas Division, Europe, Middle East and Africa Division,
Asia Pacific Division and East Asia Division, Global Credit Dept.
Makoto Ueda
Head of Nishinihon Daisan Middle Market Banking Division
Noriyuki Watanabe
Deputy Head of Wholesale Banking Unit (Credit Dept., Wholesale
Banking Unit, Area Credit Dept.), Deputy Head of Retail Banking Unit
(Area Credit Dept.)
Akio Isowa
Head of Transaction Business Division and General Manager,
Transaction Business Planning Dept.
Akihiro Ueda
Deputy Head of Retail Banking Unit
Yoshiyuki Ogata
General Manager, Hong Kong Branch
Nobuo Ozawa
Deputy Head of Corporate Advisory Division
Tomoaki Nakayama
Digital Strategy Dept.
Hiroyuki Fukuda
General Manager, Osaka Corporate Banking Dept. II
Katsuya Fujita
General Manager, Global Markets Marketing Dept.
Hitoshi Miyake
General Manager, Sydney Branch
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
Hideyuki Omokawa
Business Development Dept.
Yuichi Hirano
Head of Kobe Middle Market Banking Division
Takashi Kakiuchi
General Manager, Tokyo Corporate Banking Dept. X
Hideomi Shigematsu
Country Head of Thailand and General Manager, Bangkok Branch
Terumasa Takahashi
Deputy Head of Retail Banking Unit
Tatsuya Okumura
General Manager, Quality Management Dept.
Yasuhiro Shirai
General Manager, Osaka Corporate Banking Dept. I
Hideki Takamatsu
General Manager, Operations Planning Dept.
Hideki Tahara
General Manager, Public Relations Dept.
Daisuke Nakamura
General Manager, Kanda Corporate Business Office -I
Akio Uemura
General Manager, Planning Dept., Retail Banking Unit
Kenji Kawabata
General Manager, Credit & Investment Planning Dept.
Hideo Kawafune
General Manager, Planning Dept., Europe, Middle East and Africa Division
Akihiro Kawara
General Manager, Planning Dept., Treasury Unit
Carl Adams
Deputy Head of The Americas Division and General Manager,
Specialized Finance Dept., Americas Division, Latin America Marketing
Dept., Americas Division, Specialized Finance Dept., Americas Division and
Subscription Secured Finance Dept., Americas Division
141
SMBC GROUP ANNUAL REPORT 2020 SMBC Organization
(as of June 30, 2020)
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.
Corporate Sustainability Dept.
Olympic and Paralympic Dept.
Productivity Management Dept.
Business Development Dept.
Financial Accounting Dept.
Tax Planning Dept.
Equity Portfolio Management Dept.
IT Planning Dept.
System Security Planning Dept.
General Affairs Dept.
Legal Dept.
Human Resources Dept.
Learning and Development Institute
Counseling Dept.
Diversity and Inclusion Dept.
Global Human Resources Dept.
Retail Human Resources Dept.
Human Resources Development Dept.
Quality Management Dept.
Customer Relations Dept.
Digital Solution Division
Digital Strategy Dept.
Data Management Dept.
*4
*4
Retail
Banking Unit
Wholesale
Banking Unit
Shareholders’
Meeting
Board of
Directors
Management
Committee
Global
Banking Unit
Treasury
Unit
Compliance Unit
Compliance Dept.
Anti Money Laundering & Financial
Crime Prevention Department
Compliance Dept., Americas Division
Compliance Dept., Europe, Middle East
and Africa Division
Legal and Compliance Dept.,
Asia Pacific Division
Risk Management Unit
Corporate Risk Management Dept.
Risk Management Information Dept.
Risk Management Dept., Americas Division
Risk Management Dept.,
Europe, Middle East and Africa Division
Risk Management Dept., Asia
Credit & Investment Planning Dept.
Credit Portfolio Management Dept.
Credit Dept., Americas Division
Financial Products Credit Dept.,
Americas Division
Credit Dept., Europe, Middle East and Africa Division
Asset Finance Credit Dept.
LBO Credit Dept.,
Europe, Middle East and Africa Division
Credit Dept., Asia Pacific Division
Credit Dept., East Asia Division
Global Credit Dept.
Environmental and Social Risk Analysis Dept.
Corporate Services Unit
Administrative Services Dept.
Secretariat
Corporate Real Estate Management Dept.
Operations Planning Dept.
Inter-Market Settlement Dept.
142
Area Main Office
Branch
Private Banking Dept.
Area Private Banking Dept.
Consumer Loan Promotion Office
Remote Marketing Dept.
Remote Transaction Marketing Dept.
Call Center
Consumer Finance Promotion Office
Global Transaction Office
E-Transaction Business Center
Area Credit Business Office
Area Corporate Office
Strategic Finance Promotion Office
Credit Business Office
Real Estate Corporate Business Office
Public Institutions Business Office
Global Transaction Office
E-Transaction Business Center
Private Banking Dept.
Area Private Banking Dept.
*7
*7
*6
*6
*6
*6
*7
*7
Global FIG Dept.
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
E-Transaction Business Center
*6
*6
*2
Small and Medium
Enterprises Banking Division
Corporate Banking
Middle Market Banking
Corporate Business Office
Division
Division
Global Corporate
Banking Division
Tokyo Corporate Banking Division
Corporate Banking Dept.
Osaka Corporate Banking Division
Nagoya Corporate Banking Division
East Asia Division
Branches / Representative Offices
in East Asia
*4
*3
Americas Division
Europe, Middle East
and Africa Division
Asia Pacific Division
Planning Dept., Retail Banking Unit
Next W-ing Project Dept.
Retail Facilitating Financing Dept.
Channel Strategy Dept.
Loan Business Dept.
Retail Business Control Dept.
Retail Financial Products Compliance Dept.
Retail Anti Money Laundering Dept.
Business Promotion Dept., Retail Banking Unit
Financial Consulting Dept., Retail Banking Unit
Area Support Dept.
Retail Marketing Dept., Retail Banking Unit
Area Support Dept.
Retail IT Strategy Dept.
Card Loan Dept.
Area Credit Dept.
Planning Dept., Wholesale Banking Unit
Middle Market Facilitating Financing Dept.
Global Corporate Banking Dept.
Wholesale Business Control Dept.
Financial Solutions Dept.
Sustainable Business Promotion Dept.
*1
*5
Strategic Corporate Business Dept.
Public & Financial Institutions Banking Dept., Wholesale Banking Unit
Corporate Credit Dept.
Structured Finance Credit Dept.
Credit Dept., Wholesale Banking Unit
Credit Administration Dept.
Growth Business Development Dept.
M&A Advisory Services Dept.
Corporate Digital Solution Dept.
Small and Medium Enterprises Banking Division
Planning Dept., East Asia Division
Planning Dept., Global Banking Unit
Global IT & Business Administration Planning Dept.
Aviation & Maritime Strategy Dept.
Global Portfolio Strategy Dept.
Global IB Coordination Dept., Global Banking Unit
Planning Dept., Americas Division
Information Control Dept., Americas Division
Planning Dept., Europe, Middle East and Africa Division
IT & Security Planning Dept., Europe, Middle East and Africa Division
Planning Dept., Asia Pacific Division
Learning and Development Dept., Asia
Corporate Solutions Dept., Asia
Asia Growing Markets Dept.
Asia Innovation Centre
Planning Dept., Treasury Unit
Treasury Dept.
Global Investment Dept.
Portfolio Investment Dept.
Trading Dept.
Global Markets Marketing Dept.
Global Markets Solution Dept.
Treasury Dept., Asia Pacific Division
Treasury Dept., East Asia Division
*1
*2
Corporate Advisory Division
Private Advisory Division
Advisory Dept. I
Advisory Dept. II
Advisory Dept. III
Capital Market Dept.
Corporate Research Dept.
Private Advisory Business Dept.
Inheritance Advisory Business Dept.
Corporate Employees Solution Dept.
Defined Contribution Dept.
*3
Transaction Business Division
Transaction Business Planning Dept.
*5
Financial Solutions Division
Structured Finance Dept.
Transaction Products Development Dept.
Strategic Corporate Banking Dept.
Transaction Banking Dept.
Global Advisory Dept.
Global Business Promotion Dept.
*4 Belongs to Digital Solution Division.
*6 Belongs to Retail Banking Unit, Wholesale Banking Unit, and Global Banking Unit.
*7 Belongs to both Retail Banking Unit and Wholesale Banking Unit.
Debt Finance Dept.
Investment Banking Services Dept.
Real Estate Finance Dept.
Merchant Banking Dept.
Distribution Dept.
Asset Finance Dept.
Trust Services Dept.
Trust Business Operations Dept.
Public Institutions Operations Office
Operations Service Branch
Zaikei-office Sub-Branch
Souzoku-office Sub-Branch
Operations Service Office
SMBC GROUP ANNUAL REPORT 2020 Audit and Supervisory
Committee
Audit and Supervisory
Committee Office
Shareholders’
Meeting
Board of
Directors
Management
Committee
Global
Banking Unit
Retail
Banking Unit
Wholesale
Banking Unit
Treasury
Unit
Internal Audit Unit
Internal Audit Dept.
Credit Review Dept.
Corporate Staff Unit
Public Relations Dept.
Corporate Planning Dept.
Corporate Sustainability Dept.
Olympic and Paralympic Dept.
Productivity Management Dept.
Equity Portfolio Management Dept.
Business Development Dept.
Financial Accounting Dept.
Tax Planning Dept.
IT Planning Dept.
System Security Planning Dept.
General Affairs Dept.
Legal Dept.
Human Resources Dept.
Learning and Development Institute
Counseling Dept.
Diversity and Inclusion Dept.
Global Human Resources Dept.
Retail Human Resources Dept.
Human Resources Development Dept.
Quality Management Dept.
Customer Relations Dept.
Digital Solution Division
Digital Strategy Dept.
Data Management Dept.
*4
*4
Compliance Unit
Compliance Dept.
Anti Money Laundering & Financial
Crime Prevention Department
Compliance Dept., Americas Division
Compliance Dept., Europe, Middle East
and Africa Division
Legal and Compliance Dept.,
Asia Pacific Division
Risk Management Unit
Corporate Risk Management Dept.
Risk Management Information Dept.
Risk Management Dept., Americas Division
Risk Management Dept.,
Europe, Middle East and Africa Division
Risk Management Dept., Asia
Credit & Investment Planning Dept.
Credit Portfolio Management Dept.
Credit Dept., Americas Division
Financial Products Credit Dept.,
Americas Division
Credit Dept., Europe, Middle East and Africa Division
Asset Finance Credit Dept.
LBO Credit Dept.,
Europe, Middle East and Africa Division
Credit Dept., Asia Pacific Division
Credit Dept., East Asia Division
Global Credit Dept.
Environmental and Social Risk Analysis Dept.
Corporate Services Unit
Administrative Services Dept.
Secretariat
Operations Planning Dept.
Inter-Market Settlement Dept.
Corporate Real Estate Management Dept.
Area Main Office
*2
Small and Medium
Enterprises Banking Division
Corporate Banking
Division
Middle Market Banking
Division
*1
*5
Global Corporate
Banking Division
Tokyo Corporate Banking Division
Osaka Corporate Banking Division
Nagoya Corporate Banking Division
*4
*3
Branch
Private Banking Dept.
Area Private Banking Dept.
Consumer Loan Promotion Office
Remote Marketing Dept.
Remote Transaction Marketing Dept.
Call Center
Consumer Finance Promotion Office
Global Transaction Office
E-Transaction Business Center
*7
*7
*6
*6
Area Credit Business Office
Area Corporate Office
Corporate Business Office
Strategic Finance Promotion Office
Credit Business Office
Real Estate Corporate Business Office
Public Institutions Business Office
Global Transaction Office
E-Transaction Business Center
Private Banking Dept.
Area Private Banking Dept.
*6
*6
*7
*7
Corporate Banking Dept.
East Asia Division
Branches / Representative Offices
in East Asia
Americas Division
Europe, Middle East
and Africa Division
Asia Pacific Division
Global FIG Dept.
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
E-Transaction Business Center
*6
*6
Planning Dept., Retail Banking Unit
Next W-ing Project Dept.
Retail Facilitating Financing Dept.
Channel Strategy Dept.
Loan Business Dept.
Retail Business Control Dept.
Retail Financial Products Compliance Dept.
Retail Anti Money Laundering Dept.
Business Promotion Dept., Retail Banking Unit
Financial Consulting Dept., Retail Banking Unit
Area Support Dept.
Retail Marketing Dept., Retail Banking Unit
Area Support Dept.
Retail IT Strategy Dept.
Card Loan Dept.
Area Credit Dept.
Planning Dept., Wholesale Banking Unit
Middle Market Facilitating Financing Dept.
Global Corporate Banking Dept.
Wholesale Business Control Dept.
Financial Solutions Dept.
Sustainable Business Promotion Dept.
Strategic Corporate Business Dept.
Public & Financial Institutions Banking Dept., Wholesale Banking Unit
Corporate Credit Dept.
Structured Finance Credit Dept.
Credit Dept., Wholesale Banking Unit
Credit Administration Dept.
Growth Business Development Dept.
M&A Advisory Services Dept.
Corporate Digital Solution Dept.
Small and Medium Enterprises Banking Division
Planning Dept., East Asia Division
Planning Dept., Global Banking Unit
Global IT & Business Administration Planning Dept.
Aviation & Maritime Strategy Dept.
Global Portfolio Strategy Dept.
Global IB Coordination Dept., Global Banking Unit
Planning Dept., Americas Division
Information Control Dept., Americas Division
Planning Dept., Europe, Middle East and Africa Division
IT & Security Planning Dept., Europe, Middle East and Africa Division
Planning Dept., Asia Pacific Division
Learning and Development Dept., Asia
Corporate Solutions Dept., Asia
Asia Growing Markets Dept.
Asia Innovation Centre
Planning Dept., Treasury Unit
Treasury Dept.
Global Investment Dept.
Portfolio Investment Dept.
Trading Dept.
Global Markets Marketing Dept.
Global Markets Solution Dept.
Treasury Dept., Asia Pacific Division
Treasury Dept., East Asia Division
*1
*2
*3
Corporate Advisory Division
Advisory Dept. I
Advisory Dept. II
Advisory Dept. III
Capital Market Dept.
Corporate Research Dept.
Private Advisory Division
Private Advisory Business Dept.
Inheritance Advisory Business Dept.
Corporate Employees Solution Dept.
Defined Contribution Dept.
Transaction Business Division
Transaction Business Planning Dept.
Transaction Products Development Dept.
Transaction Banking Dept.
Global Advisory Dept.
Global Business Promotion Dept.
*4 Belongs to Digital Solution Division.
*6 Belongs to Retail Banking Unit, Wholesale Banking Unit, and Global Banking Unit.
*7 Belongs to both Retail Banking Unit and Wholesale Banking Unit.
*5
Financial Solutions Division
Structured Finance Dept.
Strategic Corporate Banking Dept.
Debt Finance Dept.
Investment Banking Services Dept.
Real Estate Finance Dept.
Merchant Banking Dept.
Distribution Dept.
Asset Finance Dept.
Trust Services Dept.
Trust Business Operations Dept.
Public Institutions Operations Office
Operations Service Branch
Zaikei-office Sub-Branch
Souzoku-office Sub-Branch
Operations Service Office
143
SMBC GROUP ANNUAL REPORT 2020 Principal Subsidiaries and Affiliates (as of March 31, 2020)
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 DS Asset Management
Company, Limited
SMBC Guarantee Co., Ltd.
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.
SMBC REIT Management Co., Ltd.
SMBC Capital Partners Co., Ltd.
87,550
0
(100)
10,000
34,000
100
100
82,843
0
(100)
140,737
10,000
100
100
2,000
50.12
—
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
71,705
20,000
450
10
495
490
500
1,100
1,600
100,010
1,000
500
90
10
10
30
30
30
200
100
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)
0
(99.99)
Jul. 14, 1976
Credit guarantee
—
—
—
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
(100)
(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
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
Mar. 10, 2020
Asset management
Feb. 10, 2020
Investments
May 1, 2017
Biometric authentication services
(Polarify biometric authentication services) and
e-KYC service (Polarify e-KYC)
Oct. 1, 2019
Cloud-based electronic contract services
Polarify, Inc.
SMBC CLOUDSIGN, Inc.
100
77.03
50
51
* Cedyna Financial Corporation and SMBC Finance Service Co., Ltd., were merged on July 1, 2020.
144
SMBC GROUP ANNUAL REPORT 2020 ■ 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
U.S.A
U.S.A.
Brazil
Russia
Germany
Malaysia
US$2,100
US$80.786 million
R$1,559.699 million
RUB6.4 billion
€450 million
MYR2,452 million
SMBC Leasing and Finance, Inc.
U.S.A.
US$4,350
SMBC Rail Services LLC
U.S.A.
SMBC Nikko Securities America, Inc.
U.S.A.
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
TT International Asset Management Ltd U.K.
SMBC Asset Management Services
(UK) Limited
U.K.
US$100
US$500
£11 million
£134 million
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$9,600
Mexico
MXN1,460 million
SMBC International Finance N.V.
Curaçao
SMFG Preferred Capital JPY 3 Limited
Cayman Islands
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$200,000
¥4,900 million
US$18 million
US$65.5 million
US$10,000
US$200 million
SAR18,000,000
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
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
(100)
(100)
100
100
Mar. 3, 2003
Commercial banking
Apr. 27, 2009
Commercial banking
(93.52)
93.52
Feb. 5, 1958
Commercial banking
0
0
(100)
Aug. 8, 1990
Management of the US BHC
and US BHC subsidiaries
(100)
Jun. 26, 1962
Commercial banking
100
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
(100)
Nov. 9, 1990
(100)
May 11, 2011
Leasing, investments,
Deferred payment services
Leasing, money lending,
selling used lease property
and maintenance, and other
related business
(80)
Aug. 8, 1990
Securities, investments
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
84.84
Mar. 13, 1990
(100)
0
(100)
Dec. 4, 1986
Derivatives and investments,
securities services
Derivatives and investments,
Leasing
(100)
(100)
100
(100)
(100)
(100)
(100)
(100)
100
(100)
(100)
(100)
(100)
(100)
100
—
—
100
100
100
100
100
—
100
100
Feb. 7, 2003
Credit guarantee,
bond investment
Feb. 28, 2020
Investment management
Oct. 16, 2019
Stock holding
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
Aug. 12, 2009
Finance
Sep. 19, 1989
Finance
Oct. 17, 1977
Investments
0
0
(100)
(100)
Dec. 18, 2003
Holding and trading securities
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.
145
SMBC GROUP ANNUAL REPORT 2020 Issued Capital
(Millions of Yen)
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
(46.57)
46.57
Sep. 19, 2000
Commercial banking
(24.08)
21.30 (0.13)
Nov. 14, 2017
Business management
0
0
(100)
(100)
Nov. 24, 1950
Commercial banking
Sep. 6, 1949
Commercial banking
37,250
29,589
38,971
39,984
Rp928,707 million
Rp2,442,060 million
US$428 million
HKD41,379 million
0
0
0
0
0
0
0
0
0
15,000
50
(100)
(100)
(35.10)
(35.10)
(15.07)
(18.25)
(19.57)
(100)
(20)
(50)
(49)
35.10
35.10
15.07
18.25
19.57
—
—
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
(49.53)
28.52 (3.33)
Mar. 29, 1969
(49)
49
Dec. 5, 2014
Information processing services
(23.67)
23.67
Apr. 24, 2012
Investment management
(40)
40
Feb. 1, 2010
Investments, fund management
(24.50)
24.50
Jul. 31, 2018
Investments
49
—
Jun. 1, 2018 Marketing
■ Principal Affiliates
Company Name
The Japan Net Bank, Limited
Kansai Mirai Financial Group, Inc.
Kansai Mirai Bank, Limited
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
US$887 million
14,374
5,000
600
2,054
100
China Post & Capital Fund Management Co., Ltd.
CNY304 million
Daiwa Securities SMBC Principal
Investments Co., Ltd.
Spring Infrastructure Capital Co., Ltd.
BrainCell, Inc.
100
250
300
0
0
0
0
0
0
0
0
0
146
SMBC GROUP ANNUAL REPORT 2020 International Directory (as of June 30, 2020)
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
Hong Kong Branch Kowloon Office
19F, The Metropolis Tower,
10 Metropolis Drive, Hunghom,
Kowloon, Hong Kong
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
147
SMBC GROUP ANNUAL REPORT 2020 Sumitomo Mitsui Banking Corporation
(China) Limited Suzhou Branch
12F, SND International Commerce Tower,
No.28 Shishan Road, Suzhou New
District, Suzhou, Jiangsu 215011,
The People’s Republic of China
Tel: 86 (512) 6606-6500
Sumitomo Mitsui Banking Corporation
(China) Limited Dalian Branch
Senmao Building 4F-A, 147 Zhongshan
Road, Xigang District, Dalian,
The People’s Republic of China
Tel: 86 (411) 3905-8500
Sumitomo Mitsui Banking Corporation
(China) Limited Tianjin Branch
12F, The Exchange Tower 2,
189 Nanjing Road, Heping District,
Tianjin 300051,
The People’s Republic of China
Tel: 86 (22) 2330-6677
Sumitomo Mitsui Banking Corporation
(China) Limited Beijing Branch
Unit1601,16F, North Tower,
Beijing Kerry Centre, No.1, Guang
Hua Road, Chao Yang District,
Beijing 100020,
The People’s Republic of China
Tel: 86 (10) 5920-4500
Sumitomo Mitsui Banking Corporation
(China) Limited Kunshan Sub-Branch
Room 2001-2005, Taiwan Business
Association International Plaza,
No. 399 Qianjin East Road, Kunshan,
Jiangsu 215300,
The People’s Republic of China
Tel: 86 (512) 3687-0588
Sumitomo Mitsui Banking Corporation
(China) Limited Shanghai Pilot Free
Trade Zone Sub-Branch
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
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 BTPN 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
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
148
SMBC GROUP ANNUAL REPORT 2020 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
149
SMBC GROUP ANNUAL REPORT 2020 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
White Plains Representative Office
1 North Lexington Avenue, 6F, 9F, 10F,
White Plains, NY,10601, U.S.A.
Tel: 1 (212) 224-7240
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
Carrera 11 #79-52, Oficina 1002,
Bogotá DC, 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
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
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
150
SMBC GROUP ANNUAL REPORT 2020 SMBC Aviation Capital Limited
IFSC House, IFSC, Dublin 1, Ireland
Tel: 353 (1) 859-9000
SMBC Advisory Services Saudi Arabia
LLC
7th Floor Al Faisaliah Tower,
P.O.Box 3333, Riyadh 12212,
Kingdom of Saudi Arabia
Tel: 966-11-417-5701
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-(4036)-6701
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 Düsseldorf Branch
Prinzenallee 7, 40549 Düsseldorf,
Germany
Tel: 49 (211) 36190
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
151
SMBC GROUP ANNUAL REPORT 2020 SMBC Bank EU AG
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
JSC Sumitomo Mitsui Rus Bank
Brussels Branch
SMBC Bank EU AG Prague Branch
Düsseldorf Branch
SMBC Bank EU AG 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
■ 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
Suzhou Industrial Park Sub-Branch
■ PT Bank BTPN Tbk
■ Sumitomo Mitsui Banking Corporation Malaysia Berhad
■ Hong Kong Branch
■ Hong Kong Branch Kowloon Office
■ 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.
152
Overseas service network (as of June 30, 2020)
Total: 86
(including banking subsidiaries and their branches/
sub-branches/rep. offices)
Consolidated subsidiary PT Bank BTPN Tbk has 507 offices. (as of June 30, 2020)
Also showing principal overseas subsidiaries
Los Angeles Branch
San Francisco Branch
Silicon Valley Representative Office
Shenyang Branch
Beijing Branch
Tianjin Branch
Dalian
Branch
Seoul
Branch
Chicago Representative
Office
Canada Branch
Manufacturers Bank
Dallas Representative Office
Houston Representative Office
New York Branch
SMBC Capital Markets, Inc.
SMBC Leasing and Finance, Inc.
SMBC Nikko Securities America, Inc.
SMBC Americas Holdings, Inc.
White Plains Representative Office
Suzhou Branch
Suzhou Industrial Park Sub-Branch
Changshu Sub-Branch
Chongqing Branch
Kunshan Sub-Branch
Head Office (Shanghai)
Shanghai Puxi Sub-Branch
Shanghai Pilot Free
Trade Zone Sub-Branch
Hangzhou
Branch
Hanoi Branch
Guangzhou
Branch
Taipei Branch
Shenzhen Branch
The Bank of East Asia, Limited
Hong Kong Branch
Kowloon Office
SMBC Capital Markets (Asia) Limited
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
Cayman Branch
Mexico City Representative Office
SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
Leon Representative Office
Bogota Representative Office
Banco Sumitomo Mitsui Brasileiro S.A.
Santiago Representative Office
Chonburi Branch
ACLEDA Bank Plc.
Lima Representative Office
Europe, Middle East and Africa
■ 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 Düsseldorf Branch
■ SMBC Bank EU AG Prague Branch
■ SMBC Bank EU AG Madrid Branch
■ SMBC Bank EU AG Milan Branch
■ London Branch
■ Düsseldorf 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
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
■ White Plains 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.
■ 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 2020 SMBC Bank EU AG
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
JSC Sumitomo Mitsui Rus Bank
Brussels Branch
SMBC Bank EU AG Prague Branch
Düsseldorf Branch
SMBC Bank EU AG Düsseldorf Branch
SMBC Bank EU AG Milan Branch
Istanbul Representative Office
SMBC Bank EU AG
Madrid Branch
Sumitomo Mitsui
Banking Corporation
Europe Limited
Paris Branch
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
Ulaanbaatar Representative Office
Mumbai Branch
New Delhi Branch
Johannesburg Representative Office
Perth Branch
Sydney Branch
SMBC Nikko Capital Markets Limited (Sydney Office)
GLOBAL NETWORK
Asia and Oceania
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Ho Chi Minh City Branch
Head Office (Shanghai)
Shanghai Pilot Free Trade Zone Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shanghai Puxi Sub-Branch
Changshu Sub-Branch
Suzhou Industrial Park Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ PT Bank BTPN Tbk
■ Sumitomo Mitsui Banking Corporation Malaysia Berhad
■ Hong Kong Branch
■ Hong Kong Branch Kowloon Office
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
Kunshan Sub-Branch
■ Taipei Branch
■ Seoul Branch
■ Singapore Branch
■ Sydney Branch
■ Perth Branch
■ New Delhi Branch
■ Mumbai Branch
■ Bangkok Branch
■ Chonburi Branch
■ Hanoi Branch
■ Manila Branch
■ Yangon Branch
■ Labuan Branch
■ Yangon Branch Thilawa Front Office
■ Labuan Branch Kuala Lumpur Office
■ Ulaanbaatar Representative Office
■ Phnom Penh Representative Office
■ SMBC Capital Markets (Asia) Limited
■ 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, 2020)
Total: 86
(including banking subsidiaries and their branches/
sub-branches/rep. offices)
Consolidated subsidiary PT Bank BTPN Tbk has 507 offices. (as of June 30, 2020)
Also showing principal overseas subsidiaries
Los Angeles Branch
San Francisco Branch
Silicon Valley Representative Office
Shenyang Branch
Beijing Branch
Tianjin Branch
Dalian
Branch
Seoul
Branch
Chicago Representative
Office
Canada Branch
Manufacturers Bank
Dallas Representative Office
New York Branch
SMBC Capital Markets, Inc.
SMBC Leasing and Finance, Inc.
SMBC Nikko Securities America, Inc.
SMBC Americas Holdings, Inc.
White Plains Representative Office
Houston Representative Office
Suzhou Branch
Suzhou Industrial Park Sub-Branch
Changshu Sub-Branch
Chongqing 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
Kowloon Office
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
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 Düsseldorf Branch
■ SMBC Bank EU AG Prague Branch
■ SMBC Bank EU AG Madrid Branch
■ SMBC Bank EU AG Milan Branch
■ London Branch
■ Düsseldorf 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
■ White Plains 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.
■ 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.
153
SMBC GROUP ANNUAL REPORT 2020 154
SMBC GROUP ANNUAL REPORT 2020 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
156
157
159
161
162
165
Notes to Consolidated Financial Statements 167
Independent Auditor’s Report
SMBC
Supplemental Information
Sumitomo Mitsui Financial Group
Income Analysis (Consolidated)
Assets and Liabilities (Consolidated)
Capital (Non-consolidated)
229
235
241
244
247
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)
328
329
332
334
338
340
345
347
349
350
Trust Assets and Liabilities (Non-consolidated) 352
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
SMBC
Capital Ratio and Leverage Ratio
Information (Consolidated)
Countercyclical buffer requirement by
country or region
Indicators for assessing Global Systemically
Important Banks (G-SIBs)
TLAC information
Liquidity Coverage Ratio Information
(Consolidated)
250
318
319
322
326
Capital Ratio and Leverage Ratio
Information (Consolidated)
Liquidity Coverage Ratio Information
(Consolidated)
353
361
Capital Ratio and Leverage Ratio Information
(Non-consolidated)
363
Liquidity Coverage Ratio Information (Non-
consolidated)
371
Compensation
Sumitomo Mitsui Financial Group
SMBC
Compensation (Consolidated)
375
Compensation
379
006_0800801372008.indd 155
155
2020/08/13 14:06:54
SMBC GROUP ANNUAL REPORT 2020 Financial Highlights
Sumitomo Mitsui Financial Group (Consolidated)
Year ended March 31
For the Year:
2020
2019
Ordinary income ����������������������������������������������������������� ¥ 5,314,313
Ordinary profit ��������������������������������������������������������������
932,064
Profit attributable to owners of parent �������������������������
703,883
Comprehensive income �����������������������������������������������
372,971
¥ 5,735,312
1,135,300
726,681
795,191
At Year-End:
Millions of yen
2018
¥ 5,764,172
1,164,113
734,368
984,133
2017
2016
¥ 5,133,245
1,005,855
706,519
966,057
¥ 4,772,100
985,284
646,687
178,328
Total net assets ������������������������������������������������������������ ¥ 10,784,903
Total assets ������������������������������������������������������������������
219,863,518
Total capital ratio (International Standard) �������������������
Tier 1 capital ratio (International Standard) ������������������
Common equity Tier 1 capital ratio
18.75%
16.63%
(International Standard) ���������������������������������������������
Number of employees ��������������������������������������������������
15.55%
86,443
¥ 11,451,611
203,659,146
¥ 11,612,892
199,049,128
¥ 11,234,286
197,791,611
¥ 10,447,669
186,585,842
20�76%
18�19%
16�37%
86,659
19�36%
16�69%
14�50%
72,978
16�93%
14�07%
12�17%
77,205
17�02%
13�68%
11�81%
73,652
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.
156
010_0800801372008.indd 156
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 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
2019
2020
*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
*8
*8
*1, *8, *16
*3, *4, *5, *6, *7,
*8, *9
*7
*8
*10, *11, *12
¥ 61,768,573
896,739
8,753,816
5,005,103
4,559,429
7,361,253
353
27,128,751
82,517,609
2,063,284
219,733
8,298,393
1,450,323
506,755
341,505
423,346
28,933
46,138
103,645
753,579
440,407
194,289
986
117,896
230,573
26,314
Millions of
U�S� dollars
2020
$ 567,674
8,241
80,450
45,999
41,903
67,652
3
249,322
758,364
18,962
2,019
76,265
13,329
4,657
3,139
3,891
266
424
953
6,926
4,047
1,786
9
1,084
2,119
242
9,564,993
(468,808)
¥203,659,146
9,308,882
(479,197)
¥219,863,518
85,552
(4,404)
$2,020,619
010_0800801372008.indd 157
157
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 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
2019
2020
Millions of
U�S� dollars
2020
*8
*8
*8
*8, *13
*14
*8, *15
*10
*8
*10
¥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
*8
*8
*8
*8, *13
*14
*8, *15
*10
*8
*10
¥127,042,217
10,180,435
3,740,539
13,237,913
$1,167,560
93,562
34,377
121,661
2,385,607
1,409,249
6,084,528
15,210,894
1,461,308
379,000
9,235,639
1,811,355
7,011,967
73,868
3,362
35,777
1,270
26,576
4,687
142,890
3,145
257,384
30,111
9,308,882
209,078,615
2,339,964
692,003
6,336,311
(13,983)
9,354,296
1,371,407
82,257
36,878
(32,839)
(92,030)
21,925
12,951
55,919
139,793
13,430
3,483
84,879
16,647
64,442
679
31
329
12
244
43
1,313
29
2,365
277
85,552
1,921,502
21,505
6,360
58,233
(129)
85,969
12,604
756
339
(302)
(846)
1,365,673
2,064
62,869
10,784,903
¥219,863,518
12,551
19
578
99,117
$2,020,619
158
010_0800801372008.indd 158
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020
Consolidated Statements of Income
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Year ended March 31
Ordinary income ��������������������������������������������������������������������������������������
Interest income �����������������������������������������������������������������������������������
Interest on loans and discounts ����������������������������������������������������
Interest and dividends on securities ���������������������������������������������
Interest on call loans and bills bought ������������������������������������������
Interest on receivables under resale agreements �������������������������
Interest on receivables under securities borrowing transactions ��
Interest on deposits with banks ����������������������������������������������������
Interest on lease transactions �������������������������������������������������������
Other interest income ��������������������������������������������������������������������
Trust fees ��������������������������������������������������������������������������������������������
Fees and commissions ����������������������������������������������������������������������
Trading income �����������������������������������������������������������������������������������
Other operating income ���������������������������������������������������������������������
Lease-related income ��������������������������������������������������������������������
Installment-related income ������������������������������������������������������������
Other ���������������������������������������������������������������������������������������������
Other income ��������������������������������������������������������������������������������������
Gains on reversal of reserve for possible loan losses �������������������
Recoveries of written-off claims ����������������������������������������������������
Other ���������������������������������������������������������������������������������������������
Ordinary expenses ����������������������������������������������������������������������������������
Interest expenses �������������������������������������������������������������������������������
Interest on deposits ����������������������������������������������������������������������
Interest on negotiable certificates of deposit ��������������������������������
Interest on call money and bills sold ���������������������������������������������
Interest on payables under repurchase agreements ���������������������
Interest on payables under securities lending transactions ����������
Interest on commercial paper �������������������������������������������������������
Interest on borrowed money ���������������������������������������������������������
Interest on short-term bonds ��������������������������������������������������������
Interest on bonds ��������������������������������������������������������������������������
Other interest expenses ����������������������������������������������������������������
Fees and commissions payments ������������������������������������������������������
Trading losses ������������������������������������������������������������������������������������
Other operating expenses ������������������������������������������������������������������
Lease-related expenses ����������������������������������������������������������������
Installment-related expenses ��������������������������������������������������������
Other ���������������������������������������������������������������������������������������������
General and administrative expenses ������������������������������������������������
Other expenses ����������������������������������������������������������������������������������
Provision for reserve for possible loan losses �������������������������������
Other ���������������������������������������������������������������������������������������������
Ordinary profit �����������������������������������������������������������������������������������������
*1
*2
*3
Millions of yen
2019
2020
Millions of
U�S� dollars
2020
¥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
—
223,825
1,135,300
*1
*2
*3
¥5,314,313
2,456,364
1,693,016
346,822
15,890
31,449
21,247
80,924
7,307
259,705
4,701
1,287,538
262,826
1,050,065
39,123
752,775
258,166
252,816
—
12,414
240,401
4,382,249
1,179,770
441,477
131,849
10,284
131,320
1,111
31,525
57,632
29
220,874
153,666
204,188
—
908,951
26,514
722,440
159,997
1,739,603
349,734
70,571
279,163
932,064
$48,840
22,575
15,559
3,187
146
289
195
744
67
2,387
43
11,833
2,415
9,650
360
6,918
2,373
2,323
—
114
2,209
40,274
10,842
4,057
1,212
95
1,207
10
290
530
0
2,030
1,412
1,877
—
8,354
244
6,639
1,470
15,988
3,214
649
2,566
8,566
010_0800801372008.indd 159
159
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 Consolidated Statements of Income
(Continued)
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 ������������������������������������������������
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 ����������������������������������������������������
Millions of yen
2020
Millions of
U�S� dollars
2020
2019
¥
*4
*5
2,826
541
2,285
14,547
4,485
9,610
*4
*5
450
1,123,579
276,329
55,095
331,424
792,155
65,474
¥ 726,681
¥ 23,896
1,855
22,040
67,314
1,910
65,106
297
888,646
213,526
(45,842)
167,684
720,962
17,078
¥ 703,883
$ 220
17
203
619
18
598
3
8,167
1,962
(421)
1,541
6,626
157
$ 6,469
160
010_0800801372008.indd 160
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 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
2019
2020
Millions of
U�S� dollars
2020
*1
¥792,155
3,035
31,157
29,981
—
10,396
(65,530)
(2,970)
795,191
687,690
107,500
¥ 720,962
(347,990)
(314,792)
166,177
(39)
(74,052)
(84,420)
(40,864)
372,971
355,302
17,669
$ 6,626
(3,198)
(2,893)
1,527
(0)
(681)
(776)
(376)
3,428
3,265
162
010_0800801372008.indd 161
161
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 Consolidated Statements of Changes in Net Assets
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
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
¥(12,493) ¥8,637,039
Total
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 ���������������������������������������������
699
Net changes in the fiscal year �����������������������������������������
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’
10
equity in the fiscal year ���������������������������������������������
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
162
010_0800801372008.indd 162
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 Consolidated Statements of Changes in Net Assets
(Continued)
Year ended March 31, 2020
Balance at the beginning of the fiscal year ��������������������� ¥2,339,443
Changes in the fiscal year
Capital
stock
Millions of yen
Stockholders’ equity
Retained
earnings
¥5,992,247
Capital
surplus
¥ 739,047
Treasury
stock
Total
¥ (16,302) ¥9,054,436
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 �����������������������������������
Decrease due to decrease in subsidiaries �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
Reversal of land revaluation excess ���������������������������
Transfer from retained earnings to capital surplus �����
Net changes in items other than stockholders’
521
521
(255,834)
703,883
(945)
(679)
(435)
(101,923)
(250)
(101,673)
(47,565)
101,923
(100,088)
733
101,673
1,043
(255,834)
703,883
(100,088)
483
—
(47,565)
(945)
(679)
(435)
—
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
521
Balance at the end of the fiscal year ������������������������������� ¥2,339,964
(47,044)
¥ 692,003
344,064
¥6,336,311
2,318
299,860
¥ (13,983) ¥9,354,296
Year ended March 31, 2020
Balance at the beginning of the fiscal year ��������������������� ¥1,688,852
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
¥(54,650)
Land
revaluation
excess
¥36,547
Foreign
currency
translation
adjustments
¥ 50,379
Accumulated
remeasurements
of defined
benefit plans
Total
¥ (7,244) ¥1,713,884
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 �����������������������������������
Decrease due to decrease in subsidiaries �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
Reversal of land revaluation excess ���������������������������
Transfer from retained earnings to capital surplus �����
Net changes in items other than stockholders’
equity in the fiscal year ���������������������������������������������
(317,445)
Net changes in the fiscal year �����������������������������������������
(317,445)
Balance at the end of the fiscal year ������������������������������� ¥1,371,407
136,907
136,907
¥ 82,257
331
331
¥36,878
(83,219)
(83,219)
¥(32,839)
(84,785)
(84,785)
(348,211)
(348,211)
¥(92,030) ¥1,365,673
Year ended March 31, 2020
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 �����������������������������������
Decrease due to decrease in subsidiaries �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
Reversal of land revaluation excess ���������������������������
Transfer from retained earnings to capital surplus �����
Net changes in items other than stockholders’
Stock
acquisition
rights
¥ 4,750
Millions of yen
Non-
controlling
interests
¥ 678,540 ¥11,451,611
Total
net assets
1,043
(255,834)
703,883
(100,088)
483
—
(47,565)
(945)
(679)
(435)
—
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year �������������������������������
(2,685)
(2,685)
¥ 2,064
(615,671)
(615,671)
(966,568)
(666,708)
¥ 62,869 ¥10,784,903
010_0800801372008.indd 163
163
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 Consolidated Statements of Changes in Net Assets
(Continued)
Year ended March 31, 2020
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 �����������������������������������
Decrease due to decrease in subsidiaries �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
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, 2020
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 �����������������������������������
Decrease due to decrease in subsidiaries �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
Reversal of land revaluation excess ���������������������������
Transfer from retained earnings to capital surplus �����
Net changes in items other than stockholders’
Millions of U�S� dollars
Stockholders’ equity
Retained
earnings
Capital
surplus
Treasury
stock
$6,792
$55,071
$(150)
Capital
stock
$21,500
5
5
(920)
7
934
(2,351)
6,469
(9)
(6)
(4)
(937)
(2)
(934)
(437)
937
Total
$83,213
(2,351)
6,469
(920)
4
—
(437)
(9)
(6)
(4)
—
5
$21,505
(432)
$6,360
3,162
$58,233
21
$(129)
2,756
$85,969
Millions of U�S� dollars
Accumulated other comprehensive income
Net unrealized
gains (losses)
on other
securities
Net deferred
gains (losses)
on hedges
Land
revaluation
excess
$15,521
$ (502)
$336
Foreign
currency
translation
adjustments
$ 463
Accumulated
remeasurements
of defined
benefit plans
$ (67)
Total
$15,751
—
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year �������������������������������
(2,917)
(2,917)
$12,604
1,258
1,258
$ 756
3
3
$339
(765)
(765)
$(302)
(779)
(779)
$(846)
(3,200)
(3,200)
$12,551
Year ended March 31, 2020
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 �����������������������������������
Decrease due to decrease in subsidiaries �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
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
$ 44
$ 6,236
Total
net assets
$105,244
10
(2,351)
6,469
(920)
4
—
(437)
(9)
(6)
(4)
—
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year �������������������������������
(25)
(25)
$ 19
(5,658)
(5,658)
$ 578
(8,883)
(6,127)
$ 99,117
164
010_0800801372008.indd 164
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 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 ���������������������������������������������������������������������
Net (gains) losses on step acquisitions ����������������������������������������������
Equity in net (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
2019
2020
Millions of
U�S� dollars
2020
¥ 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
¥ 888,646
209,198
65,106
17,533
(22,040)
(56,051)
13,411
3,103
201
101,532
(84)
2,627
(3,249)
(4,703)
(2,456,364)
1,179,770
(143,877)
(0)
118,815
54
(1,859,195)
1,930,360
(4,839,243)
5,064,595
(982,400)
4,844,384
(1,455,747)
(812,970)
(907,630)
4,256,015
(882,878)
572,787
(346,503)
296,890
17,309
294,500
152,729
458,581
2,471,480
(1,201,792)
386,091
7,370,996
(283,536)
7,087,460
$ 8,167
1,923
598
161
(203)
(515)
123
29
2
933
(1)
24
(30)
(43)
(22,575)
10,842
(1,322)
(0)
1,092
0
(17,087)
17,741
(44,474)
46,545
(9,029)
44,521
(13,379)
(7,471)
(8,341)
39,114
(8,114)
5,264
(3,184)
2,729
159
2,707
1,404
4,215
22,714
(11,045)
3,548
67,742
(2,606)
65,136
010_0800801372008.indd 165
165
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020
Consolidated Statements of Cash Flows
(Continued)
Year ended March 31
Cash flows from investing activities:
Purchases of securities ����������������������������������������������������������������������
Proceeds from sale of securities ��������������������������������������������������������
Proceeds from redemption of securities ��������������������������������������������
Purchases of money held in trust �������������������������������������������������������
Proceeds from sale of money held in trust ����������������������������������������
Purchases of tangible fixed assets ����������������������������������������������������
Proceeds from sale of tangible fixed assets ��������������������������������������
Purchases of intangible fixed assets ��������������������������������������������������
Purchase 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
stock acquisition rights ��������������������������������������������������������������������
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 ������������������������������������������
Purchase of stocks of subsidiaries not resulting in change in scope
of consolidation ��������������������������������������������������������������������������������
Proceeds from sale of stocks of subsidiaries not resulting in change
in scope of consolidation �����������������������������������������������������������������
Net cash 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 ���������������
Net change in cash and cash equivalents resulting from business
Millions of yen
2019
2020
¥(26,615,239)
17,969,410
10,078,569
(2)
1,094
(510,213)
104,451
(139,329)
¥(35,544,708)
23,204,983
9,550,000
(284)
321
(103,052)
19,206
(147,784)
Millions of
U�S� dollars
2020
$(326,668)
213,261
87,768
(3)
3
(947)
177
(1,358)
*2
*3
(57,182)
(17,365)
(160)
174,702
1,006,260
27,021
(3,011,660)
248
(27,678)
(8,000)
—
(27,539)
(245,594)
(212,537)
(77,185)
(70,094)
294
—
7,837
(632,819)
166,646
5,136,329
47,983,114
(8,000)
139,405
(113,000)
(255,771)
(436,500)
(16,922)
(100,088)
483
(234,159)
—
(1,024,554)
(74,480)
2,976,764
53,120,963
(74)
1,281
(1,039)
(2,351)
(4,012)
(156)
(920)
4
(2,152)
—
(9,416)
(685)
27,357
488,199
combinations between subsidiaries ������������������������������������������������������
—
79
1
Increase in cash and cash equivalents resulting from inclusion of
subsidiaries in consolidation �����������������������������������������������������������������
Cash and cash equivalents at the end of the fiscal year �������������������������
*1
1,519
¥ 53,120,963
—
¥ 56,097,807
*1
—
$ 515,557
166
010_0800801372008.indd 166
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020
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, 2020 which was ¥108.81 to US$1. These translations should not be construed as representations that the
Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at that rate.
010_0800801372008.indd 167
167
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 As of and for the years ended March 31, 2019 and 2020
(Significant accounting policies for preparing consolidated financial statements)
1. Scope of consolidation
(1) Consolidated subsidiaries
The number of consolidated subsidiaries at March 31, 2020 is 174.
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 DS Asset Management Company, Limited (“SMDAM”)
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, 2020 are as follows:
TT International Asset Management Ltd and 15 other companies were newly included in the scope of consolidation as a result of
acquisition of shares and for other reasons.
SMM Auto Finance, Inc. and 14 other companies were excluded from the scope of consolidation as they ceased to be subsidiaries due
to the sale of their stocks and for other reasons.
(2) Unconsolidated subsidiaries
Principal company:
SBCS Co., Ltd.
Unconsolidated subsidiaries are also excluded from the scope of consolidation because their total amounts in terms of total assets,
ordinary income, net income and retained earnings are immaterial, as such, they do not hinder a rational judgment of the 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, 2020 is 5.
Principal company:
(2) Equity method affiliates
SBCS Co., Ltd.
The number of affiliates accounted for by the equity method at March 31, 2020 is 96.
Principal companies:
Sumitomo Mitsui Finance and Leasing Company, Limited
Sumitomo Mitsui Auto Service Company, Limited
Changes in the equity method affiliates in the fiscal year ended March 31, 2020 are as follows:
3 companies became equity method affiliates due to new establishment.
Daiwa SB Investments Ltd. and 16 other companies were excluded from the scope of equity method affiliates as they ceased to be
affiliates due to merger 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
Park Square Capital / SMBC Loan Programme S. à r. l.
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.
3. The balance sheet dates of consolidated subsidiaries
(1) The balance sheet dates of the consolidated subsidiaries at March 31, 2020 are as follows:
4
2
82
1
85
June 30..................................
October 31.............................
December 31..........................
January 31..............................
March 31................................
168
010_0800801372008.indd 168
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
(2) The subsidiaries with balance sheets dated June 30 are consolidated using the financial statements as of March 31, the subsidiaries with
balance sheets dated October 31 are consolidated using the financial statements as of January 31 and a subsidiary with balance sheets
dated January 31 as well as 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 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.
010_0800801372008.indd 169
169
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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 claims, net of the expected amount of recoveries from collateral and guarantees.
Discounted Cash Flows (“DCF”) method is used for claims on borrowers whose cash flows from collection of principals and interest
can be rationally estimated, and SMBC, 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 primarily provided by setting the potential losses in the next one year or three years. The potential
losses are calculated by determining the loss ratio based on the historical loan-loss ratio derived from actual loan losses or bankruptcies
in the past one year or three years, or average (of a certain period) probability of bankruptcies, and by making necessary adjustments
including future estimations.
In addition, in light of the latest economic situation and risk factors, for potential losses for specific portfolios that are based on the
future prospects with high probability, but cannot be reflected in actual loan losses in the past and in any individual borrower’s
classification, a reserve is provided in the amount deemed necessary based on an overall assessment.
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, 2019 and 2020 were ¥139,981 million and ¥142,834 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.
170
010_0800801372008.indd 170
2020/08/21 16:48:10
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements (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.
(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.
010_0800801372008.indd 171
171
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements (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 purpose of presenting the consolidated statements of cash flows, “Cash and cash equivalents” are cash on hand, non-interest
earning deposits with banks and deposits with the Bank of Japan.
(19) Consumption taxes
National and local consumption taxes of 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)
1. “Revised Accounting Standard for Revenue Recognition” (ASBJ Statement No.29) etc. (issued March 30, 2018, revised March 31,
2020)
(1) Outline
The accounting standard etc. provide comprehensive principles for revenue recognition by taking into account of international trends.
The principles of revenue recognition in the standard etc. are to recognize revenue by depicting the transfer of promised goods or
services to customers in an amount that reflects the consideration expected to be earned in exchange for those goods or services.
(2) Date of Application
The Company will apply the standard etc. from the beginning of the fiscal year commencing on April 1, 2021.
(3) Effects of Application of the Accounting Standard etc.
The effects of the application of the accounting standard etc. are currently being assessed.
2. “Accounting Standard for Fair Value Measurement” (ASBJ Statement No.30) etc. (issued July 4, 2019)
(1) Outline
The accounting standard etc. provide the guidance regarding methods of measuring fair values to improve comparability with those
stipulated by international accounting standards.
(2) Date of Application
The Company applies the standard etc. from the beginning of the fiscal year commencing on April 1, 2020.
(3) Effects of Application of the Accounting Standard etc.
The effects of the application of the accounting standard etc. are currently being assessed.
3. “Accounting Standard for Disclosure of Accounting Estimates ” (ASBJ Statement No.31) (issued March 31, 2020)
(1) Outline
The accounting standard aims to disclose information to help users of financial statements to understand accounting estimates for items
with risks that could have significant effects on consolidated financial statements of the following fiscal year, among the amounts
determined by the accounting estimates on consolidated financial statements of the current fiscal year.
(2) Date of Application
The Company will apply the standard etc. from the end of the fiscal year ending on March 31, 2021.
4. “Revised Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections” (ASBJ Statement
No.24) (revised March 31, 2020)
(1) Outline
The accounting standard aims to provide the outline of adopted accounting principles and procedures in case that provisions of related
accounting standards etc. are not evident.
(2) Date of Application
The Company will apply the standard etc. from the end of the fiscal year ending on March 31, 2021.
172
010_0800801372008.indd 172
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements (Additional information)
1. The estimates of reserve for possible loan losses related to the increasing impact of the spread of the novel coronavirus disease
(COVID-19)
The estimates of reserve for possible loan losses related to the increased impact of COVID-19 are reflected in the consolidated financial
statements using the following method.
For potential losses related to individual borrowers due to deterioration in business performance and funding, a reserve for possible loan
losses is provided by reviewing, as necessary, the borrower’s classification based on the most recent available information.
In addition, for potential losses for specific portfolios that are based on the future prospects with high probability, which cannot be reflected
in any of individual borrower’s classification, a reserve is provided in the amount deemed necessary based on an overall assessment in light of
impacts such as fluctuations in market indices including crude oil price due to factors such as COVID-19.
2. Transition from the consolidated corporate-tax system to the group tax sharing system
Companies are required to shift from the consolidated corporate-tax system to the group tax sharing system from the fiscal year beginning on or
after April 1, 2022, in accordance with the “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 8, 2020) enacted on March 31,
2020. However, the Company and certain consolidated domestic subsidiaries, currently adopting the consolidated corporate-tax system, applied
the accounting treatment based on the provisions of the Income Tax Act before the amendment for the fiscal year ended March 31, 2020, in
accordance with the “Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to
the Group Tax Sharing System” (ASBJ Practical Issue Task Force No. 39, March 31, 2020).
(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, 2019 and 2020 were as follows:
March 31
Stocks ...............................................................................................................................
Investments ......................................................................................................................
2019
¥969,481
6,368
2020
¥943,980
661
Millions of yen
Stocks of jointly controlled entities were as follows:
March 31
Stocks of jointly controlled entities ...................................................................................
2019
¥340,821
2020
¥322,598
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, 2019 and 2020 were as follows:
March 31
Japanese government bonds in “Securities” .......................................................................
2019
¥902
2020
¥—
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, 2019 and
2020 were as follows:
March 31
Securities pledged .............................................................................................................
Securities lent ...................................................................................................................
Securities held without being disposed .............................................................................
2019
¥7,270,140
140,772
2,232,706
2020
¥11,030,067
171,224
2,546,017
Millions of yen
010_0800801372008.indd 173
173
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
*3 Bankrupt loans and non-accrual loans
Bankrupt loans and non-accrual loans at March 31, 2019 and 2020 were as follows:
March 31
Bankrupt loans .................................................................................................................
Non-accrual loans .............................................................................................................
2019
¥ 12,806
456,802
2020
¥ 13,978
378,173
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, 2019 and 2020 were as follows:
March 31
Past due loans (3 months or more) ....................................................................................
2019
¥13,444
2020
¥14,400
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, 2019 and 2020 were as follows:
March 31
Restructured loans ............................................................................................................
2019
¥193,427
2020
¥221,288
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, 2019 and
2020 were as follows:
March 31
Risk-monitored loans .......................................................................................................
2019
¥676,481
2020
¥627,840
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, 2019 and 2020 were as follows:
March 31
Bills discounted ................................................................................................................
2019
¥906,636
2020
¥850,324
Millions of yen
174
010_0800801372008.indd 174
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements *8 Assets pledged as collateral
Assets pledged as collateral at March 31, 2019 and 2020 consisted of the following:
March 31, 2019
Assets pledged as collateral:
Cash and due from banks ..................................... ¥ 7,353
11,459
Monetary claims bought ......................................
514,328
Trading assets ......................................................
6,286,499
Securities .............................................................
9,086,500
Loans and bills discounted ...................................
Millions of yen March 31, 2020
Millions of yen
Assets pledged as collateral:
78,112
Cash and due from banks ..................................... ¥
Trading assets ......................................................
834,864
Securities ............................................................. 10,502,767
Loans and bills discounted ................................... 10,679,243
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 .................................................
Due to trust account ............................................
Acceptances and guarantees .................................
26,089
5,762,587
1,582,791
7,922,955
124,550
167,027
21,908
Deposits ..............................................................
6,670,132
Payables under repurchase agreements .................
Payables under securities lending transactions .....
2,334,251
Borrowed money ................................................. 10,587,419
432,135
Due to trust account ............................................
103,886
Acceptance and guarantees ..................................
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, 2019 and 2020:
March 31, 2019
Cash and due from banks .......................................... ¥ 41,584
Trading assets ...........................................................
1,591,280
4,812,271
Securities ..................................................................
853,603
Loans and bills discounted ........................................
Cash and due from banks .......................................... ¥ 12,543
Trading assets ...........................................................
1,179,599
3,570,617
Securities ..................................................................
10,350
Loans and bills discounted ........................................
Millions of yen March 31, 2020
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, 2019
Collateral money deposited for financial instruments .... ¥2,240,739
Collateral money deposited for financial instruments .... ¥1,630,600
87,976
92,281
Surety deposits .........................................................
Surety deposits .........................................................
101,838
64,340 Margins of futures markets .......................................
Margins of futures markets .......................................
Other margins ..........................................................
46,569
Other margins ..........................................................
43,365
Millions of yen March 31, 2020
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, 2019 and 2020 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
2019
¥62,409,943
2020
¥61,881,806
44,048,947
44,330,598
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.
010_0800801372008.indd 175
175
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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, 2019 and 2020 were as follows:
March 31
Accumulated depreciation ................................................................................................
2019
¥741,648
2020
¥783,544
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, 2019 and 2020 were as follows:
March 31
Deferred gain on tangible fixed assets deductible for tax purposes .....................................
[The consolidated fiscal year concerned] .......................................................................
2019
¥62,127
[—]
2020
¥62,099
[—]
Millions of yen
*13 Subordinated borrowings
The balance of subordinated borrowings in “Borrowed money” at March 31, 2019 and 2020 were as follows:
March 31
Subordinated borrowings ..................................................................................................
2019
¥257,000
2020
¥249,000
Millions of yen
*14 Subordinated bonds
The balance of subordinated bonds included in “Bonds” at March 31, 2019 and 2020 were as follows:
March 31
Subordinated bonds ..........................................................................................................
2019
¥2,195,130
2020
¥2,216,743
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, 2019 and 2020 were as follows:
March 31
The amount of borrowings from trust account in relation to covered bonds issued
Millions of yen
2019
2020
by trust account ...........................................................................................................
¥124,550
¥432,135
176
010_0800801372008.indd 176
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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, 2019 and 2020 were as follows:
March 31
Guaranteed amount to privately-placed bonds ..................................................................
2019
¥1,662,777
2020
¥1,603,941
Millions of yen
(Notes to consolidated statements of income)
*1 Other income
“Other” in “Other income” for the fiscal years ended March 31, 2019 and 2020 included the following:
Year ended March 31, 2019
Gains on sales of stocks .............................................
Millions of yen Year ended March 31, 2020
¥134,748
Gains on sales of stocks .............................................
Millions of yen
¥154,735
*2 General and administrative expenses
“General and administrative expenses” for the fiscal years ended March 31, 2019 and 2020 included the following:
Year ended March 31, 2019
Salaries and related expenses .....................................
Research and development costs ...............................
Millions of yen Year ended March 31, 2020
¥641,844
167
Salaries and related expenses .....................................
Depreciation expense ................................................
Research and development costs ...............................
Millions of yen
¥618,071
180,765
77
*3 Other expenses
“Other expenses” for the fiscal years ended March 31, 2019 and 2020 included the following:
Year ended March 31, 2019
Write-off of loans......................................................
Millions of yen Year ended March 31, 2020
¥105,429 Write-off of loans......................................................
Write-off of stocks and others ...................................
Millions of yen
¥105,307
45,374
*4 Other extraordinary gains
“Other extraordinary gains” for the fiscal year ended March 31, 2019 and 2020 including the following gains:
Year ended March 31, 2019
Gains on step acquisitions ........................................
Millions of yen Year ended March 31, 2020
¥2,285
Gains on step acquisitions ........................................
Millions of yen
¥22,040
010_0800801372008.indd 177
177
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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, 2019 and 2020.
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 (40 items)
—
Year ended March 31, 2020
Area
Idle assets (19 items)
—
Intangible fixed assets
Purpose of use
Type
Tokyo metropolitan area ...............................Branches (21 items)
Idle assets (87 items)
Land and buildings, etc.
Kinki area ....................................................Branches (7 items)
Land and buildings, etc.
Other area in Japan .......................................Branches (5 items)
Land and buildings, etc.
Idle assets (57 items)
Americas ......................................................Lease assets for freight cars
—
—
Idle assets (20 items)
Assets for rent
Goodwill and other intangible
fixed assets
Millions of yen
Impairment loss
¥ 205
2,335
77
2,139
258
889
3,703
Millions of yen
Impairment loss
¥ 2,180
6,221
769
1,105
456
609
13,805
39,958
As for land and building, etc., at SMBC, a consolidated subsidiary of the Company, 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 land and
buildings, etc. 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 at SMBC are reduced to their recoverable amounts, and the decreased amounts are included in
“Extraordinary losses” as “Losses on impairment of fixed assets,” if there are indicators that the invested amounts may not be recoverable.
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.
Assets for rent are grouped by type of freight cars. For the fiscal year ended March 31, 2020, the carrying amounts of some of the
freight cars were reduced to their recoverable amounts, and the decreased amounts were included in “Extraordinary losses” as “Losses on
impairment of fixed assets,” as the invested amounts were considered not to be recoverable. The recoverable amount is measured by value
in use, which is calculated by discounting future cash flows by 6%.
For goodwill and other intangible fixed assets, a consolidated subsidiary is the main unit of asset group. For the fiscal year ended March
31, 2020, SMBC Trust Bank Ltd. reviewed its future cash flows in view of the current market environment. As a result, all of the
unamortized balance of goodwill and other intangible fixed assets at the end of the fiscal year ended March 31, 2020 were included in
“Extraordinary losses” as “Losses on impairment of intangible fixed assets,” as the carrying amounts of the aforementioned assets associated
with its PRESTIA business were considered not to be recoverable. The recoverable amount is measured by value in use, which is calculated
by discounting future cash flows by 6%.
178
010_0800801372008.indd 178
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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
2019
2020
¥ 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
¥(203,676)
(211,281)
(414,958)
100,166
(314,792)
128,887
110,070
238,957
(72,779)
166,177
—
—
—
(39)
(39)
(74,067)
15
(74,052)
—
(74,052)
(125,218)
5,429
(119,789)
35,369
(84,420)
(42,843)
1,979
(40,864)
—
(40,864)
¥(347,990)
010_0800801372008.indd 179
179
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
(Notes to consolidated statements of changes in net assets)
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
180
010_0800801372008.indd 180
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
Fiscal year ended March 31, 2020
1. Type and number of shares issued and treasury stock
Year ended March 31, 2020
Shares issued
At the beginning
of the fiscal year
Increase
Decrease
At the end
of the fiscal year
Number of shares
Common stock ....................................
Total ...............................................
1,399,401,420
1,399,401,420
272,536
272,536
26,502,400
26,502,400
1,373,171,556
1,373,171,556
Treasury stock
Common stock ....................................
Total ...............................................
3,800,918
3,800,918
26,525,707
26,525,707
26,681,582
26,681,582
3,645,043
3,645,043
Notes
1,2
3,4
Notes: 1. The increase of 272,536 shares in the total number of shares issued was due to issuance of new stocks as stock-based compensation.
2. The decrease of 26,502,400 shares in the total number of shares issued was due to cancellation of treasury stock.
3. The increase of 26,525,707 shares in the number of treasury common stock comprises the increase of 23,307 shares due to purchase of fractional shares, and the increase
of 26,502,400 shares due to purchase of treasury stock.
4. The decrease of 26,681,582 shares in the number of treasury common stock comprises the decrease of 179,182 shares due to sales of fractional shares as well as exercise of
stock option, and the decrease of 26,502,400 shares due to cancellation of treasury stock.
2. Information on stock acquisition rights
Year ended March 31, 2020
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
—
—
—
—
—
¥2,064
¥2,064
Date of resolution
Ordinary General Meeting of Shareholders
held on June 27, 2019 ................................ Common stock
Meeting of the Board of Directors held on
November 12, 2019 ................................... 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
¥132,582
¥95 March 31, 2019
June 28, 2019
123,252
90
September 30, 2019 December 3, 2019
Date of resolution
Ordinary General Meeting of Shareholders
held on June 26, 2020 ................................ Common stock
Type of shares
Millions of yen, except per share amount
Cash
dividends
¥136,952
Source of
dividends
Retained
earnings
Cash
dividends
per share
Record date
Effective date
¥100 March 31, 2020
June 29, 2020
010_0800801372008.indd 181
181
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
(Notes to consolidated statements of cash flows)
*1 Reconciliation of balance of “Cash and cash equivalents” at the end of the fiscal year and the amounts of items stated in the
consolidated balance sheet
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 .................................................................................................
2019
¥57,411,276
(4,290,312)
¥53,120,963
2020
¥61,768,573
(5,670,766)
¥56,097,807
Millions of yen
*2 The major components of assets and liabilities for the companies newly consolidated by stock acquisition and for other reasons
The major components of assets and liabilities at the commencement of consolidation due to consolidation of PT Bank Tabungan
Pensiunan Nasional Tbk (“BTPN”) and 1 other company by SMBC’s stock acquisition and the relation between the acquisition cost of the
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
*3 The major components of assets and liabilities of companies which were excluded from the scope of consolidation by sale of
the shares
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 the 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
182
010_0800801372008.indd 182
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements (Notes to lease transactions)
1. Finance leases
(1) Lessee side
1) Lease assets
(a) Tangible fixed assets
Tangible fixed assets mainly consisted of branches and equipment.
(b) Intangible fixed assets
Intangible fixed assets are software.
2) Depreciation method of lease assets
Depreciation method of lease assets is reported in 4. Accounting policies (4) Depreciation.
(2) Lessor side
1) Breakdown of lease investment assets
March 31
Lease receivables ......................................................................................................
Residual value .........................................................................................................
Unearned interest income ........................................................................................
Total ........................................................................................................................
Millions of yen
2019
¥269,214
65,094
(86,474)
¥247,835
2) The scheduled collections of lease payments receivable related to lease investment assets are as follows:
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 ........................................................................................................................
2019
¥ 43,411
24,003
21,214
20,682
13,813
146,089
¥269,214
2020
¥258,052
47,285
(85,604)
¥219,733
2020
¥ 26,938
26,318
23,880
16,453
13,612
150,848
¥258,052
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, 2019 was ¥1,332
million more than it would have been if such transactions had been treated in a similar way to sales of the underlying assets.
2. Operating leases
(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 .............................................................................................................................
2019
¥ 44,385
271,612
¥315,997
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 .............................................................................................................................
2019
¥ 35,936
85,242
¥121,178
Millions of yen
2020
¥ 42,384
247,206
¥289,591
2020
¥ 31,498
72,655
¥104,154
010_0800801372008.indd 183
183
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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 (derivative
transactions for both ALM and trading purposes are undertaken by the Asia and Oceania Treasury Dept. in Asia and Oceania region, and
are undertaken by the East Asia Treasury Dept. in East Asia region).
(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.
184
010_0800801372008.indd 184
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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
Management Committee and the Audit 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.
010_0800801372008.indd 185
185
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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 Audit Committee. Furthermore, the ALM Committee at SMBC, the core bank of the Company, 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 Audit Committee 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, 2020, total VaR of SMBC and its major consolidated subsidiaries was ¥50.5 billion for the banking activities,
¥16.2 billion for the trading activities and ¥942.4 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 under the stress 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.
186
010_0800801372008.indd 186
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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, 2019 and
2020 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, 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 in “Trading assets,” “Trading liabilities,” “Other assets” and “Other liabilities.” Debts and
credits arising from derivative transactions are presented on a net basis, with a net debt presented in square brackets.
010_0800801372008.indd 187
187
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements March 31, 2020
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
¥ 61,763,910
894,743
8,753,816
5,005,089
4,556,779
2,752,881
353
282,379
25,484,707
82,517,609
(301,752)
82,215,856
2,060,975
219,548
¥193,991,042
¥127,042,217
10,180,435
3,740,539
13,237,913
2,385,607
1,409,249
2,012,475
15,210,894
1,461,308
379,000
9,235,639
1,811,355
¥188,106,637
¥ 517,570
294,816
¥ 812,386
Millions of yen
Fair value
¥ 61,765,323
896,463
8,753,505
5,005,125
4,588,270
2,752,881
353
282,519
25,484,707
84,118,833
2,063,721
218,858
¥195,930,563
¥127,049,743
10,187,496
3,740,628
13,237,913
2,385,607
1,409,249
2,012,475
15,254,734
1,461,308
379,000
9,360,807
1,824,319
¥188,303,284
¥ 517,570
294,816
¥ 812,386
Net unrealized
gains (losses)
¥ 1,412
1,720
(311)
36
31,490
—
—
140
—
1,902,976
2,745
(690)
¥1,939,520
¥ 7,526
7,060
88
—
—
—
—
43,839
—
—
125,167
12,964
¥ 196,647
¥
¥
—
—
—
*1 The amounts do not include general reserve for possible loan losses and specific reserve for possible loan losses. The reserves for possible losses on “Cash and due from banks,”
“Call loans and bills bought,” “Receivables under securities borrowing transactions,” “Monetary claims bought,” “Foreign exchanges” and “Lease receivables and investment
assets” are deducted directly from consolidated balance sheet amount since they are immaterial.
*2 The amounts collectively represent the derivative transactions which are recorded in “Trading assets,” “Trading liabilities,” “Other assets” and “Other liabilities.” Debts and
credits arising from derivative transactions are presented on a net basis, with a net debt presented in square brackets.
(2) Fair value calculation methodology for financial instruments
Assets
1) Cash and due from banks, 2) Call loans and bills bought, 3) Receivables under resale agreements, 4) Receivables under securities
borrowing transactions, 9) Loans and bills discounted, 10) Foreign exchanges and 11) Lease receivables and investment assets:
Of these transactions, for dues from banks without maturity and overdrafts with no specified repayment dates, the book values are used
as fair value as they are considered to approximate their fair value.
For short-term transactions with remaining maturity not exceeding 6 months, in principle, the book values are used as fair value as
they are considered to approximate their fair value.
The fair value of those with a remaining maturity of more than 6 months is, in principle, the present value of future cash flows
(calculated by discounting estimated future cash flows, taking into account factors such as the borrower’s internal rating and pledged
collateral, using a rate comprising of a risk-free interest rate and an adjustment). Certain consolidated subsidiaries of 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.
188
010_0800801372008.indd 188
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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 by industry associations, etc.
3) Call money and bills sold, 4) Payables under repurchase agreements, 5) Payables under securities lending transactions, 6)
Commercial paper, 8) Borrowed money, 10) Short-term bonds and 11) Bonds:
The fair values of short-term transactions with remaining maturity not exceeding 6 months are based on their book values, as their
book values are considered to approximate their fair values. For transactions with a remaining maturity of more than 6 months, their
fair values are, in principle, based on the present value of estimated future cash flows calculated using the refinancing rate applied to
the same type of instruments for the remaining maturity. 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.
010_0800801372008.indd 189
189
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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:
Millions of yen
2019
2020
Unlisted stocks, etc. *1 *3 ........................................................................................
Investments in partnership, etc. *2 *3 ......................................................................
Total .............................................................................................................................
¥170,572
215,245
¥385,817
¥174,347
242,674
¥417,022
*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 ¥9,669 million and ¥22,903 million were written-off in the fiscal year ended March 31, 2019 and 2020,
respectively.
(4) Redemption schedule of monetary claims and securities with maturities
Millions of yen
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
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.
190
010_0800801372008.indd 190
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
March 31, 2020
Deposits with banks ...................................................
Call loans and bills bought .........................................
Receivables under resale agreements ...........................
Receivables under securities borrowing transactions ...
Monetary claims bought *1 .........................................
Securities ....................................................................
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
¥ 60,891,144
853,031
8,427,511
5,000,653
3,310,435
6,702,393
260,000
260,000
—
—
—
6,442,393
3,388,590
2,912
316,475
2,734,414
20,530,820
2,057,021
21,006
¥107,794,017
Millions of yen
After 1 year
through 5 years
¥ 26,083
43,708
65,286
4,450
735,646
7,787,784
—
—
—
—
—
7,787,784
2,780,300
45,000
1,123,144
3,839,340
34,431,806
2,911
58,938
¥43,156,614
After 5 years
through 10 years
¥ 5,413
—
—
—
163,273
3,250,285
22,300
—
22,300
—
—
3,227,985
450,200
179,449
814,564
1,783,771
13,516,514
—
26,716
¥16,962,203
After 10 years
¥ 906
—
—
—
295,468
4,241,524
—
—
—
—
—
4,241,524
413,700
12,775
449,623
3,365,426
6,514,499
—
65,787
¥11,118,187
*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: ¥292 million, Loans and bills discounted: ¥339,003 million,
Foreign exchanges: ¥3,351 million.
*2 “Loans and bills discounted” without the maturity dates are not included. Such amount is totaled to ¥7,182,191 million at March 31, 2020.
(5) Redemption schedule of bonds, borrowed money and other interest-bearing debts
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
010_0800801372008.indd 191
191
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
March 31, 2020
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
¥123,191,393
9,488,288
3,740,539
13,219,904
2,385,607
1,409,249
10,116,503
1,461,308
379,000
1,311,716
1,379,220
¥168,082,732
* Demand deposits are included in “Within 1 year.” Deposits include current deposits.
Millions of yen
After 1 year
through 5 years
¥ 3,269,858
692,146
—
—
—
—
4,185,181
—
—
3,876,955
282,735
¥12,306,877
After 5 years
through 10 years
¥ 158,359
—
—
—
—
—
637,820
—
—
3,016,822
149,400
¥3,962,402
After 10 years
¥ 422,607
—
—
—
—
—
271,389
—
—
1,030,816
—
¥1,724,812
192
010_0800801372008.indd 192
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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
2019
¥20,551
2020
¥(27,480)
2. Bonds classified as held-to-maturity
March 31, 2019
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, 2020
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:
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
Millions of yen
Consolidated balance
sheet amount
Fair value
Net unrealized
gains (losses)
¥260,079
2,000
—
—
262,079
—
20,300
—
—
20,300
¥282,379
¥260,286
2,001
—
—
262,287
—
20,232
—
—
20,232
¥282,519
¥206
1
—
—
208
—
(67)
—
—
—
¥140
010_0800801372008.indd 193
193
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
3. Other securities
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 ¥12,777 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.
March 31, 2020
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
¥ 2,372,608
5,197,614
2,871,225
76,337
2,250,052
10,655,671
18,225,894
222,431
4,869,781
4,216,709
164,044
489,027
2,914,076
8,006,289
¥26,232,183
Millions of yen
Acquisition cost
¥ 1,038,349
5,159,687
2,865,395
75,981
2,218,310
9,934,324
16,132,361
287,126
4,886,191
4,229,667
164,575
491,949
3,034,175
8,207,493
¥24,339,854
Net unrealized
gains (losses)
¥1,334,258
37,927
5,829
356
31,741
721,347
2,093,533
(64,694)
(16,410)
(12,957)
(530)
(2,921)
(120,098)
(201,204)
¥1,892,329
Notes: 1. Net unrealized gains (losses) on other securities shown above include losses of ¥26,403 million for the fiscal year ended March 31, 2020 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, 2020
Stocks .......................................................................................................
Other .......................................................................................................
Total .........................................................................................................
Millions of yen
¥141,767
275,254
¥417,022
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.
194
010_0800801372008.indd 194
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements 4. Held-to-maturity bonds sold during the fiscal year
Fiscal year ended March 31, 2019
There are no corresponding transactions.
Fiscal year ended March 31, 2020
There are no corresponding transactions.
5. Other securities sold during the fiscal year
Year ended March 31, 2019
Stocks ............................................................................................
Bonds ............................................................................................
Japanese government bonds ......................................................
Japanese local government bonds ..............................................
Japanese corporate bonds ..........................................................
Other ............................................................................................
Total ..............................................................................................
Year ended March 31, 2020
Stocks ............................................................................................
Bonds ............................................................................................
Japanese government bonds ......................................................
Japanese local government bonds ..............................................
Japanese corporate bonds ..........................................................
Other ............................................................................................
Total ..............................................................................................
Sales amount
¥ 206,738
8,071,326
7,797,751
80,253
193,321
9,588,573
¥17,866,638
Sales amount
¥ 205,299
8,380,330
8,036,803
92,994
250,532
14,797,180
¥23,382,810
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)
Millions of yen
Gains on sales
Losses on sales
¥115,228
26,478
25,415
295
766
120,696
¥262,403
¥(11,013)
(4,384)
(4,349)
(34)
(0)
(33,219)
¥(48,617)
6. Change of classification of securities
Fiscal year ended March 31, 2019
There are no significant corresponding transactions to be disclosed.
Fiscal year ended March 31, 2020
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, 2019 and 2020 were ¥9,013 million and ¥23,000 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.
010_0800801372008.indd 195
195
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements (Notes to money held in trust)
1. Money held in trust classified as trading purposes
Fiscal year ended March 31, 2019
There are no corresponding transactions.
Fiscal year ended March 31, 2020
There are no corresponding transactions.
2. Money held in trust classified as held-to-maturity
Fiscal year ended March 31, 2019
There are no corresponding transactions.
Fiscal year ended March 31, 2020
There are no corresponding transactions.
3. Other money held in trust
March 31, 2019
Other money held in trust .............................................................
Consolidated balance
sheet amount
¥390
March 31, 2020
Other money held in trust .............................................................
Consolidated balance
sheet amount
¥353
Millions of yen
Acquisition cost
¥390
Millions of yen
Acquisition cost
¥353
Net unrealized
gains (losses)
—
Net unrealized
gains (losses)
—
196
010_0800801372008.indd 196
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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, 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.
March 31, 2020
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
¥1,918,660
1,918,660
—
453,080
1,465,580
103,969
9,795
¥1,371,407
Notes: 1. Net unrealized losses of ¥26,403 million for the fiscal year ended March 31, 2020 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.
3. Non-controlling interests include equity acquired from non-controlling stockholders.
010_0800801372008.indd 197
197
2020/08/21 16:48:11
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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, 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.
198
010_0800801372008.indd 198
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
March 31, 2020
Listed
Interest rate futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 21,076,337
14,737,369
¥ 4,765,699
2,199,856
¥ (27,290)
27,550
¥ (27,290)
27,550
Interest rate options:
Sold ............................................................................
Bought .......................................................................
6,750,245
158,524,331
4,521,273
67,831,291
(11,465)
48,263
(11,465)
48,263
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 ..............
62,823,188
61,810,031
466,801,624
204,935,762
199,732,233
62,049,122
4,805,635
3,914,222
363,010,583
162,453,955
157,519,483
42,972,238
Interest rate swaptions:
Sold ............................................................................
Bought .......................................................................
7,216,094
6,612,746
3,744,854
3,503,884
Caps:
Sold ............................................................................
Bought .......................................................................
58,316,271
13,991,264
35,057,852
9,813,927
Floors:
Sold ............................................................................
Bought .......................................................................
3,427,268
2,001,857
Other:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
1,723,114
6,906,532
/
3,271,036
1,816,324
1,045,482
4,948,922
/
132,247
(132,242)
571,893
9,871,580
(9,312,725)
4,408
5,054
(22,405)
(27,575)
689
(34,570)
21,728
132,247
(132,242)
571,893
9,871,580
(9,312,725)
4,408
5,054
(22,405)
(27,575)
689
(34,570)
21,728
(2,327)
74,235
¥ 623,785
(2,327)
74,235
¥ 623,785
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.
010_0800801372008.indd 199
199
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
(2) Currency derivatives
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.
March 31, 2020
Listed
Currency futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 4,500
—
¥ —
—
¥ (7)
—
¥ (7)
—
Over-the-counter
Currency swaps ................................................................
Currency swaptions:
Sold ............................................................................
Bought .......................................................................
Forward foreign exchange ................................................
Currency options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
55,227,153
41,204,948
(116,557)
(97,022)
229,152
789,974
80,636,837
3,622,112
3,258,083
/
45,273
577,080
10,126,712
1,493,867
1,206,448
/
(429)
1,766
(1,771)
(429)
1,766
(1,771)
(115,008)
120,743
¥(111,265)
(115,008)
120,743
¥ (91,729)
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.
200
010_0800801372008.indd 200
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
(3) Equity derivatives
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.
March 31, 2020
Listed
Equity price index futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥683,868
470,636
Equity price index options:
Sold ............................................................................
Bought .......................................................................
625,316
476,035
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 ................................................................................
342,896
312,867
—
2,614
¥ 3,250
30,247
253,364
197,739
52,544
38,253
—
28
¥ (7,234)
1,286
(69,629)
31,351
(30,674)
32,382
—
448
¥ (7,234)
1,286
(69,629)
31,351
(30,674)
32,382
—
448
58,774
31,271
(18,606)
(18,606)
268,608
/
151,227
/
51,513
¥ (9,162)
51,513
¥ (9,162)
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.
010_0800801372008.indd 201
201
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
(4) Bond derivatives
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.
March 31, 2020
Listed
Bond futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥1,098,669
1,137,437
¥ —
—
¥(15,128)
16,168
¥(15,128)
16,168
Bond futures options:
Sold ............................................................................
Bought .......................................................................
3,000
2,992
Over-the-counter
Bond forward contract:
Sold ............................................................................
Bought .......................................................................
Bond options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
499
—
298,310
371,168
/
—
—
—
—
2
10
0
—
2
10
0
—
—
71,357
/
(119)
8,240
¥ 9,174
(119)
8,240
¥ 9,174
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.
202
010_0800801372008.indd 202
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
(5) Commodity derivatives
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.
March 31, 2020
Listed
Commodity futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 3,090
4,044
¥ —
—
¥ 171
(379)
¥ 171
(379)
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 ................................................................................
80,464
76,311
1,363
3,153
1,307
/
47,610
44,804
1,347
2,199
532
/
18,209
(15,201)
0
(529)
(89)
¥ 2,181
18,209
(15,201)
0
(529)
(89)
¥ 2,181
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.
010_0800801372008.indd 203
203
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
(6) Credit derivative transactions
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.
March 31, 2020
Over-the-counter
Credit default options:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
¥1,010,046
1,173,724
/
¥ 871,799
1,012,367
/
¥ (10,922)
13,779
¥ 2,856
¥ (10,922)
13,779
¥ 2,856
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.
204
010_0800801372008.indd 204
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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, 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 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”.
010_0800801372008.indd 205
205
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
March 31, 2020
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 floating rate/payable fixed
rate ....................................................
Interest rate swaps:
Borrowed money
Receivable floating rate/payable fixed
rate ....................................................
Total ..........................................................
Millions of yen
Contract amount
Total
Over 1 year
Fair value
¥ 435,240
1,142,505
¥ —
—
¥ 43
269
36,700,930
28,992,026
697,034
14,785,349
13,677,981
(507,233)
151,789
—
151,789
—
26,130
—
409,908
390,290
(13,781)
71,880
/
55,700
/
(Note 3)
¥ 202,463
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 transaction subject to the hedge in the “(Notes to financial instruments) 2. Fair
value of financial instruments.”
(2) Currency derivatives
March 31, 2019
Hedge accounting
method
Deferral hedge
method
Recognition of gain or
loss on the hedged items
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
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.
March 31, 2020
Hedge accounting
method
Deferral hedge
method
Recognition of gain or
loss on the hedged items
Millions of yen
Contract amount
Type of derivative
Principal items hedged
Currency swaps ................................ Foreign currency denominated loans and
Total
¥9,966,619
Over 1 year
¥5,490,043
Fair value
¥64,752
Forward foreign exchange ................
bills discounted, other securities, deposits,
foreign exchange, etc.
39,426
—
723
Currency swaps ................................ Loans and bills discounted, other
254,494
208,359
18,015
securities
Total ................................................
/
/
¥83,491
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.
206
010_0800801372008.indd 206
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
(3) Equity derivatives
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
Millions of yen
Contract amount
Total
Over 1 year
Fair value
¥48,510
/
48,510
/
1,826
¥1,826
Note:
Fair value is calculated using discounted present value.
March 31, 2020
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
Contact amount
Total
Over 1 year
Fair value
¥41,556
/
41,556
/
8,861
¥8,861
010_0800801372008.indd 207
207
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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 ..............................................................
2019
¥1,125,746
38,597
5,946
31,582
(55,656)
96
(22,529)
(22)
¥1,123,760
(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 ........................................................................................
2019
¥1,469,182
43,473
(48,332)
15,746
(42,816)
(14,348)
(1,525)
¥1,421,378
2020
¥1,123,760
37,323
4,098
13,225
(55,337)
—
1,227
(318)
¥1,123,979
2020
¥1,421,378
42,510
(112,013)
13,108
(43,656)
—
(2,551)
¥1,318,775
(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
2019
¥(1,099,416)
1,421,378
321,961
(24,343)
¥ 297,617
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 ................
2019
¥329,434
(31,816)
¥297,617
2020
¥(1,096,602)
1,318,775
222,172
(27,376)
¥ 194,795
2020
¥230,573
(35,777)
¥194,795
208
010_0800801372008.indd 208
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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
2019
2020
¥ 38,597
5,946
(43,473)
(15,100)
(131)
6,300
¥ (7,861)
¥ 37,323
4,098
(42,510)
5,569
(140)
7,521
¥ 11,861
(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 .............................................................................................................................
2019
¥ 227
94,984
¥95,212
2020
¥ 140
119,648
¥119,789
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 .............................................................................................................................
2019
¥ (300)
8,596
¥8,295
2020
¥ (159)
128,245
¥128,085
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 ........................................................................................................................
2019
2020
58.7%
17.8%
2.8%
20.7%
100.0%
56.3%
15.1%
3.0%
25.6%
100.0%
Note: The retirement benefit trusts set up for employee pension plans and lump-sum severance indemnity plans account for 36.3% and 35.5% of the total plan assets at
March 31, 2019 and 2020, 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, 2019
Domestic consolidated subsidiaries ........................
Overseas consolidated subsidiaries .........................
Year ended March 31, 2020
Percentages
(0.1)% to 0.8% Domestic consolidated subsidiaries ........................
2.4 % to 9.0% Overseas consolidated subsidiaries .........................
Percentages
0.3% to 0.8%
2.3% to 8.3%
010_0800801372008.indd 209
209
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements 2) Long-term expected rate of return on plan assets
Year ended March 31, 2019
Domestic consolidated subsidiaries ........................
Overseas consolidated subsidiaries .........................
Percentages
Year ended March 31, 2020
0% to 4.0% Domestic consolidated subsidiaries ........................
2.4% to 9.0% Overseas consolidated subsidiaries .........................
Percentages
0% to 4.0%
2.3% to 8.3%
3. Defined contribution plan
Fiscal year ended March 31, 2019
The amount required to be contributed by the consolidated subsidiaries is ¥11,500 million.
Fiscal year ended March 31, 2020
The amount required to be contributed by the consolidated subsidiaries is ¥11,122 million.
210
010_0800801372008.indd 210
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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, 2019 and 2020
are as follows:
Year ended March 31
General and administrative expenses ...................................................................................
Millions of yen
2019
¥29
2020
¥7
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, 2019 and
2020 are as follows:
Year ended March 31
Other income .....................................................................................................................
Millions of yen
2019
¥—
2020
¥1,610
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
010_0800801372008.indd 211
211
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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 is 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
7,200
—
—
2,000
5,200
59,700
2,000
17,000
—
44,700
13,600
—
—
7,200
6,400
173,600
7,200
47,800
—
133,000
65,400
—
—
7,100
58,300
161,000
7,100
38,500
—
129,600
42,700
—
—
3,500
39,200
33,300
3,500
9,900
—
26,900
59,400
—
—
17,300
42,100
32,000
17,300
21,500
—
27,800
91,200
—
—
13,500
77,700
14,400
13,500
14,800
—
13,100
121,300
—
—
18,500
102,800
24,600
18,500
27,400
—
15,700
* 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
3,318
4,159
¥ 1
3,856
3,661
¥ 1
4,002
4,904
¥ 1
3,601
2,042
¥ 1
3,263
2,215
¥ 1
3,452
1,872
¥ 1
3,739
2,811
(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.
212
010_0800801372008.indd 212
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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
Executive 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 is 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 ......................
83,240,000
—
83,240,000
—
—
9,600,000
—
9,600,000
—
—
37,896,500
—
37,896,500
—
—
After vested
Previous fiscal year-end ......
Vested ...............................
Exercised ...........................
Forfeited ............................
Exercisable ........................
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
* Number of stock options has been converted and stated as number of shares.
2) Price information
Date of resolution
Exercise price (IDR) ...............
Average exercise price (IDR) ...
Fair value at the grant date
March 26, 2015
4,000.00
—
IDR
March 26, 2015
4,000.00
—
April 29, 2016
2,617.00
—
(IDR) ................................
1,408.90
1,408.90
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.
010_0800801372008.indd 213
213
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
(Notes to deferred tax assets and liabilities)
1. Significant components of deferred tax assets and liabilities
March 31, 2019
Deferred tax assets:
Millions of yen March 31, 2020
Deferred tax assets:
Millions of yen
Reserve for possible loan losses and write-off of
loans .................................................................... ¥ 181,930
210,814
Net operating loss carryforwards *2 .......................
147,466
Securities ...............................................................
45,195
Reserve for losses on interest repayment.................
Accumulated remeasurements of defined benefit
plans ....................................................................
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:
2,785
185,582
773,774
(366,407)
407,367
(200,111)
(166,296)
Reserve for possible loan losses and write-off of
loans .................................................................... ¥ 209,156
Net operating loss carryforwards *2 .......................
177,351
146,854
Securities ...............................................................
43,753
Reserve for losses on interest repayment.................
Accumulated remeasurements of defined benefit
plans ....................................................................
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:
39,818
164,543
781,478
(192,146)
(308,148)
473,329
(116,002)
(551,785)
Net unrealized gains on other securities .................
—
Net deferred gains (losses) on hedge.......................
Depreciation ..........................................................
(44,994)
(148,562)
Other ....................................................................
Total deferred tax liabilities ........................................
(745,341)
Net deferred tax assets (liabilities) .............................. ¥ (337,974)
(445,574)
Net unrealized gains on other securities .................
(57,250)
Net deferred gains (losses) on hedge.......................
Depreciation ..........................................................
(52,125)
(149,449)
Other ....................................................................
Total deferred tax liabilities ........................................
(704,399)
Net deferred tax assets (liabilities) .............................. ¥ (231,070)
*1 The change of valuation allowance is mainly due to utilization of net operating loss carryforwards and a decrease in valuation allowance due to the judgement of recoverability of
deferred tax assets from expected future taxable income at SMBC Consumer Finance Co., Ltd.
*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.
March 31, 2020
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
¥ 68,777
(58,773)
10,044
¥ 37,998
(37,271)
727
¥ 20,754
(18,714)
2,040
¥49,821
(1,282)
48,538
¥ 177,351
(116,002)
61,349
* Net operating loss carryforwards is multiplied by statutory tax rate.
214
010_0800801372008.indd 214
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
2. Significant components of difference between the statutory tax rate used by the Company and the effective income tax rate
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%
March 31, 2020
Statutory tax rate ........................................................
Valuation allowance ...............................................
Equity in gains of affiliates ....................................
Dividends exempted for income tax purposes.........
Difference of the scope of taxable income between
corporate income tax and enterprise income tax ...
Other ....................................................................
Effective income tax rate .............................................
Percentages
30.62%
(8.36)
(1.93)
(1.05)
(1.00)
0.59
18.87%
(Notes to asset retirement obligations)
Fiscal year ended March 31, 2019
There is no significant information to be disclosed.
Fiscal year ended March 31, 2020
There is no significant information to be disclosed.
(Notes to real estate for rent)
Fiscal year ended March 31, 2019
There is no significant information to be disclosed.
Fiscal year ended March 31, 2020
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.
010_0800801372008.indd 215
215
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements 3. Information on profit and loss amount by reportable segment
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.
Year ended March 31, 2020
Consolidated gross profit .....
Expenses ..............................
Others. ................................
Consolidated net
business profit ....................
Wholesale
Business
Unit
¥ 641,542
(284,353)
52,059
Retail
Business
Unit
¥ 1,257,678
(1,025,179)
1,974
Millions of yen
International
Business
Unit
¥ 667,083
(350,579)
54,736
Global Markets
Business
Unit
¥421,629
(56,235)
33,376
Head office
account and
others
¥(219,345)
(23,256)
(86,094)
Total
¥ 2,768,587
(1,739,603)
56,051
¥ 409,247
¥ 234,473
¥ 371,240
¥398,770
¥(328,696)
¥ 1,085,304
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. 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, 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.
Year ended March 31, 2020
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
¥1,085,034
196,764
(349,734)
¥ 932,064
Note:
Figures shown in the parenthesis represent the loss.
216
010_0800801372008.indd 216
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
[Related information]
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 and others; Asia and Oceania
includes China, Singapore, Indonesia 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.
Fiscal year ended March 31, 2020
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
¥3,496,033
The Americas
¥764,766
Millions of yen
Europe and Middle East
¥395,209
Asia and Oceania
¥658,303
Total
¥5,314,313
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 and others; Asia and Oceania
includes China, Singapore, Indonesia and others except Japan.
(2) Tangible fixed assets
Japan
¥881,203
The Americas
¥511,264
Millions of yen
Europe and Middle East
¥26,941
Asia and Oceania
¥30,914
Total
¥1,450,323
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, 2019 is ¥9,610 million.
Impairment loss for the fiscal year ended March 31, 2020 is ¥65,106 million.
010_0800801372008.indd 217
217
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements [Information on amortization of goodwill and unamortized balance by reportable segment]
Year ended March 31, 2019
Amortization of goodwill ..............
Unamortized balance .....................
Year ended March 31, 2020
Amortization of goodwill ..............
Unamortized balance .....................
Wholesale
Business
Unit
¥309
—
Wholesale
Business
Unit
¥—
—
Retail
Business
Unit
¥ 4,019
50,100
Retail
Business
Unit
¥ 4,019
46,080
Millions of yen
International
Business
Unit
¥5,494
—
Global Markets
Business
Unit
¥—
—
Millions of yen
International
Business
Unit
Global Markets
Business
Unit
¥—
—
¥—
—
Head office
account and
others
¥ 16,095
143,027
Head office
account and
others
¥ 13,513
148,209
Total
¥ 25,919
193,127
Total
¥ 17,533
194,289
[Information on gains on negative goodwill by reportable segment]
Fiscal year ended March 31, 2019
There are no corresponding transactions.
Fiscal year ended March 31, 2020
There are no corresponding transactions.
[Information on related parties]
Fiscal year ended March 31, 2019
There is no significant corresponding information to be disclosed.
Fiscal year ended March 31, 2020
There is no significant corresponding information to be disclosed.
(Business Combination)
Merger between Sumitomo Mitsui Asset Management Company, Limited and Daiwa SB Investments Ltd.
On April 1, 2019, Sumitomo Mitsui Asset Management Company, Limited (“SMAM”), a consolidated subsidiary of the Company, merged
with Daiwa SB Investments Ltd. (“DSBI”), an equity method affiliate of the Company, under a merger agreement concluded between the two
companies on September 28, 2018. The trade name of the merged company is Sumitomo Mitsui DS Asset Management Company, Limited.
The outline of the merger is as follows.
1. Outline of the business combination
1) Name of the acquired company and its business
Name:
Business:
Daiwa SB Investments Ltd.
Investment management business, investment advisory and agency business
2) Main reasons for the business combination
The asset management business is undergoing global growth, and the investment management capabilities and services desired by
clients are progressively becoming more sophisticated. The merger aims to establish an asset management company that combines the
strengths and expertise of SMAM and DSBI, and offers the highest quality of investment management performance and services based
on its fiduciary duties, in order to address the aforesaid client needs.
3) Date of the business combination
April 1, 2019
4) Legal form the business combination
The structure of the merger is an absorption-type merger with SMAM as the surviving company and DSBI as the absorbed company.
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 the Company immediately prior to the business combination: 48.96%
Ratio of voting rights increased on the date of business combination: 1.16%
Ratio of voting rights after the merger: 50.12%
7) Grounds for deciding on the acquirer
The Company owns a majority of voting rights of Sumitomo Mitsui DS Asset Management Company, Limited.
218
010_0800801372008.indd 218
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements 2. Period of the acquired company’s financial results included in the consolidated statements of income of the Company
From April 1, 2019 to March 31, 2020
3. Acquisition cost and consideration of the acquired company
Fair Value at the business combination of the common shares of DSBI held by the
Company immediately prior to the business combination
Consideration (shares of SMAM) for the common shares of DSBI additionally acquired by
the Company on the date of business combination
Acquisition cost of the acquired company
40,111 million yen
958 million yen
41,070 million yen
4. Merger ratio by type of shares, its calculation method and number of shares delivered
1) Type of shares and merger ratio
Common stock
SMAM 1: DSBI 4.2156
2) Method for calculating the merger ratio
SMAM and DSBI conducted careful discussion on the merger ratio following a comprehensive consideration of the financial condition,
asset condition and future prospects of the two companies based on the analysis by each third-party appraiser regarding merger ratio,
Ernst & Young Transaction Advisory Services Co., Ltd., appointed by SMAM, and PwC Advisory LLC, appointed by DSBI. As a result,
SMAM and DSBI concluded that the merger ratio was appropriate and reached an agreement.
3) Number of shares delivered
Common share of SMAM 16,230,060 shares
5. Major acquisition-related costs
Advisory fees, etc. 9 million yen
6. 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)
41,070 million yen
19,072 million yen
21,997 million yen
7. Amount of goodwill, reason for recognizing goodwill, amortization method and the period
1) Amount of goodwill
17,022 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
Goodwill is amortized using the straight-line method over 14 years
8. Amounts of assets acquired and liabilities assumed on the date of the business combination
1) Assets
Total assets:
Cash and due from banks:
2) Liabilities
Total liabilities:
61,319 million yen
22,798 million yen
14,178 million yen
9. Amounts allocated to intangible fixed assets other than goodwill, breakdown by component and the weighted average
amortization period by component
Intangible fixed assets other than goodwill:
Assets related to customers:
19,898 million yen (13 years)
19,898 million yen (13 years)
10. Approximate amounts and their calculation method of impact on the consolidated statements of income for the fiscal year ended
March 31, 2020, assuming that the business combination had been completed at the beginning of the fiscal year
Not applicable as the date of business combination is the beginning day of the fiscal year ended March 31, 2020 (April 1, 2019).
010_0800801372008.indd 219
219
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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
2019
¥7,715.91
519.95
519.59
2020
¥7,827.50
511.87
511.57
Millions of yen except number of shares
2019
2020
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) .................
¥ 726,681
—
¥ 726,681
1,397,599
¥ 703,883
—
¥ 703,883
1,375,118
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) ..........................................................................................
¥
(21)
¥
(6)
(21)
923
923
—
(6)
801
801
—
Millions of yen except number of shares
2019
¥11,451,611
683,290
4,750
678,540
¥10,768,320
2020
¥10,784,903
64,933
2,064
62,869
¥10,719,969
1,395,600
1,369,526
(Significant Subsequent Events)
There is no significant corresponding information to be disclosed.
220
010_0800801372008.indd 220
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
[Consolidated Supplementary Financial Schedules]
[Schedule of bonds]
Company
The
Company
Type of bonds
Straight bonds, payable in U.S. dollars
(Notes 3 and 4) ................................
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 ~
Jan.2020
Jun. 2016 ~
Oct. 2019
Sep. 2016 ~
Oct. 2019
Subordinated bonds, payable in Yen ...
dollars (Note 3) ................................ Apr. 26, 2018
Sep. 2014 ~
Sep. 2016
Sep. 2014 ~
Mar. 2018
Jul. 2015 ~
Jun. 2019
Apr. 2014 ~
Sep. 2019
Subordinated bonds, payable in Yen ...
Perpetual subordinated bonds, payable
in Yen ..............................................
Subordinated bonds, payable in U.S.
dollars (Note 3) ................................
SMBC
Straight bonds, payable in Yen
(Note 4) ........................................... Apr. 23, 2014
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 and 4) ................................
Jul. 2013 ~
Jul. 2018
Straight bonds, payable in British
pounds (Notes 3 and 4) ....................
Sep. 2018
Straight bonds, payable in Australian
dollars (Notes 3 and 4) .....................
Sep. 2014 ~
Dec. 2018
Straight bonds, payable in Hong Kong
dollars (Notes 3 and 4) .....................
Mar. 2015 ~
Jul. 2015
Straight bonds, payable in Thai Baht
(Notes 3 and 4) ................................
Subordinated bonds, payable in Yen
(Note 4) ...........................................
Perpetual subordinated bonds, payable
Nov. 2016 ~
Nov. 2018
Jul. 2009 ~
Dec. 2011
in U.S. dollars (Note 3) .................... Mar.1, 2012
Subordinated bonds, payable in Euro
(Notes 3 and 4) ................................ Nov. 9, 2010
(*1)
Consolidated subsidiaries, straight
Millions of yen
At the beginning 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)
At the end of
the fiscal year
4,098,762
($37,668,982 thousand)
[270,983]
754,586
(€6,313,473 thousand)
195,744
(A$2,956,426 thousand)
4,212
(HK$300,000 thousand)
370,669
386,312
371,891
352,794
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]
166,395
($1,499,060 thousand)
93,250
(€748,695 thousand)
[—]
684,797
244,822
($2,250,000 thousand)
—
761,633
($6,999,664 thousand)
[283,994]
71,270
($655,000 thousand)
412,108
(€3,448,026 thousand)
[262,944]
33,338
(£250,005 thousand)
[33,337]
20,074
(A$303,193 thousand)
[11,255]
33,190
(HK$2,364,000 thousand)
[10,459]
19,980
(THB6,000,000 thousand)
[13,320]
289,899
[150,000]
163,019
($1,498,199 thousand)
89,517
(€748,976 thousand)
[89,565]
Percentages
Interest
rate (Note 1) Collateral
2.058 ~
4.306
0 ~
1.716
1.6617 ~
4.13
3.54
0.469 ~
1.328
0.3 ~
0.59
1.07~
2.88
3.202 ~
4.436
—
2.00413~
4.13
None
None
None
None
None
None
None
None
—
None
Date of
maturity
Mar. 2021 ~
Feb. 2048
Jan. 2022 ~
Feb. 2033
Mar. 2022 ~
Jul. 2028
Apr.26, 2028
Sep. 2024 ~
May 2030
May 2025 ~
Mar. 2028
Perpetual
Apr. 2024 ~
Sep. 2029
—
May 2020~
Mar. 2030
4.3
None
May 30,2045
0.085~
2.75
None
Apr. 2020 ~
Jul. 2023
0.82188
None
Sep. 7, 2020
2.9 ~
3.67
2.09~
2.92
2 ~
2.66
1.43 ~
2.21
None
None
None
None
Aug. 2020 ~
Mar. 2025
Apr. 2020 ~
Apr. 2025
Aug. 2020 ~
Nov. 2021
Sep. 2020 ~
Dec.2026
4.85
None
Mar. 1, 2022
4
None
Nov. 9, 2020
(*2)
bonds, payable in Yen
(Notes 2 and 4) ................................
Feb. 2011 ~
Mar. 2020
Consolidated subsidiaries, straight
bonds, payable in U.S. dollars
(Notes 2,3 and 4) .............................
Aug. 2015 ~
Mar. 2020
706,988
[108,921]
48,142
($433,516 thousand)
[3,506]
536,998
[156,953]
43,609
($400,785 thousand)
[6,578]
0.01 ~
20
0.01 ~
11.4
None
None
Apr. 2020 ~
Mar. 2050
Apr. 2020 ~
Nov. 2037
(*3)
Consolidated subsidiaries, straight
bonds, payable in Euro
(Notes 2 and 3) ................................ Dec. 18, 2018
(*4)
Consolidated subsidiaries, straight
(*5)
bonds, payable in Australian dollars
(Notes 2,3 and 4) .............................
Mar. 2016~
Dec. 2018
Consolidated subsidiaries, straight
bonds, payable in Turkish lira
(Notes 2,3 and 4) .............................
Jul. 2017~
Dec. 2018
124
(€1,000 thousand)
2,074
(A$26,388 thousand)
[—]
5,164
(TRY 259,660 thousand)
[117]
95
(€800 thousand)
1,290
(A$19,483 thousand)
[39]
4,080
(TRY 246,110 thousand)
[863]
0.1
None
Dec.18, 2023
0.01~
3
0.01~
15
None
None
Jun. 2020~
Aug. 2031
Jul. 2020~
Oct. 2023
010_0800801372008.indd 221
221
2020/08/21 16:48:12
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements Type of bonds
Date of
issuance
At the beginning of
the fiscal year
At the end of
the fiscal year
Millions of yen
Percentages
Interest
rate (Note 1) Collateral
Company
(*6)
(*7)
Consolidated subsidiaries, straight
bonds, payable in Indonesia rupiah
(Notes 2,3 and 4) .............................
Jun. 2017 ~
Nov. 2019
19,487
(IDR2,498,374,855 thousand)
[2,340]
Consolidated subsidiaries, straight
bonds, payable in Renminbi
(Notes 2,3 and 4) ............................. Mar. 2020
(*8)
Consolidated subsidiaries,
subordinated bonds, payable in Yen
(Notes 2 and 4) ................................
Consolidated subsidiaries, short-term
Dec. 1997~
Aug. 1999
(*9)
bonds, payable in Yen
(Notes 2 and 4) ................................
Total .............................................................................
Jan. 2019 ~
Mar. 2020
—
21,066
(IDR3,191,941,480 thousand)
[14,531]
6,855
(CNY 447,756 thousand)
[6,889]
20,000
[—]
379,000
[379,000]
¥9,614,639
7.50~
8.25
0
4 ~
4.15
0 ~
0.01
—
—
25,000
[5,000]
84,500
[84,500]
¥9,311,867
Date of
maturity
Jun. 2020~
Nov. 2024
Jun. 2020~
Sep. 2020
None
None
None
Jan.28, 2028
None
—
Apr. 2020 ~
Sep. 2020
—
Notes: 1. “Interest rate” indicates a nominal interest rate which is applied at respective consolidated balance sheet dates. Therefore, this rate may differ from an actual interest rate.
2. (*1) This represents an aggregate of straight bonds issued in Yen by SMBC Nikko, a domestic consolidated subsidiary.
(*2) This represents straight bonds issued in U.S. dollar by SMBC Nikko, a domestic consolidated subsidiary.
(*3) This represents straight bonds issued in Euro by SMBC Nikko, a domestic consolidated subsidiary.
(*4) This represents straight bonds issued in Australian dollar by SMBC Nikko, a domestic consolidated subsidiary.
(*5) This represents straight bonds issued in Turkish lira by SMBC Nikko, a domestic consolidated subsidiary.
(*6) This represents straight bonds issued in Indonesia rupiah by PT Bank BTPN Tbk, an overseas consolidated subsidiary.
(*7) This represents straight bonds issued in Renminbi by Sumitomo Mitsui Banking Corporation (China) Limited, an overseas consolidated subsidiary.
(*8) This represents subordinate term bonds issued in Yen by SMBC International Finance N.V., an overseas consolidated subsidiary.
(*9) This represents an aggregate of short-term bonds issued in yen by SMBC Nikko and SMCC, domestic consolidated subsidiaries.
3. Figures showed in ( ) in “At the beginning of the fiscal year” and “At the end of the fiscal year” are in foreign currency.
4. Figures showed in [ ] in “At the beginning of the fiscal year” and “At the end of the fiscal year” are the amounts to be redeemed within one year.
5. The redemption schedule over the next 5 years after respective balance sheet dates of the consolidated subsidiaries was as follows:
Within 1 year
¥1,690,716
More than 1 year
to 2 years
¥1,173,258
Millions of yen
More than 2 years
to 3 years
¥1,014,148
More than 3 years
to 4 years
¥663,631
More than 4 years
to 5 years
¥1,025,916
[Schedule of borrowings]
Classification
Borrowed money ..........................................
Other borrowings ....................................
Lease obligations ..........................................
Millions of yen
At the beginning of
the fiscal year
¥10,656,897
10,656,897
30,379
At the end of
the fiscal year
¥15,210,894
15,210,894
29,103
Percentages
Average
interest rate
0.28
0.28
3.06
Repayment Term
—
Jan. 2020 ~ Perpetual
Apr. 2020 ~ 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
¥10,116,503
7,338
More than 1
year to 2 years
¥542,906
6,006
Millions of yen
More than 2
years to 3 years
¥1,838,978
4,773
More than 3
years to 4 years
¥1,581,809
4,550
More than 4
years to 5 years
¥221,487
2,816
Since the commercial banking business accepts deposits and raises and manages funds through the call loan and commercial paper markets
as a normal course of business, the schedule of borrowings shows a breakdown of Borrowed money included in the “Liabilities” and Lease
obligations included in “Other liabilities” in the consolidated balance sheet.
Reference: Commercial paper issued for funding purpose as a normal course of business is as follows:
Commercial paper ........................................
¥2,291,813
At the beginning of
the fiscal year
At the end of
the fiscal year
¥1,409,249
Millions of yen
Percentages
Average
interest rate
1.35
Repayment Term
Apr. 2020 ~ Aug. 2020
222
010_0800801372008.indd 222
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements [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
retirement obligation is not disclosed.
[Others]
Quarterly consolidated financial information in the fiscal year ended March 31, 2020 is as follows:
Ordinary income ..........................................
Income before income taxes ..........................
Profit attributable to owners of parent ..........
Earnings per share ........................................
First quarter
consolidated
total period
¥1,334,510
282,383
215,727
155.24
Millions of yen (except Earnings per share)
Third quarter
Second quarter
consolidated
consolidated
total period
total period
¥2,707,673
578,978
431,955
312.84
¥4,021,547
831,431
610,830
443.60
Fiscal year ended March
31, 2020
¥5,314,313
888,646
703,883
511.87
Earnings per share ........................................
First quarter
consolidated
accounting period
¥155.24
Second quarter
consolidated
accounting period
¥157.61
Third quarter
consolidated
accounting period
¥130.62
Fourth quarter
consolidated
accounting period
¥67.95
Yen
010_0800801372008.indd 223
223
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements (Non-consolidated financial statements)
1. Non-consolidated balance sheets
March 31
Assets:
Current assets
Millions of yen
2019
2020
Millions of U�S�
dollars
2020
Cash and due from banks �������������������������������������������������������������������������
Prepaid expenses��������������������������������������������������������������������������������������
Accrued income ����������������������������������������������������������������������������������������
Accrued income tax refunds ���������������������������������������������������������������������
Current portion of long-term loans receivables from subsidiaries and affiliates ���
Other current assets ����������������������������������������������������������������������������������
Total current assets �����������������������������������������������������������������������������������
¥ 434,005
365
42,124
118,877
—
37,124
632,497
¥ 174,641
413
45,660
127,541
272,025
59,769
680,051
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
Investment securities ���������������������������������������������������������������������������
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 ����������������������������������������������������������������������������������������������������
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 �����������������������������������������������������������������
Current portion of bonds ���������������������������������������������������������������������������
Other current liabilities ������������������������������������������������������������������������������
Total current liabilities ��������������������������������������������������������������������������������
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
Fixed liabilities
Bonds ��������������������������������������������������������������������������������������������������������
Long-term borrowings ������������������������������������������������������������������������������
Total fixed liabilities �����������������������������������������������������������������������������������
Total liabilities ������������������������������������������������������������������������������������������������
5,790,820
234,223
6,025,043
7,306,375
Net assets:
Stockholders’ equity
80
12
29,464
29,557
270
270
645
6,341,210
7,173,150
104
476
3
13,515,590
13,545,418
¥14,225,470
¥ 1,228,030
39,682
44,409
12
39
769
410
272,025
673
1,586,051
6,441,874
231,275
6,673,150
8,259,202
Capital stock ���������������������������������������������������������������������������������������������
Capital surplus
2,339,443
2,339,964
Capital reserve �������������������������������������������������������������������������������������
Total capital surplus �����������������������������������������������������������������������������
1,560,921
1,560,921
1,561,442
1,561,442
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
1,767,989
1,798,409
(16,302)
5,682,471
2,539
5,685,011
¥12,991,386
30,420
2,046,360
2,076,780
(13,983)
5,964,203
2,064
5,966,267
¥14,225,470
$ 1,605
4
420
1,172
2,500
549
6,250
1
0
271
272
2
2
6
58,278
65,924
1
4
0
124,213
124,487
$130,737
$ 11,286
365
408
0
0
7
4
2,500
6
14,576
59,203
2,126
61,328
75,905
21,505
14,350
14,350
280
18,807
19,086
(129)
54,813
19
54,832
$130,737
224
010_0800801372008.indd 224
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes 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 ����������������������������������������������������������������
Total non-operating expenses �������������������������������������������������������������������������
Ordinary profit ������������������������������������������������������������������������������������������������������
Extraordinary gains:
Gains on sales of stocks of subsidiaries and affiliates ������������������������������������
Total extraordinary gains ���������������������������������������������������������������������������������
Extraordinary loss:
Loss on sales of stocks of subsidiaries and affiliates �������������������������������������
Total extraordinary loss �����������������������������������������������������������������������������������
Income before income taxes ������������������������������������������������������������������������������
Income taxes-current ��������������������������������������������������������������������������������������
Income taxes-deferred ������������������������������������������������������������������������������������
Income taxes ��������������������������������������������������������������������������������������������������������
Net income �����������������������������������������������������������������������������������������������������������
Millions of yen
2019
2020
Millions of U�S�
dollars
2020
¥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
¥659,428
9,087
165,319
833,835
26,146
161,535
6,843
194,525
639,310
70
1
130
202
4,312
120
5,816
10,249
629,263
—
—
—
—
629,263
(6,803)
(62)
(6,865)
¥636,128
$6,060
84
1,519
7,663
240
1,485
63
1,788
5,875
1
0
1
2
40
1
53
94
5,783
—
—
—
—
5,783
(63)
(1)
(63)
$5,846
Per share data:
Earnings per share �����������������������������������������������������������������������������������������������
Earnings per share (diluted) ����������������������������������������������������������������������������������
Yen
2019
2020
U�S� dollars
2020
¥339�29
339�07
¥462.60
462.33
$4.25
4.25
010_0800801372008.indd 225
225
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
3. Non-consolidated statements of changes in net assets
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 �����
699
Net changes in the fiscal year ��������������
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
¥(12,493)
Total
¥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)
¥(16,302)
160,219
¥5,682,471
(283)
(283)
¥2,539
(283)
159,935
¥5,685,011
226
010_0800801372008.indd 226
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
Year ended March 31, 2020
Balance at the beginning of the fiscal year ��� ¥2,339,443
Capital
stock
Capital
reserve
¥1,560,921
Other capital
surplus
Total capital
surplus
¥
— ¥1,560,921
Other retained earnings
Voluntary
reserve
¥30,420
Retained earnings
brought forward
¥1,767,989
Total retained
earnings
¥1,798,409
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
521
521
521
(255,834)
636,128
(255,834)
636,128
(250)
(101,673)
(250)
(101,673)
101,923
101,923
(101,923)
(101,923)
stockholders’ equity in the fiscal year �����
Net changes in the fiscal year ��������������
521
Balance at the end of the fiscal year ���� ¥2,339,964
521
¥1,561,442
¥
—
521
— ¥1,561,442
—
¥30,420
278,370
¥2,046,360
278,370
¥2,076,780
Year ended March 31, 2020
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
¥ (16,302) ¥5,682,471
Stock
acquisition
rights
¥2,539
Total
net assets
¥5,685,011
(100,088)
733
101,673
1,043
(255,834)
636,128
(100,088)
483
—
—
1,043
(255,834)
636,128
(100,088)
483
—
—
stockholders’ equity in the fiscal year �����
Net changes in the fiscal year ��������������
Balance at the end of the fiscal year ����
2,318
281,732
¥ (13,983) ¥5,964,203
(475)
(475)
¥2,064
(475)
281,256
¥5,966,267
010_0800801372008.indd 227
227
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements
Millions of U� S� dollars
Stockholders’ equity
Capital surplus
Retained earnings
Capital
stock
$21,500
Capital
reserve
$14,345
Other capital
surplus
$ —
Total capital
surplus
$14,345
5
5
5
(2)
(934)
937
(2)
(934)
937
Other retained earnings
Voluntary
reserve
Retained earnings
brought forward
$16,248
$280
Total retained
earnings
$16,528
(2,351)
5,846
(2,351)
5,846
(937)
(937)
5
$21,505
5
$14,350
—
$ —
5
$14,350
—
$280
2,558
$18,807
2,558
$19,086
Millions of U� S� dollars
Stockholders’ equity
Treasury
stock
$(150)
Total
$52,224
Stock
acquisition
rights
$23
Total
net assets
$52,247
(920)
7
934
10
(2,351)
5,846
(920)
4
—
—
10
(2,351)
5,846
(920)
4
—
—
Year ended March 31, 2020
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, 2020
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 ����
21
$(129)
2,589
$54,813
(4)
(4)
$19
(4)
2,585
$54,832
228
010_0800801372008.indd 228
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Notes to Consolidated Financial Statements Independent Auditor’s Report
To the Board of Directors of
Sumitomo Mitsui Financial Group, Inc.:
Opinion
We have audited the accompanying consolidated financial statements of Sumitomo Mitsui Financial Group, Inc. (“the
Company”) and its consolidated subsidiaries (collectively referred to as “the Group”), which comprise the consolidated
balance sheets as at March 31, 2020 and 2019, the consolidated statements of income, comprehensive income,
changes in net assets and cash flows for the years then ended, and notes, comprising a summary of significant
accounting policies, other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as at March 31, 2020 and 2019, and its consolidated financial
performance and cash flows for the years then ended in accordance with accounting principles generally accepted in
Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are independent of the Group in accordance with the ethical requirements that
are relevant to our audit of the consolidated financial statements in Japan, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Measurement of the reserve for possible loan losses
The key audit matter
How the matter was addressed in our audit
In the consolidated balance sheet of the Group as of
March 31, 2020, reserve for possible loan losses (the
“Reserve”) amounted to ¥301,752 million provided on
loans and bills discounted (the “Loans”) of
¥82,517,609 million (or approximately 37.5% of the
total assets). Included in such balances were mainly
corporate loans of Sumitomo Mitsui Banking
Corporation (“SMBC”), a commercial banking
subsidiary.
The primary procedures we performed to assess the
reasonableness of measurement of the Reserve for
SMBC’s corporate loans included the following:
(1) Internal control testing
We evaluated the design and operating effectiveness of
certain internal controls over the provisioning process
by focusing on controls that:
∙ approve the internal rules for accounting for the
Reserve, including the criteria for self-assessment
and the policy for write-offs and provisions;
∙ validate the obligor grading models;
010_0800801372008.indd 229
229
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 SMBC assesses all claims including the Loans in
accordance with the internal criteria for self-assessment
of asset quality, and classifies borrowers into credit
categories through examining individual credit risk
profiles. On the basis of each borrower category,
reserves and direct write-offs are recorded in
accordance with its internal policy for write-offs and
provisions. The methodologies used include an
expected credit loss (ECL) model based on the
historical loan-loss ratios or the probability of default,
and a discounted cash flow (DCF) method.
Additionally, considering recent economic
environment and risk factors, an ECL amount deemed
necessary for specific portfolios is reflected in the
Reserve based on an overall assessment of a probable
future outlook for those portfolios that has not been
fully captured in the historical data or individual
borrower classification.
The evaluation of the Reserve for SMBC’s corporate
loans involves significant measurement uncertainty,
and therefore requires complex management judgment
primarily in the following aspects:
∙ classifying borrowers into appropriate credit
categories through performing obligor-specific
qualitative assessment, including the use of forward-
looking information;
∙ deciding on whether changes to the borrower
classification as well as additional provisions for
specific portfolios are deemed necessary, and
determining appropriate methodologies to measure
such provisions, in light of recent economic
environment and risk factors, specifically the
potential impact of the spread of the COVID-19 and
the coinciding fluctuations of market indices such as
crude oil prices; and
∙ projecting future cash flow scenarios as an input to
the DCF method for borrowers with large claims
classified mainly as substandard or potentially
bankrupt.
We, therefore, determined that the measurement of
the Reserve for SMBC corporate loans; specifically,
classifying borrowers into credit categories through
qualitative assessment, reflecting recent economic
environment and risk factors into the Reserve, and
projection of cash flow scenarios used in the DCF
method, was one of the most significant in our audit
of the consolidated financial statements for this fiscal
year, and accordingly, a key audit matter.
∙ relate to classification of individual borrowers into
credit categories through qualitative assessment;
∙ reflect recent economic environment and risk factors
into the Reserve; and
∙ relate to the projection of future cash flow scenarios
used in the DCF method.
(2) Evaluation of the appropriateness of the policy
for provisions and the borrower classification
model
We evaluated the policy for provisions for compliance
with the accounting principles generally accepted in
Japan. Additionally, we involved credit risk specialists
with industry-specific knowledge and expertise who
assisted us in evaluating the obligor grading models
through analyzing the consistency of obligor grades
with external ratings, and evaluating the default
prediction capability of the models.
(3) Evaluation of the appropriateness of borrower
classification taking into account qualitative
factors
For SMBC’s corporate borrowers that we selected based
on certain criteria, we evaluated the appropriateness of
borrower classification taking into account qualitative
factors through analyzing the feasibility of their
business plan and assessing their liquidity position.
(4) Evaluation of the reasonableness of a provision
that reflects the effect of recent economic
environment and risk factors
In light of the recent economic environment and risk
factors, specifically the potential impact of the spread
of COVID-19 and the coinciding fluctuations of
market indices such as crude oil price, we evaluated
the reasonableness of changes to the borrower
classification and of an additional provision for specific
portfolios through:
∙ analyzing the liquidity position of borrowers affected
by the COVID-19 and the related circumstances
including their recent operating performance and
request for loan modifications, and assessing the
borrower classification on the basis of such analysis;
and
∙ analyzing the scope of potential effects and assessing
assumptions by inspecting available external reports
on market indices including crude oil prices, and
evaluating the methodologies used to measure an
ECL for specific portfolios.
230
010_0800801372008.indd 230
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Sumitomo Mitsui Financial GroupIndependent Auditor’s Report (5) Evaluation of the reasonableness of future
cash flow scenarios used in the DCF method
For borrowers that we selected based on certain criteria
from those in scope of DCF method, we evaluated the
reasonableness of future cash flow scenarios through
analyzing their restructuring plans and related
progress.
Measurement of the value-in-use of goodwill and other intangible assets related to the retail banking business of
SMBC Trust Bank, Ltd.
The key audit matter
How the matter was addressed in our audit
In the consolidated balance sheet of the Group as of
March 31, 2020, goodwill and other intangible fixed
assets amounted to ¥194,289 million and ¥117,896
million, respectively. The goodwill and other
intangible fixed assets consisting of assets related to
customers and core deposits (collectively, the
“Intangible Assets”) recognized in connection with the
acquisition of the retail banking business of Citibank
Japan Ltd. (the “PRESTIA business”) by SMBC Trust
bank Ltd, (“SMBC Trust Bank”) were impaired, and
an impairment loss of ¥39,958 million for the entire
amount of the Intangible Assets was recorded for the
fiscal year ended March 31, 2020.
While the Intangible Assets are amortized in a
systematic manner, whenever there is an indicator that
the carrying amounts of the Intangible Assets may not
be recoverable, the Group needs to determine whether
an impairment shall be recognized by comparing the
undiscounted future cash flows to be generated from
the business to which the Intangible Assets relate and
its carrying amount. If it is determined that the
recognition of an impairment loss is required, the
carrying amount is reduced to its recoverable amount,
with such reduction being recognized as an
impairment loss. The recoverable amount of an asset
group is the higher of its fair value less costs to sell
and its value in use.
The primary procedures we performed to evaluate the
reasonableness of the measurement of the value in use
related to the PRESTIA business of SMBC Trust Bank
included the following.
(1) Internal control testing
We evaluated the design and operating effectiveness of
certain internal controls over the process of calculating
the value in use related to the PRESTIA business of
SMBC Trust Bank by focusing controls that:
∙ evaluate the reasonableness of estimated future cash
flows; and
∙ evaluate the reasonableness of the discount rate.
(2) Evaluation of the appropriateness of valuation
methodology used to calculate the value in use
We involved valuation specialists with industry-
specific knowledge and expertise who assisted us in
evaluating the reasonableness of valuation
methodology used to calculate the value in use by
comparing it to the standard methods commonly used
for the valuation of retail banks.
(3) Evaluation of the reasonableness of future
cash flows used to calculate the value in use
We assessed the level of precision of the prior year
estimate of future cash flows by comparing it to the
actual result. In addition, we evaluated the
reasonableness of estimated future cash flows,
considering the historical operating performance, the
current market environment and economic trends
including future prospect of the PRESTIA business of
SMBC Trust Bank, and the regulatory environment.
010_0800801372008.indd 231
231
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Sumitomo Mitsui Financial GroupIndependent Auditor’s Report (4) Evaluation of the reasonableness of the
discount rate used to calculate the value in use
We involved valuation specialists with industry-
specific knowledge and expertise who assisted us in
evaluating the reasonableness of the valuation
methodology used to calculate a discount rate and the
calculation result, considering historical market data
and current market conditions.
There was an indicator of impairment for the
PRESTIA business of SMBC Trust Bank during the
year ended March 31, 2020 due to the deterioration in
its market environment. As a result of an impairment
test, the recognition of an impairment loss was
required. The value in use was used as the recoverable
amount to measure an impairment loss on the
Intangible Assets related to the PRESTIA business of
SMBC Trust Bank. The value in use was calculated
using the future cash flows based on the business plan
approved by management and a discount rate.
The estimate of future cash flows inherently requires
complex management judgments, and the discount
rate may be significantly affected by market interest
rates and other market conditions. Also, as SMBC
Trust Bank has revised the estimated future cash flows
considering the recent market environment, there was
a higher degree of uncertainty in the estimates used
for calculating the value in use.
We, therefore, determined that the measurement of
the value in use related to the PRESTIA business of
SMBC Trust Bank was one of the most significant in
our audit of the consolidated financial statements for
this fiscal year, and accordingly, a key audit matter.
Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the 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
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern in accordance with accounting
principles generally accepted in Japan.
The Audit Committee is responsible for overseeing the directors and the corporate executive officers’ performance
of their duties including the design, implementation and maintenance of the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with auditing standards generally accepted in Japan will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
232
010_0800801372008.indd 232
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Sumitomo Mitsui Financial GroupIndependent Auditor’s Report ∙ Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
∙ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, while the objective of the audit is not to express an opinion on the effectiveness of
the Group’s internal control.
∙ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
∙ Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Group to cease to continue as a going concern.
∙ Evaluate whether the presentation and disclosures in the consolidated financial statements are in accordance with
accounting standards generally accepted in Japan, the overall presentation, structure and content of the consolidated
financial statements, including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
∙ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the
audit, significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March
31, 2020 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.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified
Public Accountants Act of Japan.
010_0800801372008.indd 233
233
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Sumitomo Mitsui Financial GroupIndependent Auditor’s Report Toshihiro Otsuka
Designated Engagement Partner
Certified Public Accountant
Noriaki Habuto
Designated Engagement Partner
Certified Public Accountant
Kazuhide Niki
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Tokyo Office, Japan
June 25, 2020
234
010_0800801372008.indd 234
2020/08/21 16:48:13
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Sumitomo Mitsui Financial GroupIndependent Auditor’s Report 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
2019
2020
¥ 55,747,048
2,665,744
5,082,709
¥ 59,991,835
1,246,739
8,243,182
Millions of
U�S� dollars
2020
$ 551,345
11,458
75,758
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
957,271
4,550,644
4,133,816
0
26,282,649
84,280,613
2,057,887
219,733
4,647,291
1,341,895
506,755
305,799
417,640
7,345
15,192
89,163
320,622
272,870
—
2
47,750
226,273
26,147
8,798
41,822
37,991
0
241,546
774,567
18,913
2,019
42,710
12,332
4,657
2,810
3,838
68
140
819
2,947
2,508
—
0
439
2,080
240
8,121,131
(332,343)
¥190,690,293
7,898,071
(335,041)
¥206,089,633
72,586
(3,079)
$1,894,032
010_0800801372008.indd 235
235
2020/08/21 16:48:14
SMBC GROUP ANNUAL REPORT 2020SMBCSupplemental 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
2019
2020
Millions of
U�S� dollars
2020
$1,172,907
94,940
26,841
98,261
7,625
12,951
31,790
200,540
13,718
17,850
16,647
46,246
335
11
38
6
4
43
3,507
277
72,586
1,817,124
16,276
18,071
33,289
(1,930)
65,706
10,347
952
339
(450)
(814)
¥127,623,995
10,330,435
2,920,539
10,691,772
829,729
1,409,249
3,459,117
21,820,785
1,492,634
1,942,291
1,811,355
5,032,050
36,494
1,236
4,114
617
388
4,687
381,605
30,111
7,898,071
197,721,284
1,770,996
1,966,291
3,622,140
(210,003)
7,149,425
1,125,808
103,609
36,870
(48,969)
(88,577)
1,128,741
—
90,182
8,368,349
¥206,089,633
10,374
—
829
76,908
$1,894,032
¥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
236
010_0800801372008.indd 236
2020/08/21 16:48:14
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020SMBCSupplemental 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 �������������������������������
Other ������������������������������������������������������������
General and administrative expenses ���������������
Other expenses �������������������������������������������������
Provision for reserve for possible
loan losses �������������������������������������������������
Other ������������������������������������������������������������
Ordinary profit ��������������������������������������������������������
Millions of yen
2019
2020
¥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
—
80,212
894,501
Millions of
U�S� dollars
2020
$31,882
20,565
13,649
3,130
146
499
10
727
67
2,337
43
5,644
1,448
2,378
399
21
1,958
1,804
—
16
1,789
24,801
10,900
4,057
1,212
97
1,249
9
290
1,979
618
1,391
1,654
—
830
244
586
9,721
1,697
353
1,344
7,081
¥3,469,068
2,237,626
1,485,144
340,553
15,865
54,336
1,047
79,068
7,307
254,303
4,701
614,134
157,531
258,749
43,409
2,268
213,072
196,323
—
1,697
194,626
2,698,577
1,186,005
441,411
131,851
10,540
135,924
941
31,525
215,283
67,206
151,322
179,925
—
90,269
26,514
63,755
1,057,690
184,685
38,437
146,248
770,491
010_0800801372008.indd 237
237
2020/08/21 16:48:14
SMBC GROUP ANNUAL REPORT 2020SMBCSupplemental 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
2019
2020
¥ 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
2019
2020
¥668,976
(120,740)
(78,282)
27,672
—
12,682
(67,113)
(15,698)
548,236
500,124
48,111
Millions of
U�S� dollars
2020
$ 12
12
—
563
13
550
6,529
1,697
(16)
1,681
4,849
90
$4,758
Millions of
U�S� dollars
2020
$4,849
(2,807)
(2,758)
1,526
(0)
(617)
(766)
(192)
2,041
1,943
98
¥ 1,273
1,273
—
61,313
1,425
59,887
710,451
184,642
(1,778)
182,864
527,586
9,836
¥517,750
¥527,586
(305,464)
(300,099)
166,083
(39)
(67,110)
(83,402)
(20,896)
222,122
211,445
10,676
238
010_0800801372008.indd 238
2020/08/21 16:48:14
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020SMBCSupplemental Information
Non-consolidated Balance Sheets (Unaudited)
Sumitomo Mitsui Banking Corporation
Millions of yen
2019
March 31
Assets:
Cash and due from banks ������������������������������������������������������������������������������������ ¥ 54,205,583
Call loans ��������������������������������������������������������������������������������������������������������������
2,134,392
Receivables under resale agreements �����������������������������������������������������������������
3,364,070
Receivables under securities borrowing transactions ������������������������������������������
1,222,284
Monetary claims bought ���������������������������������������������������������������������������������������
1,470,872
Trading assets ������������������������������������������������������������������������������������������������������
1,534,100
Securities ��������������������������������������������������������������������������������������������������������������
24,336,638
Loans and bills discounted ����������������������������������������������������������������������������������
76,401,807
Foreign exchanges �����������������������������������������������������������������������������������������������
1,627,105
Other assets ���������������������������������������������������������������������������������������������������������
2,895,757
Tangible fixed assets ��������������������������������������������������������������������������������������������
802,501
Intangible fixed assets ������������������������������������������������������������������������������������������
236,352
Prepaid pension cost �������������������������������������������������������������������������������������������
321,031
Customers’ liabilities for acceptances and guarantees ���������������������������������������
9,078,706
Reserve for possible loan losses ��������������������������������������������������������������������������
(275,185)
Reserve for possible losses on investments ��������������������������������������������������������
(7,363)
Total assets ���������������������������������������������������������������������������������������������������������� ¥179,348,654
Liabilities and net assets:
Liabilities:
Deposits ��������������������������������������������������������������������������������������������������������������� ¥116,091,103
Negotiable certificates of deposit ������������������������������������������������������������������������
11,581,605
Call money ������������������������������������������������������������������������������������������������������������
796,761
Payables under repurchase agreements ��������������������������������������������������������������
7,364,577
Payables under securities lending transactions ���������������������������������������������������
418,912
Commercial paper ������������������������������������������������������������������������������������������������
1,634,811
Trading liabilities ���������������������������������������������������������������������������������������������������
1,348,931
Borrowed money ��������������������������������������������������������������������������������������������������
15,567,626
Foreign exchanges �����������������������������������������������������������������������������������������������
1,213,861
Bonds �������������������������������������������������������������������������������������������������������������������
2,910,794
Due to trust account ���������������������������������������������������������������������������������������������
1,292,699
Other liabilities ������������������������������������������������������������������������������������������������������
1,659,172
Reserve for employee bonuses ����������������������������������������������������������������������������
13,285
Reserve for executive bonuses ����������������������������������������������������������������������������
937
Reserve for point service program �����������������������������������������������������������������������
468
Reserve for reimbursement of deposits ���������������������������������������������������������������
7,425
Deferred tax liabilities �������������������������������������������������������������������������������������������
374,529
Deferred tax liabilities for land revaluation �����������������������������������������������������������
30,259
Acceptances and guarantees �������������������������������������������������������������������������������
9,078,706
Total liabilities ������������������������������������������������������������������������������������������������������
171,386,468
Net assets:
Capital stock ��������������������������������������������������������������������������������������������������������
1,770,996
Capital surplus �����������������������������������������������������������������������������������������������������
1,774,554
Retained earnings ������������������������������������������������������������������������������������������������
3,196,504
Treasury stock ������������������������������������������������������������������������������������������������������
(210,003)
Total stockholders’ equity �����������������������������������������������������������������������������������
6,532,053
Net unrealized gains (losses) on other securities �������������������������������������������������
1,427,008
Net deferred gains (losses) on hedges �����������������������������������������������������������������
(22,444)
Land revaluation excess ���������������������������������������������������������������������������������������
25,568
Total valuation and translation adjustments ������������������������������������������������������
1,430,131
Total net assets ����������������������������������������������������������������������������������������������������
7,962,185
Total liabilities and net assets ����������������������������������������������������������������������������� ¥179,348,654
2020
¥ 57,971,293
645,967
5,963,377
943,940
1,562,083
3,189,980
27,058,633
80,187,382
1,896,157
4,178,263
794,957
234,707
344,481
9,399,524
(279,702)
(127,256)
¥193,963,791
¥119,973,324
10,580,261
3,068,726
8,728,522
571,095
642,447
2,959,613
21,561,177
1,519,777
1,894,369
1,735,889
3,453,008
13,794
939
388
3,900
330,699
30,111
9,399,524
186,467,572
1,770,996
1,774,554
2,875,747
(210,003)
6,211,295
1,073,795
185,163
25,964
1,284,923
7,496,219
¥193,963,791
Millions of
U�S� dollars
2020
$ 532,775
5,937
54,805
8,675
14,356
29,317
248,678
736,949
17,426
38,400
7,306
2,157
3,166
86,385
(2,571)
(1,170)
$1,782,592
$1,102,595
97,236
28,203
80,218
5,249
5,904
27,200
198,154
13,967
17,410
15,953
31,734
127
9
4
36
3,039
277
86,385
1,713,699
16,276
16,309
26,429
(1,930)
57,084
9,869
1,702
239
11,809
68,893
$1,782,592
010_0800801372008.indd 239
239
2020/08/21 16:48:14
SMBC GROUP ANNUAL REPORT 2020SMBCSupplemental Information
Non-consolidated Statements of Income (Unaudited)
Sumitomo Mitsui Banking Corporation
Year ended March 31
Millions of yen
2019
2020
Millions of
U�S� dollars
2020
Ordinary income ���������������������������������������������������������������������������������������������������
¥2,805,840
¥2,851,162
Interest income ������������������������������������������������������������������������������������������������
1,970,831
Interest on loans and discounts �����������������������������������������������������������������
1,298,725
Interest and dividends on securities ����������������������������������������������������������
345,566
Trust fees ���������������������������������������������������������������������������������������������������������
Fees and commissions �����������������������������������������������������������������������������������
Trading income ������������������������������������������������������������������������������������������������
Other operating income ����������������������������������������������������������������������������������
Other income ���������������������������������������������������������������������������������������������������
2,250
524,566
46,507
109,674
152,009
Ordinary expenses �����������������������������������������������������������������������������������������������
2,156,192
Interest expenses ��������������������������������������������������������������������������������������������
1,026,727
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 �����������������������������������������������������������������������������������������
Income taxes - deferred ���������������������������������������������������������������������������������������
381,304
182,365
3,305
45,846
802,961
94,986
649,647
380
6,355
643,672
136,885
29,420
1,900,107
1,254,132
329,152
2,110
521,450
111,655
142,854
172,983
2,367,218
1,022,015
347,736
198,192
—
45,962
819,423
281,624
483,944
1,224
4,191
480,977
156,282
7,313
$26,203
17,463
11,526
3,025
19
4,792
1,026
1,313
1,590
21,756
9,393
3,196
1,821
—
422
7,531
2,588
4,448
11
39
4,420
1,436
67
Net income �����������������������������������������������������������������������������������������������������������
¥ 477,367
¥ 317,381
$ 2,917
Per share data:
Earnings per share ������������������������������������������������������������������������������������������
¥4,492�93
¥2,987.16
Earnings per share (diluted) ����������������������������������������������������������������������������
—
—
$27
—
Yen
2019
2020
U�S� dollars
2020
240
010_0800801372008.indd 240
2020/08/21 16:48:14
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020SMBCSupplemental Information
Income Analysis (Consolidated)
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Operating Income, Classified by Domestic and Overseas Operations
2020
2019
Millions of yen
Year ended March 31
Domestic
operations
Overseas
operations Elimination
Total
Interest income ����������������������������������������������������� ¥1,122,203 ¥1,413,309
Interest expenses ��������������������������������������������������
724,655
688,654
Net interest income ���������������������������������������������������
Trust fees �������������������������������������������������������������������
—
229,143
35,117
194,025
51,822
9,564
42,257
139,144
49,349
89,795
344,555
777,647
4,701
Fees and commissions ����������������������������������������� 1,075,452
Fees and commissions payments ������������������������
175,449
900,003
Net fees and commissions ����������������������������������������
Trading income������������������������������������������������������
220,851
Trading losses �������������������������������������������������������
282
220,569
Net trading income ����������������������������������������������������
Other operating income ����������������������������������������
912,316
Other operating expenses�������������������������������������
860,312
52,003
Net other operating income���������������������������������������
¥ (79,149) ¥2,456,364
1,179,770
1,276,593
4,701
1,287,538
204,188
1,083,350
262,826
—
262,826
1,050,065
908,951
141,114
110,558
(189,708)
—
(17,057)
(6,379)
(10,678)
(9,846)
(9,846)
—
(1,395)
(710)
(684)
Domestic
operations
¥1,178,337 ¥1,409,909
749,988
659,921
—
230,997
28,199
202,798
37,423
5,220
32,202
286,957
149,435
137,522
355,524
822,812
4,656
1,033,005
160,129
872,876
163,227
4,058
159,169
1,291,973
1,172,406
119,566
Overseas
operations Elimination
Total
¥ (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
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 ���������������������������������������������� ¥ 85,864,531
51,570,227
18,201,943
198,734
5,191,204
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 ������������
3,965,107
2,142,807
—
Interest-bearing liabilities ������������������������������������������ ¥133,242,885
101,322,743
5,259,479
1,221,029
8,586,289
1,835,513
100,091
10,272,204
233,005
3,140,917
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
2020
Interest
¥1,122,203
748,287
251,441
144
(2,473)
21,175
19,985
—
¥ 344,555
51,772
407
(288)
54,711
1,111
11
35,797
29
65,860
Average rate
1.31%
1.45
1.38
0.07
(0.05)
0.53
0.93
—
0.26%
0.05
0.01
(0.02)
0.64
0.06
0.01
0.35
0.01
2.10
Average balance
¥ 84,031,845
49,778,260
17,019,375
108,697
3,940,030
5,324,298
1,961,674
1,374,202
¥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
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
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 (2020, ¥49,066,481 million; 2019, ¥44,359,932
million).
011_0800804262008.indd 241
241
2020/08/11 18:00:48
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 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
¥45,569,621
27,230,587
5,737,546
1,575,530
2,580,540
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
Lease receivables and investment assets ������������
24,706
4,149,235
224,582
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 ��������������������������������������������������������������������
¥37,840,304
22,611,324
6,424,927
727,834
5,240,834
—
1,811,251
496,301
—
83,025
2020
Interest
¥1,413,309
948,980
126,658
15,746
57,573
72
78,027
7,307
¥ 724,655
407,081
131,442
10,573
100,259
—
31,513
19,014
—
3,367
Millions of yen
Average rate
3.10%
3.48
2.21
1.00
2.23
0.29
1.88
3.25
1.92%
1.80
2.05
1.45
1.91
—
1.74
3.83
—
4.06
Average balance
¥44,546,369
26,222,907
5,236,149
2,026,876
1,857,211
12,108
4,830,531
420,967
¥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
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
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 (2020, ¥3,486,210 million; 2019, ¥3,210,358
million).
Total of Domestic and Overseas Operations
Millions of yen
Average balance
Year ended March 31
Interest-earning assets ���������������������������������������������� ¥128,509,884
78,649,214
23,887,779
1,774,265
6,501,384
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 ������������
3,989,813
5,004,709
224,582
Interest-bearing liabilities ������������������������������������������ ¥174,571,663
122,617,614
11,684,407
1,948,864
12,556,748
1,835,513
1,911,343
10,819,244
233,005
9,395,255
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 ��������������������������������������������������������������������
2020
Interest
¥2,456,364
1,693,016
346,822
15,890
31,449
21,247
80,924
7,307
¥1,179,770
441,477
131,849
10,284
131,320
1,111
31,525
57,632
29
220,874
Average rate
1.91%
2.15
1.45
0.90
0.48
0.53
1.62
3.25
0.68%
0.36
1.13
0.53
1.05
0.06
1.65
0.53
0.01
2.35
Average balance
¥125,654,947
75,410,118
22,035,388
2,135,574
4,891,163
5,336,406
5,619,591
1,795,167
¥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
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
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 (2020, ¥52,536,286 million; 2019, ¥47,559,830
million).
242
011_0800804262008.indd 242
2020/08/11 18:00:48
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 Income Analysis (Consolidated)
Fees and Commissions
Domestic
Year ended March 31
operations
Fees and commissions ���������������������������������������������� ¥1,075,452
16,975
119,894
119,023
9,551
4,347
76,386
335,678
146,849
Deposits and loans �����������������������������������������������
Remittances and transfers ������������������������������������
Securities-related business �����������������������������������
Agency ������������������������������������������������������������������
Safe deposits ��������������������������������������������������������
Guarantees ������������������������������������������������������������
Credit card business ���������������������������������������������
Investment trusts ��������������������������������������������������
Millions of yen
2020
Overseas
operations Elimination
Total
¥229,143
131,138
21,612
41,135
—
2
9,549
0
3,500
¥(17,057) ¥1,287,538
142,545
141,475
154,238
9,551
4,350
85,585
335,678
150,349
(5,568)
(30)
(5,921)
—
—
(350)
—
—
Domestic
operations
¥1,033,005
15,736
116,871
122,233
11,423
4,544
79,110
316,877
122,475
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)
—
—
Fees and commissions payments ����������������������������� ¥ 175,449
32,905
Remittances and transfers ������������������������������������
¥ 35,117
7,817
¥(6,379) ¥ 204,188
40,598
(124)
¥ 160,129
31,501
¥ 28,199
10,630
¥ (7,308) ¥ 181,019
42,127
(4)
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
2020
Domestic
operations
¥220,851
64,082
Overseas
operations Elimination
¥(9,846)
—
¥51,822
8,418
trading transactions ��������������������������������������������
Gains on trading-related financial derivatives �������
Others �������������������������������������������������������������������
9,088
147,599
80
Trading losses������������������������������������������������������������
Losses on trading securities ���������������������������������
Losses on securities related to
trading transactions ��������������������������������������������
Losses on trading-related financial derivatives �����
Others �������������������������������������������������������������������
282
—
—
282
—
176
43,223
2
9,564
—
—
9,564
—
—
(9,846)
—
(9,846)
—
—
(9,846)
—
Millions of yen
2019
Domestic
operations
¥163,227
83,367
Overseas
operations Elimination
¥(5,974)
(718)
¥37,423
—
—
79,515
345
4,058
—
2,956
1,102
—
—
37,423
—
5,220
718
348
4,143
10
—
(5,245)
(10)
(5,974)
(718)
—
(5,245)
(10)
Total
¥194,676
82,648
—
111,693
334
3,305
—
3,305
—
—
Total
¥262,826
72,501
9,265
180,976
83
—
—
—
—
—
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_0800804262008.indd 243
243
2020/08/11 18:00:48
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 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
2020
2019
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 ������������������������������������������������������������������������������������������������������
¥ 80,041,189
17,764,493
7,198,446
105,004,129
4,081,740
¥109,085,870
¥ 14,594,963
7,264,054
179,069
22,038,088
6,098,695
¥ 28,136,783
¥137,222,653
¥ 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
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
2020
2019
Manufacturing����������������������������������������������������������������������������������������������
Agriculture, forestry, fisheries and mining ���������������������������������������������������
Construction ������������������������������������������������������������������������������������������������
Transportation, communications and public enterprises ����������������������������
Wholesale and retail ������������������������������������������������������������������������������������
Finance and insurance ��������������������������������������������������������������������������������
Real estate, goods rental and leasing ���������������������������������������������������������
Services �������������������������������������������������������������������������������������������������������
Municipalities �����������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Overseas operations:
Public sector ������������������������������������������������������������������������������������������������
Financial institutions ������������������������������������������������������������������������������������
Commerce and industry ������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 7,264,656
271,216
753,216
5,228,310
4,393,894
2,738,583
9,302,244
4,355,912
784,273
17,561,120
¥52,653,427
¥ 276,493
2,087,889
23,939,816
3,559,982
¥29,864,181
¥82,517,609
13.80%
0.52
1.43
9.93
8.34
5.20
17.67
8.27
1.49
33.35
100.00%
0.93%
6.99
80.16
11.92
100.00%
—
¥ 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%
—
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.
244
011_0800804262008.indd 244
2020/08/11 18:00:48
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 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
2020
¥336,089
143,107
0
¥479,197
¥142,834
2020
¥ 13,978
378,173
14,400
221,288
¥627,840
¥113,254
2019
¥318,233
150,533
41
¥468,808
¥139,981
2019
¥ 12,806
456,802
13,444
193,427
¥676,481
¥118,980
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
2020
¥ 87,857
326,883
235,539
650,280
95,273,195
¥95,923,476
¥ 142,834
Millions of yen
2019
¥ 89,659
398,295
207,199
695,153
90,694,649
¥91,389,803
¥ 139,981
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
011_0800804262008.indd 245
245
2020/08/11 18:00:48
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 Assets and Liabilities (Consolidated)
Securities
Year-End Balance
March 31
Domestic operations:
Millions of yen
2020
2019
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 �����������������������������������������������������������������������������������������������������������������
¥ 7,348,013
262,681
2,666,212
2,867,103
7,284,775
¥20,428,786
¥
—
—
72,866
—
6,265,416
¥ 6,338,283
¥
—
—
—
357,931
3,749
¥ 361,681
¥27,128,751
¥ 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
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
2020
2019
Millions of yen
March 31
Trading assets ����������������������������������������������������������� ¥5,973,291 ¥1,519,904
215,669
—
—
Trading securities �������������������������������������������������� 2,473,626
Derivatives of trading securities ����������������������������
128,871
Securities related to trading transactions �������������
—
Derivatives of securities related to
Domestic
operations
Overseas
operations Elimination
Total
Overseas
operations Elimination
Total
¥(131,942) ¥7,361,253
— 2,689,295
128,871
—
—
—
Domestic
operations
¥4,334,415 ¥1,014,471
365,398
—
—
2,346,123
74,204
—
¥(20,108) ¥5,328,778
— 2,711,521
74,204
—
—
—
trading transactions ��������������������������������������������
28,604
Trading-related financial derivatives ��������������������� 3,284,185
Other trading assets����������������������������������������������
58,005
19
1,298,633
5,581
—
(131,942)
—
28,624
4,450,876
63,586
28,120
1,841,968
43,997
0
649,072
—
—
(20,108)
—
28,121
2,470,932
43,997
Trading liabilities �������������������������������������������������������� ¥5,137,487 ¥1,078,983
69,515
—
Trading securities sold for short sales ������������������ 1,942,959
Derivatives of trading securities ����������������������������
129,596
Securities related to trading transactions
¥(131,942) ¥6,084,528
— 2,012,475
129,596
—
¥3,685,269 ¥ 554,132
119,540
—
1,872,773
92,370
¥(20,108) ¥4,219,293
— 1,992,314
92,370
—
sold for short sales ���������������������������������������������
—
—
—
—
—
—
—
—
Derivatives of securities related to
trading transactions ��������������������������������������������
28,931
Trading-related financial derivatives ��������������������� 3,035,999
Other trading liabilities ������������������������������������������
—
9
1,009,457
—
—
(131,942)
—
28,941
3,913,513
—
29,030
1,691,095
—
2
434,588
—
—
(20,108)
—
29,032
2,105,576
—
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.
246
011_0800804262008.indd 246
2020/08/11 18:00:48
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 Capital (Non-consolidated)
Sumitomo Mitsui Financial Group, Inc�
Changes in Number of Shares Issued and Capital Stock
Number of shares issued
Capital stock
Capital reserve
July 26, 2017* ������������������������������������������
August 3, 2018** ��������������������������������������
August 20, 2018*** ����������������������������������
July 29, 2019**** ��������������������������������������
September 20, 2019***** �������������������������
Changes
387,765
326,330
(15,368,300)
272,536
(26,502,400)
Balances
1,414,443,390
1,414,769,720
1,399,401,420
1,399,673,956
1,373,171,556
Changes
847
699
—
521
—
Balances
2,338,743
2,339,443
2,339,443
2,339,964
2,339,964
Changes
847
699
—
521
—
Balances
1,560,221
1,560,921
1,560,921
1,561,442
1,561,442
Millions of yen
Remarks:
* Allotment to third parties (in-kind contribtions of monetary compensation claims):
Common stock: 387,765 shares
Issue price:
¥4,372
¥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.
**** Allotment to third parties (in-kind contribtions of monetary compensation claims):
Common stock: 272,536 shares
Issue price:
¥3,828
¥1,914
Capitalization:
***** The decrease of 26,502,400 shares is due to cancellation of treasury stock.
Number of Shares Issued
March 31, 2020
Common stock ���������������������������������������������������������������������������������������������������������������������������������������������������������������
Total ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Number of shares issued
1,373,171,556
1,373,171,556
011_0800804262008.indd 247
247
2020/08/11 18:00:48
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 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, 2020
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
8
337
72
6,724
1,145
443
276,567
285,296
—
Number of
units
4,918
4,260,606
861,523
1,194,761
5,521,779
8,861
1,860,624
13,713,072
1,864,356
Percentage of
total
0�04%
31�07
6�28
8�71
40�27
0�06
13�57
100�00%
—
Notes: 1. Of 3,645,043 shares in treasury stock, 36,450 units are included in “Individuals and others” and the remaining 43 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, 2020
The Master Trust Bank of Japan, Ltd� (Trust Account) ��������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account) �������������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 9) ����������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 7) ����������������������������������������������������������������������������������
NATSCUMCO* ���������������������������������������������������������������������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 5) ����������������������������������������������������������������������������������
JP MORGAN CHASE BANK 385151** ��������������������������������������������������������������������������������������������������������
SSBTC CLIENT OMNIBUS ACCOUNT*** ���������������������������������������������������������������������������������������������������
STATE STREET BANK WEST CLIENT - TREATY 505234** �������������������������������������������������������������������������
Barclays Securities Japan Limited ��������������������������������������������������������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������������������������������������������������������
Number of
shares
97,156,600
78,332,600
40,332,600
29,320,200
28,121,342
27,785,900
26,387,481
25,409,243
19,353,327
18,484,174
390,683,467
Percentage of
shares outstanding
7�09%
5�71
2�94
2�14
2�05
2�02
1�92
1�85
1�41
1�34
28�52%
* Standing agent: Sumitomo Mitsui Banking Corporation
** Standing agent: Mizuho Bank, Ltd., Settlement Service Department
*** Standing agent: The Hongkong and Shanghai Banking Corporation Limited, Tokyo Branch, Custody Services 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, 2020.
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, 2020.
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 April 19, 2019. It
stated that Sumitomo Mitsui Trust Asset Management Co., Ltd. and another shareholder held the following common shares in the Company as of April 15,
2019. 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, 2020.
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: 70,915,700 shares (including joint ownership)
Shareholding ratio:
5.07%
4. Nomura Securities Co., Ltd. has submitted a Report of Possession of Large Volume regarding its shareholding as of April 7, 2020. It stated that Nomura
Securities Co., Ltd. and two other shareholders held the following common shares in the Company as of March 31, 2020. 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, 2020.
The Report of Possession of Large Volume is detailed as follows:
Principal Shareholder: Nomura Securities Co., Ltd. (and two other joint holders)
Number of shares held: 70,759,192 shares (including joint ownership)
Shareholding ratio:
5.15%
248
011_0800804262008.indd 248
2020/08/11 18:00:48
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 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
2020
49,900 shares
Common stock
¥2,216 per share
¥1,108 per share
From August 13, 2010 to August 12, 2040
2020
139,400 shares
Common stock
¥1,873 per share
¥937 per share
From August 16, 2011 to August 15, 2041
2020
187,900 shares
Common stock
¥2,043 per share
¥1,022 per share
From August 15, 2012 to August 14, 2042
2020
66,100 shares
Common stock
¥4,160 per share
¥2,080 per share
From August 14, 2013 to August 13, 2043
2020
69,900 shares
Common stock
¥3,662 per share
¥1,831 per share
From August 15, 2014 to August 14, 2044
2020
90,800 shares
Common stock
¥4,905 per share
¥2,453 per share
From August 18, 2015 to August 17, 2045
2020
118,500 shares
Common stock
¥2,812 per share
¥1,406 per share
From August 15, 2016 to August 14, 2046
011_0800804262008.indd 249
249
2020/08/11 18:00:48
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 Basel III Information
Capital Ratio and Leverage Ratio Information (Consolidated)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Regarding the calculation of the capital ratio and leverage 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 and Leverage Ratio Calculation Framework.” The aforementioned external audit was not meant to provide a statement of opinions or
conclusions on the capital ratio and leverage ratio themselves, or our internal control framework for calculating these ratios, 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.
“Consolidated Capital Ratio and Leverage 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: 174
Please refer to “Principal Subsidiaries and Affiliates” on page 144 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 Ratio Information (Consolidated)
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.
250
012_0800885852007.indd 250
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 ■ CC1: Composition of regulatory capital
Basel III
Template No.
Items
(Millions of yen, except percentages)
a
b
As of March
31, 2020
As of March
31, 2019
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)
9,217,343
8,921,854
3,031,968
6,336,311
13,983
136,952
—
2,064
1,365,673
3,078,490
5,992,247
16,302
132,582
—
2,539
1,713,884
1,155
2,181
(a)
6 Common Equity Tier 1 capital: instruments and reserves
(A)
10,586,236
10,640,460
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
634,783
657,131
237,333
397,450
247,659
409,472
3,390
2,208
84,324
50,636
62,486
5,582
160,200
3,567
—
(52,610)
81,582
60,286
3,940
228,913
4,491
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
1,004,972
985,942
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
9,581,264
9,654,517
012_0800885852007.indd 251
251
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
Basel III
Template No.
Items
Additional Tier 1 capital: instruments (3)
(Millions of yen, except percentages)
a
b
As of March
31, 2020
As of March
31, 2019
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)
—
—
—
—
684,797
598,974
—
—
9,400
62,752
—
—
—
436,500
436,500
—
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)
694,198
1,098,227
—
—
—
—
—
—
25,525
25,516
—
—
25,525
25,516
668,672
1,072,710
(E)
(F)
(G)
10,249,936
10,727,228
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)
—
—
—
—
961,464
997,723
—
—
1,546
15,087
358,491
488,092
—
—
358,491
488,092
63,204
63,204
—
1,384,706
62,357
62,357
—
1,563,260
252
012_0800885852007.indd 252
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
As of March
31, 2019
c
Reference to
Template
CC2
0
—
—
—
0
—
—
—
82,643
50,000
82,643
50,000
1,302,063
1,513,260
(I)
(J)
(K)
11,552,000
12,240,489
(L)
61,599,066
58,942,791
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”)
15.55%
16.63%
18.75%
3.52%
2.50%
0.02%
1.00%
10.63%
16.37%
18.19%
20.76%
3.60%
2.50%
0.10%
1.00%
11.87%
679,784
816,189
907,634
921,378
—
—
4,128
2,605
75,065
63,204
—
72,970
62,357
—
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
274,040
265,937
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”)
325,171
487,757
—
—
406,856
610,284
—
—
Items
Required capital ((L) ✕ 8%)
(Millions of yen)
As of March 31, 2020
4,927,925
As of March 31, 2019
4,715,423
012_0800885852007.indd 253
253
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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
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: 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, 2019
31, 2020
40,936,349 39,966,325
2,843,844
3,050,149
34,877,672 33,898,986
—
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
—
1,136,269
—
46,881
2,961,646
5,382,967
—
1,495,568
—
3,067,315
213,245
606,838
789,942
1,766,889
—
41,242
375,427
59,012
10
1,153,950
Minimum capital
requirements
As of
March
31, 2020
3,442,320
244,011
2,957,626
—
3,750
236,931
437,131
—
125,330
—
245,385
17,059
49,356
66,987
141,351
—
3,310
31,730
4,720
0
92,316
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
—
90,901
1,020,034
970,149
81,602
77,611
118,792
—
15,123
2,509,994
825,580
1,684,414
3,924,796
839,490
—
3,085,305
2,279,392
—
—
158,514
—
7,605
2,323,156
752,059
1,571,096
3,617,535
776,185
—
2,841,349
2,309,872
—
—
61,599,066 58,942,791
9,503
—
1,209
200,799
66,046
134,753
313,983
67,159
—
246,824
193,271
—
—
4,927,925
12,681
—
608
185,852
60,164
125,687
289,402
62,094
—
227,307
195,867
—
—
4,715,423
254
012_0800885852007.indd 254
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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 116 to 120 (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 virtually 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 261 to 262 “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, 2020
As of March 31, 2019
(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)
663,784
4,949
81,057,792
21,417,801
448,179
81,273,397
— 21,422,751
679,145
4,343
76,937,799
17,806,238
436,374
77,180,570
— 17,810,581
6,012
66,533,162
30,751
66,508,423
5,765
63,680,487
21,406
63,664,846
674,747 169,008,756
478,930 169,204,572
689,254 158,424,525
457,781 158,655,999
5
6
7
Total
8
Acceptances and guarantees, etc.
Commitments, etc.
Subtotal (5+6)
18,097
9,587
27,685
9,905,268
21,216,668
31,121,937
64,283
65,341
129,625
9,859,082
21,160,914
31,019,997
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
Total (4+7)
702,432 200,130,693
608,556 200,224,570
708,948 189,018,390
591,779 189,135,558
012_0800885852007.indd 255
255
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2019
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, 2020 (1+2-3-4+5)
Amount
689,254
160,092
27,420
128,030
(19,148)
674,747
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.
CR2: Changes in stock of defaulted loans and securities (of which: debt securities)
(Millions of yen)
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, 2020
As of March 31, 2019
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
117,104,673
15,714,695
6,751,935
139,571,303
113,695,547
13,028,014
7,819,862
134,543,424
10,305,832
261,335
1,611,649
12,178,818
9,095,207
295,529
1,959,265
11,350,002
508,218
1,078,838
10,365
46,235
6,571
525,155
516,118
117,601
1,242,675
1,162,654
13,035
43,884
10,848
540,001
156,515
1,363,053
6,337,831
195,824
451,513
6,985,169
6,310,609
174,252
615,181
7,100,043
5,549,017
56,166,851
208,602
2,552,894
287,865
243,609
6,045,486
58,963,355
5,764,959
54,249,795
249,713
1,012,399
317,123
188,531
6,331,796
55,450,726
9,846,929
1,147,847
89,948
11,084,725
9,365,923
1,251,563
136,385
10,753,873
4,448,552
2,290,348
20,572,251
366,545
32,320
10,892,725
74,114
1,230
3,867,830
4,889,212
2,323,898
35,332,807
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
52,288,064
5,708,881
1,556,566
59,553,513
48,427,182
4,784,721
1,564,532
54,776,436
9,743,269
6,413,387
29,954,809
6,176,597
169,392,737
3,575,176
1,154,322
832,400
146,981
21,423,577
6,164
373,929
—
1,176,472
8,308,502
13,324,610
7,941,639
30,787,210
7,500,051
199,124,817
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
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.
256
012_0800885852007.indd 256
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
As of March 31, 2019
Loans,
commitments and
other off-balance
sheet exposures
except derivatives
40,381,530
18,703,429
17,835,434
6,691,657
23,518,615
62,262,070
169,392,737
Bonds
Others
Total
6,157,045
3,901,032
2,019,572
1,241,389
8,104,537
—
21,423,577
24,658
—
—
—
—
8,283,843
8,308,502
46,563,235
22,604,461
19,855,006
7,933,047
31,623,153
70,545,913
199,124,817
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
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 2019
Term-end
Reserves
Write-offs for
the year
Term-end
balance
(Billions of yen)
Fiscal 2018
Term-end
Reserves
Write-offs for
the year
713.9
215.9
68.1
62.4
85.4
929.8
218.0
107.2
41.3
17.8
48.1
325.3
91.9
27.0
20.3
2.5
4.1
118.9
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
Term-end
balance
Fiscal 2019
Term-end
Reserves
Write-offs for
the year
Term-end
balance
(Billions of yen)
Fiscal 2018
Term-end
Reserves
Write-offs for
the year
713.9
218.0
91.9
57.0
8.4
12.0
44.0
86.1
5.4
48.0
72.5
380.5
215.9
1.9
127.7
86.3
929.8
18.9
6.7
2.5
20.8
36.8
0.2
5.6
21.0
105.4
107.2
0.2
76.0
31.0
325.3
0.6
0.0
0.4
0.9
1.0
(0.3)
(0.8)
0.5
89.5
27.0
0.0
16.3
10.8
118.9
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
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.
012_0800885852007.indd 257
257
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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 2019
2 months or more to less
than 3 months
3 months or more
Total
160.4
60.4
37.5
81.0
339.5
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 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)
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 2019
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 2018
Of which: amounts of increased
Reserves for such exposures
due to the restructuring of the
loan conditions
(Billions of yen)
Of which: other
amounts
248.2
248.2
0.0
223.2
223.2
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.
258
012_0800885852007.indd 258
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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 116 to 117). 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.
012_0800885852007.indd 259
259
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information Obligor Grade
Domestic
Corporate
J1
J2
J3
J4
J5
J6
J7
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 depending on
the situation
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 any changes in economic trends or business environment
Currently no problem with debt repayment, but it is highly likely that
this could change in cases of significant changes in economic trends
or business environment
Close monitoring is required due to problems in meeting loan
terms and conditions, sluggish/unstable business, or financial
problems
J8
J9
J7R 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
J10
Obligor Grade
Overseas
Corporate
G1
G2
G3
G4
G5
G6
G7
Definition
Very high certainty or 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 depending on
the situation
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 any changes in economic trends or business environment
Currently no problem with debt repayment, but it is highly likely that
this could change in cases of significant changes in economic trends
or business environment
Close monitoring is required due to problems in meeting loan
terms and conditions, sluggish/unstable business, or financial
problems
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
Borrower Category
Normal Borrowers
Borrowers Requiring Caution
Substandard Borrowers
Potentially Bankrupt Borrowers
Virtually Bankrupt Borrowers
Bankrupt Borrowers
• “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, 2020.
• 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.
260
012_0800885852007.indd 260
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
(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, a borrower category under self-assessment in accordance with an exclusive grading model, 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.
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, a borrower category under self-assessment in accordance with an exclusive grading model, 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
117) 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 Capital Accord.
012_0800885852007.indd 261
261
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
The actual default rates in the past three periods are lower than PD estimate values applied for the respective periods for the most
portfolios, 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.
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 requirement of Basel Capital Accord, 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 EAD 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, 2020
As of March 31, 2019
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
262
94.70 %
82.44 %
0.24 %
7.48 %
1.76 %
0.94 %
0.00 %
1.81 %
5.29 %
100.00 %
94.82 %
81.24 %
0.27 %
8.15 %
2.19 %
1.00 %
0.00 %
1.94 %
5.17 %
100.00 %
012_0800885852007.indd 262
2020/08/19 11:13:54
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
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
73,107,376
364,083
8,777
2,315
173,824
88,158
—
8
73,744,545
62,797
25,813
24
2
9,567
47,907
—
—
146,113
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)
5,651,140
789,579
124,122
24,809
619,369
34,969
—
356
7,244,349
Bank exposures (FIRB approach)
3,244
—
—
—
402
—
—
—
3,646
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
731,858
217,139
12,663
5,329
102,747
4,309
—
—
1,074,048
76.85
70.74
55.47
33.79
38.55
35.93
—
—
71.32
6,448,660
923,343
120,201
26,610
598,474
29,881
—
356
8,147,528
85.17 75,440,612
362,167
46.84
8,793
64.04
202
50.00
125,118
47.77
51,705
62.45
—
—
8
—
68.49 75,988,608
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,244
—
—
—
402
—
—
—
3,646
54.73 38,059,248
54.39 16,791,142
3,828,262
53.48
2,228,333
53.17
4,719,039
53.77
739,898
57.96
231,537
60.46
209,837
100.00
54.55 66,807,297
0.00
0.18
0.26
0.52
1.21
3.98
—
100.00
0.00
—
—
—
—
—
—
—
—
—
0.03
0.18
0.26
0.51
1.37
3.96
—
100.00
0.17
0.03
—
—
—
2.46
—
—
—
0.29
0.05
0.17
0.26
0.51
1.38
6.27
17.02
100.00
0.65
0.4
0.0
0.0
0.0
0.0
0.0
—
0.0
0.6
—
—
—
—
—
—
—
—
—
0.6
0.2
0.0
0.0
0.6
0.0
—
0.0
1.7
0.0
—
—
—
0.0
—
—
—
0.1
7.2
6.3
2.8
1.5
4.4
0.6
0.2
0.2
23.5
34.25
33.11
29.55
25.14
34.04
34.76
—
34.03
34.25
—
—
—
—
—
—
—
—
—
33.87
30.22
30.82
29.74
34.97
33.64
—
80.91
33.48
45.00
—
—
—
45.00
—
—
—
45.00
34.71
29.45
28.70
28.85
27.19
27.72
25.42
48.74
32.25
3.9
1.9
1.3
2.7
2.4
2.9
—
1.2
3.9
—
—
—
—
—
—
—
—
—
3.0
1.1
1.2
1.2
0.5
0.7
—
1.0
2.5
5.0
—
—
—
5.0
—
—
—
5.0
251,604
101,209
2,292
88
91,402
60,597
—
4
507,199
—
—
—
—
—
—
—
—
—
1,242,169
226,102
36,904
10,717
400,084
27,172
—
48
1,943,199
1,144
—
—
—
745
—
—
—
1,889
6,979,472
2.5
4,712,138
2.4
1,297,994
2.6
1,024,458
2.4
3,111,257
3.0
765,528
2.8
296,210
2.5
69,976
2.4
2.5 18,257,035
0.33
27.94
26.07
43.83
73.05
117.19
—
53.50
0.66
—
—
—
—
—
—
—
—
—
19.26
24.48
30.70
40.27
66.85
90.93
—
13.63
23.85
35.27
—
—
—
185.32
—
—
—
51.82
18.33
28.06
33.90
45.97
65.92
103.46
127.93
33.34
27.32
280
221
6
0
508
713
—
2
1,733
—
—
—
—
—
—
—
—
—
854
507
100
41
2,886
398
—
288
5,076
0
—
—
—
4
—
—
—
4
7,836
8,783
2,910
3,315
17,700
13,670
10,092
102,288
166,599
2,197
—
6,066
17
171,747
263
2020/08/19 11:13:55
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
26,480,029 13,468,788
7,497,730
13,991,591
1,005,418
3,520,031
633,162
2,072,283
2,209,416
5,502,117
402,421
981,579
57,965
236,679
17,927
202,742
52,987,056 25,292,831
012_0800885852007.indd 263
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
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)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
22
22
—
—
—
—
—
—
—
22
22
—
—
—
—
—
—
—
0.0
0.0
—
—
—
—
—
—
—
100.00
100.00
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
Mid-sized corporations and small-medium enterprises (SMEs) exposures (AIRB approach)
31.99
30.47
31.89
28.77
31.84
22.27
46.87
46.01
31.54
944,136
1,304,229
1,121,417
677,027
2,120,242
169,064
73,800
157,477
6,567,394
Mid-sized corporations and SMEs exposures (FIRB approach)
—
—
—
—
34
—
—
—
34
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
904,104
1,292,354
1,152,104
737,848
2,659,505
351,444
139,976
223,666
7,461,004
79,495
105,264
20,996
40,185
152,942
136,821
944
450
537,099
0.08
0.17
0.30
0.53
1.63
8.36
27.22
100.00
3.59
48.18
62.35
64.18
50.15
57.68
48.57
47.46
100.00
54.58
1.2
5.1
6.7
4.7
34.0
1.3
3.1
3.5
60.0
—
—
—
—
34
—
—
—
34
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1.22
—
—
—
1.22
0.04
0.17
0.26
0.51
1.07
3.96
13.94
100.00
1.16
0.04
0.17
0.26
0.51
2.17
9.88
27.27
100.00
0.09
—
—
—
—
0.0
—
—
—
0.0
0.2
0.4
0.1
0.1
0.2
0.0
0.0
0.0
1.3
1.3
0.4
0.1
0.0
0.1
0.0
0.0
0.0
2.1
—
—
—
—
45.00
—
—
—
45.00
22.50
23.40
31.56
24.61
25.18
31.15
36.08
59.44
25.11
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
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
1,967,269
1,889,210
1,035,545
759,378
964,824
170,258
28,332
52,406
6,867,224
2,901,486
220,234
14,685
4,211
16,123
1,962
21
674
3,159,398
113,312
554,107
362,381
206,481
246,808
37,954
2,594
6,757
1,530,397
46.83
54.39
53.53
56.69
59.61
82.24
85.15
100.00
55.73
1,976,616
2,031,916
967,458
616,840
884,023
105,864
27,777
49,604
6,660,101
—
—
—
—
—
—
—
—
—
— 2,901,486
220,234
—
14,685
—
4,211
—
16,123
—
1,962
—
21
—
674
—
— 3,159,398
264
—
—
—
—
—
—
—
5.0
5.0
3.1
3.6
3.8
3.4
3.4
2.7
1.6
1.8
3.4
—
—
—
—
1.0
—
—
—
1.0
3.8
4.2
4.1
3.9
3.8
4.3
3.5
3.6
4.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
—
—
—
—
—
—
—
—
—
197,069
373,474
447,563
295,384
1,369,629
124,179
153,071
23,209
2,983,581
—
—
—
—
21
—
—
—
21
240,854
599,465
486,728
286,613
543,236
121,276
51,257
26,538
2,355,971
2,968,167
291,234
24,440
9,029
56,577
10,782
179
7,588
3,367,999
—
—
—
—
—
—
—
0.00
0.00
20.87
28.63
39.91
43.62
64.59
73.45
207.41
14.73
45.43
—
—
—
—
62.80
—
—
—
62.80
12.18
29.50
50.31
46.46
61.45
114.55
184.52
53.50
35.37
102.29
132.23
166.43
214.39
350.90
549.53
836.00
1,124.99
106.60
—
—
—
—
—
—
—
10
10
258
676
1,111
1,045
11,033
3,010
9,423
72,469
99,029
—
—
—
—
0
—
—
—
0
204
857
824
784
2,459
1,306
1,396
29,485
37,319
—
—
—
—
—
—
—
—
—
2
98,375
0
41,098
—
012_0800885852007.indd 264
2020/08/19 11:13:55
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
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
961,910
360,408
70,529
35,734
84,464
4,638
193
2,688
1,520,568
69,391
100,052
78,200
66,823
87,620
4,069
1,424
220
407,803
100.00
71.87
73.31
88.28
97.75
100.00
100.00
100.00
85.57
1,021,314
429,775
126,645
94,139
168,937
8,706
1,618
2,896
1,854,035
0.06
0.18
0.29
0.57
1.48
5.14
63.51
100.00
0.49
7.0
5.8
5.3
8.1
16.4
0.8
0.2
0.1
44.0
36.30
32.66
42.04
50.13
47.10
44.77
61.47
78.66
37.66
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
617,365
201,714
65,593
37,151
64,699
3,727
—
1,057
991,308
—
106,680
—
—
—
—
—
—
106,680
—
46.72
—
—
—
—
—
—
46.72
617,365
251,556
65,593
37,151
64,699
3,727
—
1,057
1,041,149
0.06
0.17
0.26
0.51
0.89
3.96
—
100.00
0.28
0.0
0.0
0.0
0.0
0.0
0.0
—
0.0
0.2
33.48
29.97
33.40
31.81
31.36
25.02
—
46.64
32.42
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
0
—
—
—
—
—
—
37
37
385
234
1,365
3,172
2,198
28
—
—
7,384
100.00
100.00
100.00
100.00
100.00
100.00
—
—
100.00
385
234
1,365
3,172
2,198
28
—
36
7,420
0.07
0.22
0.36
0.62
1.14
2.96
—
100.00
1.17
0.0
0.0
0.0
0.1
0.1
0.0
—
0.0
0.3
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
10
20
—
1
4
—
—
—
36
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
10
20
—
1
4
—
—
—
36
0.11
0.22
—
0.58
0.92
—
—
—
0.29
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
4,967
2,033
2,402
692
58
57
—
0
10,213
—
—
—
—
20
0
—
—
20
—
—
—
—
100.00
100.00
—
—
100.00
4,967
2,033
2,402
692
79
57
—
0
10,234
0.09
0.22
0.32
0.60
1.09
2.96
—
100.00
0.23
0.0
0.0
—
0.0
0.0
—
—
—
0.0
0.4
0.2
0.4
0.1
0.0
0.0
—
0.0
1.3
45.00
45.00
—
45.00
45.00
—
—
—
45.00
65.00
65.00
39.60
64.58
63.02
65.00
—
80.91
58.99
1.1
1.0
1.0
1.0
1.1
1.0
1.0
1.0
1.1
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
1.2
—
1.0
1.0
1.0
1.0
—
1.0
1.0
—
—
—
1.0
—
—
—
—
—
—
—
—
—
126,585
91,947
47,379
59,487
142,943
11,398
2,458
394
482,595
69,229
48,777
18,485
17,297
31,463
2,506
—
144
187,903
56
67
516
1,600
1,351
24
—
—
3,615
2
6
—
0
3
—
—
—
12
764
570
546
357
52
51
—
0
2,343
12.39
21.39
37.41
63.19
84.61
130.92
151.88
13.63
26.02
11.21
19.39
28.18
46.56
48.63
67.24
—
13.63
18.04
14.54
28.66
37.82
50.46
61.45
85.89
—
0.00
48.72
21.22
31.94
—
56.66
70.61
—
—
—
34.73
15.39
28.07
22.72
51.58
66.50
90.51
—
13.63
22.90
296
260
162
276
1,187
209
626
2,279
5,298
137
132
57
60
184
36
—
493
1,102
0
0
2
8
11
0
—
16
39
0
0
—
0
0
—
—
—
0
3
2
3
2
0
1
—
0
14
3,825
772
29
0
17
012_0800885852007.indd 265
265
2020/08/19 11:13:55
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
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
17
—
—
—
—
—
—
—
17
—
—
—
—
—
—
—
—
—
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
60,714
264,550
289,571
179,072
526,965
810,722
36,656
78,426
2,246,680
Residential mortgage exposures
—
—
7,265,643
925,652
974,717
—
27,202
85,079
9,278,297
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
248,831
422,264
301,796
23,273
52,156
157,905
4,336
7,810
1,218,375
—
—
8,671
1,487
2,654
—
1,163
54
14,032
—
—
—
—
—
—
—
—
—
7.92
19.22
11.68
7.58
15.68
6.88
9.39
100.00
35.16
—
—
100.00
100.00
100.00
—
100.00
100.00
100.00
17
—
—
—
—
—
—
—
17
309,546
686,815
591,367
202,345
579,121
968,628
40,993
86,237
3,465,055
54,563
2,176
7,275,348
927,140
923,454
—
24,509
85,134
9,292,329
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)
3
106,023
331,489
44,133
916,516
28,280
13,619
51,065
1,491,132
3
11
276
1,004
502,743
142,045
5,303
889
652,277
167,005,575 30,987,064
5.13
100.00
100.00
100.00
96.14
100.00
100.00
100.00
100.00
7
106,035
331,766
45,138
1,419,260
170,326
18,922
51,954
2,143,410
58.54 185,147,723
0.03
—
—
—
—
—
—
—
0.03
0.08
0.19
0.39
0.50
1.64
4.47
48.76
100.00
4.73
0.05
0.17
0.29
0.59
0.97
—
23.16
100.00
1.36
0.08
0.17
0.38
0.67
1.36
3.05
24.87
100.00
3.87
0.62
0.0
—
—
—
—
—
—
—
0.0
4,222.3
4,582.4
3,952.4
302.0
609.3
1,602.6
78.0
153.4
15,502.8
5.9
0.2
451.6
53.1
72.3
—
2.4
6.7
592.5
0.0
2.5
9.9
2.0
2,437.7
138.3
40.2
92.9
2,724.0
18,955.0
45.00
—
—
—
—
—
—
—
45.00
70.64
71.93
68.50
73.98
77.29
76.51
73.22
76.77
73.66
39.66
72.39
25.79
27.55
33.59
—
29.18
28.18
26.87
69.84
35.00
36.03
36.40
53.67
49.52
54.42
56.69
49.40
34.59
5.0
—
—
—
—
—
—
—
5.0
4
—
—
—
—
—
—
—
4
11,621
51,375
75,125
33,683
249,060
822,217
70,595
83,217
1,396,896
13,312
881
995,548
223,565
391,466
—
39,311
22,329
1,686,415
1
13,447
73,844
13,921
842,931
117,267
23,011
94,290
1,178,714
— 34,355,402
25.88
—
—
—
—
—
—
—
25.88
3.75
7.48
12.70
16.64
43.00
84.88
172.21
96.49
40.31
24.39
40.49
13.68
24.11
42.39
—
160.39
26.22
18.14
14.69
12.68
22.25
30.84
59.39
68.84
121.60
181.48
54.99
18.55
0
—
—
—
—
—
—
—
0
188
958
1,605
756
7,390
33,015
14,628
66,208
124,751
11
2
5,480
1,507
3,164
—
1,639
23,995
35,800
0
63
465
111
10,509
2,539
2,552
29,453
45,694
522,475
0
105,920
25,981
27,972
484,023
266
012_0800885852007.indd 266
2020/08/19 11:13:55
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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 (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
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
100.00
185,511
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
2.1
52,915
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
267
012_0800885852007.indd 267
2020/08/19 11:13:55
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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
—
—
—
—
—
—
—
—
—
—
—
—
—
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
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
268
—
—
—
—
—
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
—
012_0800885852007.indd 268
2020/08/19 11:13:55
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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
012_0800885852007.indd 269
269
2020/08/19 11:13:55
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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
270
012_0800885852007.indd 270
2020/08/19 11:13:55
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
As of March 31, 2019
a
Pre-credit
derivatives
credit RWA
—
435,987
1,889
1,907,175
21
21,249,845
531,575
2,445,379
1,396,896
1,686,415
1,178,714
—
4,157,942
3,628
672,847
35,668,320
b
Actual credit
RWA
—
435,987
1,889
1,907,175
21
21,249,140
531,575
2,445,379
1,396,896
1,686,415
1,178,714
—
4,157,942
3,628
672,847
35,667,615
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
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, 2019
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, 2020
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
345
15
(1)
—
—
—
(4)
—
356
(One hundred billions of yen)
RWA amounts
368
7
(17)
—
(1)
(13)
2
—
345
012_0800885852007.indd 271
271
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2019
As of
March
31, 2018
A~A-
A2~A3
AAA~A+ Aaa~A1 AAA~A+ AAA~AA- AAA~AA-
A+~BBB- A+~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%
0.23%
1.43%
6.82%
—
1,766
4,192
13,505
26,059
14,107
—
0.00%
0.07%
0.21%
1.25%
6.25%
—
0.08%
0.33%
1.03%
6.42%
—
—
0.29%
0.82%
1,766
4,192
13,504
26,058
14,104
—
0.08% 4,962,040 4,812,835
0.35% 5,727,438 5,626,176
0.66% 3,948,483 3,737,623
7.26% 1,659,648 1,646,644
—
—
—
—
672,122
0.29% 662,016
171,058
0.86% 165,706
3,860
23.51% 25.40%
2,565
—
—
—
—
—
—
0.35%
15,246
13,787
1.41% 2,453,050 2,454,758
183,828
8.99% 183,691
—
—
0.33%
1.47%
5.73%
—
—
(%, 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
20
83
1,290
—
4,034
10,704
15,313
79,921
—
—
736
615
320
—
—
29
12,665
9,624
0
0
1
1
3
—
1,576
2,202
1,803
2,280
—
—
1
0
0
—
—
4
2,324
410
0.02%
0.03%
0.09%
0.25%
6.19%
—
0.07%
0.15%
0.33%
4.68%
—
—
0.11%
0.41%
10.08%
—
—
0.16%
0.51%
2.49%
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 84.92 percent, “Qualifying revolving retail” accounts for 4.36
percent, “Residential mortgage” accounts for 5.59 percent, and “Other retail” accounts for 3.47 percent.
272
012_0800885852007.indd 272
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
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
12,423
29,415
50% 41,023
—
29,086
30,793
70% 40,443
3,029
3,695
—
70%
3,695
51,217
5,440
90% 53,759
3,615
—
3,137
103,175
324
—
—
65,973
115%
3,792
250%
—
3,131
—
— 145,845
HVCRE
—
—
—
—
6
3,035
—
—
—
—
—
—
—
—
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
4,348
3,237
70%
4,248
4,857
95%
169,829
31,437
120%
92,083
—
—
299,142
14,357
—
—
88,010
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%
11,804
52,987
64,792
400%
174%
—
27,836
57,885
206,555
292,277
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
—
— 41,023
20,511
—
— 43,472
30,431
173
—
3,695
2,586
14
— 53,759
48,383
430
—
3,792
—
—
3,137
—
— 148,881
4,361
—
—
106,274
106
—
1,568
2,293
Exposure
amount
(EAD)
Credit
RWA
amount
Expected
losses
5,861
4,102
6,517
6,191
23
26
187,353
224,824
749
98,791
—
—
343,332
138,307
—
—
415,995
2,766
—
—
3,744
Exposure
amount
(EAD)
Credit
RWA
amount
27,836
83,509
63,400
253,603
259,543
350,780
452,830
789,942
28,634
34,120
95%
44,809
42,569
179
—
100%
—
—
012_0800885852007.indd 273
273
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 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
2,179
115%
—
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%
—
57,835
31,926
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%
—
—
274
012_0800885852007.indd 274
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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 weighted average of the risk weight 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
Look-through approach
Mandate-based approach
Simple approach (subject to 250% risk weight)
Simple approach (subject to 400% risk weight)
Fall-back approach
As of March 31, 2020
As of March 31, 2019
(Millions of yen)
964,706
—
16,497
93,856
4,720
1,337,269
—
8,231
79,338
3,334
012_0800885852007.indd 275
275
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
■ Standardised Approach
1. Scope
The following consolidated subsidiaries have adopted the standardised approach for exposures as of March 31, 2020 (i.e. consolidated
subsidiaries not listed in the “Internal Ratings-Based (IRB) Approach: 1. Scope” on page 259).
(1) Consolidated Subsidiaries Planning to Adopt Phased Rollout of the AIRB Approach
SMBC Consumer Finance Co., Ltd. and SMBC Nikko Securities Inc.
(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, 2020
c
d
Exposures pre-CCF and pre-CRM Exposures post-CCF and post-CRM
Off-balance
sheet amount
—
On-balance
sheet amount
30,832
Off-balance
sheet amount
—
On-balance
sheet amount
30,832
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
276
(Millions of yen, except percentages)
e
f
Credit RWA
amount
RWA density
0
0
0.00%
0.00%
2,629
0.13%
0
0
0.00%
0.00%
1,062
20.00%
0
—
0.00%
—
4,445
10.00%
—
—
252,457
20.56%
—
—
—
—
—
—
—
—
—
—
101,868
714,347
—
—
1,002,704
1,580,991
47,226
—
101.58%
75.00%
35.00%
—
2,753,060
2,000,186
8
1,230
5,313
1,265
—
44,459
—
1,227,664
885,549
1,393,641
134,933
—
—
—
—
—
—
—
—
—
—
—
233,441
971,198
—
—
2,753,060
2,000,186
8
1,230
5,313
1,265
—
44,459
—
1,227,664
885,191
1,393,641
134,933
—
111,258
830
111,126
830
157,361
140.55%
59
—
—
—
1,209
—
—
—
—
—
59
—
—
—
1,209
—
—
—
—
—
59
—
—
—
100.00%
—
—
—
1,209
100.00%
8,590,673
1,205,469
8,590,184
817,045
3,050,149
32.42%
012_0800885852007.indd 276
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
CR4: SA – CR exposure and CRM effects
As of March 31, 2019
a
b
c
d
e
f
(Millions of yen, except percentages)
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
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
—
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%
—
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%
012_0800885852007.indd 277
277
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
4. CR Exposures by Asset Classes and Risk Weights (CR5)
As of March 31, 2020
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
11
10
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)
30,832
2,753,060
1,994,927
8
1,230
—
1,265
—
—
—
—
4,834
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
44,459
—
—
—
—
—
—
5,313
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,259
—
—
—
—
—
—
—
— 1,208,548
—
16,736
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,379
—
6,358
—
—
— 134,933
—
—
—
— 2,107,989
—
—
—
—
— 975,867
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,719
—
—
—
—
—
—
—
—
—
—
—
7,706
97,530
59
—
—
—
1,209
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
30,832
— 2,753,060
— 2,000,186
—
—
—
—
—
—
—
8
1,230
5,313
1,265
—
44,459
—
— 1,227,664
— 987,060
— 2,107,989
— 134,933
—
—
— 111,956
—
—
—
—
—
59
—
—
—
1,209
— 9,407,230
22 Total
4,786,159
44,459 1,220,220
134,933
28,715 2,107,989
987,222
97,530
278
012_0800885852007.indd 278
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
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)
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)
29,321
2,732,090
1,272,774
—
1,065
—
3,862
—
—
—
—
8,318
—
—
—
—
—
—
—
—
—
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
—
—
—
—
—
—
—
—
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
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).
012_0800885852007.indd 279
279
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
■ 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 115 to 120). Further, exposures
to these obligors are monitored on a group basis, taking into account risk concentration in their parent companies in cases that
exposures to the obligors are guaranteed by the parent companies for risk mitigation.
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, 2020
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
53,633,492
27,639,904
12,939,469
9,007,125
24,590
20,595,740
827,011
239,656
33,890
66,211,425
296,998
4,793
257,250
140,440,658
527,485
28,763,914
147,261
13,183,919
79,156
9,298,265
9,453
—
—
24,590
—
280
012_0800885852007.indd 280
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
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
—
012_0800885852007.indd 281
281
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
a
Replacement
cost
b
PFE
c
Effective EPE
(EEPE)
—
2,310,569
—
2,548,104
d
Alpha used for
computing
regulatory EAD
1.4
—
—
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
—
—
(Millions of yen)
f
RWA
—
1,495,568
—
—
606,838
e
EAD post-
CRM
—
4,858,674
—
—
8,303,441
—
—
2,102,407
(Millions of yen)
e
EAD post-
CRM
—
3,887,415
—
—
4,676,937
f
RWA
—
1,094,827
—
—
462,418
—
—
1,557,246
282
012_0800885852007.indd 282
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
4. CVA Capital Charge (CCR2)
CCR2: CVA risk capital charge
As of March 31, 2020
As of March 31, 2019
(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
4,375,111
4,375,111
b
RWA
(Amount
calculated by
dividing CVA
capital charge
by 8%)
—
—
—
3,067,315
3,067,315
a
EAD post-
CRM
—
3,455,139
3,455,139
b
RWA
(Amount
calculated by
dividing CVA
capital charge
by 8%)
—
—
—
2,376,345
2,376,345
Item
No.
1
2
3
4
5
5. CCR Exposures by Regulatory Portfolio and Risk Weights (CCR3)
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
11 Corporates
12
SMEs and retail
13 Other than the above
14
Total
As of March 31, 2020
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
47,709
—
—
3,087
—
—
—
—
—
—
—
—
—
50,797
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 476,777
—
—
—
—
—
—
— 476,777
—
—
—
—
—
—
—
—
—
517
—
—
—
517
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 567,305
—
42,630
609,936
58,587
—
58,587
—
0
—
—
—
—
—
—
—
—
—
—
—
0
—
—
—
—
—
—
—
—
—
47,709
0
—
3,087
—
—
—
—
—
— 477,295
— 567,305
58,587
—
42,630
—
— 1,196,616
012_0800885852007.indd 283
283
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
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
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
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
SMEs and retail
12
13 Other than the above
14
Total
—
—
—
81,836
—
—
—
—
—
—
— 604,407
—
—
—
1,093
— 366,869
—
38,851
405,721
66,984
—
66,984
284
012_0800885852007.indd 284
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
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, 2020
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
(%)
3,766,191
83,118
10
—
2,621
106
—
—
3,852,047
—
—
—
—
—
—
—
—
—
4,198,535
1,140,827
548
27
43,182
192,366
—
—
5,575,486
—
—
—
—
—
—
—
—
—
0.00
0.17
0.26
—
2.13
3.96
—
—
0.00
—
—
—
—
—
—
—
—
—
0.03
0.17
0.27
0.52
0.91
3.96
—
—
0.20
—
—
—
—
—
—
—
—
—
0.8
0.0
0.0
—
0.0
0.0
—
—
0.9
—
—
—
—
—
—
—
—
—
16.4
5.2
0.0
0.0
0.1
0.0
—
—
21.9
—
—
—
—
—
—
—
—
—
2.26
34.46
35.00
—
34.56
34.93
—
—
2.97
—
—
—
—
—
—
—
—
—
17.95
15.96
31.45
35.00
6.92
0.18
—
—
16.84
—
—
—
—
—
—
—
—
—
0.2
0.0
1.0
—
1.4
1.0
—
—
0.2
—
—
—
—
—
—
—
—
—
1.2
1.1
1.0
1.0
0.1
0.0
—
—
1.1
—
—
—
—
—
—
—
—
—
4,622
15,177
2
—
2,050
100
—
—
21,952
—
—
—
—
—
—
—
—
—
291,980
199,153
139
14
5,816
1,176
—
—
498,281
—
—
—
—
—
—
—
—
—
0.12
18.26
28.13
—
78.21
93.90
—
—
0.56
—
—
—
—
—
—
—
—
—
6.95
17.45
25.42
54.14
13.47
0.61
—
—
8.93
—
—
—
—
—
—
—
—
—
012_0800885852007.indd 285
285
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2020
(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
894,668
624,623
107,002
27,357
67,808
3,036
879
1,670
1,727,046
—
—
—
—
—
—
—
—
—
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
7,003
10,873
7,257
6,391
10,469
336
5
314
42,651
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
0.17
0.26
0.51
1.49
7.47
23.45
100.00
0.29
—
—
—
—
—
—
—
—
—
0.08
0.17
0.26
0.51
1.35
9.88
27.27
100.00
1.32
—
—
—
—
—
—
—
—
—
47.9
27.4
8.1
4.3
4.4
0.6
0.0
0.0
93.1
—
—
—
—
—
—
—
—
—
3.8
7.0
2.9
3.0
6.3
0.2
0.0
0.1
23.6
—
—
—
—
—
—
—
—
—
29.74
31.09
35.19
34.39
33.15
34.35
34.78
36.99
30.79
—
—
—
—
—
—
—
—
—
33.25
33.56
35.00
34.26
34.92
35.00
35.00
46.58
34.30
—
—
—
—
—
—
—
—
—
2.4
3.2
2.6
2.7
3.0
2.3
1.2
2.9
2.8
—
—
—
—
—
—
—
—
—
2.9
3.5
3.6
3.8
3.9
3.1
1.0
4.5
3.6
—
—
—
—
—
—
—
—
—
140,730
218,903
49,169
15,810
57,217
3,951
1,540
716
488,040
—
—
—
—
—
—
—
—
—
1,474
3,484
3,054
3,880
7,976
423
8
42
20,345
—
—
—
—
—
—
—
—
—
15.72
35.04
45.95
57.79
84.38
130.13
175.22
42.92
28.25
—
—
—
—
—
—
—
—
—
21.04
32.04
42.08
60.71
76.19
125.85
161.01
13.63
47.70
—
—
—
—
—
—
—
—
—
286
012_0800885852007.indd 286
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2020
(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
(%)
122,515
350,757
108,267
51,454
123,915
6,796
1,825
2,734
768,266
0.05
0.18
0.26
0.51
1.16
3.96
13.44
100.00
0.77
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
11,965,498
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0.19
0.2
0.4
0.6
0.9
0.2
0.0
0.0
0.0
2.5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
142.2
17.82
25.82
23.94
20.38
28.34
39.33
37.70
69.53
24.62
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
14.95
4.7
4.8
4.8
4.5
4.8
4.8
4.7
4.7
4.8
—
—
—
—
—
—
—
—
—
1.3
19,606
127,049
43,497
22,066
96,927
10,021
3,664
1,462
324,295
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,352,915
16.00
36.22
40.17
42.88
78.22
147.43
200.75
53.50
42.21
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
11.30
012_0800885852007.indd 287
287
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2019
(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
(%)
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
—
—
—
—
—
—
—
—
—
288
012_0800885852007.indd 288
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
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
—
—
—
—
—
—
—
—
—
012_0800885852007.indd 289
289
2020/08/19 11:13:56
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
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
290
012_0800885852007.indd 290
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
7. Composition of Collateral for CCR Exposure (CCR5)
CCR5: Composition of collateral for CCR
exposure
As of March 31, 2020
a
b
c
d
e
f
(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
Collateral used in derivative transactions
Fair value of collateral received Fair value of posted collateral
Segregated Unsegregated
Segregated Unsegregated
27,859
666
860
7,461
9
5,216
11,446
—
53,519
94,109
345,002
6,350
—
—
—
—
—
445,462
—
—
—
—
—
—
—
—
—
307,476
493,507
4,485
—
—
—
—
—
805,469
Collateral used in securities
financing transactions (SFTs)
Fair value of
Fair value of
posted
collateral
collateral
received
11,145,743
2,612,553
6,787,322
3,787,074
—
112,253
931,679
—
25,376,627
6,184,166
4,009,606
8,495,144
2,726,571
1,129,593
80,559
1,799,917
16,921
24,442,481
(Millions of yen)
CCR5: Composition of collateral for CCR
exposure
As of March 31, 2019
a
b
c
d
e
f
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
Collateral used in derivative transactions
Fair value of collateral received Fair value of posted collateral
Segregated Unsegregated
Segregated Unsegregated
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
Collateral used in securities
financing transactions (SFTs)
Fair value of
Fair value of
posted
collateral
collateral
received
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
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, 2020
As of March 31, 2019
a
Protection
bought
b
Protection sold
a
Protection
bought
b
Protection sold
475,205
396,299
—
62,565
—
934,070
16,305
139,824
525,596
320,438
—
54,405
—
900,439
13,898
44,430
375,808
147,640
—
—
—
523,448
1,137
8,013
472,253
119,000
—
—
—
591,253
9,593
4,008
012_0800885852007.indd 291
291
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
As of March 31, 2019
a
EAD to CCP
(post-CRM)
b
RWA
a
EAD to CCP
(post-CRM)
b
RWA
203,061
167,548
6,775,421
135,509
3,320,224
6,166,396
536,455
72,569
—
—
303,373
174,687
—
9,527
7,295
2,232
—
—
—
5,468
—
—
123,328
10,729
1,451
—
6,068
61,482
—
10,183
9,089
7,295
1,794
—
—
1,093
—
—
2,826,512
469,547
24,163
—
—
172,119
164,959
—
14,781
3,617
11,163
—
—
—
2,771
—
—
66,407
56,532
9,391
483
—
3,444
97,696
—
10,365
9,810
3,617
6,192
—
—
554
—
—
292
012_0800885852007.indd 292
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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)
012_0800885852007.indd 293
293
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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.
• The Japan Net Bank, Limited
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 calculate the amount of credit risk weighted asset for securitisation exposure with the external ratings-based approach or the stan-
dardised approach, or to calculate the amount of market risk associated 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 Invest-
ment 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, 2020
(Millions of yen)
c
b
a
Bank acts as originator
f
e
d
Bank acts as sponsor
Traditional Synthetic Subtotal Traditional Synthetic Subtotal Traditional Synthetic Subtotal
i
h
g
Bank acts as investor
451,033
451,033
—
—
—
70,622
70,622
—
—
—
—
— 451,033
679,152
— 679,152
834,688
— 834,688
—
— 451,033
—
—
9,626
— 669,526
—
—
—
—
—
—
9,626
— 669,526
—
—
— 136,222
298,797
399,668
—
— 136,222
— 298,797
— 399,668
—
—
8
8
—
—
—
—
70,630
799,756
— 799,756 1,093,399
201,724 1,295,123
23,185
70,630
—
—
— 771,071
5,500
—
—
—
23,185
—
—
—
— 771,071
5,500
—
—
—
939,675
1,209
73,746
78,767
—
— 939,675
1,209
—
89,976
16,230
264,261
185,493
—
—
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
294
012_0800885852007.indd 294
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
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
—
—
—
—
22,776
145,095
—
—
— 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
—
—
8. Securitisation Exposures in the Trading Book (SEC2)
SEC2: Securitisation exposures in the trading
book
As of March 31, 2020
(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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 10,452
— 10,452
—
—
—
—
— 10,452
—
—
—
—
—
—
—
—
3,632
—
—
3,632
—
—
—
—
—
—
— 10,452
—
—
—
—
—
—
—
—
3,632
—
—
3,632
—
—
(Millions of yen)
SEC2: Securitisation exposures in the trading
book
As of March 31, 2019
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
012_0800885852007.indd 295
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8,717
—
740
7,977
—
250
—
—
250
—
—
—
—
—
—
—
—
—
—
—
—
—
8,717
—
740
7,977
—
250
—
—
250
—
—
295
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
9. Securitisation Exposures in the Banking Book and Associated Regulatory Capital Requirements
(Bank Acting as Originator or as Sponsor) (SEC3)
(Millions of yen)
As of March 31, 2020
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior Non-senior
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
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
1,147,761 1,147,761 1,147,761
446,464
446,464
216,223
216,223
189,745
189,745
368
368
446,464
216,223
189,745
377
592,259
298,427
115,753
123,745
—
1,868,291 1,868,282 1,868,282 1,030,546
99,638
—
—
132,281
—
—
132,281
—
—
132,281
—
—
Credit RWA amounts (by regulatory approach)
10
11
12
13
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
726,531
29,508
—
—
726,425
29,508
—
—
726,425
29,508
—
—
401,497
19,927
—
—
Capital charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
58,122
2,360
—
—
58,114
2,360
—
—
58,114
2,360
—
—
32,119
1,594
—
—
555,502
148,037
100,470
66,000
368
837,736
32,643
—
—
324,928
9,580
—
—
25,994
766
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
296
012_0800885852007.indd 296
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
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
Capital requirement values (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
—
—
—
—
8
8
—
—
—
105
—
—
—
8
—
—
—
—
—
—
—
8
8
—
—
—
105
—
—
—
8
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8
8
—
—
—
105
—
—
—
8
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
012_0800885852007.indd 297
297
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
298
012_0800885852007.indd 298
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
012_0800885852007.indd 299
299
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
(Millions of yen)
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior Non-senior
1,896,821 1,798,983 1,798,983
96,193
22,376
9,324
1,209
200,079
22,376
9,324
1,209
96,193
22,376
9,324
1,209
733,671 1,065,312
—
22,376
4,500
1,209
96,193
—
4,824
—
6
7
8
9
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
1,789,399 1,587,675 1,587,675
339,202
339,202
—
—
1,209
1,209
339,202
—
1,209
599,916
234,771
—
—
Credit RWA amounts (by regulatory approach)
10
11
12
13
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
293,503
89,283
—
15,123
244,769
89,283
—
15,123
244,769
89,283
—
15,123
Capital charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
23,480
7,142
—
1,209
19,581
7,142
—
1,209
19,581
7,142
—
1,209
96,054
51,986
—
—
7,684
4,158
—
—
987,758
104,430
—
1,209
148,714
37,297
—
15,123
11,897
2,983
—
1,209
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
300
012_0800885852007.indd 300
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
(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)
97,838
103,886
—
—
—
201,724
—
—
—
10
11
12
13
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
Capital charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
48,734
—
—
—
3,898
—
—
—
97,838
103,886
—
—
—
201,724
—
—
—
48,734
—
—
—
3,898
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
97,838
103,886
—
—
—
201,724
—
—
—
48,734
—
—
—
3,898
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
012_0800885852007.indd 301
301
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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)
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
302
012_0800885852007.indd 302
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
012_0800885852007.indd 303
303
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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 maximum amount of overall risk capital, taking into account the financial and business situations of
SMBC Group.
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.”
304
012_0800885852007.indd 304
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2019
Ratio of 1a / 1c
RWA at end of March 31, 2019
Movement in risk
levels
Model updates/
changes
Methodology and
policy
Acquisitions and
disposals
Foreign exchange
movements
Other
RWA at end of March 31, 2020
Ratio of 8c / 8a
RWA as of March 31, 2020
Breakdown
of variations
in the
market risk-
weighted
assets
a
VaR
465
2.8
161
68
—
—
—
(11)
(13)
204
2.3
488
b
Stressed VaR
1,105
3.0
361
53
—
—
—
(30)
—
384
3.1
1,195
012_0800885852007.indd 305
(Millions of yen)
As of March 31, 2020
RWA
(Amounts calculated by dividing
risk equivalent amounts by 8%)
384,544
256,899
20,788
7
As of March 31, 2019
RWA
(Amounts calculated by dividing
risk equivalent amounts by 8%)
371,760
177,934
17,049
627
—
159,857
—
3,483
825,580
—
178,326
—
3,180
748,878
(Billions of yen)
As of March 31, 2020
c
IRC
d
CRM
e
Other
f
Total RWA
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,571
3.0
522
121
—
—
—
(42)
(13)
589
2.8
1,684
305
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
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
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
4. IMA values for trading portfolios (MR3)
MR3: IMA values for trading portfolios
Item
No.
(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
Fiscal 2019
Fiscal 2018
(Millions of yen)
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
6
Average value
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
18,358
12,618
8,806
16,397
42,390
30,302
22,261
30,736
—
—
—
—
—
—
—
—
—
30,565
14,441
9,587
12,930
44,514
27,643
17,644
28,908
—
—
—
—
—
—
—
—
—
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.
306
012_0800885852007.indd 306
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
5. Backtesting results by the internal models approach (MR4)
The status of backtesting of trading for Fiscal 2019 and 2018 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 1, 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
)
10,000
8,000
6,000
4,000
2,000
0
-2,000
-4,000
-6,000
-8,000
-10,000
-12,000
(
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 2019
March 2020
March 2018
March 2019
012_0800885852007.indd 307
307
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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 120 to
121).
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.
308
012_0800885852007.indd 308
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
As of March 31,
2019
As of March
31, 2020
As of March 31,
2019
982,050
0
284,902
164,009
329,587
6,598
982,050
724,747
1,172
343,900
18,257
151,087
1,143
724,747
e
As of March 31, 2020
(242,555)
414,974
(252,302)
405,058
414,974
405,058
f
As of March 31, 2019
10,249,936
10,727,228
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_0800885852007.indd 309
309
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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 123 to 125.
3. Usage of Insurance to Mitigate Risk
Sumitomo Mitsui Financial Group had not taken measures to mitigate operational risk through insurance coverage for exposures.
310
012_0800885852007.indd 310
2020/08/19 11:13:57
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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,
2020
As of March 31,
2019
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
61,768,573
896,739
8,753,816
5,005,103
4,559,429
7,361,253
353
27,128,751
82,517,609
2,063,284
219,733
8,298,393
1,450,323
753,579
230,573
26,314
9,308,882
(479,197)
219,863,518
127,042,217
10,180,435
3,740,539
13,237,913
2,385,607
1,409,249
6,084,528
15,210,894
1,461,308
379,000
9,235,639
1,811,355
7,011,967
73,868
3,362
35,777
1,270
26,576
4,687
142,890
3,145
257,384
30,111
9,308,882
209,078,615
2,339,964
692,003
6,336,311
(13,983)
9,354,296
1,371,407
82,257
36,878
(32,839)
(92,030)
1,365,673
2,064
62,869
10,784,903
219,863,518
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
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
311
2020/08/19 11:13:57
Note: The regulatory scope of consolidation is the same as the accounting scope of consolidation.
012_0800885852007.indd 311
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
2,339,964
692,003
6,336,311
(13,983)
9,354,296
As of March
31, 2019
2,339,443
739,047
5,992,247
(16,302)
9,054,436
(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, 2020
As of March
31, 2019
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
9,354,296
9,054,436
3,031,968
6,336,311
13,983
—
3,078,490
5,992,247
16,302
—
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, 2020
As of March
31, 2019
2,064
2,064
4,750
2,539
As of March
31, 2020
As of March
31, 2019
2,064
—
—
2,539
—
—
As of March
31, 2020
753,579
27,128,751
49,139
As of March
31, 2019
769,231
24,338,005
61,282
167,935
173,381
As of March
31, 2020
As of March
31, 2019
237,333
397,450
—
—
—
247,659
409,472
—
—
—
—
—
As of March
31, 2020
As of March
31, 2019
230,573
329,434
Income taxes related to above
70,372
100,520
312
012_0800885852007.indd 312
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
As of March
31, 2019
160,200
228,913
As of March
31, 2020
As of March
31, 2019
26,314
257,384
30,111
167,935
70,372
40,245
378,220
30,259
173,381
100,520
(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, 2020
As of March
31, 2019
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability excluding those
arising from temporary differences (net of related tax liability)
3,390
2,208
Deferred tax assets arising from temporary differences (net of related tax
liability)
Amount exceeding the 10% threshold on specified items
Amount exceeding the 15% threshold on specified items
Deferred tax assets arising from temporary differences that are
below the thresholds for deduction (before risk weighting)
4,128
2,605
—
—
—
—
4,128
2,605
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, 2020
As of March
31, 2019
82,257
(54,650)
Composition of capital disclosure
As of March
31, 2020
As of March
31, 2019
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
84,324
(52,610)
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, 2020
As of March
31, 2019
7,361,253
5,328,778
27,128,751
82,517,609
8,298,393
24,338,005
77,979,190
7,307,305
Including trading account securities and derivatives
for trading assets
Including subordinated loans
Including derivatives
6,084,528
4,219,293
7,011,967
4,873,630
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_0800885852007.indd 313
7-a
7-b
7-c
7-d
7-e
7-f
313
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2020
As of March
31, 2019
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 external 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 external 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 external TLAC liabilities
Significant investments in the common stock of other
financials that are below the thresholds for deductions
(before risk weighting)
3,567
3,567
—
0
—
—
—
—
4,491
4,491
—
0
—
—
—
—
679,784
816,189
—
—
—
—
—
—
679,784
816,189
1,015,803
996,894
—
—
25,525
82,643
—
—
25,516
50,000
907,634
921,378
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, 2020
As of March
31, 2019
2,064
62,869
4,750
678,540
Composition of capital disclosure
As of March
31, 2020
As of March
31, 2019
(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
1,155
2,181
—
—
9,400
62,752
—
—
1,546
15,087
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, 2020
15,210,894
9,235,639
As of March
31, 2019
10,656,897
9,227,367
As of March
31, 2020
As of March
31, 2019
684,797
598,974
961,464
997,723
314
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
012_0800885852007.indd 314
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
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
61,768,573
896,739
—
—
— 8,753,816
— 5,005,103
—
—
—
—
— 2,142,709
2,416,719
61,768,573
896,739
8,753,816
5,005,103
4,559,429
7,361,253
353
27,128,751
82,517,609
2,063,284
219,733
8,298,393
1,450,323
753,579
230,573
26,314
9,308,882
(479,197)
61,768,573
896,739
8,753,816
5,005,103
4,559,429
7,361,253
353
27,128,751
82,517,609
2,063,284
219,733
8,298,393
1,450,323
753,579
230,573
26,314
9,308,882
(479,197)
353
26,527,867
81,549,423
2,063,284
219,733
3,938,793
1,450,323
167,935
70,372
9,150
9,122,875
(479,197)
219,863,518 219,863,518 189,722,949
— 4,608,371
—
—
40,000
—
—
3,338,159
—
—
—
—
—
—
21,745,451
—
—
—
—
—
—
—
—
—
—
104,292
— 7,361,253
—
—
—
74,665
—
526,218
82,643
—
845,543
—
—
—
—
—
—
— 1,019,434
2,005
—
—
—
585,644
—
—
160,200
—
—
17,164
—
—
—
—
186,007
—
—
—
2,044,044
7,361,253
3,702,484
127,042,217 127,042,217
10,180,435
3,740,539
13,237,913
2,385,607
1,409,249
6,084,528
15,210,894
1,461,308
379,000
9,235,639
1,811,355
7,011,967
73,868
3,362
35,777
1,270
26,576
4,687
142,890
3,145
257,384
30,111
9,308,882
209,078,615 209,078,615
10,180,435
3,740,539
13,237,913
2,385,607
1,409,249
6,084,528
15,210,894
1,461,308
379,000
9,235,639
1,811,355
7,011,967
73,868
3,362
35,777
1,270
26,576
4,687
142,890
3,145
257,384
30,111
9,308,882
—
3,437
—
—
—
—
— 8,112,816
— 1,211,329
—
—
— 4,072,052
—
—
—
—
—
—
—
—
—
—
— 2,177,365
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
15,573,564
3,437
—
—
—
—
—
—
— 6,084,528
—
—
—
—
—
8,538
—
—
—
—
—
—
—
—
—
—
—
8,538
— 127,038,780
— 10,180,435
— 3,740,539
— 5,125,096
— 1,174,277
— 1,409,249
94,723
— 15,210,894
— 1,461,308
—
379,000
— 9,235,639
— 1,811,355
— 4,826,063
73,868
—
3,362
—
35,777
—
1,270
—
26,576
—
4,687
—
142,890
—
3,145
—
257,384
—
30,111
—
— 9,308,882
6,084,528 191,575,322
012_0800885852007.indd 315
315
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
LI1: Differences between accounting and
regulatory scopes of consolidation and
mapping of consolidated financial statement
categories with regulatory risk categories
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
(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)
e
d
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
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
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.
316
012_0800885852007.indd 316
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
(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
217,819,474
189,722,949
21,745,451
3,702,484
7,361,253
17,503,293
3,437
15,573,564
8,538
6,084,528
200,316,180
189,719,512
15,235,348
9,557,920 (Note 1)
572,470
572,470 (Note 2)
6,171,886
5,260,135
—
10,716,035
(1,455,998)
654,840
226,038,877
— 10,454,983 (Note 3)
—
351,268
200,201,172
(1,445,998)
(10,412)
20,430,594
3,693,945
417,293
—
19,147
—
—
4,130,385
1,276,725
—
—
—
—
—
1,276,725
(Millions of yen)
As of March 31, 2019
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
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.
012_0800885852007.indd 317
317
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
(Millions of yen, except percentages)
Geographical
breakdown
Hong Kong
France
Luxembourg
Subtotal
Total
a
Applicable CCyB ratio in
effect
1.00%
0.25%
0.25%
b
RWAs used in the
computation of CCyB ratio
1,229,477
399,293
302,805
1,931,575
48,140,937
c
d
Bank-specific CCyB ratio
CCyB amount
0.02%
14,050
(Millions of yen, except percentages)
CCyB1: Countercyclical buffer (CCyB) requirement by country or region
As of March 31, 2019
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.
318
012_0800885852007.indd 318
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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,
2020
As of March 31,
2019
59,438,067
42,419,213
238,863,106
35,825,017
23,122,877
24,806,153
10,935,708
52,187,827
35,256,002
220,856,829
32,216,204
18,722,769
28,193,246
11,466,654
4,150,572,853
3,431,377,752
9,959,297
9,149,209
901,817,377
778,148,994
1,029,342
1,003,465
10,625,227
10,131,349
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
012_0800885852007.indd 319
319
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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.
320
012_0800885852007.indd 320
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information ■ 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,
2020
As of March 31,
2019
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)
189,089,655
219,863,518
179,349,049
203,659,146
—
—
—
—
30,773,863
24,310,096
878,104
188,211,550
999,843
178,349,206
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)
6,878,993
2,702,937
4,556,886
4,302,269
923,702
622,875
—
—
151,482
97,391
900,439
744,710
591,253
541,447
12,363,828
7,580,496
13,758,920
—
459,828
10,526,838
—
731,057
(c)
14,218,749
11,257,895
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
61,636,792
61,366,247
38,942,263
39,015,093
(d)
22,694,529
22,351,153
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)
10,249,936
237,488,658
4.31%
10,727,228
219,538,751
4.88%
Reason for the significant difference from the leverage ratio in the previous fiscal year
Decrease in leverage ratio is attributable to an increase in total exposures, due to a decrease in capital mainly associated with a decrease in additional Tier 1 instruments and a decline in
net unrealized gains or losses on other securities, along with an increase in on-balance sheet assets primarily comprising cash and due from banks and loans and bills discounted.
012_0800885852007.indd 321
321
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information TLAC information
■ TLAC1: 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, 2020
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)
12
13
14
15
16
17
External TLAC instruments issued directly by the bank and subordinated to excluded
liabilities
External TLAC instruments issued directly by the bank which are not subordinated to
excluded liabilities but meet all other TLAC term sheet requirements
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))
(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
(I)
(J)
(K)
9,581,264
668,672
—
—
668,672
1,302,063
(249,452)
—
152,042
1,399,473
11,649,410
9,654,517
1,072,710
—
—
1,072,710
1,513,260
(298,938)
—
176,746
1,635,453
12,362,681
(L)
4,972,597
4,147,402
(M)
(N)
1,539,976
6,512,574
1,473,569
5,620,972
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
(O)
(P)
(Q)
(R)
(S)
18,161,984
17,983,653
—
—
—
—
18,161,984
232
—
17,983,421
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)
(T)
(U)
61,599,066
237,488,658
58,942,791
219,538,751
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
29.48%
25.96%
7.64%
10.63%
3.52%
2.50%
0.02%
1.00%
30.50%
26.90%
8.19%
11.87%
3.60%
2.50%
0.10%
1.00%
322
012_0800885852007.indd 322
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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
As of March 31, 2020
Creditor ranking
2
3
No
Yes
Additional Tier 1
instruments
Yes
No
Tier 2 instruments *1
4
(most senior)
Yes
No
Other internal
TLAC liabilities
1
(most junior)
Yes
No
Common
share capital
(Millions of yen)
Sum of
1 to 4
(A)
3,545,551
— 1,185,000
— 1,010,822
770,855
5,249,352
— 11,761,581
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
—
—
—
— 1,185,000
— 1,010,822
770,855
5,249,352
— 11,761,581
— 1,185,000
—
—
—
—
—
—
— 1,010,822
—
—
303,417
—
664,405
—
531,215
258,215
98,000
155,000
4,977,327
708,103
1,875,138
2,262,344
— 11,249,916
—
966,318
— 2,276,555
— 3,081,749
—
—
—
3,545,551
— 1,185,000
—
—
43,000
—
131,741
—
174,741
—
20,000
—
— 4,750,551
1
2
3
4
5
6
7
8
9
10
11
*1
Including eligible Tier 2 capital instruments subject to transitional arrangements
SMBC Nikko Securities Inc.
As of March 31, 2020
Creditor ranking
Basel III
Template
No.
1
2
3
4
5
6
7
8
9
10
11
Items
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
(Millions of yen)
Sum of
1 to 3
—
—
—
—
—
—
—
—
—
467,714
—
467,714
467,714
—
—
—
—
467,714
012_0800885852007.indd 323
323
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
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
As of March 31, 2019
Creditor ranking
2
3
No
Yes
Additional Tier 1
instruments *1
Yes
No
Tier 2 instruments *2
4
(most senior)
Yes
No
Other internal
TLAC liabilities
1
(most junior)
Yes
No
Common
share capital
(Millions of yen)
Sum of
1 to 4
(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.
As of March 31, 2019
Creditor ranking
Items
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
324
(Millions of yen)
Sum of
1 to 3
—
—
—
—
—
—
—
—
—
467,714
—
467,714
467,714
—
—
—
—
467,714
012_0800885852007.indd 324
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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
*2
Excluding those owed to group companies
Conservatively estimated in light of quantitative materiality
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 *3
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
*2
*3
Including eligible Tier 1 capital instruments subject to transitional arrangements
Excluding those owed to group companies
Conservatively estimated in light of quantitative materiality
(A)
(B)
(A)
(B)
(Millions of yen)
As of March 31, 2020
Creditor ranking
2
3
4
(most senior)
Sum of
1 to 4
Additional
Tier 1
instruments
685,000
—
685,000
685,000
—
—
—
—
685,000
Tier 2
instruments
1,010,822
—
1,010,822
1,010,822
—
303,417
664,405
43,000
—
47,116
Unsecured
senior
bonds *1
5,296,468 10,893,698
47,116
5,249,352 10,846,582
4,977,327 10,574,557
708,103
2,178,555
2,926,749
174,741
— 4,586,407
708,103
1,875,138
2,262,344
131,741
1
(most junior)
Common
share
capital
3,901,407
—
3,901,407
3,901,407
—
—
—
—
3,901,407
(Millions of yen)
As of March 31, 2019
Creditor ranking
1
(most junior)
2
3
4
(most senior)
Sum of
1 to 4
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 *2
5,436,425 11,206,739
1,003,250
3,524
—
5,432,901 11,203,215
1,003,250
9,925,407
4,155,093
1,003,250
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
—
012_0800885852007.indd 325
325
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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 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 at 100%. The LCR of Sumitomo Mitsui Financial Group
(consolidated) exceeds the minimum requirements of the LCR, 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.
326
012_0800885852007.indd 326
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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 2020/1/1
To 2020/3/31)
Prior Quarter
(From 2019/10/1
To 2019/12/31)
TOTAL
UNWEIGHTED
VALUE
51,568,744
15,941,070
35,627,674
67,726,008
—
65,105,452
TOTAL
WEIGHTED
VALUE
4,043,579
480,191
3,563,388
33,943,371
—
TOTAL
UNWEIGHTED
VALUE
50,794,003
15,605,705
35,188,298
66,874,270
—
65,816,899
TOTAL
WEIGHTED
VALUE
3,989,542
470,101
3,519,441
33,383,095
—
62,864,690
29,082,053
62,138,687
28,647,512
4,861,318
4,861,318
350,450
4,735,583
4,735,583
307,937
24,553,230
8,077,163
24,259,419
7,875,925
1,757,427
428,946
22,366,857
10,795,251
70,009,855
TOTAL
UNWEIGHTED
VALUE
5,629,109
3,449,752
3,022,818
12,101,679
1,768,815
254,594
22,236,010
10,090,325
71,206,904
TOTAL
UNWEIGHTED
VALUE
5,269,553
2,912,447
3,028,887
11,210,888
1,757,427
428,946
5,890,790
8,184,009
1,314,676
55,913,247
TOTAL
WEIGHTED
VALUE
141,720
2,408,085
1,562,699
4,112,503
65,105,452
51,800,744
125.6%
58
1,768,815
254,594
5,852,516
7,767,822
1,346,741
54,671,061
TOTAL
WEIGHTED
VALUE
77,567
1,971,612
1,444,429
3,493,608
65,816,899
51,177,453
128.6%
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 2020/1/1
To 2020/3/31)
Prior Quarter
(From 2019/10/1
To 2019/12/31)
(In million yen)
55,947,151
9,158,300
6,231,772
94,096
1,093,902
1,738,529
65,105,452
57,113,873
8,703,026
5,866,175
79,380
915,737
1,841,734
65,816,899
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.
012_0800885852007.indd 327
327
2020/08/19 11:13:58
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel III Information
Financial Highlights
Sumitomo Mitsui Banking Corporation
Consolidated
Year ended March 31
For the Year:
2020
2019
Ordinary income ����������������������������������������������������������� ¥ 3,469,068
Ordinary profit ��������������������������������������������������������������
770,491
Profit attributable to owners of parent �������������������������
517,750
Comprehensive income �����������������������������������������������
222,122
¥ 3,369,898
894,501
617,493
548,236
At Year-End:
Millions of yen
2018
¥ 3,117,087
932,733
627,582
782,502
2017
2016
¥ 3,014,455
829,419
543,199
687,157
¥ 3,059,022
930,332
680,162
143,086
Total net assets ������������������������������������������������������������ ¥ 8,368,349
Total assets ������������������������������������������������������������������
206,089,633
Total capital ratio (BIS guidelines) ��������������������������������
Tier 1 capital ratio (BIS guidelines) �������������������������������
Common equity Tier 1 capital ratio
18.06%
15.80%
(BIS guidelines) ����������������������������������������������������������
Number of employees ��������������������������������������������������
13.70%
57,961
¥ 8,986,749
190,690,293
¥ 9,090,403
182,727,495
¥ 8,908,192
180,946,664
¥ 9,446,193
180,408,672
20�32%
17�57%
15�17%
58,527
21�14%
18�22%
15�29%
40,058
17�77%
14�61%
12�89%
45,963
18�19%
14�58%
13�04%
54,192
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:
2020
2019
Ordinary income ����������������������������������������������������������� ¥ 2,851,162
2,110
1,412,007
808,052
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
2018
¥ 2,540,450
2,038
1,427,924
810,752
2017
2016
¥ 2,551,931
2,111
1,663,654
816,942
¥ 2,277,812
2,589
1,534,271
805,483
¥ 2,805,840
2,250
1,395,586
811,533
57.2%
586,741
58�2%
584,053
56�8%
617,171
49�1%
809,052
52�5%
728,787
reserve for possible loan losses) �����������������������������
Core banking profit ������������������������������������������������������
Core banking profit (excluding gains or losses on
cancellation of investment trusts) ����������������������������
Ordinary profit ��������������������������������������������������������������
Net income �������������������������������������������������������������������
603,955
529,752
505,785
483,944
317,381
At Year-End:
Total net assets ������������������������������������������������������������ ¥ 7,496,219
Total assets ������������������������������������������������������������������
193,963,791
Deposits �����������������������������������������������������������������������
119,973,324
Loans and bills discounted ������������������������������������������
80,187,382
Securities ���������������������������������������������������������������������
27,058,633
Trust assets and liabilities ��������������������������������������������
4,261,245
Loans and bills discounted ��������������������������������������
662,844
Securities �����������������������������������������������������������������
1,164,251
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
167.61%
17.61%
15.23%
13.01%
27,957
584,053
581,176
535,229
649,647
477,367
¥ 7,962,185
179,348,654
116,091,103
76,401,807
24,336,638
3,842,641
477,094
1,330,384
1,770,996
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
106,248
70
73�09%
20�28%
17�37%
14�85%
28,482
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
Notes: 1. Core banking profit = Banking profit (before provision for general reserve for possible loan losses) – Gains (losses) on bonds
2. “Number of employees” has been reported on the basis of full-time workers. “Number of employees” includes locally hired overseas staff members but
excludes contract employees, temporary staff, and executive officers who do not concurrently serve as Directors.
328
013_0800804262008.indd 328
2020/08/21 17:06:35
SMBCSMBC GROUP ANNUAL REPORT 2020 Income Analysis (Consolidated)
Sumitomo Mitsui Banking Corporation and Subsidiaries
Operating Income, Classified by Domestic and Overseas Operations
2020
2019
Millions of yen
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���������������������������������������
Domestic
operations
Overseas
operations Elimination
Total
Domestic
operations
Overseas
operations Elimination
Total
¥910,696 ¥1,374,225
723,389
650,835
—
222,462
37,299
185,163
51,765
9,564
42,200
131,961
39,953
92,007
488,323
422,373
4,701
402,192
145,539
256,653
115,613
282
115,330
127,320
50,315
77,004
¥(47,295) ¥2,237,626
1,186,005
1,051,621
4,701
614,134
179,925
434,209
157,531
—
157,531
258,749
90,269
168,479
(25,707)
(21,588)
—
(10,520)
(2,913)
(7,606)
(9,846)
(9,846)
—
(531)
—
(531)
¥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
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 ���������������������������������������������� ¥ 80,913,276
53,436,866
17,989,408
209,079
2,711,351
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
955,889
1,170,334
Interest-bearing liabilities ������������������������������������������ ¥132,944,006
101,639,537
5,444,548
462,338
4,051,775
Deposits ����������������������������������������������������������������
Negotiable certificates of deposit �������������������������
Call money and bills sold ��������������������������������������
Payables under repurchase agreements ��������������
Payables under securities
lending transactions��������������������������������������������
Commercial paper�������������������������������������������������
Borrowed money ���������������������������������������������������
Bonds ��������������������������������������������������������������������
864,536
100,091
16,673,018
2,449,786
2020
Interest
¥910,696
568,589
244,886
118
(1,146)
975
19,042
¥488,323
51,779
409
(32)
37,754
941
11
200,322
64,314
Millions of yen
Average rate
1.13%
1.06
1.36
0.06
(0.04)
0.10
1.63
0.37%
0.05
0.01
(0.01)
0.93
0.11
0.01
1.20
2.63
Average balance
¥ 78,953,194
52,262,908
16,699,025
108,697
2,570,984
1,996,660
1,051,668
¥126,163,093
97,987,896
5,778,619
95,135
2,849,200
714,190
101,122
14,370,683
3,247,123
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
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 (2020, ¥48,171,886 million; 2019, ¥43,355,834
million).
013_0800804262008.indd 329
329
2020/08/21 17:06:35
SMBCSMBC GROUP ANNUAL REPORT 2020 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
¥45,123,324
27,120,195
5,507,688
1,575,530
2,580,540
2020
Interest
¥1,374,225
920,531
117,254
15,746
57,573
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
24,706
4,071,134
72
76,822
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 ���������������������������������������������������
Bonds ��������������������������������������������������������������������
¥37,754,490
22,539,322
6,424,927
727,834
5,240,834
—
1,811,251
490,519
69,728
¥ 723,389
406,428
131,442
10,573
100,259
—
31,513
18,937
2,891
Millions of yen
Average rate
3.05%
3.39
2.13
1.00
2.23
0.29
1.89
1.92%
1.80
2.05
1.45
1.91
—
1.74
3.86
4.15
Average balance
¥44,163,082
26,444,159
4,954,867
2,026,876
1,857,211
12,108
4,739,001
¥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
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
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 (2020, ¥3,479,071 million; 2019, ¥3,207,665
million).
Total of Domestic and Overseas Operations
Average balance
Year ended March 31
Interest-earning assets ���������������������������������������������� ¥124,382,905
80,411,348
23,497,097
1,784,610
5,193,065
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
2020
Interest
¥2,237,626
1,485,144
340,553
15,865
54,336
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
980,596
3,969,596
1,047
79,068
Interest-bearing liabilities ������������������������������������������ ¥169,045,094
122,906,987
11,869,475
1,190,173
9,193,783
Deposits ����������������������������������������������������������������
Negotiable certificates of deposit �������������������������
Call money and bills sold ��������������������������������������
Payables under repurchase agreements ��������������
Payables under securities
lending transactions��������������������������������������������
Commercial paper�������������������������������������������������
Borrowed money ���������������������������������������������������
Bonds ��������������������������������������������������������������������
864,536
1,911,343
17,017,823
2,519,514
¥1,186,005
441,411
131,851
10,540
135,924
941
31,525
215,283
67,206
Millions of yen
Average rate
1.80%
1.85
1.45
0.89
1.05
0.11
1.99
0.70%
0.36
1.11
0.89
1.48
0.11
1.65
1.27
2.67
Average balance
¥121,424,996
78,277,107
21,653,892
2,135,574
4,319,462
2019
Interest
¥2,240,944
1,481,622
354,451
16,561
36,101
2,008,768
4,639,992
2,512
101,030
¥161,886,733
119,861,906
11,795,924
902,646
6,926,818
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
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 (2020, ¥51,641,993 million; 2019, ¥46,553,893
million).
330
013_0800804262008.indd 330
2020/08/21 17:06:35
SMBCSMBC GROUP ANNUAL REPORT 2020 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 ������������������������������������������������������������
Investment trusts ��������������������������������������������������
Millions of yen
2020
Domestic
operations
¥402,192
16,975
119,894
7,581
8,312
4,347
31,077
24,099
Overseas
operations Elimination
¥(10,520)
(5,447)
(28)
(2)
—
—
(350)
—
¥222,462
131,138
21,612
37,915
—
2
9,549
40
Total
¥614,134
142,666
141,477
45,494
8,312
4,350
40,275
24,139
2019
Domestic
operations
¥404,067
15,736
116,871
12,362
9,986
4,544
32,447
22,337
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
Fees and commissions payments �����������������������������
Remittances and transfers ������������������������������������
¥145,539
32,905
¥ 37,299
7,817
¥ (2,913)
(124)
¥179,925
40,597
¥137,556
31,501
¥ 29,424
10,630
¥ (4,417)
(4)
¥162,563
42,127
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
2020
2019
Millions of yen
Domestic
operations
¥115,613
1,093
Overseas
operations Elimination
¥(9,846)
—
¥51,765
8,361
Total
¥157,531
9,454
Domestic
operations
¥48,476
530
Overseas
operations Elimination
¥(5,786)
(530)
¥37,423
—
trading transactions ��������������������������������������������
Gains on trading-related financial derivatives �������
Others �������������������������������������������������������������������
9,088
105,409
22
176
43,223
2
—
(9,846)
—
9,265
138,786
25
—
47,919
25
—
37,423
—
—
(5,245)
(10)
Total
¥80,112
—
—
80,097
14
Trading losses������������������������������������������������������������
Losses on trading securities ���������������������������������
Losses on securities related to
trading transactions ��������������������������������������������
Losses on trading-related financial derivatives �����
Others �������������������������������������������������������������������
¥ 282
—
¥ 9,564
—
¥(9,846)
—
¥
—
282
—
—
9,564
—
—
(9,846)
—
—
—
—
—
—
¥ 4,058
—
¥ 6,158
1,655
¥(5,786)
(530)
¥ 4,430
1,125
2,956
1,102
—
348
4,143
10
—
(5,245)
(10)
3,305
—
—
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.
013_0800804262008.indd 331
331
2020/08/21 17:06:35
SMBCSMBC GROUP ANNUAL REPORT 2020 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
2020
2019
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 ������������������������������������������������������������������������������������������������������
¥ 80,651,604
17,782,431
7,207,251
105,641,287
4,231,740
¥109,873,027
¥ 14,626,335
7,288,271
68,101
21,982,708
6,098,695
¥ 28,081,404
¥137,954,431
¥ 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
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
2020
2019
Manufacturing����������������������������������������������������������������������������������������������
Agriculture, forestry, fisheries and mining ���������������������������������������������������
Construction ������������������������������������������������������������������������������������������������
Transportation, communications and public enterprises ����������������������������
Wholesale and retail ������������������������������������������������������������������������������������
Finance and insurance ��������������������������������������������������������������������������������
Real estate, goods rental and leasing ���������������������������������������������������������
Services �������������������������������������������������������������������������������������������������������
Municipalities �����������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Overseas operations:
Public sector ������������������������������������������������������������������������������������������������
Financial institutions ������������������������������������������������������������������������������������
Commerce and industry ������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 7,264,656
271,216
753,216
5,228,310
4,393,787
5,927,258
9,302,176
4,355,912
784,273
16,234,304
¥54,515,111
¥ 276,493
2,093,606
23,939,816
3,455,585
¥29,765,501
¥84,280,613
13.33%
0.50
1.38
9.59
8.06
10.87
17.06
7.99
1.44
29.78
100.00%
0.93%
7.03
80.43
11.61
100.00%
—
¥ 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%
—
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.
332
013_0800804262008.indd 332
2020/08/21 17:06:35
SMBCSMBC GROUP ANNUAL REPORT 2020 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
2020
¥ 13,964
327,080
7,036
137,542
¥485,623
¥ 93,142
Millions of yen
2019
¥ 12,801
409,516
6,447
115,668
¥544,433
¥ 99,554
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
2020
2019
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 �����������������������������������������������������������������������������������������������������������������
¥ 7,348,013
262,681
2,666,212
2,712,913
6,966,667
¥19,956,489
¥
—
—
72,866
—
6,253,293
¥ 6,326,160
¥26,282,649
¥ 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
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
2020
2019
Millions of yen
March 31
Trading assets ����������������������������������������������������������� ¥2,741,487 ¥1,524,271
220,036
—
—
Trading securities ��������������������������������������������������
Derivatives of trading securities ����������������������������
Securities related to trading transactions �������������
Derivatives of securities related to
119,303
2,556
—
¥(131,942) ¥4,133,816
339,339
2,556
—
—
—
—
Domestic
operations
Overseas
operations Elimination
Total
Overseas
operations Elimination
Total
Domestic
operations
¥1,428,638 ¥1,044,294
369,842
—
—
11,708
363
—
¥(20,108) ¥2,452,825
381,551
363
—
—
—
—
trading transactions ��������������������������������������������
28,604
Trading-related financial derivatives ��������������������� 2,543,025
Other trading assets����������������������������������������������
47,998
19
1,298,633
5,581
—
(131,942)
—
28,624
3,709,715
53,579
28,120
1,344,447
43,997
0
674,451
—
—
(20,108)
—
28,121
1,998,791
43,997
Trading liabilities �������������������������������������������������������� ¥2,512,076 ¥1,078,983
69,515
—
Trading securities sold for short sales ������������������
Derivatives of trading securities ����������������������������
Securities related to trading transactions
112,471
1,976
¥(131,942) ¥3,459,117
181,987
1,976
—
—
¥1,258,988 ¥ 579,730
119,540
—
5,546
547
¥(20,108) ¥1,818,610
125,086
547
—
—
sold for short sales ���������������������������������������������
—
—
—
—
—
—
—
—
Derivatives of securities related to
trading transactions ��������������������������������������������
28,931
Trading-related financial derivatives ��������������������� 2,368,696
Other trading liabilities ������������������������������������������
—
9
1,009,457
—
—
(131,942)
—
28,941
3,246,211
—
29,030
1,223,864
—
2
460,187
—
—
(20,108)
—
29,032
1,663,943
—
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.
013_0800804262008.indd 333
333
2020/08/21 17:06:35
SMBCSMBC GROUP ANNUAL REPORT 2020 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
¥599,969
2020
International
operations
¥1,306,302
Interest expenses ���������������������������������������
38,291
989,888
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 (%) �������������������������
561,678
2,041
323,338
140,929
182,409
1,114
—
1,114
44,419
28,969
15,449
¥762,693
316,413
68
198,112
57,263
140,848
110,540
—
110,540
98,434
16,992
81,442
¥ 649,314
Total
¥1,900,107
[6,164]
1,022,015
[6,164]
878,091
2,110
521,450
198,192
323,257
111,655
—
111,655
142,854
45,962
96,892
¥1,412,007
Domestic
operations
¥680,105
2019
International
operations
¥1,306,346
42,009
1,000,338
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
1.06%
1.27%
1.19%
1�22%
1�10%
1�20%
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 of interdepartmental lending and borrowing activities 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. 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
Average balance
Year ended March 31
Interest-earning assets ����������������������������������� ¥ 71,689,376
[4,564,882]
49,200,031
12,852,752
275,937
2,711,351
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Bills bought �������������������������������������������������
Deposits with banks �����������������������������������
807,427
—
9,298
Interest-bearing liabilities ������������������������������� ¥114,916,658
94,329,528
5,709,196
231,706
2,460,296
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Short-term bonds ���������������������������������������
Bonds ���������������������������������������������������������
1,243
10,484,063
—
315,249
Millions of yen
2020
Interest
¥599,969
[6,164]
440,440
118,136
(97)
(1,146)
282
—
13
¥ 38,291
6,234
408
(150)
(2,475)
7
28,223
—
5,348
Average rate
0.83%
0.89
0.91
(0.03)
(0.04)
0.03
—
0.14
0.03%
0.00
0.00
(0.06)
(0.10)
0.56
0.26
—
1.69
Average balance
¥ 69,584,790
[2,777,146]
48,779,204
12,664,232
62,829
2,570,984
1,515,257
—
10,725
¥107,848,148
90,417,718
6,041,635
36,302
897,869
175,193
8,555,317
—
434,144
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
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2020, ¥46,959,708 million; 2019, ¥42,195,891
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 [ ].
334
013_0800804262008.indd 334
2020/08/21 17:06:35
SMBCSMBC GROUP ANNUAL REPORT 2020 Income Analysis (Non-consolidated)
International Operations
Year ended March 31
Average balance
Interest-earning assets ����������������������������������� ¥51,106,233
27,255,573
11,370,094
1,128,672
709,057
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Deposits with banks �����������������������������������
115,111
6,319,952
Interest-bearing liabilities ������������������������������� ¥50,248,864
[4,564,882]
21,386,813
6,414,014
947,990
5,259,016
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Commercial Paper ��������������������������������������
Borrowed money ����������������������������������������
Bonds ���������������������������������������������������������
603,448
1,120,502
6,236,349
2,161,426
2020
Interest
¥1,306,302
813,691
211,015
(2,009)
17,683
311
89,226
¥ 989,888
[6,164]
341,501
130,711
13,464
109,125
908
17,768
174,118
59,555
Millions of yen
Average rate
2.55%
2.98
1.85
(0.17)
2.49
Average balance
¥49,223,041
26,790,832
9,794,923
1,593,638
582,477
2019
Interest
¥1,306,346
845,075
170,648
(3,491)
16,891
Average rate
2�65%
3�15
1�74
(0�21)
2�90
0.27
1.41
1.96%
1.59
2.03
1.42
2.07
0.15
1.58
2.79
2.75
122,858
6,386,681
358
108,377
¥48,831,825
[2,777,146]
22,245,705
5,781,018
1,044,194
5,174,319
¥1,000,338
[15,620]
374,188
133,339
15,445
111,561
284,133
1,860,723
5,747,523
2,841,907
911
31,459
176,571
78,045
0�29
1�69
2�04%
1�68
2�30
1�47
2�15
0�32
1�69
3�07
2�74
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2020, ¥293,523 million; 2019, ¥134,841
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 ����������������������������������� ¥118,230,727
76,455,604
24,222,846
1,404,609
3,420,409
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Bills bought �������������������������������������������������
Deposits with banks �����������������������������������
922,539
—
6,329,250
Interest-bearing liabilities ������������������������������� ¥160,600,640
Deposits������������������������������������������������������ 115,716,342
Negotiable certificates of deposit ���������������
12,123,210
Call money ��������������������������������������������������
1,179,697
Payables under repurchase agreements ����
7,719,312
Payables under securities
lending transactions ���������������������������������
Commercial Paper ��������������������������������������
Borrowed money ����������������������������������������
Short-term bonds ���������������������������������������
Bonds ���������������������������������������������������������
604,691
1,120,502
16,720,413
—
2,476,676
2020
Interest
¥1,900,107
1,254,132
329,152
(2,106)
16,536
594
—
89,239
¥1,022,015
347,736
131,120
13,313
106,649
915
17,768
202,341
—
64,904
Millions of yen
Average rate
1.60%
1.64
1.35
(0.14)
0.48
Average balance
¥116,030,685
75,570,036
22,459,156
1,656,467
3,153,462
2019
Interest
¥1,970,831
1,298,725
345,566
(3,487)
15,441
Average rate
1�69%
1�71
1�53
(0�21)
0�48
0.06
—
1.40
0.63%
0.30
1.08
1.12
1.38
0.15
1.58
1.21
—
2.62
1,638,115
—
6,397,407
759
—
108,392
¥153,902,827
112,663,423
11,822,654
1,080,496
6,072,188
¥1,026,727
381,304
133,768
15,418
110,197
459,327
1,860,723
14,302,840
—
3,276,052
933
31,459
204,277
—
85,150
0�04
—
1�69
0�66%
0�33
1�13
1�42
1�81
0�20
1�69
1�42
—
2�59
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2020, ¥47,253,231 million; 2019, ¥42,330,733
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.
013_0800804262008.indd 335
335
2020/08/21 17:06:35
SMBCSMBC GROUP ANNUAL REPORT 2020 Income Analysis (Non-consolidated)
Breakdown of Interest Income and Interest Expenses
Domestic Operations
Year ended March 31
Interest income �����������������������������������������������
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Bills bought �������������������������������������������������
Deposits with banks �����������������������������������
Interest expenses �������������������������������������������
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Short-term bonds ���������������������������������������
Bonds ���������������������������������������������������������
International Operations
Year ended March 31
Interest income �����������������������������������������������
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Deposits with banks �����������������������������������
Interest expenses �������������������������������������������
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Commercial paper�����������������������������������������
Borrowed money ����������������������������������������
Bonds ���������������������������������������������������������
Volume-related
increase
(decrease)
¥17,613
3,767
1,732
(75)
(75)
(187)
—
(2)
¥ 2,355
258
(23)
(127)
(1,702)
(22)
5,192
—
(1,945)
Volume-related
increase
(decrease)
¥ 48,135
13,874
28,716
827
3,156
(21)
(1,121)
¥ 27,915
(14,130)
12,899
(1,383)
1,757
480
(11,842)
13,648
(18,687)
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)
¥ 35,358
14,526
23,965
530
1,290
(331)
—
(1,143)
¥ 42,622
9,174
3,250
1,119
22,756
220
(11,842)
29,256
—
(20,777)
2020
Rate-related
increase
(decrease)
¥(97,749)
(16,976)
(58,514)
(25)
379
69
—
0
¥ (6,072)
(1,139)
3
4
590
6
(4,675)
—
188
2020
Rate-related
increase
(decrease)
¥(48,180)
(45,258)
11,650
654
(2,365)
(25)
(18,029)
¥(38,365)
(18,556)
(15,527)
(598)
(4,193)
(483)
(1,848)
(16,100)
197
2020
Rate-related
increase
(decrease)
¥(106,082)
(59,119)
(40,380)
851
(195)
166
—
(18,009)
¥ (47,334)
(42,742)
(5,899)
(3,224)
(26,304)
(238)
(1,848)
(31,192)
—
530
Millions of yen
Net
increase
(decrease)
¥(80,135)
(13,209)
(56,781)
(100)
303
(117)
—
(1)
¥ (3,717)
(880)
(20)
(123)
(1,111)
(15)
517
—
(1,757)
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)
Millions of yen
Net
increase
(decrease)
¥ (44)
(31,384)
40,367
1,481
791
(47)
(19,150)
¥(10,450)
(32,687)
(2,628)
(1,981)
(2,436)
(3)
(13,691)
(2,452)
(18,489)
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)
Millions of yen
Net
increase
(decrease)
¥(70,724)
(44,593)
(16,414)
1,381
1,094
(165)
—
(19,152)
¥ (4,711)
(33,567)
(2,648)
(2,104)
(3,548)
(18)
(13,691)
(1,935)
—
(20,246)
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
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)
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
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)
Note: Increase (decrease) attributed to both volume-related and rate-related is prorated according to proportion of change in each factor.
336
013_0800804262008.indd 336
2020/08/21 17:06:35
SMBCSMBC GROUP ANNUAL REPORT 2020
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
¥323,338
13,988
98,757
6,208
6,113
4,347
13,143
2020
International
operations
¥198,112
111,246
40,713
1,236
—
—
17,809
Total
¥521,450
125,235
139,471
7,445
6,113
4,347
30,952
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
Fees and commissions payments ������������������
Remittances and transfers �������������������������
¥140,929
27,460
¥ 57,263
11,741
¥198,192
39,202
¥132,234
26,039
¥ 50,131
12,122
¥182,365
38,161
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
¥1,114
1,093
2020
International
operations
¥110,540
—
Total
¥111,655
1,093
Domestic
operations
¥556
530
2019
International
operations
¥45,951
—
Total
¥46,507
530
—
—
21
9,081
9,081
101,458
0
101,458
22
¥ —
—
¥
—
—
—
—
—
—
—
—
¥
—
—
—
—
—
—
—
25
¥ —
—
—
—
—
—
—
45,951
—
¥ 3,305
—
45,951
25
¥ 3,305
—
3,305
3,305
—
—
—
—
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
¥15,449
(2,430)
2,535
—
2020
International
operations
¥81,442
76,634
5,683
538
Total
¥96,892
74,203
8,219
538
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
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 �����������������������������������������������������������������������������������������������������������������
2020
¥284,749
(5,815)
45,664
104,452
55,662
6,290
3,853
5,073
5,778
6,187
16,053
50,214
31,578
198,309
¥808,052
Millions of yen
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
013_0800804262008.indd 337
337
2020/08/21 17:06:35
SMBCSMBC GROUP ANNUAL REPORT 2020 Deposits (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Deposits and Negotiable Certificates of Deposit
Year-End Balance
March 31
Domestic operations:
Millions of yen
2020
2019
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 ������������������������������������������������������������������������������������������������������
¥ 79,443,753
17,624,378
1,638,536
98,706,668
4,502,740
¥103,209,408
¥ 10,177,761
6,172,895
4,915,999
21,266,656
6,077,521
¥ 27,344,178
¥130,553,586
Notes: 1. Liquid deposits = Current deposits + Ordinary deposits + Savings deposits + Deposits at notice
2. Fixed-term deposits = Time deposits + Installment savings
77.0% ¥ 74,533,808
17,778,577
17.0
1,277,119
1.6
93,589,505
95.6
5,389,733
4.4
100.0% ¥ 98,979,238
37.2% ¥ 10,527,786
6,586,866
22.6
5,386,945
18.0
22,501,598
77.8
6,191,872
22.2
100.0% ¥ 28,693,470
¥127,672,708
—
75�3%
18�0
1�3
94�6
5�4
100�0%
36�7%
22�9
18�8
78�4
21�6
100�0%
—
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2020
2019
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 ������������������������������������������������������������������������������������������������������
¥ 75,693,379
17,749,920
886,229
94,329,528
5,709,196
¥100,038,725
¥ 10,133,921
6,126,164
5,126,728
21,386,813
6,414,014
¥ 27,800,827
¥127,839,552
¥ 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
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 �����������������������������������������������������������������������������������������������������������������
2020
¥ 49,052,970
53,131,027
¥102,183,997
48.0%
52.0
100.0%
2019
¥47,106,526
50,152,636
¥97,259,162
48�4%
51�6
100�0%
Millions of yen
Note: The figures above exclude negotiable certificates of deposit and Japan offshore banking accounts.
338
013_0800804262008.indd 338
2020/08/21 17:06:35
SMBCSMBC GROUP ANNUAL REPORT 2020 Deposits (Non-consolidated)
Balance of Investment Trusts, Classified by Type of Customer
March 31
Individual ���������������������������������������������������������������������������������������������������������
Corporate ��������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
2020
¥1,593,388
379,675
¥1,973,063
2019
¥1,752,186
389,246
¥2,141,432
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 ����������������������������������������������������������������������������������������������������������
2020
¥10,687,089
6,216,619
1,700
4,468,770
4,108,282
3,351,521
1,800
754,961
5,282,833
4,788,235
410
494,187
1,495,344
1,302,646
3,980
188,717
1,233,834
963,279
4,859
265,695
989,888
482,885
506,439
563
¥23,797,273
17,105,189
519,188
6,172,896
Millions of yen
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
013_0800804262008.indd 339
339
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 Loans (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Balance of Loans and Bills Discounted
Year-End Balance
March 31
Domestic operations:
Millions of yen
2020
2019
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
International operations:
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 225,691
40,171,297
10,231,982
38,806
¥50,667,777
¥ 1,428,505
27,793,181
297,917
—
¥29,519,604
¥80,187,382
¥ 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
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2020
2019
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
International operations:
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 303,641
39,264,897
9,590,833
40,658
¥49,200,031
¥ 1,462,915
25,566,394
226,263
—
¥27,255,573
¥76,455,604
¥ 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
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 �����������������������������������������������������������������������������������������������������������������
2020
¥20,644,721
59,542,661
¥80,187,382
25.7%
74.3
100.0%
2019
¥20,985,244
55,416,563
¥76,401,807
27�5%
72�5
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 �����������������������������������������������������������������������������������������������������������������
2020
¥ 1,819,416
1,108,314
—
6,914,460
1,898,216
11,740,408
23,257,352
45,189,621
¥80,187,382
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
340
013_0800804262008.indd 340
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 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.
Loans (Non-consolidated)
Millions of yen
2020
¥14,584,910
14,155,126
9,929,489
4,225,637
13,489,165
10,489,184
2,999,981
6,134,963
4,729,480
1,405,482
21,293,316
19,221,910
2,071,406
10,529,900
10,529,900
—
¥80,187,382
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
Balance of Loan Portfolio, Classified by Industry
March 31
Domestic operations:
Millions of yen
2020
2019
Manufacturing����������������������������������������������������������������������������������������������
Agriculture, forestry, fisheries and mining ���������������������������������������������������
Construction ������������������������������������������������������������������������������������������������
Transportation, communications and public enterprises ����������������������������
Wholesale and retail ������������������������������������������������������������������������������������
Finance and insurance ��������������������������������������������������������������������������������
Real estate ���������������������������������������������������������������������������������������������������
Goods rental and leasing �����������������������������������������������������������������������������
Services �������������������������������������������������������������������������������������������������������
Municipalities �����������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Overseas operations:
Public sector ������������������������������������������������������������������������������������������������
Financial institutions ������������������������������������������������������������������������������������
Commerce and industry ������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 7,193,086
257,491
753,216
5,128,181
4,385,298
7,130,276
7,621,115
1,580,709
4,279,121
784,273
15,500,557
¥54,613,328
¥ 174,297
1,929,564
21,485,675
1,984,517
¥25,574,054
¥80,187,382
13.2%
0.5
1.4
9.4
8.0
13.1
13.9
2.9
7.8
1.4
28.4
100.0%
0.7%
7.5
84.0
7.8
100.0%
—
¥ 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%
—
Notes: 1. Domestic operations represents the operations of SMBC’s domestic branches. Overseas operations represents 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) �������������������������������������������������������������������������������������������������������������
2020
¥54,613,328
33,095,033
60.6%
2019
¥53,967,341
32,994,754
61�1%
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.)
013_0800804262008.indd 341
341
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 Loans (Non-consolidated)
Consumer Loans Outstanding
March 31
Consumer loans ����������������������������������������������������������������������������������������������
Housing loans ����������������������������������������������������������������������������������������������
Residential purpose ���������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
2020
¥12,427,001
11,583,830
9,267,478
843,171
2019
¥13,000,685
12,118,257
9,660,356
882,427
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, 2020
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
¥168,006
[3,351]
102,782
[1,044]
39,712
[1,044]
0
¥270,789
[4,395]
* Reversal by reversal method
Note: Figures in brackets [ ] indicate foreign exchange translation adjustments.
Year ended March 31, 2019
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
¥226,555
[(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.
Millions of yen
Increase during
the fiscal year
¥188,572
Decrease during the fiscal year
Objectives
¥ —
Others
¥168,006*
Balance at end
of the fiscal year
¥188,572
91,128
31,049
19,371
83,411*
91,128
9,599
30,112*
31,049
0
¥279,702
—
¥19,371
0*
¥251,418
0
¥279,702
Millions of yen
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
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
Write-Off of Loans
Year ended March 31
Write-off of loans ���������������������������������������������������������������������������������������������
2020
¥19,799
2019
¥9,245
Millions of yen
Note: Write-off of loans include amount of direct reduction.
Specific Overseas Loans
March 31
Argentina ���������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
Ratio of the total amounts to total assets �������������������������������������������������������
Number of countries ����������������������������������������������������������������������������������������
Millions of yen
2020
2019
¥8
¥8
0.00%
1
¥15
¥15
0�00%
1
342
013_0800804262008.indd 342
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 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
2020
¥ 12,978
305,587
4,468
90,338
¥413,372
¥ 78,064
Millions of yen
2019
¥ 11,612
386,396
5,525
58,230
¥461,765
¥ 82,342
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 ������������������������������������������������������������������������������
2020
¥ 72,976
260,833
94,807
428,617
92,797,390
¥93,226,007
¥ 95,410
Notes: Definition of NPLs categories
Millions of yen
2019
¥ 75,341
337,375
63,756
476,472
88,460,445
¥88,936,918
¥ 89,256
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
013_0800804262008.indd 343
343
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 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
¥73.0
¥61.9
¥11.1
Direct
write-offs
(Note 1)
¥16.9
(Note 2)
100%
(Note 3)
March 31, 2020
Category of
borrowers under
self-assessment
Bankrupt Borrowers
Effectively Bankrupt
Borrowers
Potentially
Bankrupt
Borrowers
Borrowers
Requiring
Caution
Doubtful assets (2)
¥260.8
Substandard loans (3)
¥94.8
(Claims to substandard borrowers)
Normal Borrowers
Normal assets
¥92,797.4
NPL ratio (5) / (4)
0.46%
Total
(4)
¥93,226.0
(A) = (1) + (2) + (3)
¥428.6
( 5 )
Portion of claims secured by
collateral or guarantees, etc. (b)
¥162.3
Necessary
amount
reserved
¥98.5
Portion of substandard loans
secured by collateral or
guarantees, etc. (c)
¥36.5
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)
¥260.7
Unsecured portion
(C) = ( A ) – (B )
Specific
reserve
General
reserve
¥74.1
(Note 2)
75.18%
(Note 3)
General reserve
for substandard
loans ¥21.3
¥188.8
(Note 5)
¥0.0
¥279.7
¥112.2
¥167.9
13.07%
(Note 3)
36.74%
(Note 3)
3.98%
9.32%
(Note 4)
[
]
0.11%
(Note 4)
Reserve ratio
(D) / (C)
66.81%
(Note 6)
Coverage ratio { ( B) + (D) } / (A)
87.00%
Notes: 1. Includes amount of direct reduction totaling ¥95.4 billion.
2. Includes reserves for assets that are not subject to disclosure under the Financial Reconstruction Act. (Bankrupt/Effectively Bankrupt Borrowers: ¥5.7
billion; Potentially Bankrupt Borrowers: ¥1.9 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 ¥0.2 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, 2018
➀
¥ 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
➁
¥ 75�3
337�4
¥412�7
Fiscal 2019
New occurrences Off-balanced
¥ (30�0)
(186�5)
¥(216�5)
¥ 27�6
110�0
¥137�6
March 31, 2020
➂
¥ 73�0
260�8
¥333�8
Billions of yen
Bankrupt and quasi-bankrupt assets ���
Doubtful assets ������������������������������������
Total ������������������������������������������������������
Increase/
Decrease
➁ – ➀
¥ (5�6)
54�0
¥48�4
Increase/
Decrease
➂ – ➁
¥ (2�4)
(76�5)
¥(78�9)
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 ¥33.8 billion in fiscal 2019, recognized as “new occurrences” in the first half of the term, was included in the amounts off-balanced
in the second half.
344
013_0800804262008.indd 344
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020
Securities (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Balance of Securities
Year-End Balance
March 31
Domestic operations:
Millions of yen
2020
2019
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 �����������������������������������������������������������������������������������������������������������������
¥ 7,083,933
262,681
2,654,105
3,057,077
526,499
/
/
¥13,584,298
¥
—
—
—
—
13,474,334
9,253,087
4,221,247
¥13,474,334
¥27,058,633
¥ 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
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2020
2019
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 �����������������������������������������������������������������������������������������������������������������
¥ 7,252,028
162,752
2,686,829
2,007,411
743,730
/
/
¥12,852,752
¥
—
—
—
—
11,370,094
7,502,214
3,867,879
¥11,370,094
¥24,222,846
¥ 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
Note: The average balance of foreign-currency-denominated transactions by domestic branches in international operations is calculated by the monthly current
method.
013_0800804262008.indd 345
345
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 Securities (Non-consolidated)
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
2020
¥ 3,387,319
2,921
160,177
2,210,080
2,206,579
380
2,689,510
7,266
547,895
955,459
920,199
481
101,020
37,691
660,686
1,312,431
1,240,586
4,851
—
6,146
529,884
725,098
695,251
9,030
454,732
195,889
224,384
1,109,262
1,061,245
6,216
451,350
12,765
531,076
3,398,949
3,129,224
184,026
—
—
—
3,057,077
4,289,551
—
4,016,259
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
¥ 7,083,933
262,681
2,654,105
3,057,077
14,000,834
9,253,087
4,221,247
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
346
013_0800804262008.indd 346
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 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 ����������������������������������������������������������������
2020
0.24%
6.26
0.16
4.10
Percentage
2019
0�35%
8�18
0�26
6�01
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
2020
2019
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) ��������������������������������������������������������������������������������������������������������
0.83%
0.55
0.28
2.55%
2.37
0.18
1.60%
1.13
0.47
0�97%
0�60
0�37
2�65%
2�45
0�20
1�69%
1�19
0�50
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
2020
2019
¥ 50,667,777
103,209,408
¥ 49,751,966
98,979,238
49.09%
49.18
50�26%
50�56
¥ 29,519,604
27,344,178
¥ 26,649,840
28,693,470
107.95%
98.03
92�87%
95�59
¥ 80,187,382
130,553,586
¥ 76,401,807
127,672,708
61.42%
59.80
59�84%
60�70
013_0800804262008.indd 347
347
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 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
2020
2019
¥ 13,584,298
103,209,408
¥ 13,533,737
98,979,238
13.16%
12.84
13�67%
13�12
¥ 13,474,334
27,344,178
¥ 10,802,901
28,693,470
49.27%
40.89
37�64%
34�94
¥ 27,058,633
130,553,586
¥ 24,336,638
127,672,708
20.72%
18.94
19�06%
18�04
348
013_0800804262008.indd 348
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 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, 2020
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, 2020
Sumitomo Mitsui Financial Group, Inc� ����������������������������������������������������������
Number of shares
106,248,400
b. Preferred Stock (1st series Type 6)
March 31, 2020
Sumitomo Mitsui Banking Corporation �����������������������������������������������������������
Number of shares
70,001
Percentage of
shares outstanding
100�00%
Percentage of
shares outstanding
100�00%
013_0800804262008.indd 349
349
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 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) �������������������������������������������������������
2020
27,957
37-4
14-0
¥8,286
2019
28,482
36-9
13-6
¥8,203
Notes: 1. “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 do not concurrently serve as Directors.
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:
2020
2019
Main offices and branches ��������������������������������������������������������������������������
Subbranches �����������������������������������������������������������������������������������������������
Agency ���������������������������������������������������������������������������������������������������������
Overseas network:
Branches �����������������������������������������������������������������������������������������������������
Subbranches �����������������������������������������������������������������������������������������������
Representative offices ���������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
515
350
1
19
22
4
911
511
382
1
19
23
4
940
Notes: 1. “Main offices and branches” includes the International Business Operations Dept. (2020, 2 branches; 2019, 2 branches), specialized deposit account
branches (2020, 47 branches; 2019, 47 branches) and ATM administration branches (2020, 18 branches; 2019, 18 branches).
2. “Subbranches” includes Corporate Business Office, etc.
Number of Automated Service Centers
March 31
Automated service centers������������������������������������������������������������������������������
2020
50,141
2019
50,378
Domestic Exchange Transactions
Year ended March 31
Exchange for remittance:
Destined for various parts of the country:
Millions of yen
2020
2019
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
464,147
¥ 573,531,737
Received from various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
326,166
¥ 962,772,521
Collection:
Destined for various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
1,638
¥ 4,156,697
Received from various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
605
¥ 1,370,869
¥1,541,831,826
437,415
¥ 535,257,829
318,485
¥ 932,517,945
1,771
¥ 4,451,331
649
¥ 2,333,608
¥1,474,560,716
350
013_0800804262008.indd 350
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 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
2020
$1,874,818
1,305,477
$1,074,787
40,072
$4,295,156
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 �����������������������������������������������������������������������������������������������������������������
2020
¥ 88,378
47,917
—
54,605
62,008
¥ 252,910
1,227,196
7,919,417
¥9,399,524
2019
$2,171,749
1,352,488
$1,094,203
42,055
$4,660,496
2019
¥ 111,466
57,386
—
50,416
67,462
¥ 286,732
940,913
7,851,060
¥9,078,706
013_0800804262008.indd 351
351
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020 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�������������������������������������������������������������������������������������
Others ������������������������������������������������������������������������������������������������������
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 ����������������������������������������������������������������������������������������������
2020
¥ 662,844
662,844
1,164,251
29,226
1,092,438
—
42,055
531
25,120
38,000
518,415
20,592
497,822
895
—
1,735,784
115,904
115,904
29
29
¥4,261,245
¥1,370,430
1,290,980
328,022
38,000
264,830
968,982
¥4,261,245
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
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
352
013_0800804262008.indd 352
2020/08/21 17:06:36
SMBCSMBC GROUP ANNUAL REPORT 2020
Basel III Information
Capital Ratio and Leverage 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
31,2020
As of March
31,2019
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)
7,105,013
7,120,831
3,527,284
3,622,140
—
44,411
—
—
1,128,741
3,527,346
3,743,614
—
150,128
—
—
1,434,667
5,182
2,181
(a)
6 Common Equity Tier 1 capital: instruments and reserves
(A)
8,238,937
8,557,681
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
235,399
281,339
10,074
225,324
26,214
255,125
3,331
2,208
105,676
—
62,486
5,582
157,217
—
—
(45,242)
—
60,286
3,940
225,610
3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
569,694
528,146
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
7,669,242
8,029,535
014_0800885852007.indd 353
353
2020/08/11 14:18:18
SMBCSMBC GROUP ANNUAL REPORT 2020
Basel III
Template No.
Items
Additional Tier 1 capital: instruments (3)
(Millions of yen, except percentages)
a
b
As of March
31,2020
As of March
31,2019
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
—
—
—
—
1,185,000
1,100,000
—
—
13,554
23,795
—
173,000
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)
—
—
1,198,554
173,000
—
1,296,795
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)
—
—
—
—
—
—
25,525
25,516
—
—
25,525
25,516
1,173,028
1,271,279
(E)
(F)
(G)
8,842,271
9,300,814
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)
—
—
—
—
961,777
1,003,250
—
—
3,471
5,921
358,595
488,222
358,595
—
23,731
8,354
15,377
1,347,576
488,222
—
7,664
7,477
187
1,505,059
354
014_0800885852007.indd 354
2020/08/11 14:18:18
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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
31,2020
As of March
31,2019
c
Reference to
Template
CC2
—
—
—
—
—
—
82,643
50,000
82,643
50,000
1,264,933
1,455,059
(I)
(J)
(K)
10,107,204
10,755,873
(L)
55,953,809
52,910,688
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”)
13.70%
15.80%
18.06%
15.17%
17.57%
20.32%
199,699
289,593
561,567
567,146
—
126
8,354
26,349
15,377
—
220
7,477
29,069
187
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
252,170
243,795
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”)
247,571
371,357
—
—
406,905
610,358
—
—
Items
Required capital ((L) ✕ 8%)
(Millions of yen)
As of March 31,2020
4,476,304
As of March 31,2019
4,232,855
014_0800885852007.indd 355
355
2020/08/11 14:18:18
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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,
2020
As of March 31,
2019
Reference to Template CC1
Reference to appended table
59,991,835
1,246,739
8,243,182
957,271
4,550,644
4,133,816
0
26,282,649
84,280,613
2,057,887
219,733
4,647,291
1,341,895
320,622
226,273
26,147
7,898,071
(335,041)
206,089,633
127,623,995
10,330,435
2,920,539
10,691,772
829,729
1,409,249
3,459,117
21,820,785
1,492,634
1,942,291
1,811,355
5,032,050
36,494
1,236
4,114
617
388
4,687
381,605
30,111
7,898,071
197,721,284
1,770,996
1,966,291
3,622,140
(210,003)
7,149,425
1,125,808
103,609
36,870
(48,969)
(88,577)
1,128,741
—
90,182
8,368,349
206,089,633
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
(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.
356
014_0800885852007.indd 356
2020/08/11 14:18:18
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
As of March
31, 2019
1,770,996
1,770,996
1,966,291
1,966,353
3,622,140
3,743,614
(210,003)
(210,003)
7,149,425
7,270,960
(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, 2020
As of March
31, 2019
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
7,149,425
7,270,960
3,527,284
3,622,140
—
—
3,527,346
3,743,614
—
—
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, 2020
320,622
26,282,649
10,074
As of March
31, 2019
375,389
23,469,621
14,211
95,298
108,261
As of March
31, 2020
As of March
31, 2019
10,074
225,324
—
—
—
26,214
255,125
—
—
—
—
—
As of March
31, 2020
As of March
31, 2019
226,273
324,672
69,056
99,062
As of March
31, 2020
As of March
31, 2019
157,217
225,610
014_0800885852007.indd 357
1a
2
1c
31a
Ref. No.
2-a
2-b
Basel III Template
No.
8
9
20
24
74
Ref. No.
3
(Millions of yen)
Remarks
(Millions of yen)
Remarks
Software and other
(Millions of yen)
Remarks
Remarks
(Millions of yen)
Basel III Template
No.
15
357
2020/08/11 14:18:18
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
As of March
31, 2019
26,147
381,605
30,111
95,298
69,056
23,399
446,993
30,259
108,261
99,062
(Millions of yen)
Remarks
Ref. No.
4-a
4-b
4-c
(Millions of yen)
Composition of capital disclosure
As of March
31, 2020
As of March
31, 2019
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability excluding those
arising from temporary differences (net of related tax liability)
3,331
2,208
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)
126
—
—
126
220
—
—
220
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, 2020
As of March
31, 2019
103,609
(47,281)
Composition of capital disclosure
As of March
31, 2020
As of March
31, 2019
Net deferred gains or losses on hedges
105,676
(45,242)
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, 2020
As of March
31, 2019
4,133,816
2,452,825
26,282,649
84,280,613
4,647,291
23,469,621
79,792,401
3,571,248
3,459,117
1,818,610
5,032,050
2,929,172
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
358
014_0800885852007.indd 358
2020/08/11 14:18:18
SMBCSMBC GROUP ANNUAL REPORT 2020Basel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2020
As of March
31, 2019
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
—
—
—
—
—
—
199,699
289,593
—
—
—
—
—
—
199,699
289,593
669,736
642,662
—
—
25,525
82,643
—
—
25,516
50,000
561,567
567,146
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, 2020
As of March
31, 2019
—
90,182
2,210
278,910
Composition of capital disclosure
As of March
31, 2020
As of March
31, 2019
(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
5,182
2,181
—
—
13,554
23,795
—
—
3,471
5,921
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, 2020
21,820,785
As of March
31, 2019
15,988,948
As of March
31, 2020
As of March
31, 2019
1,185,000
1,100,000
961,777
1,003,250
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
014_0800885852007.indd 359
359
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel III Information ■ 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,
2020
As of March 31,
2019
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)
182,339,952
206,089,633
172,497,155
190,690,293
—
—
—
—
23,749,681
18,193,137
421,474
181,918,477
534,678
171,962,477
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)
6,246,855
2,329,551
3,661,146
3,413,858
744,315
499,696
—
—
151,482
97,391
83,014
—
—
—
10,583,849
6,145,714
9,200,454
—
401,975
6,522,869
—
562,301
(c)
9,602,429
7,085,171
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
55,713,902
55,580,884
35,281,098
35,362,496
(d)
20,432,803
20,218,388
6
Leverage ratio on a consolidated basis (5)
20
21
22
8
The amount of capital (Tier 1 capital)
Total exposures ((a)+(b)+(c)+(d))
Leverage ratio on a consolidated basis ((e)/(f))
(e)
(f)
8,842,271
222,537,560
3.97%
9,300,814
205,411,750
4.52%
Reason for the significant difference from the leverage ratio on a consolidated basis in the previous fiscal year
Decrease in leverage ratio on a consolidated basis is attributable to an increase in total exposures, due to a decrease in capital associated with a decline in net unrealized gains or losses on
other securities, and a decrease in additional Tier 1 instruments, along with an increase in on-balance sheet assets primarily comprising loans and bills discounted and cash and due from
banks.
360
014_0800885852007.indd 360
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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 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 at 100%. The LCR of SMBC (consolidated) exceeds the minimum
requirements of the LCR, 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 “due to trust account,” etc. under “cash outflows based on other
contracts” prescribed in Article 60 of the LCR Notification.
014_0800885852007.indd 361
361
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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 2020/1/1
To 2020/3/31)
Prior Quarter
(From 2019/10/1
To 2019/12/31)
TOTAL
UNWEIGHTED
VALUE
51,569,057
15,941,139
35,627,918
67,378,301
—
63,857,207
TOTAL
WEIGHTED
VALUE
4,043,605
480,193
3,563,412
33,595,357
—
TOTAL
UNWEIGHTED
VALUE
50,794,060
15,605,762
35,188,298
66,460,732
—
64,495,445
TOTAL
WEIGHTED
VALUE
3,989,544
470,103
3,519,441
32,969,328
—
62,517,563
28,734,620
61,709,391
28,217,987
4,860,738
4,860,738
209,707
4,751,341
4,751,341
192,472
24,385,085
7,838,434
24,248,308
7,676,828
1,471,642
428,946
22,484,498
7,847,102
65,118,323
TOTAL
UNWEIGHTED
VALUE
3,202,109
3,251,582
2,119,675
8,573,366
1,519,563
254,594
22,474,151
7,216,805
67,347,605
TOTAL
UNWEIGHTED
VALUE
2,458,964
2,620,401
2,122,165
7,201,531
1,471,642
428,946
5,937,846
5,888,911
1,249,957
52,825,972
TOTAL
WEIGHTED
VALUE
123,786
2,369,650
1,048,771
3,542,207
63,857,207
49,283,765
129.5%
58
1,519,563
254,594
5,902,672
5,514,918
1,334,815
51,677,905
TOTAL
WEIGHTED
VALUE
71,434
1,839,301
970,240
2,880,975
64,495,445
48,796,930
132.1%
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 2020/1/1
To 2020/3/31)
Prior Quarter
(From 2019/10/1
To 2019/12/31)
(In million yen)
55,140,341
8,716,866
6,222,267
75,678
1,080,960
1,337,962
63,857,207
56,224,520
8,270,925
5,861,487
46,533
896,419
1,466,485
64,495,445
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.
362
014_0800885852007.indd 362
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel III Information
Capital Ratio and Leverage 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
31,2020
As of March
31,2019
c
Reference to
Template
CC2
(a)
6,166,883
6,382,096
3,335,548
2,875,747
—
44,411
—
—
1,284,923
7,451,807
3,335,548
3,196,677
—
150,128
—
—
1,430,047
7,812,144
162,839
164,075
—
162,839
—
164,075
—
—
187,152
—
62,486
—
239,000
—
—
(20,578)
19,757
60,286
—
222,859
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
651,480
446,401
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
6,800,327
7,365,742
014_0800885852007.indd 363
363
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel III Information
Basel III
Template No.
Items
Additional Tier 1 capital: instruments (3)
(Millions of yen, except percentages)
a
b
As of March
31,2020
As of March
31,2019
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
—
—
—
—
1,185,000
1,100,000
—
—
—
173,000
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)
1,185,000
1,273,000
—
—
—
—
—
—
25,525
25,516
—
—
25,525
25,516
1,159,474
1,247,483
(E)
(F)
(G)
7,959,801
8,613,226
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)
—
—
—
—
961,777
1,003,250
—
—
358,595
488,222
4,472
—
4,472
1,324,845
—
—
—
1,491,472
364
014_0800885852007.indd 364
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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
31,2020
As of March
31,2019
c
Reference to
Template
CC2
—
—
—
—
—
—
82,643
50,000
82,643
50,000
1,242,202
1,441,472
(I)
(J)
(K)
9,202,003
10,054,699
(L)
52,248,875
49,574,518
13.01%
15.23%
17.61%
14.85%
17.37%
20.28%
198,628
281,885
491,896
516,070
—
—
—
2,727
4,472
—
—
—
3,671
—
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
258,012
248,544
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”)
247,471
371,207
—
—
403,448
605,172
—
—
Items
Required capital ((L) ✕ 8%)
(Millions of yen)
As of March 31,2020
4,179,910
As of March 31,2019
3,965,961
014_0800885852007.indd 365
365
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel III Information
■ CC2: Reconciliation of regulatory capital to balance sheet
Sumitomo Mitsui Banking Corporation
Items
(Assets)
Cash and due from banks
Call loans
Receivables under resale agreements
Receivables under securities borrowing transactions
Monetary claims bought
Trading assets
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Reserve for possible losses on investments
Total assets
(Liabilities)
Deposits
Negotiable certificates of deposit
Call money
Payables under repurchase agreements
Payables under securities lending transactions
Commercial paper
Trading liabilities
Borrowed money
Foreign exchanges
Bonds
Due to trust account
Other liabilities
Reserve for employee bonuses
Reserve for executive bonuses
Reserve for point service program
Reserve for reimbursement of deposits
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Total liabilities
(Net assets)
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total stockholders’ equity
Net unrealized gains 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
a
Balance sheet as
in published financial
statements
b
c
d
(Millions of yen)
Under regulatory scope of consolidation
As of
March 31,
2020
As of
March 31,
2019
As of
March 31,
2020
As of
March 31,
2019
57,971,293
645,967
5,963,377
943,940
1,562,083
3,189,980
27,058,633
80,187,382
1,896,157
4,178,263
794,957
234,707
344,481
9,399,524
(279,702)
(127,256)
193,963,791
119,973,324
10,580,261
3,068,726
8,728,522
571,095
642,447
2,959,613
21,561,177
1,519,777
1,894,369
1,735,889
3,453,008
13,794
939
388
3,900
330,699
30,111
9,399,524
186,467,572
1,770,996
1,774,554
2,875,747
(210,003)
6,211,295
1,073,795
185,163
25,964
—
1,284,923
—
7,496,219
193,963,791
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
57,971,293
645,967
5,963,377
943,940
1,562,083
3,189,980
27,058,633
80,187,382
1,896,157
4,178,263
794,957
234,707
344,481
9,399,524
(279,702)
(127,256)
193,963,791
119,973,324
10,580,261
3,068,726
8,728,522
571,095
642,447
2,959,613
21,561,177
1,519,777
1,894,369
1,735,889
3,453,008
13,794
939
388
3,900
330,699
30,111
9,399,524
186,467,572
1,770,996
1,774,554
2,875,747
(210,003)
6,211,295
1,073,795
185,163
25,964
—
1,284,923
—
7,496,219
193,963,791
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
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)
366
014_0800885852007.indd 366
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
As of March
31, 2019
1,770,996
1,770,996
1,774,554
1,774,554
2,875,747
3,196,677
(210,003)
(210,003)
6,211,295
6,532,225
(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, 2020
As of March
31, 2019
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
6,211,295
6,532,225
3,335,548
2,875,747
—
—
3,335,548
3,196,677
—
—
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, 2020
As of March
31, 2019
234,707
236,352
71,867
72,276
As of March
31, 2020
As of March
31, 2019
—
162,839
—
—
—
—
164,075
—
—
—
—
—
As of March
31, 2020
As of March
31, 2019
344,481
321,031
105,480
98,171
As of March
31, 2020
As of March
31, 2019
239,000
222,859
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
014_0800885852007.indd 367
367
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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, 2020
As of March
31, 2019
330,699
30,111
71,867
105,480
374,529
30,259
72,276
98,171
(Millions of yen)
Remarks
Ref. No.
4-a
4-b
(Millions of yen)
Composition of capital disclosure
As of March
31, 2020
As of March
31, 2019
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, 2020
As of March
31, 2019
185,163
(22,542)
Composition of capital disclosure
As of March
31, 2020
As of March
31, 2019
Net deferred gains or losses on hedges
187,152
(20,578)
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, 2020
As of March
31, 2019
3,189,980
1,534,100
27,058,633
80,187,382
4,178,263
24,328,778
76,401,807
2,895,757
2,959,613
1,348,931
3,453,008
1,657,565
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
368
014_0800885852007.indd 368
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2020
As of March
31, 2019
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)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
198,628
281,885
—
—
—
—
—
—
198,628
281,885
600,065
591,586
—
—
25,525
82,643
—
—
25,516
50,000
491,896
516,070
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, 2020
21,561,177
As of March
31, 2019
15,392,856
As of March
31, 2020
As of March
31, 2019
1,185,000
1,100,000
961,777
1,003,250
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
014_0800885852007.indd 369
369
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel III Information ■ 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,
2020
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)
171,987,707
193,963,791
162,689,001
179,340,794
21,976,084
16,651,792
427,366
171,560,340
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)
3,412,019
1,314,321
2,201,998
2,017,546
497,394
506,786
—
—
225,519
283,480
—
—
—
—
5,885,893
3,555,174
6,907,318
—
366,826
4,586,354
—
542,831
(c)
7,274,144
5,129,185
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
53,501,369
58,704,798
31,790,200
37,308,724
(d)
21,711,168
21,396,073
The amount of capital (Tier 1 capital)
Total exposures ((a)+(b)+(c)+(d))
Leverage ratio ((e)/(f))
(e)
(f)
7,959,801
206,431,546
3.85%
8,613,226
192,337,226
4.47%
Reason for the significant difference from the leverage ratio on a non-consolidated basis in the previous fiscal year
Decrease in leverage ratio on a non-consolidated basis is attributable to an increase in total exposures, due to a decrease in capital associated with a decline in net unrealized gains or
losses on other securities and a decrease in retained earnings due to dividend payments, along with an increase in on-balance sheet assets primarily comprising loans and bills discounted
and cash and due from banks.
370
014_0800885852007.indd 370
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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.
014_0800885852007.indd 371
371
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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 2020/1/1
To 2020/3/31)
Prior Quarter
(From 2019/10/1
To 2019/12/31)
TOTAL
UNWEIGHTED
VALUE
48,883,010
15,465,940
33,417,070
64,434,658
—
58,994,905
TOTAL
WEIGHTED
VALUE
3,806,306
463,978
3,342,327
32,356,463
—
TOTAL
UNWEIGHTED
VALUE
48,169,397
15,138,728
33,030,669
63,406,409
—
59,539,021
TOTAL
WEIGHTED
VALUE
3,757,840
454,162
3,303,678
31,526,598
—
59,480,908
27,402,712
58,604,993
26,725,182
4,953,750
4,953,750
202,346
4,801,416
4,801,416
189,089
21,927,960
6,634,858
21,810,875
6,439,096
426,396
428,946
21,072,618
6,795,280
67,014,239
TOTAL
UNWEIGHTED
VALUE
1,710,217
4,101,004
1,535,830
7,347,051
434,093
254,594
21,122,188
6,331,550
67,127,219
TOTAL
UNWEIGHTED
VALUE
1,411,727
3,607,724
1,607,791
6,627,242
426,396
428,946
5,779,516
3,659,963
1,222,015
47,881,950
TOTAL
WEIGHTED
VALUE
124,083
3,330,475
829,475
4,284,033
58,994,905
43,597,917
135.3%
58
434,093
254,594
5,750,409
3,380,980
1,248,136
46,541,739
TOTAL
WEIGHTED
VALUE
65,714
2,933,080
782,797
3,781,591
59,539,021
42,760,148
139.2%
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 2020/1/1
To 2020/3/31)
Prior Quarter
(From 2019/10/1
To 2019/12/31)
(In million yen)
50,845,503
8,149,402
5,762,150
75,678
973,612
1,337,962
58,994,905
51,992,957
7,546,063
5,273,656
46,533
759,388
1,466,485
59,539,021
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.
372
014_0800885852007.indd 372
2020/08/11 14:18:19
SMBCSMBC GROUP ANNUAL REPORT 2020Basel 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.
014_0800885852007.indd 373
373
2020/08/11 14:18:19
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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.
374
014_0800885852007.indd 374
2020/08/11 14:18:19
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Basel 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, 2019 to March 31, 2020)
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.
015_0800885852007.indd 375
375
2020/08/21 10:43:17
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020 ■ 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
principles for its Compensation Committee to determine individual remuneration for its directors and executive officers (the
“Executives”).
The Policy’s aim is that executive compensation pursuant to it shall provide the appropriate incentives for the Executives to pursue our
Mission while materializing our medium-/long-term vision.
Sumitomo Mitsui Banking Corporation, one of the Group’s main subsidiaries shall determine its executive compensations in accordance
with this Policy.
Executive compensation at SMBC Group shall be determined based on the following concept.
I.
SMBC Group’s executive compensation aims at providing appropriate incentives toward the realization of our mission and our
vision.
SMBC Group’s executive compensation shall reflect the changing business environment and the short-, medium-and long-term
performance of the group, and shall account for the contribution to shareholder value, customer satisfaction, and realisation of sus-
tainable society.
Individual remuneration shall reflect the assigned roles and responsibilities as well as the performance of the respective Executive.
SMBC 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.
SMBC 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. SMBC Group shall establish appropriate governance and controls of the compensation process, and shall regularly review to update
its executive compensation practices according to changing market practices and/or business environment.
I.
SMBC Group’s executive compensation programme (the “Programme”) shall have three components: base salary, cash bonus, and
stock compensation.
However, compensation for outside directors and Audit Committee members shall comprise base salary alone, in consideration of
the nature of their role of management supervision.
In order to hold the Executives accountable and provide them with appropriate incentives for the performance of SMBC 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
stockbased 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 single year performance of SMBC Group 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 medium-/ long-
term perspectives. Around 70% of the determined amount shall be paid in cash and the remaining 30% or so shall be paid under
Stock Compensation Plan II (the “Plan II”).
VI.
VII. Stock compensation plans consist of three types, which are, Stock Compensation Plan I (the “Plan I”), under which the remuneration
of the Executives shall be determined based on SMBC Group’s medium-term performance, etc., the Plan II, determined based on
SMBC Group’s single year 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 SMBC 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 single year performance of SMBC 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,
IX.
remunerations under the Plans could be reduced or fully forfeited.
Notwithstanding the aforementioned “Compensation Programme,” executive compensation for the Executives locally appointed at
overseas entities and those domiciled outside Japan shall be individually designed, not only in accordance with the basic concept
above, but also with consideration to local regulations, tax regime, 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, establishes a “Compensation Committee” to resolve
the following:
376
015_0800885852007.indd 376
2020/08/21 10:43:17
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Compensation
• The Policy, executive compensation programme including the aforementioned compensation programme and regulations
concerning the Policy
• Individual remunerations for Sumitomo Mitsui Financial Group’s directors and corporate executive officers
In addition to the above, the Compensation Committee shall review and discuss the below:
• The individual remuneration for Sumitomo Mitsui Financial Group’s corporate officers and other officers.
• Executive compensation programmes/practices of group companies of Sumitomo Mitsui Financial Group.
(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. Compensation for employees and others are determined by the HR departments
of respective SMBC Group companies by comprehensively taking into account the surrounding business environment, performance
trends, pay history and other factors. Compensation policies for overseas employees are determined following the aforementioned
compensation policy for employees and others in Japan as well as in accordance with local laws, regulations and employment practices.
■ 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
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 SMBC Group has not been adopted. While terms of employment presented at the time of recruitment may
include 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
employees of certain major consolidated subsidiaries.
015_0800885852007.indd 377
377
2020/08/21 10:43:17
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Compensation ■ 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
17
945
895
—
32
32
16
—
14
504
218
—
285
285
—
—
—
—
—
—
—
—
1,449
150
6,442
5,863
—
404
404
173
—
150
5,283
4,538
876
745
665
—
—
81
360
—
28
102
—
12,189
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.
Special compensation, etc.
(Headcount, millions of yen)
(a)
(b)
(c)
(d)
(e)
(f)
Officers
Employees and others
Bonus guarantee
Headcount
—
55
Total amount
—
359
One-off recruitment payment
Headcount
Total amount
—
—
—
—
Additional retirement allowance
Total amount
Headcount
—
449
—
5
■ Other Information Regarding Compensation Structures of Sumitomo Mitsui Financial Group and its Group
Companies
Deferred compensation, etc.
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
378
(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
—
1,364
—
1,527
2,868
—
5,760
—
930
—
388
2,256
—
3,576
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
63
—
628
286
—
978
015_0800885852007.indd 378
2020/08/21 10:43:17
Sumitomo Mitsui Financial GroupSMBC GROUP ANNUAL REPORT 2020Compensation 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 375).
■ 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 376).
■ 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 page 377).
015_0800885852007.indd 379
379
2020/08/21 10:43:17
SMBCSMBC GROUP ANNUAL REPORT 2020 ■ 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
14
770
710
—
42
42
16
—
11
381
165
—
216
216
—
—
—
—
—
—
—
—
1,152
141
6,002
5,434
—
394
394
173
—
141
4,844
4,096
806
747
667
—
—
81
360
—
28
102
—
11,311
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
—
55
Total amount
—
359
One-off recruitment payment
Headcount
Total amount
—
—
—
—
Additional retirement allowance
Total amount
Headcount
—
449
—
5
380
015_0800885852007.indd 380
2020/08/21 10:43:17
SMBCSMBC GROUP ANNUAL REPORT 2020Compensation
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
14
770
710
—
42
42
16
—
11
381
165
—
216
216
—
—
—
—
—
—
—
—
1,152
141
6,002
5,434
—
394
394
173
—
141
4,844
4,096
806
747
667
—
—
81
360
—
28
102
—
11,311
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)
Bonus guarantee
Headcount
—
55
Total amount
—
359
Officers
Employees and others
(c)
(d)
(e)
(f)
(Headcount, millions of yen)
One-off recruitment payment
Headcount
Total amount
—
—
—
—
Additional retirement allowance
Total amount
Headcount
—
449
—
5
015_0800885852007.indd 381
381
2020/08/21 10:43:17
SMBCSMBC GROUP ANNUAL REPORT 2020Compensation
■ 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
—
1,078
—
1,360
2,963
—
5,402
—
735
—
388
2,292
—
3,415
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
112
—
544
232
—
888
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
—
1,078
—
1,360
2,963
—
5,402
—
735
—
388
2,292
—
3,415
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
112
—
544
232
—
888
382
015_0800885852007.indd 382
2020/08/21 10:43:17
SMBCSMBC GROUP ANNUAL REPORT 2020Compensation 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)
Sustainability
https://www.smfg.co.jp/sustainability/(Japanese)
https://www.smfg.co.jp/english/sustainability/(English)
To Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationAbout SMBC Group SMBC GROUP
ANNUAL REPORT
2020
YEAR ENDED MARCH 31, 2020
S
M
B
C
G
R
O
U
P
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
0
Printed in Japan