SMBC GROUP ANNUAL REPORT
SMBC GROUP ANNUAL REPORT
2023
2023
YEAR ENDED MARCH 31, 2023
YEAR ENDED MARCH 31, 2023
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Editorial Policy
SMBC GROUP ANNUAL REPORT 2023 is designed to convey financial and non-financial
information about the overall picture, business strategy, and corporate infrastructure of
SMBC Group. It has been compiled with reference to the International Integrated Reporting
Framework issued by the International Integrated Reporting Council (IIRC) in December
2013. The appendix in the back of this report contains more detailed information on the
Group. Additional information on Sustainability activities can be found on the Company’s
corporate website.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This document contains “forward-looking statements” (as defined in the U.S. Private
Securities Litigation Reform Act of 1995), regarding the intent, belief or current expecta-
tions of us and our management with respect to our future financial condition and results
of operations. In many cases but not all, these statements contain words such as “antici-
pate,” “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 successfully implement our business strategy
through our subsidiaries, affiliates and alliance partners; and exposure to new risks as we
expand the scope of our business. Given these and other risks and uncertainties, you
should not place undue reliance on forward-looking statements, which speak only as of the
date of this document. We undertake no obligation to update or revise any forward looking
statements.
Please refer to our most recent disclosure documents such as our annual report on
Form 20-F and other documents submitted to the U.S. Securities and Exchange
Commission, as well as our earnings press releases, for a more detailed description of the
risks and uncertainties that may affect our financial condition and our operating results,
and investors’ decisions.
Scope of Report
Period covered:
FY2022 (April 2022 to March 2023)
Some subsequent information is also included.
Organizations covered:
Sumitomo Mitsui Financial Group and its subsidiaries and affiliates
Published:
August 2023
“SMBC” has been designated as the corporate group’s master brand. All Group
companies use the SMBC logo and promote the SMBC brand in order to enhance the
brand power of the entire SMBC Group.
Rising Mark
The Rising Mark is the upward curving strip seen beside the letters “SMBC.” This mark
indicates our desire for the Group to grow together with our customers, shareholders, and
society by providing high-value-added, cutting-edge, and revolutionary services.
Corporate Colors
The fresh green color (color of young grass) of the Rising Mark symbolizes youthfulness,
intellect, and gentleness while the trad green (deep, dark green) background presents
tradition, reliability, and stability.
Contents
P.002
Value Creation at
SMBC Group
002
A History of Standing Side-by-Side with Customers and Society
006 MISSION & VISION & FIVE VALUES
008 Message from Group CEO
018
SMBC Group’s Value Creation Process
020
Core Policies of the Medium-Term Management Plan
P.040
Business Strategies for
Creating Value
(FY2023 - FY2025)
024
Communication with Stakeholders
026 Message from Group CFO
032
Response to Administrative Actions and Efforts to Prevent
Recurrence
034
Round-Table Discussion with Outside Directors
042
Group Structure
044
Retail Business Unit
048 Wholesale Business Unit
052
Global Business Unit
056
Global Markets Business Unit
060 Using Digital to Create the Future of Finance
064
Key Measures to Drive SMBC Group’s Future Growth
066 Multi-Franchise Strategy, Overseas Securities Business
070
Olive
076 U.S. Digital Bank
080
Creating Social Value to Achieve Sustainability
090 Human Resource Strategies to Support Value Creation
098
People who Embody Our Five Values
P.108
Corporate Infrastructure
Supporting Value Creation
110
Corporate Governance
126
Risk Management
130
Compliance
132
Customer-Oriented Initiatives
135
IT Governance
136
Cybersecurity
138
Internal Audit
139
ESG Information
140
Financial Review
SMBC GROUP ANNUAL REPORT 2023
001
Value Creation at SMBC Group
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
A History of Standing
Side-by-Side with
Customers and Society
SMBC Group has inherited the business spirit of Mitsui and Sumitomo,
creating social value while standing side-by-side with customers and society.
With this spirit, we will continue to take initiative in economic growth and
resolution of social issues to contribute to “Fulfilled Growth” where people
feel fulfilled.
MITSUI
Innovation of Business Practices
Achieved better life for people in the city of Edo by anticipating potential needs
SUMITOMO
Revitalization of Land Damaged by Copper Mines
Put efforts into reforestation under the spirit, “benefit self and benefit others,
private and public interests are one and the same”
Supporting economic growth through proactive financing
The cabinet of Hayato Ikeda, inaugurated in July 1960,
launched the “Income Doubling Plan” with the goal of dou-
bling per-capita national income in 10 years, and Japan
entered an era of rapid economic growth, with an average
GDP growth rate of 10%. Mitsui Bank and Sumitomo Bank,
the predecessors of SMBC, supported this growth through the
proactive supply of financing.
1967
1968
1969
Sumitomo Credit Service (now Sumitomo Mitsui Card
Company) established
Sogo Lease (now Sumitomo Mitsui Finance and Leas-
ing) established
Japan Information Services (now the Japan Research
Institute) established
1960’s
An Era of Economic Growth
1980’s
Expanding high-risk/high-return loans with the arrival of the Bubble Economy
Starting in 1983, stock and land prices consistently rose,
ushering in the Bubble Economy era. Corporate earnings
increased, and low interest rates and low-cost financing from
capital markets allowed firms to increase upfront capital
expenditures and financial operations. At the same time, the
competitive environment for banks intensified, as a result of
interest rate liberalization, etc. Our predecessor banks in-
creased high-risk, high-return lending in order to survive, such
as real estate investment and financial engineering.
1985
1985
Sumigin-Bankers Investment Management (now Sum-
itomo Mitsui DS Asset Management) established
Mitsui Investment Management (now Sumitomo Mitsui
DS Asset Management) established
002 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
003
Value Creation at SMBC Group
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
A History of Standing Side-by-Side with Customers and Society
The Bubble Economy bursts, bringing with it prolonged financial difficulties
Expanding and strengthening group and global management
1990
1999
Mitsui Taiyo-Kobe Bank established (renamed Sakura
Bank in 1992)
Sakura Leasing (now Sumitomo Mitsui Finance and
Leasing) established
Companies that had invested excessive amounts of money
in asset transactions fell into financial difficulties with the
bursting of the Bubble Economy, and for the banks that had
provided funding, the disposal of bad loans became a major
challenge to their business.
On the other hand, the “Japanese Big Bang” expanded
the scope of banks’ operations in the 1990s. The financial
industry began to draw up a growth strategy taking advantage
of the expanded scope of business, while defending against
financial instability. Sakura Bank and Sumitomo Bank also
shifted toward a merger based on the principle of “together
establishing a new financial business providing customers with
higher value-added products and services.”
In order to provide more valuable services to our customers,
we strived for top-line growth by significantly expanding our
operational and geographic wings in the first half of the 2010s.
However, the business environment surrounding us changed
dramatically with the China shock in 2015, the introduction
of negative interest rates in 2016, and the resolution of Basel
III finalization in 2017, and our strategy shifted from top-line
growth to efficiency of capital, assets, and expenses.
As our business diversified and globalized, we focused
on improving the quality of corporate infrastructure through
the establishment of materialities (“Environment,” “Next
Generation,” and “Community”) in 2014, the formation of Five
Values in the same year, and the introduction of units and CxO
system in 2017.
2012
Promise becomes a subsidiary
SMBC Aviation Capital becomes a subsidiary
2013
Bank BTPN becomes an equity-method affiliate
Societe Generale Private Banking (now SMBC
Trust Bank) becomes a subsidiary
2015
The Bank of East Asia becomes an equity-method
affiliate
2016
Sumitomo Mitsui Asset Management becomes a
subsidiary
2018
Sumitomo Mitsui Finance and Leasing is deconsol-
idated, and becomes an equity-method affiliate
2019
Bank BTPN becomes a subsidiary
Sumitomo Mitsui DS Asset Management launched
1990’s
An Era of Stagnation
2000’s
2010’s
The Birth of a new, advanced financial institution for the 21st century
Realization of growth with quality
In 2001, Sakura Bank and Sumitomo Bank merged into
Sumitomo Mitsui Banking Corporation. The business base
was expanded in order to provide the most valuable services
to customers by adding new functions such as consumer
finance and securities, after the transition to a holding com-
pany structure in the following year. The non-performing loan
ratio, which had weighed heavily on the business, was reduced
by half after the merger, and public funds were fully repaid
in 2006. Just when it at last appeared that SMBC Group had
been put into an environment where we could achieve a more
autonomous management strategy, the Global Financial Crisis
struck. An international trend towards reviewing the financial
system to prevent such a crisis accelerated, and we were
forced to respond with increased capital when we had planned
to proactively invest in key strategic areas.
2001
2002
2003
2004
2009
Sumitomo Mitsui Banking Corporation established
Sumitomo Mitsui Financial Group established
Reorganization to make Sumitomo Mitsui Card Com-
pany, SMBC Leasing (now Sumitomo Mitsui Finance
and Leasing), and Japan Research Institute subsidiar-
ies of Sumitomo Mitsui Financial Group
Promise (now SMBC Consumer Finance) becomes an
equity-method affiliate
Nikko Cordial Securities (now SMBC Nikko Securities)
becomes a subsidiary
The Medium-Term Management Plan in FY2020-2022 was
launched amid the COVID-19 pandemic. SMBC Group has
taken various measures to achieve our vision of becoming “a
trusted global solution provider committed to the growth of our
customers and advancement of society.” In particular, after
achieving the CET1 ratio target in 2019, as we entered a phase
where we could utilize excess capital, we actively invested in
priority areas such as our multi-franchise strategy in Asia and
overseas securities business.
During this Medium-Term Management Plan, we revised
our Mission and added “society” as one of stakeholders.
Efforts on sustainability were also accelerated by the establish-
ment of the Sustainability Committee and Group CSuO, as well
as a Sustainability Division.
An Era of Fulfilled Growth
2020’s
2021
2022
2023
Invested in ARA Asset Management
Invested in RCBC
Invested in Jefferies
FE Credit becomes an equity-method affiliate
Fullerton India (now SMFG India Credit Company)
becomes a subsidiary
Investment in SBI Holdings
CCCMK Holdings becomes an equity-method
affiliate
004 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
005
Value Creation at SMBC Group
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
MISSION &
VISION &
FIVE VALUES
MISSION
VISION
FIVE VALUES
MI SSION
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.
V I SION
A trusted global solution provider committed to the growth of our customers
and advancement of society
FI V E VALUE S
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.
Practicing
FIVE
VALUES
Five Values have been established as
the basis for all employees and
executives’ day-to-day decisions, and
are practiced by our many employees as
a source of strength for SMBC Group.
The stories of five employees
practicing the Five Values are shown
from P.098 onwards.
FIVE VALUES 2
Customer First
Maho Uchiyama
Elder Concierge
Sumitomo Mitsui Banking Corporation
P.100
FIVE VALUES 4
Speed & Quality
Takuya Kondo
Private Corporate Advisory III Dept.
SMBC Nikko Securities
P.104
FIVE VALUES 1
Integrity
Natsuko Kugai
Customer Service Plaza
SMBC Consumer Finance
P.098
FIVE VALUES 3
Proactive & Innovative
Megumi Omae
Strategic Planning Department, The Americas Division
Manufacturers Bank &
Sumitomo Mitsui Banking Corporation
P.102
FIVE VALUES 5
Team “SMBC Group”
Takuya Ogawa
Product Planning and Development Division
Sumitomo Mitsui Card Company
P.106
006 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
007
Value Creation at SMBC Group
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
MESSAGE FROM GROUP CEO
Jun Ohta
Director President and Group CEO
Realizing Growth with Quality
F ocusing on output that makes a lasting impression
on one’s memory rather than on the record books.
This was my response to a query I received during an in-
regardless of the business environment, we steadily carried
out our various initiatives and succeeded in exceeding our
original targets for consolidated net business profit and
ternal seminar geared towards the preparation of the new
bottom-line profit by significant amounts. In addition, we
Medium-Term Management Plan (“new Plan”). An employ-
laid down the cornerstones for sustainable future growth in
ee wanted to know about the specific actions we needed
our Asia Multi-Franchise Strategy and overseas securities
to take for SMBC Group to realize “Growth with Quality.”
business.
A financial institution’s business is built upon customers’
Having said this, challenges also became clear. Busi-
trust. Trust is not won simply because of compliance. Trust
nesses which we had viewed as being part of our strength
is built and maintained as the result of our daily efforts, for
suffered a significant downturn during the pandemic, and
example reliable operations and IT systems, and proposals
we were faced with the need to transform our business
that accurately address customers’ needs. The desired
portfolio into an even more resilient one. Furthermore, the
results will naturally come if we look beyond growing our
enhancement of corporate infrastructure is our top priority
financial results and focus on engaging in frank communi-
given that compliance issues occurred as we were in the
cations with customers and putting forth optimal solutions.
process of building a Group-based governance framework.
What do we need to do in order to realize such “Growth
Our business environment continues to undergo
with Quality?” I shared this question with SMBC Group
significant change. Deglobalization and decoupling, the
employees, and we have put our heads together to come
end of monetary easing overseas, the further acceleration
up with the answer.
of digitalization, and the mitigation of climate change
In the previous Medium-Term Management Plan
are just some examples. Individual values are becoming
(“previous Plan”), we operated under a challenging and
increasingly diverse, and more people want consumption
uncertain business environment, starting with COVID-19’s
to include a story of resolving social issues. Technology
rapid spread throughout the world, and followed by Rus-
continues to evolve at a remarkable speed, and AI can now
sia’s invasion of Ukraine, the sharp depreciation of the Jap-
be used to create complex and natural sentences. We, the
anese yen, the transition from deflation to inflation, and the
users, must make sure that we are aware of the various
failure of several western financial institutions. However,
risks when we use such technology.
008 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
009
Value Creation at SMBC Group
MESSAGE FROM GROUP CEO
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
No Change to Our Strategy. Ascertain the Circumstances and Revise Our Tactics
Placing the Creation of Social Value as a Cornerstone of Our Actions
A s you can see, we are in the midst of a paradigm
shift. However, there is no change in the path we
must follow. Our Vision, “A trusted global solution provider
when required. I believe that the tenacious repetition of
such efforts will allow us to realize “Growth with Quality.”
It is with this goal that SMBC Group established the
“ Building an Era of Fulfilled Growth.”
In Annual Report 2022, I used this phrase to describe
my aspiration for the next 30 years of my life, a period
in repeated discussions at Management Committee meet-
ings and Board of Director meetings regarding the actions
SMBC Group must take.
committed to the growth of our customers and advance-
new Plan: “Plan for Fulfilled Growth.” I first used the term
which follows the first 30 years represented by “growth”
We received some opinions stating that it was suffi-
ment of society,” was designed to illustrate SMBC Group’s
“Fulfilled Growth” in Annual Report 2022. I believe that
as it overlapped with an era of high economic growth in
cient to create social value within the boundaries of our
path to sustainable growth. Not only must we further
“Fulfilled Growth” refers to a state in which people feel
Japan and the following 30 years which was represented
core businesses. However, society is what makes our
develop our capabilities in the financial sector, but we must
happiness and fulfillment by being part of a society where
by “stagnation” as this was a period in which Japan battled
business possible, and it is impossible for a corporation to
also enhance our ability to provide high-quality solutions
we experience economic growth while also working togeth-
with deflation in the post-bubble economy era.
realize sustainable growth if the society in which it operates
in non-financial areas on a global basis, regardless of the
er to address social issues. We desire to contribute to an
SMBC Group has established “We contribute to a
does not also grow. This is why we established “Create So-
changing business environment. We will take concrete
age of “Fulfilled Growth” by fulfilling our responsibilities as
sustainable society by addressing environmental and so-
cial Value” as a pillar of our business strategy. This reflects
steps towards the realization of our Vision.
a corporation and meeting our stakeholders’ expectations.
cial issues” as part of our Mission, and we strive to realize
our commitment to anticipating future trends and to even
On the other hand, the paradigm shift also offers us
“Plan for Fulfilled Growth” is a reflection of this desire.
our sustainability vision of “Creating a society in which
proactively undertake activities that do not immediately
a chance to break free of traditional restraints and unlock
The new Plan has three basic policies: “Create Social
today’s generation can enjoy economic prosperity and
lead to economic value. We established “Environment,”
a new future. Even though we are at a major turning point
Value,” “Pursue Economic Value,” and “Rebuild Corporate
well-being and pass it on to future generations.” Based on
“DE&I/Human Rights,” “Poverty & Inequality,” “Declining
in history, we will continue to strongly push forward in the
Infrastructure.” I will go into detail regarding each basic
this mindset, we have contributed to advancing the reso-
Birthrate & Declining Population,” and “Japan’s Regrowth”
right direction while revising our tactics in a timely manner
policy.
See page 020 for details.
Core Policies of the Medium-Term Management Plan (FY2023 - FY2025)
VISION
A trusted global solution
provider committed
to the growth of
our customers and
advancement of society
Rebuild
Corporate
Infrastructure
Quality
builds Trust
Create Social Value
Contribute to
“Fulfilled Growth”
Growth
with
Quality
Pursue Economic Value
Transformation &
Growth
lution of a wide range of social issues while adapting to the
as our new priority issues (materiality). We have set goals
changing times.
by which we can measure our success in resolving the
However, the social issues that humanity faces keep
priority issues and have integrated them into our business
growing, with global warming, violation of human rights,
strategy.
and the spread of poverty and inequality being some exam-
Going forward, we will implement concrete action
ples. Japan is no exception, as we have fallen into a period
plans that are aimed at resolving social issues, and will
of extended economic stagnation, also referred to as the
create a framework in which employees that want to
“Lost Three Decades,” leading to the further acceleration
contribute to the improvement of society can freely take
of falling birthrates, an aging population, and population
part. This will allow us to create an environment in which
decline.
each and every one of our employees can enjoy high levels
Going forward, I believe that in addition to the pursuit
of job satisfaction while working towards the resolution of
of economic value, the generation of social value will gain
social issues. SMBC Group will contribute to the realization
even greater importance. Corporations that are unable to
of “Fulfilled Growth” in our society by leading the resolution
create social value will be viewed as no longer having the
of social issues and the creation of economic growth based
right to pursue economic value. Corporations that create
on the philosophy of creating social value that has been
social value are corporations that contribute to the fulfilled
passed on from our forebears at Mitsui and Sumitomo.
growth of humanity. As such, over the past year we gath-
ered the views and opinions of our employees and engaged
See page 080 for details.
Creating Social Value to Achieve Sustainability
010 SMBC GROUP ANNUAL REPORT 2023
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Value Creation at SMBC Group
MESSAGE FROM GROUP CEO
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Strive to Realize Growth That Is Not Possible Via Existing Methods
SMBC Group will contribute to the realization of
“Fulfilled Growth” in our society by leading the resolution
of social issues and the creation of economic growth based on
the philosophy of creating social value that has been passed on
from our forebears at Mitsui and Sumitomo.
Environment
Poverty & Inequality
To pass on a green earth to future generations. This is
Many of you may have felt that something was out
the mission and responsibility of the present generation.
of place when a financial institution such as SMBC Group
SMBC Group has positioned climate change and
established “Poverty & Inequality” as a priority issue
other sustainability-related efforts as key initiatives in its
(materiality). However, “Poverty & Inequality” is not an
business strategy. We are engaging in Group-wide efforts
issue that is limited to developing countries. According to
to support the smooth transition to a decarbonized so-
the Ministry of Health, Labour and Welfare, one in seven
ciety. In FY2023, we will establish 2030 medium-term
children in Japan are considered to be living in relative
GHG reduction targets for high GHG emitting sectors
poverty. The so called “Chain of Poverty” in which the
and strengthen our phase-out strategy for the coal sec-
parents’ income disparity leads to their children’s income
tor. However, there is no simple, straightforward method
disparity is a serious problem. We must break this nega-
of achieving carbon neutrality. In order to ensure a fair,
tive cycle. It is with this strong belief that I decided SMBC
orderly transition, the establishment of next-generation
Group needed to go beyond the boundaries of our core
technology is indispensable, and we must engage in
businesses and tackle social issues, even though they do
thorough discussions with customers to determine the
not immediately lead to economic value. SMBC Group
realistic route and pace up to 2050 while paying careful
will collaborate with Non-Profit Organizations and non-fi-
attention to each country’s unique circumstances. As a
nancial institutions to provide children with educational
proud member of the financial sector, SMBC Group will
opportunities and opportunities to challenge themselves.
do its best to contribute to the securing of stable energy
Furthermore, in the Asian developing nations where
supplies and long-term decarbonization by supporting
SMBC has a presence, we will focus on promoting finan-
customers’ efforts to transition to a carbon neutral busi-
cial inclusion and the social independence of the poor
ness model and develop new technologies.
through microfinance and consulting.
W hile pursuing a bottom-line profit in excess of ¥1
trillion by the end of the next Medium-Term Man-
agement Plan (FY2028), we will target bottom-line profit
Third, in our overseas businesses we will continue efforts to
optimize our portfolio and drive the growth of SMBC Group
through our Multi-Franchise Strategy and the U.S. market,
of ¥900 billion in the new Plan as an interim goal in order
which is not only the largest in the world but also is expect-
to assert our standing as an international financial insti-
ed to enjoy stable growth.
tution with a global network. As the first step, we will even
While the respective heads of our Business Units will
more dynamically reduce our exposure to labor intensive,
provide details regarding individual strategies, I would like
inefficient businesses; low growth/unprofitable assets; and
to take this opportunity to touch upon four key initiatives.
assets for which the holding rationale has decreased due
to changes in the business environment. We will realize re-
silient business operations and enhanced capital efficiency
by optimizing our business portfolio as a result of proac-
tively reallocating the management resources we have
secured through the aforesaid efforts to investments for
growth and strengthening corporate infrastructure. We will
also pave the way to reaping the benefits of our Multi-Fran-
chise Strategy and other investments for growth. In regard
to cost control, we will focus on reducing base expense by
transforming our domestic business model, consolidating
domestic Group functions, and enhancing the efficiency of
overseas operations.
However, this profit target does not reflect rising
interest rates in Japan. If we see a material positive change
in the domestic interest rate environment, we will make
sure to capture the upside opportunities that arise and give
serious thought to raising our target.
In order to reach challenging targets that would
not be possible only through existing methods, we will
further evolve “Transformation & Growth” and pursue
initiatives in the key strategic areas focusing on three
perspectives. First, in our domestic mass retail and small
and medium-sized enterprise wholesale businesses we
will expand our customer base in a more effective manner
and establish a stable, efficient business model through
comprehensive digitalization and the enhancement of our
payment business. Second, we will transform the business
model of our wholesale business targeting large foreign
and domestic corporations to one that is not dependent on
the expansion of balance sheet, strengthen our fee busi-
ness by leveraging the capabilities of Group companies,
and diversify our risk solutions line-up so that we can add
value to customers while also enhancing asset efficiency.
012 SMBC GROUP ANNUAL REPORT 2023
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013
Value Creation at SMBC Group
MESSAGE FROM GROUP CEO
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
A Digital-Centric Mass Retail Strategy
Enhancing the Global CIB Business
Jenius BankTM
Multi-Franchise Strategy
We will carry-out comprehensive efforts to digitalize
As the Global Corporate and Investment Banking
The launch of a U.S. digital banking unit was a strat-
Almost ten years have passed since we announced
our mass retail business. We launched a new service
(CIB) business remains a critical pillar of our wholesale
egy that came into being due to expatriates seconded to
the Multi-Franchise Strategy in the Medium-Term Manage-
called Olive in March 2023, and the application seamlessly
operations, which targets large corporations, enhancing
the U.S. directly approaching me regarding the matter
ment Plan we launched in FY2014. During this time, we
brings together various functions, such as customers’ bank
our overseas securities capabilities has been a significant
during a business trip to New York. Employees who were
have undertaken concrete steps towards building a second
accounts, credit card settlement, loan, and securities. Olive
challenge. The strategic solution to this was our alliance
passionately committed to seeing the project succeed
and third SMBC Group in the four Asian countries which
offers users one-stop services regarding payment, receipt
with Jefferies, a leading U.S.-based full-service investment
joined together and the project team has now grown to
we expect to experience high economic growth. In the
of salary, loan, and asset building. If customers use Olive
bank and capital markets firm. In April 2023, we unveiled
270 members. I am delighted that we were able to launch
previous Plan, we made investments in India, Vietnam, and
as their main account to manage their household finances,
plans to enhance our strategic capital and business alli-
Jenius BankTM this year.
the Philippines. Combined with Bank BTPN, our consoli-
not only will they enjoy greatly enhanced convenience,
ance with Jefferies. This partnership, initiated in July 2021,
While there are many digital bank offerings/compet-
dated subsidiary in Indonesia, we now have established the
SMBC Group can hope for increased volume in deposits
has now expanded into U.S. investment banking, home to
itors globally, our focus is not on becoming a top player in
foundations of future growth in the four target countries.
and usage of credit cards. Furthermore, we will strive to
the world’s largest capital markets and M&A businesses.
a short period of time but on methodically implementing
We are reconfirming the high potential of each respective
establish a dominant platform by growing our customer
As part of this expansion, we will integrate functions that
a flexible strategy and leverage cutting edge technology
country through the discussions we are holding with the in-
base through the merger of SMBC Group’s V Point reward
overlap, allowing SMBC Group to focus on lending and
to provide a new financial experience. We will first focus
vestee companies regarding collaborations in a wide range
program with Culture Convenience Club’s T Point reward
debt capital markets, while Jefferies will focus on M&A
on expanding our business infrastructure by developing
of businesses. Going forward, we will not limit ourselves to
program, which has more than 70 million members, and by
and equity capital markets. In addition, SMBC Group and
a high-quality customer base and accumulating assets.
realizing synergies with investee companies. Rather, we
expanding services through collaborations with SBI Securi-
Jefferies will conduct joint marketing activities targeted at
The expansion of our business infrastructure will be ac-
will also focus on realizing synergies within SMBC Group by
companied by the expansion of our product line-up. We
having investee companies share their expertise with each
will carefully grow Jenius Bank over a ten-year period and
other. The new Plan sets the stage to further enhance the
develop it into a pillar that supports SMBC Group’s sustain-
results produced by past initiatives. We will strive to expand
able growth.
our businesses on a scale that exceeds the growth of the
respective countries by working together with our trusted
partners to maximize the results of collaborations.
See page 076 for details.
U.S. Digital Bank
See page 102 for details.
People who Embody Our Five Values
Proactive & Innovative
See page 066 for details.
Efforts to Achieve the Multi-Franchise Strategy
ties, an online securities firm.
See page 070 for details.
Olive
See page 106 for details.
People who Embody Our Five Values
Team “SMBC Group”
SMBC Group’s clients. Furthermore, we plan to increase
our economic ownership in Jefferies to up to 15%. I am
confident that both SMBC Group and Jefferies can expe-
rience growth by providing advanced financial services on
a global scale and generating new business opportunities.
This will be achieved by leveraging each other’s strengths
in a symbiotic relationship. As true allies, we will deepen
our partnership and build upon our track record of suc-
cessful collaborations, standing by each other in both
prosperous and challenging times, supporting one another
on our shared journey towards success.
See page 069 for details.
Strengthening Our Overseas Securities Business
In order to reach challenging targets that
would not be possible only through existing methods,
we will further evolve “Transformation & Growth” and
pursue initiatives in the key strategic areas focusing on
three perspectives.
014 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
015
With John Rosenfeld, President of Jenius Bank
Value Creation at SMBC Group
MESSAGE FROM GROUP CEO
Quality builds Trust
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Sustainable Growth of Corporate Value
“ Rebuild Corporate Infrastructure” has even more
importance than in the past. We established “Quality
builds Trust” as a keyword of this third pillar to reflect our
“Producing new CEOs” is an initiative I started in
which in-house start-ups are launched by leveraging the
ideas of junior and mid-tier staff. In FY2022, the project
U nder the previous Plan, we increased our annual
dividend by ¥50, achieving our dividend payout ratio
target of 40%. We also carried out share buybacks totaling
while paying careful attention to the external environment.
Our share price continues to fall below a PBR (Price
to Book Ratio) of one. This may be unavoidable as investors
commitment to enhancing the quality of our operations
saw the launch of Family Network Service, a business
to a level that will allow us to win back the trust of stake-
which offers family watching services though a smartphone
holders we lost as a result of the Administrative Disposition
application. A female employee in her 30s was named as
that was issued last year. First, we will make a Group-wide
CEO of the new company. I have no doubt that an era of
¥200 billion while making inorganic investments of ¥510
view Japan’s financial sector with pessimism given the
billion for our future growth. I am well aware that this has
long-standing economic stagnation and the ongoing nega-
led to some investors raising concerns that we were allo-
tive interest rate environment. However, even against such
cating a disproportionate amount of assets to investments
a backdrop, it is important to clearly communicate a growth
effort to improve compliance with our governance and
“Fulfilled Growth” can be reached if each and every one of
for growth.
strategy and to execute that strategy. We have placed even
compliance frameworks, which are the foundations of our
our employees can make a positive impact on society as a
business. We will also strive to realize resilient business
result of them breaking the mold by thinking outside of the
operations by enhancing our ability to proactively address
box and pursuing their aspirations.
the risks that arise in the uncertain business environment
In addition, “DE&I (Diversity, Equity and Inclusion),”
by aggressively investing in IT infrastructure.
Creating a workplace in which employees can pursue
their hopes and dreams with positivity and confidence is a
which was added as a priority issue (materiality), is a
reflection of our growth strategy. SMBC Group is powered
by a diverse talent pool of more than 110,000 employees
key point in enhancing our corporate infrastructure. Re-
spread across Japan and 38 countries and territories. Car-
gardless of how much our business environment changes,
rying out our duties based on a mindset of mutual respect
there will be no change to the fact that our people form
leads to the competitiveness of SMBC Group, and the inter-
the basis of SMBC Group’s competitiveness and are our
action of various values and ideas leads to innovation. In
most important management resource. Ever since I was
April 2023, we established the SMBC Group Talent Policy
appointed Group CEO, under the slogan “Break the Mold”
as part of efforts to realize a workplace where diverse pro-
I have endeavored to develop a corporate culture in which
fessional talents can continue to pursue challenging goals
employees can transform themselves without being caught
and enjoy high levels of job satisfaction. We will enhance
up in fixed ideas and preconceptions. I believe that an
both our global and Group-based talent pool by creating a
important responsibility of a business leader is to support
framework in which SMBC Group and its employees share
employees proactively pursuing their hopes and aspira-
a common mission, vision, and values while at the same
tions and to prepare optimal conditions so that employees
time committing to each other.
can reach their full potential.
However, there is no change to our policy of allocating
greater focus on capital efficiency in the new Plan and will
capital in a balanced manner between investments for
enhance our ROE by optimizing our business portfolio to
growth and shareholder returns over the medium- to long-
improve profitability and increasing revenue by executing
term based on a foundation of financial soundness. In the
the Key Strategies. Furthermore, we will attempt to limit the
new Plan, dividends will continue to be our principal ap-
capital cost of investors by minimizing the asymmetry of
proach to shareholder returns. We will maintain a progres-
information as a result of proactively disclosing both finan-
sive dividend policy and a dividend payout ratio of 40%. We
cial and non-financial information and engaging in close
aim to increase dividend payouts through bottom-line profit
communications with our stakeholders. Through such
growth. Although we postponed committing to a share
consistent efforts, we will strive to realize the sustainable
buyback in May 2023, we will actively consider the matter
growth of SMBC Group’s corporate value.
Dreams Make Our Future
“ There is nothing like a dream to create the future.”
These are the famous words of the French writer, Victor
Hugo, and I feel that they make a particularly strong impres-
challenges or more complex issues. Even when faced with
such challenges, not giving up on one’s dreams and work-
ing with colleagues to overcome those challenges will allow
sion as our world suffers from increasing uncertainty.
SMBC Group to become even bigger and even stronger. I
As I stated at the start of my message, we continue
strongly believe that the future that lies at the end of this
to experience great volatility. In my New Year message to
process will be one of “Fulfilled Growth.”
SMBC Group, I said I wanted each and every one of our
To transform SMBC Group into such an organization is
employees to strive to realize their dreams and hopes
both my dream and responsibility as Group CEO. I will fulfill
based on a clear understanding that they are responsible
this responsibility by standing at the forefront of SMBC
for shaping the future. I do not want our employees to
Group’s 110,000 employees as we carry out our “Plan
adopt a passive attitude because of the current business
for Fulfilled Growth.” I would like to ask for the continued
environment. Bigger dreams may very well lead to bigger
support and understanding of our stakeholders.
Internal seminar for formulating the new Medium-Term Management Plan
016 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
017
Value Creation at SMBC Group
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
SMBC Group’s
Value Creation
Process
SMBC Group is committed to providing solutions that meet
customer needs and solve social issues by leveraging our
strengths developed over many years and maximizing the
power of industry-leading subsidiaries.
We will return economic and social value created through
business activities to stakeholders and contribute to the
realization of “Fulfilled Growth.”
(FY2022 Results)
(FY2022 Results)
Financial Infrastructure
Financial Infrastructure
Disciplined capital
Disciplined capital
management and
management and
high-quality asset portfolio
high-quality asset portfolio
Net income: ¥805.8 billion
Net income: ¥805.8 billion
ROCET1: 9.4%
ROCET1: 9.4%
CET1 ratio: 10.1%
CET1 ratio: 10.1%
NPL ratio: 0.80%
NPL ratio: 0.80%
Human Resources
Human Resources
Diverse, professional employees
Diverse, professional employees
who work as a team and
who work as a team and
continue to challenge themselves
continue to challenge themselves
Headcount: 116,000
Headcount: 116,000
Annual training cost: ¥3.95 billion
Annual training cost: ¥3.95 billion
Network
Network
A network of offices
A network of offices
in Japan and
in Japan and
38 countries/regions
38 countries/regions
Brand
Brand
Trust and performance
Trust and performance
since the foundation of
since the foundation of
Mitsui and Sumitomo
Mitsui and Sumitomo
Corporate Culture
Corporate Culture
Culture that allows for
Culture that allows for
the expression of individuality,
the expression of individuality,
and an attitude of contribution
and an attitude of contribution
to customers and society
to customers and society
Customer Base
Customer Base
A robust customer base
A robust customer base
grounded in longstanding
grounded in longstanding
relationships of trust
relationships of trust
Number of corporate accounts: 1 million
Number of corporate accounts: 1 million
Number of personal accounts: 28 million
Number of personal accounts: 28 million
Credit card members: 54 million
Credit card members: 54 million
Bank
Bank
Leasing
Leasing
Create Social Value
Create Social Value
Rebuild
Rebuild
Corporate
Corporate
Infrastructure
Infrastructure
Medium-Term
Medium-Term
Management Plan
Management Plan
in FY2023-2025
in FY2023-2025
Growth with
Growth with
Quality
Quality
(P.020)
(P.020)
Pursue Economic
Pursue Economic
Value
Value
Bottom-line profit
Bottom-line profit
¥900 billion
¥900 billion
ROCET1
ROCET1
≧9.5%
≧9.5%
Base expenses
Base expenses
Reduction
Reduction
from FY2022
from FY2022
CET1 ratio
CET1 ratio
c.10%
c.10%
Consumer
Consumer
Finance
Finance
Asset
Asset
Management
Management
Materiality and
Materiality and
Main KPIs
Main KPIs
Environment
Environment
Sustainable finance (P.083)
Sustainable finance (P.083)
(FY2020 – 2029)
(FY2020 – 2029)
¥50
¥50
trillion
trillion
DE&I/Human Rights
DE&I/Human Rights
Engagement score (P.097)
Engagement score (P.097)
maintain at least 70
maintain at least 70
Poverty & Inequality
Poverty & Inequality
Number of microfinance borrowers (P.088)
Number of microfinance borrowers (P.088)
+800 K people
+800 K people
Declining Birthrate & Aging Population
Declining Birthrate & Aging Population
AM/foreign currency balance (P.046)
AM/foreign currency balance (P.046)
¥18
¥18
trillion
trillion
Japan’s Regrowth
Japan’s Regrowth
Investment and loans for
Investment and loans for
startups (P.089)
startups (P.089)
¥135 billion
¥135 billion
Value provided to
Value provided to
stakeholders
stakeholders
Customers
Customers
More valuable
More valuable
services
services
Shareholders
Shareholders
Permanently increase
Permanently increase
shareholder value
shareholder value
Trust
Trust
Employees
Employees
A workplace
A workplace
where employees
where employees
can demonstrate their
can demonstrate their
abilities to the fullest
abilities to the fullest
Society
Society
Realization of
Realization of
a sustainable society
a sustainable society
“Fulfilled Growth”
“Fulfilled Growth”
People feel fulfilled as
People feel fulfilled as
economic growth accompanies
economic growth accompanies
the resolution of social issues
the resolution of social issues
Credit
Credit
Card
Card
Securities
Securities
018 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
019
Value Creation at SMBC Group
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Core Policies of the Medium-Term Management Plan
(FY2023 - FY2025)
The new Medium-Term Management Plan, covering the three-year period from FY2023,
aims to achieve “Growth with Quality” strongly and proactively by further advancing ex-
isting initiatives that leverage the Group’s collective strengths to respond to major envi-
ronmental changes that could be called a paradigm shift, including the current reversal of
social and economic globalization, inflation and rising interest rates in regions such as the
U.S. and Europe, progress in digital transformation, and the expansion and worsening of
social issues faced around the world.
Core Policies
The new Medium-Term Management Plan is titled the “Plan for Fulfilled Growth,” express-
ing our strong desire to achieve “Growth with Quality” while fulfilling our three core policies
of “Create Social Value,” “Pursue Economic Value,” and “Rebuild Corporate Infrastruc-
ture” toward the Vision of becoming a “a trusted global solution provider committed to the
growth of our customers and advancement of society,” which we defined in 2020.
VISION
A trusted global solution
provider committed
to the growth of
our customers and
advancement of society
Rebuild
Corporate
Infrastructure
Quality
builds Trust
Create Social Value
Contribute to
“Fulfilled Growth”
Growth
with
Quality
Pursue Economic Value
Transformation &
Growth
Financial Targets
In order to compete globally as a global financial institution, we will work toward goals that are not an
extension of previous plans. Specifically, we aim to realize bottom-line profits of ¥1 trillion or more in
the next Medium-Term Management Plan (FY2026-FY2028), and ¥900 billion in the new Medium-Term
Management Plan as a milestone on the way to that target.
As in the previous Medium-Term Management Plan, we have set three indicators: profitability,
efficiency, and financial soundness. In particular, for ROCET1, an indicator of profitability, we will also
pay close attention to ROE including OCI and aim to steadily improve capital efficiency.
Previous Plan
New Plan
ROCET1*1
≥9.5%
Base expenses
10% of domestic headcount
Shift management resources
Pursuit of economic value
Rebuild corporate infrastructure
RWA
+¥11 trillion
Workload
+3 K
IT investment
+¥ 650 billion
020 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
021
Value Creation at SMBC Group
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Core Policies of the Medium-Term Management Plan (FY2023 - FY2025)
Create Social Value
Contributing to “Fulfilled Growth”
In the new Medium-Term Management Plan, SMBC Group has selected five key issues (materialities)
to be proactively addressed: “Environment,” “DE&I/Human Rights,” “Poverty & Inequality,” “Declining
Birthrate & Aging Population,” and “Japan’s Regrowth,” and has set ten goals for resolving these ma-
terialities. With a business spirit that aims at creating social value as corporate citizens long passed
down through Mitsui and Sumitomo, we will further expand our existing activities. Furthermore, we will
contribute to “Fulfilled Growth” where society and people can enjoy sustainable prosperity by creating
social value and returning to society.
Environment
DE&I/Human
Rights
Poverty &
Inequality
Declining
Birthrate & Aging
Population
Japan’s
Regrowth
Support the transition to achieve a decarbonized society
Contribute to the conservation and restoration of natural capital
Realize a workplace where employees enjoy high job satisfaction
Respect human rights throughout the supply chain
Sustainable finance
¥50 trillion (FY3/21-30)
Engagement score
maintain at least 70
Break the cycle of poverty and inequality for the next generation
Contribute to financial inclusion in developing countries
Number of microfinance borrowers
+800K people
l
s
n
a
p
n
o
i
t
c
a
c
fi
c
e
p
s
e
r
o
m
i
Relieve anxiety about the 100-year life era
Build user-friendly infrastructure to support a society with a declining
population
AM / foreign currency balance
¥18 trillion
Support customers’ business model transformation
Create innovation and foster new industries
Investment and loans for startups
¥135 billion
t
n
e
m
h
s
i
l
b
a
t
s
E
Materiality identification process
In light of the ever-growing and increasingly serious social issues facing the world, it has become even
more important to proactively address a wide range of social issues, and aim to create social value as
a corporate citizen. Based on this recognition, we have reviewed the materialities identified in 2014.
Identification of social issues to be addressed
We identify social issues with the potential to have a significant impact on SMBC Group and society, based on our top risks
and past efforts to resolve social issues, in addition to global issues such as the SDGs and efforts by Japanese government.
Discussion and examination
Approximately 20,000 employees in Japan and overseas responded to a questionnaire survey conducted on “Social issues
that SMBC Group should focus on.”
In addition to discussions at Management Committee, Diversity Committee, and other meetings on the executive side,
discussions are also held at meetings of the Board of Directors and Sustainability Committee on the supervisory side.
Five materialities and ten goals have been selected based on the results of the employee survey and opinions from both the
supervisory and executive sides (including opinions of external committee members).
Institutional decisions
KPIs associated with materiality and targets are also added and decided by the Board of Directors following deliberation by
Management Committee.
1
2
3
Pursue Economic Value
Transformation & Growth
We will engage in continuous business model reform that reflects major changes in the environment
and carry out efforts to establish franchises in strategic overseas areas while steadily realizing the
benefits of existing growth investments and initiatives with the key phrase “Transformation & Growth”
in continuation from the previous Medium-Term Management Plan. Through these efforts, SMBC Group
will transform our business portfolio and realize robust growth in profitability that is accompanied by
enhanced capital efficiency.
Reform domestic business for
possible interest rate hike
Improve capital efficiency with
B/S discipline
Build global portfolio based on
growth potential
1
2
3
4
5
6
7
Transformation
Continuous reform of our business model
Build digital-based retail business
Strengthen payment business
Enhance wholesale business utilizing digital technology
Expand institutional investor business
Strengthen global CIB and S&T
Deepen and expand U.S. business
Realize growth through our Multi-Franchise Strategy
Growth
Establish franchises in key strategic areas
Rebuild Corporate Infrastructure
Quality builds Trust
In the previous Medium-Term Man-
agement Plan, we carried out various
initiatives aimed at enhancing SMBC
Group’s corporate infrastructure with
“Quality” as a keyword. In the new Me-
dium-term Management Plan, we will
engage in tireless efforts to enhance
SMBC Group’s corporate infrastruc-
ture and win the trust of our customers
and other stakeholders with “Quality
builds Trust” as a key phrase.
Ⅰ
Improve the quality of governance and compliance
Ⅱ
Ⅲ
Ⅳ
Sophisticate human capital management
Reinforce IT infrastructure
Improve risk analysis and risk control capabilities
022 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
023
Value Creation at SMBC Group
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Communication with
Stakeholders
Basic Approach
SMBC Group aims to contribute to the sustainable development
of society by building relationships and providing greater value
to various stakeholders: “Customers,” “Shareholders and the
markets,” “Employees,” and “Society and the environment.”
Engagement with Customers
Value We Provide: More valuable services
“Customer First,” thinking from the customer’s perspective
and providing value that meets the needs of each individ-
ual, is one of our Five Values, which are shared by all our
Engagement with Shareholders and
the Markets
Value We Provide: Continuous growth of shareholder value
We recognize that appropriate disclosure of corporate and
management information must form the foundation of our
efforts to realize shareholder value management, and strive
to provide accurate understanding of our management
strategies and financial situation through investor meetings
after announcement of financial results, conferences and
one-on-one meetings, large meetings for individual inves-
tors and other activities.
Parties engaging in dialogue
Group CEO, Group CFO, Outside Directors, Heads of
Business Units, Director in charge of Corporate Planning
Department, Investor Relations Dept, etc.
Engagement with Employees
Value We Provide: A workplace where employees realize
Engagement with Society
Value We Provide: Contribution to a sustainable society
full potential
SMBC Group has positioned “Create Social Value” as a pil-
Various initiatives, such as town hall meetings, are being
lar of its management strategy and intends to engage in a
implemented to foster mutual understanding between
wide range of initiatives that go beyond our core business.
employees and management. For example, Group CEO
We emphasize dialogue with society by proactively disclos-
luncheons in which employees from various Group com-
ing our efforts to resolve our five materialities selected in
panies participated were held six times in FY2022. A lively
April 2023.
exchange of ideas took place during the luncheon, with
Moreover, a sustainable society cannot be achieved
various new ideas and concepts being generated as em-
without cooperative relationships with the various stake-
ployees talked about their own dreams and goals.
holders active in society. To this end, we are actively
We also conduct monthly engagement surveys to
involved with external parties through participation and in-
visualize and analyze the state of employee engagement.
volvement in various domestic and international initiatives,
Results are returned to each individual and organization to
as well as through implementing “GREEN x GLOBE Part-
encourage independent improvement. The KPI for engage-
ners,” a community of businesses that transcends organiza-
ment score is set to be maintained at 70 or higher.
tional barriers to address environmental and social issues.
employees. In addition to daily communication with our
Activities in FY2022
See page 090 for more information on our human
resource strategies.
See page 080 for more information on our
sustainability initiatives.
sales staff, we have also established points of contact to
receive feedback and requests, and to listen to feedback
from our customers. We strive to continuously improve our
products and services based on the feedback we receive.
For example, Sumitomo Mitsui Card Company released
a V-point investment service in July 2022, in response to
General meeting of shareholders
Participants: 990*
IR meetings for institutional investors and analysts
13 meetings
One-on-one meetings with institutional investors and analysts
470 meetings
Of which, implemented by managements
Of which foreign investors
Of which SR interviews
118 meetings
289 meetings
36 meetings
5 conferences
2 meetings
a request that it be possible to use V-points to purchase
Conferences held by securities companies
mutual funds at SBI Securities.
See page 132 for more information on
our customer-oriented initiatives.
Large meetings for individual investors
* Including 603 viewers of simultaneous Internet broadcast
Investor interests
Financial performance and
management strategy
The path toward achieving the profit targets set forth in
Medium-Term Management Plan
Capital policy
Shareholder returns policy, target of growth investment,
balance between growth investment and shareholder
returns
Financial and economic
environment
Outlook on domestic and foreign interest rates and view
toward financial instability abroad
ESG
Climate change initiatives, reduction of equity holdings,
and measures to prevent recurrence of misconduct
Feedback to management
Quarterly reports are presented the Board of Directors and
Management Committee meetings, and information is also
shared regularly via e-mail.
Feedback incorporated into management and disclosure
• Improving of business management by business unit
• Disclosing of ROE including OCI
• Disclosing of future profit contributions from growth investments
• Accelerating the reduction pace of equity holdings
Employee-organized meetings with the Group CEO to exchange opinions
2023 IIF Sustainable Finance Summit
“Huddle Fukutome” (an exchange event with the president of
Sumitomo Mitsui Banking Corporation)
GREEN x GLOBE Partners Events
024 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
025
Value Creation at SMBC Group
MESSAGE FROM GROUP CFO
We will realize the sustainable growth of SMBC Group’s
corporate value by enhancing capital efficiency through
the prompt execution of initiatives aimed at delivering
“Growth with Quality.”
In April 2023, I was appointed Group CFO and Group CSO. As Group CSO, I will supervise the
execution of our initiatives in key strategic areas while maintaining a view of the overall strategy.
At the same time, as Group CFO I will continue to oversee the optimal allocation of our management
resources to ensure sound financial and capital management. I will take great care to communicate
to investors information regarding SMBC Group’s strategies and businesses from both standpoints in
a comprehensible manner.
Fumihiko Ito
Group CFO & CSO
Director Senior Managing Executive Officer
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Review of the Previous Medium-Term Management Plan
In the previous Medium-Term Management Plan (“pre-
SMBC Group’s history consolidated gross profit exceed-
vious Plan”) we operated in a challenging and uncertain
ed ¥3 trillion in FY2022. Even after booking the negative
business environment due to the COVID-19 pandemic,
impact of items, such as additional impairment losses
Russia’s invasion of Ukraine, and various other unforeseen
stemming from our aircraft leasing business and taking
factors. However, regardless of such an environment, we
proactive measures for the future (forward-looking provi-
steadily carried out the Seven Key Strategies established
sions due to uncertainties in the business environment,
under “Transformation & Growth.” We also proactively
impairment losses stemming for our retail branches, etc.),
addressed major global trends, such as “Digital” and
we were able to generate profit attributable to owners of
“Green.” Recently, in the domestic market we are seeing
parent of ¥805.8 billion. This represents a year-on-year
an increase in demand for solutions to address the post-
increase of ¥99.2 billion and is the first time to exceed
COVID-19 business environment as the corporate sector
¥800 billion since FY2013. It goes without saying that we
recovers from the global health crisis and becomes more
exceeded our original targets by a substantial amount.
active in capital investment and business reorganization.
In overseas markets, we are facing an increase in capi-
tal demand from customers followed by an increase in
cross-selling opportunities including securities business.
Not only were we able to capture significant opportunities
resulting from the growth of the cashless payment mar-
ket by issuing next-generation credit cards (numberless/
cardless, etc.), we also succeeded in laying down the
(JPY bn)
Results FY2022
YoY
Consolidated net
business profit
Total credit cost
Ordinary profit
Profit attributable to
owners of parent
1,276.4
210.2
1,160.9
805.8
+123.6
(64.2)
+120.3
+99.2
cornerstones of our future growth. For example, we made
We also achieved our original financial targets for
investments in our Asia Multi-Franchise Strategy and in our
overseas securities business.
Due to the balanced increase in profits across the
key businesses of each Business Unit, for the first time in
Return on Common Equity Tier1 (ROCET1), base expens-
es, and Common Equity Tier1(CET1) ratio. For ROCET1 we
exceeded our target by close to 1%, a significant amount.
Financial Targets of the Previous Plan
ROCET1
Base expense*1
CET1 ratio*2
9.4%
JPY 1,515 bn
10.1%
(2) Strengthen the Internal Control System
(3) Foster a Sound Corporate Culture
• Strengthen supervision of management execution
• Improve the effectiveness of the Three Lines
Appoint a new outside director
• Implement compliance training for executives
• Prioritize the allocation of resources on “defense”
Increase personnel in the Second and Third Line, and make IT
investment of over ¥10 billion to strengthen internal control
systems
of Defense system
Formulate and implement a target operating
model by utilizing external knowledge
• Reorganize compliance division
Strengthen supervisory functions, and clarify
roles and responsibilities
• Strengthen expertise in the First and Second Line of defense
• Establish the Fraudulent Trade Prevention
Promote to hire outside specialists
• Establish the Product and Services Council
Discuss risks, issues and measures regarding products and
services among the First and Second Line of defense
Committee
Strengthening the trade control system by
discussing the risk of unfair trading among the
First and Second Line
• Formulate new corporate philosophy systems
Restructure the existing philosophy systems to
incorporate SMBC Group’s “Five Values”
• Dialogue between management and
employees
Establish a forum for discussion on improve-
ment measures, company direction, etc. (held
at 271 locations in total)
• Increase involvement in SMBC Nikko’s executive personnel
• Establish the Group Business Management
• Issue CEO message
and resource allocation plan, and verify its sufficiency
Department
Strengthen capabilities to deal with irregulari-
ties and scandals on a Group-wide basis
Distribute at SMBC Group annual policy
meetings and SMBC Nikko’s general manager’s
meetings
(4) Strengthen the Business Management System
(5) Strengthen the Customer Information
• Implement whistle-blowing training
• Reinforce the Company’s Compliance Department structure
Management System
• Establish and enforce information management
rules
• Enhance post-event monitoring by utilizing
artificial intelligence, etc.
(6) Foster Awareness of Compliance
• Establish a new rule for compliance
training management and increase training
opportunities
Market
manipulation
cases
Violation of
regulations on
the firewall
between banking
and securities
operations
The Company: Establish the Group Business
Management Department
The Company has established the Group Business
Management Department with the aim of strengthen-
ing the capability for emergency issues as a group. We
will continue to strengthen capability for emergency
issues of the eight major subsidiaries (including SMBC
Nikko) by enhancing communication with them.
NEW
Collaboration
Business Unit
(First Line
of defense)
Group Business Management
Department
Collaboration
CxO
(Second and
Third Line
of defense)
Business
management
Execute improvement plan
Emergency response
Examination/Instruction
Business
management
First Line of defense
Group companies
Second and Third Line
of defense
SMBC Nikko: Formulate new corporate philosophy
systems
In order to ensure that the philosophy fully permeates
the entire company, SMBC Nikko has restructured
the existing philosophy which includes five new SMBC
Nikko’s core values that encapsulate the SMBC
group’s common five values.
SMBC Nikko Securities Management Philosophy
SMBC
Group
Mission
Mission
Value
Social Mission
• Connect the development of sound capital markets to
realization of satisfying and fulfilling lives and society
Brand Slogan
• Share the Future
— For Tomorrow of All Stakeholders —
Vision
• Formulated for each period of the Medium-Term
Management plan
Important Values as a professionals
• Kindness and honesty
• Co-existence and co-prosperity
• Sustainable growth
• Respect for diversity
• Market integrity
Incorporate
Five Values
SMBC Nikko: Dialogue between Management and
Employees
The management of SMBC Nikko has declared a
strong commitment to compliance and risk manage-
ment, and has enhanced bidirectional communica-
tion with sales staff, conducting town hall meetings at
a total of 271 locations. Members of the Management
Committee will discuss opinions and suggestions
from employees during bidirectional communication
and will incorporate these into various measures
going forward.
SMBC Nikko: Reorganize compliance division
The organization and operation of the compliance
department have been reviewed with the aim of
strengthening the internal control system. By appoint-
ing vice president to oversee compliance, we have
reinforced the compliance department. Furthermore,
we have reorganized the compliance departments by
function, aiming to clarify roles and responsibilities.
Second Line of defense (Compliance Division)
Head of Compliance Unit
(Deputy President/Representative Director)
Enhancement of the Compliance
Division’s positioning
Deputy Head of Compliance Unit
(lawyer)
Appointment of legal and compli-
ance specialists
Head of Compliance
(General Manager of Compliance dept.)
Deputy Head of Compliance
Reinforcement of supervisory
functions
Appointment of a person with
First Line management experience
Each compliance department
Reorganize each function
032 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
033
Value Creation at SMBC Group
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Round-Table Discussion with Outside Directors
The Values SMBC Group Must
Embody as it Strives to Realize
Sustainability
Ito Today, I will ask Ms. Eriko Sakurai and Mr. Masayuki
The new Plan has already started, and I feel that
Matsumoto, both outside directors of Sumitomo Mitsui Fi-
everyone in SMBC Group is pursuing the new Plan’s
nancial Group, to share their expectations for SMBC Group
strategies and initiatives with much enthusiasm. I believe
taking into consideration the new Medium-Term Manage-
that SMBC Group’s organizational strengths will further
ment Plan (“new Plan”) that we publicly announced in
increase if the new Plan is carried out with this level of
May 2023. Ms. Sakurai and Mr. Matsumoto were deeply
enthusiasm.
involved in the preparation of the new Plan as repeated
discussions took place during Board of Directors (“BOD”)
Sakurai As Mr. Matsumoto shared his thoughts regard-
meetings and BOD internal committee meetings over a
ing the new Plan in general, I would like to first share my
period of approximately one year.
thoughts from my position as Chairperson of the Sustain-
ability Committee given that it was this role which allowed
Matsumoto I feel that the new Plan significantly differs
me to take part in the preparation of the new Plan from the
from past Medium-Term Management Plans in three key
draft stage. Frankly speaking, the early drafts struck me
areas. First, a large number of SMBC Group employees
as trying to cover too many issues. It is easy to talk about
of various seniority levels devoted significant time and
wanting to solve social issues, actually reflecting this in
effort to the preparation of the new Plan. As a result, the
your corporate activities via concrete initiatives is a differ-
new Plan not only takes into consideration the issues
ent matter. As such, I advised that SMBC Group should
and results of past Plans, it also reflects current changes
narrow down and focus on selecting key issues so that
in the business environment. Second, the new Plan has
each and every one of its employees must have a sense of
established “Create Social Value” as a new pillar on top
ownership if the Group is to make concrete contributions to
of “Pursue Economic Value” and “Rebuild Corporate
the resolution of social issues.
Infrastructure”. Third, the new Plan clearly stipulates the
SMBC Group was already contributing to “Creating
social issues SMBC Group will address in order to create
Social Value” via various initiatives, for example holding
the aforementioned social value, and its commitment to
financial education seminars that have been attended by
resolving those issues. As “Create Social Value” has been
hundreds of thousands of high school students. It was un-
established as a key pillar of the new Plan, I hope to see
der such circumstances that we engaged in repeated dis-
SMBC Group tackle these social issues with a strong sense
cussions about how SMBC Group employees could more
of responsibility and determination.
consciously contribute to the resolution of social issues.
034 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
035
Value Creation at SMBC Group
Round-Table Discussion with Outside Directors
For example, when the key phrase “Fulfilled Growth” was
Plan’s various initiatives while making sure that employees
brought up, detailed discussions took place regarding the
remain engaged.
meaning of fulfillment and the actions that we needed to
take within society in order to achieve growth. It was the
Matsumoto I personally believe that a megabank has four
first-time detailed discussions regarding such topics had
key responsibilities. The first is to contribute to and take
taken place within SMBC Group.
responsibility for people’s livelihoods and the Japanese
In addition, as I am a member of the Compensation
economy. The second is to establish trust and credibility as
Committee and Nomination Committee, I took part in dis-
the basis of all its activities. The third is to practice sound
cussions regarding how “Creating Social Value” should be
business management, including in regard to revenue and
reflected in determining compensation and in the selection
governance. The fourth is to fairly contribute to all stake-
of leaders. I provided various suggestions with the mindset
holders. All four of these responsibilities must be fulfilled.
that I am speaking on behalf of SMBC Group’s numerous
The three basic policies established under the new Plan
stakeholders so that it is able realize the theme “Create
“Create Social Value,” “Pursue Economic Value,” and “Re-
Social Value” in its many business activities.
build Corporate Infrastructure” serve as the basis of SMBC
Group’s unwavering commitment to pursue “Growth with
Ito As Ms. Sakurai just said, the Sustainability Committee
Quality” by fulfilling these roles.
was deeply involved in the preparation of the strategies es-
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Masayuki
Matsumoto
Outside Director,
Sumitomo Mitsui Financial Group
tablished under the new Plan. This itself is proof that SMBC
Ito In regard to the third responsibility of sound business
rate through our Multi-Franchise Strategy, growing our U.S.
targeting growth areas as it strives to achieve the goals set
Group places great importance on “Creating Social Value”
management that Mr. Matsumoto spoke about, in response
business, and the transformation of our domestic retail and
under the new Plan.
and embodies its commitment to placing this mindset at
to the request from the Tokyo Stock Exchange to improve
wholesale business models.
the center of its actions.
our PBR, SMBC Group has publicly announced that we
Ito Thank you. Next, I would like to move on to SMBC
On the other hand, as Mr. Matsumoto stated, it is vital
will pursue ROE including OCI of 8%. As a first step, we will
Matsumoto A PBR of one is a minimum goal that all
Group’s efforts aimed at combating climate change, a
that SMBC Group executes and brings to a successful con-
pursue a PBR of one by focusing on asset and capital effi-
corporates should strive to attain, and I believe that the
theme that is of great interest to our stakeholders.
clusion its initiatives with a strong sense of responsibility
ciencies. In addition, this will be achieved from both ROE
actions of the companies are consistent with this. However,
and determination. I want to further elaborate on the new
and PER standpoints by increasing our anticipated growth
given the regulatory requirements applicable to the finan-
Matsumoto When the Sustainability Committee provides
Fumihiko
Ito
Group CFO & Group CSO,
Sumitomo Mitsui Financial Group
cial sector, financial companies must improve PBR while
reports regarding climate change at BOD meetings, I
also accumulating capital. As ROE including OCI of 8% is a
am always impressed with the level of detail the reports
challenging target, SMBC Group will be required to focus
provide and that the reports are the result of very thorough
on improving profitability via portfolio optimization and
discussions. A long-term action plan is established for
other concrete measures.
the entire SMBC Group that adheres to global standards
based on a clear and accurate understanding of the dis-
Sakurai How to incorporate the Tokyo Stock Exchange’s
cussions that have taken place in the Sustainability Com-
request in the new Plan was the subject of much dis-
mittee and the current status of climate change issues.
cussion during BOD meetings. As a financial institution,
While current efforts are based on this process, I believe
SMBC Group must operate in a highly regulated business
that SMBC Group was able to reiterate its unwavering
environment, and one key point is for SMBC Group to
focus on resolving sustainability-related issues by adding
carefully determine in which businesses it is able to grow.
“Support the transition to achieve a decarbonized society”
SMBC Group’s business operations have undergone
as a goal for “Environment,” a priority issue (materiality) in
substantial change since I became an Outside Director
the new Plan. I understand that detailed action plans are
in 2015, and I will continue to pay close attention to
being prepared by sorting out issues that arise from daily
how SMBC Group can successfully execute its initiatives
changes in the business environment while engaging in
036 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
037
Value Creation at SMBC Group
Round-Table Discussion with Outside Directors
communications with clients. I feel that this reflects SMBC
by SMBC Nikko Securities (“SMBC Nikko”) in FY2022.
Group’s commitment to steadily carry out its sustainabili-
In response to this incident, measures were prepared
ty-related plans.
and implemented for the purpose of ensuring that such
an incident would never occur again. These measures
Sakurai I provided very in-depth suggestions focusing
were prepared based on feedback from various parties,
on whether SMBC Group’s internal implementation frame-
including from the BOD. Could you please share with us
work for addressing climate change is adequate. I have
your forthright opinions regarding the incident and the
spent many years at a global chemical manufacturer and
progress we are making in the implementation of the
it was necessary to build or upgrade factories if they were
preventive measures?
to become compatible with GHG reduction technology.
A timeframe of several years is necessary to acquire the
Matsumoto All companies, regardless of their industry
land for the factory, build the factory on that land, and then
or size, have essential values that must not be lost in order
for production to finally start. I will pay close attention to
for them to exist. For a securities company, protecting the
whether SMBC Group is facing head-on the needs of each
fairness of the financial market is an essential value, and
business sector based on a clear understanding of their is-
this incident is extremely regrettable. As part of efforts to
sues, including issues such as the one which I just shared,
ensure that such an incident never occurs again, in my
which are difficult to see from the outside. Against such a
role as Chairperson of the Audit Committee, not only did
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Eriko
Sakurai
Outside Director,
Sumitomo Mitsui Financial Group
backdrop, I am seeing various improvements that are being
I receive reports regarding the causes of the incident and
Sakurai I was very grateful when I learned that Mr. Mat-
work, including risk management. I make sure to voice my
made to reflect feedback from onsite staff. For instance,
the preventative measures, I also physically went to SMBC
sumoto and other members of the Audit Committee had
concerns and obtain an answer if I have any doubts regard-
in addition to communicating with clients in key sectors,
Nikko’s head office and met face to face with their execu-
actually met and talked with both executives and employ-
ing these matters. Going forward, I will continue to put forth
SMBC Group is hiring staff who have actual experience
tive officers.
ees of SMBC Nikko. I felt that they represented the BOD
my opinions and suggestions aimed at ensuring the sound
working in those sectors. Furthermore, large corporations
My involvement in the railroad sector spans many
very strongly in dealing with this issue. I agree that a corpo-
business management of SMBC Group so that it can meet
possess internal frameworks aimed at GHG reduction.
years, and in that sector the highest priority is placed on
rate culture such as the one Mr. Matsumoto just touched
stakeholders’ expectations.
For example, they are able to internally calculate climate
safety. As such, a “fail safe” culture, where when in doubt
upon will play a key role in ensuring that such an incident
change-related data. However, many SMEs do not possess
the safe option is selected, is firmly embedded throughout
does not repeat itself. I will continue to pay close attention
Sakurai I directly speak with business leaders from
the know-how required to calculate such data. SMBC
the industry. I have actually experienced situations where
to the progress being made regarding this issue by putting
around the world and third-party experts to keep myself
Group is paying close attention to a wide variety of such
onsite staff protected customers’ safety and prevented
forward very specific questions regarding important topics
informed so that I am able to reflect what I have learned in
needs and launched “Sustana” and other GHG reduction
major accidents by taking the appropriate actions based
such as the method used to conduct employee surveys
the running of SMBC Group as one of its outside directors.
services to assist clients.
on this mindset.
and how communications are conducted between staff
I will continue to devote myself to expanding my knowl-
I am also focusing on how committed top manage-
Patience and perseverance are required to success-
and their supervisors. I will continue to monitor the sit-
edge so that I can provide input that will help SMBC Group
ment is to addressing climate change, and I believe that
fully instill a culture in which individuals uphold the values
uation with both warmth and strictness as, looking from
develop from the standpoints of sustainability and gover-
incorporating “Creating Social Value” as a non-financial
that are essential to the existence of their organization.
within SMBC Group, I feel that SMBC Nikko is definitely
nance at a level that adheres to global standards.
indicator in determining executive compensation is a large
I have witnessed the employees of SMBC Nikko take to
changing for the better.
step forward. As an Outside Director, when SMBC Group
heart their CEO’s message and work together to ensure
Ito As both Ms. Sakurai and Mr. Matsumoto pointed out,
acquires a company though M&A, I also place particular
that such an incident will never occur again. If such efforts
Matsumoto At the start of today’s round-table discussion,
each and every one of SMBC Nikko’s employees must work
importance on its vision regarding social value and whether
continue, I believe it is possible for the required culture to
I mentioned that contributing to its stakeholders is one of
to spread and embed a healthy risk culture in order for the
it is consistently implementing initiatives aimed at address-
take root. I have high hopes for SMBC Nikko as it is not un-
the key responsibilities of a megabank. As the Chairperson
preventive measures to succeed. We will continue to reflect
ing climate change.
common for a better result to be produced due to pausing
and thinking about matters in the process of overcoming
Ito The final topic I would like to discuss today is com-
a crisis.
pliance issues such as the market manipulation incident
of the Audit Committee, I pay close attention to whether
the opinions we receive in our business strategies as we
sound business management is being promoted/preserved
carry out the new Plan and strive to realize a sustainable
and to various facets of SMBC Group’s governance frame-
society. Thank you for your time.
038 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
039
Business Strategies for Creating Value
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Business Strategies for Creating Value
042 Group Structure
044 Retail Business Unit
048 Wholesale Business Unit
052 Global Business Unit
056 Global Markets Business Unit
060 Using Digital to Create the Future of Finance
064 Key Measures to Drive SMBC Group’s Future Growth
066 Multi-Franchise Strategy, Overseas Securities Business
070 Olive
076 U.S. Digital Bank
080 Creating Social Value to Achieve Sustainability
090 Human Resource Strategies to Support Value Creation
098
People who Embody Our Five Values
040 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
041
Business Strategies for Creating Value
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Group Structure
SMBC Group is a global financial group that develops
operations in a wide range of fields, including bank-
ing, 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.
Net Business Profit by Business Unit in FY2022
Retail
¥ 221.6 billion
12
Wholesale
¥ 558.5 billion
32
Global
¥ 612.2 billion
Global Markets
¥ 374.2 billion
35
21
Group-Wide Business Units
and CxO System
Business
Business
Units
Units
Retail
Retail
Wholesale
Wholesale
Global
Global
Global Markets
Global Markets
Banking
Banking
Leasing
Leasing
Securities
Securities
Credit Cards and Consumer Finance
Credit Cards and Consumer Finance
Other Business
Other Business
Sumitomo Mitsui
Sumitomo Mitsui
Banking Corporation
Banking Corporation
SMBC Trust Bank
SMBC Trust Bank
Sumitomo Mitsui
Sumitomo Mitsui
Finance and Leasing
Finance and Leasing
SMBC Nikko
SMBC Nikko
Securities
Securities
Sumitomo Mitsui
Sumitomo Mitsui
Card Company
Card Company
SMBC
SMBC
Consumer Finance
Consumer Finance
Japan Research
Japan Research
Institute
Institute
Sumitomo Mitsui DS Asset
Sumitomo Mitsui DS Asset
Management
Management
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
Head Office (CxO System)
Head Office (CxO System)
CFO
Chief Financial Officer
CSO
Chief Strategy Officer
CRO
Chief Risk Officer
CCO
Chief Compliance Officer
CHRO
Chief Human Resources Officer
CIO
Chief Information Officer
CDIO
Chief Digital Innovation Officer
CSuO
Chief Sustainability Officer
CAE
Chief Audit Executive
042 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
043
Business Strategies for Creating Value
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Retail Business Unit
The Retail Business Unit consists of the top-class companies in the banking,
securities, credit card, and consumer finance industries. We are addressing the
financial needs of all individual customers through services capitalizing on the
Group’s comprehensive strength, striving to develop the No. 1 Japanese retail
finance business chosen by customers.
Net Business Profit by Business Unit in FY2022
Contribution to Consolidated Net Business Profit (FY2022)
Retail
¥ 221.6 billion
12
Wholesale
¥ 558.5 billion
32
Gross profit (JPY bn)
Expenses (JPY bn)
Base expenses (JPY bn)
Global
Net business profit (JPY bn)
ROCET1*2
¥ 612.2 billion
RwA (JPY tn)
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figures exclude provision for losses on interest repayments, etc.
35
The Retail Business Unit possesses the leading
Global Markets
business foundation in Japan in its principal
business areas, including wealth management,
¥ 374.2 billion
payment service, and consumer finance,
backed by high-quality in-person consulting
capabilities and advanced payment and
FY2022 Results
YoY*1
1,150.2
933.3
702.2
221.6
11.0%
13.3
(14.0)
+0.7
(38.1)
(13.5)
+0.8%
+0.6
In this context, we have been quick to imple-
ment measures to respond to changes in the
business environment, such as expanding the
functions of SMBC Direct, developing branch-
es exclusively for retail customers, and intro-
ducing the SMBC Elder Program.
21
finance products and services.
Under the new medium-term manage-
Although each business was affected
ment plan, we will differentiate our wealth
by the COVID-19 pandemic and other factors
management business by building a group-
during the previous medium-term manage-
based asset management business model to
ment plan, the asset management business
strengthen our competitiveness and increase
saw the balance of fee-based AUM increase
our presence in the market. Moreover, by
by ¥4 trillion more than planned, and the
transforming our retail business to a digital
settlement and finance business caught
model based on Olive, we will expand our
up with the plan with a ¥10 trillion increase
customer base nationwide and provide prod-
in purchase transaction volume. Card loan
ucts and services on a group basis. We aim to
balances, which had declined with the effects
become “Japan’s No. 1 retail financial group
of the COVID-19 pandemic, began to increase
with a sustainable operating foundation” by
year-on-year in FY2022.
expanding our market share in each business,
The retail business environment has also
and improving convenience and reducing
changed dramatically with the acceleration
costs through digitalization, through the
of cashless and digitalization, the shift from
development of hybrid strategies that leverage
savings to investment, and the increasing need
“digital” and “the human touch.”
to prepare for the era of the 100-year lifespan.
Takashi Yamashita
Senior Managing Executive Officer
Head of Retail Business Unit
044 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
045
Business Strategies for Creating Value
Retail Business Unit
PRIORITY
STRATEGY
PRIORITY
STRATEGY
Building a group-wide business for high-net-worth
individuals in order to become the market leader
in high-net-worth individual transactions
We will provide total consulting services leveraging the
combined strength of the group through collaboration
between banks, securities firms, and trust companies
in order to meet diverse needs such as advanced
portfolio proposals, inheritance and succession, and
business loans.
For affluent customers such as corporate own-
ers, we will enhance our responsiveness and approach
to customer needs and expand our market share by
strengthening cooperation between corporate and
retail sales and group companies.
In the inheritance business, SMBC Nikko Secu-
rities is strengthening its ability to respond to testa-
mentary trust and estate planning needs by similarly
strengthening cooperation, and the Company is
moving forward with asset consolidation and acquiring
transactions among the next generation.
SMBC and SMBC Trust & Banking are also
advancing proposals for currency diversification by
utilizing the “PRESTIA” brand to address the risk of
customers’ assets declining in value due to inflation,
currency depreciation, and other factors.
Expanding market share in the payments business
In light of the acceleration of cashless and digitaliza-
tion during the COVID-19 pandemic, we are promoting
the standardization of mobile payment, where pay-
ments, procedures, and services are completed on
mobile devices. We are also aiming to attract users
through convenience and benefits by enhancing
added value through partnerships with non-financial
services. For our business customers, we are promot-
ing the introduce of multi-device “stera terminals”
and “stera transit” for public transportation in order to
respond to a variety of usage scenarios. We will also be
improving convenience and benefit through the use of
V-points, SMBC Group’s shared point system, includ-
ing through external partnerships.
In consumer finance, we are responding to a
greater range of customer needs, such as financial
needs spurred by the recovery of consumer spending
and use of payment solutions and the digitalization of
processes.
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
（年度）
計画
AM* & Foreign Currency Balances
(JPY tn)
3-year increase
+JPY 5 tn
13.0
Mar.23 Mar.24
Mar.25
Mar.26
* Mutual funds, fund wraps, etc.
（年度）
計画
AM* & Foreign Currency Balances
Sales Handled
(JPY tn)
AM* & Foreign Currency Balances
(JPY tn)
20
(JPY tn)
50
15
20
40
計画
3-year increase
+JPY 5 tn
3-year increase
+JPY17 tn
3-year increase
+JPY 5 tn
13.0
（年度）
10
15
30
20
5
10
10
0
5
0
0
30.2
13.0
Mar.23 Mar.24
Mar.25
Mar.26
’22
’23
’24
’25
(FY)
Mar.23 Mar.24
Mar.25
Mar.26
Sales Handled
Finance Balance
(JPY tn)
Sales Handled
(JPY tn)
50
(JPY tn)
3
40
50
2.47
30.2
3-year increase
+JPY17 tn
3-year increase
+JPY 0.5 tn
3-year increase
+JPY17 tn
30.2
’22
’23
’24
’25
(FY)
Mar.23 Mar.24
Mar.25
Mar.26
’22
’23
’24
’25
(FY)
Finance Balance
(JPY tn)
Finance Balance
3
(JPY tn)
2.47
3-year increase
+JPY 0.5 tn
3-year increase
+JPY 0.5 tn
2.47
Mar.23 Mar.24
Mar.25
Mar.26
Mar.23 Mar.24
Mar.25
Mar.26
20
15
10
5
0
30
40
2
20
30
10
1
20
0
10
0
0
3
2
2
1
1
0
0
PRIORITY
STRATEGY
Transformation into a digital model centered on
“Olive”
As cashless and digital transactions grow more
pervasive, we are developing a new business model,
one based on mobile-app transactions rather than
in-store transactions. Through Olive, which seamlessly
integrates bank account, card settlement, finance,
securities, insurance, and other functions digitally, we
will provide new integrated financial services to retail
customers nationwide.
While day-to-day procedures will be handled
digitally at the customer’s convenience, the digital
channel will be complemented by brick-and-mortar
stores operated by a small number of staff in easily
accessible business locations. We will pursue a hybrid
model of digital and physical services through an
“integrated group channels” approach that brings
together consultants from the banking, securities, and
trust sectors for high net-worth customers.
For more information about Olive, see pages 070 and 106.
Store (Aeon Mall Atsuta)
Initiatives to Create Social Value
By solving various issues related to our customers’ money, we are supporting abundant and safe lifestyles for
all generations.
In order to provide our customers with peace of mind and comfort in the era of 100-year lifespan, we are
offering the “SMBC Elder Program” and “SMBC Digital Safety Box,” in which concierges respond to custom-
ers’ non-monetary concerns and requests, and the “Family Network Service,” an information sharing appli-
cation facilitating preparation against various family risks. In addition to financial services, we will continue to
expand our service lineup in non-financial fields to support health, security, and a life worth living.
We are also focusing on financial and economic edu-
cation activities on a group basis, leveraging the knowledge
and expertise of each group company. Based on the SMBC
Group Statement on Sustainability, SMBC Group has set
a KPI of providing financial and economic education to a
total of 1.5 million people between FY2020 and FY2029.
We will continue to expand the scope of the program to
include schools, workplaces, and facilities for the elderly,
while contributing to achieving a society in which everyone
can obtain correct knowledge about money and live with
peace of mind.
Joint Seminar by SMBC and SMBC Consumer Finance
at a High School in Ehime Prefecture
046 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
047
Business Strategies for Creating Value
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, payments, M&A advisory, leasing and real estate brokerage
services through a Group-wide effort.
Net Business Profit by Business Unit in FY2022
Retail
Value Creation at SMBC Group
¥ 221.6 billion
12
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Contribution to Consolidated Net Business Profit (FY2022)
Wholesale
¥ 558.5 billion
32
Global
¥ 612.2 billion
Gross profit (JPY bn)
Expenses (JPY bn)
Base expenses (JPY bn)
Global Markets
Net business profit (JPY bn)
35
ROCET1*2
¥ 374.2 billion
RwA (JPY tn)
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figures exclude medium- to long-term foreign currency funding costs.
21
FY2022 Results
YoY*1
773.7
293.3
290.0
558.5
14.6%
31.2
+22.3
(9.3)
(4.3)
+43.6
+3.4%
+0.8
During the previous Medium-term Manage-
and (2) establishing a sales structure that fully
ment Plan, amid accelerating moves toward
utilizes digital technology, we aim to (3) con-
business restructuring by customers due to
struct a high ROE business portfolio.
the prolonged impact of the COVID-19 pan-
We will focus on three business areas in
demic and heightened geopolitical risks in
particular: “growth support,” which aims to
Russia and Ukraine, the Group as a whole aptly
capture major financial events by supporting
seized business opportunities for restructur-
various growth opportunities in the corporate
ing, etc. by proposing seasonal solutions, while
lifecycle, such as real estate business and
taking exhaustive control of expenses, result-
startup support; “transformation support,”
ing in a significant increase in net business
which supports corporate transformation,
profit. Furthermore, ROCET1 also landed high-
including sustainability and digital trans-
er than planned due to the promotion of high
formation; and “creation of new business,”
value-added and highly profitable businesses
which takes on the challenges of corporate
such as real estate business and LBOs, as well
payment services and supply chain business-
as a year-on-year decrease in credit costs.
es through the creation of digital channels
With the reversal of globalization, the end
in order to develop future pillars of business
of global monetary easing, the acceleration
from new angles.
of sustainability initiatives, and other para-
We will contribute to the development
digm-shift changes underway, it is necessary
and re-growth of the Japanese economy by
to move ahead with business transformation at
solving our customers’ ever-changing and
an even faster pace. In the new Medium-term
sophisticated business challenges, growing
Management Plan, by (1) creating and honing
sustainably in step with them.
a group edge by strengthening our expertise,
Left
Toru Nakashima
Deputy President and
Deputy President and
Executive Officer
Executive Officer
Co-Head of Wholesale
Co-Head of Wholesale
Business Unit
Business Unit
Right
Muneo Kanamaru
Senior Managing
Senior Managing
Executive Officer
Executive Officer
Co-Head of Wholesale
Co-Head of Wholesale
Business Unit
Business Unit
048 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
049
Business Strategies for Creating Value
Wholesale Business Unit
PRIORITY
STRATEGY
Creating and honing a group edge by
strengthening expertise
Consulting and execution capabilities to un-
derstand and resolve increasingly complex and
sophisticated customer needs while anticipating
paradigm shifts will become even more important
in the future.
In the new Medium-term Management
Plan, we will take on the challenge of creating
business in new growth areas and further en-
hance our consulting function by strengthening
our expertise and creating new edges, while
continuing to shift resources to existing growth
areas such as growth support and transformation
support, which were the subject of focus in the
previous Medium-term Management Plan, and
strengthening the group collaboration system to
expand solution proposals.
PRIORITY
STRATEGY
Establishing a sales structure that fully
utilizes digital technology
We aim to establish a new sales structure in order
to provide higher value-added solutions and fur-
ther strengthen advanced risk-taking functions.
Through the timely shift of resources to growth
areas, we will be strengthening both the “strong
front office” and the “highly specialized solutions
unit.” We will unlock resources by expanding
areas of business that can be completed digitally
through the creation of digital channels, data
utilization and the use of AI. We will use these
resources to strengthen our ability to respond
to global management issues in large corporate
transactions and to provide highly specialized
solutions and proposals tailored to business char-
acteristics in medium-sized corporate transac-
tions, thereby further enhancing our ability to
respond to our customers.
s
a
e
r
a
h
t
w
o
r
g
g
n
i
t
s
i
x
E
h
t
w
o
r
g
w
e
N
s
a
e
r
a
Growth support
Real estate
Startups
PE fund
Owner approach
Transformation support
Sustainability / Decarbonization
Digital transformation
Cashless
New business creation
Turnaround
Group corporate settlement
Asset backing / Management
Supply chain
Highly specialized solutions A digital approach
Large
enterprises
Medium-sized
enterprises
Small and medium
enterprises
Sector coverage
Real x Digital approach
Global / Banking and securities
partnership
Centralized online provision of
group company services
New risk taking /
Business creation
Utilization of data / AI
Digitalization of business processes
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
PRIORITY
STRATEGY
Building a high-ROE business portfolio
Changes are also occurring in the Japanese
financial market, such as expectations of higher
yen interest rates from the end of 2022. While
keeping these market anomalies in mind, we will
carefully assess mid- to long-term trends and
risks, and strategically invest assets in high-mar-
gin products such as LBOs, real estate, start-
ups and revitalization investment. We will also
strengthen the fee business of each group com-
pany by further deepening cooperation between
SMBC group companies and investing manage-
ment resources. In addition to these efforts to
improve margins and non-asset business, we will
also be taking on the challenge of asset-backed
business leveraging group companies’ assets and
functions.
SMBC Nikko
Securities
SMBC
Sumitomo Mitsui
Card Co.
Risk solution
product expansion
Risk-taking in
high-profit areas
Strengthen
merchant
business
SMBC Trust Bank
Strengthen real
estate brokerage
Sumitomo Mitsui
Finance and
Leasing Co.
Strengthen
non-asset
business
Initiatives to Create Social Value
In FY2022, we established the Sustainable Solutions Division to strengthen our ability to respond to environ-
mental and social issues and engage with our customers to support their decarbonization efforts. Under the
new Medium-term Management Plan, we will promote the expansion of sustainable finance, engagement
response, and various solutions to provide maximum support to customers who are working toward decar-
bonization, and, from a long-term perspective, we will also work to create a new business that holds and sells
renewable energy.
In addition, to support startup companies, we will enhance our financing capabilities to accommodate
our customers’ growth stages by enhancing our lending methods based on a new evaluation model and es-
tablishing a new fund for startups. We will pursue economic value through the development of a unified group
structure and contribute to Japan’s regrowth by revitalizing its startup ecosystems through collaboration with
academia, global companies, and large corporations.
Enhanced debt and
equity functions
SMBC
Group
Seed
Industry
Global enterprise,
large enterprise,
and
sector collaboration
e
t
a
L
Startups
E
a
r
l
y
Collaboration with
academia
Academia
Middle
Govern-
ment
Policy advocacy
(JPY bn)
60
40
20
0
Startup Investment and Loan Values
Three-Year Cumulative Total
JPY135 bn
29
’22
’23
’24
’25
(FY)
050 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
051
Business Strategies for Creating Value
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.
Net Business Profit by Business Unit in FY2022
Retail
¥ 221.6 billion
12
Wholesale
Value Creation at SMBC Group
¥ 558.5 billion
32
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Contribution to Consolidated Net Business Profit (FY2022)
Global
¥ 612.2 billion
35
Global Markets
¥ 374.2 billion
Gross profit (JPY bn)
Expenses (JPY bn)
Base expenses (JPY bn)
Net business profit (JPY bn)
ROCET1*2
RwA (JPY tn)
FY2022 Results
YoY*1
21
1,205.2
637.9
598.9
612.2
10.4%
46.3
+144.4
+71.0
+57.2
+114.9
+2.2%
+1.6
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figures exclude medium- to long-term foreign currency funding costs.
During the previous Medium-term Manage-
ing monitoring the growing impact of policy
ment Plan, despite the business environment
rate hikes in various countries on the real
remaining volatile due to the COVID-19
economy and the foreign currency funding
pandemic and the situation in Russia and
environment. In addition, we will continue to
Ukraine, we were able to significantly in-
focus on new high-growth, high profitability
crease gross business profit through flexible
areas such as upgrading our global CIB busi-
resource management. As a result, we also
ness, including deepening collaboration with
significantly increased net business profit and
Jefferies, creating group synergies, strength-
served as a growth driver for the entire group,
ening the multi-franchise strategy though eco-
even as we invested to expand operations,
system development, and launching a digital
such as strengthening our securities business
bank in the U.S.
and making upfront investments in our U.S.
To achieve this business expansion and
digital bank.
diversification, it is also essential to construct
We are also making steady progress with
an operating structure that makes maximum
initiatives aimed at mid- to long-term growth,
use of the knowledge of the entire group,
such as strengthening our global CIB business
and to upgrade the governance system to
by expanding our alliance with Jefferies, a
meet our stakeholders’ high expectations. In
U.S. securities firm, and increasing our in-
addition, alongside addressing social issues
vestments in countries in Asia that fall within
in countries around the world, as a Japanese
our multi-franchise strategy, and we feel that
bank we also strive to provide value to Japa-
these efforts have been met with a positive
nese society and businesses.
response.
Every one of us will take ownership and
Under the new Medium-term Manage-
strive to achieve quality growth by unflinch-
ment Plan, we will enhance our systems for
ingly facing change.
predicting and managing various risks, includ-
Left
Tetsuro
Imaeda
Deputy President and
Executive Officer
Co-Head of Global
Business Unit
Right
Keiichiro
Nakamura
Senior Managing
Executive Officer
Co-Head of Global
Business Unit
052 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
053
Business Strategies for Creating Value
Global Business Unit
PRIORITY
STRATEGY
PRIORITY
STRATEGY
Reinforcement of Global CIB and Global S&T
Leveraging the team that we built under the
previous Medium-term Management Plan, we
will further reinforce our cross-selling capabilities
by strengthening sector collaboration in terms
of coverage and enhancing our ability to offer
cross-product solutions that integrate banking,
securities, and derivatives. One example is the
strengthening of the strategic capital and busi-
ness alliance with Jefferies announced in April
2023. We will be expanding our collaboration to
include M&A advisory and equity-related ser-
vices, and will work with Jefferies to establish a
joint coverage structure.
See page 069 for more information on how we are
strengthening our partnership with Jefferies.
We will also create a flexible portfolio after
articulating the strategy for each customer
segment. With the aim of building a high-quality
Expand and deepen the U.S. business
We have positioned the U.S., the world’s largest
and most stable market, as our biggest growth
driver, and will continue to expand and diversify
this business.
In the wholesale business, which is one
area of focus, we will strengthen our global CIB
business through initiatives including collabo-
ration with Jefferies, etc., and also promote the
use of investor funds based on our competitive
edge in LBOs and infrastructure projects, etc., to
expand our business efficiently.
In addition, in order to flexibly capture
market revenues in response to changing mar-
ket conditions, we will strengthen our sales and
trading operations and enter the retail business
through the launch of a digital bank.
See pages 076 and 102 for more information about
our digital bank.
client base, we will strive to acquire new cli-
ents and tier-up in the sectors on which we are
focused, while at the same time reducing and
recycling low-profit assets such as project and
trade finance, as well as assets in regions with
low growth and excess competition.
Net Business Profit from Overseas
Securities
(JPY bn)
50
Net Business Profit from Overseas
Securities
40
(JPY bn)
49
49
April 2023
Strengthened capital and
business partnership
with Jefferies
22
April 2023
Strengthened capital and
business partnership
with Jefferies
22
27
27
’19
30
50
20
40
10
30
0
20
10
’22
’25
(FY)
Net Business Profit from Americas
0
Division
(USD mn)
’19
’22
’25
3-year increase
+500
Net Business Profit from Americas
2,500
Division
2,000
(USD mn)
(FY)
1,500
2,500
1,000
2,000
500
1,500
0
1,000
500
0
1,344
3-year increase
+500
CIB, etc.
1,344
CIB, etc.
Digital Bank
S&T
AM etc.
Digital Bank
S&T
AM etc.
’22
’25
’28
(FY)
’22
’25
’28
(FY)
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Geopolitical risks
New business areas
Market
fluctuations
Climate
change
Stricter financial
regulations
Proactive responses to market fluctuations and
overseas regulatory requirements
Enhancement of
corporate governance
Strengthening of risk
management functions
Reinforcement of
compliance
• Integrated strengthening of global operations centered
on Group CxO system
• Generation of resources by diligently streamlining operations
PRIORITY
STRATEGY
Building a resilient management foundation
Given the number of rapid environmental chang-
es currently taking place, we will closely monitor
warning signs and build a resilient management
foundation. In order to respond to the diversifi-
cation of our businesses, such as the implemen-
tation of our multi-franchise strategy and the
opening of our digital bank in the U.S., we will vi-
sualize the profitability of each business in terms
of ROE and net income, and will continue to
build a strong business portfolio by dynamically
reviewing asset allocation in response to changes
throughout the term of the Medium-term Man-
agement Plan. Moreover, as our business ex-
pands and diversifies, it is essential to strengthen
risk management and governance systems, and
upgrade operations. We will work as a single
global entity to build management infrastructure
that meets the needs of an increasingly complex
business environment.
Initiatives to Create Social Value
In the previous Medium-term Management Plan, we formed specialized sustainable finance teams in each
region, and worked to strengthen the Group’s overall pitching and solution capabilities through global collab-
oration. In February 2023, we structured US$600 million/€700 million in multi-currency green bonds for a
major U.S. chemical company to finance low-carbon hydrogen projects, including one of the world’s largest
green hydrogen projects. By implementing multiple initiatives that enhance and leverage our knowledge of
these advanced technologies, we have continued to maintain a strong presence and ranked second globally
for green loan initiatives by value in FY2022.
In the new Medium-term Management Plan, we
will continue to address various key issues such as the
Environment, Diversity, Equity & Inclusion (DE&I) and
Human Rights, and Poverty & Inequality. In the sustain-
able finance field, we will establish a global task force to
accelerate the consolidation of knowledge and expertise,
and develop an accompanying framework. We will also
continue to expand our financial services in countries
that fall within our multi-franchise strategy, including fi-
nancial and economic education at Bank BTPN and rural
microfinance at Fullerton India (now SMFG India Credit
Company). Furthermore, as our business grows more
diverse and complex, we aim to create an environment in
which our professional employees throughout the world
can leverage their diverse skills and values to play an ac-
tive role in our operations and feel fulfilled in their work.
(USD bn)
50
40
30
20
10
0
Sustainable Finance
2nd
1st
2nd
’20
’21
’22
(FY)
League Table (Green Loan)*¹
KPI
Number of microfinance borrowers*²
+800 K people
*1 Source: Dealogic
*2 Bank BTPN Syariah, SMFG India Credit Company
054 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
055
Net Business Profit by Business Unit in FY2022
¥ 221.6 billion
Retail
12
Wholesale
¥ 558.5 billion
32
Global
Value Creation at SMBC Group
¥ 612.2 billion
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
35
Contribution to Consolidated Net Business Profit (FY2022)
Global Markets
¥ 374.2 billion
21
Gross profit (JPY bn)
Expenses (JPY bn)
Base expenses (JPY bn)
Net business profit (JPY bn)
ROCET1*2
RwA (JPY tn)
FY2022 Results
YoY*1
457.8
112.5
110.0
374.2
16.7%
6.6
+49.2
+7.0
+7.8
+44.1
+1.8%
+0.1
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figures include internal risk capital related to IRRBB (Interest-Rate Risk in the Banking Book).
The Global Markets Business Unit is, as market
transition from a world of low inflation and low
risk professionals, committed to enhancing
interest rates to an entirely different stage.
risk-taking skills for our investment portfolio
We achieved profitability through flexible
while continuously supplying customers with
rebalancing, in combination with controlling
high level of value.
risk in both equities and bonds. At the same
To support these efforts, we are focused
time, we maintained stable foreign currency
on analyzing the various phenomena that oc-
funding to meet the funding needs of custom-
cur throughout the world based on the Three
ers. Meanwhile, in sales & trading, we sought
“I” s of Insight, Imagination, and Intelligence
to develop a full understanding of customer
in order to forecast the market trends that will
needs so that we could address these needs
emerge in the future. In short, we emphasize
by providing optimal solutions.
the capacity to discern the underlying essence
The current market environment fea-
of world affairs.
tures ongoing uncertainty about the future. In
Having risen since the second half of the
addition, customer needs continue to become
previous fiscal year, inflation remained high in
more diverse, as indicated by the advance-
FY2022 against a backdrop of various factors,
ment of the digitalization trend and growing
including global fragmentation. Interest rates
interest in social issues.
in many developed countries rose sharply, par-
In order to continue to create solutions
ticularly in the first half of FY2022, as central
our customers will choose, even in such an
banks focused on curbing inflation, but tempo-
environment, under the new Medium-term
rarily fell sharply in the second half of the year
Management Plan, we will maintain and
due to credit concerns following the collapse
enhance our DNA, our strength, while striving
of financial institutions in the U.S. It has been
to evolve through challenges in new fields and
a year of not only high volatility, but also of
constant self-reformation.
Business Strategies for Creating Value
Global Markets Business Unit
The Global Markets Business Unit offers solutions through foreign
exchange, derivatives, bonds, stocks, and other marketable financial
products and also undertakes asset liability management (“ALM”)
operations that comprehensively control balance sheet liquidity risks
and market risks.
Masamichi Koike
Senior Managing Executive Officer
Head of Global Markets Business Unit
056 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
057
Business Strategies for Creating Value
Global Markets Business Unit
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
PRIORITY
STRATEGY
Flexible portfolio management in response to
market changes
Overview of Portfolio Rebalancing
PRIORITY
STRATEGY
Development of robust foreign currency
funding base
Turning point
of trend
Carefully-crafted
risk control
Dynamic portfolio
rebalancing
Turning point of trend
The strength of the Global Markets Business Unit lies
in its ability to dynamically adjust its portfolio to maxi-
mize earnings by accurately capturing market trends
through proactive observation of market fluctuations.
By making use of the Three “I” s, each employ-
ee collects and analyzes information with regard to
various phenomena and thoroughly discusses these
phenomena with others. Then, they make positions
in accordance with the scenarios formulated through
this work, after which they review the results and
validity of these positions. The consistent application
of this iterative process is the only way we can hone
our ability to read the markets.
Amid the current uncertain environment, we are
placing an emphasis on risk control while taking on
the challenge of increasing the sophistication of our
portfolio management in preparation for upcoming
investment opportunities. Now, market attention is be-
coming focused on the BOJ’s monetary policy as well
as that of other central banks, and we will seek oppor-
tunities to build a portfolio with Japanese government
bonds from a medium- to long-term perspective.
PRIORITY
STRATEGY
Enhancement of capability to provide solutions
through marketable financial products
The Global Markets Business Unit is continuing to
accelerate the development of the functions essential
for responding to the risk-hedging needs associated
with customers’ businesses and balance sheets and
the risk-taking needs related to asset management
and investment activities.
Specifically, in order to meet our customers’
increasingly advanced and sophisticated needs, we
are strengthening our ability to provide tailor-made
proposals specific to each customer’s situation. We
will continue to provide comprehensive solutions to
our customers through the utilization of data and link-
ages with electronic platforms for foreign exchange
transactions.
We will also accelerate the promotion of our
securities business, particularly in the U.S. and Asia,
and deepen our global collaboration to strengthen our
sales system, providing a one-stop shop for a variety
of products.
Utilize
data
Identify
risks
Improve
customer
satisfaction
Propose hedge solutions
Tokyo
U.S.
Global Collaboration
Fixed Income
Equity Forex
Expansion of Lineup
Cash Securities &
Repo
Derivatives
EMEA
Asia
＄
Fed
Global ALM
€
ECB
Effects of monetary tightening
Change in credit cycle
¥
Increasing
Correlation
BOJ
• Effective management for cash flows and collaterals
• Responsive strategy for medium-to long-term funding
The Global Markets Business Unit is taking steps re-
garding foreign currency funding to balance ensuring
stability with pursuing cost efficiency so that we can
continue to support customers’ businesses through
lending. For this purpose, we make funding strategies
by taking into account the structure of SMBC Group’s
balance sheet and the market condition, along with
seeking to expand our investor base and diversify
funding methods.
Initiatives toward these ends have included,
in addition to regular foreign currency denominated
straight bonds, issuing covered bonds and utilizing
cross-currency repo transactions.*
Going forward, we will continue to face head-
winds in the funding environment, in the form of
continued restrictive monetary policy in regions such
as Europe and the U.S., ensuing potential credit
concerns among financial institutions, and the emer-
gence of geopolitical risks, but we will respond pro-
actively from a long-term perspective, and promote
stable balance sheet control.
* Cross-currency repo transactions are forms of foreign currency funding
backed by Japanese government bonds, etc.
Initiatives to Create Social Value
The Global Markets Business Unit regularly issues green bonds from which procured funds are only used for
eco-friendly projects, such as renewable energy projects.
In October 2015, we became the first Japanese private financial institution to issue U.S. dollar-denom-
inated green bonds. In the years that followed, we proceeded to expand the scope of investors served with
our green bonds, becoming the first private company in Japan to issue green bonds for individual investors in
December 2018 and then issuing green bonds through a public offering in the U.S. in January 2021. To date,
we have floated seven green bond issues in Japan and
overseas, procuring a total of approximately US$3.1 billion.
In these issues, we have carefully explained our sustainabil-
ity initiatives to investors to foster mutual understanding. In
December 2022, we also implemented our first green loan
financing.
SMBC Group possesses a strong track record in proj-
ect finance for domestic and overseas renewable energy
projects such as for solar and wind power generation. Going
forward, we will continue to make further contributions
to market growth and to environmental preservation as
Japan’s leading issuer of green bonds.
058 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
059
Business Strategies for Creating Value
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Using Digital to Create
the Future of Finance
The new Medium-term Management Plan sets out two directions for SMBC Group’s digital strategy:
“Beyond & Connect” and “Empower Innovation,” and further develops the existing strategy with the
aim of “evolving into a global digital solution provider that also creates social value by creating new
businesses on the basis of the trust held in SMBC Group.”
Specifically, through digital’s power to transcend and connect beyond boundaries (Beyond & Con-
nect), we will work with a variety of partners to provide solutions that transcend business categories,
companies, regions, etc., to further improve customer convenience and create and nurture businesses
that will serve as the foundation of SMBC Group in the future.
At the same time, in doing business, it is necessary to look at the state of global digitization,
including in emerging economies, in the context of a complex and rapidly changing environment involv-
ing a variety of events, such as the advance of technological innovation, demographic change, shifting
values, and the rise of geopolitical risk. In order to respond to our customers’ ever-changing needs amid
a transforming business environment, we will pivot the direction of our businesses according to the
situation, transforming our business models to fit current trends.
In addition, the creation of new businesses requires that we strengthen our framework for acceler-
ating innovation (Empower Innovation). We will also accelerate the creation of systems to generate new
seed businesses both within and without the company, by continuing our efforts to transform the com-
pany culture through initiatives such as “Producing new CEOs” and internal social networking, together
with the development of functions for the speedy creation of new businesses, such as establishing a
corporate venture capital (CVC) arm to strengthen open innovation structures on a global basis and
invest in startups.
Direction of SMBC Group Digital Strategy
Upgrading existing services
Expansion of business areas
Beyond & Connect
Existing business areas
SMBC Group
New business areas
Partners
External platforms
Accelerating innovation
Empower Innovation
Infrastructure improvements
Transforming company culture
Beyond &
Connect 1
Expanding and Evolving Digital Services
SMBC Group is expanding and
visits, facilitates communication with
evolving its various digital services
doctors and hospitals, and enables
under “Beyond & Connect,” one of
sharing of medical data. These initia-
the two arms of its digital strategy.
tives are offered to individual custom-
In this context, we are also focusing
ers through partnerships with various
on developing services in business
companies and municipalities,
areas that solve issues facing society
including PARK WELLSTATE Senri
as a whole and enrich lives, such as
Chuo, a senior residence operated by
healthcare, payments, and contracts,
Mitsui Fudosan Residential.
and some of our services function as
infrastructure for wider society.
In the medical field, we are
supporting individuals to lead rich
lives in the era of the 100-year lifes-
pan. In March 2023, our subsidiary
Plusmedi Corp. released “wellcne,” a
In the payments field, in July
new hospital visit support application
2023, a new company, BPORTUS,
incorporating an information bank-
was established through the merger
ing service leveraging the trust held
of two subsidiaries: NCore, which pro-
in banks in terms of the safety and
vides BPO services with cutting-edge
security of personal data. Connecting
ICT technology and know-how to
the application to a medical insti-
improve operational efficiency, and
tution’s electronic medical record
brees corporation, which provides
or medical affairs system reduces
PAYSLE, a paperless payment slip
time and congestion during hospital
service using electronic bar codes.
By combining the strengths of the
two companies, such as their ability
to solve problems related to stream-
lining billing operations and unique
technological capabilities, we will
accelerate the provision of efficient
and convenient payment solutions
that leverage digital technology.
Akio Isowa
Senior Managing Executive Officer
Group CDIO
Achieving synergies through integration
060 SMBC GROUP ANNUAL REPORT 2023
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061
Business Strategies for Creating Value
Expanding and Evolving Digital Services
In the contracts fields, in July
5,000 companies already using the
2022, SMBC CLOUDSIGN, Inc., an
system, it is one of the top-ranked
electronic contract service provider,
in Japan by number of users. Going
began offering a new service called
forward, we will continue to support
“AI Contract Management,” which
business-to-business transactions
uses AI to support corporate con-
by expanding functions to support
tract management. With more than
various aspects of contracting.
Beyond &
Connect 2
Initiatives for the Future
In addition to our current efforts to
we have started a proof-of-concept
advanced technology and knowledge
solve social issues, we are seeking
experiment to commercialize Soul-
in this field, we have established the
new business opportunities in the
Bound Token (SBT), which could be
“Co-Creation Lab,” an open organi-
Web 3.0 field, centered on tokens
called non-transferable NFTs, and
zation that will accelerate the study
and games, to create businesses that
are expected to be used for online
of initiatives to implement “gaming
will serve as the foundation of SMBC
personal identification, etc. We have
commerce,” combining games and
Group in the future, and are promot-
invited ideas from various depart-
business. In addition, in February
ing a variety of new initiatives with
ments within the Company and are
2023, a basic agreement was signed
partner companies.
pursuing business possibilities across
between 10 Japanese companies, led
In the tokens field, in July 2022,
the entire group.
by the TBT Lab Group, to create the
we began examining collaboration
In the games field, we are
“Japan Metaverse Economic Zone,”
with HashPort Group, which has
looking to provide new services in the
which aims to develop the entire
extensive knowledge in this field,
game-x-metaverse space. Together
industry by integrating real and digital
chiefly with NFTs. From April 2023,
with TBT Lab Group, which possesses
technologies.
hoops link tokyo 5th Anniversary NFT
User
Providing new experiences
Co-Creation Lab
Global
Expansion
Gaming
Business
Web 3.0/
Startup
Collaboration as a collaborative partner/
participation in the Lab
Providing business models in
the Game x Metaverse space
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Empower
Innovation
Creating Infrastructure to Advance Digital Business and
Transforming Company Culture
Under the other arm of the digital
and third SMBC Group in Asia, with
cate our digital transformation initia-
strategy, Empower Innovation, we
the aim of creating further added val-
tives.
are developing infrastructure to
ue. In addition, in August 2022, a VR
In May 2023, a condominium
accelerate innovation and expanding
space called “virtual hoops link” was
management DX service born from an
measures to achieve cultural trans-
constructed, recreating the “hoops
idea sent out by a young employee on
formation.
link tokyo” open innovation center in
the internal social networking service
In the infrastructure develop-
Shibuya, and is being used for various
“Midoriba,” and jointly developed with
ment field, we have been developing
purposes including voice and chat
NTT Data NJK Corporation, became
various systems, such as holding
interaction, events, meetings, and
the first project originating from our
CDIO meetings to support the com-
object displays.
internal social networking service to
mercialization of new digital busi-
In terms of cultural transforma-
be launched. A representative from
nesses through rapid decision-mak-
tion, we are fostering the bottom-up
the Corporate Sales Division heard
ing and resource allocation, and the
creation of the culture required for
about customers’ issues handling a
establishment of open innovation
creating new businesses, through
series of complex condominium man-
centers both in Japan and overseas.
such measures including the “Mi-
agement-related operations, which
In a new initiative, we are aim-
doriba” internal SNS, the selection of
prompted the representative to take
ing to create an ecosystem through
young presidents for digital subsid-
action on their own, embodying the
partnership with startups, and in May
iaries through the “Producing new
idea of “breaking the mold.” In July
2023, we established the “SMBC
CEOs” program, and open recruit-
2023, the president of BPORTUS, a
Asia Rising Fund,” a CVC with a total
ment for participation in specific
new company created by the merger
US$200 million together with an
new business survey teams. We are
of NCore and brees corporation, will
incubator fund, with the primary pur-
also taking measures to spread
be chosen through an internal recruit-
pose of investing in promising com-
company culture through two digital
ment process: initiatives not previous-
panies and with a focus on Asia. This
owned-media; “DX-link” and “Busi-
ly seen at SMBC Group are steadily
CVC will be linked to the multi-fran-
nessNavi,” and by hosting the “SMBC
taking shape, and we will continue to
chise strategy of creating a second
Digital Summit” event to communi-
accelerate this momentum.
Innovation hub
Strengthen ties with local startups at the Silicon Valley Lab and
Singapore office
An innovation hub also present in VR: Creating virtual hoops link
CDIO meeting
Establish a system to support the commercialization of ideas
through rapid decision-making
In-house investment funds
Establishment of a CVC together with an incubator fund to promote
investment activities in Asia
Infrastructure improvements
Decision-making
Business
ideas
CDIO
Meeting
Support bringing
ideas to life
Silicon Valley Lab
virtual hoops link
Creation of new businesses
Transforming company culture
Outbound media
Communicate SMBC Group’s philosophy and digital initiatives both
internally and externally
Producing new CEOs
Actively supporting internal startups and selecting young people to
serve as presidents
In-house SNS
Mentoring by people with experience in new businesses, and
operation of a community to support the commercialization of ideas
Launch of “Condominium Management DX,” the first new business
to originate from our SNS
062 SMBC GROUP ANNUAL REPORT 2023
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063
Industrial companies/Creators
●SMBCグループの理念やデジタルの取組を社内外に
発信
Business Strategies for Creating Value
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
SPECIAL CONTENT
Key Measures to Drive
SMBC Group’s Future Growth
P.066
1
Multi-Franchise Strategy
Overseas Securities Business
2
P.070
Olive
3
P.076
U.S. Digital Bank
SMBC Group has made a variety of investments to achieve growth that follows quality.
In the previous Medium-Term Management Plan, we invested in local financial institutions in India,
Vietnam, and the Philippines in addition to Indonesia, in which we have already invested, in order to
accelerate our Multi-Franchise Strategy targeting high growth potential areas in Asia. In the U.S., we have
made steady progress in building alliances that form the core of our strategy in overseas securities busi-
ness, and worked to enter digital consumer banking business. In Japan, we have formed a partnership to
strengthen online securities business, and that partnership also plays an important role in “Olive,” an in-
tegrated financial service for retail customers. Under new Medium-Term Management Plan, we will firstly
ensure that those investments become established businesses moving on the right track, and aim for their
profit contribution as a growth driver through creating synergies by value up of investee companies and
collaboration among SMBC Group.
Bottom-line profit contribution (after amortization of goodwill)
(JPY bn)
300
250
200
150
100
50
0
Invested
capital:
JPY 800 bn
o/w JPY 510 bn
invested
Digital
the U.S.
Asia
Aircraft leasing
’22
’25
’28
(FY)
064 SMBC GROUP ANNUAL REPORT 2023
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065
Business Strategies for Creating Value
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Key Measures to Drive SMBC Group’s Future Growth
Indonesia
Special Content
1
Multi-Franchise
Strategy,
Overseas Securities
Business
Efforts to Achieve the Multi-Franchise Strategy
India
In Asia, SMBC Group has positioned Indo-
financial services. At the same time, we are
nesia, India, Vietnam, and the Philippines
committed to contributing to the further
as target countries for our “multi-franchise
growth of the overall Asian financial sec-
strategy.” We are aiming to create a second
tor and reinforcing SMBC Group’s growth
and third SMBC Group by developing our
strategy in Asia.
full-line financial business, including retail, in
In the previous Medium-Term Man-
emerging Asian countries where high eco-
agement Plan, we made investments and
nomic growth is expected.
acquisitions in our partners, laying the
By deepening our cooperation with
groundwork for growth in countries targeted
our investment partners, we aim to build
in our multi-franchise strategy, including
a more granular support system for SMBC
India, Vietnam, and the Philippines. This
Group customers seeking to expand their
has set the stage for the future platform
business in Asia through the provision of
development.
local branch networks and a wide range of
Large enterprise
Corporate clients
Small, medium and
micro enterprises
High net-worth
customers
Retail clients
Mass and middle
class
I
n
d
o
n
e
s
i
a
I
n
d
a
i
i
V
e
t
n
a
m
P
h
i
l
i
i
p
p
n
e
s
2013
24%
2014
40%
2019
92%
• Commercial banking
• Securities
• Leasing
2021
74.9%
• Real estate loans
• Business loans
2022
Business partnership
2023
15% planned
• Commercial banking
• Digital bank
2015
35%
• Auto loans
• Unsecured loans
• Mortgages
• Unsecured loans
• Credit card
2021
49%
2021
4.99%
2023
20% planned
Investment ratio
• Commercial banking
• Auto loans
• Credit card
• Unsecured loans
• Digital bank
Vietnam
The Philippines
India
Vietnam
The Philippines
In November 2021, we acquired a
In October 2021, we acquired a 49%
In June 2021, we executed a 4.99%
74.9% stake in Fullerton India, now
stake in FE Credit, the leading local
investment in RCBC, the sixth largest
known as SMFG India Credit Compa-
consumer finance company that
local commercial bank in the Philip-
ny, a non-banking entity catering to
offers unsecured loans, installment
pines in terms of asset size. Since the
small and medium-sized enterprises
financing, and credit card services,
investment, we have been actively ex-
and individuals. Since this invest-
through SMBC Consumer Finance,
ploring opportunities for collaboration
ment, we have been leveraging the
making it an equity method affiliate.
with RCBC across a diverse range of
SMBC Group’s customer base to pro-
Since this investment, we have been
business areas. Through our partner-
vide solutions such as sales finance,
extending various local financial
ship with RCBC, we aim to enhance
dealer finance, and workplace loans,
services to SMBC Group’s customers,
the convenience of local banking
particularly to companies within the
broadening our product and service
transactions for SMBC Group cus-
manufacturing industry that have
lineup, and fostering collaboration to
tomers and bolster our product and
supply chains in India. In addition,
stimulate further growth for FE Credit.
service offerings. These include sus-
SMBC Group strives to enhance its
Moreover, we established a
tainable finance and project finance
presence in India and realize syner-
business partnership in May 2022,
for our wholesale customers, and
gies through the provision of funding
and a capital alliance in March 2023,
wealth management as well as mass
support and sharing of expertise
with VPBank, a co-shareholder of FE
market loans for our retail custom-
accumulated both domestically and
Credit and a rapidly growing com-
ers. Additionally, we have initiated
abroad. Furthermore, in a country like
mercial bank in Vietnam. Through our
collaborations on a broad spectrum
India where financial services are yet
partnership with VPBank, we aim to
of topics, such as improving opera-
to fully penetrate all regions, through
further solidify our business founda-
tional efficiency and leveraging digital
SMFG India Credit Company, we are
tion in Vietnam. This will be achieved
technologies. In order to further
contributing to financial inclusion
by providing services to customers
expedite these initiatives, we signed
efforts by extending our services to
who wish to expand their business
an additional investment agreement
rural areas where we have a strong
in Vietnam, as well as by leveraging
in November 2022 with the intention
presence.
the SMBC Group’s expertise in areas
of acquiring up to a 20% stake in the
such as trade finance, green finance,
company.
and credit cards.
Multi-Franchise
Strategy
in
ASIA
066 SMBC GROUP ANNUAL REPORT 2023
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Business Strategies for Creating Value
Key Measures to Drive SMBC Group’s Future Growth
Further Collaboration and
Synergy Creation
In Indonesia, we made the local com-
BTPN and establishing a framework
These include convening meetings
mercial bank, Bank BTPN, an equity
for group collaboration.
with the CEOs and key executives of
method associate in 2013, which
Beyond the one-on-one collabo-
each of our Asian investee compa-
was later consolidated and merged
rations and synergies between SMBC
nies and establishing the ‘SMBC Asia
with PT Bank Sumitomo Mitsui Indo-
Group and its investment companies,
Rising Fund’, a corporate venture
nesia in 2019 to acquire a full-line
we are also building a network and
capital entity that makes FinTech
commercial banking platform.
cooperative structure that includes
investments to further strengthen the
We plan to expedite the realiza-
our investee companies, aiming to
businesses of our partner companies.
tion of our multi-franchise strategy in
create further synergies.
India, Vietnam, and the Philippines
More specifically, we are imple-
by fully utilizing the expertise we have
menting various measures to rein-
cultivated through managing Bank
force SMBC Group’s platform in Asia.
Initiatives to Strengthen Collaboration with Investee Companies
SMBC Group is promoting collaboration among its
their mutual understanding by sharing information
investee companies with the aim of generating even
about their individual business environments, growth
greater synergies. In November 2022, we held the Asia
strategies, and initiatives in the digital domain. In the
Partners Executive Summit (APES) to facilitate mutual
consumer finance sector, a common area of operation
understanding and spark discussions about potential
for all these companies, Sumitomo Mitsui Card Com-
collaborations among these companies.
pany and SMBC Consumer Finance presented their
At APES, top management from Bank BTPN,
initiatives and provided an opportunity for the investee
SMFG India Credit Company, FE Credit, and RCBC
companies to meet and discuss specific collaborative
convened at the SMBC’s head office. They engaged in
measures. Following APES, knowledge sharing has
discussions with SMBC Group management to deepen
advanced across various domains, and the pace of col-
their understanding of the group’s vision, business
laboration has accelerated, both between SMBC Group
strategy, ESG initiatives, and governance policies.
and its investee companies, and among the investee
Further, the companies were able to enhance
companies themselves.
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Strengthening Our Overseas Securities Business
One of SMBC Group’s key focus
investment bank and capital markets
partnerships in M&A advisory, as well
areas is “strengthening Global CIB
firm. In April 2023, we announced
as equity and debt capital markets,
and Global S&T,” with a particular
plans to acquire an additional eco-
primarily catering to large invest-
emphasis on reinforcing our secu-
nomic stake of up to 15% in Jefferies.
ment-grade corporations in the U.S.
rities and investment banking busi-
Under an appropriate information
We aim to deliver industry-lead-
ness in the U.S., home to the world’s
management and governance
ing financial services by integrating
largest capital markets and M&A
framework, both firms will jointly
SMBC Group’s global customer
businesses.
work to propose financial solutions
base, lending, and debt capital
In July 2021, we entered into
to clients. These efforts will take
markets capabilities with Jefferies’
a strategic capital and business
place under the co-branding of both
exceptional industry insight, M&A
partnership agreement with Jeffe-
firms. In addition to existing areas of
advisory and equity capital markets
ries, a leading U.S. based full-service
collaboration, we aim to further our
capabilities.
SMBC Group’s Inorganic Strategy
Investment Target
We have set two axes: “investment to create a busi-
9.5% or more, and (3) manageable risk. Moreover, we
ness platform for medium to long-term growth” and
consider investment opportunities upon discussion
“high asset and capital efficiency investment that can
with outside directors and the CxO department, and
be expected to contribute to profits in the short term.”
adhere to strict discipline. In addition, we consider
Investment Criteria and Discipline
selling or replacing unprofitable assets or those
whose strategic importance has declined. In the
Based on our basic capital policy, premised on ensur-
previous mid-term business plan, we terminated our
ing soundness, of allocating capital in a way that bal-
partnership with Eximbank in Vietnam and began a
ances shareholder returns and investment for growth,
partnership with VPBank. We conduct flexible reviews
the three investment criteria are: (1) alignment with
of our portfolio, and aim for more capital-efficient
SMBC Group’s strategy, (2) an expected ROCET1 of
investments.
068 SMBC GROUP ANNUAL REPORT 2023
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Business Strategies for Creating Value
Key Measures to Drive SMBC Group’s Future Growth
Special Content
2
Olive
Aiming to open the most accounts
in Japan with Olive,
a world-first using Visa’s
new payment function
See page 106 for practical
examples of the FIVE VALUES
of the project members.
A roundtable discussion was held with members
involved in the development of Olive,
an integrated financial service for retail customers.
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Ryosuke Ito
Marketing Division
Sumitomo Mitsui Card Company (SMCC)
As project leader of “Olive,” oversees all aspects of
development, product planning, and promotion.
Takuya Ogawa
Product Planning and
Development Department
Sumitomo Mitsui Card Company (SMCC)
Engaged in product development for Flexible
Pay, Olive’s payment function, as well as card
design and UI/UX development of the application
interface.
Aisa Ikemoto
Retail IT Strategy Department
Sumitomo Mitsui Banking
Corporation (SMBC)
Engaged in planning and UI/UX development of the
SMBC App that features Olive.
Rie Sato
Retail Marketing Department
Sumitomo Mitsui Banking
Corporation (SMBC)
Engaged in product design, planning and develop-
ment for Olive bank account benefits.
Masaaki Kido
Corporate Planning Department
SBI Securities
Oversees progress management, promotions etc.,
relating to Olive’s development on the SBI Securities
side.
Christopher Bishop
Head of Consulting & Analytics
Visa Worldwide Japan (Visa)
Oversees coordination with the global development
team for the delivery of the new Visa-developed
payment functionality, including definition of
requirements and progress management.
070 SMBC GROUP ANNUAL REPORT 2023
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071
Business Strategies for Creating Value
Key Measures to Drive SMBC Group’s Future Growth
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Ito, SMCC:
them to participate as the main digital
Ito, SMCC:
Ogawa, SMCC:
Ito, SMCC:
It brings me great pleasure to welcome
brokerage.
“Flexible Pay” is a world-first service in
We were also very particular about the
Thanks to the help of many people both
all of you who have contributed to the
* SBI Securities’ service to build mutual funds with Sumi-
that it incorporates new payment func-
design of the credit card. We worked
inside and outside the Group, we were
development of Olive, which launched
in March 2023. Thank you all very
tomo Mitsui Card Company.
much. The Olive project began about
Kido, SBI Securities:
two and a half years ago, based on the
SBI Group and SMBC Group signed a
concept of offering SMBC and SMCC
basic agreement on strategic capital
products together in a single package,
and a business partnership in April
and the two companies have worked to-
2020. As part of this effort, we have
gether on the question of how to make
been providing partner services with
this a reality.
SMCC since June 2021, to offer credit
Chris, Visa:
tions developed by Visa, and we believe
with Visa’s designers, had numerous
able to launch “Olive” on schedule. For
that competitors will not easily be able
discussions with our in-house design-
me personally, I can honestly say that I
to follow suit. We are moreover confi-
ers, and redid the design more than 30
am relieved that we were able to
dent in both our technology and our
times before it was completed. We re-
successfully launch on schedule and
service, as the application integrates
ceived many highly positive comments
that so many customers have joined so
with SBI Securities, the number one
on the design following the launch, and
quickly. Can you tell us what your
online securities firm and our superb
we feel that it has become one of our
thoughts were about this project?
lineup of insurance products. In terms
strengths.
of promotions, SMCC already acquires
The background to this project’s
cards, V-points, and the Vpass App,
For Visa, the challenge was how to
the majority of its members online, and
Chris, Visa:
inception was the rapid digitization of
with steady results. In June 2022, a
improve the customer experience and
is using the know-how it has accumu-
There were many difficult moments
banking transactions. Whereas 90% of
comprehensive capital and business
make cashless transactions safer and
lated there to develop a combination
on the development side, but we felt
account openings were once handled
partnership was announced between
more convenient in Japan, which has
of mass-media and digital advertising.
a strong commitment from Mr. Ogawa
in branches, in the past few years
the two groups, and SBI Securities
a low cashless payment ratio among
With strengths in both merchandising
and everyone at SMBC Group to make
the percentage of accounts opened
has given their full participation to the
developed economies. Since we do
and promotion, the odds are in our
the customer experience even better.
digitally has increased to more than
“Olive” project. Despite being only
not have direct contact with end-us-
favor.
50%. To compete with online banks,
about six months away from launch,
ers, we believe the most effective way
They have a spirit of taking on new
challenges, and a culture of creating
which are rapidly expanding their
we were conscious that this project
for us to get over our challenges is to
Sato, SMBC:
precedent.
market share, Olive was born from the
was symbolic as an integrated capital
work together with our clients to drive
As a megabank group, we have earned
Ogawa, SMCC:
idea of offering a comprehensive range
and business partnership, which was a
the change. This project was of great
the trust of our customers over many
Kido, SBI Securities:
I have been involved in the launch of
significance for Visa because we had
the opportunity to contribute to Flexible
Pay, an innovative service offered by
SMBC and SMCC, our important clients
even on the global level.
of services from group companies and
sobering thought.
strong partner companies, with mobile
transactions as a core premise.
We have been working with SBI
Securities since 2021 on projects such
as “Sumitomo Mitsui Card Tsumitate-In-
vestment,”* which is used by a large
number of our customers. In order
to develop this into “Olive,” we asked
“Olive” was released on March 1, 2023 as an integrated
financial service for retail customers. It is an entirely
new service that seamlessly integrates bank account,
card payment, finance, securities, insurance, and other
functions within an application.
years, and we also have a system in
The SBI Group prides itself on its corpo-
credit, debit, and prepaid products, so I
place that allows customers to easily
rate culture of taking on new challenges
was conscious that Flexible Pay, which
consult with us at our branch counters,
with a startup spirit, and I am very
integrates these products into one, is
call centers, and chat rooms if they
surprised that even in the huge organi-
the culmination of my career. I think it
encounter problems, which I think is
zation that is SMBC Group, we can take
was this strong desire to ensure a good
an advantage that online-only banks
on the challenge of providing such a
product that allowed us to stick to our
cannot offer.
world-first service without compromise.
commitment to the product and its
design right until the very end.
Ikemoto, SMBC:
Ikemoto, SMBC:
That’s right. It’s important to be close
What you have both just said corre-
Sato, SMBC:
to our customers, and we have endeav-
sponds exactly with SMBC Group’s
With the help of the project’s members,
ored to create a design that would be
“Five Values,” and I am delighted that,
my desire to absolutely succeed togeth-
comfortable for both those who mainly
in hearing people outside the company
er, and to deliver “Olive” to our custom-
use the SMBC App for account trans-
talk about “Speed & Quality,” “Custom-
ers as soon as possible, grew stronger
actions, and those who mainly use the
er First,” and “Proactive & Innovative,”
each day. We were truly delighted with
Vpass App for credit card transactions.
our values are being conveyed.
the great response following the launch,
072 SMBC GROUP ANNUAL REPORT 2023
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Business Strategies for Creating Value
Key Measures to Drive SMBC Group’s Future Growth
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
and we will continue to listen to our
Ogawa, SMCC:
members of the same team, even when
Ikemoto, SMBC:
Chris, Visa:
Ikemoto, SMBC:
customers and improve our products
It is truly amazing that we have been
working for different companies.
There were many different opinions on
Going forward, we intend to develop
I check responses on social media and
so that customers will continue to use
able to bring forth a world first from
the design and text of the application,
functionality based on customer feed-
respond to app store comments. We
them.
Japan to the world of finance. We could
Kido, SBI Securities:
and many things were not decided until
back and needs, so that we can take
receive many comments such as “it
not have done it without the help of
The culture in meetings did not stand
the last minute. However, we were able
SMBC Group’s “Flexible Pay” to the
would be easier to read if the font size
Ikemoto, SMBC:
Visa. We are truly grateful for the
on hierarchy: we could exchange frank
to maintain our commitment, without
next level.
I’m pleased that through this project,
countless times you have listened to our
opinions with one other, saying things
compromise, because the “Customer
on the screen were a little larger.” We
will continue to improve the application
we have been able to add even more
requests for help while you worked not
like, “this is okay, this is impossible,”
First” concept of valuing customers
Kido, SBI Securities:
closely reflecting customer feedback.
superb services to the “SMBC App” and
only on this project, but on so many
and those discussions moved ahead
was embodied in every team member,
We have succeeded in creating a
“Vpass App.” We will continue to make
other projects around the world.
smoothly. It was so hard to believe we
and I believe we were able to create a
system that allows customers to easily
improvements, brining useful functions
and great design to even more people.
Kido, SBI Securities:
“Olive” is a project that symbolizes the
alliance between our group and SMBC
group, so we were under a lot of pres-
sure to make it a success. The “Olive”
project has been the biggest project in
my career, so I was quite nervous. Like
Mr. Ito, I feel a great sense of relief now
that the project is completed.
Ito, SMCC:
were from different companies.
product that delights our customers as
create an SBI Securities account by
Chris, Visa:
I always felt like we were working as
one team. I’ve been involved in a range
of projects in the past, but I think the
sense of unity we had as a team on this
project was remarkable.
Sato, SMBC:
Absolutely. During meetings, there was
always an attitude of discussing “how
a result.
Ito, SMCC:
opening an SMCC credit card or “Olive”
account, but we will continue to develop
the system to make it more seamless.
Finally, I would like to talk about what
We will also review the UI so that SMBC
“Olive” is aiming for going forward. The
Group customers feel more familiar with
“O” in “Olive” symbolizes “circulation,”
asset management, such as by provid-
while “live” expresses our customer’s
ing guidance on opening an SBI Secu-
lives. The name “Olive” embodies the
rities account together with promoting
idea that our customers’ lives will flow
“Olive” in SMBC storefronts.
Ogawa, SMCC:
more smoothly by using this product.
Olives are green, like SMBC’s company
Sato, SMBC:
Even now, we are planning new services
with the same volume as that of the ini-
Looking back, as the launch date drew
we can do it,” and I think the fact that
color, and the design also incorporates
We will listen carefully to customer
tial launch. We will continue to improve
Chris, Visa:
closer, challenges appeared one after
each company was able to maintain this
our desire to become a new company,
feedback at our branches, call centers,
“Olive” by shortening the cycle with
This was certainly a very memora-
another, and at times I wondered if the
mindset was a key factor in the success
while preserving SMBC’s traditions
and on social media, as well as to
which we reflect customer feedback.
ble project, both for Visa and for me
project was even possible. Yet I believe
of this project.
and the relationship of trust with our
requests from our branch employees,
personally, as it is the first Visa product
that one major factor in our successful
from Japan, and Flexible Pay is the
launch was everyone’s positive attitude,
world’s first solution using Visa’s new
that everyone demonstrated great pro-
payment function.
fessionalism in their respective roles as
Flexible Pay is a world-first service by using
a new feature developed by Visa that enables customer to
choose credit card, debit card, and points payment
(prepaid card) in a single card on an application in
addition to cash card function.
customers. As for numerical targets,
and reliably respond to those requests.
Ito, SMCC:
we have set the goal of acquiring 12
million “Olive” accounts, and 5 million
new cardholders per year, over the next
five years. This target is premised on
achieving top place for the number of
accounts opened in Japan. Could you
all talk about your efforts to achieve
this goal?
As everyone has said, there are many
small improvements, and we have re-
ceived customer feedback, so we would
like to steadily reflect those improve-
ments to make the product even better.
We are planning to launch new services
during FY2023, and I thank everyone
for their continued support.
074 SMBC GROUP ANNUAL REPORT 2023
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Business Strategies for Creating Value
Key Measures to Drive SMBC Group’s Future Growth
Special Content
3
U.S.
Digital Bank
Drive the growth of our
U.S. business by providing
new value through
Jenius Bank
See page 102 for practical
examples of the FIVE VALUES
of the project members.
In 2023, SMBC Group launched Jenius Bank, its U.S. digital retail bank. John Rosenfeld, President of Jenius Bank,
and Daisuke Tanaka, Managing Director and Joint General Manager, Strategic Planning Department, The Americas
Division, discussed the background, current initiatives, and future plans for Jenius Bank.
John Rosenfeld
Daisuke Tanaka
Jenius Bank
President
Head of Corporate Development, Deputy Head,
Strategic Planning Dept., Americas Division
Tanaka:
In 2018, I was appointed to the Strategic Plan-
Rosenfeld:
Thank you. While I have worked in U.S. consumer
ning Department, Americas Division, and the
topic of growth opportunities in the U.S. market
was already the subject of much discussion
across the team. During such discussions, we
gradually turned our attention to the idea of
establishing a digital retail bank knowing that in
order to realize future growth, we needed to
expand into new business areas while also
diversifying our USD funding capabilities.
At first, we considered the possibility of
investing in a U.S. regional bank. However, we
banking for over twenty years, I really was not
familiar with Sumitomo Mitsui Banking Corpora-
tion. When Tanaka-san first approached me
about joining the Jenius Bank project, I did some
quick research, and I was quite impressed. I also
realized that SMBC Group’s lack of presence in
the U.S. consumer market could actually create
some exciting competitive advantages. Tana-
ka-san and I discussed how we could build the
digital bank business truly from scratch, leverage
some of the latest technology, and grow SMBC
recognized that the importance of physical bank
into a stronger bank.
branches to consumers was decreasing due to
digitalization. The concept of a digital bank was
born based on our recognition of such issues,
which in turn led to the Jenius Bank project.
By positioning Jenius Bank as a division of
Manufacturers Bank, a U.S. subsidiary of SMBC
Group, we were able to launch Jenius Bank in
a relatively short period of time by leveraging
existing licenses. Furthermore, being able to work
with John on the project, especially given his
We would not be hampered by various
obstacles and challenges that typically plague
traditional banks. Traditional banks have ag-
ing infrastructure and technology, extensive
manual processing, and high cost branch and
ATM networks, that really impede their ability to
implement new digital technology. Additionally,
traditional banks rely heavily upon punitive fee
income to offset the high cost of their physical
infrastructure, which impacts their customer
experience in leading the digital bank of a major
experience negatively.
U.S. bank, was a big plus.
Furthermore, the COVID-19 pandemic
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
accelerated the introduction of digital services
ees with such diverse backgrounds that everyone
in all business sectors throughout the world. The
seemed to have different ways of doing things. At
banking sector was no exception, and consum-
first, this created some inefficiency and chal-
ers selecting to substitute trips to physical bank
lenges, but we recognized the benefits of diverse
branches with digital services acted as a tailwind
experience. We resolved this issue by creating
for the establishment of Jenius Bank.
“The Jenius Way.” We encouraged our team to
These challenges, combined with the accel-
share how they had done things in the past and
erated adoption of digital services we saw during
then we discussed the advantages and disadvan-
the pandemic, have created an opportune time to
tages of the various approaches. Together, we
enter the market with a new and innovative value
then decided how we would do things as a newly
proposition. Since our business model does not
combined team and called it “The Jenius Way”. It
include the high cost of a traditional bank, we can
allowed us to expedite internal decision making.
pass on that saving to our customers with more
I am confident that by leveraging the diversity of
favorable pricing and no fees, creating a very
our talent pool, we were able to produce optimal
competitive offering while preserving our margins.
solutions that made good use of a wide range of
Tanaka:
Leveraging its strengths as a digital bank, Jenius
ideas and opinions.
Bank has hired talent from throughout the U.S.
The team became very skilled in utilizing
and its approximately 270 employees perform
online meeting and collaboration tools, but we
the majority of their duties remotely. We devel-
recognized the importance of face-to-face en-
oped new ways of working remotely, which has
gagements and how they led to stronger working
proven to be a very compelling employee benefit,
relationships. Once a month, our management
while many other companies were forcing their
team conducts meetings in Jenius Bank’s U.S. of-
employees back into their offices. We had to be
fices. In addition, we conduct biannual meetings
flexible in our approach to ensure that our diverse
in which approximately 100 employees in leader-
talent pool could perform their duties in an effi-
ship positions take part to reaffirm the direction
cient and effective manner. As the project head,
of strategies and strengthen existing initiatives.
John always took great care to reflect employees’
Additionally, we started an all-employee call to
views in our plans and operations.
wrap up every week and recognize great work
Rosenfeld:
As we worked on the project, efficient consensus
across the team. This became a very popular
building between employees who were working
meeting and we have maintained it to this day,
remotely was the first key issue we had to over-
now with about 270 people attending each week
come. We had brought in so many new employ-
to celebrate each other’s successes.
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Business Strategies for Creating Value
Key Measures to Drive SMBC Group’s Future Growth
Tanaka:
Many employees decided to join Jenius Bank
because it was part of SMBC Group. They felt
that Jenius Bank presented a unique opportunity
to work in the digital bank sector using cutting-
edge technology while being backed by the
stable capital base of SMBC Group. The history
and strength of SMBC, combined with its focus
childbirth, children’s education, and the pur-
on long-term sustainable growth is distinct from
chase of homes and automobiles. We also plan
many U.S. companies that focus more on the
to expand our product line-up to meet the wealth
short-term. John, how do you feel about SMBC
management needs of customers that very often
Group’s corporate culture?
arise in later life stages. We have invested consid-
Rosenfeld:
SMBC Group’s Five Values resonated very strong-
erable time in conducting preliminary research
ly with me. “Customer First” and “Proactive &
so that we are able to properly address such
Innovative” play a key role in bringing the team
needs. Our designs are driven by the “Voice of our
together through a common mindset. These
Customers.”
values align perfectly with Agile ways of working
Rosenfeld:
Consumers have told us that they want to feel
and customer-driven iterative design processes,
more confident in the choices they have made
which have become foundational in many of
the most successful digital companies in the
regarding their finances. As we dove deeper, we
heard that people struggle simply to keep track
world. We create a prototype of an idea, test it
of all of their financial activities. On average,
with consumers, refine our approach based on
American consumers maintain accounts at 5.3
their feedback and then continually repeat that
different banks or financial services companies,
process.
which is different than many other parts of the
I’ve always liked to interact with people from
world. This is driven by the fact that there are
other countries and experience different cultures.
more than 4,500 different banks in the U.S., more
I’ve read books regarding Japanese business cul-
than any other country. This highly competitive
ture, and I was fascinated by how some of these
market makes it more compelling for consumers
cultural differences have driven such strong em-
to shop around for different financial needs, but
ployee work ethics and loyalty. Additionally, the
it also leads to far more complex financial lives.
approaches to build consensus, to drive sustain-
Managing transactions with multiple banks can
able growth, and to prioritize strength in compli-
be cumbersome and make it difficult to obtain a
ance and risk management over speed to market
clear picture of one’s financial situation.
or short-term returns, are very compelling.
Tanaka:
As we want to be our customers’ long-term partner,
Tanaka:
You brought up the key word “Customer,” and at
we have placed considerable focus on our mobile
Jenius Bank our target customers are individuals
app as it will be the primary channel with most of
that regularly use digital products and services as
our customers. We are building a “hub” for our
part of their everyday lives.
customers that will allow them to see all of their
Our vision is to become a platform that
accounts across multiple banks in one place. We
can meet the banking needs of our customers
can then leverage this wealth of data and ad-
throughout all their respective life stages. In the
vanced analytics to help our customers analyze
future, we will offer various products such as
their spending, refinance their high-interest debt,
home loans, automobile loans, and student loans
and optimize their savings. This all ties back to our
to meet the needs of customers for marriage,
Jenius Bank purpose, “to help you live a richer life.”
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Rosenfeld:
While we all agree on the enormous power of data
Tanaka:
The U.S. market is enormous, and its growth ex-
and the future potential of AI and machine learn-
ceeds that of Japan in terms of both deposits held
ing, we must not forget the significance of direct
by traditional banks with physical branches and
human interactions with customers. Some digital
deposits held by digital banks. While many U.S.
banks today do not even list a phone number on
consumers remain loyal to the larger bank brands
their website, instead they steer their customers
due to their perception of stability, there is a tec-
to automated services and chatbots. Once again,
tonic shift happening that is driving consumers to
we see this as an opportunity to differentiate from
investigate alternatives. As we have discussed,
competitors by “humanizing digital banking”. We
consumers are accepting more digital-only
have established a contact center where custom-
services than ever before. They are also finding
ers can contact a Jenius Bank expert 24 hours a
that the lower-cost business models may offer
day, 365 days a year by phone or chat. While this
different capabilities and far more competitive
is more costly than most digital and traditional
rates. We intend to capitalize on those growing
banks are willing to accept, we can afford to offer
trends, but it may prove to be a hard nut to crack.
this level of service based on the lower cost of our
As such, rather than focusing on winning market
infrastructure.
share directly from major banks given the fluid
Tanaka:
With the backing of SMBC Group, Jenius Bank
market conditions, we will focus on our target
was able to receive significant investments from
client base, present an innovative new value
the very beginning. Through such investments,
proposition, and develop a niche market.
we are attempting to launch multiple products by
Rosenfeld:
I agree with Tanaka-san. It is important to main-
establishing the necessary business foundations
tain a long-term perspective and ensure that we
in a short period of time. The start-up model
remain consistent with our strategy. Specifically
followed by Jenius Bank was made possible
speaking, in terms of services, we will start by
because we are part of a major corporation. With
offering individual loans and then expand to
the finance sector currently experiencing turbu-
include savings accounts, checking accounts,
lence, the backing of SMBC Group is a source of
debit cards, and access to ATMs. We also plan on
reassurance for Jenius Bank customers.
further expanding our product line-up to include
Rosenfeld:
Technology will be one of our core strengths, as
credit cards, automobile loans, home equity
we are building Jenius Bank on one of the most
loans, and student loans. We will bring all of this
modern and proven core platforms in the world.
together in an integrated customer experience
Our new real-time banking core is constructed
leveraging our capabilities, which will create a
such that different capabilities are provided as
network effect that continually increases the val-
compartmentalized micro-services that commu-
ue our customers realize with every new service
nicate with each other through a standardized
they accept from Jenius Bank.
set of API messages. This allows us to “plug-
Tanaka:
Jenius Bank is not a project to drive SMBC
and-play” new capabilities far faster and more
Group’s growth just in the U.S. Rather, it is a key
efficiently than almost any other bank today.
project in SMBC Group’s global strategy. We will
In traditional banking platforms, systems are
enhance the value of the entire SMBC Group by
generally siloed and hard-wired to one another,
sharing the know-how and expertise we obtain
making it very difficult and costly to implement
from the Jenius Project with other business units.
changes or take advantage of new innovation. In
contrast, Jenius Bank’s new platform and archi-
tecture enable us to rapidly refine our offerings as
customers’ needs continue to evolve.
Jenius Bank is a division of Manufacturers Bank. Member FDIC.
078 SMBC GROUP ANNUAL REPORT 2023
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Business Strategies for Creating Value
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Creating
Social Value to Achieve
Sustainability
Achieving sustainability
Create a society in which today’s generation can
enjoy economic prosperity and well-being,
and pass it on to future generations
Creation of social value
New materiality
Environment
DE&I/
Human rights
Poverty &
Inequality
Declining Birthrate
& Aging Population
Japan’s
Regrowth
Expansion/worsening of
social issues
Changes to the metrics for
measuring corporate value
DNA
Sustainability efforts of Mitsui and Sumitomo over long years
Message from Group CSuO
SMBC Group states that “we contribute to a sustainable society by addressing
environmental and social issues” in its Mission. In the SMBC Group Statement
on Sustainability, we commit to “creating a society in which today’s genera-
tion can enjoy economic prosperity and well-being, and passing it on to future
generations” so that we can solve social issues and create a better society.
SMBC Group has also formulated the new Medium-Term Management
Plan, the “Plan for Fulfilled Growth,” under which the creation of social value
is identified as a pillar of management in light of the expansion/worsening of
social issues and our impact on society being added as a factor for measuring
corporate value. With the formulation of our new Medium-Term Management
Plan, we revised the key issues (materiality) of SMBC Group for the first time
in about a decade. Of the multitude of social issues facing the world, we have
identified five issues to focus on in particular as our new materiality. These is-
sues are the Environment, DE&I/Human rights, Poverty & Inequality, Declining
Birthrate & Aging Population, and Japan’s Regrowth. We have also identified
10 goals for solving the five issues.
In order to achieve these goals, it is important to incorporate efforts for
solving our new material issues in the daily activities of SMBC Group and
steadily execute those efforts. This involves enhancing dialogue within the
company via internal social media and town hall meetings, as well as incorpo-
rating the creation of social value in the items for evaluating business divi-
sions and units, andi individual employees. Looking ahead, we will formulate
detailed action plans for each material issue and endeavor to set and disclose
impact-based KPIs that measure our impact on society. If we can visualize a
new metric for measuring our impact and our efforts for solving social issues
create a flow of money, which in turn will bring value back to us, then our
efforts for creating social value will spread throughout society. In order to
achieve such a society, it is important for the various constituents of society,
such as government, corporations, individuals, and universities, to work
together across boundaries. We at SMBC Group will contribute to building
the foundation and market for such cooperation as the point of connection
between our customers in diverse regions and industries across the world.
SMBC Group aims to create social value in order to solve social issues
while achieving economic growth, and make people living in such a society
feel happy, or in other words, contribute to growth for happiness. As Group
CSuO, I will make my best effort to provide leadership that enables the offi-
cers and employees of SMBC Group to work together to solve social issues in
accordance with our new Medium-Term Management Plan and newly defined
material issues.
Masayuki Takanashi
Executive Officer
Group CSuO
080 SMBC GROUP ANNUAL REPORT 2023
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Business Strategies for Creating Value
Creating Social Value to Achieve Sustainability
Promoting Sustainability
Sustainability Promotion System
SMBC Group has established the Sustainability Committee
and Corporate Sustainability Committee, responsible for
supervising and executing, respectively, to continuously
enhance our sustainability management.
In April 2022, we also established the Sustain-
ability Division in charge of planning and promoting both
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Transition Plan to Realize Net Zero by 2050
2021
2022
2023
2024
2025
2030
2040
2050
New Medium-Term Management Plan
corporate and business efforts, under the oversight of the
Group CSuO. This division gathers functions and knowl-
edge from across the group.
Scope 1 and 2
(operational greenhouse
gas emissions)
2030
Net Zero
Commitment
Switch to
renewable energy
SMBC head office
Switch to
renewable energy
Self-owned buildings
Achieve
mid-term target
Net Zero
Board of Directors
Sustainability Committee
SMBC Group Management Committee
Corporate Sustainability Committee
Group CSuO (Chief Sustainability Officer)
Sustainability Division
Corporate Sustainability Department
Company-wide planning and corporate responses
Sustainable Solution Department
Business planning and promotion
Business development, solutions planning and development
Efforts for Environment
Efforts Relating to Climate Change
SMBC Group earnestly strives to reduce greenhouse gas
emissions in line with the goals of the Paris Agreement and
support efforts for the transition and technical innovation
of our customers, so that we can actively contribute to
achieving net zero by 2050.
• Governance
The promotion of sustainability management at SMBC
Group is the responsibility of group CxOs including the
CEO, supervised by the Board of Directors, and adminis-
tered under a robust governance system. In addition to
our Board of Directors, internal committees such as the
Sustainability Committee supervise and debate measures
for tackling climate change. Concrete business strategies
for tackling climate change are executed upon being
deliberated and decided on in meetings such as manage-
ment committees. In June 2023, we revised our executive
compensation system to incorporate new quantitative
ESG indicators including reduction targets for our portfolio
greenhouse gas emissions in the medium-term perfor-
mance-linked compensation. We are also strengthening
our internal control in line with the movement for enhanc-
ing sustainability-related disclosure standards. We have
already completed the installment of an internal control
evaluation system for TCFD disclosure. In the future, we
plan to expand it to include other non-financial information
such as natural capital. As further enhanced efforts are
required to achieve net zero, we will accelerate our com-
mitment while strengthening our functions for supervising
progress.
For information on our executive compensation system, see page 118.
• Transition plan for achieving net zero
by 2050
SMBC Group aims to achieve net zero for our own green-
house gas emissions by 2030, and for our entire loan and
investment portfolio by 2050. We have systemized the
series of targets and actions in the transition plan.
Set mid-term
target
Power, Coal,
Oil & Gas
Established
phase-out
strategy
Scope 3
(portfolio greenhouse gas
emissions)
2050
Net Zero
Commitment
Coal
Loan balance for
coal-fired power
generation
Loan balance for
thermal coal
mining
Sustainable finance
Orange: Published in May 2023
Set mid-term
target
Steel, Automobile
Complete target
setting for
NZBA 9 sectors
Achieve mid-term
target
Net Zero
Established
phase-out strategy
Project finance
50% reduction
from Mar. 21
Zero Balance for
Project finance and
Corporate finance
tied to facilities
Zero Balance
OECD countries
Zero Balance
non-OECD
countries
¥30 trillion to
¥50 trillion
• Achieving Decarbonization via Support of
Customer Transitions
(1) Raised sustainable finance targets
Large-scale capital investment and technical innovations
for the medium to long-term reduction of greenhouse gas
emissions will be essential to achieve a decarbonized soci-
ety. As a financial institution, we recognize this as a busi-
ness opportunity for providing new financial products and
services. This is why SMBC Group has further enhanced
our sustainable finance efforts, and revised our targets for
FY2020 to FY2029 upwards from ¥30 trillion to ¥50 trillion.
We strictly define sustainable finance in accordance with
the green bond principles and social bond principles of the
International Capital Market Association (ICMA).
Sustainable Finance (Total)
(JPY tn)
Single fiscal year results
KPI
50
(2) Support via decarbonization solutions
We support decarbonization efforts of our customers via
various solutions utilizing digital technologies. The Sustana
cloud service developed by SMBC helps calculate and
reduce greenhouse gas emissions by importing various
types of data on the business of a customer. The service
has a function for recommending reduction measures in
addition to assisting disclosure, and since its launch in
2022, has been used by more than 1,000 companies. We
will continue to contribute to the decarbonization of our
customers by providing decarbonization support solutions
that leverage the strengths of SMBC Group.
2.8
’20
8.0
5.2
’21
15.0
7.0
’22
2.2
Portion considered green finance (single fiscal year)
3.4
1.4
30
10 years cumulative
(2020 to 2029)
(FY)
082 SMBC GROUP ANNUAL REPORT 2023
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Business Strategies for Creating Value
Creating Social Value to Achieve Sustainability
Efforts for Environment
• Efforts for Scope 3
We will sincerely strive to reduce our greenhouse gas emis-
sions in line with the targets of the Paris Agreement while
supporting the efforts of our customers towards transition
and technical innovation. We are committed to achieving
net zero for our Scope 3 emissions (portfolio greenhouse
gas emissions) by the year 2050. In FY2022, we set medi-
um-term reduction targets for the power, oil & gas, and coal
sectors for the year 2030, in order to draw a path to these
reductions. We also plan to set reduction targets for the
steel and transport (automobile) sectors in FY2023, thus
completing the setting of medium-term targets for the nine
sectors required by the NZBA (Net-Zero Banking Alliance),
an international banking initiative for achieving net zero.
Phase out strategy for coal sector
In order to reduce our portfolio greenhouse gas emissions,
we are proceeding with efforts to make our policy for
financing the coal sector stricter and formulate a phase
out strategy. More specifically, we have announced that
we will not support projects for expanding or creating new
coal-fired power plants or thermal coal extraction busi-
nesses, and set a goal of zero loan balance, as indicated in
the graph on the right.
• Efforts for Scope 1 and 2
SMBC Group has set a target of achieving net zero Scope
1 and 2 emissions (our operational greenhouse gas
emissions) by the year 2030. In May 2023, we set new
medium-term targets of a 40% reduction by FY2025 and
a 55% reduction by FY2026, compared to FY2021. Major
reduction efforts include switching our power use to re-
newable energy. In April 2023, we completed our switch to
renewable power at all our buildings in Japan and the head
office buildings of our major group companies in Japan. In
the future, we will further accelerate our global efforts for
the entire group, including our overseas offices.
Path to Scope 3 Reduction
2021 Announced commitment to net zero by 2050
2022
Set mid-term- reduction targets for power,
oil & gas, and coal sectors
Calculation of estimated sectoral emissions
First half of FY2023
2023
Set medium-term targets for steel and
automobiles sector
2024
Completion of mid-term target-setting in
NZBA 9 sectors
Loans for Coal-fired Power Generation
During FY2023
Complete mid-term reduction target-setting in majority of Scope3
(JPY bn)
Loans for Coal-fired Power Generation
Approx.270
Project finance
(JPY bn)
Loans for Coal-fired Power Generation
Approx.270
Approx.230
(JPY bn)
Approx.270
Approx.230
Approx.230
Approx.80
Approx.80
Mar. 22
Approx.80
Mar. 21
Mar. 21
Mar. 22
Loans for Thermal Coal Mining
Mar. 22
Mar. 21
(JPY bn)
Loans for Thermal Coal Mining
c.56
(JPY bn)
Loans for Thermal Coal Mining
c.56
(JPY bn)
c.56
Corporate finance
(tied to facilities)
Project finance
Corporate finance
Project finance
(tied to facilities)
Corporate finance
(tied to facilities)
Zero balance
FY3/41
(FY)
Zero balance
FY3/41
Zero balance
(FY)
FY3/41
Non-OECD countries
(FY)
OECD countries
Non-OECD countries
OECD countries
Non-OECD countries
OECD countries
c.20
c.20
Mar. 22
c.20
Zero balance
Zero balance
2030
Zero balance
2040
Zero balance
(FY)
Target sector
Target sector
Mar. 22
Target assets
Target assets
Target sector
Target sector
Mar. 22
Target sector
Target sector
Target assets
Target assets
2030
Zero balance
Thermal coal mining projects, and companies whose main business are
thermal coal mining
2040
Loans (total of corporate finance and project finance)
Thermal coal mining projects, and companies whose main business are
2040
thermal coal mining
Thermal coal mining projects, and companies whose main business are
Loans (total of corporate finance and project finance)
thermal coal mining
Zero balance
2030
(FY)
(FY)
Target assets
Target assets
Loans (total of corporate finance and project finance)
Scope 1 and 2 results and targets
(1,000 t-CO2e)
Scope 1 and 2 results and targets
177
(1,000 t-CO2e)
Scope 1 and 2 results and targets
167
Mid-term targets
40%
reduction
Mid-term targets
55%
vs FY2021
reduction
40%
baseline
Mid-term targets
vs FY2021
reduction
55%
baseline
40%
vs FY2021
reduction
reduction
baseline
55%
vs FY2021
vs FY2021
reduction
baseline
baseline
vs FY2021
baseline
2026
2025
177
(1,000 t-CO2e)
177
167
167
2021
2022
Net zero
2030
Net zero
(FY)
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
• Risk management
(1) Risk Appetite Framework (RAF)
In order to achieve our net zero target, we manage our
credit portfolio using the “Risk Appetite Framework” for
risk management over the entire group. In April 2023, we
added new climate related categories to the framework
and added our portfolio greenhouse gas emissions as
management indicators. We will manage our emissions by
sector and business division in line with the 1.5°C scenario.
For information on the risk appetite framework, see page 126.
(2) Risk management in financing
We have established a due diligence framework in order to
appropriately manage the impact that our business has on
the environment and society. When considering whether
to invest in large-scale projects, we conduct environmental
and social risk assessments based on the “Equator Prin-
ciples” and utilize non-financial information such as the
greenhouse emissions of the business operator and how it
responds to climate related risks.
Enhancement of Climate Related Risk Management
• Scenario analysis
In order to understand and manage the financial risks
associated with climate change, we conduct scenario anal-
yses of physical and transition risks. In regard to physical
risks, water-related disasters are expected to account for a
majority of natural disasters caused by climate change. We
calculate expected water level rises and the likelihood of
flooding in various climate change scenarios, and estimate
additional credit related costs that will be incurred by
SMBC lending to business enterprises. Regarding transi-
tion risks, we use the 1.5°C scenario to estimate additional
credit related costs that will be incurred by lending to
sectors which are expected to be highly impacted by the
transition to a decarbonized society. Through enhance-
ment of analysis methods and expansion of target sectors,
we will identify the financial impacts of climate change
in more detail and utilize this information to improve risk
management across SMBC Group.
Physical Risks
Hazard map
AI technology including
satellite imagery
2C scenario and 4C scenario (IPCC)
Traditional metrics
New metrics
Expected increase in credit-related costs (up to 2050)
(1) Portfolio
management
Risk-weighted assets
Portfolio greenhouse
gas emissions
(2) Account planning
Credit risk, etc.
(3) Data governance
Financial information
+ Climate-related risks
Transition risk and
others
Non-financial
information
Cumulative ¥67-85 billion
Transition Risks
Energy
Power
Automobile
Steel
1.5C and 3C scenarios (IEA and NGFS)
Expected increase in credit-related costs (up to 2050)
¥2.5-28 billion each year
Release of Transition Finance Playbook
T o accelerate global decarbonization, it is essential to finance the transition of hard-to-abate
sectors that have limited technical and economic alternatives for decarbonization and face
challenges in the transition to a low-carbon economy. That is why in May 2023, SMBC Group released
the Transition Finance Playbook, which defines criteria for supporting transition finance. This playbook
was created in accordance with national/regional policies and regulations in addition to international
guidelines for transition finance.
For details, refer to the SMBC Group website.
https://www.smfg.co.jp/english/sustainability/materiality/environment/business/pdf/tfp_en.pdf
Column
Transition Finance
Transition Finance
Playbook
Playbook
084 SMBC GROUP ANNUAL REPORT 2023
2021
2022
2025
2026
2030
Net zero
(FY)
2021
2022
2025
2026
2030
(FY)
SMBC GROUP ANNUAL REPORT 2023
085
Business Strategies for Creating Value
Creating Social Value to Achieve Sustainability
Efforts for Environment
Contribution to Conserving and Restoring
Natural Capital
We believe that in order to conserve the global environ-
ment, it is essential to achieve “nature positive” results to
halt and reverse the loss of natural capital, in addition to
tackling climate change. To achieve this, we consider a
framework for appropriately evaluating and disclosing risks
and opportunities regarding natural capital, and promote
various initiatives.
• Release of TNFD Report
In April 2023, we released the SMBC Group 2023 TNFD
Report, which details our concept of natural capital. This
report follows the framework recommended by TNFD to
analyze the relationship between our business and natural
capital and areas that we should focus on in particular, and
identifies risks and opportunities to indicate the direction
of our efforts regarding natural capital.
• Nature Positive Initiatives
FANPS*
An Alliance to support
companies’ efforts to
strengthen nature
positive initiatives
Mirai Farm Akita
Putting a sustainable
food and agricultural
management model into
practice
The Reforestation Fund
Investing in funds which
focus on afforestation of
South America
For details, refer to the SMBC Group website.
https://www.smfg.co.jp/english/sustainability/materiality/
environment/naturalcapital/pdf/tnfd_report_e_2023.pdf
* Finance Alliance for Nature Positive Solutions
Column
Furano Shizen Juku
S MBC Group has been supporting the activities of Furano Shizen Juku led by screenwriter Soh Kura-
moto since it was established. Since 2006, the Furano Shizen Juku has been involved in reforesting a
closed golf course in Furano, Hokkaido and conducting a field-based environmental education program to
encourage people to think about the global environment. The SMBC Group actively assists these efforts by
employees volunteering to help reforesting and sponsoring a university environmental program for young
people who wish to become teachers.
For details, refer to the SMBC Group website.
https://www.smfg.co.jp/furano/
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Efforts for DE&I / Human Rights
Promoting DE&I
More than 110,000 diverse employees work at SMBC
Group in Japan and 38 other countries and regions. In
order to enable employees with diverse backgrounds to
flourish and build a virtuous cycle to create new social
value, we have positioned DE&I/human rights as one of
our materiality.
For information regarding our employee DE&I, see page 096.
• Pro-bono projects
As one measure for achieving diverse work styles, we
promote pro-bono activities. This system allows some work
time to be used for such activities, and our employees can
utilize the specialized knowledge and skills that they gain
during work to help solving social problems, via projects
linked with NPOs and other organizations.
Respect for Human Rights
• Basic concept of human rights
SMBC Group fulfills our responsibilities for respecting
human rights of all stakeholders including our customers,
suppliers, employees, in accordance with our “Statement
on Human Rights.” We identify various negative impacts
that may have on the rights of our stakeholders and strive
to prevent, mitigate, and remedy them. Fulfilling our re-
sponsibilities for respecting human rights through these
efforts will help us gain the trust of society, and ultimately
improve our corporate value and contribute to creating
positive impacts on society.
SMBC
Group
Prevent, mitigate
“negative impact”
on human rights,
and enable remediation
Secure trust by
fulfilling responsibility for
human rights
Various
stakeholders
Customers
Employees
Investors
NGOs
Suppliers
• Enhancement of human rights due diligence
We conduct human rights due diligence in accordance
with international standards such as the “United Nations
Guiding Principles on Business and Human Rights”. In
specific terms, we identify and evaluate negative impacts
on human rights, incorporate measures for preventing and
mitigating negative impacts in our internal procedures,
track and verify the effect of measures, and disclose the
series of efforts, as well as building governance to support
our human rights due diligence and promoting awareness
within the company.
Done
Strengthened
Strengthened
Identify, analyze,
and assess impact
on human rights
Formulate control
measures in accordance
with assessment
Disclose
series of activities
Track the effectiveness
of control measures
Strengthened
Strengthened
• Disclosing information on human rights
In May 2023, we published a human rights report in order
to disclose appropriate and highly transparent information
on our efforts for respecting human rights. Based on this
report, we will continue to engage in dialogue with our
stakeholders, while striving to promote further activities
and expand information disclosure.
For details, refer to the SMBC Group website.
https://www.smfg.co.jp/english/sustainability/
group_sustainability/forrights/Human_Rights_Report_e.pdf
086 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
087
Business Strategies for Creating Value
Creating Social Value to Achieve Sustainability
Efforts to tackle Poverty & Inequality
• Efforts for the next generation of children
Poverty & inequality is one of the serious social issues in
Japan. Children born to poor families have fewer opportu-
nities for extracurricular learning and practical activities
than other children and are unable to develop their innate
talents. If these children cannot escape from poverty
before they become adults, their children will also be born
to poverty, in what is known as an intergenerational cycle
of poverty. SMBC Group aims to break that cycle by collab-
orating with other companies and NPOs.
Poverty ratio
of children
in Japan:
13.5%*
Opportunities
for education,
after school activities,
and taking on
challenges
Overcome
poverty
Income
disparities
remain
Cycle of poverty/inequality beyond generations
Provide opportunities to
break the negative cycle
Conduct impact assessment
NPOsNPOs
Companies
Companies
*Source: Ministry of Health, Labour and Welfare
• Efforts for financial inclusion
We are actively involved in promoting financial inclusion
with a focus on developing countries by expanding the pro-
vision of financial products and services to individuals who
lack bank accounts and businesses that have difficulty ob-
taining financial services. For example, we provide finance
to small and medium-sized businesses, expand financial
solicitation to individuals without bank accounts, promote
financial services that do not require a bank branch, such
as mobile banking, and provide financial literacy programs.
KPI
Number of microfinance borrowers
+800 K people
• Efforts for financial literacy programs
SMBC Group implements SMBC Group Financial Literacy
Programs in order to create a society where everyone has
correct knowledge and capabilities for decision making
regarding money and can live with security. In order to
further popularize financial literacy programs in Japan, we
collaborated in planning the financial literacy certificate of
the Kinzai Institute for Financial Affairs, as well as the joint
production of textbooks.
KPI
Financial literacy programs
provided to
1.5 million people
FY2020 to FY2029
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Efforts to tackle Declining Birthrate & Aging Population
In an age where people can live as long as 100 years, we
provide customers with various types of support in addition
to financial products and services, so that they can enjoy
living a healthy and meaningful life. For example, we have
support systems to meet the various needs of our custom-
ers, including non-financial needs. Some examples are the
SMBC Elder Program, which appoints dedicated concierg-
es to individual elderly customers to provide both financial
services such as banking and non-financial services of
partner companies, as well as the Family Network Service,
which enables customers to take care of elderly family
members via a smartphone app.
Build
Prepare
Eliminate
financial concerns
Build asset
Prepare for retirement
Enrich post-retirement life
NISA/iDeCo
Investment trust
Foreign currency
Insurance
Borrow
Mortgage/education loans
Gather
Convey
SMBC Digital Safety Box
Leave
Estate clearing/will trust
Secured
Affluent
SMBC Elder Program
Introduction of nursing care facilities, etc.
Support for
a more prosperous
life
Enjoy
Watch over
Family Network Service
Efforts for Japan’s Regrowth
We make full use of our financial functions to prompt
customer business model changes via diverse risk taking
and efforts such as support in DX, while also contributing to
new industrial development and strongly encouraging the
autonomous regrowth of Japan. In order to provide finance
solutions as a group in line with the growth stage of our
customers, we have set a KPI for investment and loans of
¥135 billion in startups over three years. We also support
the building of a startup ecosystem via entrepreneurial
assistance and business matching.
Column
Seed
Early
Middle
Later
Debt financing
Sophisticate lending method through new valuation model
Learning support programs in cooperation with major educational institution and NPO
S MBC Group collaborates with the Kumon
Kumon style education
Financial literacy program
Tablets for learning, etc.
Children’s
home
Institute Education to provide children in
children’s homes with Kumon style education,
financial literacy education by volunteer employ-
ees, and tablets for learning. We also collaborate
with Chance for Children to provide children from
economically challenged families with coupons
for a wide variety of extracurricular activities. In
addition to financial support, SMBC Group plans to
be involved in program planning and management
via employee staffing and pro-bono activities at the
organization.
NEW
Equity financing
Funding
SMBC Asia Rising Fund US$ 200 million
Enhance value of our investees in Asia by developing businesses with growing companies
NEW
Growth fund
Support to incubate unicorns in Japan
IPO support
Business
Business
co-creation
co-creation
Decarbonization
Decarbonization
Token business
Metaverse
Investment and loans for startups
¥135 billion in 3 years
¥300 million in
financial support
(over 3 years)
Employees
SMBC Group
Study Coupon
Cram school
Lessons
Innovation
Support for startups
Mirai Cross
• Provided mentoring to 400 startups (since 2015) • Support for business collaboration
Expand business matching network
Support for academia
Consulting / dispatching workforce
088 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
089
Human Resource
Strategies to Support
Value Creation
Takashi
Kobayashi
Senior Managing
Executive Officer
Group CHRO
The environment surrounding our
business is changing faster than
ever before, and together with the
growing importance of issues such
as “sustainability,” “digital,” “global,”
and “compliance,” our responsibili-
ties to society as a company are also
increasing dramatically.
In order to respond to increas-
ingly complex and serious social
issues and to meet increasingly
diverse and sophisticated customer
needs, SMBC Group has established
the basic policies of “creating social
value,” “pursuing economic value,”
and “further strengthening our
management foundations” in its new
medium-term management plan
beginning from FY2023.
Further diversification and
specialization of human resources,
the most important driving force
behind the execution of the new
medium-term management plan,
is also essential. To respond to the
transformation of our business port-
folio, we will make strategic efforts
to build a human resources portfolio
focusing on specialized personnel in
fields such as digital, compliance and
human resources able to drive global
business.
At the same time, employee
values and work perspectives are
diversifying alongside the transfor-
mation of society, and changes in the
relationship between companies and
employees are increasing the mobility
of human resources and intensifying
competition for talent. With a view to
SMBC Group’s sustainable growth,
we will continue to review our ap-
praisal systems and the way we treat
our employees in a timely and appro-
priate manner to ensure that we are
an “employer of choice,” and we will
further accelerate our transformation
from traditional HR operating styles,
including a review of operations that
emphasize age-based seniority.
We will further promote DE&I
with an emphasis on individuals
taking on challenges and growing au-
tonomously to create an environment
where diverse professional human
resources can demonstrate the best
of their abilities. We will also strive to
enhance the sophistication of human
resource management by establish-
ing a fair evaluation system based on
skills and performance.
We aim to achieve a virtuous
cycle in which employees repeatedly
take on challenges and grow, and
contribute to the development of
customers and society by providing
added value, thereby enhancing the
corporate value of SMBC Group.
As Group CHRO, I will personally
take the lead in taking on challenges
and transformation, and will increase
opportunities for dialogue with em-
ployees through town hall meetings
and seminars, and for internal com-
munication by the Human Resources
Department, so that the vision the
company and its employees are
aiming for can spread throughout
the group and our human resource
capabilities are maximized.
People in SMBC Group at a Glance*1
Number of SMBC Group employees*2
(March 31, 2023: Changes since March 31, 2020) 116,000
persons
Retail
Business Unit
Wholesale Business
Unit
Global Business
Unit
Global Markets
Business Unit
Head Office
Administration Unit
37,000 persons
9,000
52,000
1,000
17,000
(7,000) persons
persons
+1,000 persons
persons
+23,000 persons
persons
(0) persons
persons
(2,000) persons
EMEA
3,000persons
ASIA
47,000
persons
JAPAN
62,000
persons
+0 persons
+20,000 persons
(7,000) persons
AMERICAS
5,000
persons
+2,000 persons
Male
51.9%
50s and over
25.8%
Gender ratio
Age Ratio
Female
48.1%
40s
23.7%
20s
17.5%
30s
33.0%
New graduate recruitment
Percentage of female graduate hires
1,098
(Joined April 2023)
persons
37.5%
(Joined April 2023)
Voluntary retirement rate
Average years of service
4%
(FY2022)
15.4
(March 2023)
years
Total annual training costs
¥3.95
(FY2022)
billion
Number of participants in
training programs for young and
mid-career employees
26,000
(FY2022)
persons/year
Experienced hire rate
30.7%
(FY2022)
Absenteeism*3*4
2.9%
(FY2022)
Average training time
21
(FY2022)
hours/year
*1 Unless otherwise noted, data are for employees hired in Japan by the nine major group companies *2 Group, consolidated *3 Sumitomo Mitsui Banking Corporation, non-consolidated
*4 Percentage of employees with at least one day of absence or leave of absence in a year
090
091
SMBC GROUP ANNUAL REPORT 2023SMBC GROUP ANNUAL REPORT 2023Value Creation at SMBC GroupBusiness Strategies for Creating Value Corporate Infrastructure Supporting Value CreationBusiness Strategies for Creating Value Business Strategies for Creating Value
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Human Resource Strategies to Support Value Creation
Creating and Sharing SMBC Group Talent Policy
In addition to changes in the management and business
the best results as a team,” and “carry on, stay bold even
environment, employee values have become more diverse
if challenging,” based on the premise that they are mem-
due to generational changes in business leaders, promo-
bers of a global financial group with great responsibility to
tion of female empowerment in the workplace, and the
society and operate with a DE&I mindset, which actively
growth of experienced hire recruitment. In line with this
accepts values that differ from their own.
change, the relationship between companies and employ-
At the same time, we are pushing our employees who
ees is shifting from one of mutual dependence to one of
are working to realize these goals to achieve their dreams:
choosing and being chosen.
we provide an environment in which they can express their
Inheriting the business spirit and culture of Mitsui and
individuality, opportunities to contribute to customers and
Sumitomo, which have long emphasized people, character-
society by leveraging our business foundations, and sup-
ized by the lines “Mitsui is its people” and “Business is peo-
port for career development and growth.
ple,” and in order to continue being a place where diverse
In order to spread and implement this policy, we will
employees can gather, grow and play active roles, SMBC
be updating the criteria and items of personnel evaluations
Group clearly states in the “SMBC Group Talent Policy,”
in line with the SMBC Group Talent Policy, and further
“what SMBC Group want employees to be” and “employee
emphasize competence rather than hiring year or age for
Value Proposition.”
promotions and advancement.
Employees are expected to “carry out their respon-
sibilities as professionals,” “respect others and pursue
The SMBC Group Human Capital Management Model
In accordance with SMBC Group Talent Policy, we will
creation of human resources portfolio that is linked to the
advance measures that contribute to “1. Creating human
Group’s strategies while maximizing team performance.
resources portfolio that supports our strategy” and “2.
We are also realizing the aspirations of our employ-
Supporting employee growth and wellbeing” and “3. Max-
ees by creating an environment that maximizes individual
imizing team performance” for all employees in order to
employee performance within teams by supporting growth
maximize human resources capabilities through group and
and wellbeing.
global human capital management.
Maximizing human resource capabilities and realizing
In line with this, we will review our evaluation system,
both management strategy and employees’ aspirations will
compensation system, and other platforms, and further
lead to achieving our management philosophy, together
expand our human capital investment. For example, SMBC
with the creation of both economic and social value. In
is increasing its human capital investment in FY2023 by
addition, one of our ten goals for creating social value, “cre-
7% compared to the previous year. Moreover, we are not
ating a workplace where employees feel fulfilled in their
simply increasing the amount of investment, but investing
work,” increases the value that SMBC Group can provide to
strategically and effectively in focused areas while verifying
its employees, creating a virtuous cycle leading to further
the effectiveness of the investment using various profitabil-
human capital investment.
ity indicators we have defined.
This will ensure the achievement of management
strategy by optimizing staffing and investments through the
The SMBC Group Human Capital Management Model
HR Initiatives
Path to Value Creation
SMBC Group Talent Policy
What SMBC Group expects
employees to be
Professional
Collaborative
Agile
Employee Value Proposition
Be Yourself
Make a Difference
Build Your Career
1
Creating a human
resources portfolio that
supports our strategies
Human
capital
investment
2
Supporting employee
growth and wellbeing
3
Maximizing team
performance
Maximize
human
resources
capabilities
Realizing
our
management
philosophy
Realization of
management
strategy
Realization of
employees’
aspirations
Economic value
Social value
1.
Creating a Human Resources Portfolio
that Supports Our Strategy
A Human Resources Portfolio to Support Business
Strategy
SMBC Group will upgrade its human resources portfolio
management as a framework for securing the human
resources needed to achieve its business strategies and re-
allocating human resources to strategic areas. Specifically,
the business units, which have deep business knowledge,
and the human resources department, which possess-
es deep human resources knowledge, work together to
clarify the human talent requirements, such as experience
and skills needed, for each key strategic area. Identifying
gaps between the desired talent portfolio and the existing
portfolio of employees belonging to each business unit, the
Human Resources department expands mid-career re-
cruitment and enhances hiring process for new graduates
for a specific course. All employees are identified by their
human resources type based on their experience and skills,
and we strive to train and flexibly optimize the allocation of
human resources.
Leading Investment in Focus Areas
To ensure the “further strengthening of our business
foundations,” one of our business strategies, we will con-
tinue to secure human resources, especially in the fields of
Legal & Compliance, Risk Management, and IT. In order to
secure human resources with skills and expertise in digital
transformation and analytics to promote “business model
reform in domestic market” and global skills and know-
how to support overseas business development, we have
identified specific talent requirements for each business in
Japan, and plan to deploy a total of 1,400 employees over
three years through mid-career recruitment and internal
reallocation.
Plan for Human Resources Investment
in Focus Areas (3 years)
Business strategy
Further
strengthening of
our business
foundations
-Quality builds Trust-
Pursuit of
economic value
-Transformation & Growth-
Focus area
Legal & Compliance,
Risk Management,
IT
Human
resources
planning
(3 years)
+1,000 persons
DX,Analytics
+300 persons
Global
+100 persons
092 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
093
Business Strategies for Creating Value
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Human Resource Strategies to Support Value Creation
Acquiring Human Resources with Special Skills
Recruitment of people with special expertise
We hire experienced skilled persons and also strengthen
course-specific recruitment for new graduates to respond
career conscious candidates. For example, SMBC newly
established three courses focus on data science, cyber-
security and risk analysis. SMBC group is also expanding
such style of recruitment.
Certifying specialists
We have established a system to certify employees who
possess and demonstrate high levels of expertise in a par-
ticular area. There are 31 fields in SMBC’s expert/specialist
framework, and certified individuals are provided com-
pensation depending on their level. JRI’s IT Professional
Certification System certifies those with digital expertise to
contribute to the strengthening the digital domain through-
out the Group. Sumitomo Mitsui Card Company has further
established a Digital & Marketing Skill Certification System,
among other measures, to create an environment in which
human resources throughout the Group can maximize
performance.
Alongside these efforts, we will promote the further in-
dependent growth of employees with expertise, and secure
and develop professionals in each field by establishing a
framework that enables appropriate evaluation of expertise
in each field of business, with a focus on priority areas, and
a compensation system tailored to the characteristics of
the business.
Number of Persons Certificated Specialist
Number of certified
persons
Mar. 22
Mar. 23
1,230 persons
1,652 persons
Digital
343 persons
577 persons
Investment banking
419 persons
531 persons
Governance
108 persons
103 persons
2.
Supporting Employee Growth and
Wellbeing
Securing Human Resources to Support the Group’s
Development
SMBC Group expects all employees to be professionals
with a sense of responsibility in their respective positions
who are able to provide high value-added services. To
this end, we provide a wide range of growth opportunities
regardless of the time, place, or type of employment, and
strive to develop human resources that will support the
Group’s development.
Recruitment and training of human resources
For new graduate recruitment in FY2022, more than
2,000 employees participated in recruitment and public
relations events, providing students with opportunities to
understand our operations and company culture. For new
employee training, we send employees representing each
department as lecturers to help new employees under-
stand the wide variety of banking operations and to support
their career development. We are also planning to increase
the number of experienced hires, and are expanding our
recruiting methods to include referral recruiting, comeback
recruiting, and direct recruiting.
Mid-career Recruitment-related KPIs
FY2021
FY2022
Ratio
(Number of hires)
Ratio of management
positions
20.3%
(278)
15.8%
30.7%
(487)
18.0%
Target for
FY2025
30.7%
18.0%
We have also established a system for human re-
source development through on-the-job training, in-service
training, and self-development, and in addition to the
efforts of each group company on its own, we are actively
engaged in training and transfers for a wide range of talent,
from new recruits through to executive officers, on a group
and global basis. In FY2022, more than 10,000 people
participated in group joint training, and 1,100 people
participated in group joint new hire training. In addition, for
global talents development who leads global business, we
offer various training programs for employees from offices
around the globe, including the leadership training for
management-level employees delivered in partnership with
The Wharton School of the University of Pennsylvania in
the U.S., INSEAD in France and joint programs such as the
Global Japan Program where locally hired employees are
assigned to departments in Japan, with approximately 150
participants.
generating innovation through the formation of personal
networks and the broadening of values.
Framework to Support Independent Career Development
Independent career development
Each employee sets his or her own career aspirations
and goals, and develops his or her career independently
through feedback in interviews with supervisors and 1-on-
1 opportunities.
The Human Resources Department provides a total
of more than 7,000 hours of communication with employ-
ees annually. Among the 5,500 transfers made annually,
we actively transfer mainly young employees across divi-
sions and group companies, in so doing supporting career
development that takes advantage of SMBC Group’s broad
business foundations.
We also aim to achieve the best mix of “job-based”
and “membership-based” approaches, which are gaining
attention in Japan, while developing a framework for career
paths that allow each employee to develop his or her
expertise around a specific field of work.
We have various other systems in place to support
employees’ independent career development and career
diversification. For example, in addition to an open recruit-
ment system in which employees can apply for jobs and
posts within the Group, some Group companies promote
the development of human resources with business skills
and experience in diverse areas through an external dis-
patch system in which employees gain experience outside
SMBC Group for a period of time, and internal side-jobs
in which employees devote part of their working hours
to work in another department. Sumitomo Mitsui Card
Company and SMBC Finance Services also allow side-
jobs, including employment at other companies, with the
aim of supporting independent pursuit of challenges and
FY2020
FY2021
FY2022
Number of
applicants
1,171
persons
1,595
persons
1,693
persons
Pass rate
31%
32%
30%
Open
recruitment
system
External dispatch through
open recruitment
Use of side-job system
(including internal)
7
persons
117
persons
22
persons
183
persons
19
persons
318
persons
Furthermore, to support employees’ learning, we
have established a system to support a portion of the cost
of attending graduate school and acquiring various qual-
ifications, together with a comprehensive learning portal,
“SMBC Group eCampus,” which allows employees to learn
necessary knowledge and skills on their own initiative, and
we are expanding the content of this portal.
Work-style Reform
Creating an environment that fits employees’
lifestyles
As the lifestyles and values of individual employees be-
come increasingly diverse, SMBC Group is developing
infrastructure enabling employees to work flexibly without
being constrained to a particular location or set hours. We
are supporting employees’ self-actualization by enabling
employees to choose working styles that fit their own life-
styles, including activities outside of work.
Furthermore, in order to create a work environment
where employees can play an active role while balancing
work and childcare, we also encourage male employees to
take at least 30 days of childcare leave.
Working hours
Place of work
Operational efficiency
• Flextime system
• Staggered working hours
• Four-day workweek
• Systems to prevent overwork
(System to ensure sufficient intervals between
shifts, consultations with an occupational
physician)
• Remote working
(home or satellite offices)
• Workplace choice system
• Digitalization of business operations
(use of RPA, etc.)
• Paperless operations
Encouraging employee self-actualization
Networking
Family time
Side job or
concurrent positions
Self-development
(including systems and initiatives at some Group companies)
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Business Strategies for Creating Value
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Human Resource Strategies to Support Value Creation
Employee Well-being
Health management
Each of our Group companies has instituted a Statement
on Health Management, and under the leadership of the
Chief Health Officer, the company, health insurance as-
sociation, and health support center are working together
to create an environment in which employees are healthy
and lively. More than 1,600 employees have participated
in health seminars on topics such as wellbeing and fertility
treatment, as well as walking events and expanded sys-
tems and training on women-specific health issues.
In FY2022, a lactation room and running station for
use by all SMBC Group employees was installed at SMBC’s
head office and East Tower. In addition, a total of 6,222
people from 404 departments participated in walking
events held by Sumitomo Mitsui Card Company and SMBC
Finance Services in FY2022, leading to the establishment
of exercise habits and revitalized communication. In recog-
nition of these efforts, the Company has been certified as a
“Health & Productivity Stock Selection 2023.”
Employee asset formation initiatives
As part of our efforts to create an environment in which
employees can concentrate on their work, we are also
making efforts to help them build their assets.
In Japan, in addition to the system of property ac-
cumulation savings and stock ownership plan, we have
introduced a dormitory and company housing system, a
group insurance system, a retirement allowance, a defined
benefit pension plan (DB), and a defined contribution
pension plan (company DC).
We have also introduced external services that pro-
vide access to a wide range of services at preferential pric-
es, including accommodation, restaurants, sports facilities,
certifications, childcare, and more.
3.
Maximizing Team Performance
Enhancing Human Resource Management and
Flexible Organizational Management
Group management personnel development and
succession management
Candidate successors are identified and systematically
trained for key management positions. For example, for
posts responsible for management of the Group, in addi-
tion to identifying candidates available to immediately take
over, we prepare training plans to fill in missing experience
according to the readiness of a given candidate. We also
conduct the “Group Management Personnel Exchange
Program,” in which candidates are transferred between
Group companies to deepen their understanding of differ-
ent businesses, organizations, and climates, with a total of
20 participants each year.
State of Key Posts Eligible for Successor Management
Ready
89
persons
Within
5 years
91
persons
Future
candidates
174
persons
Number of
candidates
Approval Readiness*
3.2x
3.3x
6.4x
* Number of candidates as a percentage of posts eligible
Agile organizational management
The Marketing Division of Sumitomo Mitsui Card Compa-
ny and SMBC Finance Services are implementing agile
organizations to strengthen customer responsiveness and
increase speed.
We have created “squads” to which the most suitable
members are assigned cross-departmentally according to
the mission and KPIs set to meet customer needs. Mem-
bers are periodically swapped to create an environment in
which a wide range of experience can be gained.
Promoting Diversity and Inclusion
For SMBC Group, promoting Diversity and Inclusion is the
very essence of our growth strategy by which to provide
greater value to our customers and achieve sustainable
growth together with our stakeholders. In FY2023, our Di-
versity & Inclusion Statement will be revised to incorporate
the concept of “equity,” which emphasizes the provision of
fair opportunities based on employees’ circumstances, and
to clarify the goal of aiming to be an “innovative organiza-
tion with diverse perspectives.”
Gender diversity
To promote women’s empowerment in the workplace, we
are working to recruit women, train candidates for manage-
rial positions, and provide support for career advancement
and steady promotion to managerial positions. Although
senior management has committed itself to promoting
DE&I through regular discussions at meetings of the Board
of Directors, the Management Committee, and the Diver-
sity and Inclusion Committee, we recognize there remain
challenges in terms of diversifying decision-making layers
of the organization, and these efforts need to be advanced
further.
For example, in FY2015, SMBC Nikko Securities
introduced a system under which executives and depart-
ment managers act as mentors to support the growth of
female managers (mentees) through dialogue, with the aim
of producing managers with managerial perspectives, with
approximately 120 mentees participating.
In support of LGBTQ community, we are offering in-
house employee benefits and welfare rules for same-sex
partners and set up an external consultation desk respond
to various work-related consultations involving gender
identity and sexual orientation. At overseas offices, the
Employee Resource Group (ERG), which advances enlight-
enment of the LGBTQ community, hosts awareness-raising
events both internally and externally, and SMBC Group also
sponsors these events. In Japan, we are actively supporting
the development of networks of allies through continuous
aid and donations for external events and distribution of
ally goods to those who have participated the events.
Global diversity
The group has established the Global Talents Management
Council as a framework for increasing transparency of
promotion of locally hired employees, and for developing
talents on a global basis regardless of hired location.
For example, SMBC provided career opportunities by
moving across the region for more than 500 employees in
FY2022, with the aim of developing talent that is broadly
familiar with a range of business markets in various coun-
tries and regions and who drive the growth of businesses
on a global basis. Through the expansion of global mobility
across regions, we will accelerate the diversity and work-
place where diverse professional talents aim high regard-
less of hired location.
KPIs Concerning Gender and Internationality
Jun. 22
Jun. 23
Target for
FY2025
Target for
FY2030
13.3%
20.0%
22
15
30
21
–
30
25
30%
–
–
Mar. 22
Mar. 23
Target for
FY2025
Target for
FY2030
17.2%
19.1%
25%
30%
Percentage of
Women on the
Board of Directors
Number
of
officers
Females
Foreign
nationals
Ratio of female
managers
Supporting the empowerment of people with
disabilities
To promote understanding of how people with disabilities
can play an active role in the company, we hold seminars
in which athletes with disabilities affiliated with the Group
take the stage, and roundtable discussions on the theme
of “what is means to be truly barrier-free,” with the aim
of creating a rewarding workplace for all employees. In
addition, SMBC Green Service, a special subsidiary, has
created a workplace environment in which all employees,
including approximately 500 employees with disabilities,
can work and play an active role with peace of mind in both
hard and soft aspects, including the introduction of a voice
transcription system and face-recognition monitors, as well
as a system for rehabilitation into work and full-time em-
ployment support counselors.
Employee Engagement
The engagement survey is used as a tool to visualize em-
ployee engagement; in addition to organizational improve-
ments made in each organization, monthly 1-on-1 meet-
ings are used to build trust between supervisors and their
juniors, and to promote both parties’ growth. This will foster
an organizational culture in which employees are aware of
issues and motivated to improve, are able to exercise their
abilities to the fullest in their respective positions, and can
take on a range of challenges.
Engagement Score Trends
73
68
73
69
72
67
KPI 70
Overall Score
“Challenging Culture” score
’21/3
’22/3
’23/3*
* Expanded scope of data collection (SMBC only up to Mar 2022)
096 SMBC GROUP ANNUAL REPORT 2023
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Business Strategies for Creating Value
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
People who
Embody Our
Five Values
FIVE VALUES 1
Integrity
Natsuko Kugai
Customer Service Plaza
SMBC Consumer Finance
As a professional, always act with sincerity and
a high ethical standard.
I joined SMBC Consumer Finance as a new
and that investment is required for building as-
graduate in 2013, and since moving to the Cus-
sets, as well as helping society, the economy, and
tomer Service Plaza, which was located in Omiya
companies develop. At the end of my seminars, I
in 2016, I have been working as a speaker for the
make sure to tell everyone how important it is to
Financial Literacy Education Program. At first, I
think about how to use and manage money.
was not good at speaking in front of others, and
Up until now, only SMBC Consumer Finance
I remember my hands shaking when I held the
was in charge of these seminars, but from FY
microphone at my first seminar.
2022, we have speakers from all over SMBC
Our seminars are held at junior high schools,
Group. As financial professionals, we lead finan-
high schools, universities, and vocational colleges
cial literacy education, but the quality of our sem-
across Japan, and feature both classroom learn-
inars is further improved by having representa-
ing and presentations where students think about
tives from Sumitomo Mitsui Banking Corporation,
how to use money. To get the students interested,
SMBC Nikko Securities, and Sumitomo Mitsui
I ask questions like “How much would it cost to
Card Company talk about their respective fields
have a wedding in Cinderella Castle at Disney-
of expertise. All of our speakers are passionate
land?” and include both quizzes and other work.
about teaching students, and I was very happy to
With the lowering of the legal age of adult-
learn how many people in SMBC Group want to
hood in April 2022, there is greater danger of
be involved in financial literacy education. Of our
students becoming involved in financial trouble.
Five Values, I can feel Team “SMBC Group” and I
This has led to requests for seminars from many
believe that we all embody Integrity.
schools, and I can tell that financial literacy edu-
In order to achieve financial wellbeing, it
cation is becoming more important.
is important to gain knowledge on how to use
When I hold seminars, I go through a pro-
money correctly. I will continue to provide many
cess of trial and error to figure out how I can
people with opportunities to do so via seminars
convey stories about wealth management and
around the country, and I hope that I can convey
how money and happiness are intertwined. I try
that money is something we have to think about
to teach students that money is required for living
on our own.
away from home and achieving one’s dreams,
098 SMBC GROUP ANNUAL REPORT 2023
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Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Business Strategies for Creating Value
People who Embody Our Five Values
FIVE VALUES 2
Customer First
Maho Uchiyama
Elder Concierge
Sumitomo Mitsui Banking Corporation
Always look at it from the customer’s point of view,
and provide value based on their individual needs.
I am currently working as an Elder Concierge in
and he was thinking about moving into a nursing
charge of the SMBC Elder Program service, which
facility. When I visited his home, I found the house
started in April 2021. In my previous job, I was in
was filled with his wife’s clothes, from floor to
charge of wealth management consultation for
ceiling, and he could not even reach the Buddhist
about 12 years, but I became ill and had to take
altar on the other side. I said “You really need
half a year off to recover. When I returned to work,
to be able to make offerings at the altar. Maybe
I found that I was no longer the main person at my
your late wife brought me here so that I could do
job, and had a really tough time. This was when
something about this situation. Cleaning up your
I decided to apply to work at Sumitomo Mitsui
house would be good for your mind.” He agreed
Banking Corporation, who told me to “come with
to clean up the mountain of clothes and opted to
confidence, as we have many opportunities for
use a service from one of our business partners.
you to flourish.” I ended up joining the company
After doing this, he decided not to move to the
as a Money Life Partner in 2018, then became an
nursing facility, and continued living at home.
Elder Concierge in 2021.
Once a fan of radio controlled vehicles, I heard
We charge our customers a monthly fee
that he is now amusing himself flying drones, and
for the SMBC Elder Program, so I thought that I
enjoying his new lifestyle. He told me that the
should not only create added value through the
SMBC Elder Program changed his way of thinking
service guidance and procedure support that I
and his outlook on life, and that he was happy
provide, but also create added value for myself.
that he met me, which made me feel even more
In addition to learning about the services of our
satisfied about my job.
partner companies that I can suggest to our
I enjoy my job every day, find it fulfilling, and
customers, I have also earned qualifications to
am able to work independently. I am now thinking
be an organization and storage advisor, as well
about getting certified as a housing environment
as qualifications to be an end of life counselor,
coordinator. “I am an Elder Concierge that takes
so that I can empathize with my customers and
care of my customers” is something that I hope to
think about what we can do together.
be able to say with confidence.
One of my customers left a particular im-
pression upon me. His wife had passed away,
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Business Strategies for Creating Value
People who Embody Our Five Values
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
FIVE VALUES 3
Proactive & Innovative
Megumi Omae
Strategic Planning Department, The Americas Division
Manufacturers Bank &
Sumitomo Mitsui Banking Corporation
Embrace new ideas and perspectives,
don’t be deterred by failure.
I currently work in the United States at Jenius
consensus, I believe it is important to collect ac-
Bank, the digital retail banking division of Manu-
curate information and cooperate together while
facturers Bank, where I am involved in marketing,
persuading those around us. It is also important
PR, and planning.
to constantly confirm that the team members are
I joined Sumitomo Mitsui Banking Corpora-
heading in the same direction.
tion in 2010, and was assigned to the Hirakata
We have sessions for conveying the culture
Branch in Osaka, where I did office work for
of SMBC Group in periodic off-site meetings, and
opening customer accounts and giving advice
the Five Values are deeply entrenched in the
on wealth management. Based on a desire to
team at Jenius Bank, making us an organization
expand my horizons, I switched my job title to
that truly embodies the values of SMBC Group. I
the one with broader career path in 2014, where
believe that our team has high ethical standards,
I was in charge of providing services for wealth
as we realize the necessity of protecting the trust
management and inheritance to high-net-worth
built up by SMBC Group over its long years of
individuals.
history.
I then moved to the U.S. in 2021, after jump-
Every one of us is united in our desire to
ing at the opportunity to apply to join a project for
provide better services, and we are free to ex-
launching a digital retail banking business in the
press our opinions regardless of our position,
country. Being involved in the launch of a new
which fosters active discussion of diverse talking
business is a precious opportunity, and I felt that
points on a regular basis. I strive to be an interme-
there was tremendous potential for digital retail
diary between Jenius Bank and Sumitomo Mitsui
banking in the rapidly growing U.S. market, which
Banking Corporation and approach my job with a
is why I decided to volunteer for the role. Despite
high level of motivation, and I believe that this has
my job being in the same retail banking industry
helped my self-growth. This is the first time for
as before, the culture and environment in the U.S.
SMBC Group to launch a retail business across
is completely different from that in Japan, and I
the U.S. I hope that I can help create a solid foun-
find this challenging yet extremely satisfying.
dation and strengthen our business, while never
The people working at Jenius Bank are
forgetting our Proactive & Innovative spirit, so
from various companies and have diverse back-
that we can provide services that our customers
grounds and histories. To build team member
need over the long term.
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Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Business Strategies for Creating Value
People who Embody Our Five Values
FIVE VALUES 4
Speed & Quality
Takuya Kondo
Private Corporate Advisory III Dept.
SMBC Nikko Securities
Differentiate ourselves through the speed and
quality of our decision-making and service delivery.
I joined SMBC Nikko Securities in 2015, where I
venture capital and other fields, the company
was assigned to the Private Corporate Advisory
was successfully listed.
III Dept. Prior to joining SMBC Nikko Securities, I
This is the third securities company that I
worked at Daiwa Securities SMBC from 2009 as a
have worked for, but I think it is the most custom-
new graduate, then an other securities company.
er-focused. Venture companies change at a rapid
I have always been involved in advising private
pace, and it is common for sales to double in a
companies of capital policy, M&A, and Initial Pub-
month or new employees to join on a weekly basis.
lic Offerings (IPOs). I feel rewarded about my job
Despite this environment, SMBC Nikko Securities
because IPOs are a delightful solution for share-
is renowned among shareholders, executives, and
holders, management, employees, and business
CFOs for our ability to promptly provide accurate
partners (due to further corporate growth).
responses to any sudden challenges that emerge.
Our company has been ranked number 1
We tell our customers that IPOs are the
in IPO underwriting for three consecutive years,
second founding of a company. I believe that
and one of our major strengths is our ability
SMBC Nikko Securities is the only company
to proactively take on new challenges without
that can provide comprehensive assistance on
preconceptions. For example, in one up-front
management strategy, capital policy, and client
investment type IPO project, I was involved in
introductions in tandem with our customers, in
reviewing the initial listing requirements for
addition to consulting on internal management
the Tokyo Stock Exchange Growth Market to
systems required for an IPO, such as governance
increase the likelihood of the company being
and compliance.
listed by properly explaining and appropriately
Of our Five Values, I believe that “Customer
disclosing the business model and path to prof-
First” is extremely well established, and the basic
itability. By doing so, the company could attract
policy of our company aims for “Customer-Ori-
investors who were aware of the risk involved,
ented Business Initiative.” I believe that Speed
even if the company is in the red when it is list-
& Quality are required to achieve our values of
ed. I discussed with the Tokyo Stock Exchange
Proactive & Innovative and Customer First.
about the need for the Japanese market to
I hope that I can continue to support venture
encourage venture companies with cutting-edge
companies via the capital market to contribute
technologies via up-front investment, and with
to the creation of companies that flourish on the
the assistance of various parties involved in
global stage.
104 SMBC GROUP ANNUAL REPORT 2023
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Business Strategies for Creating Value
People who Embody Our Five Values
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
FIVE VALUES 5
Team “SMBC Group”
Takuya Ogawa
Product Planning and Development Division
Sumitomo Mitsui Card Company
Respect and leverage the knowledge and
diverse talent of our global organization, as a team.
I joined Sumitomo Mitsui Card Company as a new
from many users on social media, and I felt that it
graduate in 2006, where I worked in the acquiring
was really worth the effort it took.
of franchise stores and screening of new mem-
Looking back, I believe Olive was able to
bers, before being transferred to the Product
be launched in time because we demonstrated
Planning and Development Division, where I cur-
the best of our ability in regard to all of the Five
rently work. When developing the “Olive” financial
Values. I would like to emphasize Team “SMBC
service for individual customers, I was in charge
Group” in particular. We were able to have not
of overall planning and development, including
only Sumitomo Mitsui Banking Corporation,
product development for the flexible payment
Sumitomo Mitsui Card Company and Japan Re-
function and the card design.
search Institute work together as one team, but
The design of the Olive card started based
also external companies such as SBI Securities
on the concept of aiming for the ultimate in
and Visa. I was happy to see our attitude carry
simplicity. The first proposal we received from an
over to members of other companies, and we also
external designer had a good basic design, but
received stimulation from those at other compa-
its colors were not preferrable for the Japanese
nies, which increased our sense of unity.
market. I then created other proposals about
Our team was able to fulfill their own roles
ideas that would be appealing for our customers
and responsibilities while also thinking about the
in Japan, based on discussions with team mem-
roles of others. We trusted each other and had
bers including in-house designers.
extremely good communication. I believe that this
At times, I thought we had created the
was the key to our success, and I respect every
best design possible, only to find that the actual
one of the project members. Olive is the world’s
printed object differed from our expectations.
first flexible payment system using Visa’s new
Ultimately, five core members, including my-
functions, and it has enabled us to provide new
self, decided upon a design that we thought to
value via unprecedented products and services.
be best. The design was completed just in time
I hope that I can continue working to evolve Olive
for launch, and struck a good balance of being
and create a service that is both convenient and
simple yet refined. We received a good response
impactful for our customers.
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Corporate Infrastructure Supporting Value Creation
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Corporate Infrastructure
Supporting Value Creation
110 Corporate Governance
126 Risk Management
130 Compliance
132 Customer-Oriented Initiatives
135
IT Governance
136 Cybersecurity
138
Internal Audit
139
ESG Information
140
Financial Review
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Corporate Infrastructure Supporting Value Creation
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Corporate
Governance
Our Approach
We position “Our Mission” as the universal philosophy
underpinning the management of SMBC Group and as the
foundation for all of our corporate activities. We are working
toward effective corporate governance as we consider the
strengthening and enhancement of corporate governance to be
one of our top priorities in realizing “Our Mission.”
Initiatives for Improving Corporate Governance
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 ensuring appropri-
ate operations
2010
Listing of shares on the New York Stock Exchange in order to
improve transparency of financial reporting, increase convenience
for investors, and diversify fund procurement methods
2015
Establishment of the “SMFG Corporate Governance Guideline”
Increase in the number of outside directors to five and in the
number of outside corporate auditors to three
2016
2017
Strengthening of Group governance by appointing the chairman of
SMBC Nikko Securities as a director of Sumitomo Mitsui Financial
Group along with the president of SMBC
Commencement of evaluations of the effectiveness of the Board of
Directors
Transition to a Company with Three Committees; increase in the
number of outside directors to seven; establishment of voluntary
Risk Committee together with legally mandated Nomination
Committee, Compensation Committee, and Audit Committee;
and appointment of outside directors as chairmen of three legally
mandated committees
Institution of new Group governance system through introduction of
group-wide Business Units and CxO system
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
2021
Appointment of Group CSuO
Establishment of voluntary Sustainability Committee (Chaired by an
outside director)
2023
Establishment of Group Business Management Department
Sumitomo Mitsui Financial Group’s Corporate
Governance System
SMFG Group employs the Company with Three Commit-
tees structure. 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 to achieve
enhanced oversight of the exercise of duties by the Board
of Directors and expedite this exercise of duties. In addi-
tion, core subsidiaries SMBC and SMBC Nikko Securities
employ the Company with Audit and Supervisory Commit-
tee system described in the Companies Act.
Corporate Governance System
Outside
directors
Internal non-executive
directors
Internal executive
directors
Other experts
Chairmen
Through the implementation of effective corporate
governance systems, we aim to prevent corporate miscon-
duct 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 struc-
tures. Accordingly, we will continue working toward the
strengthening and enhancement of corporate governance
in order to realize higher levels of effectiveness.
Other experts
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Board of Directors Focus on supervision of executive officers’ and directors’ execution of duties
Directors
Internal
Committees
Nomination
Committee
Compensation
Committee
Audit
Committee
Risk
Committee
Sustainability
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Management Committee
Business execution decisions
Audit Dept.
Departments
*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
*3 Professor at the University of Tokyo Institute for Future Initiatives
*4 Senior Counselor of The Japan Research Institute, Limited.
110 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
111
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 respon-
sible for making decisions on the matters that are within its
legally mandated scope of authority, such as basic man-
agement policies, as well as for overseeing the exercise
of duties of executive officers and directors. Authority for
execution decisions other than those legally required to be
made by the Board of Directors will, in principle, be dele-
gated to executive officers. The purpose for this delegation
is to enhance the oversight function of the Board of Direc-
tors and to expedite the exercise of duties.
The Board of Directors works toward the realization of
“Our Mission” and the long-term growth of corporate value
and the common interests of the shareholders. Any action
that may impede those objectives will be addressed with
impartial decisions and response measures.
Furthermore, the Board of Directors is responsible
for establishing an environment that supports appropriate
risk taking by executive officers. It will develop a system for
ensuring the appropriateness of SMBC Group’s business
operations pursuant to the Companies Act and other rel-
evant legislation in order to maintain sound management.
Another responsibility of the Board of Directors is to exer-
cise 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, experience,
gender and nationality.
As of June 29, 2023, the Board of Directors was
comprised of 15 directors, which the Company believes
to be the appropriate number of directors for the Board to
perform its functions most efficiently and effectively. Ten of
the 15 directors did not have business execution respon-
sibilities at the Company or its subsidiaries, with seven of
these 10 directors being outside directors. The chairman
of Sumitomo Mitsui Financial Group, who does not have
business execution responsibilities, serves as the chairman
of the Board of Directors. This membership ensures an
objective stance toward supervising the exercise of duties
by executive officers and directors.
Outside directors serve as chairmen and members
of the Company’s legally mandated and voluntarily estab-
lished committees. When necessary, outside directors will
request reports on compliance, risk management, or other
matters from the relevant divisions in order to promote
appropriate coordination and supervision.
Number of directors
15
Non-executive
directors
10
%67
Outside directors
designated as
independent directors
Composition
of the Board
of Directors
7
%47
Internal directors
(non-executive)
3
Internal directors
(executive)
5
Deliberations on the formulation of the new Medium-Term Management Plan
Focused supervision of SMBC Nikko Securities in light of the administrative
action taken by the Financial Services Agency
Examples of matters discussed by the Board of Directors
Progress of the Medium-Term Management Plan and business plan
Global compliance
Digitalization efforts
Sustainability initiatives
Human resources measures
System strategy policy
Corporate governance structure
Capital policy (ROE and PBR improvement)
Policy for equity holdings
Responding to geopolitical risks
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Processes for selecting and dismissing directors and
executive officers
We expect our directors and executive officers to embody
the values expressed in our management philosophy at
a high level, to possess a wealth of practical experience
and high levels of ability and insight, and to contribute
to the further development of SMBC Group. In selecting
directors, the Nominating Committee spends ample time
deliberating whether a candidate can meet these expecta-
tions. Where it is difficult for a director or executive officer
to perform their duties effectively, the Group will consider
their dismissal.
For details, please see References 4 and 5 in the “SMFG
Corporate Governance Guidelines.”
https://www.smfg.co.jp/english/aboutus/pdf/
cg_guideline_e.pdf
Succession planning for top management
One of the matters discussed by the Nominating Commit-
tee that directly relates to our Mission and management
strategy is succession plans for the Company president
(Group CEO) and the presidents of the core subsidiaries
SMBC and SMBC Nikko Securities. To train and develop
our future top management, we take our time systemati-
cally forming a candidate pool through tough work assign-
ments and third-party assessment and coaching. From
within this large pool of candidates, the best candidates
with the qualities required to lead a global financial group,
such as broad vision and communication abilities, are
selected for top management.
Top management selection process
Review of the
succession planning
process
Discussion of the
qualities required of
top management
Assessment of
candidate
qualifications
Formation of a candidate pool and candidate development
Top management
selection
Skills Matrix of Directors
A skills matrix is developed following deliberations by the Nominating Committee as to the knowledge and experience ex-
pected of directors in exercising sufficient supervisory functions as a Board of Directors of a global financial group. In 2022,
IT/DX and Sustainability, which are becoming increasingly important in SMBC Group’s business strategy, were added.
Appointed
Corporate
management
Finance
Global
Legal affairs/
Risk
management
Financial
accounting
IT/DX
Sustainability
Expected knowledge and experience in particular*
Takeshi Kunibe
Jun Ohta
Akihiro Fukutome
Teiko Kudo
Fumihiko Ito
Toshihiro Isshiki
Yoshiyuki Gono
Yasuyuki Kawasaki
Masayuki Matsumoto
Shozo Yamazaki
Yoshinobu Tsutsui
Katsuyoshi Shinbo
Eriko Sakurai
Charles D. Lake II
Jenifer Rogers
2014
2023
2021
2023
2021
2023
2021
2017
2017
2017
2017
2015
2023
2023
* The items listed in “Skills Matrix of Directors” are areas particularly expected of the relevant directors and do not represent all of the knowledge and experience possessed by the directors.
112 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
113
Corporate Infrastructure Supporting Value Creation
Corporate Governance
Support Systems for Outside Directors
The Company recognizes that outside directors
require an in-depth understanding of the Group’s
business operations and business activities.
Accordingly, we continually endeavor to supply
outside directors with the information and insight
on business activities that are necessary to super-
vise management while also providing the oppor-
tunities needed to fulfill their roles.
Initiatives to support directors in FY2022
included those indicated to the right.
Participation in meetings of general managers of core Group com-
panies 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 busi-
ness activities
Informal meetings between outside directors and relevant depart-
ments on topics including Central Bank Digital Currency and promot-
ing DE&I.
Explanatory forums on Board of Directors’ meeting agenda items prior
to Board meetings to assist in understanding of items
Study sessions led by external lecturers on topics such as information
sharing regulations (firewall regulations), business and human rights,
and cybersecurity
Timely and effective provision of information such as details on the
proceedings of internal meetings to outside directors
External director-only meetings
Outside Directors visit to Sumitomo Mitsui Card Company locations
Outside Director Independence Standards
In order for an outside director (“Outside Director”) of the Company to be classified as independent, they must not fall under,
or have recently fallen under, any of the following categories:
Major Business
1
Partner
2 Specialist
• An entity that has the Company or SMBC as a major business partner or an executive director, officer, or other person engaged in the
execution of business of such an entity.
• An entity that is a major business partner of the Company or SMBC or an executive director, officer, or other person engaged in the exe-
cution 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 ¥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 con-
sulting 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
3 Donations
has received–on average over the last three years, donations or other payments from the Company or SMBC in excess of the greater of
¥10 million per year and 2% of the recipient’s annual revenue.
4 Major Shareholder
• A major shareholder of the Company or an executive director, officer, or other person engaged in the execution of business of a major
shareholder (including anyone who has been a major shareholder, or an executive director, officer, or other person engaged in the exe-
cution 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
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Internal Committees
Main role
Number of meetings
in FY2022
(average attendance)
Activities in FY2022
Nomination
Committee
Compensation
Committee
Audit Committee
The Nomination Committee is responsible for
preparing proposals regarding the appointment
and dismissal of directors to be submitted
to the general meeting of shareholders. This
committee also deliberates on matters regard-
ing personnel decisions pertaining to officers
of the Company and major subsidiaries and the
selection of successors to the presidents of the
Company, SMBC, and SMBC Nikko Securities.
The Compensation Committee is responsible
for deciding policies for determining the com-
pensation of directors and executive officers of
the Company as well as compensation amounts
of individual directors and executive officers
of the Company based on those policies. In
addition, this committee deliberates on the poli-
cies for determining the compensation of the
executive officers of major subsidiaries and the
compensation amounts of individual executive
officers of the Company.
The Audit Committee is responsible for auditing
the execution of duties by executive officers
and directors of the Company, preparing audit
reports, and determining the content of propos-
als for election, dismissal, or non-reelection of
the accounting auditor to be submitted to the
general meeting of shareholders. Committee
members appointed by this Committee are to
perform audits of the operations and assets of
the Company and its subsidiaries.
5 meetings
(93%)
7 meetings
(100%)
16 meetings
(100%)
Risk Committee
The Risk Committee is responsible for delib-
eration on matters relating to environmental
and risk awareness, the operation of the Risk
Appetite Framework, and the implementation
of risk management systems as well as other
important matters pertaining to risk manage-
ment and reporting to the Board of Directors on
these matters.
4 meetings
(100%)
Sustainability
Committee
The Sustainability Committee is responsible for
deliberating on the progress of sustainability
initiatives, including climate change initiatives,
domestic and overseas sustainability trends,
and other important matters related to sustain-
ability. It regularly reports to, and advises, the
Board or Directors.
2 meetings
(100%)
In anticipation of the change of SMBC president
in April 2023, ongoing discussions have been
held concerning succession planning.
Specifically, the committee narrowed down
the list of candidates based on the “qualities
required for top management” discussed in
FY2021, and agreed to appoint a new president.
With the start of the new Medium-Term
Management Plan from FY2023, we have
reviewed how medium-term performance-linked
remuneration is assessed. Specifically, we have
investigated incorporating “Create social value”
into the evaluation index as a non-financial
index.
The committee also discussed disciplinary
actions to be taken against the officers of SMBC
Nikko Securities for market manipulation and
violation of the firewall regulations separating
banking and securities.
In accordance with the audit policy and audit
plan, audited the execution of duties by direc-
tors and executive officers by attending key
meetings, interviewing with executive officers
and directors, receiving reports from internal
departments and visiting domestic and overseas
offices.
Provided summaries of the results of its delib-
erations to the Board of Directors, and issued
recommendations and opinions to executive
officers, etc. where necessary.
The committee deliberated the environment
and risk recognition in the new Medium-Term
Management Plan, including geopolitical risks,
the trends and outlooks of monetary policy
across Europe, the U.S., and Japan.
In preparation for formulating the Medium-Term
Management Plan and operational plan, the
committee discussed the risk appetite and the
policy for addressing risk scenarios when they
materialize, based on the top risks and stress
test results.
The committee also engaged in discussion on
SMBC Group’s risk management system, includ-
ing the strengthening of group governance.
The committee reviewed SMBC Group’s mate-
riality, with the aim of creating social value by
addressing a wide range of social issues.
The committee reviewed the results of com-
pany-wide efforts regarding sustainability, and
discussed the policy for sustainability initiatives
in the new Medium-Term Management Plan
starting from FY2023.
114 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
115
Corporate Infrastructure Supporting Value Creation
Corporate Governance
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Evaluation of the Board of Directors’ Effectiveness
Equity Holdings
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 FY2022, the evaluation focused on the three
areas described below, which are areas for which provi-
sions 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 2023 and interviews of internal directors
were conducted thereafter. Discussions were held at
Board of Directors’ meetings in June based on the find-
ings of these interviews with internal directors, 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.
S
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Process
Implementation overview
Opinion-gathering
interviews
• Outside directors express their opinions
at meetings of the Board of Directors
• Interviews with internal directors
Review of the results
of evaluations
• Analysis and evaluation including reviews
provided by outside experts
Discussion of the results
of evaluations
• Discussions at Board of Directors meetings
Overview of Results of Evaluation of the Board of Directors’ Effectiveness
In FY2022, based on appropriate actions taken to respond to the findings of the last Effectiveness Evaluation, the Board of
Directors assessed the Group to be sufficiently effective, and more effective than before, as a result of efforts to increase the
sophistication and effectiveness of deliberations at Board of Directors meetings. Based on the results of the latest Effective-
ness Evaluation, together with the diverse opinions of the directors and the recommendations of external experts gathered
through a series of processes, our Board of Directors is working to further improve effectiveness by promoting mutual under-
standing between outside directors and internal officers and employees, and by discussing fundamental issues to enhance
our corporate value.
Role of the Board
of Directors
FY2022 Evaluation
FY2023 Priority Issues
• Steps are taken to invigorate discussions by drawing on 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 particular, in FY2022, the Board of Directors had thorough discussions on important topics such as the formulation of
the new Medium-Term Management Plan for the future of SMBC Group, and, as its holding company, focused supervision of
SMBC Nikko Securities in light of an incident in which former officers and employees of the company violated Article 159,
Paragraph 3 (illegal market manipulation) of the Financial Instruments and Exchange Act (the “market manipulation case”).
• 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 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.
The Board of Directors will play an even more involved role
based on mutual understanding between the outside directors
and internal officers and employees in supervising the progress
of the new Medium-Term Management Plan (Plan For Fulfilled
Growth) while being aware of environmental changes including
monetary policy trends, market demands regarding return on
capital, geopolitical risks, and technological innovation such
as generative AI, as well as in supervising efforts to respond to
administrative action, etc., in response to market manipulation
cases and to prevent such cases occurring again, and in
exercising supervisory functions over major subsidiaries.
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 at the appropriate level.
• Appropriate agenda management by the chairperson has facilitated the continuation of brisk discussions.
• The Board of Directors continues to make flexible management decisions amid the changing operating environment.
Members of the Board of Directors are provided with the information necessary for exercising their oversight function in a
timely and appropriate manner.
• The Company continued to provide systems for effectively supporting the Board of Directors in making management
decisions through venues such as study sessions for outside directors and forums for discussions between outside
directors and internal directors, executive officers, and accounting auditors, etc. Steps were taken to contribute to livelier
discussions at meetings of the Board of Directors, including the provision of information about major Group companies and
the setting-up of meetings, in order deepen understanding of the Group companies’ operations.
We will further increase the sophistication of discussions by,
for example, taking further advantage of outside directors’
knowledge, and continuing to ensure sufficient time for delibera-
tion of important topics.
Composition of the
Board of Directors
• As of June 30, 2023, the Board of Directors consisted of 15 directors, seven of whom were outside directors. Accordingly,
outs ide directors represented over 40% of all directors. It was once again acknowledged that the outside directors
represented a diverse range of expertise, genders, and nationalities and that the Board of Directors features an atmosphere
conducive to outside directors voicing opinions regarding management.
The Nominating Committee shall continue to examine and
review the ideal composition of the Board of Directors in light
of its role.
Policy for Equity Holdings
(1) In principle, SMBC Group does not hold the shares of
other companies where “the rationale to hold” those
shares cannot be recognized.
This policy is in place in order to maintain SMBC
Group’s financial soundness taking into consideration
the standards of globally operating financial institutions
and our proactive response to global regulation.
(2) We determine “the rationale to hold” as a case where
the shareholding will contribute to increasing SMBC
Group’s corporate value over the medium to long term.
We determine this with comprehensive consideration
based on (a) the profitability - through an appropriate
assessment and understanding of relevant factors,
such as associated risks, costs and returns of the
holding; (b) the objectives to hold - such as maintain-
ing and strengthening our relationship, capital and
business alliance, restructuring support, and (c)other
relevant factors.
(3) We examine “the rationale to hold” on a regular basis.
We will sell them by taking into consideration vari-
ous factors, such as market impact and the financial
strategy of the issuers, where an appropriate rationale
no longer exists. In the case that where we recognize
there is good rationale for doing so, we will continue to
hold shares.
Reduction Plan for Equity Holdings
SMBC Group continuously makes efforts to reduce price
fluctuation risks from the point of view of maintaining a
foundation that can sufficiently demonstrate its financial
intermediary function even in a stressful environment in
which the prices of stocks drastically fall.
Based on the five-year, ¥300 billion reduction plan
(FY2020–FY2024), we have reduced ¥180 billion in the
three-year period up to FY2022. However, based on the
recent environment surrounding equity holdings, we made
a revision to accelerate the reduction plan in May 2023.
Specifically, in line with the three-year Medium-Term
Management Plan starting in FY2023, we extended the
plan one year and added ¥80 billion to reduction amount
for a reduction of ¥380 billion in six years, and set a plan
to reduce ¥200 billion in the next three years. Also, this
plan is set as the minimum, and we are aiming to exceed
it as much as possible. In addition, we will aim to earn a
good prospect of achieving the reduction of the proportion
of market value of equity holdings to less than 20% of our
consolidated net assets during the period of the next Me-
dium-Term Management Plan. Under the new plan, we will
work to further reduce equity holdings going forward.
Reduction Plan of Equity Holdings
State of reduction
(JPY tn)
Book value of domestic listed stocks*1
Market value of equity holdings*2 / consolidated net assets
6.09
Revised plan
JPY (380) bn
Reduction
FY2020
FY2021
FY2022
¥180 billion
¥55 billion
¥67 billion
¥58 billion
Unsold accepted sales balance
¥62 billion
Reduced and accepted total
¥243 billion
1.33
JPY (180) bn
1.15
JPY (200) bn
0.95
c. 30%
<20%
Apr.01
Mar.20
Mar.23
Mar.26
Next Medium-Term
Management Plan period
(FY3/27-29)
*1 Excluding investments after Mar.20 for the business alliance purpose *2 Including balance of deemed held shares
For details, refer to the SMBC Group website.
https://www.smfg.co.jp/english/company/organization/governance/structure/hold.html
116 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
117
Corporate Infrastructure Supporting Value Creation
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Corporate Governance
Compensation Program
To facilitate the fulfillment of Our Mission and the realization
of Our Vision, SMBC Group’s medium- to long-term vision, we
developed a compensation program for Directors, Corporate
Executive Officers and Executive Officers (the “Executives”)
and introduced Stock Compensation Plans as a part of Execu-
tives’ compensation programs, for the purpose of:
Executive Compensation System (FY2023)
Cash compensation
Stock compensation
Variable compensation
1 Providing appropriately functioning incentives for Execu-
tives, strengthening linkage with our short-, medium-, and
long-term performance, and
2 Further aligning the interests of Executives with those of
shareholders, by increasing the weight of stock compen-
sation and enhancing the shareholding of our Executives.
Compensation
Components
Payment Standards (Range of Variation) and Target Indices
Payment Method
Base salary
Fixed compensation
• Cash
Bonus (cash)
Bonus
(Stock
Compensation
Plan II)
Compensation determined based on
SMFG’s annual performance (0%−150%) *2
Standard levels × annual performance of SMFG and SMBC, progress of initiatives
towards the realization of sustainability, performance of the executive
Target Index*3
Weight
ESG Evaluation
Weight
SMBC Banking
profit*4
Annual growth /
Target achievement
SMBC Net income
(pre-tax) *5
Annual growth /
Target achievement
SMFG Net
income*6
Annual growth /
Target achievement
50%
25%
25%
Progress of KPIs*7
Performances of
external ESG ratings
±10%
• Cash : 70%
• Restricted stock : 30%
Compensation determined based on SMFG’s medium-term performance,
etc. (0%−150%) *8
Standard levels × SMFG’s medium-term performance, etc.
Financial index
Evaluation index
ROCET1*9
Base expenses*10
SMFG Gross profit*11
SMFG Net income*6
Share index
TSR (Total shareholder return)*12
Non-financial index
Create social value*13
Qualitative evaluation
Initiatives in new business areas, compliance,
customer-oriented initiatives, and risk management
Weight
20％
20％
15％
15％
15％
15％
±5％
In the case that the CET1 ratio falls below a designated level at the end of each
fiscal year, Stock Compensation Plan I for the respective fiscal year becomes
null and void (knock-out provision).
• Restricted stock
(Promotion reward plan)
• Restricted stock
Stock
Compensation
Plan I
Stock
Compensation
Plan III
¹
*
%
0
4
:
n
o
i
t
a
s
n
e
p
m
o
c
e
b
a
i
r
a
v
l
f
o
n
o
i
t
r
o
P
%
5
2
:
n
o
i
t
a
s
n
e
p
m
o
c
d
e
s
a
b
-
k
c
o
t
s
f
o
n
o
i
t
r
o
P
*1
*2
*3
*4
Variable compensation capped at a maximum of 100% of total base salary
Compensation amounts for each fiscal year determined by the Compensation Committee
If the Compensation Committee recognizes any element other than the above mentioned target indexes which should be taken into
consideration, the Compensation Committee will, if appropriate, judge the circumstances comprehensively and may adjust the
compensation to be paid to the employee by a maximum of 5%, plus or minus.
Adding collaboration incentives between each company in the Group and Sumitomo Mitsui Banking Corporation to the banking profit of
Sumitomo Mitsui Banking Corporation
Income before income taxes at Sumitomo Mitsui Banking Corporation
The Company’s consolidated profit attributable to owners of parent
Achievement of annual progress of KPIs in the “SMBC Group GREEN×GLOBE 2030,” such as the reduction of greenhouse gas emissions
Compensation amounts determined by the Compensation Committee at the conclusion of the Medium-Term Management Plan
Post-Basel III reforms basis, excludes net unrealized gains (losses) on other securities
*5
*6
*7
*8
*9
*10 General and administrative expenses excluding “revenue-linked cost,” “prior investment cost” and others
*11 The Company’s consolidated gross profit
*12 The Compensation Committee determines progress of performance by relative evaluation of TSR during the term of the Group’s Medium-Term Management Plan
*13 The Compensation Committee evaluates the achievement of KPIs related to the environment (FE reduction and amount of sustainability finance executed) and employees
Foster a prudent risk
culture expected of a
financial institution
Stock Compensation Plan I,
Stock Compensation Plan II, and
Stock Compensation Plan III are
applicable to malus and
claw-back provisions
Executive Compensation Structure
In principle, executive compensation consists of base
salary, bonuses and stock compensation. The perfor-
mance-linked portion, which fluctuates with the business
environment and performance, accounts for approximately
40% of total compensation.
Annual Performance-Linked Incentive
Both the Bonus (Cash) and Stock-Compensation Plan II are
paid as annual performance-linked incentives. Three per-
formance indicators are used: “SMFG Net Income” which
is management’s end performance, and “SMBC Banking
profit” and “SMBC Net Income (pre-tax),” which indicate
the profitability of SMFG’s major subsidiaries. These create
a strong link between performance and executive compen-
sation, ensuring that compensation functions as an appro-
priate incentive for performance.
FY2020-FY2022 Results: Stock Compensation Plan I
Target Index
Weight
Actual
performance
Evaluation
Financial
Performance
Share
performance
Qualitative
evaluation
ROCET1
Base expenses
Gross profit
Net income
TSR
(Total shareholder
return)
Customer satis-
faction, ESG initia-
tive, employee
engagement,
efforts to develop
new business
areas
20%
20%
20%
20%
20%
22.0%
25.0%
26.4%
23.8%
18.0%
±10%
±0%*2
115%*3
*2 Although “ESG initiative” and “Efforts to develop new business areas” progressed
steadily, the Company took very seriously the market manipulation case at SMBC Nik-
ko Securities Inc. and the violation of regulations on the firewall between banking and
securities operations, and determined the evaluation as maximum 0%, plus or minus.
*3 The final performance evaluation is determined by summing the actual performance
and rounding down to the nearest whole number
FY2022 Results: Bonus (Cash) & Stock Compensation Plan II
Evaluation of efforts to create social value
Target Index
Weight
SMBC Banking profit
SMBC Net income (pre-tax)
SMFG Net income
50%
25%
25%
ESG Evaluation
Weight
Actual
performance
Performance
evaluation
coefficient
61.3%
30.9%
27.9%
Evaluation
results
121%*1
Achievement of KPIs
Results of major ESG ratings
±10%
+1.5%
*1 The final performance evaluation coefficient is determined by summing the actual
performance and the evaluation results and rounding down to the nearest whole
number.
Medium-Term Performance-Linked Compensation
Stock Compensation I is paid as medium-term perfor-
mance-linked compensation. In order to improve account-
ability incentives for our medium- and long-term perfor-
mance and to increase shareholder value, medium-term
performance-inked compensation is calculated based on
the target indices of ROCET1 and base expenses together
with qualitative evaluations including “customer satisfac-
tion” and “initiatives in new business fields.”
Compensation programs and levels are determined
by the Compensation Committee based on third-party
surveys of manager compensation, economic and social
trends, and the operating environment.
We are incorporating an indicator evaluating efforts to
create social value into executive compensation with the
aim of further increasing our executives’ commitment to
contributing to the realization of a sustainable society and
achieving “SMBC Group GREEN×GLOBE 2030.”
From FY2022, the Compensation Committee will
judge performances of annual progress of KPIs in the
“SMBC Group GREEN×GLOBE 2030”, such as the reduc-
tion of greenhouse gas emissions, and performances of
external ESG ratings. These performances will be reflected
in annual performance-linked incentive by a maximum of
10%, plus or minus.
“Create social value” has been incorporated in the
evaluation index of the medium-term performance-linked
remuneration since FY2023 as a non-financial index.
Specifically, the Compensation Committee evaluates the
rate of KPI achievement for environmental and employ-
ee-related initiatives, as well as efforts to address the five
key issues (materiality) set by SMBC Group.
Ensuring Robust Business Operations
We have also introduced provisions for malus (forfeiture) of
restricted stock and the claw-back of vested stock allo-
cated under the Stock Compensation Plans in the event of
incidents occurring such as material revisions to financial
statements or material damage to the reputation of the
Group.
We are working to restrain excessive risk-taking
and foster a prudent risk culture expected of a financial
institution.
(employee engagement and DE&I), as well as the status of efforts to address the five key challenges set forth by the Group (“Environment,” “DE&I/Human Rights,” “Declining
Birthrate & Aging Population,” “Japan’s Regrowth,” and “Poverty & Inequality”).
118 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
119
Corporate Infrastructure Supporting Value Creation
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
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.
SMBC Group has appointed Global Advisors to provide advice to it on global
business and on political and economic issues in the Americas, EMEA, and Asia. At
SMBC Group Global Advisory Meetings, advisors inform the Management Committee
of trends and developments in the financial sector and the political and economic
environments of respective regions. Global Advisors also provide regular insight with
respect to political and economic issues related to the formulation of strategies and
key risks faced by SMBC Group.
SMBC Group
Technology
Advisors
SMBC Group Technology Advisory Committee meets regularly to facilitate the en-
hancement of the Company’s IT-related initiatives. This committee is an advisory
body in which chief technology officer-class information system representatives
from domestic and overseas companies participate. Meetings of this committee
are held regularly to discuss predetermined themes for the purpose of gathering
suggestions and advice regarding the outlook for IT-related trends and directives
for SMBC Group. In 2022, committee meetings were held covering the topics
of “blockchain” and “responding to advanced technologies that will be imple-
mented in society in future,” in which a range of opinions were exchanged on the
current state of technology and the future outlook in light of recent social trends.
Andrew N. Liveris
Cesar V. Purisima
Motoo Nishihara
Seishi Okamoto
Itaru Nishizawa
2017–2018 Executive Chairman, DowDuPont Inc.
2010–2016 Secretary of Finance of the Republic of the
2004–2017 Chairman and CEO, The Dow Chemical
Company
Philippines
2004–2005 Secretary of Trade and Industry of the
Republic of the Philippines
Corporate Executive Vice President and CTO - President of
Global Innovation Business Unit
NEC Corporation
Corporate Executive Officer, EVP, Head of Fujitsu Research
Fujitsu Limited
Vice President and Executive Officer, CTO, GM of the
Research & Development Group
Hitachi, Ltd.
Joseph Yam
Paul Polman
Norishige Morimoto
Kenzaburo Tamaru
2017–Present A member of the Executive Council,
2018–Present Vice-Chair of the UN Global Compact
CTO & VP, IBM Research & Development
Director, National Technology Officer
Hong Kong SAR
1993–2009 Chief Executive of the Hong Kong Monetary
Authority
2009–2019 Chief Executive Officer, Unilever
IBM Japan, Ltd.
Microsoft Japan Co., Ltd.
120 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
121
Corporate Infrastructure Supporting Value Creation
Corporate Governance
Sumitomo Mitsui Financial Group Directors
(As of June 29, 2023)
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
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
Director Senior Managing Corporate
Executive Officer
Group CFO, Group CSO
Senior Managing Executive Officer
of SMBC
Director
Director of SMBC
Director
Director
Chairman of the Board
(Representative Director)
of SMBC Nikko
Takeshi Kunibe
Jun Ohta
Akihiro Fukutome
Teiko Kudo
Fumihiko Ito
Toshihiro Isshiki
Yoshiyuki Gono
Yasuyuki Kawasaki
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
1982 Joined Sumitomo Bank
2009 Executive Officer of SMBC
2012 Managing Executive Officer of SMBC
2013 Managing Executive Officer of the
Company
1985 Joined Mitsui Bank
2014 Executive Officer of SMBC
2015 Managing Executive Officer of SMBC
2017 Resigned as Managing Executive
Officer of SMBC
2014 Senior Managing Executive Officer of
2018 Chief Officer of Sales Finance
the Company
Senior Managing Executive Officer of
SMBC
Director of the Company
2015 Director and Senior Managing
2017 President of the Company
Executive Officer of SMBC
Resigned as Director of SMBC
Director President of the Company
2019 Chairman of the Board of the Company
(to present)
2021 Chairman of the Board of SMBC
2023 Resigned as Director 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
Business Group of TOYOTA MOTOR
CORPORATION
President of TOYOTA FINANCIAL
SERVICES Co., Ltd.
2021 Retired from Chief Officer of Sales
Finance Business Group of TOYOTA
MOTOR CORPORATION
Resigned as Director of TOYOTA
FINANCIAL SERVICES Co., Ltd.
Senior Managing Corporate Executive
Officer of the Company
Senior Managing Executive Officer of
SMBC
2022 Director and Senior Managing
Executive Officer of SMBC
2023 Resigned as Corporate Executive
Officer of the Company
President of SMBC (to present)
Director of the Company (to present)
1987 Joined Sumitomo Bank
2014 Executive Officer of SMBC
2017 Managing Executive Officer of SMBC
2020 Senior Managing Executive Officer of
the Company
Senior Managing Executive Officer of
SMBC
2021 Director and Senior Managing
Executive Officer of SMBC (to present)
Senior Managing Corporate Executive
Officer of the Company
Director Senior Managing Corporate
Executive Officer of the Company (to
present)
1990 Joined Sumitomo Bank
2018 Executive Officer of SMBC
Executive Officer of the Company
2020 Managing Executive Officer of the
Company
Managing Executive Officer of SMBC
2023 Senior Managing Corporate Executive
Officer of the Company
Senior Managing Executive Officer of
SMBC (to present)
Director Senior Managing Corporate
Executive Officer of the Company (to
present)
1985 Joined Sumitomo Bank
2013 Executive Officer of SMBC
2015 Managing Executive Officer of SMBC
2017 Managing Executive Officer of the
Company
2019 Senior Managing Executive Officer of
the Company
Senior Managing Executive Officer of
SMBC
2021 Retired as Senior Managing Executive
Officer of SMBC
Director of the Company (to present)
2023 Director of SMBC (to present)
1988 Joined Sumitomo Bank
2018 Executive Officer of the Company
Executive Officer of SMBC
2021 Managing Executive Officer of the
Company
Managing Executive Officer of SMBC
2023 Resigned as Managing Executive
Officer of SMBC
Director 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
Company
2014 Senior Managing Executive Officer of
the Company
Senior Managing Executive Officer of
SMBC
2015 Director and Senior Managing
Executive Officer of SMBC
2017 Deputy President of the Company
Director and Deputy President of
SMBC
Deputy President and Corporate
Executive Officer of the Company
2018 Deputy Chairman of the Company
Deputy Chairman of SMBC
2020 Retired as Deputy Chairman of the
Company
Retired as Deputy Chairman of SMBC
Representative Director and Deputy
President
Executive Officer of SMBC Nikko
Securities Inc. (“SMBC Nikko”)
2021 Chairman of the Board (Representative
Director) of SMBC Nikko (to present)
Director of the Company (to present)
122 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
123
Corporate Infrastructure Supporting Value Creation
Corporate Governance
Sumitomo Mitsui Financial Group Directors
(As of June 29, 2023)
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Director
Special Advisor of Central
Japan Railway Company
Director
Certified public accountant
Director
Chairman of Nippon Life Insurance
Company
Director
Attorney at law
Director
Former President and Representative
Director of Dow Chemical Japan
Limited
Director
Chairman and Representative Director
of Aflac Life Insurance Japan Ltd.
Attorney at Law, admitted in
Pennsylvania, the U.S.A.
Attorney at Law, admitted in
Washington, D.C. , the U.S.A.
Director
General Counsel Asia of Asurion
Japan Holdings G.K.
Attorney at Law, admitted in New
York, the U.S.A.
Masayuki Matsumoto
Shozo Yamazaki
Yoshinobu Tsutsui
Katsuyoshi Shinbo
Eriko Sakurai
Charles D. Lake II
Jenifer Rogers
1967 Joined the Japanese National Railways
1987 Joined Central Japan Railway
Company
1992 Director and Manager of the
Secretariat of Central Japan Railway
Company
1996 Executive Director of Central Japan
Railway Company
1970 Joined Tohmatsu Awoki & Co.
(currently Deloitte Touche Tohmatsu
LLC)
1974 Registered as a certified public
accountant (to present)
1991 Representative Partner of Tohmatsu
& Co. (currently Deloitte Touche
Tohmatsu LLC)
1998 Senior Executive Director of Central
2010 Retired from Deloitte Touche Tohmatsu
Japan Railway Company
2000 Executive Vice President and
Representative Director of 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
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
1977 Joined Nippon Life Insurance Company
2004 Director of Nippon Life Insurance
1984 Registered as an attorney at law (to
present)
Company
1999 Attorney at law at Shinbo Law Office
(to present)
2015 Corporate Auditor of SMBC
2017 Director of the Company (to present)
Resigned as Corporate Auditor of
SMBC
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
2011 Resigned as Director of Central Japan
2017 Director of the Company (to present)
Company (to present)
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
Note: Mr. Masayuki Matsumoto, Mr. Shozo Yamazaki, Mr. Yoshinobu Tsutsui, Mr. Katsuyoshi Shinbo, Ms. Eriko Sakurai, Mr. Charles D. Lake II and
Ms. Jenifer Rogers satisfy the requirements for an “outside director” under the Companies Act.
See page 177 for information on SMBC’s Board of Directors, Directors, Members of the Audit and
Supervisory Committee and Executive Officers.
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.
Chairman and CEO of Dow Toray Co.,
Ltd.
2020 President and Representative Director
of Dow Chemical Japan Limited
2022 Resigned as Director of Dow Chemical
Japan Limited
1989 Joined Haight Gardner Poor & Havens
(currently Holland & Knight LLP)
1990 Registered as an attorney at law,
admitted in New York, the U.S.A. (to
present)
1991 Joined The Industrial Bank of Japan
Ltd. (currently Mizuho Bank, Ltd.)
1994 Joined Merrill Lynch Japan Securities
Co., Ltd. (currently BofA Securities
Japan Co., Ltd.)
2000 Merrill Lynch Europe Plc
2006 Merrill Lynch (Asia Pacific) Limited
(currently Bank of America
Corporation) (Hong Kong)
2012 Bank of America Merrill Lynch
(currently Bank of America
Corporation) (New York)
General Counsel Asia of Asurion Asia
Pacific Limited
2014 General Counsel Asia of Asurion Japan
Holdings G.K. (to present)
2021 President of the American Chamber of
Commerce in Japan
2023 Director of the Company (to present)
1990 Entered the Office of the U.S. Trade
Representative as Special Assistant
Registered as an attorney at law, admitted in
Pennsylvania, the U.S.A. (to present)
1992 Director of Japan Affairs, the Office of the U.S.
Trade Representative
1993 Director of Japan Affairs and Special Counsel to
the Deputy U.S. Trade Representative, the Office
of the U.S. Trade Representative
1995 Attorney at law at Dewey Ballantine LLP
1996 Registered as an attorney at law, admitted in
Washington, D.C., the U.S.A. (to present)
1999 Vice President and Counsel of Aflac
International, Inc.
Vice President and Counsel of Japan Branch,
American Family Life Assurance Company of
Columbus (currently Aflac Life Insurance Japan
Ltd.)
2001 Senior Vice President and Counsel of Japan
Branch, American Family Life Assurance
Company of Columbus (currently Aflac Life
Insurance Japan Ltd.)
Senior Vice President and General Counsel of
Japan Branch, American Family Life Assurance
Company of Columbus (currently Aflac Life
Insurance Japan Ltd.)
Deputy President of Japan Branch, American
Family Life Assurance Company of Columbus
(currently Aflac Life Insurance Japan Ltd.)
2003 President and Representative in Japan of
Japan Branch, American Family Life Assurance
Company of Columbus (currently Aflac Life
Insurance Japan Ltd.)
2005 Vice Chairman and Representative in Japan of
Japan Branch, American Family Life Assurance
Company of Columbus (currently Aflac Life
Insurance Japan Ltd.)
2008 Chairman and Representative in Japan of
Japan Branch, American Family Life Assurance
Company of Columbus (currently Aflac Life
Insurance Japan Ltd.)
2014 President of Aflac International, Inc. (to present)
2018 Chairman and Representative Director of Aflac
Life Insurance Japan Ltd. (to present)
2023 Director of the Company (to present)
124 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
125
Customer-Oriented
Initiatives
Corporate Infrastructure Supporting Value Creation
Risk Management
Our Approach
Strengthening of compliance and risk management is positioned as a key issue in SMBC
Group’s Principles of Action on Compliance and Risk. SMBC Group is therefore devoted to
improving its systems in these areas in order to become a truly outstanding global group.
Risk Culture
In order for SMBC Group to realize and maintain a sustain-
able growth in corporate value as a “Top Tier Global Finan-
cial 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 stake-
holders, not just if they are compliant with laws and regula-
tions. SMBC Group has established “Principles of Action on
Compliance and Risk” for every colleague to hold onto as
a “keystone” of their daily business. The principles include
“Business based on the Risk Appetite Framework” and
“We will conduct business operations with risk ownership
of the risks, such as credit risk, market risk, liquidity risk,
operational risk, and conduct risk, that arise in our own
business.” 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 in-
formation on the operating environment and risks facing
SMBC Group among management and for facilitating
appropriate risk taking based thereon.
リスクアペタイト・フレームワークの位置付け
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
環境・リスク認識
トップリスク
リスクレジスター
KRE（Key Risk Events）
Risk Appetite Framework Positioning
リスクアペタイト・
フレームワーク
経営管理の両輪
ストレステスト
Environment/Risk View
Top Risks
Risk Register
KRE（Key Risk Events）
Two pivots of
our business
management
Risk Appetite
Framework
Stress Testing
業務戦略
Business
Strategies
capital based on group-wide management constitution.
Overall risk capital levels are thus monitored throughout
the course of each fiscal year to clearly indicate risk-taking
capacity and promote the sound taking of risks.
In addition, specific risk appetite indicators have been
set for credit risk, market risk, liquidity risk, and other risk
categories to facilitate appropriate management based on
a quantitative understanding of risk appetite.
*2 The amount of capital required to cover the theoretical maximum potential loss
arising from risks of business operations.
Risk Appetite Composition
Categories
Top Risks
Soundness
Profitability
Liquidity
Credit
Market
Climate-related
Operational
Conduct*1
Established for each category
Risk Appetite Statement
Risk Appetite Measures
A qualitative explanation of our approach to risk
Risk Appetite Composition
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
Categories
Soundness
*1 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.
Profitability
Liquidity
Credit
Operational
Conduct*1
Market
Established for each category
Risk Appetite Statement
Individual risk appetites have been established by
strategies for each business unit as necessary based on
Risk Appetite Measures
the overall risk appetite of SMBC Group. Risk appetites are
A qualitative explanation of our approach to risk
Quantitative Risk Appetite Measures that function
taking and risk management for various
as benchmarks for risks that
decided during the process of formulating business strat-
risk categories
we are considering taking and for risk/return
egies 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 as part of a system for assessing the risks pres-
ent in new and existing business activities and for 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 for the upper limit for overall risk
SMBC Group identifies risks that threaten to significantly
impact management as Top Risks.
The selection of Top Risks involves comprehensive
screening of risk factors, evaluation of each risk scenario’s
possibility of occurrence and potential impact on manage-
ment, and discussion by the Risk Management Committee
and the Management Committee. Top Risks are utilized
to enhance risk management by being incorporated into
discussions of the Risk Appetite Framework and the for-
mulation of business strategies and into the creation of risk
scenarios for stress testing.
World economic stagnation
Disasters such as large-scale earthquakes,
storms, and floods
Highly volatile commodity price and
financial / foreign exchange markets
Lack of preparedness against cyber attacks
and financial crimes
Sudden deterioration of the foreign
currency funding conditions
Changes in industrial structure due to
technological innovation
Japanese economic stagnation
Inadequate responses to climate change risk
and environmental issues
Japanese fiscal instability
Inadequate responses to human rights issues
The U.S. - China struggle for supremacy
Improper labor management
Growing tensions around Russia-Ukraine
conflict
Misconduct such as an employee’s
inappropriate behavior
Unstable situations in the Middle East
and Asia
Inadequate improvement in the operational
resilience system
Political turmoil and social instability
Inadequate preparedness for heightened
regulatory and supervisory scrutiny
Outbreak of serious infectious disease
Difficulty in securing human resources
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.
See page 151 for Top Risks.
126 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
127
Corporate Infrastructure Supporting Value Creation
Risk Management
Stress Testing
Key Risk Events
At SMBC Group, we use stress testing to analyze and
comprehend the impact on SMBC Group’s businesses of
changes in economic or market conditions, in order to plan
and execute forward-looking business strategies.
In our stress testing, we prepare multiple risk scenar-
ios including macroeconomic variables such as GDP, stock
prices, interest rates, and foreign exchange rates based
on the aforementioned Top Risks, discussions with experts
and related departments.
When developing business strategies, we set out sce-
narios 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 main-
tained under stress. For example, we are conducting stress
testing assuming prolonged monetary tightening in the U.S.
and Europe, a global credit crunch, and economic stag-
nation in Japan to verify the soundness of SMBC Group’s
capital and confirm the appropriate actions to be taken.
During a fiscal year, we will conduct stress testing in a
timely manner to assess the potential impact on our busi-
ness and to take the appropriate actions in case a serious
risk event occurs.
In addition, we conduct detailed stress testing for in-
dividual risks such as credit risk, market risk, and liquidity
risk, so as to decide and review risk-taking strategies.
Key Risk Events (KRE), external events that indicate the
increased threat of risks, have been identified to ascertain
the symptoms of the potential risks. KRE are utilized to
analyze and assess how likely similar cases will occur in
SMBC Group and what effects such similar cases will have
on SMBC Group, and to enhance our risk management
system.
Operational Resilience
In recent years, the risk environment surrounding financial
institutions has been rapidly changing, with the emergence
of pandemics and increasingly sophisticated cyberattacks,
as well as reliance on IT systems and the spread of cloud
service use.
In response to this environment, in addition to our
existing risk management framework, we recognize that
one of our important responsibilities is to strengthen our
ability to continue and promptly restore critical operations
(operational resilience) on the assumption that business
interruption may occur, and we are working on the follow-
ing measures.
Efforts are made to ensure effectiveness by reviewing the
following cycles according to the operational and internal/
external environment.
1. Identify critical operations that could pose a significant risk
We are also conducting scenario analyses on physical
in the event of a disruption in service delivery
and transition risks related to climate change.
See page 085 for more information on our climate change risk analysis.
Risk Register
A risk register is formulated by each business unit for the
purpose of realizing more sophisticated risk governance
and enhancing business units’ risk ownership. In formulat-
ing these registers, business units communicate with risk
management departments to identify the risks present in
their business, and these risks are reflected in business
strategies after they have been evaluated and the adequa-
cy of measures for controlling them has been verified.
2. Set the tolerable time for interruption to critical operations
in consideration of alternative means, etc.
3. Identify management resources essential to the provision
of critical operations and organize their interdependencies
4. Conduct scenario testing to verify appropriateness of
resource allocation, and review periodically.
Risk Management Systems
Based on the recognition of the importance of risk man-
agement, top management is actively involved in the risk
management process, and systems are in place for verify-
ing and monitoring the effectiveness and appropriateness
of this process. Specifically, the groupwide basic policies
for risk management and the Risk Appetites for the entire
SMBC Group are determined by the Management Com-
mittee and authorized by the Board of Directors. After that,
the status of risk management based on these policies and
risk appetites is reported to the Board of Directors by the
Group CRO four times per year.
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
If the outlooks for the operating environ-
SMBC Group’s Risk Management System
ment and risks change drastically from the
assumption in the beginning of the fiscal year,
we will review the Risk Appetite for the entire
group in a timely and appropriate manner with
approval by the Board of Directors.
We have also clarified related roles and
responsibilities of relevant divisions in light of
our three lines of defense. With these provi-
sions in place, risk management systems have
been established based on the characteristics
of particular businesses, and measures are
being put in place to strengthen and improve
the effectiveness of these systems in accor-
dance with these basic policies for risk man-
agement.
Furthermore, SMBC Group is strength-
ening groupwide risk management systems
through the Group CRO Committee and the
Global CRO Committee.
Three Lines of Defense
The Basel Committee on Banking Supervi-
sion’s “Corporate governance principles for
banks” recommends “three lines of defense”
as a framework for risk management and gov-
ernance. Based on this framework, we have
clarified the roles and responsibilities of each
unit, as shown in the table on the right, and we
are taking steps to achieve more effective and
stronger risk management and compliance
frameworks.
Holding Company (Sumitomo Mitsui Financial Group)
Board of Directors
Risk Committee
Audit Committee
Management Committee
External Audit
Group CRO
Risk Management Committee
Audit Dept.
ALM Committee
Credit Risk Committee
Group CRO Committee
Global CRO Committee
Departments Responsible for Risk Management
Group Companies
Principal Organizations
Roles and Responsibilities
First Line
Business Units
Second Line
Risk Management
and
Compliance
Departments
Third Line
Audit Department
The Business Units shall be risk owners concerning their operations
and shall be responsible for the following in accordance with the basic principles
provided by Second Line.
• Identification and evaluation of risks encountered in the business
activities
• Implementation of measures for minimizing and controlling risks
• Monitoring of risks and reporting within First Line and to Second Line
• Creation and fostering of a sound risk culture
The Risk Management and Compliance Departments shall assume the following
functions and responsibilities in order to manage the risk management and
compliance systems.
• Drafting and development of basic principles and frameworks
concerning risk management and compliance
• Oversight, monitoring, and development of training programs for First
Line
Independent from First Line and Second Line, the Audit Department
shall assess and verify the effectiveness and appropriateness of risk
management and compliance systems managed and operated by First
Line and Second Line, and report these results to the Audit Committee
and the Management Committee. The Department shall provide
recommendations regarding identified issues / problems.
Column
Risk Management Initiatives Amid a Volatile Financial and Economic Environment
I n FY 2022, interest rates in various countries rose as monetary policy
authorities in the U.S., Europe, and other countries tightened monetary
policy due to sharply rising inflation and other factors.
We identified “highly volatile financial / foreign exchange markets”
and “sudden deterioration of foreign currency funding conditions” as our
top risks, and conducted stress testing. We discussed this at the Manage-
ment Committee and the Risk Committee to determine the action for better
addressing market deterioration.
In the face of the market turmoil triggered by the bankruptcy of
Silicon Valley Bank and the subsequent bank failures in March 2023, we
analyzed our risk profile, including testing the survival period in terms of
liquidity risk under the stress, and decided policy quickly, while closely
communicating and coordinating with the relevant departments.
We also recognize these incidents as Key Risk Events (KRE) and
analyze our deposit and securities portfolios. Through these efforts, we will
continue to further enhance our risk management.
128 SMBC GROUP ANNUAL REPORT 2023
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129
Corporate Infrastructure Supporting Value Creation
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Compliance
Our Approach
Compliance Systems at SMBC Group
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.
Compliance Management
SMBC Group seeks to maintain a compliance system that
provides appropriate instructions, guidance, and monitor-
ing 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 imple-
ment corrective measures.
SMBC Group has established the Compliance Com-
mittee, 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 compli-
ance. SMBC Group has established a framework to provide
specific action plans for each group company to imple-
ment compliance and promote the development of compli-
ance systems, and for the unified management of overseas
compliance frameworks. When we receive consultations
and/or reports on compliance-related matters from group
companies and overseas offices, we provide suggestions
and guidance as necessary to ensure complete compli-
ance at the Group and Global levels.
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 manage-
ment, including compliance. In particular, financial institu-
tions should emphasize compliance and risk management,
considering its public mission and the heaviness of the
social responsibility.
Based on this recognition, management positions the
strengthening of compliance and risk management as a
key issue in enabling SMBC Group to fulfill its public mis-
sion and social responsibilities. SMBC Group is therefore
devoted to improving its systems in these areas in order to
become a truly outstanding global group.
Specifically, SMBC Group has defined the Principles
of Action on Compliance and Risk to serve as guidelines for
executives and employees in practicing compliance and
risk management. Continuous reviews are carried out to
improve compliance with these guidelines and to ensure
their effectiveness.
Anti-Money Laundering (AML), Countering the Financing
of Terrorism (CFT) and Economic Sanctions
by contacting outside professionals specializing in such
matters.
SMBC Group recognizes the importance of preventing
money laundering and terrorist financing (ML/TF), and of
compliance with regulations concerning state economic
sanctions and therefore, undertakes every effort to prevent
ourselves and employees, from engaging in, and/or provid-
ing assistance to, the commission of ML/TF, and to comply
with regulations concerning economic sanctions imposed
on states.
SMBC Group strictly complies with AML/CFT and eco-
nomic sanctions regulations by establishing a Group Policy
and by implementing effective internal control systems in
each of the Group companies to ensure that our operations
are sound and appropriate.
The Group Policy and systems are implemented in
accordance with the requirements of the relevant interna-
tional organizations (e.g. the United Nations, the Financial
Action Task Force Recommendations) and the laws/regu-
lations of relevant countries including Japan in which the
SMBC Group has operations (e.g. U.S. “Office of Foreign
Assets Control Regulations”).
In April 2019, SMBC entered into a written agreement
with the Federal Reserve Bank of New York (the “Reserve
Bank”) to improve its New York Branch’s program for
compliance with the Bank Secrecy Act (“BSA”) and related
U.S. anti-money laundering (“AML”) laws and regulations,
which was found to be inadequate by the Reserve Bank.
Furthermore, SMBC is working to improve compliance
on a global basis while taking other necessary actions
based on the written agreement with the Reserve Bank.
Response to Anti-Social Forces
SMBC Group has established a basic policy stipulating
that all Group companies must unite in establishing and
maintaining a system that ensures that the Group does
not have any connection with anti-social forces or related
individuals.
Specifically, the Group strives to ensure that no busi-
ness transactions are made with anti-social forces or indi-
viduals. Contractual documents or terms and conditions
state the exclusion of anti-social forces from any business
relationship. In the event that it is discovered subsequent
to the commencement of a deal or trading relationship
that the opposite party belongs to or is affiliated with an
antisocial force, we undertake appropriate remedial action
Basic Policy for Anti-Social Forces
1. Completely sever any connections or relations from antiso-
cial forces.
2. Repudiate any unjustifiable claims, and do not engage in
any “backroom” deals. Further, promptly take legal action
as necessary.
3. Appropriately respond as an organization to any anti-social
forces by cooperating with outside professionals.
Customer Information Management
SMBC Group has established Group policies that set forth
guidelines for the entire Group regarding proper protection
and use of customer information. All Group companies
adhere to these policies in developing frameworks for
managing customer information.
Group companies establish and disclose privacy
policies for their measures regarding the proper protection
and use of customer information and customer numbers.
Appropriate frameworks are established based on these
policies.
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
value that violate laws, regulations or social practices and
customs. Group companies have developed frameworks
to prevent bribery and corruption based on these policies.
The Compliance Department conducts annual bribery
and corruption risk assessments of the offices of the major
Group companies to identify transaction and counterpar-
ty-related risks, and to assess the effectiveness of controls.
Risk assessment results are reported to the Compliance
Committee, and following consultation with the companies
and offices in question, appropriate risk mitigations are put
in place in Group company offices identified as being at
high risk.
130 SMBC GROUP ANNUAL REPORT 2023
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131
Corporate Infrastructure Supporting Value Creation
Value Creation at SMBC Group
Business Strategies for Creating Value
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.”
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 Improve-
ment 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,
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.
deliberates on concrete measures based on reports from
the CX Improvement Subcommittee.
The appropriateness and efficacy of customer-ori-
ented business conduct is reviewed and assessed by the
Audit Department, the results of which are reported regu-
larly to the Audit Committee, a subcommittee of the Board
of Directors, and to the Group Management Committee.
Customer feedback, including complaints, is also regularly
reported to the Audit Committee.
Initiatives to Improve Product and Service Quality
In order to provide customer-oriented products and ser-
vices, SMBC Group always confirms that adequate assess-
ments and responses to possible risks are taken during the
planning and development stages, and that there is cus-
tomer demand. We also carry out periodic quality reviews of
existing services, and the CX Improvement Subcommittee,
composed of external experts and relevant heads of depart-
ment, reviews and discusses the efforts of each Group com-
pany to improve the quality of our products and services.
Customer-Oriented Business Initiative
Based on the Principles for Customer-Oriented Business
Conduct (a guideline on fiduciary duties) released by the
Financial Services Agency, SMBC Group formulated its
Basic Policy for Customer-Oriented Business Conduct and
the Basic Policy for Customer-Oriented Business Conduct
in the Retail Business Unit.
Basic Policy for Customer-Oriented Business Conduct*
(Excerpt)
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 period-
ically 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 nec-
essary 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
Basic Policy for Customer-Oriented Business Conduct in
the Retail Business Unit
Based on Sumitomo Mitsui Financial Group’s Basic Policy
for Customer-Oriented Business Conduct, the Retail Busi-
ness Unit shall adhere to the following conduct policies in
offering service as a retail company that is responsible for
providing wealth management and asset building services
for individual customers. In accordance with these policies,
the Retail Business Unit shall implement a plan– do–
check–act (PDCA) cycle that 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 man-
agement 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 com-
panies 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 custom-
er-oriented sales activities.
5. Improvement of Consulting Capabilities
We shall continuously improve our consulting capa-
bilities to ensure we are always capable of proposing
the best possible solution for customers’ wide-ranging
needs.
For information on the Basic Policy for Customer-Oriented Business
Conduct, please see pages 168-169.
132 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
133
16 Risks and returns of investment trusts with top-ranking balance
450
300
(Tens of thousands of people)
Mar. 18 Mar. 19
Mar. 20
(Tens of thousands of people)
Mar. 22 Mar. 23
Mar. 21
0
40
Increase in balance of investment assets (since Apr. 2013)
(JPY tn)
+10
+8
+6
+4
+2
Increase in balance of investment assets (since Apr. 2013)
Number of Customers Using Wealth Management Products
(Indicator 3)
(JPY tn)
We continue to increase the number of customers using
+10
+0
wealth management products by working to accurately
’21
address customers’ needs related to protecting or building
+8
assets.
’22
’18
’20
’19
(FY)
Number of customers using wealth management products (left axis)
Number of customers commencing new transactions (right axis)
+6
+4
(Tens of thousands of people)
(Tens of thousands of people)
’18
’19
’20
’21
’22
(FY)
40
30
20
450
+2
425
+0
400
375
350
Number of customers using wealth management products (left axis)
10
325
Number of customers commencing new transactions (right axis)
425
Number of Investment Trust and Automatic Foreign Currency
Number of investment trust and automatic foreign currency deposit accounts
Deposit Accounts (Indicator 8)
400
30
Number of such customers who are under 50
20
To respond to the needs of customers seeking to begin ac-
375
(Tens of thousands of accounts)
quiring assets, we have been aggressively proposing invest-
60
350
ment trust products that allow for small-sum investments
50
325
as well as time-dispersed investments in automatic foreign
currency deposits. As a result, there has been steady
300
40
growth in the number of investment trust and automatic
foreign currency deposit accounts.
30
Mar. 18 Mar. 19
Mar. 22 Mar. 23
Mar. 21
Mar. 20
10
0
(Tens of thousands of accounts)
60
0
’18
’19
’20
’21
’22
(FY)
50
40
30
20
10
0
’18
’19
’20
’21
’22
(FY)
20
10
Number of investment trust and automatic foreign currency deposit accounts
(JPY bn)
Number of such customers who are under 50
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
IT Governance
Our Approach
We are strengthening resilience in order to protect unchanged
value and respond to new risks associated with the provision of
new value. We will pursue the dual goals of social and economic
value through a continuous shift from people to IT systems, the
expansion of development IT systems to support this shift, and
the development and control of IT system architecture. As a
financial mega-group responsible for social infrastructure, we
combine stability and flexibility, leveraging digital technology to
drive our business.
IT Investment Strategies
With the aim of fueling further growth of SMBC Group and
to accelerate its digital strategy in Japan and overseas, we
have increased the CEO budget by an additional 30% from
the previous Medium-Term Management Plan, bringing its
total value to ¥180 billion. The CEO budget can be used to
make flexible investments in fields the Group CEO deems
to be vital to the business. Total IT investment under the
new Medium-Term Management Plan has been increased
to ¥650 billion, up by ¥115 billion from the previous plan,
making it possible to allocate resources with an emphasis
on strategic investments, such as promoting digitalization,
strengthening internal controls, reinforcing management
foundations including building greater resilience, and
implementing business strategies.
Enhance IT infrastructure through Aggressive Investment
650
535
Of which
the CEO’s budget
JPY 180 bn
(up JPY 45 bn)
FY2020-FY2022
FY2023-FY2025
Strengthening Resilience to Support Stable IT systems
Operation
As we continue progress toward digitization, we are work-
ing to expand both functions and services linked between
internal and external systems to improve customer con-
venience. Due to these increased links, however, system
failure threatens to cause greater impact to customers,
making stable systems operation even more important.
We are taking measures to prevent failures, such as allo-
cating additional resources for critical systems, predictive
failure detection and preventative maintenance, while also
working to strengthen resilience in the event of a failure by
improving our contingency plans, systematizing manual
response and upgrading training content.
Use of Advanced Technology and Steady Response to
New Risks
Digital technology is essential to business, and we are
examining a wide range of advanced technologies to use it
effectively.
For example, we have from an early stage focused
on generative AI, a technology that interprets intent in text
and generates naturally-worded sentences, and quick-
ly began in-house proof-of-concept testing. In addition
to reducing the time employees spend on responding
to inquiries and preparing planning documents, we are
promoting the widespread use of generative AI in the fields
of image recognition, voice recognition, and advanced
system development. In order to control AI-related risk, we
ensure that internal rules, such as having employees judge
the accuracy of the content of AI responses, are thoroughly
enforced and reviewed as appropriate in light of the latest
developments in regulations, etc.
Contribute to Solving Societal Issues and Work to Create
New Value to Society
As part of its efforts to address the environment, which has
long been a priority issue for SMBC Group, the Group is
supporting its customers’ decarbonization efforts with Sus-
tana, a service that visualizes greenhouse gas emissions,
while SMBC Group itself is working toward net zero GHG
emissions in 2030. SMBC Group’s data centers account
for about a quarter of the Group’s GHG emissions in Japan,
and in addition to working on measures to save energy at
existing centers including AI-driven air conditioning control
optimization and expansion of solar power generation facil-
ities, we will further reduce environmental impact through
energy conservation at the next-generation data centers
we are planning.
In addition, as a contribution to “Japan’s Regrowth,”
SMBC Group will provide a variety of digital and IT training,
which is planned and supervised by the Digital University,
SMBC Group’s in-house digital and IT training organization.
SMBC GROUP ANNUAL REPORT 2023
135
Corporate Infrastructure Supporting Value Creation
Customer-Oriented Initiatives
Disclosed Indicators*
Increase in balance of investment assets
1
2 Balance of investment trusts and fund wraps
3 Number of customers using wealth management products
4 Ratio sales by wealth management product
5 Average investment trust holding period
6 Fund wrap sales and cancellation amounts
7 Amount of fixed-term foreign currency deposits
8 Number of investment trust and automatic foreign currency deposit
accounts
9 Amount of investment trusts and automatic foreign currency deposits
10 Tsumitate Nisa account numbers, balances, and ratio of new users
11 By product sales amounts of lump-sum insurance products
12 Ratio of sales of investment trust products of Group companies
13 Sales amounts of investment trusts (including fund wraps)
(Breakdown of monthly allocation type and others)
14 Breakdown of losses and gains by customers using investment trusts
and fund wraps
15 Costs and returns of investment trusts with top-ranking balance
amounts
amounts
17 Foreign currency-denominated insurance investment ratings by cus-
tomer
18 Foreign currency-denominated insurance costs and return by brand
19 Acquisition status of FP qualifications
*as of May, 2023
Performance with Regard to Disclosed Indicators
Increase in Balance of Investment Assets (Indicator 1)
In FY2022, the total balance of investment assets for
SMBC, SMBC Nikko Securities, and SMBC Trust Bank
continued to grow due in part to the continuation of cus-
tomer-oriented initiatives focused on medium- to long-term
diversified investment.
Increase in balance of investment assets (since Apr. 2013)
(JPY tn)
+10
+8
+6
+4
+2
+0
’18
’19
’20
’21
’22
(FY)
Note: Figures represent the combined total for the Retail Banking Unit of SMBC and the
Retail (Private) of SMBC Nikko Securities.
134 SMBC GROUP ANNUAL REPORT 2023
Number of customers commencing new transactions (right axis)
Number of customers using wealth management products (left axis)
(Tens of thousands of people)
(Tens of thousands of people)
40
30
20
10
0
Mar. 18 Mar. 19
Mar. 20
Mar. 21
Mar. 22 Mar. 23
Number of investment trust and automatic foreign currency deposit accounts
Number of such customers who are under 50
(Tens of thousands of accounts)
450
425
400
375
350
325
300
60
50
40
30
20
10
0
’18
’19
’20
’21
’22
(FY)
Corporate Infrastructure Supporting Value Creation
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Cybersecurity
Our Approach
The risk of cyber threats is growing ever more serious as a result
of the accelerated digitization of financial services and changes
to the surrounding environment.
We will further strengthen our security measures in order to
achieve a society that is resilient to cyber threats and provide
safer and more secure services to our customers.
Cybersecurity Management System
Governance System
SMBC Group considers cyber threats to be one of the most
important risks to its business, and is continuously promot-
ing management-led cybersecurity initiatives under the
“Declaration of Cybersecurity Management.”
In order to clarify the roles and responsibilities of
promoting effective security measures, a specialist CISO*1
has been assigned under the Group CIO and CRO, and
the Head of the System Security Planning Department is
responsible for this role. The CISO promotes cybersecurity
strategies in unison with management through discus-
sions at meetings including the Management Committee
meeting. Under the leadership of the CISO, the Company is
creating a responsive posture to growing cyber threats on a
group and global basis.
*1 Chief Information Security Officer
Incident Response System
SMBC Group has established a Computer Security Incident
Response Team (CSIRT)*2 and a Security Operation Center
(SOC)*3 to create a response system with which to prepare
for, and respond to, incidents.
The CSIRT is an organization in which the System
Security Planning Department, responsible exclusively
for cybersecurity, plays a central role. Working to ensure
preparation for cyber incidents, the CSIRT actively gathers
information on attackers’ methods and vulnerabilities from
both within the Group and externally, and where necessary
shares this information with national government agencies
as well as with external institutions such as FS-ISAC*4 in
the U.S. and ISAC in Japan.
SMBC Group’s Cybersecurity Governance System
The SOC is organized around the Japan Research
Institute and has a 24-hour, 365-day monitoring system.
We are also working to further strengthen security monitor-
ing on a group and global basis in cooperation with SOCs
established in Europe, the U.S., and Asia.
Corporate
staff
IT Planning
Department
Corporate Planning
Department
Public Relations
Department
General Affairs
Department
Risk Management
Department
Board of Directors / Management Committee
Group CIO
Group CRO
CISO (Chief Information Security Officer)
System Security Planning Dept.
Group companies and offices in Japan / overseas
Group companies and offices in Japan / overseas
CSIRT
(Computer Security Incident Response Team)
Government,
law enforcement
agencies
ISAC, industry
bodies
NISC
FS-ISAC
Metropolitan Police
Department
Financials ISAC Japan
CEPTOAR council
Etc.
Etc.
Security vendors,
experts etc.
SMBC Group has also centralized its Japanese secu-
rity functions at the Cyber Fusion Center (CFC) to ensure
constant and close coordination between CSIRT and SOC.
*2 Computer Security Incident Response Team
*3 Security Operation Center
*4 Financial Services Information Sharing and Analysis Center
Global Information Aggregation
• Cyber Threat Information
• Incident occurrence and
state of response
etc.
Japanese Security
Function Consolidation
• System Security Management
• Support for Group Companies
• Security Measures Planning
• Cyber Threat Trend Analysis
• Incident Response
• Security Monitoring
etc.
SMBC
Group
CFC
Key Measures related to Cybersecurity
Cybersecurity Measures
The Company possesses a multilayered defense system
that includes detection and interception of suspicious
communications from the outside, as well as operation
and monitoring of various security services and systems, in
preparation against various cyberattacks such as unautho-
rized and mass access attacks.
We also expect to further mature our intelligence
functions, which collect and analyze information on attack-
ers’ latest tactics and trends.
In addition, in preparation against possible attacks,
we are working to further strengthen our cyber resilience
through simulated attack exercises conducted by outside
experts and regular participation in cyberattack response
exercises organized by the Financial Services Agency and
the ISAC.
Security Awareness and Professional Development
SMBC Group conducts ongoing awareness-raising activi-
ties through e-mail drills and study sessions to further fos-
ter a culture that encourages conscious efforts to address
security measures.
In terms of professional personnel, we have actively
recruited career professionals and established the Cyber-
security Course for new graduates recruited. We are also
focusing on developing core personnel through further
participation in external industry associations, sending
staff to graduate schools in Japan and abroad, and sup-
porting them in obtaining and maintaining professional
certifications.
136 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
137
Corporate Infrastructure Supporting Value Creation
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
Internal Audit
Our Approach
As a part of SMBC Group’s internal control framework, the
Internal Audit Department (the Department) verifies the
effectiveness of the internal control of each business unit,
risk management and compliance departments, and other
departments 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.
Purpose and Mission of Internal Audit
The purpose of internal audit at SMBC Group is the ob-
jective provision of assurance*1 and consulting services in
accordance with the policies and plans approved by the
Board of Directors but independent of management, busi-
ness unit and the departments responsible for risk man-
agement and compliance, in order to add value to SMBC
Group and improve its operations.
The mission of internal audit at SMBC Group is to
grow and preserve the value of SMBC Group by providing
risk-based and objective assurance, advice and insight.
*1 Reviewing the adequacy and effectiveness of each process relating to governance,
risk management and control processes, and providing assurance and recommenda-
tions for improvement based on the results.
Overview of the Internal Audit Framework
The Department has been established under the Audit
Committee and is independent from each Business Unit,
risk management and compliance departments, and other
departments. Internal audits within our Group companies
are structured broadly in line with SMFG. Group CAE over-
sees group-wide internal audit activities.
The Department verifies the appropriateness and the
effectiveness of internal control that 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 mon-
itoring of Group companies’ internal auditing and other
activities. The activities are based on the “Group Internal
Audit Charter” and the “Audit Policy and Strategy” formu-
lated 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 regular information
exchange with external auditors.
Internal Audit Framework
Holding Company (Sumitomo Mitsui Financial Group)
Board of Directors
Audit Committee*²
Group Management
Committee
Reporting line
Group CAE
Internal Audit Dept.
Group Companies
*2 The Audit Committee holds the right to consent regarding personnel affairs of the
Group CAE.
Enhancement and Effectiveness of Internal Audit
The Department has adopted auditing methods in ac-
cordance with the Institute of Internal Auditors (IIA) stan-
dards, conducts risk-based audits, and expands the same
approach to Group companies. To implement effective and
efficient internal audits, the Department conducts moni-
toring by attending important meetings and by obtaining
internal management documents of SMFG and Group
companies.
In addition, the Department strives 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 au-
ditors 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 leading practices
ESG Information
Accreditation
Acquired Top Gold Rating in PRIDE index
Selected as a company exercising superior
Recognized as a company that stands
evaluation for LGBTQ-related initiatives
work with Pride
health and productivity management
METI, Tokyo Stock Exchange,
on the forefront of sustainable growth
by heightening productivity through
Nippon Kenko Kaigi
workstyle reforms
Nikkei
Support for Initiatives in Japan and Overseas
As a global corporate citizen part of 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 corporate activities and principles).
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, 2023).
GPIF Selected Indices
138 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
139
Corporate Infrastructure Supporting Value Creation
Financial Review
Principal Financial Data
Principal Financial Data
Consolidated Performance Summary
Consolidated Performance Summary
Consolidated gross profit
Consolidated gross profit
Net interest income
Net interest income
Net fees and commissions + Trust fees
Net fees and commissions + Trust fees
Net trading income + Net other operating income
Net trading income + Net other operating income
General and administrative expenses
General and administrative expenses
Overhead ratio
Overhead ratio
Equity in gains (losses) of affiliates
Equity in gains (losses) of affiliates
Consolidated net business profit
Consolidated net business profit
(Reference) Consolidated net business profit (old definition)
(Reference) Consolidated net business profit (old definition)
Total credit cost (gains)
Total credit cost (gains)
Gains (losses) on stock
Gains (losses) on stock
Other income (expenses)
Other income (expenses)
Ordinary profit
Ordinary profit
Extraordinary gains (losses)
Extraordinary gains (losses)
Income taxes
Income taxes
Profit attributable to non-controlling interests
Profit attributable to non-controlling interests
Profit attributable to owners of parent
Profit attributable to owners of parent
Consolidated Balance Sheet Summary
Consolidated Balance Sheet Summary
Total assets
Total assets
Loans and bills discounted
Loans and bills discounted
Securities
Securities
Total liabilities
Total liabilities
Deposits
Deposits
Negotiable certificates of deposit
Negotiable certificates of deposit
Total net assets
Total net assets
Shareholders’ equity
Shareholders’ equity
Retained earnings
Retained earnings
Accumulated other comprehensive income
Accumulated other comprehensive income
Non-controlling interests
Non-controlling interests
Financial Indicators
Financial Indicators
Total capital ratio (BIS guidelines)
Total capital ratio (BIS guidelines)
Tier 1 capital ratio (BIS guidelines)
Tier 1 capital ratio (BIS guidelines)
Common equity Tier 1 capital ratio (BIS guidelines)
Common equity Tier 1 capital ratio (BIS guidelines)
Dividend per share (Yen)
Dividend per share (Yen)
Dividend payout ratio
Dividend payout ratio
ROE (on a stockholders’ equity basis)
ROE (on a stockholders’ equity basis)
Market Data (As of the end of each fiscal year)
Market Data (As of the end of each fiscal year)
Nikkei Stock Average (Yen)
Nikkei Stock Average (Yen)
Foreign exchange rate (USD/JPY)
Foreign exchange rate (USD/JPY)
FY2013
FY2013
2,898.2
2,898.2
1,484.2
1,484.2
987.1
987.1
427.0
427.0
1,569.9
1,569.9
54.2%
54.2%
10.2
10.2
1,338.5
1,338.5
1,242.4
1,242.4
(49.1)
(49.1)
89.2
89.2
(44.5)
(44.5)
1,432.3
1,432.3
(9.6)
(9.6)
458.8
458.8
128.5
128.5
835.4
835.4
161,534.4
161,534.4
68,227.7
68,227.7
27,152.8
27,152.8
152,529.4
152,529.4
94,331.9
94,331.9
13,713.5
13,713.5
9,005.0
9,005.0
6,401.2
6,401.2
3,480.1
3,480.1
878.0
878.0
1,724.0
1,724.0
15.51%
15.51%
12.19%
12.19%
10.63%
10.63%
120
120
20.3%
20.3%
13.8%
13.8%
14,828
14,828
102.88
102.88
FY2014
FY2014
2,980.4
2,980.4
1,505.2
1,505.2
999.6
999.6
475.7
475.7
1,659.3
1,659.3
55.7%
55.7%
(10.6)
(10.6)
1,310.5
1,310.5
-
-
7.8
7.8
66.7
66.7
(48.2)
(48.2)
1,321.2
1,321.2
(11.8)
(11.8)
441.4
441.4
114.4
114.4
753.6
753.6
183,442.6
183,442.6
73,068.2
73,068.2
29,633.7
29,633.7
172,746.3
172,746.3
101,047.9
101,047.9
13,825.9
13,825.9
10,696.3
10,696.3
7,018.4
7,018.4
4,098.4
4,098.4
2,003.9
2,003.9
1,671.7
1,671.7
16.58%
16.58%
12.89%
12.89%
11.30%
11.30%
140
140
26.2%
26.2%
11.2%
11.2%
19,207
19,207
120.15
120.15
FY2015
FY2015
2,904.0
2,904.0
1,422.9
1,422.9
1,007.5
1,007.5
473.5
473.5
1,724.8
1,724.8
59.4%
59.4%
(36.2)
(36.2)
1,142.9
1,142.9
-
-
102.8
102.8
69.0
69.0
(123.9)
(123.9)
985.3
985.3
(5.1)
(5.1)
225.0
225.0
108.4
108.4
646.7
646.7
186,585.8
186,585.8
75,066.1
75,066.1
25,264.4
25,264.4
176,138.2
176,138.2
110,668.8
110,668.8
14,250.4
14,250.4
10,447.7
10,447.7
7,454.3
7,454.3
4,534.5
4,534.5
1,459.5
1,459.5
1,531.0
1,531.0
17.02%
17.02%
13.68%
13.68%
11.81%
11.81%
150
150
32.7%
32.7%
8.9%
8.9%
16,759
16,759
112.62
112.62
FY2016
FY2016
2,920.7
2,920.7
1,358.6
1,358.6
1,017.1
1,017.1
545.0
545.0
1,812.4
1,812.4
62.1%
62.1%
24.6
24.6
1,132.9
1,132.9
-
-
164.4
164.4
55.0
55.0
(17.6)
(17.6)
1,005.9
1,005.9
(26.6)
(26.6)
171.0
171.0
101.8
101.8
706.5
706.5
197,791.6
197,791.6
80,237.3
80,237.3
24,631.8
24,631.8
186,557.3
186,557.3
117,830.2
117,830.2
11,880.9
11,880.9
11,234.3
11,234.3
8,119.1
8,119.1
5,036.8
5,036.8
1,612.5
1,612.5
1,499.3
1,499.3
16.93%
16.93%
14.07%
14.07%
12.17%
12.17%
150
150
29.9%
29.9%
9.1%
9.1%
18,909
18,909
112.19
112.19
* SMFG changed accounting treatment for installment sales transactions in FY2020; figures for FY2019 have been restated to reflect this change.
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
FY2018
FY2018
FY2019*
FY2019*
FY2017
FY2017
2,981.1
2,981.1
1,390.2
1,390.2
1,070.5
1,070.5
520.3
520.3
1,816.2
1,816.2
60.9%
60.9%
39.0
39.0
1,203.8
1,203.8
-
-
94.2
94.2
118.9
118.9
(64.5)
(64.5)
2,846.2
2,846.2
1,331.4
1,331.4
1,064.6
1,064.6
450.2
450.2
1,715.1
1,715.1
60.3%
60.3%
61.1
61.1
1,192.3
1,192.3
-
-
110.3
110.3
116.3
116.3
(63.1)
(63.1)
1,164.1
1,164.1
1,135.3
1,135.3
(55.3)
(55.3)
270.5
270.5
104.0
104.0
734.4
734.4
199,049.1
199,049.1
72,945.9
72,945.9
25,712.7
25,712.7
187,436.2
187,436.2
116,477.5
116,477.5
11,220.3
11,220.3
11,612.9
11,612.9
8,637.0
8,637.0
5,552.6
5,552.6
1,753.4
1,753.4
1,219.6
1,219.6
19.36%
19.36%
16.69%
16.69%
14.50%
14.50%
170
170
32.7%
32.7%
8.8%
8.8%
21,454
21,454
106.25
106.25
(11.7)
(11.7)
331.4
331.4
65.5
65.5
726.7
726.7
203,659.1
203,659.1
77,979.2
77,979.2
24,338.0
24,338.0
192,207.5
192,207.5
122,325.0
122,325.0
11,165.5
11,165.5
11,451.6
11,451.6
9,054.4
9,054.4
5,992.2
5,992.2
1,713.9
1,713.9
678.5
678.5
20.76%
20.76%
18.19%
18.19%
16.37%
16.37%
180
180
34.6%
34.6%
8.2%
8.2%
21,206
21,206
111.00
111.00
2,768.6
2,768.6
1,306.9
1,306.9
1,088.1
1,088.1
373.6
373.6
1,739.6
1,739.6
62.8%
62.8%
56.1
56.1
1,085.0
1,085.0
-
-
170.6
170.6
80.5
80.5
(62.8)
(62.8)
932.1
932.1
(43.4)
(43.4)
167.7
167.7
17.1
17.1
703.9
703.9
219,863.5
219,863.5
82,517.6
82,517.6
27,128.8
27,128.8
209,078.6
209,078.6
127,042.2
127,042.2
10,180.4
10,180.4
10,784.9
10,784.9
9,354.3
9,354.3
6,336.3
6,336.3
1,365.7
1,365.7
62.9
62.9
18.75%
18.75%
16.63%
16.63%
15.55%
15.55%
190
190
37.0%
37.0%
7.6%
7.6%
18,917
18,917
108.81
108.81
FY2020
FY2020
2,806.2
2,806.2
1,335.2
1,335.2
1,098.9
1,098.9
372.1
372.1
1,747.1
1,747.1
62.3%
62.3%
25.0
25.0
1,084.0
1,084.0
-
-
360.5
360.5
92.6
92.6
(105.0)
(105.0)
711.0
711.0
(38.8)
(38.8)
156.3
156.3
3.1
3.1
512.8
512.8
242,584.3
242,584.3
85,132.7
85,132.7
36,549.0
36,549.0
230,685.3
230,685.3
142,026.2
142,026.2
12,570.6
12,570.6
11,899.0
11,899.0
9,513.4
9,513.4
6,492.6
6,492.6
2,313.1
2,313.1
70.8
70.8
18.61%
18.61%
16.96%
16.96%
16.00%
16.00%
190
190
50.8%
50.8%
5.4%
5.4%
29,179
29,179
110.71
110.71
FY2021
FY2021
2,945.5
2,945.5
1,528.0
1,528.0
1,205.5
1,205.5
212.0
212.0
1,821.1
1,821.1
61.8%
61.8%
28.5
28.5
1,152.9
1,152.9
-
-
274.4
274.4
209.1
209.1
(46.9)
(46.9)
1,040.6
1,040.6
(111.0)
(111.0)
214.5
214.5
8.4
8.4
706.6
706.6
257,704.6
257,704.6
90,834.1
90,834.1
38,538.7
38,538.7
245,507.3
245,507.3
148,585.5
148,585.5
13,069.8
13,069.8
12,197.3
12,197.3
9,938.6
9,938.6
6,916.5
6,916.5
2,159.6
2,159.6
97.6
97.6
16.56%
16.56%
15.46%
15.46%
14.45%
14.45%
210
210
40.7%
40.7%
7.3%
7.3%
27,821
27,821
122.41
122.41
(JPY bn)
(JPY bn)
FY2022
FY2022
3,170.2
3,170.2
1,717.8
1,717.8
1,225.7
1,225.7
226.7
226.7
1,949.2
1,949.2
61.5%
61.5%
55.5
55.5
1,276.4
1,276.4
-
-
210.2
210.2
155.9
155.9
(61.2)
(61.2)
1,160.9
1,160.9
(62.5)
(62.5)
282.1
282.1
10.5
10.5
805.8
805.8
270,428.6
270,428.6
98,404.1
98,404.1
33,213.2
33,213.2
257,637.5
257,637.5
158,770.3
158,770.3
13,025.6
13,025.6
12,791.1
12,791.1
10,308.4
10,308.4
7,423.6
7,423.6
2,372.1
2,372.1
109.5
109.5
15.98%
15.98%
14.94%
14.94%
14.02%
14.02%
240
240
40.4%
40.4%
8.0%
8.0%
28,041
28,041
133.54
133.54
140 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
141
Corporate Infrastructure Supporting Value Creation
Financial Review
Consolidated Performance Summary
Consolidated gross profit increased by ¥224.7 billion
year-on-year to ¥3,170.2 billion due to well-balanced
profit growth in major businesses in each business
unit, including the impact of the depreciation of yen, an
increase in loan balances for both domestic and interna-
tional corporate customers and good results of ancillary
businesses, as well as strong performance in the settle-
ment business.
General and administrative expenses increased
year-on-year mainly due to the depreciation of yen and
consolidation of Fullerton India*1, as well as higher vari-
able marketing cost of Sumitomo Mitsui Card Company,
which is successfully increasing new customers. Equity
in gains of affiliates increased due to gains on change in
equity interest at The Bank of East Asia, despite addi-
tional impairment losses on aircraft leased to Russia
by SMBC Aviation Capital. As a result, consolidated net
business profit increased by ¥123.6 billion year-on-year
to ¥1,276.4 billion.
Total credit cost decreased by ¥64.2 billion year-
on-year to ¥210.2 billion because of the reaction to
the reserves recorded for large domestic and overseas
obligors in the previous consolidated fiscal year, despite
recognizing forward-looking provisions to prepare for
future uncertainties such as inflation or recession under
interest rate hike overseas.
In addition to the factors above, ordinary profit
increased by ¥120.3 billion year-on-year to ¥1,160.9
billion, due to factors including the recording of gains on
sales of strategic shareholdings.
Profit attributable to owners of the parent in-
creased by ¥99.2 billion year-on-year to ¥805.8 billion,
despite recognizing impairment losses for branches at
SMBC.
(JPY bn)
FY2022
Increase (Decrease)
Consolidated gross profit
General and
administrative expenses
Equity in gains (losses)
of affiliates
Consolidated net busi-
ness profit
Total credit cost
Gains (losses) on stocks
Ordinary profit
Profit attributable to
owners of parent
3,170.2
1,949.2
55.5
1,276.4
210.2
155.9
1,160.9
805.8
+224.7
+128.1
+27.0
+123.6
(64.2)
(53.2)
+120.3
+99.2
Performance of Major Group Companies
(Left: FY2022 performance; Right: Year-on-year comparison)
SMBC
SMBC Trust
Gross profit
1,699.5
+120.3
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
883.6
815.9
634.2
+26.4
+93.9
+87.9
58.2
36.8
21.4
17.1
SMBC Nikko*2
SMCC
263.4
325.3
(61.9)
(45.7)
(125.4)
+0.6
(126.0)
(93.8)
449.4
375.5
74.3
21.8
SMBCCF*3
SMDAM
36.1
30.3
5.8
3.3
278.4
126.7
133.6
44.1
SMFL*4
271.0
122.4
158.4
51.8
+7.4
+5.7
(16.5)
(22.6)
50%
+37.6
+19.2
+20.2
+16.4
Ratio of Ownership by SMFG
*1 Fullerton India changed its name to SMFG India Credit Company on May 11, 2023.
*2 Figures are on a managerial accounting basis including profit from overseas equity
method affiliates of SMBC Nikko Securities Inc. (consolidated subsidiaries of SMFG).
*3 Year-on-year comparison retroactively reflects impact of reorganization.
*4 Figures are on a managerial accounting basis.
Value Creation at SMBC Group
Business Strategies for Creating Value
Corporate Infrastructure Supporting Value Creation
(JPY bn)
+9.7
(7.3)
+17.0
+33.0
+43.4
+35.6
+8.4
+2.0
50%
(3.1)
+0.1
(3.2)
(2.1)
Consolidated Balance Sheet Summary
Loans and Bills Discounted (SMBC non-consolidated)
The balances of loan and bills discounted increased by ¥6.6
trillion year-on-year to ¥94.3 trillion. This was mainly due to
addressing firm demand for funds in Japan primarily from small
and medium-sized enterprises (SMEs) including demand for
growth capital with stimulating business activity in anticipation
of the post-COVID era, as well as capturing demand for funds in
overseas centered around America.
Balance of Loans (JPY tn)
76.4
22.4
80.2
25.6
81.9
25.0
87.7
29.7
54.0
54.6
56.9
58.0
94.3
33.2
61.1
100
50
0
Mar.19
Mar.20
Mar.21
Mar.22
Mar.23
■ Domestic offices (excluding Japan offshore banking accounts)
■ Overseas offices and Japan offshore banking accounts
Deposits (SMBC non-consolidated)
Deposits increased by ¥8.9 trillion year-on-year to ¥149.9 tril-
lion. This increase was mainly due to increases in both individual
and corporate deposits in Japan.
Balance of Deposits (JPY tn)
■ Individuals (domestic) ■ Corporates (domestic) ■ Others
150
75
0
116.1
120.0
134.7
141.0
149.9
50.2
53.1
59.3
62.6
65.1
47.1
49.1
53.4
56.1
57.9
Mar.19
Mar.20
Mar.21
Mar.22
Mar.23
Domestic Loan-to-Deposit Spread
(SMBC non-consolidated)
The domestic loan-to-deposit spread, calculated by subtracting
the value of deposits from the value of loans, remained virtually
unchanged from the previous year at 0.83%.
Domestic Loan-to-Deposit Spread
FY2022
(%)
FY2021
Interest earned on
loans and bills
discounted
Interest paid on
deposits, etc.
Loan-to-deposit
spread
1Q
2Q
3Q
4Q
Yearly
average
Yearly
average
0.83
0.84
0.81
0.82
0.83
0.84
0.00
0.00
0.00
0.00
0.00
0.83
0.84
0.81
0.82
0.83
0.00
0.84
Securities
Other securities decreased by ¥5,650.0 billion year-on-year to
¥32,465.0 billion due to decrease in the amount of Japanese
government bonds required to be held by SMBC for collateral
purpose. Net unrealized gains on other securities decreased
by ¥362.1 billion year-on-year to ¥1,915.1 billion, mainly due
to lower unrealized gains resulting from progress in reducing
strategic-shareholding, as well as a deterioration in unrealized
profit and loss on foreign bonds due to higher interest rates
overseas.
Unrealized Gains (Losses) on Other Securities
(JPY bn)
Balance
Net unrealized gains (losses)
March 31, 2023
YoY
March 31, 2023
YoY
Stocks
Bonds
Others
3,345.4
(58.0)
1,944.8
13,177.5
(6,382.8)
15,942.1
+790.9
(64.2)
34.6
Total
32,465.0
(5,650.0)
1,915.1
(88.9)
(14.1)
(259.0)
(362.1)
NPLs Based on the Banking Act and
Financial Reconstruction Act
The balance of NPLs based on the Banking Act and the Finan-
cial Reconstruction Act decreased by ¥229.7 billion year-on-
year to ¥927.8 billion due to reducing the balances of some
large obligors. The NPL ratio also improved by 0.28% over the
previous year, reaching 0.80%.
NPLs Based on the Banking Act and NPL Ratio
(JPY bn)
（%）
1,500
1,000
500
0
966.5
1,157.6
927.8
805.3
695.2
650.3
476.5
428.6
0.76
0.54
0.68
0.46
627.8
0.98
0.65
1.08
0.77
586.6
0.80
0.52
Mar.23
Mar.19
Mar.20
Mar.21
Mar.22
Balance: ■ Consolidated ■ SMBC non-consolidated
Ratio: ■ Consolidated ■ SMBC non-consolidated
6
4
2
0
142 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
143
Appendix I
CONTENTS
Group Companies .......................................... 146
Corporate Data ............................................... 175
Risk Management ........................................... 151
Sumitomo Mitsui Financial Group, Inc.
Internal Reporting Systems and
Hotline for Inappropriate Accounting
and Auditing Activities .................................... 167
Basic Policy for Customer-Oriented
Business Conduct ........................................... 168
Support for Mid-Sized
Corporations and SMEs,
Vitalization of Local Regions in Japan ............ 170
Employees ....................................................... 172
Main Work-Life Balance Support System ........ 174
Directors and Executive Officers ................ 175
Sumitomo Mitsui Financial Group
Organization ............................................... 176
Sumitomo Mitsui Banking Corporation
Board of Directors, Directors, Members of
the Audit and Supervisory Committee and
Executive Officers ........................................ 177
SMBC Organization ..................................... 180
Principal Subsidiaries and Affiliates ................ 182
Principal Domestic Subsidiaries ................. 182
Principal Overseas Subsidiaries ................. 183
Principal Affiliates ........................................ 184
International Directory .................................... 185
Corporate Infrastructure Supporting Value Creation
Financial Review
Capital
Capital
Common equity Tier 1 capital increased by ¥380.6 bil-
lion from the end of the previous fiscal year to ¥10,839.0
billion, primarily due to an increase in profit attributable
to owners of the parent and foreign exchange effects.
As a result, Tier 1 capital increased by ¥362.7 billion to
¥11,548.9 billion and total capital increased by ¥367.0
billion to ¥12,350.8 billion.
Risk-Weighted Assets
Risk-weighted assets increased by ¥4,935.0 billion from
the end of the previous fiscal year to ¥77,285.0 billion,
mainly due to an increase in loans in Japan and overseas.
Capital Ratio
As a result of the above, the Common Equity Tier 1 ratio,
which represents the most important form of core capital,
stood at 14.02%, while the total capital ratio was 15.98%.
Both ratios remain adequate.
Leverage Ratio
Despite an increase in Tier 1 capital, the leverage ratio fell
by 0.14% to 5.03%, mainly due to an increase in on-bal-
ance assets, as a result of an increase in loans in Japan
and overseas.
External TLAC Ratio
In addition to increasing our own equity capital, SMBC
Group seeks to increase external TLAC capital by procuring
external TLAC bonds primarily from overseas corporate
bond markets. The external TLAC ratio was 25.28% on a
risk-weighted asset basis and 9.72% on a total exposure
basis, exceeding the mandated levels on both items.
Total Capital Ratio (BIS Guidelines)
(JPY bn)
March 31,
2023 (A)
March 31,
2022 (B)
YoY (A–B)
Common equity Tier 1 capital
10,839.0
10,458.4
+380.6
Additional Tier 1 capital
710.0
727.8
(17.8)
Tier 1 capital
Tier 2 capital
Total capital
11,548.9
11,186.2
+362.7
801.9
797.5
+4.4
12,350.8
11,983.8
+367.0
Risk-weighted assets
77,285.0
72,350.1
+4,935.0
Common equity Tier 1 capital ratio
Tier 1 ratio
Total capital ratio
14.02%
14.94%
15.98%
14.45%
15.46%
16.56%
(0.43)%
(0.52)%
(0.58)%
Leverage Ratio
Leverage ratio
External TLAC Ratio
5.03%
5.17%
(0.14)%
Risk-weighted asset basis
25.28%
24.98%
Total exposure basis
9.72%
9.54%
+0.30%
+0.18%
Total Exposure
Total exposure*
229,517.0
216,080.4
+13,436.6
* Excludes deposits with the Bank of Japan
144 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
145
Group Companies (as of March 31, 2023)
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: ¥2,341.8 billion
Stock Exchange Listings:
Tokyo Stock Exchange (Prime Market)
Nagoya Stock Exchange (Premier Market)
Notes:
1. American Depositary Receipts (ADRs) are listed on
the New York Stock Exchange.
Credit Ratings (as of June 30, 2023)
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)
2023
Billions of yen
2021
2022
2020
1,160�9
1,040�6
For the Year:
Ordinary income �������� ¥ 6,142�1 ¥ 4,111�1 ¥ 3,902�3 ¥ 4,591�8
Ordinary profit���������
932�0
Profit attributable to
owners of parent �����
At Year-End:
Net assets �������������� ¥12,791�1 ¥12,197�3 ¥ 11,899�0 ¥ 10,784�9
Total assets ������������ 270,428�5 257,704�6 242,584�3 219,863�5
Note: All amounts shown are rounded down to the nearest 100 million�
711�0
805�8
703�8
706�6
512�8
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: Akihiro Fukutome
(Concurrent Director at Sumitomo
Mitsui Financial Group)
Number of Employees: 27,839
Number of branches and other business locations:
1,756*
In Japan:
Branches:
524
(Including 47 specialized deposit account branches)
393
Sub-branches:
2
Banking agencies:
837
Automated service centers:
45
19
23
3
* 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:
Credit Ratings (as of June 30, 2023)
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)
2023
Billions of yen
2021
2022
2020
867�8
1,125�9
For the Year:
Ordinary income ������� ¥ 4,991�9 ¥ 2,990�4 ¥ 2,786�6 ¥ 3,469�0
Ordinary profit ��������
770�4
Profit attributable to
owners of parent �����
At Year-End:
Net assets �������������� ¥ 9,735�5 ¥ 9,219�8 ¥ 9,256�3 ¥ 8,368�3
Total assets ������������ 252,567�5 242,105�9 228,066�5 206,089�6
Note: All amounts shown are rounded down to the nearest 100 million�
534�7
517�7
807�0
568�2
406�0
www.smfg.co.jp/english/
www.smbctb.co.jp/en
SMBC Trust Bank, formerly Societe General
Private Banking (Japan), and Citibank’s retail
banking business (Japan) now under the new
“PRESTIA” brand, will celebrate 10th anniver-
sary as a member of SMBC Group in October
2023. Our goal has been to contribute to our
customers and society by providing compre-
hensive and advanced solutions connecting
three functions; “Foreign Currency, Real
Estate, and Trust”. Under the new vision of
“Becoming a ‘Trust Bank’ that grows together
with our customers and society as a solution
provider of foreign currency, real estate and
trust services”, the management goal is
defined as “Create the ‘Next’” in our Medium-
Term Management Plan beginning from
FY2023. We continue to address sustainable
growth and further enhance our corporate
value by realizing this vision.
Sumitomo Mitsui Finance and Leasing is one
of the top-class general leasing companies in
Japan. We provide a range of services that
help to solve our customers’ business and
social issues by leveraging our expertise cul-
tivated across more than 50 years in the
leasing business, as well as the customer
bases and networks of both SMBC Group
and Sumitomo Corporation shareholders.
We have launched a new Medium-Term
Management Plan, the theme of which is
“Pursuing our strengths as a business with a
wide range of financial functions to solve
social issues.” By combining the business
foundations and financial functions estab-
lished in the previous Medium-Term Business
Plan with our industry-leading digital trans-
formation capabilities, we will provide
solutions unique to SMFL. We will capture
further business and business opportunities
to solve social issues and expand both our
social and economic value.
Company Name: SMBC Trust Bank Ltd.
Business Profile: Commercial banking and
Trust Banking
Establishment: February 25, 1986
Head Office: 1-3-2, Marunouchi, Chiyoda-ku, Tokyo
President and CEO: Ryuji Nishisaki
Number of Employees: 1,562
Number of branches: 26 (in Japan)
Financial Information (Years ended March 31)
2023
Billions of yen
2021
2022
2020
For the Year:
Ordinary income �������
Ordinary profit (loss) ��
Net income (loss) ������
At Year-End:
Total assets ��������������
¥3,423�3
Note: All amounts shown are rounded down to the nearest 100 million�
¥ 61�0
1�0
(32�7)
¥ 86�1
23�3
17�0
¥ 56�5
4�6
(15�9)
¥ 47�9
(7�5)
(8�5)
¥3,687�1
¥3,494�7
¥4,125�1
www.smfl.co.jp/english/
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: 3,847
Credit Ratings (as of June 30, 2023)
Standard & Poor’s
R&I
JCR
Long-term Short-term
A–
AA–
AA
—
a-1+
J–1+
Financial Information
(Consolidated basis, years ended March 31)
2023
Billions of yen
2021
2022
2020
¥2,433�5
1,438�2
41�3
45�0
¥3,143�1
2,159�3
133�1
136�5
¥2,939�2
1,818�5
116�2
119�4
For the Year:
Leasing transaction
volume ���������������������
Operating revenue �����
Operating profit ���������
Ordinary profit�����������
Profit attributable to
owners of parent �������
At Year-End:
Total assets ��������������
Notes:
1� All amounts shown are rounded down to the nearest 100 million�
2� Consolidated subsidiaries include SMBC Aviation Capital Limited�
¥2,489�2
1,513�7
89�4
90�3
¥7,041�9
¥6,378�7
¥9,245�6
¥7,795�9
33�6
35�3
50�4
61�2
146 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
147
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 driving the advance
of cashless payments.
In April 2021, the headquarters functions
of Sumitomo Mitsui Card Company and
SMBC Finance Service were consolidated
into the SMBC Toyosu Building. This seam-
less environment will lead to increased
coordination between the two companies
and thereby enable them to provide even
higher-quality services as the core of SMBC
Group’s cashless payment strategies.
Capitalizing on the transaction base,
expertise, credibility, and other strengths it
has accumulated as an industry leader,
Sumitomo Mitsui Card Company aims to
evolve beyond the provision of products and
services, to grow into a digital and innovation
company that is chosen by clients and which
supports these clients in their various activi-
ties through the integration of its credit card,
installment and transaction business.
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: 9,039
www.smbcnikko.co.jp/en
Credit Ratings (as of June 30, 2023)
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)
2023
Billions of yen
2021
2022
2020
79�5
81�9
71�0
56�6
59�6
44�2
(42�0)
(38�3)
(32�3)
For the Year:
Operating revenue ����� ¥ 262�8 ¥ 333�1 ¥ 354�7 ¥ 378�0
39�0
Operating income������
42�6
Ordinary profit�����������
Net income ���������������
32�1
At Year-End:
Total assets �������������� ¥14,993�2 ¥13,979�8 ¥13,213�1 ¥12,090�9
Notes:
1� All amounts shown are rounded down to the nearest 100 million�
2� Due to a change in the method of presentation of financial income
beginning from FY2021, adjusted operating revenue values are
presented for prior periods�
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: 2-2-31, Toyosu,
Koto-ku, Tokyo
Credit Rating (as of June 30, 2023)
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: 2,752
2023
Billions of yen
2021
2022
2020
For the Year:
Revenue from credit
card operations ��������� ¥30,181�6 ¥24,715�0 ¥20,751�5 ¥20,548�5
480�8
Operating revenue �����
50�5
Operating profit ���������
50�8
Ordinary profit�����������
38�2
Net income (loss) ������
At Year-End:
Total assets
470�5
31�0
34�1
19�8
447�5
34�5
35�3
35�8
523�5
32�8
33�0
21�8
Sumitomo Mitsui
Card Company ������� ¥ 3,400�1 ¥ 2,852�2 ¥ 2,524�5 ¥ 2,257�2
SMBC Finance
Service ����������������� ¥ 2,062�7 ¥ 2,382�6 ¥ 2,372�1 ¥ 2,052�2
SMBC Finance Service Co., Ltd., was formed
in April 2009 through the merger of OMC Card,
Inc., Central Finance Co., Ltd., and QUOQ Inc.
Originally named Cedyna Financial Corpora-
tion, this company assumed its current name
in July 2020.
In April 2021, the headquarters functions of
SMBC Finance Service and Sumitomo Mitsui
Card Company were consolidated into the
SMBC Toyosu Building. This proximity is
expected to lend itself to increased coordina-
tion between the two companies and to
thereby enable them to provide even high-
er-quality services as the core of SMBC
Group’s cashless payment strategies.
Together with Sumitomo Mitsui Card Com-
pany, SMBC Finance Service aims to grow
into a digital and innovation company that is
chosen by clients and which supports these
clients in their various activities.
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.
www.smbc-fs.co.jp/
(Japanese only)
Note: To reflect the integrated management of SMBC Finance Service
and Sumitomo Mitsui Card Company, financial information
for both companies is displayed in the latter’s section on the
previous page�
Company Name: SMBC Finance Service Co., Ltd.
Business Profile: Credit card, Installment and
Transaction business
Establishment: September 11, 1950
Head Office:
Head Office: 3-23-20, Marunouchi,
Naka-ku, Nagoya
Tokyo Head Office: 2-2-31, Toyosu,
Koto-ku, Tokyo
President and CEO: Naoki Ono
Number of Employees: 2,816
www.smbc-cf.com/english/
Company Name: SMBC Consumer Finance Co., Ltd.
Business Profile: Consumer lending
Establishment: March 20, 1962
Head Office: 2-2-31, Toyosu, Koto-ku, Tokyo
President and CEO: Ryohei Kaneko
Number of Employees: 2,139
Credit Rating (as of June 30, 2023)
R&I
Long-term Short-term
AA–
—
Financial Information (Years ended March 31)
2023
Billions of yen
2021
2022
2020
For the Year:
Operating revenue �����
Operating profit ����������
Ordinary profit�����������
Net income ���������������
At Year-End:
Total assets ��������������
¥1,011�3
Note: All amounts shown are rounded down to the nearest 100 million�
¥ 180�4
40�8
40�6
52�9
¥ 199�8
41�4
42�9
78�6
¥ 179�3
41�2
42�0
38�8
¥187�1
46�7
48�0
38�8
¥1,333�0
¥1,279�3
¥953�5
4,754
5,437
5,239
4,986
Number of
cardholders (in tens
of thousands) ������������
Notes:
1� All amounts shown are rounded down to the nearest 100 million�
2� To reflect the integrated management of Sumitomo Mitsui Card
Company and SMBC Finance Service, the above figures for
operating revenue, operating profit, ordinary profit, and net income
(loss) 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 SMBC Finance Service�)
148 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
149
3� From FY2019, revenue from credit card operations includes
e-money transactions�
4� Number of cardholders includes the number of debit cardholders�
The Japan Research Institute, Limited (“JRI”)
is a comprehensive information services
company with think-tank, consulting and IT
solutions functions.
Under the fundamental philosophy of “creat-
ing new value for the client,” JRI offers concrete
proposals for identifying and resolving issues
together with support for enacting those
solutions.
JRI conducts a wide range of activities,
including research and analysis of domestic
and foreign economies and sharing policy pro-
posals, supporting the creation of new
businesses, consulting on management strat-
egies and administrative reforms, planning and
developing IT-based strategic data systems,
as well as providing outsourcing services.
Company Name: The Japan Research Institute,
Limited
Business Profile: Economic research, management
consulting, system development
and data processing
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: 2,962
www.jri.co.jp/english/
Financial Information (Years ended March 31)
2023
Billions of yen
2021
2022
2020
For the Year:
Operating revenue �����
Operating profit ���������
Ordinary profit�����������
Net income ���������������
At Year-End:
Total assets ��������������
¥100�8
Note: All amounts shown are rounded down to the nearest 100 million�
¥214�3
4�5
5�0
3�6
¥147�4
1�9
2�3
2�4
¥219�7
4�0
5�0
3�5
¥143�2
2�9
2�8
0�9
¥105�6
¥116�8
¥124�3
Sumitomo Mitsui DS Asset Management
Company, Limited is an asset management
company that strengths in active investment
and has an industry-leading investment
research platform, and a global network.
Sumitomo Mitsui DS Asset Management
Company provides high-quality asset man-
agement services that meet specific needs
of its diverse client base that ranges from
Japanese and non-Japanese institutional
(pension funds, financial institutions, etc.) to
individual investors. The company’s vision is
to become the best asset management firm
for better Quality of Life of its clients and all
the other stakeholders.
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
Financial Information (Years ended March 31)
Establishment: July 15, 1985
Head Office: 1-17-1 Toranomon, Minato-ku, Tokyo
President and CEO: Takashi Saruta
Number of Employees: 806
2023
Billions of yen
2021
2022
2020
For the Year:
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At Year-End:
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Note: All amounts shown are rounded down to the nearest 100 million�
¥ 65�5
1�5
2�2
0�6
¥ 72�0
3�8
3�3
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¥ 61�6
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(28�9)
¥ 77�3
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¥133�6
¥107�8
¥113�8
¥106�4
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
Credit risk is the possibility of a loss arising from a credit event, such as deterioration in the financial condition of
a borrower, that causes an asset (including off-balance sheet transactions) to lose value or become worthless.
Risk Category
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,
Risk Management Information 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,
Risk Management Information Department
Operational risk Operational risk is the possibility of losses arising from inadequate or failed internal processes, people, and
systems or from external events (see page 141 for information on risk categories and the departments in charge).
Corporate Risk Management Department,
Risk Management Information Department
Conduct risk
Model risk
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
Model risk is the risk of potential adverse consequences or financial loss resulting from misinformed decision
making based on inaccurate model outputs or using the model inappropriately.
Corporate Risk Management Department
Reputational risk Reputational risk refers to the risk of not meeting the expectations for high ethics, integrity, etc. by the stake-
holders (that is, customers, shareholders, market, society, environment, employees, etc.) due to the business
of the SMBC Group and the behavior of employees and other related parties leading to impairment of the
Enterprise Value and decline in trust.
General Affairs Department,
Public Relations Department
Top Risks
Top Risks, risks that threaten to significantly impact management, recognized by SMBC Group are listed in the table below (see page 127 for
information on methods of utilizing Top Risks).
Top Risks
Example Scenarios
World economic stagnation
• Global economic recession due to factors such as the reversal of the credit cycle and economic slowdown in China
Highly volatile commodity price and financial / foreign exchange markets • Adverse effects of monetary tightening in major economies on the financial system and the emergence of a global
financial crisis
Sudden deterioration of foreign currency funding conditions
• Sudden deterioration of the foreign currency funding condition due to market disruption
Japanese economic stagnation
• Deterioration of the economy accompanied by debt adjustments due to the shift from monetary easing, and
decline in potential growth due to a decline in the labor force
Japanese fiscal instability
• Emergence of Japan sell-off due to increased interest payments on government debt and deteriorating public
finances due to rising defense spending
The U.S. - China struggle for supremacy
• Deterioration of the business environment due to political conflict between the U.S. and China and growing
concerns over the security environment
Growing intension of Russia-Ukraine conflict
• Russia’s escalation including the use of nuclear weapons, against Western countries’ enhancing support to Ukraine
Unstable situations in the Middle East and Asia
• Occurrence of emergency incidents due to heightened tensions in the Korean Peninsula; opposition from
neighboring countries in connection with Japan’s policies
Political turmoil and social instability
• Social turmoil surrounding the next presidential election in the U.S.; opaque policy management due to changes in
China’s leadership
Outbreak of serious infectious disease
• Occurrence of a pandemic due to the emergence of a virus or bacterium that is highly infectious to humans
Disasters such as large-scale earthquakes, storms, and floods
• Negative impact caused by the occurrence of large-scale earthquakes and volcanic eruptions, increased
frequency of extreme weather events and natural disasters, and impairment of natural capital
Lack of preparedness against cyber attacks and financial crimes
• Increase in national-level cyber-attacks and damage to critical infrastructure, and diversification of attack methods
Changes in industrial structure due to technological innovation
• Decrease in our competitiveness due to the rapid digitization of financial services (fintech, digital currency, etc.)
Inadequate responses to climate change risk and environmental issues
• Deterioration of reputation and occurrence of stranded assets due to inadequate efforts to reduce GHG emissions
and to conserve natural capital
Inadequate responses to human rights issues
Improper labor management
• Reputational damage due to inadequate response to issues such as forced labor and racial discrimination
• Reputational damage due to inadequate responses to gender issues and work-style reform
Misconduct such as an employee’s inappropriate behavior
• Administrative disposition or reputational damage due to inadequate actions or serious breaches of regulations
by employees
Inadequate improvement in the operational resilience system
• Significant negative impact on customers and reputational damage due to data breaches and system failures
Inadequate preparedness for heightened regulatory and supervisory
scrutiny
• Impact on our business due to the increasing focus on AML/CFT controls and the strengthening of financial
supervision and regulation
Difficulty in securing human resources
• Restriction on business operations and decreased competitiveness due to a lack of headcount and specialized
human resources
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.
150 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
151
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 consolidated balance sheets and consolidated statements
of income, which include data from affiliates, with the goal of iden-
tifying 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 which we
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
may face risks (e.g. an outlook encompassing the entire world).
for practicing proper governance of stress testing will be applied.
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.
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
¥77,285 billion as of March 31, 2023, up ¥4,935 billion from March
and basic operating concepts, policies, and standards for credit
31, 2022. The main factors behind the increase in risk-weighted
operations, in accordance with our business mission and rules of
assets was an increase in our corporate credit exposure in Japan
conduct. SMBC Group is promoting the understanding of and strict
and overseas, as well as the effects of the depreciation of the yen on
adherence to its Group credit policy among all its managers and
exchange rates.
■ Risk-Weighted Assets as of March 31, 2023
employees. By fostering a culture of appropriate levels of risk-taking
and providing high-value-added financial services, SMBC Group
aims to enhance shareholder value and play a key contributory role
(Trillions of yen)
in the community.
Credit risk
Market risk
Operational risk
Floor adjustments*
Total
March 31,
2022
March 31,
2023
Increase
(decrease)
63.2
3.0
4.3
1.7
72.3
65.0
4.4
4.8
2.9
77.2
+1.7
+1.4
+0.5
+1.2
+4.9
* Adjustments for difference between Advanced Internal Ratings-Based (AIRB) approach
and Foundation Internal Ratings-Based (FIRB) approach
■ Risk Assets of Individual Business Units
2. Credit Risk Management System
At SMBC Group, the Group CRO formulates credit risk manage-
ment policies each year based on the group-wide basic policies
for risk management. Meanwhile, the Credit & Investment Planning
Department is responsible for the comprehensive management of
credit risk. This department drafts and administers credit risk regu-
lations, including the Group credit policies, manages non-performing
loans (NPLs), and performs other aspects of credit portfolio manage-
ment. We have also established the Credit Risk Committee to serve
(Trillions of yen)
as a body for deliberating on matters related to group-wide credit
SMBC Group
Credit risk
Market risk
Operational risk
65.0
4.4
4.8
Floor adjustments 2.9
Retail Business Unit
Wholesale Business Unit
Global Business Unit
10.9
20.7
29.3
Global Markets Business Unit 6.7
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.
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 com-
prehensive 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, including
active portfolio management using credit derivatives.
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.
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
draws up plans for their workouts, including write-offs. It works to
efficiently reduce the amount of NPLs through Group company
SMBC Servicer Co., Ltd., which engages in related services, and
by such means as the sell-off of claims. Through industrial and
sector-specific surveys and studies of individual companies, the
152 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
153
Corporate Research Department works to form an accurate idea of
3. Credit Risk Management Methods
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
Disclosure Category Based on
Financial Reconstruction Act
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
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 21 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.
10
Legally or formally bankrupt
154 SMBC GROUP ANNUAL REPORT 2023
Potentially
Bankrupt Borrowers
Virtually
Bankrupt Borrowers
Bankrupt
Borrowers
Doubtful
Assets
Bankrupt and
Quasi-Bankrupt
Assets
SMBC GROUP ANNUAL REPORT 2023
155
(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. We
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
obligor grades and review self-assessment and credit policies so
run credit operations on the basic principle of earning returns that
agement throughout SMBC Group, consolidated subsidiaries carry
Normal Borrowers
that problems can be detected at an early stage and quick and
are commensurate with the credit risk involved, and make every
out self-assessment in substantially the same manner.
effective action can be taken. The system includes periodic moni-
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 and other instruments to
flexibly manage portfolios to stabilize credit portfolios.
(4) Self-Assessment, Write-Offs and Provisions,
Non-Performing Loans Disclosure
To take risks within the acceptable level of capital, we set upper
(a) Self-Assessment
limits for overall risk capital based on the risk appetite and portfolio
Self-assessment is a preparatory task for ensuring SMBC Group’s
plan of each business unit and monitor credit risk capital as a break-
asset quality and calculating the appropriate level of write-offs and
down of overall risk capital.
(b) Controlling Concentration Risk
provisions. Each asset is assessed individually for its security and
collectibility. Depending on the borrower’s current situation, the
As the equity capital of SMBC Group may be materially impaired in
borrower is assigned to one of five categories: Normal Borrowers,
the event that the credit concentration risk becomes apparent, we
Borrowers Requiring Caution, Potentially Bankrupt Borrowers, Vir-
implement measures to manage credit toward industrial sectors with
tually Bankrupt Borrowers, and Bankrupt Borrowers. Based on
excessive risk concentration and introduce large exposure limit lines
the borrower’s category, claims on the borrower are classified into
and conduct intensive loan review for obligors with large exposure.
Classification I, II, III, and IV assets according to their default and
To manage country risk, we also have credit limit guidelines
impairment risk levels, taking into account such factors as collateral
based on each country’s creditworthiness.
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
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-
offs can be made either in the form of loss recognition by offsetting
uncollectible amounts against corresponding balance sheet items,
referred to as a direct write-off, or else by recognition of a loan
loss provision on a contra-asset account in the amount deemed
uncollectible, referred to as an indirect write-off. Recognition of
indirect write-offs is generally known as provision for the reserve for
possible loan losses.
The write-off and provision standards and procedures for
each self-assessment borrower category at SMBC, the core bank
of SMBC Group, are shown on the right. 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.
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�
Further, when cash flows from future reconstruction can be
estimated reasonably accurately, the DCF method is applied
mainly to large claims for calculating the provision amount�
Virtually Bankrupt / Bankrupt
Borrowers
General Reserve
Provisions made in accordance with general inherent default risk
of loans, unrelated to specific individual loans or other claims
Notes
Specific Reserve
Provisions made for claims that have been found uncollectible
in part or in total (individually evaluated claims)
Discounted Cash Flow Method
SMBC uses the discounted cash flow (DCF) method to calculate
the provision amounts for large claims on Substandard Borrowers
or below when the cash flow from repayment of principal and inter-
est received can be estimated reasonably accurately. SMBC then
makes provisions equivalent to the excess of the book value of the
claims over the said cash inflow discounted by the initial contractual
interest rate or the effective interest rate at the time of origination.
One of the major advantages of the DCF method over conven-
tional methods of calculating the provision amount is that it enables
effective evaluation of each individual borrower. However, as the
provision amount depends on the future cash flow estimated on the
basis of the borrower’s business reconstruction plan and the DCF
formula input values, such as the discount rate and the probability
of the borrower going into bankruptcy, SMBC makes every effort
to 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.
156 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
157
(c) Non-Performing Loans Disclosure
Non-Performing Loans are loans and other claims of which recov-
2. Market and Liquidity Risk Management System
In accordance with the group-wide basic policies for risk manage-
ery of either principal or interest appears doubtful. In disclosing
ment decided upon by the Management Committee, SMBC Group
Non-Performing Loans, the disclosure category is determined by
determines important matters relating to the management of market
the borrower categories assigned during self-assessment, and are
and liquidity risks, such as basic policies and risk limits, in order to
disclosed as Non-Performing Loans based on the Banking Act and
manage these risks. The ALM Committee meets four times a year,
the Reconstruction Act.
4. Risk Management of Marketable Credit
Transactions
Financial products, such as investments in funds, securitized
products, and credit derivatives, that bear indirect risk arising from
underlying assets such as bonds and loan obligations are considered
to be exposed to both credit risk from the underlying assets as well
as “market risk” and “liquidity risk” that arise from their trading as
financial products. This is referred to as marketable credit risk.
For these types of products, we manage credit risk by analyzing
and assessing the characteristics of the underlying assets, but, for the
sake of complete risk management, we also apply the methods for
management of market and liquidity risks.
In addition, we have established guidelines based on the charac-
teristics of these types of risks and appropriately manage the risk of
losses.
Market and Liquidity Risks
1. Basic Approach to Market and Liquidity
Risk Management
(1) Definitions of Market and Liquidity Risks
Market risk is the possibility that fluctuations in interest rates, foreign
exchange rates, stock prices, or other market prices will change the
market value of financial products, leading to a loss.
Liquidity risk is defined as the uncertainty around the ability of the
firm to meet debt obligations without incurring unacceptably large
losses. Examples of such risk include the possible inability to meet
current and future cash flow/collateral needs, both expected and
unexpected. In such cases, the firm may be required to raise funds
at less than favorable rates or be unable to raise sufficient funds for
settlement.
(2) Fundamental Principles for Market and Liquidity
Risk Management
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 trans-
parency of the risk management process; and clearly separating
front-office, middle-office, and back-office operations to establish a
highly efficient system of mutual checks and balances.
in principle, to report on the state of market and liquidity risk man-
agement and to discuss ALM operation policies. The Corporate Risk
Management Department and the Risk Management Information
Department which are independent of the business units that
directly handle market transactions, manage market and liquidity
risks in an integrated manner. These departments not only monitor
the current risk situation but also regularly report to the Management
Committee and the Board of Directors. Furthermore, the ALM
Committee at SMBC, the core bank of SMBC Group, 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.
3. Market and Liquidity Risk Management Methods
(1) Market Risk Management
SMBC Group manages market risk by controlling amounts of value
at risk (VaR), losses, and risk capital based on consideration for
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 VaR 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.
The risk of interest rate fluctuation differs substantially by how
The following table shows the VaR results of the Group’s trading
to recognize the dates for the maturity of demand deposits (current
activities during fiscal 2022.
accounts and ordinary deposit accounts that can be withdrawn
b. Banking activities
at any time) and how to estimate the time of cancellation prior to
Banking activities are market operations which gain profits by con-
maturity of time deposits and consumer loans. At SMBC, the matu-
trolling interest rates and term period for assets (loans, bonds, etc.)
rity of demand deposits that are expected to be left with the bank
and liabilities (deposits, etc.). At SMBC Group, in the same way as in
for a prolonged period is regarded to be up to 5 years (2.5 years on
the case of trading activities, we assess and manage the market risk
average). The cancellation prior to the maturity of time deposits and
of banking activities on a daily basis, utilizing VaR and other tools.
consumer loans is estimated based on historical data.
The following table shows the VaR results of the Group’s banking
(a) Market Risks
a. Trading activities
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.
activities during fiscal 2022.
■ VaR for Trading Activities
March 31, 2023
September 30, 2022
Fiscal 2022
Maximum
Minimum
Average
(Billions of yen)
March 31, 2022
Sumitomo Mitsui Financial Group
(consolidated)
Interest rates
Foreign exchange
Equities, commodities, etc.
SMBC (consolidated)
SMBC (non-consolidated)
27.7
37.6
23.9
11.2
11.6
5.4
28.8
63.6
56.5
13.2
12.9
5.6
31.8
84.4
75.1
17.1
15.3
7.6
25.2
21.7
13.2
9.1
10.5
3.0
28.4
63.5
50.8
13.1
12.6
5.3
25.9
59.0
42.7
12.4
10.2
2.9
Note: VaR for a one-day holding period with a one-sided confidence interval of 99.0% (computed daily using the historical simulation method (based on four years of historical observations)).
■ VaR for Banking Activities
March 31, 2023
September 30, 2022
Fiscal 2022
Maximum
Minimum
Average
(Billions of yen)
March 31, 2022
Sumitomo Mitsui Financial Group
(consolidated)
Interest rates
Equities, etc.
SMBC (consolidated)
SMBC (non-consolidated)
69.4
64.7
11.3
68.0
55.2
56.1
53.2
5.5
55.3
43.6
74.0
68.0
19.0
73.4
63.7
44.7
41.2
3.3
43.6
33.3
58.0
54.5
8.8
57.1
46.4
62.6
59.4
17.1
61.9
53.1
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, etc.” does not include equity holdings.
158 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
159
(b) Market Risk Volume Calculation Model
can sufficiently demonstrate its financial intermediary function even in
The tolerated levels of risk are set based on account funding
risk management across the entire Group. Under these policies,
SMBC Group uses internal models to measure VaR and stressed
a stressful environment in which the prices of stocks drastically fall.
status, cash management planning, economic environments, and
we have been working to enhance the operational risk manage-
VaR. For information on the consolidated subsidiaries that employ
Based on the five-year, 300 billion yen(*) reduction plan
other factors, and measures are monitored on a daily or monthly
ment framework across the whole Group by establishing an effec-
these internal models, please refer to the section on market risk.
(FY2020–FY2024), we have reduced 180 billion yen in the three-year
basis in order to limit reliance on short-term funding and appropri-
tive system for identifying, assessing, controlling, and monitoring
a. Presuppositions and limits of model
period up to FY2022. However, based on the recent environment
ately manage liquidity.
material operational risks as well as a system for addressing risks
In the Group’s internal VaR and stressed VaR models, various
surrounding equity holdings, we made a revision to accelerate the
As a framework to complement the Risk Appetite Measures,
that have materialized and implementing emergency response
market fluctuation scenarios are drawn up on the basis of past
reduction plan in May 2023.
upper limits are set in place on both a Group company basis and
measures. Based on the framework of the Basel Capital Accord,
data, and the historical simulation method is used to run profit-
Specifically, in line with the three-year Medium-Term Management
an individual branch basis with regard to funding gaps, which is
we have been continuously pursuing sophisticated quantification of
and-loss movement simulations that enable us to forecast probable
Plan starting in FY2023, we extended the plan one year and added
defined as a maturity mismatch between the source of funds and
operational risks and advanced group-wide management.
maximum losses. The appropriateness of the internal model is later
80 billion yen to reduction amount for a reduction of 380 billion yen
use of funds.
verified through back-testing.
in six years, and set a plan to reduce 200 billion yen in the next three
However, as this method cannot take into account major
years. Also, this plan is set as the minimum, and we are aiming to
market fluctuations that have not actually occurred historically, we
exceed it as much as possible. In addition, we will aim to earn a
supplement this method with the use of stress testing.
good prospect of achieving the reduction of the proportion of market
This internal model employed by SMBC Group undergoes
value of equity holdings to less than 20% of our consolidated net
regular auditing by an independent auditing firm to ensure that it
assets during the period of the next Medium-Term Management
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 confirm the appropriateness of VaR
calculation and the adequacy of risk capital management.
ii Back-testing results
Information on back-testing of trading in fiscal 2022 can be found
on page 252.
c. Substitute indicators
SMBC Group employs, as substitute indicators, VaR wherein pre-
sumptions for the model (observation periods, etc.) change.
d. Changes in model from fiscal 2021
There have been no changes in the model from fiscal 2021.
(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.
(d) Management of Equity Holdings
Plan. Under the new plan, we will work to further reduce equity hold-
ings going forward.
(*) The book value of Japanese listed stocks held by SMBC Group.
■ Composition, by Industry, of Listed Equity Portfolio
(%)
30
25
20
15
10
5
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(2) Liquidity Risk Management
At SMBC Group, liquidity risk is regarded as one of the major risks.
The Group’s liquidity risk management is based on a framework
SMBC Group establishes risk allowance limits for total risk capital to
consisting of setting Risk Appetite Measures and establishing con-
control stock price fluctuation risk appropriately. Risk capital associ-
tingency plans.
ated with equity holdings is monitored as a component of total risk
The Risk Appetite Measures are measures for selecting the types
capital. More specifically, VaR (1 year holding period) computed from
and levels of risk that we are willing to take on or tolerate. As the level
profit-and-loss simulations based on historical market fluctuation
of liquidity risk is evaluated based on cash flow and balance sheet
data and aggregated fluctuation in market price from the beginning
conditions, Risk Appetite Measures have been set for both of these
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
1. Basic Approach to Operational Risk Management
(1) Definition of Operational Risk
Operational risk is the risk of loss arising from inadequate or failed
internal processes, people, and systems or from external events.
Specifically, the risk—which, in addition to processing risk and sys-
tem risk, covers legal risk, human resources risk, 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 process management.
(2) Fundamental Principles for Operational Risk Management
We have set forth the policies on Operational Risk Management to
define the basic rules to be observed in the conduct of operational
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 Commit-
tee makes decisions on basic policies for operational risk manage-
ment, and these decisions are authorized by the Board of Directors.
In addition, the Corporate Risk Management Department and the
Risk Management Information Department oversee the overall man-
agement of operational risks and work together with departments
responsible for the subcategories such as processing risks and
system risks 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 comprehensively
specifying scenarios involving operational risks based on the oper-
ational procedures of companies that have adopted the Advanced
Measurement Approach (AMA) on a regular basis and estimating the
loss amount and frequency of the occurrence of such losses based
on each scenario. Risk severities are quantified for each scenario. For
those scenarios having high severities, risk mitigation plans will be
developed and the implementation status of such risk mitigation plans
will be monitored by the Corporate Risk Management Department
and the Risk Management Information Department. Furthermore,
Risk Category
Definition
Department in Charge
Operational risk
The risk of loss arising from inadequate or failed internal processes, people, and systems or from external events. Corporate Risk Management
Processing risk
System risk
The risk of losses arising from the failure of directors and employees to perform administrative duties in accordance
with administrative rules and procedures, or from accidents or misconduct.
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 information).
Department,
Risk Management Information
Department
Operations Planning Department
System 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
of the fiscal year are subject to risk capital management and moni-
areas. These measures include Liquidity Coverage Ratio and Net
Human resources risk The risk of loss arising from inappropriate labor practices, poor working environments, discriminatory conduct, an
Human Resources Department
tored on a daily basis.
Stable Funding Ratio, a liquidity regulation; periods set for which it will
SMBC Group continuously makes efforts to reduce price fluc-
be possible to maintain funding levels even under stress due to deposit
tuation risks from the point of view of maintaining a foundation that
outflow or other factors; and the ratio that stable funding covers loans.
outflow or loss of human resources, or deterioration in employee morale.
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
160 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
161
operational risks are quantified and quantitatively managed by utilizing
operational risk equivalent amount and risk asset amounts. In
measurement accuracy is ensured through a framework of regu-
materializes. A risk management system has thus been put in place
the collected internal loss data and scenarios. Risk severities are
addition, steps are taken to ensure the objectivity, accuracy, and
larly conducted verifications of the quantification models pre- and
to ensure adequate risk management.
quantified for each scenario.
comprehensiveness of scenario evaluations by utilizing external
post-measurement.
Furthermore, as SMBC Group’s scope expands beyond the
Regular reports are issued to the Group CRO on internal loss
loss data and Business Environment and Internal Control Factors in
Meanwhile, the operational risk equivalent amounts of other
bounds of finance, we are taking steps to identify risks from new
data, KRI, scenario risk severity information, and the status of risk
verification processes.
Group companies that do not apply the AMA are calculated
perspectives and to implement management systems that match
mitigation to ensure the effectiveness of risk management measures.
The quantification model produces the distribution of loss
according to the Basic Indicator Approach (BIA), and the opera-
the extent of risks in a given area of business. SMBC Group is
Moreover, our independent Internal Audit Department conducts
frequency and loss severity based on the internal loss data and
tional risk equivalent amounts for Sumitomo Mitsui Financial Group
strengthening its risk management, beginning with high risk areas,
periodic internal audits to verify that the Group’s operational risk
scenario analysis results, and it also produces the loss distribution
consolidated basis and SMBC consolidated basis are calculated by
to assist in strengthening the risk management structure at compa-
management system is functioning properly.
based on said distribution of loss frequency (distribution of losses
consolidating such amounts calculated based on the BIA with the
nies requiring sophisticated risk management, as well as business
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.
Specifically, a model to which internal loss data and scenario
anal ysis results are input has been introduced to calculate the
■ Basic Framework of Operational Risk Measurement
in a year) and the distribution of loss severity (distribution of loss
amount per case) by making various combinations of frequencies
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
the case of Sumitomo Mitsui Financial Group consolidated basis,
the risk of losses on repayment of excess interest is added on. The
Internal Loss Data
Data
input
Distribution of Loss Frequency
Calculation of Operational Risk Equivalent Amount Using Quantification Model
External Loss Data
Verifi-
cation
Scenario
Analysis
Results
Business Environment and
Internal Control Factors
(
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)
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(
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0.30
0.25
0.20
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0.10
0.05
0
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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
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0.4
0.3
0.2
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99.9%
Aggregated annual loss amount
operational risk equivalent amount calculated based on the AMA.
partners and other areas of the supply chain.
4. Processing Risk Management
Processing risk is the risk of losses arising from the failure of direc-
tors and employees to perform administrative duties in accordance
with administrative rules and procedures, or from accidents or
misconduct.
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 business strat-
egies, inappropriate technologies applied, changes to the develop-
ment plan and delays 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
establishing contingency plans to minimize losses if a system risk
In addition, we actively and openly incorporate various tech-
nological progress to improve convenience for customers. We also
strengthen our risk management structure on an ongoing basis in
response to environmental changes, to deal with projected risks aris-
ing from promoting digitalization in a wide range of fields, such as the
creation of new businesses and boosting productivity and efficiency.
As SMBC Group adopts artificial intelligence, cloud, robotic process
automation, application programming interface, and other technol-
ogies, manuals have been prepared with regards to items requiring
compliance at the time of implementation and items for periodic
monitoring as part of efforts to reinforce group-wide IT governance.
The risk of cyber threats is growing increasingly serious due to
greater surface area for attack caused by the accelerating digitization
of financial services and growing geopolitical tensions. To prepare
against these growing threats, we have established an intelligence
function and security monitoring system in addition to technical mea-
sures for cyber security, and we are also focusing on the training of
professional personnel who will be responsible for these measures.
In addition, the Company regularly participates in drills and exercises,
and carries out third party evaluations of its response posture to
increase their effectiveness.
SMBC operates its risk management system by conducting
risk assessments based on the Security Guidelines published by
the Center for Financial Industry Information Systems (FISC) and by
enhancing safety measures based on the results of these assess-
ments. System failures at banks have the potential to heavily impact
society. In addition, system risks are diversifying and growing more
complex due to advances in IT and the expansion of business fields.
Recognizing these facts, we have numerous measures in place for
system failure prevention, including maintenance to ensure stable
and uninterrupted operation, multiplexing 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.
162 SMBC GROUP ANNUAL REPORT 2023
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163
Conduct Risk
Model Risk
1. Basic Approach to Conduct Risk Management
1. Basic Approach to Model Risk Management
(1) Definition of Conduct Risk
Conduct risk is the risk that our conduct negatively affects custom-
(1) Definition of Model Risk
Model risk is the risk of potential adverse consequences or financial
ers, market integrity, effective competition, public interests, and the
loss resulting from misinformed decision making based on inaccu-
SMBC Group’s stakeholders, through acts that violate laws and
rate model outputs or using the model inappropriately.
regulations or social norms.
(2) Fundamental Principles of Conduct Risk Management
SMBC Group’s fundamental stance is that its business is not
(2) Fundamental Principles of Model Risk Management
SMBC Group is working to improve model risk management across
the Group by adhering to basic principles such as performing man-
Reputational Risk
1. Basic Approach to Reputational Risk
Management
(1) Definition of Reputational Risk
Reputational risk refers to the risk of not meeting the expectations
for high ethics, integrity, etc. by the stakeholders (that is, cus-
tomers, shareholders, market, society, environment, employees,
etc.) due to the business of the SMBC Group and the behavior of
employees and other related parties, leading to impairment of the
to negatively affect customers, market integrity, effective compe-
agement based on a risk-based approach, evaluating model risk
Enterprise Value and decline in trust.
The matter leading to the reputational risk is discussed in the
reputational risk management committee to consider various mea-
sures to minimize the risk, as necessary.
3. Reputational Risk Management Methodology
SMBC Group minimizes losses by adequately gathering information
about the situations where reputational risk could materialize as well
as taking proper measures against such situations.
General Affairs Department and Public Relations Department
strive to control and reduce the risk by gathering information about
the situations where reputational risk could materialize and taking
tition, public interests, and stakeholders. Efforts are being made
and carrying out quantitative management.
(2) Fundamental Principles of Reputational Risk
proper measures against the reputational risk matters identified.
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.
2. Conduct Risk Management System
Based on the group-wide basic policies for risk management,
2. Model Risk Management System
SMBC Group has established a system for managing model risk
based on the group-wide basic policies for risk management. The
Management Committee makes decisions on basic policies for
model risk management, and these decisions are authorized by the
Board of Directors.
Management
SMBC Group has set forth the rules on Reputational Risk
Management to define the basic rules to be observed in the
conduct of its reputational risk management. Under these rules,
SMBC Group has been working to enhance the reputational risk
management framework across the whole Group by clarifying a
management structure as well as management system, methodol-
In addition, the Corporate Risk Management Department cen-
ogies, and rules.
SMBC Group has developed a conduct risk management system.
trally oversees model risk management and is responsible for drafting
The Management Committee makes decisions on basic policies for
model risk management plans, as well as their operation, promotion
conduct risk management, and these decisions are authorized by
and support. The Internal Audit Department carries out regular audits
the Board of Directors. In addition, the Corporate Risk Management
of the efficacy of the model risk management system.
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
discuss these circumstances to ensure the effectiveness of conduct
risk management. Furthermore, the Internal Audit Unit verifies and
evaluates the conduct risk management system.
3. Conduct Risk Management Methodology
SMBC Group mitigates and controls conduct risk by having
3. Model Risk Management Methodology
SMBC Group strives to reduce model risk by implementing appropri-
ate controls for each process pertaining to model development and
use in preparation for the emergence of model risk resulting from a
financial and economic environment beyond that anticipated when
developing the model, as well as the inappropriate use of models
by employees. For example, we carry out validations during the
development of models or when we start to use them, and periodic
validation as part of model lifecycle to prevent their obsolescence
or deterioration of their accuracy. In addition, we also strive to
business units identify and assess the major risks present in
strengthen risk management according to model importance by
their business and establish measures for controlling these risks
assessing the risks present in each model.
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
with regard to matters such as the need to add risks or revisit
assessments while checking and monitoring activities in order to
improve the effectiveness of conduct risk management efforts.
2. Reputational Risk Management System
Based on the group-wide basic policies for risk management, SMBC
Group has developed a reputational risk management system.
In addition, General Affairs Department and Public Relations
Department control reputational risk management in a centralized
manner and formulate and operate the plan for reputational risk man-
agement, promote and provide support for related matters as well as
summarize and analyze information related to reputational risk.
164 SMBC GROUP ANNUAL REPORT 2023
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165
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
In the case of market risk, this would be factors such as the share price
or interest rate; in the case of credit risk, this would be factors such as
the 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.
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
15th floor, Marunouchi Building
2-4-1, Marunouchi, Chiyoda-ku, Tokyo 100-6315
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 will also be accepted. Since an investigation
cannot be conducted without adequate information, please
provide as much detail as possible of the circumstance.
• 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 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
166 SMBC GROUP ANNUAL REPORT 2023
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167
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,
2. Initiatives for Promoting Customer-Oriented
Business Conduct
(5) Frameworks for Properly Motivating Employees
Always thinking and acting based on a customer-oriented perspec-
Sumitomo Mitsui Financial Group will implement the following ini-
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.
This policy informs our basic stance of emphasizing the dispers-
and compliance systems. Through these and other efforts, we have
conduct into its activities.
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.
1. SMBC Group’s Customer-Oriented
Business Conduct
at Group companies are carried out to promote the exercise of a
customer-oriented perspective on a group-wide basis. In addition,
the CX Improvement Committee, which comprises officers sitting on
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.
(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
and to supply various types of information as well as for process-
ing- and infrastructure-related expenses. We will seek to provide
Taku Umezawa
thorough explanations of these fees that are as easy to understand
Former Commissioner of the Consumer
Affairs Agency and Executive Director of the
Japanese Red Cross Society
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.
168 SMBC GROUP ANNUAL REPORT 2023
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169
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
Demonstrating Financial Intermediary and
Consulting Functions
Along with its efforts to fulfill its financial intermediary function
Efforts to Revitalize Communities
SMBC Group works with businesses, local governments, regional
banks, and others to resolve social issues facing local communities.
has in place a system for providing specialized services utilizing the
unsecured and unguaranteed financing, and also provides jointly
smoothly, SMBC seeks to provide solutions to management issues,
In FY2022, Sumitomo Mitsui Banking Corporation made a donation
networks of SMBC Group companies to address customers’ funding
guaranteed loans and support for using prefectural financing systems
putting itself in the position of the client to devise optimum proposals
to Kobe City, Hyogo Prefecture through the Corporate version of
needs, wide-ranging financial needs, and management issues. We
in Japan through collaboration with local credit guarantee corporations,
based on the nature of the issues and the client’s stage in life.
Hometown tax as part of an initiative to achieve a sustainable and
are also working to support mid-sized corporations and SME clients
enabling it to meet the funding needs of customers facing challenges
We further propose and support the implementation of optimized
decarbonized local society and to revitalize the local economy. The
customers’ facing challenges such as the impact of the COVID-19
such as the past impact of the more than three years of the COVID-19
solutions to help our customers who have been affected by natural
Company has also agreed a “Comprehensive Partnership Agreement
pandemic over the past three years, and coping with soaring prices
pandemic, and coping with soaring prices around the world.
disasters, the COVID-19 pandemic, and global price hikes, rebuild
for the Promotion of a Decarbonized Society,” between SMBC,
around the world, by providing cash flow support to help them con-
We will continue offering services to fund and support the manage-
their lives and businesses.
Hyogo Prefecture, Kobe Shimbun, Kobe University and the Institute
tinues their businesses.
ment of the mid-sized corporations and SMEs that form the backbone
In addition, based on the “Guidelines for Business Revitalization,
for Global Environmental Strategies, and we are making efforts to
Going forward, we will continue to fulfill our social responsibility
of the Japanese economy.
as a financial institution by providing support based on the custom-
er’s standpoint.
Credit Guarantee Corporation
Name
Credit Guarantee Corporation of Tokyo
Loans proposed by
financial institutions
(support for
computerization of
promissory notes,
etc.)
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 head office
• External
Affiliation
organizations
• External experts /
professionals
Affiliation
SMBC Group Companies
etc. of Small- and Medium-sized Enterprises” released in March 2022,
foster the next generation of decarbonization promoters through
we support our customers’ business revitalization by providing sup-
industry-government-academia collaboration. In other regions, we
port and advice for the formulation of business improvement plans.
have signed distributorship agreements with regional banks such
In addition, in order to establish financing practices that do not
as Awa Bank to provide the Sustana GHG emissions calculation
rely on personal guarantees, we are working to enhance methods
service, thereby encouraging decarbonization efforts not only in
of financing that substitute business guarantor functions, and are
urban areas, but also in other regions. In March 2023, we held the
earnestly taking actions in line with the contents of the Guidelines
“Osaka City Public-Private Reverse Pitch,” in which issues faced
on Management Guarantees, such as providing careful and specific
by the government were communicated to businesses to solicit
explanations tailored to customers’ individual situations when signing
proposals for solving problems, in which approximately 90 busi-
guarantee contracts.
nesses and organizations participated. SMBC Consumer Finance,
with the cooperation of North Pacific Bank, Ltd., holds financial and
economic education programs at Hokkaido University with the aim
of improving the students and local
residents’ financial literacy. In these
ways, SMBC Group will continue
to leverage its all-round strengths
to contribute to the revitalization of
local economies.
Press Conference with
Hyogo Prefecture Governor
Motohiko Saito
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”
170 SMBC GROUP ANNUAL REPORT 2023
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171
Employees
SMBC
March 31
Number of employees*1
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions
Ratio of employees with
disabilities (% of total)*2
2021
2022
2023
26,229
11,879
45.29%
14,350
54.71%
38 yrs 4 mos�
40 yrs 6 mos�
36 yrs 6 mos�
14 yrs 5 mos�
16 yrs 3 mos�
13 yrs 0 mos�
25,658
11,535
44.96%
14,123
55.04%
38 yrs 11 mos�
40 yrs 10 mos�
37 yrs 4 mos�
15 yrs 1 mos�
16 yrs 7 mos�
13 yrs 10 mos�
25,099
11,198
44.62%
13,901
55.38%
39 yrs 7 mos�
41 yrs 3 mos�
38 yrs 3 mos�
15 yrs 8 mos�
16 yrs 11 mos�
14 yrs 8 mos�
837
819
933
2.70%
2.83%
2.83%
Sumitomo Mitsui Finance and Leasing
March 31
Number of employees*1
2022
2021
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
2,460
1,596
64.88%
864
35.12%
42 yrs 5 mos�
43 yrs 11 mos�
39 yrs 8 mos�
15 yrs 2 mos�
16 yrs 5 mos�
13 yrs 0 mos�
2,427
1,551
63.91%
876
36.09%
42 yrs 7 mos�
44 yrs 0 mos�
40 yrs 1 mos�
15 yrs 4 mos�
16 yrs 6 mos�
13 yrs 4 mos�
2023
2,456
1,544
62.87%
912
37.13%
42 yrs 8 mos�
43 yrs 11 mos�
40 yrs 6 mos�
15 yrs 2 mos�
16 yrs 4 mos�
13 yrs 2 mos�
38
38
70
2.30%
2.41%
2.42%
Sumitomo Mitsui Card
March 31
Number of employees*1
2021
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
6,084
3,111
51.13%
2,973
48.87%
42 yrs 2 mos�
44 yrs 4 mos�
40 yrs 0 mos�
17 yrs 3 mos�
18 yrs 11 mos�
15 yrs 7 mos�
2022
2023
5,976
3,034
50.77%
2,942
49.23%
42 yrs 7 mos�
44 yrs 5 mos�
40 yrs 8 mos�
17 yrs 6 mos�
19 yrs 1 mos�
15 yrs 11 mos�
5,850
2,957
50.55%
2,893
49.45%
42 yrs 9 mos�
44 yrs 4 mos�
41 yrs 2 mos�
17 yrs 8 mos�
19 yrs 2 mos�
16 yrs 2 mos�
81
85
86
2.50%
2.50%
2.41%
*1 The number of full-time employees, including employees seconded to other companies and
organizations� The following list of employees is deducted from the total number of employees:
executive officers, employees on short-term contracts, part-time employees, employees of
temporary employment agencies, and locally hired employees at overseas branches�
*2 As of March 1 of respective years
*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)�
*1 The number of full-time employees� This excludes directors, consultants, advisors, employees
seconded from external companies and organizations, contract and temporary employees, part-
time and specialist contract employees, as well as affiliated company employees�
*2 Computed based on single month of March�
Note: Includes figures for SMBC Finance Service (a wholly-owned subsidiary of SMBC Card Company)�
April 1
2023
Number of new hires
363
Number of newly employed female graduates
137
Ratio of newly employed females to total new employees 36.3% 39.6% 37.7%
2022
472
187
2021
542
197
Fiscal
Number of employees taking parental leave*
Number of career hires*
* Revised retroactively for periods prior to the change in definition�
2022
2021
2020
1,531
1,509
1,585
<556> <533> <516>
97
52
58
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
2021
2022
2023
2,072
993
47.92%
1,079
52.08%
43 yrs 9 mos�
44 yrs 8 mos�
43 yrs 2 mos�
9 yrs 9 mos�
8 yrs 8 mos�
11 yrs 0 mos�
1,807
881
48.75%
926
51.25%
44 yrs 4 mos�
44 yrs 8 mos�
45 yrs 1 mos�
10 yrs 10 mos�
12 yrs 3 mos�
9 yrs 5 mos�
1,723
877
50.90%
846
49.10%
44 yrs 11 mos�
46 yrs 0 mos�
43 yrs 11 mos�
10 yrs 10 mos�
9 yrs 4 mos�
12 yrs 5 mos�
76
65
59
2.42%
2.37%
2.52%
*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, 2023�
April 1
2023
Number of new hires
23
Number of newly employed female graduates
9
Ratio of newly employed females to total new employees 33.3% 42.9% 39.1%
2022
14
6
2021
24
8
Fiscal
Number of employees taking parental leave*
Number of career hires*
* Revised retroactively for periods prior to the change in definition�
2020
76
<36>
16
2021
45
<12>
14
2022
60
<15>
28
*2 As of March 1 of respective years
April 1
2023
Number of new hires
87
Number of newly employed female graduates
40
Ratio of newly employed females to total new employees 41.9% 42.3% 46.0%
2022
71
30
2021
62
26
April 1
2023
Number of new hires
103
Number of newly employed female graduates
39
Ratio of newly employed females to total new employees 40.9% 46.8% 37.9%
Note: Includes figures for SMBC Finance Service (a wholly-owned subsidiary of SMBC Card Company)�
2022
109
51
2021
115
47
Fiscal
Number of employees taking parental leave*
Number of career hires*
* Revised retroactively for periods prior to the change in definition�
2020
44
<21>
16
2021
111
<80>
21
2022
76
<39>
52
Fiscal
Number of employees taking parental leave*3
Number of career hires
*3 Includes childcare leave (paid and leave-of-absence systems)�
Note: Includes figures for SMBC Finance Service (a wholly-owned subsidiary of SMBC Card Company)�
2022
178
<65>
71
2021
178
<69>
46
2020
168
<59>
30
SMBC Nikko Securities
March 31
Number of employees*1
2021
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
9,794
6,049
61.76%
3,745
38.24%
41 yrs 5 mos�
42 yrs 4 mos�
39 yrs 8 mos�
13 yrs 7 mos�
13 yrs 7 mos�
13 yrs 7 mos�
2022
2023
9,623
5,926
61.58%
3,697
38.42%
41 yrs 6 mos�
42 yrs 5 mos�
40 yrs 0 mos�
14 yrs 2 mos�
14 yrs 1 mos�
14 yrs 2 mos�
9,306
5,701
61.26%
3,605
38.74%
42 yrs 2 mos�
43 yrs 0 mos�
40 yrs 11 mos�
14 yrs 2 mos�
14 yrs 1 mos�
14 yrs 5 mos�
183
207
215
2.61%
2.68%
2.86%
*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
2023
Number of new hires
299
Number of newly employed female graduates
115
Ratio of newly employed females to total new employees 36.2% 33.8% 38.5%
2022
219
74
2021
229
83
Fiscal
Number of employees taking parental leave*4
Number of career hires*5
*4 Revision of the short-term childcare leave system and creation of a new special leave for childcare
2022
2021
371
580
<86> <445> <220>
72
2020
439
66
76
in FY2021�
*5 Revised retroactively for periods prior to the change in definition�
SMBC Consumer Finance
March 31
2021
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
2,551
1,466
57.47%
1,085
42.53%
41 yrs 11 mos�
43 yrs 5 mos�
39 yrs 10 mos�
16 yrs 2 mos�
18 yrs 4 mos�
13 yrs 6 mos�
2022
2023
2,592
1,474
56.87%
1,118
43.13%
42 yrs 4 mos�
43 yrs 9 mos�
40 yrs 6 mos�
16 yrs 7 mos�
18 yrs 7 mos�
13 yrs 11 mos�
2,594
1,460
56.28%
1,134
43.72%
42 yrs 12 mos�
44 yrs 5 mos�
41 yrs 1 mos�
17 yrs 1 mos�
19 yrs 2 mos�
14 yrs 6 mos�
137
147
166
2.75%
2.75%
2.67%
*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
2023
Number of new hires
35
Number of newly employed female graduates
12
Ratio of newly employed females to total new employees 52.2% 65.3% 34.3%
2022
49
32
2021
46
24
Fiscal
Number of employees taking parental leave
Number of career hires
2020
35
<7>
1
2021
33
<9>
2
2022
34
<13>
1
Japan Research Institute
March 31
2021
Number of employees*1*2
Male
Percentage of total
Female
Percentage of total
Average age*2
Male
Female
Average years of service
Male
Female
Ratio of employees with
disabilities (% of total)*2
2,571
1,893
73.63%
678
26.37%
41 yrs 1 mos�
41 yrs 8 mos�
39 yrs 7 mos�
13 yrs 1 mos�
13 yrs 5 mos�
12 yrs 3 mos�
2022
2023
2,640
1,931
73.14%
709
26.86%
41 yrs 0 mos�
41 yrs 6 mos�
39 yrs 6 mos�
13 yrs 1 mos�
13 yrs 5 mos�
12 yrs 3 mos�
2,777
2,000
72.02%
777
27.98%
40 yrs 8 mos�
41 yrs 3 mos�
39 yrs 2 mos�
12 yrs 8 mos�
13 yrs 1 mos�
11 yrs 11 mos�
2.26%
2.31%
2.16%
*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, 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
2023
Number of new hires
168
Number of newly employed female graduates
52
Ratio of newly employed females to total new employees 30.7% 36.4% 31.0%
2022
143
52
2021
127
39
Fiscal
Number of employees taking parental leave
Number of career hires*3
*3 Excluding former bank employees transferred to the company
2020
43
<23>
52
2021
58
<33>
51
2022
44
<26>
134
Sumitomo Mitsui DS Asset Management
March 31
Number of employees*1
2021
2022
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions
824
596
72.33%
228
27.67%
46 yrs 5 mos�
47 yrs 11 mos�
42 yrs 3 mos�
15 yrs 6 mos�
16 yrs 10 mos�
12 yrs 0 mos�
770
542
70.39%
228
29.61%
46 yrs 0 mos�
47 yrs 7 mos�
42 yrs 2 mos�
15 yrs 6 mos�
17 yrs 1 mos�
11 yrs 9 mos�
2023
747
509
68.14%
238
31.86%
46 yrs 4 mos�
47 yrs 11 mos�
43 yrs 0 mos�
12 yrs 11 mos�
13 yrs 4 mos�
11 yrs 10 mos�
9
10
11
*1 The number of full-time employees� This excludes directors, dispatched employees, and locally
hired employees at overseas branches�
April 1
2023
Number of new hires
20
Number of newly employed female graduates
8
Ratio of newly employed females to total new employees 50.0% 50.0% 40.0%
2022
12
6
2021
8
4
Fiscal
Number of employees taking parental leave
Number of career hires
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�
2022
24
<12>
32
2021
19
<12>
16
2020
23
<14>
5
172 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
173
Main Work-Life Balance Support System
Parental leave
Childcare leave system
May be taken in installments up to
the age of 18 months or maximum of
2 years in case of inability to place
in daycare center
4 weeks within 8 weeks after birth
(up to 28 days)
May be taken in installments
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 3rd grade
SMBC
Restrictions
on overtime
Until March 31 of
the 3rd grade
Exemption from
late-night work
Until March 31 of
the 3rd grade
Other principal systems
• Short-term childcare leave
• Work relocations
• Primary Work Location Registration
• Career design leave system
• System for rehiring former
employees
SMBC Trust
Bank
Sumitomo
Mitsui Finance
and Leasing
May be taken in installments up to the
age of 1 (Up to the age of 2 years and
2 months in case of inability to place in
daycare center)
4 weeks within 8 weeks after birth
(up to 28 days)
May be taken in installments
May be taken in installments up to the
age of 1 (Up to the age of 2 in case of
inability to place in daycare center)
4 weeks within 8 weeks after birth
(up to 28 days)
May be taken in installments
Until March 31 of the 6th
grade (10 days per annum
per child; 20 days for two
or more children)
Can be acquired on a
by-hour, half-day, or full-day
basis
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
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 3rd grade
Shortened working hour
flextime system available
allowing for 6�5- and
7-hour workdays
Employees may reduce
daily working hours in
increments of 30 minutes
up to 2�5 hours until
March 31 of the 6th grade
Until the entry into
elementary school
Until the entry into
elementary school
Until March 31 of
the 6th grade
Until March 31 of
the 6th grade
May be taken in installments up to the
age of 3
4 weeks within 8 weeks after birth
(up to 28 days)
May be taken in installments
Until March 31 of the 6th
grade (5 days per annum per
child; 10 days for two or more
children)
Can be acquired on a
by-hour, half-day, or full-day
basis
Until March 31 of the 6th
grade (40 hours per annum
per child; 80 hours for two or
more children)
Employees can choose to
reduce daily working hours
by 30, 60, 90, 120, or 150
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
(SMBC Finance
Service: available
until starting
elementary school)
Until March 31 of
the 3rd grade
(SMBC Finance
Service: available
until starting
elementary school)
Until the entry into elementary
school (5 days per annum per
child; 10 days for two or more
children)
Employees can choose
to work 5, 5�5, 6, 6�5, or
7 hours a day until
March 31 of 6th grade
Until the entry into
junior high school
Until the entry into
junior high school
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
Until the entry into
elementary school
SMBC Nikko
Securities
Sumitomo
Mitsui Card
SMBC
Consumer
Finance
Japan
Research
Institute
Sumitomo
Mitsui DS Asset
Management
May be taken in installments up to
the age of 18 months or maximum of
2 years in case of inability to place
in daycare center
(SMBC Finance Service: available up
to the age of three)
4 weeks within 8 weeks after birth
(up to 28 days)
May be taken in installments
May be taken in installments up to
the age of 18 months or maximum of
2 years in case of inability to place
in daycare center
4 weeks within 8 weeks after birth
(up to 28 days)
May be taken in installments
May be taken in installments up to
the age of 18 months or maximum of
2 years in case of inability to place
in daycare center
Paid leave for the first 15 days of
maternity leave
4 weeks within 8 weeks after birth
(up to 28 days)
May be taken in installments
Maximum 28 days’ paid leave
May be taken in installments up to
the age for 1 year or maximum of
36 months in case of
inability to place in daycare center
4 weeks within 8 weeks after birth
(up to 28 days)
May be taken in installments
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 March 31 of
the 6th grade
Until March 31 of
the 3rd grade
• Leave for childbirth by spouse
• Nursing care leave system
(by the hour)
• Annual leave in half-day
increments
• Teleworking system
• Leave for nursing care
• Shorter working hours allowed
for nursing care
• Paid leave for initial 28 days
of childcare
• Annual leave in hour increments
• Flextime system
• Daycare subsidies
• Celebratory gifts for birth of
3rd child
• Leave for accompanying spouse
undergoing job relocation
• Lifestyle enriching leave
• Job return system
system
• Work Location of Choice system
• Childcare expense subsidy system
• Leave for nursing care
• Shorter working hours allowed
for nursing care
• Nursing care leave system
(by the hour)
• Flextime system
• Teleworking system
• Paternity leave (3 days)
• Leave for nursing care
• Shorter working hours allowed
for nursing care
• Special leave for childbirth
• Carryover leave (infertility
treatment)
• Half-day leave
• Teleworking system
• Staggered working hours
• Dual-Career Support system
for side work
• Family care time off (by the hour)
• Family support leave
• Short-term childcare leave
• Annual leave in hour increments
• Work relocations
• Short-term childcare leave
• Leave for nursing care
• Shorter working hours allowed
for nursing care
• Nursing care leave system
• Half-day leave
• Staggered working hours
• Flextime system
• Shortened working hour flextime
system
• Teleworking system
• Life support leave system
• System for rehiring former
employees
• Career support leave system
• Short-term childcare leave
• Discounted rates for daycare center
• Special leave for childbirth
• Nursing care leave
• Special days off for nursing care
• Half-day paid leave
• Hourly paid leave
• Amortized Holiday Reserving Policy
• Side business
• Long-Term Self Development Leave
(by the hour)
• Shorter working hours allowed
for nursing care
• Short-term leave for nursing care
• Staggered working hours
(working in shifts)
• Rehiring former employees
• Childcare subsidies
• Teleworking system
• Work relocations
• Staggered working hours
• Half-day paid leave
• Special leave for childbirth
• Childcare subsidies
• Nursing care leave system
(by the hour)
• Shorter working hours for nursing
care
• Rehiring former employees
• 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
• Flexibility in the work place
• Flextime system
• Nursing care leave
• Shorter working hours
(for nursing care, etc�)
• Time off and shorter working hours
• Days off for nursing care
(by the hour)
Policy a�k�a� “Challenge Leave”
• Three-day and four-day workweeks
• Corporate-led nursery school
• Baby-sitter discount system
• Special leave for childcare
• Memorial leave system
• Volunteering leave system
• Reverse leave system
• Pro bono work
• Teleworking system
• Flextime system
• Health-purpose or anniversary
leave
(The below applies only to SMBC
Finance Service Co�, Ltd�)
• Maternity leave
• Maternity work system
• Short-term childcare leave
• 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 (by the hour)
• Adjustment of work start and
end times
• Career design leave system
• Special leave for childbirth
• Half-day leave
• Leave system for receiving
treatment while working
• Career design leave system
• Carryover leave
• Side work system
Corporate Data
Sumitomo Mitsui Financial Group, Inc.
■ Directors and Executive Officers (as of June 30, 2023)
DIRECTORS AND CORPORATE
EXECUTIVE OFFICERS
EXECUTIVE OFFICERS
Senior Managing Executive Officers
Chairman of the Board
Takeshi Kunibe
Director President
(Representative Executive Officer)
Jun Ohta
Group CEO
Director
Akihiro Fukutome
Director Senior Managing Executive Officers
Teiko Kudo
Group CRO
Corporate Risk Management Dept.,
Risk Management Information Dept.,
Risk Management Dept., Americas Division,
Credit & Investment Planning Dept.
Fumihiko Ito
Group CFO and Group CSO
Public Relations Dept., Corporate Planning Dept.,
Business Development Dept., Corporate Sustainability Dept.,
Financial Accounting Dept., Accounting Service & Planning Dept.
Digital Strategy Dept.
Directors
Toshihiro Isshiki
Yoshiyuki Gono
Yasuyuki Kawasaki
Masayuki Matsumoto (1)
Shozo Yamazaki (1)
Yoshinobu Tsutsui (1)
Katsuyoshi Shinbo (1)
Eriko Sakurai (1)
Charles D. Lake II (1)
Jenifer Rogers (1)
Deputy President and Executive Officers
(Representative Executive Officers)
Tetsuro Imaeda
Co-Head of Global Business Unit
(Head office departments (Global Business Unit),
Asia Pacific Division)
Toru Nakashima
Co-Head of Wholesale Business Unit
Senior Managing Executive Officers
Masamichi Koike
Head of Global Markets Business Unit
Muneo Kanamaru
Co-Head of Wholesale Business Unit
(Head office departments (Wholesale Business Unit))
Takashi Yamashita
Head of Retail Business Unit
Jun Uchikawa
Group CIO
IT Planning Dept., System Security Planning Dept.,
Data Management Dept., Operations Planning Dept.
Yoshihiro Hyakutome
Group CCO
Compliance Dept., Anti Money Laundering & Financial Crime
Prevention Dept.
Takeshi Mikami
Group CAE
Internal Audit Dept.
Keiichiro Nakamura
Co-Head of Global Business Unit
(Americas Division, Europe, Middle East and Africa Division)
Akio Isowa
Group CDIO
Digital Solution Division
Digital Strategy Dept.
Head of Digital Solution Division, Deputy Head of Wholesale
Business Unit
Takashi Kobayashi
Group CHRO
General Affairs Dept., Human Resources Dept.,
Quality Management Dept., Administrative Services Dept.
(1) Mr. Matsumoto, Mr. Yamazaki, Mr. Tsutsui, Mr. Shinbo, Ms. Sakurai,
Mr. Lake II and Ms. Rogers satisfy the requirements for an “outside
director” under the Companies Act.
Kotaro Hagiwara
Public Relations Dept., Corporate Planning Dept.,
Business Development Dept., Corporate Sustainability Dept.,
Financial Accounting Dept., Accounting Service & Planning Dept.,
Digital Strategy Dept.
Hirofumi Otsuka
Head of Americas Division
Managing Executive Officers
Naoya Ishida
Wholesale Business Unit
Takaki Ono
Transaction Business Division
Eiichi Sekiguchi
Wholesale Business Unit
Kenichi Hida
Group Deputy CCO
Hideki Sakamoto
Deputy Head of Wholesale Business Unit
Yuichi Nishimura
Co-Head of Asia Pacific Division
Tatsuya Suzuki
Deputy Head of Wholesale Business Unit
Tetsuya Shindo
Retail Business Unit
Katsuyuki Tokuda
Deputy Head of Retail Business Unit
Head of Payments & Consumer Finance Division
Kenji Hirao
Deputy Head of Wholesale Business Unit
Fumito Yoshioka
Wholesale Business Unit
Takafumi Tsuji
Wholesale Business Unit (Specialized Finance Dept.)
Toshihiko Umetani
Deputy Head of Global Business Unit
Takahiro Yazawa
Deputy Head of Global Business Unit
Masashi Sakamoto
Deputy Head of Retail Business Unit
Head of Wealth Management Division
Shinichiro Watanabe
Global Business Unit
Yuichiro Nagayama
Wholesale Business Unit
Shuji Yoshioka
Group Deputy CFO and Group Deputy CSO
Nobuaki Nakamura
Deputy Head of Global Markets Business Unit
Katsufumi Uchida
Head of Asia Business Development Division
Nobuo Ozawa
Deputy Head of Wholesale Business Unit
Takashi Kakiuchi
Deputy Head of Asia Pacific Division
Natsuhiro Samejima
Corporate Risk Management Dept., Risk Management Information Dept.,
Risk Management Dept., Americas Division
Yukihiro Mabuchi
Wholesale Business Unit
Carl Adams
Deputy Head of Americas Division and Functional Head (Head of Verticals)
Richard A. Eisenberg
Deputy Head of Americas Division and Functional Head (Head of Verticals)
Rajeev Veeravalli Kannan
Co-Head of Asia Pacific Division
Norikazu Akedo
Deputy Head of Global Markets Business Unit
Akira Yamamoto
Group Deputy CRO
Tatsuya Shiine
Group Deputy CHRO
Takeya Sasaki
Deputy Head of Retail Business Unit
Eiichi Takasaki
Credit & Investment Planning Dept.
Daiji Nakata
General Manager, Planning Dept., Wealth Management Division
Daisuke Nakamura
Wholesale Business Unit
Akio Uemura
Deputy Head of Asia Business Development Division and General Manager,
Planning Dept., Retail Business Unit
Hideo Kawafune
Head of Europe, Middle East and Africa Division
Takahiko Hirashima
Group Deputy CCO
Kazuyuki Anchi
General Manager, Corporate Planning Dept.
Kazuya Ikeda
General Manager, Strategic Planning Dept., Global Business Unit
Arihiro Nagata
General Manager, Planning Dept., Global Markets Business Unit
Haruyuki Yoshikawa
General Manager, General Affairs Dept.
Executive Officers
Hideyuki Omokawa
Group Deputy CSO
Corporate Planning Dept.
Tatsuya Okumura
General Manager, Administrative Services Dept.
Hideki Takamatsu
General Manager, IT Planning Dept.
Kenji Kawabata
General Affairs Dept., Credit & Investment Planning Dept.
Akihiro Kawara
General Manager, Planning Dept., Global Markets Business Unit
Yukiko Yoritaka
Group Deputy CHRO
Katsuya Fujita
Deputy Head of Americas Division and Functional Head (Head of Verticals)
Shinsuke Yoshioka
Group Deputy CIO and Group Deputy CDIO
Takeshi Kimoto
General Manager, Asia Growing Markets Dept.
Naoki Shiraishi
General Manager, Digital Strategy Dept.
Susumu Masuda
Global Markets Business Unit
Naoki Kanbayashi
Group Deputy CAE
General Manager, Internal Audit Dept.
Toshihiko Kato
General Manager, Planning Dept., Retail Business Unit
Nobuyuki Takiguchi
General Manager, Strategic Planning Dept., Europe, Middle East and Africa
Division and Co-General Manager, Operations Planning Dept.,
Europe, Middle East and Africa Division
Toshihiro Horiuchi
Group Deputy CSuO
Hiroshi Maeda
General Manager, Quality Management Dept.
Hiroshi Ibaraki
General Manager, Governance Planning Dept., Global Business Unit
Deborah A. Freer
Functional Head (US COO)
Hiroshi Tsutsui
Group Deputy CIO
Kazuhiro Fukuda
Global Business Unit
Katsuyuki Kubo
Deputy Head of Americas Division
Masayuki Takanashi
Group CSuO
Sustainability Division, Corporate Sustainability Dept.,
Head of Sustainability Division and General Manager,
Corporate Sustainability Dept.
Tamaki Shibuya
Head of Transaction Business Division
Hironori Shimojima
Deputy Head of Asia Pacific Division
Yoshihiro Kitagawa
General Manager, Credit & Investment Planning Dept.
Toshinori Tajima
General Manager, Planning Dept., Wholesale Business Unit
Hiroshi Nishimura
General Manager, Strategic Planning Dept., Asia Pacific Division and
Governance Planning Dept., Asia Pacific Division
Masahiro Yoshimura
General Manager, Business Development Dept.
Takahiko Watanabe
General Manager, Human Resources Dept.
Lisette Lieberman
Regional CCO (Americas)
General Manager, Compliance Dept., Americas Division,
Compliance Dept. and Functional Head (US COO)
Scott A. Ashby
Deputy Head of Americas Division and Functional Head (Head of Verticals)
John Nolan
Co-General Manager, Internal Audit Dept., Americas Division,
Internal Audit Dept. and Functional Head (US CAE)
Glenn Swanton
Co-Regional CRO (Europe, Middle East & Africa)
[REFERENCE]
Group CxO/Head of Business Units
(as of June 30, 2023)
Group CxO
Group CEO
Jun Ohta
Group CFO and Group CSO
Fumihiko Ito
Group CRO
Teiko Kudo
Group CCO
Yoshihiro Hyakutome
Group CHRO
Takashi Kobayashi
Group CIO
Jun Uchikawa
Group CDIO
Akio Isowa
Group CSuO
Masayuki Takanashi
Group CAE
Takeshi Mikami
Head of Business Units
Head of Retail Business Unit
Takashi Yamashita
Co-Head of Wholesale
Business Unit
Toru Nakashima
Co-Head of Wholesale
Business Unit
Muneo Kanamaru
Co-Head of Global Business Unit
Tetsuro Imaeda
Co-Head of Global Business Unit
Keiichiro Nakamura
Head of Global Markets
Business Unit
Masamichi Koike
174 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
175
Sumitomo Mitsui Financial Group Organization (as of June 30, 2023)
Sumitomo Mitsui Banking Corporation
Board of
Directors
Nomination
Committee
Shareholders’
Meeting
Compensation
Committee
Group
Management
Committee
Audit
Committee
Office
Audit
Committee
Risk
Committee
Sustainability
Committee
Public Relations Dept.
Corporate Planning Dept.
Investor Relations Dept.
Productivity Management Dept.
Asset Management Business Dept.
Business Development Dept.
Sustainability Division
Corporate Sustainability Dept.
*1
*1
Retail Business Unit
Planning Dept., Retail Business Unit
Retail Risk Management Dept.
Wealth Management Division
Planning Dept., Wealth Management Division
Wealth Management Products Planning Dept.
PRESTIA Business Planning Dept.
Financial Accounting Dept.
Tax Planning Dept.
Channel Strategy Dept.
Private Wealth Division
Equity Portfolio Management Dept.
Payments & Consumer Finance Division
Accounting Service & Planning Dept.
IT Planning Dept.
System Security Planning Dept.
General Affairs Dept.
Planning Dept., Payments & Consumer
Finance Division
Card Loan Dept.
Retail Marketing Dept.
Group Business Management Dept.
Retail IT Strategy Dept.
Legal Dept.
Human Resources Dept.
Learning and Development Institute
Diversity and Inclusion Dept.
Global Human Resources Dept.
Quality Management Dept.
Digital Solution Division
Digital Strategy Dept.
*2
*2
Silicon Valley Digital Innovation Lab.
Data Management Dept.
Corporate Risk Management Dept.
Wholesale Business Unit
Planning Dept., Wholesale Business Unit
Kansai Growth Strategy Dept.
Specialized Finance Dept.
Corporate Digital Solution Dept.
Global Business Unit
Strategic Planning Dept., Global Business Unit
Securities Business Planning Dept.,
Global Business Unit
Risk Management Information Dept.
Governance Planning Dept., Global Business Unit
*3
*3
*3
*3
*3
*3
*4
*4
*4
*5
*5
*2
Risk Management Dept.,
Americas Division
Credit & Investment Planning Dept.
Environmental and Social Risk
Management Dept.
Compliance Dept.
Compliance Dept.,
Americas Division
Anti Money Laundering &
Financial Crime Prevention Dept.
Administrative Services Dept.
Secretariat
Corporate Real Estate
Management Dept.
Operations Planning Dept.
Internal Audit Dept.
Internal Audit Dept.,
Americas Division
*1 Belongs to Sustainability Division.
*2 Belongs to Digital Solution Division.
*3 Belongs to Wealth Management Business Division.
*4 Belongs to Payments & Consumer Finance Division.
*5 Belongs to Wealth Management Division and
Payments & Consumer Finance Division.
*6
Transaction Business Division
Transaction Business Planning Dept.
Transaction Product Development Dept.
Americas Division
Europe, Middle East
and Africa Division
Strategic Planning Dept.,
Americas Division
Governance Planning
Dept., Americas Division
Strategic Planning Dept.,
Europe, Middle East
and Africa Division
Operations
Planning Dept.,
Europe, Middle East
and Africa Division
Asia Pacific Division
Strategic Planning Dept.,
Asia Pacific Division
Governance
Planning Dept.,
Asia Pacific Division
Planning Dept.,
East Asia
Asia Business
Development Division
Asia Growing
Markets Dept.
Global Markets Business Unit
Planning Dept., Global Markets Business Unit
i
S
u
s
t
a
n
a
b
l
e
S
o
l
u
t
i
o
n
D
e
p
t
.
*1
T
r
a
n
s
a
c
t
i
o
n
B
u
s
i
n
e
s
s
D
i
v
i
s
i
o
n
*6
■ Board of Directors, Directors, Members of the Audit and Supervisory Committee and Executive Officers
DIRECTORS, MEMBERS OF THE AUDIT AND
SUPERVISORY COMMITTEE
Shuji Yabe
Takayuki Inoue
Sonosuke Kadonaga (2)
Michiko Kuboyama (2)
Yoriko Goto (2)
Chikatomo Hodo (2)
Daiken Tsunoda (2)
Toshihiro Isshiki
(2) Mr. Kadonaga, Ms. Kuboyama, Ms. Goto, Mr. Hodo and Mr. Tsunoda satisfy the requirements
for an “outside director” under the Companies Act.
(as of June 30, 2023)
BOARD OF DIRECTORS
Chairman of the Board
Makoto Takashima
President and Chief Executive Officer (Representative Director)
Akihiro Fukutome*
Deputy Chairman of the Board
Keiji Kakumoto
Located at Osaka
Director and Deputy Presidents (Representative Directors)
Tetsuro Imaeda*
Co-Head of Global Banking Unit
(Head office departments (Global Banking Unit), The Asia Pacific Division)
Toru Nakashima*
Co-Head of Wholesale Banking Unit
Head of Global Corporate Banking Division
Director and Senior Managing Executive Officers
Teiko Kudo*
Corporate Risk Management Dept., Risk Management Information Dept.,
Risk Management Depts., Americas Division, Europe, Middle East and Africa
Division, Asia Pacific Division and East Asia, Credit & Investment Planning
Dept., Credit Depts., Americas Division, Europe, Middle East and Africa
Division and Asia Pacific Division, Global Credit Dept.
Jun Uchikawa*
IT Planning Dept., System Security Planning Dept.,
Data Management Dept., Operations Planning Dept.,
Inter-Market Settlement Dept.
Kotaro Hagiwara*
Public Relations Dept., Corporate Planning Dept.,
Business Development Dept., Corporate Sustainability Dept.,
Financial Accounting Dept., Accounting Service & Planning Dept.
Digital Strategy Dept.
Yoshihiro Hyakutome*
Compliance Dept., Anti Money Laundering & Financial Crime
Prevention Dept.
Takashi Kobayashi*
General Affairs Dept., Human Resources Dept.,
Human Resources Development Dept., Quality Management Dept.,
Administrative Services Dept.
Directors
Paul Yonamine (1)
Isao Teshirogi (1)
* These Directors are appointed as Executive Officers also.
(1) Mr. Yonamine and Mr. Teshirogi satisfy the requirements for an “outside director” under
the Companies Act.
176 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
177
EXECUTIVE OFFICERS
Senior Managing Executive Officers
Masamichi Koike
Head of Global Markets & Treasury Unit
Muneo Kanamaru
Co-Head of Wholesale Banking Unit
(Head office departments (Wholesale Banking Unit))
Corporate Advisory Division
Takashi Yamashita
Head of Retail Banking Unit
Hiroyuki Kamimoto
Deputy Head of Wholesale Banking Unit
Keiichiro Nakamura
Co-Head of Global Banking Unit
(The Americas Division, Europe, Middle East and Africa Division)
Akio Isowa
Digital Solution Division
Digital Strategy Dept.
Head of Digital Solution Division, Deputy Head of Wholesale Banking Unit
Fumihiko Ito
Corporate Planning Dept.
Hirofumi Otsuka
Head of The Americas Division and President of SMBC Americas Holdings, Inc.
Managing Executive Officers
Takaki Ono
Private Advisory Division, Transaction Business Division
Yuichi Nishimura
Co-Head of The Asia Pacific Division
Katsufumi Uchida
Head of Asia Business Development Division and Deputy Head of The Asia
Pacific Division
Rajeev Veeravalli Kannan
Co-Head of The Asia Pacific Division
Yoshiyuki Ogata
Deputy Head of Global Corporate Banking Division
Osaka Corporate Banking Division
(Osaka Corporate Banking Depts. I and II)
Takafumi Tsuji
Head of Financial Solutions Division
Hiroyuki Fukuda
Deputy Head of Global Corporate Banking Division
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. I, V and VII)
Nobuo Ozawa
Deputy Head of Wholesale Banking Unit
Head of Corporate Banking Division
Takashi Kakiuchi
Deputy Head of The Asia Pacific Division and President of Sumitomo Mitsui
Banking Corporation (China) Limited
Natsuhiro Samejima
Corporate Risk Management Dept., Risk Management Information Dept.,
Risk Management Depts., Americas Division, Europe, Middle East and Africa
Division, Asia Pacific Division and East Asia
Yasuhiro Shirai
Deputy Head of Global Corporate Banking Division
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. II, VIII and IX)
Hideki Niiyama
Deputy Head of Global Corporate Banking Division
Nagoya Corporate Banking Division (Nagoya Corporate Banking Dept.)
Head of Nagoya Middle Market Banking Division
Yukihiro Mabuchi
Deputy Head of Wholesale Banking Unit
Carl Adams
Deputy Head of The Americas Division and Functional Head (Head of Verticals)
Stanislas Roger
Deputy Head of Europe, Middle East and Africa Division and CEO of SMBC
Bank EU AG
Richard A. Eisenberg
Deputy Head of The Americas Division, Functional Head (Head of Verticals)
and Co-General Manager, Corporate and Investment Banking Coverage Dept.,
Americas Division
Hideomi Shigematsu
Deputy Head of Global Corporate Banking Division
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. III and X)
Toshihiro Michioka
Deputy Head of Wholesale Banking Unit (in charge of West Japan)
Takeya Sasaki
Deputy Head of Retail Banking Unit
Eiichi Takasaki
Credit & Investment Planning Dept.
Deputy Head of Wholesale Banking Unit
(Corporate Credit Dept., Credit Administration Dept., Trust Services Dept.)
Corporate Research Dept.
Daiji Nakata
Deputy Head of Retail Banking Unit
Daisuke Nakamura
Deputy Head of Wholesale Banking Unit
Tomonari Inoue
Deputy Head of Global Corporate Banking Division
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. IV and VI)
Akio Uemura
Deputy Head of Asia Business Development Division
Ichiro Okawara
General Manager, Corporate Credit Dept.
Seiichi Katsuyama
Head of Corporate Advisory Division
and Deputy Head of Financial Solutions Division
Hideo Kawafune
Head of Europe, Middle East and Africa Division and CEO of SMBC Bank
International plc
Mikiko Hyodo
Deputy Head of Retail Banking Unit
Kazuyuki Anchi
General Manager, Corporate Planning Dept.
Kazuya Ikeda
General Manager, Strategic Planning Dept., Global Banking Unit
Arihiro Nagata
General Manager, Planning Dept., Global Markets & Treasury Unit
Haruyuki Yoshikawa
General Manager, General Affairs Dept.
Executive Officers
Antony Yates
President of SMBC Nikko Capital Markets Limited
Alan Krouk
Deputy Head of Global Banking Unit
James Fenner
Deputy Head of Europe, Middle East and Africa Division
Katsuya Fujita
Deputy head of The Americas Division, Functional Head (Head of Verticals)
and Chairman of SMBC Capital Markets, Inc.
Kazuhiro Fukuda
Deputy Head of Global Banking Unit
Tetsuro Yoshino
Internal Audit Dept., Domestic Branches Audit Dept.
Tatsuya Okumura
General Manager, Administrative Services Dept.
Hideki Takamatsu
General Manager, IT Planning Dept.
Hideki Tahara
Deputy Head of Corporate Advisory Division
Kenji Kawabata
General Affairs Dept., Credit & Investment Planning Dept.
Akihiro Kawara
President of SMBC Capital Markets, Inc.
Tomomi Izawa
Head of Higashinihon Daisan Middle Market Banking Division
Toshihiko Kato
General Manager, Planning Dept., Retail Banking Unit
Takeshi Kimoto
General Manager, Asia Growing Markets Dept.
Katsuyuki Kubo
Deputy Head of The Americas Division
Naoki Shiraishi
General Manager, Digital Strategy Dept.
Honami Matsugasaki
Internal Audit Dept., Domestic Branches Audit Dept.
Hitoshi Ryoji
Deputy Head of Financial Solutions Division
Paul Derek Gibbon
General Manager, Loan Capital Markets Dept., Europe, Middle East and
Africa Division
Yasunori Takahashi
Credit Depts., Americas Division, Europe, Middle East and Africa Division and
Asia Pacific Division, Global Credit Dept.
Akira Masuda
Deputy Head of Financial Solutions Division
Hideo Uchida
General Manager, Corporate Banking Dept., Asia Pacific Division
Makiko Kaji
General Manager, Global Markets Marketing Dept.
Kyoji Tanaka
Deputy Head of Retail Banking Unit
Ko Aoki
Deputy Head of Wholesale Banking Unit (Credit Dept., Wholesale
Banking Unit), Deputy Head of Retail Banking Unit (Retail Credit Dept.)
Takakazu Ishimura
General Manager, Tokyo Corporate Banking Dept. I
Hirokazu Sakamoto
Head of Higashinihon Daini Middle Market Banking Division
Yoshihiro Takami
General Manager, Structured Finance Dept.
Nobuyuki Takiguchi
General Manager, Strategic Planning Dept., Europe, Middle East and
Africa Division and Co-General Manager, Operations Planning Dept.,
Europe, Middle East and Africa Division
Hiroshi Maeda
General Manager, Quality Management Dept.
Hidetaka Matsuda
Head of Higashinihon Daiyon Middle Market Banking Division
Hajime Yokohata
General Manager, Osaka Corporate Banking Dept. I
Masaru Ishibashi
General Manager, Global Markets Trading Dept.
Hiroshi Ibaraki
General Manager, Governance Planning Dept., Global Banking Unit
Hiroshi Kawamura
General Manager, Tokyo Corporate Banking Dept. V
Tamaki Shibuya
Head of Transaction Business Division
Deborah A. Freer
Functional Head (US COO)
Yunson Du
SMBC Capital Markets, Inc.
Hideyuki Omokawa
Corporate Planning Dept.
Deputy Head of Wholesale Banking Unit (in charge of investment business),
Deputy Head of Global Banking Unit (in charge of investment business)
Motonori Yuki
Head of Kobe Middle Market Banking Division
Goro Goda
General Manager, Tokyo Corporate Banking Dept. IX
Kimiaki Iritani
General Manager, Strategic Corporate Business Dept.
Tsuyoshi Kuzuma
Head of Kyoto Hokuriku Middle Market Banking Division and General
Manager, Kyoto Corporate Business Office-I
Masayuki Takanashi
Sustainability Division
Corporate Sustainability Dept.
Head of Sustainability Division and General Manager, Corporate Sustainability
Dept.
Takanori Ueda
General Manager, Shinjuku Nishiguchi Corporate Business Office-I
Shinji Kodera
General Manager, Tokyo Corporate Banking Dept. IV
Hironori Shimojima
Deputy Head of The Asia Pacific Division
Reiko Mori
General Manager, Global FIG Dept.
Yoshihiro Kitagawa
General Manager, Credit & Investment Planning Dept.
Toshinori Tajima
General Manager, Planning Dept., Wholesale Banking Unit
Kensuke Tanaka
General Manager, Treasury Dept.
Hiroshi Nishimura
General Manager, Strategic Planning Dept., Asia Pacific Division and
Governance Planning Dept., Asia Pacific Division
Masahiro Yoshimura
General Manager, Business Development Dept.
Takahiko Watanabe
General Manager, Human Resources Dept.
Lisette Lieberman
General Manager, Compliance Dept., Americas Division, Compliance Dept.
and Functional Head (US COO)
Anjali Mohan
Co-General Manager, Legal & Compliance Dept., Asia Pacific division,
Compliance Dept.
John Nolan
Co-General Manager, Internal Audit Dept., Americas Division, Internal Audit
Dept. and Functional Head (US CAE)
Elena Paitra
General Manager, Corporate Banking Dept.-II, Europe, Middle East and Africa
Division
Glenn Swanton
Co-General Manager, Risk Management Dept., Europe, Middle East and Africa
Division
178 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
179
SMBC Organization
(as of June 30, 2023)
Audit and Supervisory
Audit and Supervisory
Committee
Committee
Audit and Supervisory
Audit and Supervisory
Committee Office
Committee Office
Shareholders’
Shareholders’
Meeting
Meeting
Board of
Board of
Directors
Directors
Management
Management
Committee
Committee
*1 Belongs to Sustainability Division.
*1 Belongs to Sustainability Division.
*2 Belongs to Digital Solutions Division.
*2 Belongs to Digital Solutions Division.
*3 Belongs to Corporate Advisory Division.
*3 Belongs to Corporate Advisory Division.
*4 Belongs to Financial Solutions Division.
*4 Belongs to Financial Solutions Division.
*5 Belongs to Private Banking Division.
*5 Belongs to Private Banking Division.
*6 Belongs to Global Banking Unit and Wholesale Banking Unit
*6 Belongs to Global Banking Unit and Wholesale Banking Unit
*7 Belongs to Asia Business Development Division.
*7 Belongs to Asia Business Development Division.
*8
*8
*9
*9
Private Advisory Division
Private Advisory Division
Succession Advisory Business Dept.
Succession Advisory Business Dept.
Human Resource Advisory Business Dept.
Human Resource Advisory Business Dept.
Defined Contribution Dept.
Defined Contribution Dept.
Transaction Business Division
Transaction Business Division
Transaction Business Planning Dept.
Transaction Business Planning Dept.
Transaction Products Development Dept.
Transaction Products Development Dept.
Transaction Banking Dept.
Transaction Banking Dept.
Global Advisory Dept.
Global Advisory Dept.
Global Business Promotion Dept.
Global Business Promotion Dept.
Internal Audit Unit
Internal Audit Unit
Internal Audit Dept.
Internal Audit Dept.
Internal Audit Dept., Americas Division
Internal Audit Dept., Americas Division
Credit Review Dept., Americas Division
Credit Review Dept., Americas Division
Internal Audit Dept., Europe, Middle East
Internal Audit Dept., Europe, Middle East
and Africa Division
and Africa Division
Internal Audit Dept., Asia Pacific Division
Internal Audit Dept., Asia Pacific Division
Domestic Branches Audit Dept.
Domestic Branches Audit Dept.
Corporate Staff Unit
Corporate Staff Unit
Public Relations Dept.
Public Relations Dept.
Corporate Planning Dept.
Corporate Planning Dept.
Productivity Management Dept.
Productivity Management Dept.
Asset Management Business Dept.
Asset Management Business Dept.
Business Development Dept.
Business Development Dept.
Sustainability Division
Sustainability Division
Corporate Sustainability Dept.
Corporate Sustainability Dept.
Financial Accounting Dept.
Financial Accounting Dept.
Tax Planning Dept.
Tax Planning Dept.
Equity Portfolio Management Dept.
Equity Portfolio Management Dept.
Accounting Service and Planning Dept.
Accounting Service and Planning Dept.
IT Planning Dept.
IT Planning Dept.
System Security Planning Dept.
System Security Planning Dept.
General Affairs Dept.
General Affairs Dept.
Group Business Management Dept.
Group Business Management Dept.
Legal Dept.
Legal Dept.
Human Resources Dept.
Human Resources Dept.
Learning and Development Institute
Learning and Development Institute
Counseling Dept.
Counseling Dept.
Diversity and Inclusion Dept.
Diversity and Inclusion Dept.
Global Human Resources Dept.
Global Human Resources Dept.
Human Resources Development Dept.
Human Resources Development Dept.
Quality Management Dept.
Quality Management Dept.
Customer Relations Dept.
Customer Relations Dept.
Digital Solution Division
Digital Solution Division
Digital Strategy Dept.
Digital Strategy Dept.
Data Management Dept.
Data Management Dept.
*1
*1
*1
*1
*2
*2
*2
*2
Risk Management Unit
Risk Management Unit
Corporate Risk Management Dept.
Corporate Risk Management Dept.
Risk Management Information Dept.
Risk Management Information Dept.
Risk Management Dept., Americas Division
Risk Management Dept., Americas Division
Risk Management Dept.,
Risk Management Dept.,
Europe, Middle East and Africa Division
Europe, Middle East and Africa Division
Risk Management Dept., Asia Pacific Division
Risk Management Dept., Asia Pacific Division
Risk Management Dept., East Asia Division
Risk Management Dept., East Asia Division
Credit & Investment Planning Dept.
Credit & Investment Planning Dept.
Environmental and Social Risk Management Dept.
Environmental and Social Risk Management Dept.
Credit Dept., Americas Division
Credit Dept., Americas Division
Credit Dept., Europe, Middle East and Africa Division
Credit Dept., Europe, Middle East and Africa Division
LBO Credit Dept.,
LBO Credit Dept.,
Europe, Middle East and Africa Division
Europe, Middle East and Africa Division
Credit Dept., Asia Pacific Division
Credit Dept., Asia Pacific Division
Global Credit Dept.
Global Credit Dept.
Compliance Unit
Compliance Unit
Compliance Dept.
Compliance Dept.
Compliance Dept., Americas Division
Compliance Dept., Americas Division
Compliance Dept., Europe, Middle East
Compliance Dept., Europe, Middle East
and Africa Division
and Africa Division
Legal and Compliance Dept.,
Legal and Compliance Dept.,
Asia Pacific Division
Asia Pacific Division
Anti Money Laundering &
Anti Money Laundering &
Financial Crime Prevention Dept.
Financial Crime Prevention Dept.
Corporate Services Unit
Corporate Services Unit
Retail
Retail
Banking Unit
Banking Unit
Wholesale
Wholesale
Banking Unit
Banking Unit
Global
Global
Banking Unit
Banking Unit
Global Markets and
Global Markets and
Treasury Unit
Treasury Unit
*10 Belongs to Retail Banking Unit, Wholesale Banking Unit
*10 Belongs to Retail Banking Unit, Wholesale Banking Unit
Administrative Services Dept.
Administrative Services Dept.
and Global Banking Unit.
and Global Banking Unit.
Secretariat
Secretariat
Corporate Real Estate Management Dept.
Corporate Real Estate Management Dept.
Operations Planning Dept.
Operations Planning Dept.
Inter-Market Settlement Dept.
Inter-Market Settlement Dept.
180 SMBC GROUP ANNUAL REPORT 2023
Planning Dept., Retail Banking Unit
Planning Dept., Retail Banking Unit
Next W-ing Project Dept.
Next W-ing Project Dept.
Retail Facilitating Financing Dept.
Retail Facilitating Financing Dept.
Channel Strategy Dept.
Channel Strategy Dept.
Loan Business Dept.
Loan Business Dept.
Retail Risk Management Dept.
Retail Risk Management Dept.
Retail Anti Money Laundering Dept.
Retail Anti Money Laundering Dept.
Retail Compliance Dept.
Retail Compliance Dept.
Business Promotion Dept., Retail Banking Unit
Business Promotion Dept., Retail Banking Unit
PRESTIA Business Planning Dept.
PRESTIA Business Planning Dept.
Financial Consulting Dept., Retail Banking Unit
Financial Consulting Dept., Retail Banking Unit
Area Support Dept.
Area Support Dept.
Life Shift Solution Dept.
Life Shift Solution Dept.
Retail Marketing Dept., Retail Banking Unit
Retail Marketing Dept., Retail Banking Unit
Area Support Dept.
Area Support Dept.
Retail IT Strategy Dept.
Retail IT Strategy Dept.
Card Loan Dept.
Card Loan Dept.
Retail Credit Dept.
Retail Credit Dept.
Planning Dept., Wholesale Banking Unit
Planning Dept., Wholesale Banking Unit
Middle Market Facilitating Financing Dept.
Middle Market Facilitating Financing Dept.
Global Corporate Banking Dept.
Global Corporate Banking Dept.
Wholesale Business Control Dept.
Wholesale Business Control Dept.
Small and Medium Enterprises Planning Dept.
Small and Medium Enterprises Planning Dept.
Strategic Corporate Business Dept.
Strategic Corporate Business Dept.
Group Solution Promotion Dept.
Group Solution Promotion Dept.
Kansai Growth Strategy Dept.
Kansai Growth Strategy Dept.
Public & Financial Institutions Banking Dept., Wholesale Banking Unit
Public & Financial Institutions Banking Dept., Wholesale Banking Unit
Corporate Credit Dept.
Corporate Credit Dept.
Structured Finance Credit Dept.
Structured Finance Credit Dept.
Credit Dept., Wholesale Banking Unit
Credit Dept., Wholesale Banking Unit
Credit Administration Dept.
Credit Administration Dept.
Growth Business Development Dept.
Growth Business Development Dept.
M&A Advisory Services Dept.
M&A Advisory Services Dept.
Corporate Digital Solution Dept.
Corporate Digital Solution Dept.
Corporate Advisory Division
Corporate Advisory Division
Advisory Dept. I
Advisory Dept. I
Advisory Dept. II
Advisory Dept. II
Advisory Dept. III
Advisory Dept. III
Capital Market Dept.
Capital Market Dept.
Corporate Research Dept.
Corporate Research Dept.
Financial Solutions Division
Financial Solutions Division
Structured Finance Dept.
Structured Finance Dept.
Strategic Corporate Banking Dept.
Strategic Corporate Banking Dept.
Specialized Finance Dept.
Specialized Finance Dept.
Debt Finance Dept.
Debt Finance Dept.
Investment Banking Services Dept.
Investment Banking Services Dept.
Real Estate Finance Dept.
Real Estate Finance Dept.
Distribution Dept.
Distribution Dept.
Asset Finance Dept.
Asset Finance Dept.
Trust Services Dept.
Trust Services Dept.
Trust Business Operations Dept.
Trust Business Operations Dept.
Private Banking Division
Private Banking Division
Private Banking Planning Dept.
Private Banking Planning Dept.
Merchant Banking Dept.
Merchant Banking Dept.
Sustainable Solution Dept.
Sustainable Solution Dept.
Strategic Planning Dept., Global Banking Unit
Strategic Planning Dept., Global Banking Unit
Aviation & Maritime Strategy Dept., Global Banking Unit
Aviation & Maritime Strategy Dept., Global Banking Unit
Securities Business Planning Dept., Global Banking Unit
Securities Business Planning Dept., Global Banking Unit
Governance Planning Dept., Global Banking Unit
Governance Planning Dept., Global Banking Unit
Strategic Planning Dept., Americas Division
Strategic Planning Dept., Americas Division
Governance Planning Dept., Americas Division
Governance Planning Dept., Americas Division
Information Control Dept., Americas Division
Information Control Dept., Americas Division
Strategic Planning Dept., Europe, Middle East and Africa Division
Strategic Planning Dept., Europe, Middle East and Africa Division
Operations Planning Dept., Europe, Middle East and Africa Division
Operations Planning Dept., Europe, Middle East and Africa Division
IT & Security Planning Dept., Europe, Middle East and Africa Division
IT & Security Planning Dept., Europe, Middle East and Africa Division
Planning Dept., Asia Pacific Division
Planning Dept., Asia Pacific Division
Learning and Development Dept., Asia
Learning and Development Dept., Asia
Asia Innovation Centre
Asia Innovation Centre
Governance Planning Dept., Asia Pacific Division
Governance Planning Dept., Asia Pacific Division
IT Planning Dept., Asia Pacific Division
IT Planning Dept., Asia Pacific Division
Planning Dept., East Asia Division
Planning Dept., East Asia Division
Asia Business Development Division
Asia Business Development Division
Asia Growing Markets Dept.
Asia Growing Markets Dept.
*2
*2
*3
*3
*3
*3
*3
*3
*3
*3
*3
*3
*3
*3
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*5
*5
*5
*5
*4, 6
*4, 6
*1, 6
*1, 6
*7
*7
*7
*7
Planning Dept., Global Markets and Treasury Unit
Planning Dept., Global Markets and Treasury Unit
Treasury Dept.
Treasury Dept.
Global Investment Dept.
Global Investment Dept.
Portfolio Investment Dept.
Portfolio Investment Dept.
Global Markets Trading Dept.
Global Markets Trading Dept.
eFX Business Promotion Dept.
eFX Business Promotion Dept.
Global Markets Marketing Dept.
Global Markets Marketing Dept.
Global Markets Solution Dept.
Global Markets Solution Dept.
Global Markets and Treasury Dept., Asia Pacific Division
Global Markets and Treasury Dept., Asia Pacific Division
Global Markets and Treasury Dept., East Asia
Global Markets and Treasury Dept., East Asia
*9
*9
Area Main Office
Area Main Office
Branch
Branch
Consumer Loan Promotion Office
Consumer Loan Promotion Office
Private Wealth Dept.
Private Wealth Dept.
Securities Sales Dept.
Securities Sales Dept.
PRESTIA Sales Dept.
PRESTIA Sales Dept.
Remote Marketing Dept.
Remote Marketing Dept.
Remote Transaction Marketing Dept.
Remote Transaction Marketing Dept.
Call Center
Call Center
Consumer Finance Promotion Office
Consumer Finance Promotion Office
Area Corporate Credit Business Office
Area Corporate Credit Business Office
Global Transaction Office
Global Transaction Office
E-Transaction Business Dept.
E-Transaction Business Dept.
*10
*10
*10
*10
Inheritance Advisory Business Dept.
Inheritance Advisory Business Dept.
Corporate Banking Dept.
Corporate Banking Dept.
Corporate Business Office
Corporate Business Office
Strategic Finance Promotion Office
Strategic Finance Promotion Office
Public Institutions Business Office
Public Institutions Business Office
Real Estate Corporate Business Office
Real Estate Corporate Business Office
Real Estate Finance Corporate Business Office
Real Estate Finance Corporate Business Office
Credit Business Office
Credit Business Office
Private Banking Dept.
Private Banking Dept.
Global Transaction Office
Global Transaction Office
E-Transaction Business Dept.
E-Transaction Business Dept.
*10
*10
*10
*10
Area Corporate Office
Area Corporate Office
Area Corporate Credit Business Office
Area Corporate Credit Business Office
i
i
P
P
r
r
i
i
v
v
a
a
t
t
e
e
A
A
d
d
v
v
s
s
o
o
r
r
y
y
D
D
v
v
s
s
o
o
n
n
i
i
i
i
i
i
Global Corporate
Global Corporate
Banking Division
Banking Division
Tokyo Corporate Banking Division
Tokyo Corporate Banking Division
Osaka Corporate Banking Division
Osaka Corporate Banking Division
Nagoya Corporate Banking Division
Nagoya Corporate Banking Division
Corporate Banking
Corporate Banking
Division
Division
Middle Market Banking
Middle Market Banking
Division
Division
Small and Medium
Small and Medium
Enterprises Banking Division
Enterprises Banking Division
*8
*8
T
T
r
r
a
a
n
n
s
s
a
a
c
c
t
t
i
i
o
o
n
n
B
B
u
u
s
s
n
n
e
e
s
s
s
s
D
D
v
v
s
s
o
o
n
n
i
i
i
i
i
i
i
i
Americas Division
Americas Division
Europe, Middle East
Europe, Middle East
and Africa Division
and Africa Division
Asia Pacific Division
Asia Pacific Division
Departments of Americas Division
Departments of Americas Division
Departments of Europe, Middle East
Departments of Europe, Middle East
and Africa Division
and Africa Division
Branches / Representative Offices in
Branches / Representative Offices in
Asia Pacific Division
Asia Pacific Division
Global FIG Dept.
Global FIG Dept.
Global Client Business Dept.
Global Client Business Dept.
Global Trade Finance Dept.
Global Trade Finance Dept.
Global Supply Chain Finance Dept.
Global Supply Chain Finance Dept.
Transportation Dept.
Transportation Dept.
Global Transaction Office
Global Transaction Office
E-Transaction Business Dept.
E-Transaction Business Dept.
*10
*10
*10
*10
Operations Service Branch
Operations Service Branch
Public Institutions Operations Office
Public Institutions Operations Office
Operations Service Office
Operations Service Office
Souzoku-office Sub-Branch
Souzoku-office Sub-Branch
Zaikei-Office
Zaikei-Office
SMBC GROUP ANNUAL REPORT 2023
181
Principal Subsidiaries and Affiliates (as of March 31, 2023)
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.
■ Principal Overseas Subsidiaries
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
Company Name
Country
Issued Capital
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
Sumitomo Mitsui Banking Corporation
1,770,996
100
SMBC Trust Bank Ltd.
SMBC Nikko Securities Inc.
Sumitomo Mitsui Card Company, Limited
SMBC Finance Service Co., Ltd.
SMBC Consumer Finance Co., Ltd.
The Japan Research Institute, Limited
Sumitomo Mitsui DS Asset Management
Company, Limited
SMBC Guarantee Co., Ltd.
SMBC Mobit Co., Ltd.
JAIS, Limited
Alternative Investment Capital Limited
NCore Co., Ltd.
plus medi corp.
SMBC VALUE CREATION CO., LTD.
SMBC GMO PAYMENT, Inc.
SMBC Venture Capital Management Co.,Ltd.
SMBC Venture Capital Co., Ltd.
SMBC Consulting Co., Ltd.
Japan Pension Navigator Co., Ltd.
SMBC ReSolutions Inc.
Plari Town, Inc.
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.
187,720
20,000
450
400
10
100
495
490
643
500
1,100
1,600
10
100
1,000
500
90
10
10
30
30
30
250
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)
(100)
(100)
(100)
(100)
(100)
(100)
(80)
(100)
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)
(100)
(100)
(60)
—
100
—
—
—
—
—
—
—
—
—
60
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, installment businesses, and
transaction businesses
Mar. 20, 1962
Consumer loans
Nov. 1, 2002
System engineering, data processing,
management consulting, and economic research
Dec. 1, 2002
Investment management
Jul. 14, 1976
Credit guarantee
May 17, 2000
Consumer lending
Oct. 16, 1990
System engineering and data processing
Jul. 15, 2002
Investment management and advisory services
(50.99)
50.99
Apr. 1, 2004
Data processing service and e-trading consulting
96.01
(100)
(60)
(40)
—
100
10
40
Dec. 15, 2016
Information services
Feb. 20, 2019
Data processing service and e-trading consulting
Nov. 2, 2015
Settlement agent
Jul. 1, 2010
Management consulting services, investment
management services
(100)
0
(100)
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
80
100
—
—
—
Apr. 1, 2020
Real estate management
May 26, 2020
Platform management and operation
Mar. 11, 1999
Servicer
Apr. 16, 2009
Electronic monetary claims recording
Jul. 15, 1982
Temp worker dispatch services, fee-based
headhunting services and contracting of human
resources-related procedures
May 27, 1998
Training services
Apr. 15, 2002
HR related clerical services
Jan. 31, 1996
Banking clerical work
Mar. 15, 1990
Contract preparation of deposit survey responses
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
Jul. 8, 2021
Advertising and marketing
Polarify, Inc.
100
78.60
SMBC CLOUDSIGN, Inc.
SMBC Digital Marketing, Ltd.
SMBC HUMAN CAREER Co., Ltd.
50
100
150
51
66
0
(100)
100
Mar. 1, 1987
Job introduction and staffing
SMBC Bank International plc
Sumitomo Mitsui Banking Corporation
(China) Limited
U.K.
China
US$3,200 million
CNY10.0 billion
PT Bank BTPN Tbk
Indonesia
Rp162.982 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$2,730
US$530.786 million
R$1,559.699 million
RUB6.4 billion
€5,100 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$655
SMBC Nikko Capital Markets Limited
U.K.
US$1,138 million
SMBC Capital Markets, Inc.
U.S.A.
TT International Asset Management Ltd U.K.
SMBC Asset Management Services
(UK) Limited
U.K.
US$100
£92 million
£240 million
SMBC DIP Limited
SFVI Limited
SMBC, S.A.P.I. DE C.V.,
SOFOM, E.N.R.
Cayman Islands
US$1
British Virgin Islands
US$9,600
Mexico
MXN1,460 million
SMBC International Finance N.V.
Curaçao
Sumitomo Mitsui Finance Dublin Limited Ireland
Sakura Finance Asia Limited
Hong Kong
SMBC Derivative Products Limited
U.K.
SMBC Advisory Services Saudi Arabia LLC Saudi Arabia
US$200,000
US$12 million
US$65.5 million
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
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
100
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
Fullerton India Credit Company Limited
India
22,467 million rupees
74.89
(0)
(100)
(100)
100
100
Mar. 3, 2003
Commercial banking
Apr. 27, 2009
Commercial banking
(93.49)
93.49
Feb. 5, 1958
Commercial banking
(100)
100
Aug. 8, 1990
Management of the US BHC
and US BHC subsidiaries
(100)
0
(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
84.84
Mar. 13, 1990
(100)
0
(100)
Dec. 4, 1986
Derivatives and investments,
securities services
Derivatives and investments,
leasing, securities business
—
—
100
100
100
100
100
100
Feb. 28, 2020
Investment management
Oct. 16, 2019
Stock holding
Mar. 16, 2005
Loans, buying /
selling of monetary claims
Jul. 30, 1997
Investments
Sep. 18, 2014
Money lending business,
derivatives business and
services related to leasing
Jun. 25, 1990
Finance
Sep. 19, 1989
Finance
Oct. 17, 1977
Investments
0
(100)
Apr. 18, 1995
Derivatives and investments
100
—
Dec. 29, 2017
Consulting
Aug. 30, 1994
Money lending business
(Note 1) NCore Co., Ltd. was excluded from Sumitomo Mitsui Banking Corporation’s consolidated subsidiaries following the transfer of all shares held by Sumitomo
Mitsui Banking Corporation to Sumitomo Mitsui Financial Group on April 28, 2023.
(Note 2) Fullerton India Credit Company Limited changed its company name to SMFG India Credit Company Limited on May 11, 2023.
182 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
183
Issued Capital
(Millions of Yen)
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
■ Principal Affiliates
Company Name
PayPay Bank Corporation
PT Oto Multiartha
PT Summit Oto Finance
ACLEDA Bank Plc.
The Bank of East Asia, Limited
Sumitomo Mitsui Finance and Leasing
Company, Limited
72,216
Rp928,707 million
Rp2,442,060 million
US$433 million
HKD38,804 million
0
0
0
0
0
(46.57)
(35.10)
(35.10)
(18.06)
(21.44)
15,000
50
Sumitomo Mitsui Auto Service Company, Limited
13,636 26.16 (59.56)
SMBC Aviation Capital Limited
US$2,249 million
0
(100)
Osaka Digital Exchange Co.,Ltd.
2,000
20
VPBank SMBC Finance Company Limited
VND10,928,000 million
0
POCKET CARD CO., LTD.
JSOL CORPORATION
Sakura Information Systems Co., Ltd.
SAKURA KCS Corporation
brees corporation
14,374
5,000
600
2,054
100
China Post & Capital Fund Management Co., Ltd.
CNY304 million
Spring Infrastructure Capital Co., Ltd.
BrainCell, Inc.
Cotra Ltd.
250
300
1,700
0
0
0
0
0
0
0
0
(49)
(20)
(50)
(49)
46.57
35.10
35.10
18.06
21.44
—
—
32
—
—
20
—
49
Sep. 19, 2000
Commercial banking
Mar. 28, 1994
Automotive financing
Sep. 20, 1990 Motorcycle financing
Dec. 1, 2003
Commercial banking
Nov. 14, 1918
Commercial banking
Feb. 4, 1963
Leasing
Feb. 21, 1981
Leasing
Aug. 14, 1997
Leasing
Apr. 1, 2021
Proprietary Trading System (PTS)
Management
Oct. 28, 2021
Consumer finance business
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
(47.45)
28.52 (1.25)
Mar. 29, 1969
(49)
(23.67)
(24.50)
49
(25)
49
23.67
24.50
—
25
Dec. 5, 2014
Information processing services
Apr. 24, 2012
Investment management
Jul. 31, 2018
Investments
Jun. 1, 2018 Marketing
Jul. 1, 2021
Planning and operation of fund
settlement infrastructure
(Note) brees corporation was excluded from Sumitomo Mitsui Banking Corporation’s equity-method affiliates following the transfer of all shares held by Sumitomo
Mitsui Banking Corporation to Sumitomo Mitsui Financial Group on April 28, 2023.
International Directory (as of June 30, 2023)
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
88 Market Street, #33-01, CapitaSpring,
Singapore 048948
Tel: 65-6882-0000
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
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
12th Floor Harbor Mall, 12B01, 12C01
4/222 Moo 10 Sukhumvit Road,
Tungsukha, Sriracha Chonburi 20230,
Thailand
Tel: 66-(2) 353-8000
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
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
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
New Delhi Branch
12&13th Floor, Hindustan Times
House,18-20, Kasturba Gandhi Marg,
New Delhi 110001, India
Tel: 91 (11) 4768-9111
Chennai Branch
10th Floor, Chaitanya Imperial Tower,
Plot No.610, 610A, 612, D. No.1/104-BB,
Block A, Annasalai, Teynampet,
Chennai, 600018, Tamil Nadu, India
Tel: 91- (44) 6144-9999
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, Gong Shu District,
Hangzhou, Zhejiang Province,
The People’s Republic of China
Tel: 86 (571) 2889-1111
Sumitomo Mitsui Banking Corporation
(China) Limited Chongqing Branch
Unit1&15-18, 20/F, Tower 1, Chongqing
IFS, No.1 Qingyun Road, Jiangbei
District, Chongqing,
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
184 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
185
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 601, Room 605-608,
Building 1 Fortune Plaza,
No.258 Dengyun Road, Yushan Town,
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
12F, Maxdo Center, 8 XingyiRoad,
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.33 Dongnan
Road, Changshu New & Hi-tech
Industrial Development Zone of Jiangsu
Changshu 215500,
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 Securities (Hong Kong)
Limited
Room 607-614, 6/F, One International
Finance Centre, 1 Harbour View Street,
Central, Hong Kong
Tel: 852-3716-7000
SMBC Nikko Securities (Hong Kong)
Limited (Sydney Office)
Level 35, The Chifley Tower,
2 Chifley Square, Sydney,
NSW 2000, Australia
Tel: 61 (2) 9376-1895
SMBC Nikko Securities (Singapore)
Pte. Ltd.
88 Market Street #34-02 CapitaSpring
Singapore 048948
Tel: 65-6690-441
SMBC Nikko Investment Consulting
(Shanghai) Limited
Room 1720, Shanghai World Financial
Center, No.100 Century Avenue,
Pudong New Area, Shanghai,
The People’s Republic of China
Tel: 86-21-3817-9000
SMBC Nikko Securities Inc.,
Beijing Representative Office
Room 403A, 4/F, China Central Place
Tower 2, No.79 Jianguo Road,
Chaoyang District, Beijing
Tel: 86-10-6587-2881
The Bank of East Asia, Limited
10 Des Voeux Road, Central, Hong Kong
Tel: 852-3608-3608
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 17T40, 17F, Shanghai World
Financial Center, 100 Century Avenue,
Pudong New Area, Shanghai 200120
The People’s Republic of China
Tel: 86 (21) 6841-2788
Sumitomo Mitsui Finance and Leasing
(Singapore) Pte. Ltd.
Singapore Branch
152 Beach Road, #05-06/08 Gateway
East, Singapore 189721
Tel: 65-6224-2955
Sumitomo Mitsui Finance and Leasing
(Hong Kong) Ltd.
Unit 4206-8, 42/F, Dah Sing Financial
Centre, 248 Queen’s Road East,
Wanchai, Hong Kong
Tel: 852-2523-2280
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
Shanghai Sumitomo Mitsui General
Finance and Leasing Co., Ltd.
10th Floor, Pingan Riverfront
Financial Center, 757 Mengzi Road,
Huangpu District, Shanghai, China
Tel: 86-21-5396-5522
Sumitomo Mitsui Finance and Leasing
(China) Co., Ltd.
Beijing Branch
Unit 1001, 10F, 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, Wan Chai,
Hong Kong
Tel: 852 (3199) 1000
Liang Jing Co., Ltd.
9th Floor No.6, Sec 3, Min Chuan E.Rd.,
Taipei, Taiwan 104477,R.O.C.
Tel: 886 (2) 2515-1598
PROMISE (THAILAND) CO., LTD.
159/19-20 Serm-mit Tower, Unit 1201,
12th Floor,Sukhumvit 21 (Asoke) Road,
North Klongtoey, Wattana, Bangkok
10110, Thailand
Tel: 66 (2) 655-8574
PROMISE (SHENZHEN) CO., LTD.
2801, 2803, 28/F, Tower A, Kingkey 100
Building, No.5016 Shennan East Road,
Luohu District,Shenzhen 518000,
The People’s Republic of China
Tel: 86(755) 6186 5108
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.
1406-1408, Tower A, Tianan Guoji
Building, Nanhu Road Renmin South
Road, Luoho District, Shenzhen 518005,
The People’s Republic of China
Tel: 86 (755) 3698-5100
PROMISE (TIANJIN) CO., LTD.
28F 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.
1209A, No.68, Zourong Road,
Yuzhong District, Chongqing,
The People’s Republic of China
Tel: 86 (23) 6037-5200
PROMISE (CHENGDU) CO., LTD.
Level 18, Minyoun Financial Plaza,
No.35 Zidong Section Dongda Street,
Jinjiang District, Chengdu, 610061,
The People’s Republic of China
Tel: 86 (28) 6528-5000
PROMISE (WUHAN) CO., LTD.
14F, Block A, Pingan International
Financial Building, 216 Gongzheng Road,
Wuchang, Wuhan, Hubei, 430000,
The People’s Republic of China
Tel: 86 (27) 8711-6300
PROMISE (SHANGHAI) CO., LTD.
Room 03-10, Floor 14, China Insurance
Building No.166, East Lujiazui Road,
Pudong New Area, Shanghai 200120,
The People’s Republic of China
Tel: 86 (21) 2066-6262
PROMISE ASSET MANAGEMENT
(TAIWAN) CO., LTD.
9th Floor No.6, Sec 3, Min Chuan E.Rd.,
Taipei, Taiwan 104477, R.O.C.
Tel: 886 (2) 2515-6369
VPBank SMBC Finance Company
Limited
Floor 2, REE Tower Building, No.9,
Doan Van Bo Street, Ward 13,
District 04, Ho Chi Minh City
Tel: 84-28-3911-5212
SMCC Consulting (Shanghai) Co., Ltd.
Room 971, 9F Hang Seng Bank Tower,
No.1000 Lujiazui Ring Road,
Pudong New District, Shanghai,
People’s Republic of China
Sumitomo Mitsui DS Private Fund
Management (Shanghai) Co., Ltd.
Suite2710B - 11, 27/F,
CITIC Square, 1168 Nanjing Road West,
Shanghai, 200041, China
Tel: 86-(0)21-5292-5960
Sumitomo Mitsui DS Asset
Management (Hong Kong) Limited
6/F, One International Finance Centre,
1 Harbour View Street, Central,
Hong Kong
Tel: 852-2521-8883
Sumitomo Mitsui DS Asset
Management (Singapore) Pte. Ltd.
88 Market Street #33-03 CapitaSpring
Singapore 048948
Tel: 65-6297-6811
186 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
187
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: 1-914-688-4100
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) 478-0900
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: 52-55-2623-0200
SMBC Nikko Securities America, Inc.
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-5300
SMBC Nikko Securities America, Inc
San Francisco Branch
555 California Street, Suite 3320,
San Francisco, CA 94104, U.S.A
Tel: 1-415-616-3070
SMBC Nikko Securities America, Inc.
Charlotte Branch
500 East Morehead Street,
Charlotte, NC 28202, U.S.A
SMBC Nikko Securities Canada, Ltd.
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.
Sumitomo Mitsui Finance and Leasing
Company, Limited
New York Branch
666 Third Avenue,
New York, NY 10017, U.S.A.
Tel: 1 (917) 542-3500
Sumitomo Mitsui DS Asset
Management (USA) Inc.
300 Park Avenue, 16th Floor,
New York, NY 10022, United States
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
100 Liverpool Street,
London EC2M 2AT, UK
Tel: 44 (0) 20-4507-1000
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 (0) 2-495-4000
Istanbul Representative Office
Metrocity Is Merkezi, Kirgulu Sokak No:4
Kat:7/A D Blok, Esentepe Mahallesi, Sisli
34394, Istanbul, Republic of Turkey
Tel: 90 (212) 371-5900
Doha QFC Office
Office 1901, 19th Floor,
Qatar Financial Centre Tower,
Diplomatic Area-West bay, Doha,
Qatar, P.O.Box 23769
Tel: 974-(4036)-6701
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
SMBC Bank International plc
100 Liverpool Street, London,
EC2M 2AT, UK
Tel: 44 (0) 20-4507-1000
SMBC Bank International plc
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 Amsterdam Branch
World Trade Center Amsterdam,
Tower H, Level 15 Zuidplein 130,
1077XV, Amsterdam, The Netherlands
Tel: 31 (20) 718-3888
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 Paris Branch
1/3/5 rue Paul Cézanne - 75008 Paris,
France
Tel: 33- (1) 44- (90) 48-00
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
100 Liverpool Street, London,
EC2M 2AT, UK
Tel: 44 (20) 4507-1000
SMBC Nikko capital Markets Limited
ADGM Branch
2445, 24th Floor, Al Sila Tower,
Abu Dhabi Global Market Square,
Al Maryah Island, Abu Dhabi,
United Arab Emirates
SMBC Derivative Products Limited
100 Liverpool Street,
London EC2M 2AT, UK
Tel: 44 (20) 4507-1000
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
100 Liverpool Street, London
EC2M 2AT, U.K.
Tel: 44-(0)20-4507-1000
Sumitomo Mitsui DS Asset
Management (UK) Limited
100 Liverpool Street, London,
EC2M 2AT, United Kingdom
Tel: 44 (0) 20-7507-6400
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 Leasing (UK) Limited
100 Liverpool Street, London,
EC2M 2AT, UK
Tel: 44 (20) 7786-1741
SMBC Nikko Bank (Luxembourg) S.A.
2, rue Hildegard von Bingen L-1282
Luxembourg,
Grand Duchy of Luxembourg
Tel: 352 (442) 828-1
SMBC Nikko Investment Fund
Management Company S.A.
2, rue Hildegard von Bingen L-1282
Luxembourg,
Grand-Duchy of Luxembourg
Tel: 352-442-828-1
Sumitomo Mitsui Finance and Leasing
Company, Limited
London Branch
100 Liverpool Street,
London, EC2M 2RH, U.K.
Sumitomo Mitsui Finance and Leasing
Company, Limited
Dublin Branch
IFSC House, IFSC, Dublin 1, Ireland
Tel:
(353-1-859-9000)
SMBC Aero Engine Lease B.V.
World Trade Center, Office Tower B / 16F,
Strawinskylaan 1639, 1077 XX,
Amsterdam, The Netherlands
Tel: 31-20-705-4980
SMFL LCI Helicopters Limited
6 George’s Dock, IFSC, Dublin 1, Ireland
DMG MORI Finance GmbH
Rita-Maiburg-Strasse 40, 70794
Filderstadt, Germany
Tel: 49 711 34 24 4 0-0
188 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
189
SMBC Bank EU AG
SMBC Bank EU AG
SMBC Bank EU AG
SMBC Bank EU AG
Dublin Branch
Dublin Branch
Sumitomo Mitsui Finance
Sumitomo Mitsui Finance
Dublin Limited
Dublin Limited
SMBC Aviation
SMBC Aviation
Capital Limited
Capital Limited
SMBC Bank
SMBC Bank
International plc
International plc
SMBC Nikko Capital
SMBC Nikko Capital
Markets Limited
Markets Limited
London Branch
London Branch
SMBC Bank EU AG
SMBC Bank EU AG
Amsterdam Branch
Amsterdam Branch
JSC Sumitomo Mitsui Rus Bank
JSC Sumitomo Mitsui Rus Bank
Brussels Branch
Brussels Branch
SMBC Bank EU AG Prague Branch
SMBC Bank EU AG Prague Branch
Düsseldorf Branch
Düsseldorf Branch
SMBC Bank EU AG Düsseldorf Branch
SMBC Bank EU AG Düsseldorf Branch
SMBC Leasing (UK) Limited
SMBC Leasing (UK) Limited
SMBC Bank EU AG Milan Branch
SMBC Bank EU AG Milan Branch
SMBC Bank EU AG
SMBC Bank EU AG
Madrid Branch
Madrid Branch
SMBC Bank EU AG
SMBC Bank EU AG
Paris Branch
Paris Branch
SMBC Nikko Bank
SMBC Nikko Bank
(Luxembourg) S.A.
(Luxembourg) S.A.
Istanbul Representative Office
Istanbul Representative Office
SMBC Bank
SMBC Bank
International plc
International plc
Paris Branch
Paris Branch
Cairo Representative Office
Cairo Representative Office
Tehran Representative Office
Tehran Representative Office
New Delhi Branch
New Delhi Branch
DIFC Branch-Dubai
DIFC Branch-Dubai
SMBC Advisory Services Saudi Arabia LLC
SMBC Advisory Services Saudi Arabia LLC
Doha QFC Office
Doha QFC Office
Mumbai Branch
Mumbai Branch
Abu Dhabi Representative Office
Abu Dhabi Representative Office
Chennai Branch
Chennai Branch
Johannesburg Representative Office
Johannesburg Representative Office
Perth Branch
Perth Branch
Sydney Branch
Sydney Branch
GLOBAL NETWORK
GLOBAL NETWORK
Asia and Oceania
Asia and Oceania
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Head Office (Shanghai)
Head Office (Shanghai)
Shanghai Pilot Free Trade Zone Sub-Branch
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
Guangzhou Branch
Guangzhou Branch
Shanghai Puxi Sub-Branch
Shanghai Puxi 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
Hangzhou Branch
Hangzhou Branch
Changshu Sub-Branch
Changshu 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
Chongqing Branch
Chongqing Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shenzhen Branch
Shenzhen Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shenyang Branch
Shenyang Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Suzhou Branch
Suzhou Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Dalian Branch
Dalian Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Tianjin Branch
Tianjin Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Beijing Branch
Beijing Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Kunshan Sub-Branch
Kunshan Sub-Branch
Suzhou Industrial Park Sub-Branch
Suzhou Industrial Park Sub-Branch
■ PT Bank BTPN Tbk
■ PT Bank BTPN Tbk
■ Sumitomo Mitsui Banking Corporation Malaysia Berhad
■ Sumitomo Mitsui Banking Corporation Malaysia Berhad
■ Hong Kong Branch
■ Hong Kong Branch
■ Hong Kong Branch Kowloon Office
■ Hong Kong Branch Kowloon Office
■ Taipei Branch
■ Taipei Branch
■ Seoul Branch
■ Seoul Branch
■ Singapore Branch
■ Singapore Branch
■ Sydney Branch
■ Sydney Branch
■ Perth Branch
■ Perth Branch
■ Mumbai Branch
■ Mumbai Branch
■ New Delhi Branch
■ New Delhi Branch
■ Chennai Branch
■ Chennai Branch
■ Bangkok Branch
■ Bangkok Branch
■ Chonburi Branch
■ Chonburi Branch
■ Ho Chi Minh City Branch
■ Ho Chi Minh City Branch
■ Hanoi Branch
■ Hanoi Branch
■ Manila Branch
■ Manila Branch
■ Yangon Branch
■ Yangon Branch
■ Yangon Branch Thilawa Front Office
■ Yangon Branch Thilawa Front Office
■ Labuan Branch
■ Labuan Branch
■ Labuan Branch Kuala Lumpur Office
■ Labuan Branch Kuala Lumpur Office
■ Phnom Penh Representative Office
■ Phnom Penh Representative Office
■ SMBC Capital Markets (Asia) Limited
■ SMBC Capital Markets (Asia) Limited
■ SMBC Nikko Securities (Hong Kong) Limited
■ SMBC Nikko Securities (Hong Kong) Limited
■ SMBC Nikko Securities (Singapore) Pte. Ltd.
■ SMBC Nikko Securities (Singapore) Pte. Ltd.
■ The Bank of East Asia, Limited
■ The Bank of East Asia, Limited
■ PT Oto Multiartha
■ PT Oto Multiartha
■ PT Summit Oto Finance
■ PT Summit Oto Finance
■ ACLEDA Bank Plc.
■ ACLEDA Bank Plc.
Overseas service network (as of June 30, 2023)
Overseas service network (as of June 30, 2023)
Total: 88
Total: 88
(including banking subsidiaries and their branches/
(including banking subsidiaries and their branches/
sub-branches/rep. offices)
sub-branches/rep. offices)
Consolidated subsidiary PT Bank BTPN Tbk has 292 offices. (as of June 30, 2023).
Consolidated subsidiary PT Bank BTPN Tbk has 292 offices. (as of June 30, 2023).
SMFG India Credit Co., Ltd has 854 offices (as of March 31, 2023).
SMFG India Credit Co., Ltd has 854 offices (as of March 31, 2023).
Los Angeles Branch
Los Angeles Branch
San Francisco Branch
San Francisco Branch
Silicon Valley Representative Office
Silicon Valley Representative Office
Shenyang Branch
Shenyang Branch
Beijing Branch
Beijing Branch
Tianjin Branch
Tianjin Branch
Dalian
Dalian
Branch
Branch
Seoul
Seoul
Branch
Branch
Chicago Representative
Chicago Representative
Office
Office
Canada Branch
Canada Branch
Manufacturers Bank
Manufacturers Bank
Dallas Representative Office
Dallas Representative Office
New York Branch
New York Branch
SMBC Capital Markets, Inc.
SMBC Capital Markets, Inc.
SMBC Leasing and Finance, Inc.
SMBC Leasing and Finance, Inc.
SMBC Nikko Securities America, Inc.
SMBC Nikko Securities America, Inc.
SMBC Americas Holdings, Inc.
SMBC Americas Holdings, Inc.
White Plains Representative Office
White Plains Representative Office
Houston Representative Office
Houston Representative Office
Suzhou Branch
Suzhou Branch
Suzhou Industrial Park Sub-Branch
Suzhou Industrial Park Sub-Branch
Changshu Sub-Branch
Changshu Sub-Branch
Chongqing Branch
Chongqing Branch
Kunshan Sub-Branch
Kunshan Sub-Branch
Head Office (Shanghai)
Head Office (Shanghai)
Shanghai Puxi Sub-Branch
Shanghai Puxi Sub-Branch
Shanghai Pilot Free
Shanghai Pilot Free
Trade Zone Sub-Branch
Trade Zone Sub-Branch
Hangzhou
Hangzhou
Branch
Branch
Guangzhou
Guangzhou
Branch
Branch
Taipei Branch
Taipei Branch
Hanoi Branch
Hanoi Branch
Shenzhen Branch
Shenzhen Branch
The Bank of East Asia, Limited
The Bank of East Asia, Limited
Hong Kong Branch
Hong Kong Branch
Kowloon Office
Kowloon Office
SMBC Capital Markets (Asia) Limited
SMBC Capital Markets (Asia) Limited
SMBC Nikko Securities (Hong Kong) Limited
SMBC Nikko Securities (Hong Kong) Limited
Yangon Branch
Yangon Branch
Thilawa Front Office
Thilawa Front Office
Bangkok Branch
Bangkok Branch
Chonburi Branch
Chonburi Branch
Manila Branch
Manila Branch
Phnom Penh Representative Office
Phnom Penh Representative Office
ACLEDA Bank Plc.
ACLEDA Bank Plc.
Ho Chi Minh City Branch
Ho Chi Minh City Branch
Sumitomo Mitsui Banking
Sumitomo Mitsui Banking
Corporation Malaysia Berhad
Corporation Malaysia Berhad
Kuala Lumpur Office
Kuala Lumpur Office
Labuan Branch
Labuan Branch
Singapore Branch
Singapore Branch
SMBC Nikko Securities (Singapore) Pte. Ltd.
SMBC Nikko Securities (Singapore) Pte. Ltd.
PT Bank BTPN Tbk
PT Bank BTPN Tbk
PT Oto Multiartha
PT Oto Multiartha
PT Summit Oto Finance
PT Summit Oto Finance
Indicates branch or sub-branch of
Indicates branch or sub-branch of
Sumitomo Mitsui Banking Corporation (China) Limited
Sumitomo Mitsui Banking Corporation (China) Limited
The Americas
The Americas
Europe, Middle East and Africa
Europe, Middle East and Africa
Cayman Branch
Cayman Branch
Mexico City Representative Office
Mexico City Representative Office
SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
Leon Representative Office
Leon Representative Office
Bogota Representative Office
Bogota Representative Office
Lima Representative Office
Lima Representative Office
Banco Sumitomo Mitsui Brasileiro S.A.
Banco Sumitomo Mitsui Brasileiro S.A.
Santiago Representative Office
Santiago Representative Office
■ SMBC Bank International plc
■ SMBC Bank International plc
■ SMBC Bank International plc Paris Branch
■ SMBC Bank International plc Paris Branch
■ SMBC Bank EU AG
■ SMBC Bank EU AG
■ SMBC Bank EU AG Amsterdam Branch
■ SMBC Bank EU AG Amsterdam Branch
■ SMBC Bank EU AG Dublin Branch
■ SMBC Bank EU AG Dublin Branch
■ SMBC Bank EU AG Düsseldorf Branch
■ SMBC Bank EU AG Düsseldorf Branch
■ SMBC Bank EU AG Paris Branch
■ SMBC Bank EU AG Paris Branch
■ SMBC Bank EU AG Prague Branch
■ SMBC Bank EU AG Prague Branch
■ SMBC Bank EU AG Madrid Branch
■ SMBC Bank EU AG Madrid Branch
■ SMBC Bank EU AG Milan Branch
■ SMBC Bank EU AG Milan Branch
■ London Branch
■ London Branch
■ Düsseldorf Branch
■ Düsseldorf Branch
■ Brussels Branch
■ Brussels Branch
■ DIFC Branch-Dubai
■ DIFC Branch-Dubai
■ Abu Dhabi Representative Office
■ Abu Dhabi Representative Office
■ Istanbul Representative Office
■ Istanbul Representative Office
■ Doha QFC Office
■ Doha QFC Office
■ Johannesburg Representative Office
■ Johannesburg Representative Office
■ Cairo Representative Office
■ Cairo Representative Office
■ Tehran Representative Office
■ Tehran Representative Office
■ JSC Sumitomo Mitsui Rus Bank
■ JSC Sumitomo Mitsui Rus Bank
■ SMBC Nikko Capital Markets Limited
■ SMBC Nikko Capital Markets Limited
■ Sumitomo Mitsui Finance Dublin Limited
■ Sumitomo Mitsui Finance Dublin Limited
■ SMBC Aviation Capital Limited
■ SMBC Aviation Capital Limited
■ SMBC Advisory Services Saudi Arabia LLC
■ SMBC Advisory Services Saudi Arabia LLC
■ SMBC Leasing (UK) Limited
■ SMBC Leasing (UK) Limited
■ SMBC Nikko Bank (Luxembourg) S.A.
■ SMBC Nikko Bank (Luxembourg) S.A.
■ New York Branch
■ New York Branch
■ San Francisco Branch
■ San Francisco Branch
■ Los Angeles Branch
■ Los Angeles Branch
■ Canada Branch
■ Canada Branch
■ Cayman Branch
■ Cayman Branch
■ Chicago Representative Office
■ Chicago Representative Office
■ Dallas Representative Office
■ Dallas Representative Office
■ Houston Representative Office
■ Houston Representative Office
■ Silicon Valley Representative Office
■ Silicon Valley Representative Office
■ White Plains Representative Office
■ White Plains Representative Office
■ Mexico City Representative Office
■ Mexico City Representative Office
■ Leon Representative Office
■ Leon Representative Office
■ Santiago Representative Office
■ Santiago Representative Office
■ Bogota Representative Office
■ Bogota Representative Office
■ Lima Representative Office
■ Lima Representative Office
■ Manufacturers Bank
■ Manufacturers Bank
■ Banco Sumitomo Mitsui Brasileiro S.A.
■ Banco Sumitomo Mitsui Brasileiro S.A.
■ SMBC Capital Markets, Inc.
■ SMBC Capital Markets, Inc.
■ SMBC Nikko Securities America, Inc.
■ SMBC Nikko Securities America, Inc.
■ SMBC Leasing and Finance, Inc.
■ SMBC Leasing and Finance, Inc.
■ SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
■ SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
■ SMBC Americas Holdings, Inc.
■ SMBC Americas Holdings, Inc.
190 SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
191
Appendix II
CONTENTS
Financial Data
Sumitomo Mitsui Financial Group
SMBC
Financial Highlights
194
Financial Highlights
276
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)
Net Stable Funding Ratio Information
(Consolidated)
195
264
265
268
272
274
Capital Ratio and Leverage Ratio
Information (Consolidated)
Liquidity Coverage Ratio Information
(Consolidated)
Net Stable Funding Ratio Information
(Consolidated)
277
286
288
Capital Ratio and Leverage Ratio Information
(Non-consolidated)
290
Liquidity Coverage Ratio Information (Non-
consolidated)
Net Stable Funding Ratio Information (Non-
consolidated)
298
300
Compensation
Sumitomo Mitsui Financial Group
SMBC
Compensation (Consolidated)
304
Compensation
308
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Sumitomo Mitsui Financial Group
Financial Highlights
Financial Data (Excerpt from Securities Report) of Sumitomo Mitsui Financial Group can be found on our website�
URL: https://www�smfg�co�jp/english/investor/library/annual/cy2023annu_eng_smfg�html
Sumitomo Mitsui Financial Group (Consolidated)
Year ended March 31
For the Year:
2023
2022
Ordinary income ����������������������������������������������������������� ¥ 6,142,155
Ordinary profit ��������������������������������������������������������������
1,160,930
Profit attributable to owners of parent �������������������������
805,842
Comprehensive income �����������������������������������������������
1,031,712
¥ 4,111,127
1,040,621
706,631
561,887
At Year-End:
Millions of yen
2021
¥ 3,902,307
711,018
512,812
1,465,014
2020
2019
¥ 4,591,873
932,064
703,883
372,971
¥ 4,804,428
1,135,300
726,681
795,191
Total net assets ������������������������������������������������������������ ¥ 12,791,106
Total assets ������������������������������������������������������������������
270,428,564
Total capital ratio (BIS guidelines) ��������������������������������
Tier 1 capital ratio (BIS guidelines) �������������������������������
Common equity Tier 1 capital ratio
15.98%
14.94%
(BIS guidelines) ����������������������������������������������������������
Number of employees ��������������������������������������������������
14.02%
105,955
¥ 12,197,331
257,704,625
¥ 11,899,046
242,584,308
¥ 10,784,903
219,863,518
¥ 11,451,611
203,659,146
16�56%
15�46%
14�45%
101,023
18�61%
16�96%
16�00%
86,781
18�75%
16�63%
15�55%
86,443
20�76%
18�19%
16�37%
86,659
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 and temporary staff.
2. Sumitomo Mitsui Financial Group, Inc. has changed the recognition of installment-sales-related income and installment-sales-related expenses from fiscal
year ended March 31, 2021, and the change in accounting policies is applied retroactively for and before the year ended March 31, 2020. As a result of
comparing before and after the retroactive application, ordinary income decreased by ¥930,884 million for fiscal year ended March 31, 2019, and ¥722,440
million for fiscal year ended March 31, 2020.
Sumitomo Mitsui Financial Group
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: 184
Please refer to “Principal Subsidiaries and Affiliates” on page 182 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.
194
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
■ CC1: Composition of regulatory capital
Basel III
Template No.
Items
(Millions of yen, except percentages)
a
b
As of March
31, 2023
As of March
31, 2022
c
Reference
to Template
CC2
Basel III
Template No.
Items
Additional Tier 1 capital: instruments (3)
(Millions of yen, except percentages)
a
b
As of March
31, 2023
As of March
31, 2022
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)
10,140,313
9,794,672
3,036,589
7,423,600
151,798
168,077
—
1,145
2,372,074
3,035,543
6,916,468
13,402
143,936
—
1,475
2,159,606
1,404
1,231
(a)
6 Common Equity Tier 1 capital: instruments and reserves
(A)
12,514,937
11,956,985
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)
—
—
—
—
766,214
733,998
—
—
29,268
22,104
—
—
—
—
—
—
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
841,089
849,602
405,810
435,279
438,657
410,945
6,899
11,334
(74,959)
—
52,939
47,781
489,035
7,205
—
(79,373)
—
56,744
23,109
432,092
4,317
—
187,705
200,779
118,285
118,285
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
1,675,982
1,498,608
Common Equity Tier 1 capital (CET1)
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)
795,482
756,102
—
—
—
—
2,547
2,729
82,978
25,525
—
—
85,526
28,255
709,956
727,847
(E)
(F)
(G)
11,548,912
11,186,225
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)
—
—
—
—
766,438
753,571
—
—
5,825
4,722
—
—
—
—
—
—
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
10,838,955
10,458,377
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
105,858
79,073
26,784
878,121
108,729
69,589
39,139
867,023
(H)
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
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, 2023
As of March
31, 2022
c
Reference
to Template
CC2
0
—
0
—
36,190
32,765
—
—
40,062
36,723
76,252
69,488
801,869
797,534
(I)
(J)
(K)
12,350,781
11,983,759
(L)
77,285,048
72,350,071
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”)
14.02%
14.94%
15.98%
3.60%
2.50%
0.10%
1.00%
7.98%
14.45%
15.46%
16.56%
3.53%
2.50%
0.03%
1.00%
8.56%
1,114,494
1,065,915
1,095,724
1,044,534
—
—
199,927
130,489
85,077
79,073
26,784
71,960
69,589
39,139
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
326,973
321,224
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”)
—
—
—
—
—
—
—
—
Items
Required capital ((L) ✕ 8%)
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SMBC GROUP ANNUAL REPORT 2023
(Millions of yen)
As of March
31, 2023
6,182,803
As of March
31, 2022
5,788,005
■ 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, 2022
31, 2023
48,133,282 47,216,303
3,234,291
3,650,094
40,237,209 40,298,246
—
42,158
3,641,606
5,086,633
—
1,535,455
—
2,567,540
144,150
839,486
960,416
2,209,787
—
44,598
413,050
189,538
113
1,409,040
—
36,042
4,209,936
5,247,547
—
1,503,981
—
2,594,370
284,745
864,450
847,614
2,550,305
—
85,894
550,764
271,158
255
1,311,406
Minimum capital
requirements
As of
March
31, 2023
4,043,801
292,007
3,412,115
—
2,883
336,794
427,703
—
126,501
—
207,549
22,779
70,872
71,877
204,024
—
7,083
45,946
21,692
21
104,912
As of
March
31, 2022
3,970,735
258,743
3,417,291
—
3,372
291,328
414,124
—
128,947
—
205,403
11,532
68,241
81,443
176,783
—
3,637
34,836
15,163
9
112,723
1,074,905
1,216,667
85,992
97,333
168,987
218,204
5,741
4,111
17,644
14,184
3,052,578
4,474,842
1,081,295
1,607,836
1,971,282
2,867,006
4,356,154
4,870,622
970,096
1,112,261
—
—
3,386,058
3,758,360
2,937,560
3,239,127
—
—
1,716,046
2,927,635
77,285,048 72,350,071
17,456
328
1,134
357,987
128,626
229,360
389,649
88,980
—
300,668
273,891
—
234,210
6,182,803
13,519
459
1,411
244,206
86,503
157,702
348,492
77,607
—
270,884
248,567
—
137,283
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Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
■ 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 154 to 158 (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 206 to 207 “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, 2023
As of March 31, 2022
(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
4
3
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)
916,540
4,100
96,078,487
25,370,319
732,290
96,262,737
— 25,374,419
1,128,501
7,203
89,119,744
30,539,190
811,223
89,437,022
— 30,546,393
144,231
85,292,570
46,659
85,390,142
17,575
82,092,045
35,072
82,074,547
1,064,872 206,741,377
778,949 207,027,300
1,153,280 201,750,979
846,296 202,057,963
5
6
7
Total
8
Acceptances and guarantees, etc.
Commitments, etc.
Subtotal (5+6)
7,625
40,257
47,883
14,455,696
31,232,414
45,688,111
60,430
70,620
131,051
14,402,891
31,202,052
45,604,943
22,930
17,381
40,311
12,599,237
28,562,640
41,161,878
62,782
73,920
136,702
12,559,385
28,506,101
41,065,487
Total (4+7)
1,112,756 252,429,488
910,000 252,632,244
1,193,592 242,912,857
982,998 243,123,450
3. Changes in stock of defaulted loans and securities (of which: debt securities) (CR2)
CR2: Changes in stock of defaulted loans and securities (of which: debt securities)
(Millions of yen)
Amount
Stock of loans and securities (of which: debt securities) that were placed in defaulted
status as of March 31, 2022
1,153,280
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
230,238
68,744
202,950
(46,951)
Stock of loans and securities (of which: debt securities) that were placed in defaulted
status as of March 31, 2023 (1+2-3-4+5)
1,064,872
Item
No.
1
2
3
4
5
6
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, 2021
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
Amount
967,121
472,807
81,536
139,874
(65,237)
Stock of loans and securities (of which: debt securities) that were placed in defaulted
status as of March 31, 2022 (1+2-3-4+5)
1,153,280
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, 2023
As of March 31, 2022
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
135,864,846
18,647,976
9,389,132
163,901,956
131,238,735
24,335,658
8,581,732
164,156,126
12,086,282
122,856
1,996,652
14,205,791
11,389,309
168,802
2,084,962
13,643,074
262,150
1,228,917
6,430
34,605
3,004
271,585
402,771
134,809
1,398,333
1,102,453
3,276
34,918
2,833
408,881
140,264
1,277,636
7,418,455
230,885
499,411
8,148,753
7,161,426
247,477
472,431
7,881,335
6,623,832
67,197,664
135,308
2,194,188
410,348
330,061
7,169,489
69,721,915
6,280,039
66,595,377
154,234
1,574,982
402,540
307,134
6,836,814
68,477,494
15,043,141
1,238,633
83,117
16,364,892
13,778,672
1,195,797
101,684
15,076,154
4,863,194
1,830,028
19,311,178
266,010
171,204
14,247,852
96,019
1,644
5,834,061
5,225,224
2,002,877
39,393,093
4,878,199
1,569,565
18,080,919
283,175
110,854
20,562,140
98,923
1,537
4,969,420
5,260,298
1,681,957
43,612,480
76,529,143
6,741,578
2,288,716
85,559,437
67,505,444
6,219,476
2,239,462
75,964,383
17,505,424
7,966,317
42,702,686
8,354,714
212,393,990
4,490,993
1,225,126
611,797
413,660
25,389,554
8,363
456,111
—
1,824,240
11,677,848
22,004,781
9,647,555
43,314,484
10,592,615
249,461,394
14,102,811
7,242,864
37,961,552
8,198,215
198,744,179
4,133,539
1,104,151
683,279
298,506
30,555,135
5,708
444,797
—
1,788,956
10,821,195
18,242,059
8,791,814
38,644,831
10,285,678
240,120,510
Notes: 1. The above amounts are exposures after Credit Risk Mitigation (CRM).
2. The above amounts do not include “securitisation exposures” and “credit RWA under Article 145 of the Notification.”
3. “Domestic operations” comprises the operations of us, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic consolidated
subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated subsidiaries.
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Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
(2) Exposure Balance by Type of Assets and Residual Term
(Millions of yen)
6. Term-End Balance of Exposures by Past Due Periods
Less than 1 month
1 month or more to less
than 2 months
Fiscal 2022
2 months or more to less
than 3 months
3 months or more
Total
144.3
63.4
24.7
80.9
313.4
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 2021
2 months or more to less
than 3 months
3 months or more
Total
455.9
62.1
38.2
99.9
656.2
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 2022
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 2021
Of which: amounts of increased
Reserves for such exposures
due to the restructuring of the
loan conditions
(Billions of yen)
Of which: other
amounts
393.0
393.0
0.0
494.4
494.4
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.
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, 2023
As of March 31, 2022
Loans,
commitments and
other off-balance
sheet exposures
except derivatives
59,067,939
25,907,221
22,835,840
9,114,056
23,001,636
72,467,295
212,393,990
Bonds
Others
Total
9,188,027
3,566,043
3,933,771
1,647,817
7,053,894
—
25,389,554
26,399
—
—
—
—
11,651,449
11,677,848
68,282,365
29,473,265
26,769,612
10,761,873
30,055,531
84,118,745
249,461,394
Loans,
commitments and
other off-balance
sheet exposures
except derivatives
52,956,794
23,302,223
19,573,478
8,281,524
23,081,915
71,548,243
198,744,179
Bonds
Others
Total
10,379,103
6,169,758
3,621,204
3,282,357
7,102,711
—
30,555,135
24,942
—
—
—
—
10,796,252
10,821,195
63,360,840
29,471,981
23,194,683
11,563,881
30,184,627
82,344,495
240,120,510
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
Term-end
balance
Fiscal 2022
Term-end
Reserves
Write-offs for
the year
Term-end
balance
(Billions of yen)
Fiscal 2021
Term-end
Reserves
Write-offs for
the year
781.7
522.5
290.2
92.6
139.7
1,304.2
203.4
234.2
156.8
26.5
50.9
437.6
78.3
28.2
25.3
1.8
1.2
106.5
997.9
904.5
620.0
91.8
192.7
1,902.3
368.3
207.3
121.8
21.0
64.6
575.6
67.6
23.6
34.1
(0.4)
(10.1)
91.2
Term-end
balance
Fiscal 2022
Term-end
Reserves
Write-offs for
the year
Term-end
balance
(Billions of yen)
Fiscal 2021
Term-end
Reserves
Write-offs for
the year
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
781.7
136.4
2.7
8.4
45.1
69.8
6.5
42.2
114.4
356.0
522.5
17.8
415.7
89.0
1,304.2
203.4
43.6
1.6
2.0
17.7
22.1
0.2
5.8
34.3
76.2
234.2
16.7
193.8
23.7
437.6
78.3
11.6
0.7
0.2
0.0
0.4
0.0
(0.2)
(1.4)
67.1
28.2
0.0
6.4
21.9
106.5
997.9
298.5
3.8
8.6
46.8
90.4
7.9
50.4
120.1
371.4
904.5
17.0
676.7
210.8
1,902.3
368.3
184.7
0.8
2.1
15.9
36.9
0.7
7.4
36.9
82.8
207.3
15.4
159.8
32.2
575.6
67.6
(2.0)
(1.0)
0.1
0.3
2.0
0.0
(0.4)
(0.4)
69.0
23.6
15.3
(4.6)
12.9
91.2
Notes: 1. Term-end Reserves include partial direct write-offs (direct reduction).
2. “Domestic operations” comprises the operations of SMBC Group (excluding overseas branches) and domestic consolidated subsidiaries. “Overseas operations” comprises the
operations of SMBC Group’s overseas branches and overseas consolidated subsidiaries, and the term-end balances are calculated based on the obligor’s domicile country.
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
■ 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., and SMBC Trust
Bank Ltd.
(2) Overseas Operations
SMBC Bank International plc, Sumitomo Mitsui Banking Corporation (China) Limited, Banco Sumitomo Mitsui Brasileiro S.A., JSC
Sumitomo Mitsui Rus Bank, Sumitomo Mitsui Banking Corporation Malaysia Berhad, SMBC Leasing and Finance, Inc., SMBC Capital
Markets, Inc., SMBC Nikko Capital Markets Limited, SMBC Derivative Products Limited, SMBC Capital Markets (Asia) Limited,
SMBC Bank EU AG, PT Bank BTPN Tbk and SMBC Leasing (UK) Limited.
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 154 to 155). 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.
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, 2023.
• 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.
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Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
(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.
For most portfolios, the actual default rates are lower than PD estimate values applied for the respective periods, because the long-
term average value including the recession period is estimated, and also because the possibility of estimation errors is taken into
account.
Validation consists of two systems: “backtesting” to retrospectively compare and validate the parameter estimated value and the
actual value for the respective applicable period, and “pretesting” to validate before applying the parameter for the purpose of
complementing the “backtesting.” The overview for each is as follows.
(a) Backtesting
This is to compare the 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
Internal data are used to estimate and validate PDs and LGDs. The definition of default is the definition stipulated in the
estimation method or rating system.
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.
(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.
PDs and LGDs used to calculate credit risk-weighted asset amounts are estimated based on the default experience for each
B. LGD
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
155) 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 denominator and the
number of defaults occurred during the fiscal year as the numerator.
For assets and ratings 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.
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
using recovery cost. The averaged period from the time of default to the termination of recovery is used as discount period.
As for validation, backtesting and pretesting are conducted as in 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 A. PD.
4. Percentage of EAD by Asset Class by Type of Approach for Calculating Credit RWA to Total EAD
As of March 31, 2023
As of March 31, 2022
IRB approach
Corporate exposures (Advanced Internal Ratings-Based (AIRB) approach)
Corporate exposures (Foundation Internal Ratings-Based (FIRB) approach)
Retail exposures
Equity exposures
Purchased receivables (AIRB approach)
Purchased receivables (FIRB approach)
Other assets, etc.
SA
Total
94.78 %
83.42 %
0.27 %
5.93 %
1.87 %
1.12 %
0.00 %
2.15 %
5.21 %
100.00 %
95.38 %
83.97 %
0.26 %
5.99 %
2.10 %
1.13 %
0.00 %
1.89 %
4.61 %
100.00 %
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Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
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, 2023
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
2,942
—
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
93,633,322
641,893
47,656
12
91,561
60,383
11,100
126,344
94,612,274
152,011
171,767
9,765
—
69,840
17,214
—
—
420,599
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)
5,007,954
719,404
150,391
10,000
547,721
192,480
5,600
593
6,634,145
Bank exposures (FIRB approach)
48,945
102
—
1,210
2,280
—
—
—
52,537
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
—
—
—
—
—
—
—
—
—
1,469,203
180,362
39,981
2,526
155,635
23,557
—
—
1,871,267
—
—
—
—
—
—
—
—
—
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
32,446,992 16,125,650
17,474,685 14,497,451
3,705,167
7,496,947
103,539
542,767
2,196,914
5,163,341
553,464
1,150,151
270,960
726,466
49,206
500,246
65,501,599 37,502,355
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SMBC GROUP ANNUAL REPORT 2023
62.93
46.32
50.27
—
92.37
45.97
—
—
60.05
96,065,791
717,071
25,766
12
69,790
14,565
9,865
126,344
97,029,207
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
86.70
57.32
43.34
45.97
47.90
79.32
—
—
79.56
6,797,378
811,622
147,431
11,161
552,579
162,701
4,541
593
8,488,008
—
—
—
—
—
—
—
—
—
48,945
102
—
1,210
2,280
—
—
—
52,537
54.49 46,608,362
54.79 22,772,210
7,856,228
53.71
585,699
51.66
5,530,634
52.55
1,267,564
53.14
759,742
56.03
469,093
100.00
54.46 85,849,536
0.00
0.15
0.38
0.74
1.42
4.15
13.24
100.00
0.13
—
—
—
—
—
—
—
—
—
0.03
0.15
0.40
0.74
1.17
4.11
17.14
100.00
0.22
0.03
0.16
—
0.74
2.21
—
—
—
0.14
0.05
0.16
0.34
0.73
1.40
5.99
16.09
100.00
0.97
0.4
0.2
0.0
0.0
0.0
0.0
0.0
0.0
0.7
—
—
—
—
—
—
—
—
—
0.6
0.2
0.0
0.0
0.2
0.0
0.0
0.0
1.2
0.0
0.0
—
0.0
0.1
—
—
—
0.1
7.2
6.2
4.1
0.7
2.5
0.7
0.3
0.3
22.2
33.40
31.41
28.16
35.00
30.65
28.93
29.84
54.76
33.41
—
—
—
—
—
—
—
—
—
29.82
28.25
28.19
35.00
31.63
26.56
30.00
79.25
29.71
45.00
45.00
—
45.00
45.00
—
—
—
45.00
33.65
28.58
28.99
34.40
26.19
26.40
24.33
46.29
31.29
3.7
1.9
1.2
1.0
3.2
1.5
1.0
1.0
3.7
—
—
—
—
—
—
—
—
—
2.3
1.2
0.9
1.0
1.2
1.0
0.4
1.0
2.0
5.0
5.0
—
5.0
5.0
—
—
—
5.0
146,695
169,520
7,646
5
50,525
12,816
12,890
58,914
459,014
—
—
—
—
—
—
—
—
—
986,019
168,624
46,905
7,155
366,716
130,810
6,413
80
1,712,726
17,362
82
—
1,769
4,027
—
—
—
23,242
7,381,597
2.4
5,775,865
2.2
3,012,585
2.3
394,277
2.5
3,772,093
3.2
1,218,636
2.6
911,538
2.7
155,954
2.1
2.4 22,622,549
0.15
23.64
29.67
49.63
72.39
87.98
130.66
46.63
0.47
—
—
—
—
—
—
—
—
—
14.50
20.77
31.81
64.10
66.36
80.39
141.23
13.63
20.17
35.47
81.01
—
146.22
176.65
—
—
—
44.23
15.83
25.36
38.34
67.31
68.20
96.13
119.97
33.24
26.35
226
353
28
0
292
173
389
69,196
70,661
—
—
—
—
—
—
—
—
—
778
365
171
28
2,103
1,776
233
470
5,928
6
0
—
4
22
—
—
—
33
8,043
10,450
7,911
1,491
20,927
20,893
29,705
217,189
316,611
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, 2023
a
On-balance
sheet gross
exposures
b
Off-balance
sheet
exposures pre
CCF and pre
CRM
c
Average
CCF
(%)
d
EAD
post
CCF and
post
CRM
e
f
g
h
i
j
Average
PD
(%)
Number
of
obligors
Average
LGD
(%)
Average
maturity
Credit
RWA
amounts
RWA
density
(%)
k
EL
l
Eligible
provisions
Corporate exposures (FIRB approach)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1 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
—
—
—
—
—
—
—
—
—
Mid-sized corporations and small-medium enterprises (SMEs) exposures (AIRB approach)
24.93
27.11
26.12
26.65
25.98
20.60
35.92
45.54
26.72
818,090
1,271,292
1,356,274
412,121
1,161,869
159,210
78,198
156,446
5,413,504
Mid-sized corporations and SMEs 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
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
776,693
1,419,695
1,546,558
444,790
1,523,124
205,223
136,914
213,184
6,266,185
64,803
298,513
159,696
23,191
63,969
10,103
2,627
5,795
628,701
47.23
54.52
56.51
86.87
51.38
47.59
52.83
100.00
55.45
0.07
0.15
0.34
0.72
1.75
8.24
24.42
100.00
4.05
1.3
4.8
8.1
3.5
21.3
1.2
2.3
3.0
45.7
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2.6
3.2
3.7
3.6
3.5
2.6
2.2
1.8
3.3
—
—
—
—
—
—
—
—
—
3.4
3.6
3.7
2.0
3.4
3.2
3.4
2.9
3.5
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
—
—
—
—
—
—
—
—
—
105,407
287,753
461,011
195,144
649,625
107,495
126,219
23,438
1,956,096
—
—
—
—
—
—
—
—
—
366,921
587,658
969,636
20,914
907,825
233,964
420,003
26,210
3,533,135
3,771,067
603,393
151,111
3,579
60,161
33,052
2,148
9,242
4,633,756
—
—
—
—
—
—
—
—
—
12.88
22.63
33.99
47.35
55.91
67.51
161.40
14.98
36.13
—
—
—
—
—
—
—
—
—
10.91
20.53
35.18
38.54
51.54
109.26
184.49
46.63
31.28
102.61
123.55
190.94
228.96
299.40
523.01
796.56
1,125.00
108.47
—
—
—
—
—
—
—
—
—
146
541
1,222
796
5,293
2,619
6,899
71,258
88,778
—
—
—
—
—
—
—
—
—
324
905
2,229
90
4,621
2,799
12,788
29,273
53,032
—
—
—
—
—
—
—
—
—
0
93,366
—
83,429
—
SMBC GROUP ANNUAL REPORT 2023
209
—
—
—
—
—
—
—
—
—
0.04
0.16
0.35
0.74
1.18
4.11
15.58
100.00
1.22
0.04
0.15
0.41
0.74
1.55
8.89
24.92
100.00
0.10
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1.1
0.4
0.2
0.0
0.0
0.0
0.0
0.0
1.9
—
—
—
—
—
—
—
—
—
21.88
19.67
22.21
22.53
21.96
31.80
35.27
52.07
22.03
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
10,967
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
3,348,460
2,592,890
2,498,862
54,253
1,792,728
266,936
288,326
93,302
10,935,760
3,675,024
488,369
79,138
1,563
20,093
6,319
269
821
4,271,600
80,085
810,476
1,272,789
—
588,769
23,310
87,257
20,664
2,883,352
3,361,496
46.35
2,862,094
51.95
2,755,888
52.05
54,253
—
1,761,163
61.07
214,130
54.99
227,656
55.39
100.00
56,209
54.17 11,292,893
—
—
—
—
—
—
—
—
—
— 3,675,024
488,369
—
79,138
—
1,563
—
20,093
—
6,319
—
269
—
821
—
— 4,271,600
78
383,182
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
(Millions of yen, %, the number of data in thousands, years)
(Millions of yen, %, the number of data in thousands, years)
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
As of March 31, 2023
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
1,453,903
432,523
166,977
4,981
43,848
3,649
106
4,249
2,110,239
266,886
127,816
145,865
34,666
101,131
5,022
1,768
106
683,263
99.81
99.55
100.00
100.00
100.00
100.00
100.00
100.00
99.84
1,707,106
555,738
310,355
39,594
144,504
8,639
1,874
4,308
2,772,122
0.05
0.16
0.36
0.64
1.45
5.73
60.52
100.00
0.40
7.3
5.9
10.0
4.5
17.8
0.8
0.2
0.1
46.9
35.30
32.86
43.09
61.70
55.34
51.70
63.38
72.93
37.23
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
996,337
428,001
164,610
—
18,339
1,975
—
549
1,609,814
858
—
—
—
—
—
—
—
858
45.48
—
—
—
—
—
—
—
45.48
996,728
428,001
164,610
—
18,339
1,975
—
549
1,610,205
0.05
0.16
0.27
—
1.72
5.76
—
100.00
0.16
0.1
0.0
0.0
—
0.0
0.0
—
0.0
0.2
33.03
32.63
33.43
—
28.32
28.40
—
45.23
32.91
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
—
—
—
—
—
—
—
89
89
90
169
1,659
787
1,191
—
—
—
3,898
100.00
100.00
100.00
100.00
100.00
—
—
—
100.00
90
169
1,659
787
1,191
—
—
88
3,986
0.11
0.20
0.42
0.61
1.00
—
—
100.00
2.81
0.0
0.0
0.0
0.0
0.0
—
—
0.0
0.1
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
86
0
1
0
0
0
—
—
88
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
86
0
1
0
0
0
—
—
88
0.11
0.20
0.49
0.61
1.09
2.70
—
—
0.11
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
4,543
2,370
1,753
244
78
—
—
—
8,990
—
—
—
—
20
—
—
—
20
—
—
—
—
100.00
—
—
—
100.00
4,543
2,370
1,753
244
98
—
—
—
9,010
0.08
0.20
0.34
0.60
0.95
—
—
—
0.19
0.0
0.0
0.0
0.0
0.0
0.0
—
—
0.0
0.3
0.1
0.2
0.0
0.0
—
—
—
0.8
45.00
45.00
45.00
45.00
45.00
45.00
—
—
45.00
65.00
65.00
50.88
64.25
63.71
—
—
—
62.21
1.1
1.0
1.1
1.0
1.1
1.0
1.0
1.0
1.1
1.2
1.1
1.0
—
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
—
—
—
—
—
—
—
—
—
234,702
115,625
138,458
31,915
145,764
13,151
3,065
587
683,271
109,091
85,867
45,642
—
9,914
1,766
—
74
252,356
18
51
668
373
687
—
—
—
1,797
17
0
0
0
0
0
—
—
18
642
624
520
125
61
—
—
—
1,974
13.74
20.80
44.61
80.60
100.87
152.22
163.50
13.63
24.64
10.94
20.06
27.72
—
54.06
89.41
—
13.63
15.67
19.97
30.23
40.26
47.45
57.64
—
—
0.00
45.10
19.97
30.02
51.59
57.94
76.03
106.02
—
—
20.61
14.13
26.32
29.68
51.55
62.92
—
—
—
21.91
763
309
497
156
1,131
246
713
3,142
6,960
192
222
152
—
84
34
—
248
934
0
0
3
2
5
—
—
39
50
0
0
0
0
0
0
—
—
0
2
3
3
0
0
—
—
—
10
7,672
1,378
21
0
20
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
As of March 31, 2023
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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
81,876
386,287
698,222
2,907
565,432
711,871
37,445
76,728
2,560,771
Residential mortgage exposures
—
—
7,434,456
813,742
735,074
—
20,041
65,530
9,068,846
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
279,145
496,656
317,206
7,065
55,876
139,334
5,246
6,776
1,307,308
—
—
4,487
858
1,490
—
594
59
7,490
—
—
—
—
—
—
—
—
—
6.41
15.75
9.12
6.32
14.23
5.49
8.92
100.00
33.79
—
—
100.00
100.00
100.00
—
100.00
100.00
100.00
—
—
—
—
—
—
—
—
—
361,021
882,944
1,015,428
9,972
621,308
851,206
42,692
83,504
3,868,080
31,928
1,831
7,439,509
814,627
704,721
—
18,128
65,589
9,076,336
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)
1
104,804
270,659
156,479
617,465
15,641
13,686
41,472
1,220,209
2
13
113
351,047
151,086
139,233
6,121
640
648,258
204,853,153 45,957,374
100.00
100.00
100.00
100.00
90.32
100.00
97.02
61.95
100.00
4
104,817
270,772
507,526
768,551
154,875
19,807
42,112
1,868,467
58.21 231,605,586
—
—
—
—
—
—
—
—
—
0.08
0.18
0.38
0.62
1.67
4.14
50.95
100.00
4.05
0.05
0.16
0.31
0.58
0.92
—
20.93
100.00
1.14
0.08
0.15
0.34
0.64
1.33
2.78
23.78
100.00
3.52
0.72
—
—
—
—
—
—
—
—
—
4,883.2
5,491.6
3,994.0
141.3
655.8
1,518.2
86.5
240.4
17,011.3
3.8
0.1
434.7
48.6
58.2
—
1.8
5.2
552.8
0.0
2.5
8.2
335.4
1,439.4
124.0
38.2
99.7
2,047.7
19,732.3
—
—
—
—
—
—
—
—
—
67.52
69.74
68.73
66.64
75.79
73.04
70.87
74.39
71.07
38.92
77.51
24.04
25.45
31.33
—
26.56
19.96
24.77
66.64
34.35
35.22
50.97
53.66
46.21
53.88
57.95
48.66
33.28
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12,722
61,291
125,864
1,756
262,840
656,599
73,235
92,246
1,286,558
8,074
691
992,857
179,374
269,095
—
25,983
11,713
1,487,791
0
11,957
54,891
213,666
467,719
98,185
23,667
94,264
964,351
— 39,618,642
—
—
—
—
—
—
—
—
—
3.52
6.94
12.39
17.61
42.30
77.13
171.54
110.46
33.26
25.28
37.74
13.34
22.01
38.18
—
143.32
17.85
16.39
14.01
11.40
20.27
42.09
60.85
63.39
119.48
223.83
51.61
17.10
—
—
—
—
—
—
—
—
—
205
1,131
2,678
41
7,864
25,754
15,424
62,124
115,224
6
2
5,560
1,202
2,135
—
994
13,096
23,000
0
54
331
1,670
5,557
1,978
2,526
24,405
36,523
717,750
—
121,424
24,711
29,983
759,180
210
SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
211
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
(Millions of yen, %, the number of data in thousands, years)
(Millions of yen, %, the number of data in thousands, years)
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
As of March 31, 2022
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
96,723,291
572,528
32,158
244
329,222
53,405
728
8
97,711,588
159,205
112,751
1,498
—
85,201
7,024
16,525
—
382,206
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)
4,414,736
685,316
175,179
—
759,694
32,919
2,676
248
6,070,770
Bank exposures (FIRB approach)
70,541
54
190
—
5,217
—
—
—
76,004
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
—
—
—
—
—
—
—
—
—
1,159,053
175,015
23,351
—
174,284
4,919
—
—
1,536,624
—
—
—
—
—
—
—
—
—
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
30,298,457 15,121,634
14,584,399 11,445,232
3,286,811
5,643,341
116,695
933,388
2,979,153
5,918,358
603,415
1,331,901
357,971
816,187
50,699
700,074
60,226,109 33,961,614
73.09
45.96
100.00
—
80.75
62.15
45.97
—
99,695,142
624,423
27,257
244
266,601
22,243
7,748
8
65.53 100,643,669
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
84.04
53.23
41.31
—
45.31
70.80
—
—
75.45
5,756,408
759,618
168,197
—
720,484
33,686
1,566
248
7,440,210
—
—
—
—
—
—
—
—
—
70,541
54
190
—
5,217
—
—
—
76,004
53.95 42,995,830
53.98 19,823,294
6,426,017
51.55
978,304
54.80
5,282,925
52.12
1,093,599
48.44
936,751
52.39
100.00
678,490
53.52 78,215,214
0.00
0.15
0.39
0.50
1.77
4.12
13.36
100.00
0.00
—
—
—
—
—
—
—
—
—
0.04
0.15
0.35
—
1.43
4.09
13.36
100.00
0.21
0.03
0.16
0.26
—
2.15
—
—
—
0.17
0.06
0.16
0.31
0.50
1.38
6.09
15.66
100.00
1.33
0.5
0.2
0.0
0.0
0.0
0.0
0.0
0.0
0.8
—
—
—
—
—
—
—
—
—
0.6
0.2
0.0
—
0.3
0.0
0.0
0.0
1.3
0.0
0.0
0.0
—
0.1
—
—
—
0.2
6.9
6.1
2.9
1.0
3.5
0.8
0.3
0.3
22.1
34.03
33.25
32.73
35.00
33.74
33.76
35.00
33.58
34.02
—
—
—
—
—
—
—
—
—
30.89
31.77
33.78
—
34.66
18.88
34.99
79.82
31.36
45.00
45.00
45.00
—
45.00
—
—
—
45.00
34.76
30.29
28.77
31.45
29.11
25.56
24.29
47.03
32.56
3.8
2.0
1.3
1.1
3.9
1.2
2.4
1.0
3.8
—
—
—
—
—
—
—
—
—
2.1
1.3
2.1
—
0.8
1.7
0.0
1.0
1.9
5.0
5.0
5.0
—
5.0
—
—
—
5.0
189,191
160,338
9,740
102
255,890
22,049
12,816
3
650,132
—
—
—
—
—
—
—
—
—
838,538
189,734
90,522
—
500,210
20,796
2,614
32
1,642,450
25,004
44
191
—
9,386
—
—
—
34,626
7,810,994
2.4
5,339,500
2.2
2,320,875
2.3
502,087
2.4
3,767,199
2.8
1,030,711
2.8
1,138,221
2.9
2.3
166,659
2.4 22,076,249
0.18
25.67
35.73
42.07
95.98
99.13
165.39
38.88
0.64
—
—
—
—
—
—
—
—
—
14.56
24.97
53.81
—
69.42
61.73
166.90
13.13
22.07
35.44
81.01
100.37
—
179.90
—
—
—
45.55
18.16
26.93
36.11
51.32
71.30
94.24
121.50
24.56
28.22
226
325
35
0
1,612
307
362
2
2,873
—
—
—
—
—
—
—
—
—
709
384
206
—
3,580
260
73
198
5,412
9
0
0
—
50
—
—
—
60
9,073
9,637
5,887
1,539
21,518
17,521
36,755
319,123
421,055
5,442
—
9,887
136
473,640
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
As of March 31, 2022
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)
25.03
28.99
28.33
25.47
26.95
21.46
34.77
44.38
27.74
786,506
1,264,867
1,036,508
539,328
1,692,140
184,540
95,875
177,427
5,777,195
Mid-sized corporations and SMEs 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
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
774,513
1,295,368
1,160,836
595,140
2,278,120
354,651
155,218
237,281
6,851,130
20,737
186,331
75,405
7,801
222,310
130,505
1,019
6,040
650,152
49.92
57.38
50.17
50.14
57.38
55.26
59.27
100.00
56.19
0.07
0.16
0.30
0.51
1.57
8.33
24.23
100.00
4.34
1.2
4.9
5.6
3.6
28.2
1.3
2.5
3.2
51.0
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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
2,694,097
2,442,460
2,043,120
67,931
1,558,543
294,445
316,005
89,265
9,505,870
3,670,673
437,422
103,772
20,760
17,228
12,284
302
1,899
4,264,344
120,291
662,790
868,846
—
406,602
68,369
119,402
12,490
2,258,793
46.32
55.09
53.04
—
59.24
66.22
49.37
100.00
54.87
2,709,030
2,716,398
1,957,947
67,931
1,503,812
248,053
290,221
50,493
9,543,888
—
—
—
—
—
—
—
—
—
— 3,670,673
437,422
—
103,772
—
20,760
—
17,228
—
12,284
—
302
—
1,899
—
— 4,264,344
—
—
—
—
—
—
—
—
—
0.04
0.16
0.35
0.50
1.13
4.09
14.80
100.00
1.39
0.04
0.15
0.41
0.50
1.72
7.94
24.89
100.00
0.14
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1.2
0.4
0.1
0.0
0.1
0.0
0.0
0.0
2.0
—
—
—
—
—
—
—
—
—
22.08
22.48
25.60
23.15
22.75
40.79
35.81
52.12
24.09
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
—
—
—
—
—
—
—
5.0
5.0
2.6
3.4
3.7
3.4
3.5
2.6
2.2
1.8
3.3
—
—
—
—
—
—
—
—
—
3.6
4.0
3.8
2.6
3.5
3.6
3.8
3.6
3.7
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
—
—
—
—
—
—
—
—
—
106,554
323,828
369,071
207,863
943,436
130,195
151,018
24,940
2,256,908
—
—
—
—
—
—
—
—
—
317,937
694,468
792,835
26,099
808,198
355,239
538,747
19,631
3,553,158
3,759,112
543,521
241,061
42,597
50,919
62,561
2,479
21,373
4,723,627
—
—
—
—
—
—
—
0.00
0.00
13.54
25.60
35.60
38.54
55.75
70.55
157.51
14.05
39.06
—
—
—
—
—
—
—
—
—
11.73
25.56
40.49
38.42
53.74
143.21
185.63
38.88
37.22
102.40
124.25
232.29
205.18
295.55
509.27
818.64
1,125.00
110.77
—
—
—
—
—
—
—
9
9
155
588
915
719
7,183
3,188
8,096
78,757
99,605
—
—
—
—
—
—
—
—
—
284
982
1,793
78
3,915
4,139
15,149
26,317
52,660
—
—
—
—
—
—
—
—
—
2
103,699
—
70,974
—
212
SMBC GROUP ANNUAL REPORT 2023
SMBC GROUP ANNUAL REPORT 2023
213
012_0800885852308.indd 212
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2023/08/16 9:40:37
012_0800885852308.indd 213
012_0800885852308.indd 213
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2023/08/16 9:40:37
Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
(Millions of yen, %, the number of data in thousands, years)
(Millions of yen, %, the number of data in thousands, years)
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
As of March 31, 2022
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
1,162,248
802,642
210,561
19,818
159,954
1,456
84
4,549
2,361,314
81,482
56,412
45,512
64,832
107,686
4,700
1,421
346
362,395
97.96
96.72
100.00
100.00
97.30
100.00
100.00
100.00
98.23
1,218,624
849,143
252,850
84,403
263,925
6,134
1,505
4,837
2,681,423
0.06
0.16
0.35
0.55
1.65
5.54
58.11
100.00
0.51
6.9
5.8
5.2
8.4
17.5
0.8
0.2
0.1
45.3
35.24
29.94
36.09
55.01
40.61
54.17
58.60
72.22
34.92
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
875,005
460,898
316,960
14,030
48,262
1,013
6,478
23,581
1,746,230
3,349
8,412
—
—
—
—
—
—
11,762
45.48
45.48
—
—
—
—
—
—
45.48
876,528
464,724
316,960
14,030
48,262
1,013
6,478
23,581
1,751,579
0.06
0.16
0.27
0.50
1.56
8.38
13.36
100.00
1.57
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
32.25
31.26
29.65
35.00
27.66
34.32
25.00
40.59
31.50
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
—
—
—
—
—
—
—
102
102
60
251
514
1,862
987
37
—
—
3,714
100.00
100.00
100.00
100.00
100.00
100.00
—
—
100.00
60
251
514
1,862
987
37
—
100
3,815
0.07
0.20
0.33
0.57
0.99
2.82
—
100.00
3.26
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
100
0
—
1
—
0
—
—
102
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
100
0
—
1
—
0
—
—
102
0.11
0.20
—
0.52
—
2.82
—
—
0.11
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
3,620
1,232
1,819
443
37
9
—
1
7,165
—
—
—
—
20
—
—
—
20
—
—
—
—
100.00
—
—
—
100.00
3,620
1,232
1,819
443
58
9
—
1
7,185
0.08
0.20
0.32
0.57
1.09
2.82
—
100.00
0.22
0.0
0.0
—
0.0
—
0.0
—
—
0.0
0.0
0.0
0.1
0.0
0.0
0.0
—
0.0
0.1
45.00
45.00
—
45.00
—
45.00
—
—
45.00
60.00
60.00
44.28
59.65
57.95
60.00
—
79.82
55.98
1.1
1.0
1.0
1.0
1.1
1.0
1.0
1.2
1.1
1.1
1.0
1.0
1.0
1.2
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
—
—
—
—
—
—
—
—
—
162,365
153,318
85,239
56,673
201,466
9,523
2,406
635
671,629
106,349
86,608
91,128
6,997
25,103
1,260
7,087
3,096
327,632
9
68
187
887
578
40
—
—
1,771
20
0
—
0
—
0
—
—
21
469
299
452
205
35
7
—
0
1,470
13.32
18.05
33.71
67.14
76.33
155.25
159.89
13.13
25.04
12.13
18.63
28.75
49.87
52.01
124.43
109.40
13.13
18.70
15.02
27.39
36.37
47.63
58.62
107.58
—
0.00
46.43
19.97
30.02
—
53.46
—
107.58
—
—
20.51
12.96
24.30
24.88
46.30
60.76
82.92
—
13.13
20.46
337
415
317
258
1,656
175
507
3,493
7,163
199
232
254
24
198
29
216
9,573
10,728
0
0
0
4
4
0
—
45
56
0
0
—
0
—
0
—
—
0
1
1
2
1
0
0
—
0
8
6,957
2,190
20
0
15
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
As of March 31, 2022
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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
75,285
336,510
553,081
2,801
539,903
662,949
30,955
71,663
2,273,152
Residential mortgage exposures
—
—
7,253,693
841,055
805,915
—
22,106
78,828
9,001,599
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
261,676
444,126
298,003
6,833
48,894
132,829
3,994
6,756
1,203,115
—
—
5,644
1,048
1,842
—
687
59
9,282
—
—
—
—
—
—
—
—
—
6.31
15.89
9.40
6.45
13.69
5.46
8.10
100.00
34.60
—
—
100.00
100.00
100.00
—
100.00
100.00
100.00
—
—
—
—
—
—
—
—
—
336,961
780,637
851,085
9,635
588,798
795,779
34,950
78,420
3,476,268
37,966
2,358
7,259,383
842,120
770,247
—
19,916
78,888
9,010,882
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)
1
106,436
289,482
126,554
682,910
18,674
11,425
42,977
1,278,463
2
11
159
350,326
133,694
142,131
4,352
657
631,337
201,373,972 41,011,020
100.00
100.00
100.00
100.00
88.26
100.00
95.42
67.32
100.00
4
106,448
289,641
476,881
816,605
160,806
15,778
43,634
1,909,800
57.12 224,801,607
—
—
—
—
—
—
—
—
—
0.08
0.18
0.37
0.61
1.67
3.97
49.58
100.00
4.09
0.06
0.16
0.31
0.57
0.94
—
22.42
100.00
1.31
0.08
0.16
0.36
0.66
1.35
2.82
23.13
100.00
3.52
0.81
—
—
—
—
—
—
—
—
—
4,581.6
5,042.8
3,894.5
136.6
586.6
1,447.9
70.7
191.6
15,952.6
4.4
0.2
437.5
49.9
62.4
—
2.0
6.1
562.7
0.0
2.6
8.8
336.5
1,677.8
129.2
35.7
93.9
2,284.7
18,923.6
—
—
—
—
—
—
—
—
—
68.41
70.68
69.91
67.46
76.84
74.71
71.81
75.48
72.35
39.04
63.10
24.81
26.38
32.35
—
27.63
21.18
25.64
67.46
34.52
35.47
54.38
53.59
46.66
55.25
56.48
49.47
34.29
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12,153
56,009
106,140
1,696
253,312
609,275
61,328
83,326
1,183,241
10,238
949
999,967
192,193
307,940
—
29,856
14,644
1,555,790
0
12,765
61,244
216,913
499,113
103,117
19,097
91,116
1,003,369
— 39,682,079
—
—
—
—
—
—
—
—
—
3.60
7.17
12.47
17.60
43.02
76.56
175.47
106.25
34.03
26.96
40.27
13.77
22.82
39.97
—
149.90
18.56
17.26
14.19
11.99
21.14
45.48
61.12
64.12
121.03
208.81
52.53
17.65
—
—
—
—
—
—
—
—
—
197
1,038
2,253
39
7,591
23,522
12,488
59,192
106,323
9
2
5,602
1,288
2,462
—
1,215
16,708
27,289
0
58
377
1,715
6,032
2,105
2,004
24,647
36,941
770,189
—
107,328
25,439
29,101
834,837
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Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
6. Effect on Credit RWA of Credit Derivatives Used as CRM Techniques (CR7)
8. Backtesting of Probability of Default (PD) per Portfolio (CR9)
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, 2023
As of March 31, 2022
a
Pre-credit
derivatives
credit RWA
—
385,671
23,242
1,631,397
—
24,615,146
622,798
3,647,258
1,286,558
1,487,791
964,351
—
5,481,371
1,816
937,602
41,085,004
b
Actual credit
RWA
—
385,671
23,242
1,631,397
—
24,614,964
622,798
3,647,258
1,286,558
1,487,791
964,351
—
5,481,371
1,816
937,602
41,084,823
a
Pre-credit
derivatives
credit RWA
—
560,055
34,626
1,581,450
—
24,371,426
624,336
3,658,093
1,183,241
1,555,790
1,003,369
—
5,684,044
1,792
1,000,732
41,258,959
b
Actual credit
RWA
—
560,055
34,626
1,581,450
—
24,371,130
624,336
3,658,093
1,183,241
1,555,790
1,003,369
—
5,684,044
1,792
1,000,732
41,258,663
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, 2022
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, 2023
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, 2021
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, 2022
(One hundred billions of yen)
RWA amounts
412
16
(31)
—
—
—
12
—
410
(One hundred billions of yen)
RWA amounts
392
14
(8)
—
—
—
13
—
412
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, 2022
As of
March
31, 2021
AAA~A+ Aaa~A1 AAA~A+ AAA~AA- AAA~AA-
A+~BBB- A+~BBB-
A~A-
A~A-
A2~A3
to BB+
BBB+~BB Baa1~Ba2 BBB+~BB
to BB+
to BB+
BB-~B Ba3~B2 BB-~B to BB+
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
0.00%
0.06%
0.21%
1.25%
10.54%
—
—
0.27%
1.59%
6.07%
—
—
0.30%
0.75%
22.85%
—
—
0.31%
1.28%
4.76%
——
——
0.02%
0.07%
0.22%
1.64%
18.41%
427
5,832
12,898
27,802
3,848
427
5,832
12,898
27,802
3,844
—
—
0.22% 15,258,274 15,254,470
752,003
1.40%
739,258
1,524,535
6.68% 1,530,944
—
—
636,976
150,845
2,269
—
—
14,594
2,250,369
178,320
0.32%
13,342
1.17% 2,247,946
7.86%
178,429
628,545
144,161
2,007
0.30%
0.79%
23.78%
——
——
——
——
(%, 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)
0
1
23
102
640
—
—
19,376
11,039
77,547
—
—
623
489
246
—
—
2
8,937
8,367
0
0
0
0
4
—
—
3,837
2,095
3,086
—
—
8
8
0
—
—
0
111
289
0.02%
0.02%
0.12%
0.35%
11.66%
—
0.08%
0.16%
0.68%
4.77%
—
—
0.11%
0.37%
9.60%
—
—
0.09%
0.46%
4.20%
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,” “Banks,” “Specialized
lending,” “Equity (PD/LGD approach)” 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 89.19 percent, “Qualifying revolving retail” accounts for 2.94
percent, “Residential mortgage” accounts for 3.83 percent, and “Other retail” accounts for 2.49 percent.
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Sumitomo Mitsui Financial Group
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, 2023
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
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, 2022
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
— 52,428
50% 52,428
—
24,249
—
70% 15,950
8,299
22,694
1,111
70% 23,205
126,803
7,836
90% 130,618
9,534
—
3,847
187,129
2,716
—
—
64,093
115% 10,783
250%
—
3,847
—
— 236,833
HVCRE
—
—
—
—
—
8,299
—
—
—
—
—
—
—
—
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
19,866
8,181
70%
6,321
6,537
95%
135,532
10,158
120%
68,118
—
—
336,004
20,061
—
—
68,613
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%
43,997
—
43,997
400%
129%
—
75,418
30,856
287,621
393,896
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
—
— 52,428
26,214
— 24,249
16,974
— 23,205
16,243
—
96
92
— 130,618
117,557
1,044
— 10,783
—
—
3,847
—
— 245,132
12,400
—
—
189,390
301
—
1,923
3,460
Exposure
amount
(EAD)
Credit
RWA
amount
Expected
losses
23,627
16,539
9,326
8,860
94
37
142,639
171,167
570
86,689
—
—
379,382
121,364
—
—
429,176
2,427
—
—
3,598
Exposure
amount
(EAD)
Credit
RWA
amount
30,856
92,570
95,859
383,438
287,621
414,337
371,605
847,614
2,353
3,412
50%
3,924
—
25,991
3,399
70% 22,932
4,628
5,456
—
70%
5,456
105,885
16,657
90% 113,717
5,298
4,931
3,537
153,455
30,911
10,279
—
64,660
115% 36,194
9,657
250%
—
3,537
— 195,420
HVCRE
—
—
—
—
—
4,628
—
—
—
—
—
—
—
—
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
1,590
2,355
70%
16,119
12,349
95%
114,778
23,079
120%
72,547
—
—
321,071
22,430
—
—
91,736
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%
400%
61%
—
21,249
122,618
143,867
67,923
86,685
509,387
663,996
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
—
—
3,924
1,962
—
— 27,561
19,292
110
—
5,456
3,819
21
— 113,717
102,345
909
— 36,194
9,657
—
—
3,537
— 200,049
41,624
24,144
—
193,188
1,013
772
1,768
4,596
Exposure
amount
(EAD)
Credit
RWA
amount
Expected
losses
2,672
1,870
21,795
20,706
10
87
125,884
151,061
503
88,451
—
—
370,918
123,832
—
—
422,979
2,476
—
—
3,606
Exposure
amount
(EAD)
Credit
RWA
amount
86,685
260,055
77,692
310,768
632,005
796,383
389,592
960,416
106,166
23,675
95%
117,099
111,244
468
116,035
31,522
95%
132,113
125,507
528
—
100%
—
—
—
100%
—
—
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Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
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, 2023
As of March 31, 2022
(Millions of yen)
1,056,257
—
34,357
137,691
21,408
1,337,001
—
17,839
103,262
15,163
■ Standardised Approach
1. Scope
The following consolidated subsidiaries have adopted the standardised approach for exposures as of March 31, 2023 (i.e. consolidated
subsidiaries not listed in the “Internal Ratings-Based (IRB) Approach: 1. Scope” on page 204).
(1) Consolidated Subsidiaries Planning to Adopt Phased Rollout of the AIRB Approach
SMBC Consumer Finance Co., Ltd.
(2) Consolidated Subsidiaries Planning to Adopt Phased Rollout of the FIRB Approach
SMBC Nikko Securities Inc.
(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)
(Millions of yen, except percentages)
CR4: SA – CR exposure and CRM effects
As of March 31, 2023
a
b
c
d
e
f
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
Exposures pre-CCF and pre-CRM Exposures post-CCF and post-CRM
Off-balance
sheet amount
—
On-balance
sheet amount
30,923
Off-balance
sheet amount
—
On-balance
sheet amount
30,923
3,832,051
2,212,839
10
126,273
3,965
1,392
—
96,971
—
1,216,433
906,830
1,980,133
209,296
—
—
—
—
—
—
—
—
—
—
—
348,485
945,356
—
—
3,832,051
2,212,839
10
126,273
3,965
1,392
—
96,971
—
1,216,433
893,080
1,980,133
209,296
—
Credit RWA
amount
RWA density
0
0
0.00%
0.00%
42,135
1.90%
0
0
0.00%
0.00%
793
20.00%
0
—
0.00%
—
9,697
10.00%
—
—
295,453
24.28%
—
—
—
—
—
—
—
—
—
—
116,774
629,180
—
—
1,050,444
1,956,985
73,253
—
104.01%
75.00%
35.00%
—
155,899
170
155,715
170
221,261
141.93%
69
—
—
—
—
—
—
—
—
—
69
—
—
—
—
—
—
—
—
—
69
—
—
—
—
100.00%
—
—
—
—
10,773,090
1,294,012
10,759,156
746,125
3,650,094
31.72%
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Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
(Millions of yen, except percentages)
4. CR Exposures by Asset Classes and Risk Weights (CR5)
CR4: SA – CR exposure and CRM effects
As of March 31, 2022
a
b
c
d
e
f
Exposures pre-CCF and pre-CRM Exposures post-CCF and post-CRM
Off-balance
sheet amount
—
On-balance
sheet amount
27,088
Off-balance
sheet amount
—
On-balance
sheet amount
27,088
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
2,753,076
2,018,063
9
54,550
4,112
1,381
—
92,682
—
1,429,248
764,321
1,726,816
189,189
—
—
—
—
—
—
—
—
—
—
—
285,007
927,241
—
—
2,753,076
2,018,063
9
54,550
4,112
1,381
—
92,682
—
1,429,248
762,644
1,726,816
189,189
5
Credit RWA
amount
RWA density
0
0
0.00%
0.00%
2,789
0.13%
0
0
0.00%
0.00%
822
20.00%
0
—
0.00%
—
9,268
10.00%
—
—
336,063
23.51%
—
—
—
—
—
—
—
—
—
—
89,546
619,562
—
—
874,057
1,759,784
66,216
5
102.56%
75.00%
35.00%
100.00%
129,396
226
129,167
226
185,186
143.11%
97
—
—
—
—
—
—
—
—
—
97
—
—
—
—
—
—
—
—
—
97
—
—
—
—
100.00%
—
—
—
—
9,190,035
1,212,475
9,188,135
709,335
3,234,291
32.67%
CR5: SA – CR exposures by asset
classes and risk weights
Item
No.
Asset classes
Risk weight
As of March 31, 2023
a
b
c
d
f
CR exposure amounts (post-CCF and CRM)
g
h
e
(Millions of yen)
i
j
k
0%
10% 20% 35% 50% 75% 100% 150% 250% 1250% Total
1 Cash
2 Government of Japan and BOJ
3
4
Foreign central governments and
foreign central banks
Bank for International
Settlements, etc.
30,923
3,832,051
2,128,569
10
5 Local governments of Japan
126,273
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)
—
1,392
—
—
—
—
3,669
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
96,971
—
—
—
—
—
—
3,965
—
—
—
—
— 1,125,692
—
—
—
—
—
—
—
—
—
—
—
—
—
84,270
—
—
—
—
—
—
—
40,851
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
49,889
—
—
—
—
—
—
—
—
—
—
1,161
—
—
—
—
—
209,296
—
—
— 2,609,313
—
—
—
—
— 1,005,024
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
7,303
—
—
—
—
—
—
—
—
—
—
—
10,526
138,055
69
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
30,923
— 3,832,051
— 2,212,839
—
—
—
—
—
—
—
10
126,273
3,965
1,392
—
96,971
—
— 1,216,433
— 1,009,855
— 2,609,313
209,296
—
—
—
—
155,885
—
—
—
—
—
69
—
—
—
—
— 11,505,282
22 Total
6,122,890
96,971
1,130,818
209,296
132,425
2,609,313
1,065,510
138,055
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Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
As of March 31, 2022
a
b
c
d
f
CR exposure amounts (post-CCF and CRM)
g
h
e
(Millions of yen)
i
j
k
■ 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.
0%
10% 20% 35% 50% 75% 100% 150% 250% 1250% Total
CR5: SA – CR exposures by asset
classes and risk weights
Item
No.
Asset classes
Risk weight
1 Cash
2 Government of Japan and BOJ
3
4
Foreign central governments and
foreign central banks
Bank for International
Settlements, etc.
27,088
2,753,076
2,012,483
9
5 Local governments of Japan
54,550
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)
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)
—
1,381
—
—
—
—
2,073
—
—
—
32
—
—
—
—
—
—
—
—
—
—
—
—
—
92,682
—
—
—
—
—
—
4,112
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,579
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 1,332,961
—
53,631
—
42,655
—
3,953
—
—
— 189,189
—
—
—
— 2,346,378
—
—
—
—
— 846,164
—
—
5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8,716
—
—
—
—
—
—
—
—
—
—
—
277
120,366
97
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
27,088
— 2,753,076
— 2,018,063
—
—
—
—
—
—
—
9
54,550
4,112
1,381
—
92,682
—
— 1,429,248
— 852,191
— 2,346,378
— 189,189
5
—
— 129,393
—
—
—
—
—
97
—
—
—
—
— 9,897,470
22 Total
4,850,697
92,682 1,341,026
189,189
67,927 2,346,378
889,200
120,366
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).
(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 153 to 158). 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, 2023
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
66,405,972
29,856,764
13,274,199
10,516,994
32,138
24,985,159
389,260
134,580
10,685
85,006,276
383,866
11,101
259,468
176,397,408
814,442
30,629,891
250,429
13,419,881
83,170
10,787,148
46,275
—
—
32,138
—
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
CR3: CRM techniques
Item
No.
a
b
As of March 31, 2022
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
60,030,223
29,406,799
13,027,563
10,461,219
17,845
30,046,627
499,766
163,865
21,749
81,729,726
344,821
6,750
295,726
171,806,576
912,770
30,251,386
240,510
13,198,178
93,617
10,778,695
43,855
—
—
17,845
—
■ 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, 2023
a
Replacement
cost
b
PFE
c
Effective EPE
(EEPE)
—
2,402,391
—
3,857,731
d
Alpha used for
computing
regulatory EAD
1.4
—
—
As of March 31, 2022
a
Replacement
cost
b
PFE
c
Effective EPE
(EEPE)
—
2,971,841
—
3,002,516
d
Alpha used for
computing
regulatory EAD
1.4
—
—
(Millions of yen)
f
RWA
—
1,503,981
—
—
864,450
e
EAD post-
CRM
—
6,260,123
—
—
8,324,288
—
—
2,368,432
(Millions of yen)
e
EAD post-
CRM
—
5,974,358
—
—
6,735,277
f
RWA
—
1,535,455
—
—
839,486
—
—
2,374,942
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Basel III Information
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Sumitomo Mitsui Financial Group
4. CVA Capital Charge (CCR2)
CCR2: CVA risk capital charge
As of March 31, 2023
As of March 31, 2022
(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
5,735,518
5,735,518
b
RWA
(Amount
calculated by
dividing CVA
capital charge
by 8%)
—
—
—
2,594,370
2,594,370
a
EAD post-
CRM
—
5,439,583
5,439,583
b
RWA
(Amount
calculated by
dividing CVA
capital charge
by 8%)
—
—
—
2,567,540
2,567,540
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
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
11 Corporates
12
SMEs and retail
13 Other than the above
14
Total
As of March 31, 2023
a
b
c
d
e
Credit equivalent amounts (post-CRM)
f
(Millions of yen)
g
h
i
8
9
10
11 Corporates
SMEs and retail
12
13 Other than the above
14
Total
0%
10%
20%
50%
75%
100% 150% Others
Total
191,331
—
—
1,057
—
—
—
—
—
—
—
—
—
192,389
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 419,720
—
—
—
—
—
—
— 419,720
—
—
—
—
—
—
—
—
—
227
—
—
—
227
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 511,671
—
72,721
584,393
72,229
—
72,229
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 191,331
—
—
—
—
—
—
—
—
—
—
1,057
—
—
—
—
—
— 419,947
— 511,671
72,229
—
72,721
—
— 1,268,959
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
As of March 31, 2022
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
34,480
—
—
1,104
—
—
—
—
—
—
—
—
—
35,584
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 827,290
—
—
—
—
—
—
— 827,290
—
—
—
—
—
—
—
—
—
322
—
—
—
322
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 567,905
—
83,122
651,027
79,383
—
79,383
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
34,480
—
—
1,104
—
—
—
—
—
— 827,613
— 567,905
79,383
—
—
83,122
— 1,593,609
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
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, 2023
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2023
(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
(%)
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)
773,434
148,880
3
2,858
—
—
—
—
925,176
—
—
—
—
—
—
—
—
—
6,386,190
847,877
1,783
—
90,487
—
—
—
7,326,339
—
—
—
—
—
—
—
—
—
0.00
0.15
0.48
0.74
—
—
—
—
0.02
—
—
—
—
—
—
—
—
—
0.03
0.15
0.37
—
1.38
—
—
—
0.06
—
—
—
—
—
—
—
—
—
0.3
0.0
0.0
0.0
0.0
—
—
—
0.4
—
—
—
—
—
—
—
—
—
28.5
2.2
0.0
0.0
0.3
0.0
—
—
31.2
—
—
—
—
—
—
—
—
—
9.66
10.84
35.00
1.00
—
—
—
—
9.83
—
—
—
—
—
—
—
—
—
20.72
11.53
32.98
—
5.46
—
—
—
19.47
—
—
—
—
—
—
—
—
—
1.5
0.5
1.0
3.2
—
—
—
—
1.4
—
—
—
—
—
—
—
—
—
1.8
1.3
2.3
—
0.2
—
—
—
1.7
—
—
—
—
—
—
—
—
—
549
7,079
1
75
—
—
—
—
7,706
—
—
—
—
—
—
—
—
—
617,464
136,054
848
—
11,447
—
—
—
765,815
—
—
—
—
—
—
—
—
—
0.07
4.75
39.67
2.64
—
—
—
—
0.83
—
—
—
—
—
—
—
—
—
9.66
16.04
47.58
—
12.65
—
—
—
10.45
—
—
—
—
—
—
—
—
—
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
3,117,081
1,192,759
208,887
6,711
125,219
21,694
2,453
107
4,674,915
—
—
—
—
—
—
—
—
—
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
11,391
18,354
19,723
4,114
3,499
639
42
58
57,822
Mid-sized corporations and SMEs exposures (FIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
—
—
—
—
—
—
—
—
—
0.04
0.15
0.36
0.74
1.21
8.35
23.15
100.00
0.17
—
—
—
—
—
—
—
—
—
0.07
0.16
0.35
0.74
1.92
8.95
23.81
100.00
0.57
—
—
—
—
—
—
—
—
—
51.0
24.8
14.2
1.1
2.9
0.9
0.0
0.0
95.3
—
—
—
—
—
—
—
—
—
1.8
4.1
4.1
0.9
3.4
0.1
0.0
0.0
14.9
—
—
—
—
—
—
—
—
—
17.48
23.69
32.72
35.00
31.14
34.26
33.86
51.66
20.22
—
—
—
—
—
—
—
—
—
33.90
32.84
34.72
35.00
34.83
35.02
35.00
46.13
34.00
—
—
—
—
—
—
—
—
—
1.5
2.2
2.7
2.6
1.9
2.2
1.3
1.7
1.7
—
—
—
—
—
—
—
—
—
3.5
3.6
3.7
2.8
2.6
4.0
3.4
3.5
3.5
—
—
—
—
—
—
—
—
—
232,383
292,501
101,593
4,469
83,831
29,565
4,281
40
748,666
—
—
—
—
—
—
—
—
—
2,679
5,988
9,835
2,478
2,554
908
72
7
24,525
—
—
—
—
—
—
—
—
—
7.45
24.52
48.63
66.58
66.94
136.28
174.46
37.57
16.01
—
—
—
—
—
—
—
—
—
23.52
32.62
49.86
60.24
73.01
141.98
170.95
13.63
42.41
—
—
—
—
—
—
—
—
—
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
230
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012_0800885852308.indd 231
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2023/08/16 9:40:38
Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2023
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2022
(Millions of yen, %, the number of data in thousands, years)
(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
(%)
33,872
145,048
104,682
—
40,458
4,389
2,130
617
331,198
0.04
0.15
0.35
—
1.09
4.11
15.79
100.00
0.66
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
13,315,452
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0.11
0.1
0.5
2.0
—
0.2
0.0
0.0
0.0
3.1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
145.1
7.95
16.75
17.73
—
16.00
51.49
48.37
54.77
16.80
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
19.06
4.7
4.7
4.7
—
4.4
4.9
4.8
4.9
4.7
—
—
—
—
—
—
—
—
—
1.8
2,760
31,162
33,735
—
16,929
8,576
5,644
287
99,096
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,645,809
8.14
21.48
32.22
—
41.84
195.38
264.99
46.63
29.92
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12.36
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
(%)
327,300
62,469
1,339
3
11,306
—
—
—
402,420
—
—
—
—
—
—
—
—
—
6,342,965
820,555
935
—
45,988
0
—
—
7,210,443
—
—
—
—
—
—
—
—
—
0.00
0.15
0.26
0.50
2.27
—
—
—
0.09
—
—
—
—
—
—
—
—
—
0.04
0.15
0.31
—
1.67
4.09
—
—
0.06
—
—
—
—
—
—
—
—
—
0.4
0.0
0.0
0.0
0.0
—
—
—
0.5
—
—
—
—
—
—
—
—
—
23.5
3.3
0.1
—
0.2
0.0
—
—
27.3
—
—
—
—
—
—
—
—
—
10.14
33.13
1.07
35.00
1.02
—
—
—
13.42
—
—
—
—
—
—
—
—
—
17.65
18.53
35.26
—
5.33
35.00
—
—
17.68
—
—
—
—
—
—
—
—
—
1.3
0.3
4.7
1.0
1.0
—
—
—
1.1
—
—
—
—
—
—
—
—
—
1.1
1.4
1.8
—
0.2
1.0
—
—
1.2
—
—
—
—
—
—
—
—
—
618
8,360
30
1
316
—
—
—
9,327
—
—
—
—
—
—
—
—
—
430,467
163,213
378
—
5,620
0
—
—
599,679
—
—
—
—
—
—
—
—
—
0.18
13.38
2.24
40.57
2.80
—
—
—
2.31
—
—
—
—
—
—
—
—
—
6.78
19.89
40.42
—
12.22
114.94
—
—
8.31
—
—
—
—
—
—
—
—
—
232
SMBC GROUP ANNUAL REPORT 2023
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233
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2022
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2022
(Millions of yen, %, the number of data in thousands, years)
(Millions of yen, %, the number of data in thousands, years)
a
b
c
EAD post-
CRM
Average PD
(%)
Number of
obligors
d
Average
LGD
(%)
e
f
g
Average
maturity
Credit RWA
RWA density
(%)
Item
No.
PD scale
Corporate exposures (AIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Corporate exposures (FIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
1,805,759
886,930
107,310
4,852
163,236
10,679
2,877
2,143
2,983,789
—
—
—
—
—
—
—
—
—
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
55,759
6,542
4,158
3,890
6,187
521
13
189
77,261
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
0.15
0.35
0.50
1.09
5.21
20.10
100.00
0.26
—
—
—
—
—
—
—
—
—
0.08
0.16
0.26
0.50
1.37
8.90
24.89
100.00
0.53
—
—
—
—
—
—
—
—
—
50.9
22.8
8.2
1.6
4.3
0.5
0.1
0.0
88.8
—
—
—
—
—
—
—
—
—
1.9
3.9
1.8
1.6
3.3
0.1
0.0
0.0
13.0
—
—
—
—
—
—
—
—
—
22.14
31.10
34.66
32.42
33.86
33.18
33.98
38.89
25.97
—
—
—
—
—
—
—
—
—
12.35
34.79
34.85
33.87
34.98
33.94
35.00
64.70
18.63
—
—
—
—
—
—
—
—
—
1.6
3.3
3.1
3.2
1.9
2.0
2.0
1.6
2.2
—
—
—
—
—
—
—
—
—
0.3
3.5
3.7
3.8
4.0
4.1
2.3
4.6
1.2
—
—
—
—
—
—
—
—
—
185,308
310,565
62,943
2,819
113,684
12,413
4,974
556
693,265
—
—
—
—
—
—
—
—
—
2,779
2,191
1,795
2,285
4,747
680
20
24
14,525
—
—
—
—
—
—
—
—
—
10.26
35.01
58.65
58.10
69.64
116.23
172.88
25.96
23.23
—
—
—
—
—
—
—
—
—
4.98
33.49
43.16
58.74
76.72
130.46
158.51
13.13
18.80
—
—
—
—
—
—
—
—
—
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
(%)
70,018
192,568
101,573
197
56,622
13,712
7,055
361
442,110
0.04
0.15
0.35
0.50
1.14
4.09
14.31
100.00
0.74
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
11,116,026
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0.14
0.2
0.5
1.9
0.0
0.2
0.1
0.0
0.0
3.1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
132.9
17.83
21.84
20.99
35.00
24.47
47.74
42.75
40.62
22.50
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
19.95
4.6
4.7
4.7
1.4
4.7
4.7
4.7
4.8
4.7
—
—
—
—
—
—
—
—
—
1.6
10,311
54,132
38,062
87
38,379
24,639
16,206
140
181,960
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,498,757
14.72
28.11
37.47
44.36
67.78
179.69
229.72
38.88
41.15
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
13.48
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
7. Composition of Collateral for CCR Exposure (CCR5)
9. RWA flow statements of CCR exposures under the Expected exposure method (IMM) (CCR7)
(Millions of yen)
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, 2023
As of March 31, 2022
a
EAD to CCP
(post-CRM)
b
RWA
a
EAD to CCP
(post-CRM)
b
RWA
158,031
129,483
3,784,452
75,696
2,908,794
3,075,359
666,754
42,338
—
—
381,938
202,805
—
517,076
394,002
106,782
16,290
—
—
3
—
—
61,507
13,341
846
—
7,638
74,696
—
126,714
126,710
88,186
22,233
16,290
—
3
—
—
2,433,329
432,718
42,746
—
—
265,354
189,627
—
20,187
6,906
13,280
—
—
—
0
—
—
58,301
48,666
8,779
854
—
5,307
65,875
—
14,666
14,666
6,906
7,759
—
—
0
—
—
CCR5: Composition of collateral for CCR
exposure
As of March 31, 2023
Item
No.
1
2
3
4
5
6
7
8
9
Cash (domestic currency)
Cash (other currencies)
Domestic sovereign debt
Other sovereign debt
Government agency debt
Corporate bonds
Equity securities
Other collateral
Total
a
b
c
d
e
f
Collateral used in derivative transactions
Fair value of collateral received Fair value of posted collateral
Segregated Unsegregated
Segregated Unsegregated
Collateral used in securities
financing transactions (SFTs)
Fair value of
Fair value of
posted
collateral
collateral
received
12,837
103
292
992
6
5,576
5,939
—
25,748
230,100
632,101
52,392
183,265
—
—
—
—
1,097,859
—
—
—
—
—
—
—
—
—
171,595
474,897
125,658
72,289
—
—
—
—
844,441
6,123,681
5,054,287
4,169,561
2,789,246
521,855
5,929,154
2,150,791
—
26,738,578
8,235,330
6,599,823
6,472,875
3,974,426
19,854
474,996
804,390
—
26,581,697
(Millions of yen)
CCR5: Composition of collateral for CCR
exposure
As of March 31, 2022
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
11,720
41
1,130
1,163
158
5,284
4,687
—
24,187
58,864
262,432
179,495
72,162
—
—
—
—
572,954
—
—
—
—
—
—
—
—
—
615,276
480,909
1,707
—
—
—
—
—
1,097,893
Collateral used in securities
financing transactions (SFTs)
Fair value of
Fair value of
posted
collateral
collateral
received
8,937,625
5,591,725
6,088,798
2,232,531
891,860
94,588
3,038,195
5,148
26,880,472
9,712,771
1,998,023
9,647,647
5,031,358
25,207
210,256
1,743,593
—
28,368,859
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, 2023
As of March 31, 2022
a
Protection
bought
b
Protection sold
a
Protection
bought
b
Protection sold
400,301
845,493
—
120,186
—
1,365,980
608,659
748,559
—
—
—
1,357,219
465,905
910,056
—
85,687
—
1,461,648
601,039
625,379
—
—
—
1,226,418
4,724
12,923
12,718
10,094
11,197
246,617
164,206
14,229
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
■ 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)
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
• Feathertop Funding Limited
Excluding consolidated subsidiaries, subsidiaries or affiliated companies holding securitisation exposures related to the security transactions
conducted by the Holding Company Group are as follows:
• PayPay Bank Corporation
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, 2023
(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
f
e
d
Bank acts as sponsor
Traditional Synthetic Subtotal Traditional Synthetic Subtotal Traditional Synthetic Subtotal
i
h
g
Bank acts as investor
423,084
423,084
—
—
—
228,117
228,117
—
—
—
—
— 423,084
872,771
— 872,771 1,408,177
— 1,408,177
—
— 423,084
—
—
60,000
— 812,771
—
—
—
—
—
—
60,000
— 812,771
—
—
— 358,947
272,935
776,295
—
— 358,947
— 272,935
— 776,295
—
—
5
5
—
—
—
—
228,122
688,106
— 688,106 2,197,777
— 2,197,777
—
228,122
—
—
— 605,079
83,026
—
—
—
— 1,931,250
—
1,134
—
—
179,099
— 605,079
86,293
83,026
—
—
—
—
— 1,931,250
—
1,134
— 179,099
86,293
—
—
—
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
SEC1: Securitisation exposures in the
banking book
As of March 31, 2022
(Millions of yen)
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, 2023
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
1,533,766 1,533,766 1,533,766
276,143
276,143
256,214
256,214
145,497
145,497
457
457
276,143
256,214
145,497
462
671,075
249,733
234,420
140,626
—
2,095,625 2,095,620 2,095,620 1,250,887
34,719
10,248
—
106,210
10,248
—
106,210
10,248
—
106,210
10,248
—
Credit RWA amounts (by regulatory approach)
10
11
12
13
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
650,715
28,742
4,111
—
650,652
28,742
4,111
—
650,652
28,742
4,111
—
497,349
8,055
4,111
—
Capital charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
52,057
2,299
328
—
52,052
2,299
328
—
52,052
2,299
328
—
39,787
644
328
—
862,690
26,410
21,793
4,871
457
844,732
71,491
—
—
153,302
20,686
—
—
12,264
1,654
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Item
No.
Type of underlying asset
1
2
3
4
5
6
7
8
9
10
11
Retail (total)
- of which
Residential mortgage
Credit card
Other retail exposures
Re-securitisation
Wholesale (total)
- of which
Loans to corporates
Commercial mortgage
Lease and receivables
Other wholesale
Re-securitisation
a
c
b
Bank acts as originator
d
f
e
Bank acts as sponsor
Traditional Synthetic Subtotal Traditional Synthetic Subtotal Traditional Synthetic Subtotal
g
i
h
Bank acts as investor
453,676
453,676
—
—
—
190,216
190,216
—
—
—
—
— 453,676
686,473
— 686,473 1,217,831
— 1,217,831
—
— 453,676
3,060
—
—
— 683,413
—
—
—
—
—
3,060
—
— 683,413
—
—
— 388,042
295,418
534,370
—
— 388,042
— 295,418
— 534,370
—
—
190,222
731,519
— 731,519 1,829,165
— 1,829,165
5
5
—
—
—
—
2,562
190,222
—
—
— 723,956
5,000
—
—
—
—
—
—
— 723,956
5,000
—
—
—
2,562 1,558,955
1,411
161,106
107,691
—
— 1,558,955
—
1,411
— 161,106
— 107,691
—
—
(Millions of yen)
8. Securitisation Exposures in the Trading Book (SEC2)
SEC2: Securitisation exposures in the trading
book
As of March 31, 2023
Item
No.
Type of underlying asset
1
2
3
4
5
6
7
8
9
10
11
Retail (total)
- of which
Residential mortgage
Credit card
Other retail exposures
Re-securitisation
Wholesale (total)
- of which
Loans to corporates
Commercial mortgage
Lease and receivables
Other wholesale
Re-securitisation
a
c
b
Bank acts as originator
d
f
e
Bank acts as sponsor
Traditional Synthetic Subtotal Traditional Synthetic Subtotal Traditional Synthetic Subtotal
g
i
h
Bank acts as investor
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 27,671
— 27,671
— 26,372
—
—
1,299
—
—
—
—
—
—
—
—
—
5,322
5,322
—
—
—
—
— 26,372
—
—
1,299
—
—
—
—
—
—
—
—
—
5,322
5,322
—
—
—
—
(Millions of yen)
SEC2: Securitisation exposures in the trading
book
As of March 31, 2022
Item
No.
Type of underlying asset
1
2
3
4
5
6
7
8
9
10
11
Retail (total)
- of which
Residential mortgage
Credit card
Other retail exposures
Re-securitisation
Wholesale (total)
- of which
Loans to corporates
Commercial mortgage
Lease and receivables
Other wholesale
Re-securitisation
a
c
b
Bank acts as originator
d
f
e
Bank acts as sponsor
Traditional Synthetic Subtotal Traditional Synthetic Subtotal Traditional Synthetic Subtotal
g
i
h
Bank acts as investor
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 12,056
— 12,056
—
—
587
—
— 11,468
—
—
—
—
587
—
— 11,468
—
—
— 19,739
— 19,739
—
6,227
— 13,448
64
—
—
—
—
—
—
6,227
— 13,448
64
—
—
—
—
—
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
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, 2023
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
—
—
—
—
5
5
—
—
—
63
—
—
—
5
—
—
—
—
—
—
—
5
5
—
—
—
63
—
—
—
5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5
5
—
—
—
63
—
—
—
5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(Millions of yen)
As of March 31, 2022
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
1,161,851 1,161,851 1,161,851
435,492
435,492
255,873
255,873
208,282
208,282
385
385
435,492
255,873
208,282
391
452,931
364,062
227,124
96,031
—
1,893,846 1,893,840 1,893,840 1,063,912
64,531
11,706
—
156,339
11,706
—
156,339
11,706
—
156,339
11,706
—
Credit RWA amounts (by regulatory approach)
10
11
12
13
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
833,257
41,163
5,741
—
833,184
41,163
5,741
—
833,184
41,163
5,741
—
438,883
14,217
5,741
—
Capital charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
66,660
3,293
459
—
66,654
3,293
459
—
66,654
3,293
459
—
35,110
1,137
459
—
708,920
71,429
28,748
112,250
385
829,928
91,807
—
—
394,300
26,945
—
—
31,544
2,155
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
(Millions of yen)
10. Securitisation Exposures in the Banking Book Associated Capital Requirements
SEC3: Securitisation exposures in the
banking book and associated
regulatory capital requirements
(bank acting as originator or
sponsor) (2/2)
Item
No.
As of March 31, 2022
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
—
—
—
—
5
5
—
—
—
73
—
—
—
5
—
—
—
—
—
—
—
5
5
—
—
—
73
—
—
—
5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5
5
—
—
—
73
—
—
—
5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(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)
6
7
8
9
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
As of March 31, 2023
(Millions of yen)
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior Non-senior
3,421,361 3,421,361 3,421,361 1,382,524 2,038,837
66,770
74,720
16,315
1,134
70,476
95,271
17,710
1,134
70,476
95,271
17,710
1,134
70,476
95,271
17,710
1,134
3,706
20,551
1,395
—
2,963,084 2,963,084 2,963,084 1,035,412 1,927,672
268,970
641,736
—
—
1,134
1,134
641,736
—
1,134
641,736
—
1,134
372,765
—
—
Credit RWA amounts (by regulatory approach)
10
11
12
13
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
424,189
189,462
—
14,184
424,189
189,462
—
14,184
424,189
189,462
—
14,184
134,050
72,860
—
—
290,139
116,602
—
14,184
Capital charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
33,935
15,157
—
1,134
33,935
15,157
—
1,134
33,935
15,157
—
1,134
10,724
5,828
—
—
23,211
9,328
—
1,134
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
244
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
SEC4: Securitisation exposures in the
banking book and associated
capital requirements (bank acting
as investor) (2/2)
Item
No.
As of March 31, 2023
(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
Capital charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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, 2022
(Millions of yen)
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior Non-senior
2,920,953 2,920,953 2,920,953 1,130,337 1,790,616
6,364
17,518
13,254
1,411
84,735
24,202
15,693
1,411
78,370
6,684
2,438
—
84,735
24,202
15,693
1,411
84,735
24,202
15,693
1,411
6
7
8
9
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
2,497,149 2,497,149 2,497,149
548,435
548,435
—
—
1,411
1,411
548,435
—
1,411
847,892 1,649,256
178,497
369,938
—
—
1,411
—
Credit RWA amounts (by regulatory approach)
10
11
12
13
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
383,409
127,824
—
17,644
383,409
127,824
—
17,644
383,409
127,824
—
17,644
131,865
72,896
—
—
251,544
54,928
—
17,644
Capital charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
30,672
10,225
—
1,411
30,672
10,225
—
1,411
30,672
10,225
—
1,411
10,549
5,831
—
—
20,123
4,394
—
1,411
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
246
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
(Millions of yen)
■ 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.
In addition, regarding stocks of subsidiaries, assets and liabilities of subsidiaries are categorized into corresponding risk categories and
risk-managed on a consolidated basis, in light of the upper limits set for each risk.
As for stocks of affiliates, risks related to gains and losses from investments are managed with the upper limits.
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 are carried at their market prices (cost of securities sold is calculated using primarily the
moving-average method), and those with no available market prices are carried at cost using the moving-average method.
Net unrealized gains (losses) on available-for-sale securities and net of income taxes are reported as a component of “net assets.”
SEC4: Securitisation exposures in the
banking book and associated
capital requirements (bank acting
as investor) (2/2)
Item
No.
As of March 31, 2022
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 charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
248
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
■ Market Risk
1. Scope
The following approaches are used to calculate market risk equivalent amounts.
(1) Internal Models Method
General market risk of SMBC, SMBC Bank International plc, 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, SMBC Bank International plc, 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, 2022
Ratio of 1a / 1c
RWA at end of March 31, 2022
Movement in risk
levels
Model updates/
changes
Methodology and
policy
Acquisitions and
disposals
Foreign exchange
movements
Other
RWA at end of March 31, 2023
Breakdown
of variations
in the
market risk-
weighted
assets
Ratio of 8c / 8a
RWA as of March 31, 2023
a
VaR
542
2.5
210
54
—
—
—
3
18
286
3.4
1,001
b
Stressed VaR
1,429
2.3
602
86
—
—
—
(4)
—
684
2.7
1,865
(Millions of yen)
As of March 31, 2023
RWA
(Amounts calculated by dividing
risk equivalent amounts by 8%)
711,369
600,099
44,410
0
As of March 31, 2022
RWA
(Amounts calculated by dividing
risk equivalent amounts by 8%)
630,810
199,056
124,600
429
—
78,546
—
173,410
1,607,836
—
108,768
—
17,628
1,081,295
(Billions of yen)
As of March 31, 2023
c
IRC
d
CRM
e
Other
f
Total RWA
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,971
2.4
813
141
—
—
—
(1)
18
971
2.9
2,867
a
VaR
390
3.0
130
71
—
—
—
20
(11)
210
2.5
542
b
Stressed VaR
1,216
2.7
434
(14)
—
—
—
182
—
602
2.3
1,429
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, 2021
Ratio of 1a / 1c
RWA at end of March 31, 2021
Movement in risk
levels
Model updates/
changes
Methodology and
policy
Acquisitions and
disposals
Foreign exchange
movements
Other
RWA at end of March 31, 2022
Ratio of 8c / 8a
RWA as of March 31, 2022
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, 2022
c
IRC
d
CRM
e
Other
f
Total RWA
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,607
2.8
564
57
—
—
—
202
(11)
813
2.4
1,971
Fiscal 2022
Fiscal 2021
(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
31,912
23,331
14,784
22,944
85,369
50,753
35,967
54,793
—
—
—
—
—
—
—
—
—
17,841
12,256
8,392
16,849
59,603
39,090
20,654
39,505
—
—
—
—
—
—
—
—
—
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.
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Sumitomo Mitsui Financial Group
5. Backtesting results by the internal models approach (MR4)
The status of backtesting of trading for Fiscal 2022 and 2021 is as follows. “Daily gain/loss” represents the actual gain/loss incurred, and
“Daily VaR” represents the daily VaR calculated using the risk measurement model with a one-day holding period. In the past 250 business
days, the number of times loss exceeded VaR was 0, and the VaR model (one-sided confidence level of 99.0%) is considered to have sufficient
accuracy.
Daily gain/loss
Daily VaR
Daily gain/loss
Daily VaR
(
M
i
l
l
i
o
n
s
o
f
Y
e
n
)
10,000
5,000
0
-5,000
-10,000
-15,000
-20,000
(
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
March 2022
March 2023
March 2021
March 2022
■ 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 158 to 159).
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 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 as the
maximum term (2.5 years on average). The maturity of the bank’s demand deposits is regarded to be 5 years as the maximum term (0.8 year
on average).
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, time 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.
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Sumitomo Mitsui Financial Group
■ 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., SMBC Bank International
plc, Sumitomo Mitsui Banking Corporation (China) Limited, SMBC Nikko Securities Inc., and SMBC Consumer Finance Co., Ltd.
2. Outline of the AMA
For the “Outline of the AMA,” please refer to pages 161 to 163.
3. Usage of Insurance to Mitigate Risk
Sumitomo Mitsui Financial Group had not taken measures to mitigate operational risk through insurance coverage for exposures.
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 2.5%
of our Tier 1 capital, not larger than 15%.
As for ΔNII, net interest income declines under the prescribed parallel shock down scenario and increases 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 subsidiary banks 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 ( JPY and USD) which covers 5% or
more of the total amount of interest rate-sensitive assets and liabilities.
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, 2023
As of March 31,
2022
As of March
31, 2023
As of March 31,
2022
287,092
85,466
165,125
36,163
64,628
67,412
287,092
446,108
3,324
256,565
133,193
201,194
50,896
446,108
e
As of March 31, 2023
(462,516)
664,372
(339,392)
546,591
546,591
664,372
f
As of March 31, 2022
11,548,912
11,186,225
Note: Interest rate shocks of deposits with central banks is considered to be the same with the standardized interest rate shocks when calculating ⊿NII.
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Sumitomo Mitsui Financial Group
■ CC2: Reconciliation of regulatory capital to balance sheet
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Items
(Assets)
Cash and due from banks
Call loans and bills bought
Receivables under resale agreements
Receivables under securities borrowing transactions
Monetary claims bought
Trading assets
Money held in trust
Securities
Loans and bills discounted
Foreign exchanges
Lease receivables and investment assets
Other assets
Tangible fixed assets
Intangible fixed assets
Net defined benefit asset
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Total assets
(Liabilities)
Deposits
Negotiable certificates of deposit
Call money and bills sold
Payables under repurchase agreements
Payables under securities lending transactions
Commercial paper
Trading liabilities
Borrowed money
Foreign exchanges
Short-term bonds
Bonds
Due to trust account
Other liabilities
Reserve for employee bonuses
Reserve for executive bonuses
Net defined benefit liability
Reserve for executive retirement benefits
Reserve for point service program
Reserve for reimbursement of deposits
Reserve for losses on interest repayment
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
a
Consolidated balance sheet as
in published financial
statements
As of March 31,
2023
As of March 31,
2022
b
(Millions of yen)
c
Reference to
Template CC1
Reference to
appended table
75,913,960
5,684,812
5,785,945
5,576,612
5,558,287
8,751,204
12,957
33,213,165
98,404,137
1,942,764
226,302
13,243,899
1,494,527
897,848
704,654
74,084
13,693,771
(750,369)
270,428,564
158,770,253
13,025,555
2,569,055
16,772,716
1,521,271
2,349,956
8,066,745
13,674,830
1,465,847
424,000
10,365,003
2,413,464
11,923,748
96,254
3,307
35,449
1,133
28,659
10,845
128,378
3,902
265,354
27,952
13,693,771
257,637,458
2,342,537
694,052
7,423,600
(151,798)
10,308,391
1,373,521
(13,293)
35,005
843,614
133,226
2,372,074
1,145
109,495
12,791,106
270,428,564
74,792,123
1,965,134
6,035,507
5,649,632
5,370,377
7,351,878
310
38,538,724
90,834,056
2,812,104
228,608
10,175,873
1,457,254
898,817
623,045
66,720
11,722,239
(817,784)
257,704,625
148,585,460
13,069,796
1,129,999
19,359,965
1,580,580
1,866,366
6,377,968
18,877,990
1,216,893
442,000
9,808,107
2,443,873
8,415,621
89,894
4,064
40,864
1,087
25,000
5,767
135,084
3,902
275,570
29,193
11,722,239
245,507,293
2,341,878
693,664
6,916,468
(13,402)
9,938,608
1,632,080
(80,061)
36,320
450,143
121,123
2,159,606
1,475
97,641
12,197,331
257,704,625
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
(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, 2022
As of March
31, 2023
2,342,537 2,341,878
693,664
7,423,600 6,916,468
(13,402)
10,308,391 9,938,608
(151,798)
694,052
(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, 2023
As of March
31, 2022
Remarks
Basel III Template
No.
Directly issued qualifying common share capital plus
related capital surplus and retained earnings
10,308,391
9,938,608
of which: capital and capital surplus
of which: retained earnings
of which: treasury stock (–)
of which: other than the above
Directly issued qualifying Additional Tier 1
instruments plus related capital surplus of which:
classified as equity under applicable accounting
standards and the breakdown
3,036,589
7,423,600
151,798
—
3,035,543
6,916,468
13,402
—
—
—
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
As of March
31, 2023
As of March
31, 2022
1,145
1,145
1,475
1,475
(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
As of March
31, 2023
As of March
31, 2022
1,145
1,475
—
—
—
—
As of March
31, 2023
As of March
31, 2022
897,848
898,817
33,213,165 38,538,724
128,509
122,801
Income taxes related to above
185,267
172,017
Stockholders’ equity attributable to
common shares (before adjusting
national specific regulatory adjustments
(earnings to be distributed))
Stockholders’ equity attributable to
preferred shares with a loss
absorbency clause upon entering into
effectively bankruptcy
(Millions of yen)
Remarks
(Millions of yen)
Remarks
(Millions of yen)
Remarks
1a
2
1c
31a
Ref. No.
2
Basel III Template
No.
1b
31b
46
Ref. No.
3-a
3-b
(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)
As of March
31, 2023
As of March
31, 2022
405,810
438,657
(Millions of yen)
Remarks
Basel III Template
No.
8
435,279
410,945 Software and other
—
—
—
—
—
—
—
—
9
20
24
74
Note: The regulatory scope of consolidation is the same as the accounting scope of consolidation.
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4. Net defined benefit asset
(1) Consolidated balance sheet
Consolidated balance sheet items
Net defined benefit asset
As of March
31, 2023
As of March
31, 2022
704,654
623,045
Income taxes related to above
215,618
190,952
(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, 2023
489,035
As of March
31, 2022
432,092
As of March
31, 2023
As of March
31, 2022
74,084
265,354
27,952
66,720
275,570
29,193
185,267
215,618
172,017
190,952
(Millions of yen)
Remarks
Ref. No.
4
(Millions of yen)
Remarks
Basel III Template
No.
15
(Millions of yen)
Remarks
Ref. No.
5-a
5-b
5-c
(Millions of yen)
Composition of capital disclosure
As of March
31, 2023
As of March
31, 2022
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability
excluding those arising from temporary differences
(net of related tax liability)
6,899
11,334
Deferred tax assets arising from temporary
differences (net of related tax liability)
199,927
130,489
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.
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)
—
—
—
—
199,927
130,489
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
As of March
31, 2023
As of March
31, 2022
(13,293)
(80,061)
(2) Composition of capital
Composition of capital disclosure
As of March
31, 2023
As of March
31, 2022
Net deferred gains or losses on hedges
(74,959)
(79,373)
7. Items associated with investments in the capital of financial institutions
(1) Consolidated balance sheet
(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”
Ref. No.
6
Basel III Template
No.
11
(Millions of yen)
Remarks
Ref. No.
Consolidated balance sheet items
Trading assets
Securities
Loans and bills discounted
Other assets
Trading liabilities
Other liabilities
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As of March
31, 2023
As of March
31, 2022
8,751,204
7,351,878
Including trading account securities
and derivatives for trading assets
33,213,165 38,538,724
98,404,137 90,834,056 Including subordinated loans
13,243,899 10,175,873 Including derivatives
8,066,745
11,923,748
6,377,968
Including trading account securities
sold and derivatives for trading
liabilities
8,415,621 Including derivatives
10
21
25
75
7-a
7-b
7-c
7-d
7-e
7-f
As of March
31, 2023
As of March
31, 2022
Remarks
Basel III Template
No.
(Millions of yen)
(2) Composition of capital
Composition of capital disclosure
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)
7,205
7,205
—
0
—
—
—
—
4,317
4,317
—
0
—
—
—
—
1,340,937
1,302,189
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)
187,705
2,547
36,190
200,779
2,729
32,765
1,114,494
1,065,915
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)
1,337,050
1,106,783
118,285
—
82,978
40,062
—
—
25,525
36,723
1,095,724
1,044,534
16
37
52
17
38
53
18
39
54
72
19
23
40
55
73
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, 2023
As of March
31, 2022
1,145
109,495
1,475
97,641
(Millions of yen)
Remarks
(Millions of yen)
Composition of capital disclosure
As of March
31, 2023
As of March
31, 2022
Remarks
Amount allowed in group CET1
1,404
1,231
Qualifying Additional Tier 1 instruments plus related
capital surplus issued by special purpose vehicles
and other equivalent entities
—
—
Amount allowed in group AT1
29,268
22,104
Qualifying Tier 2 instruments plus related capital
surplus issued by special purpose vehicles and other
equivalent entities
—
—
Amount allowed in group T2
5,825
4,722
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)
Ref. No.
8-a
8-b
Basel III Template
No.
5
30-31ab-32
34-35
46
48-49
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Sumitomo Mitsui Financial Group
9. Other capital instruments
(1) Consolidated balance sheet
Consolidated balance sheet items
Borrowed money
Bonds
Total
(2) Composition of capital
As of March
31, 2023
As of March
31, 2022
13,674,830 18,877,990
9,808,107
10,365,003
24,039,833 28,686,097
(Millions of yen)
Remarks
Ref. No.
9-a
9-b
(Millions of yen)
Composition of capital disclosure
As of March
31, 2023
As of March
31, 2022
Remarks
Basel III Template
No.
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
766,214
733,998
766,438
753,571
32
46
■ 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, 2023
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)
(Note 2)
Market risk
(Note 3)
Items not
subject to
capital
requirements
or subject to
deduction
from capital
3,392,899
5,684,812
5,785,945
5,576,612
5,558,287
8,751,204
12,957
—
—
— 5,785,945
— 5,576,612
—
—
—
—
— 2,165,387
75,913,960 75,913,960 75,913,960
5,684,812
5,684,812
5,785,945
5,576,612
5,558,287
8,751,204
12,957
—
—
—
—
—
—
—
—
—
—
104,098
— 8,751,204
— 4,255,026
—
—
—
—
329,773
—
— 1,060,822
40,062
—
— 1,669,723
—
—
—
—
—
—
—
—
— 1,090,002
5,384
6,795,876
—
—
—
—
712,580
—
—
—
489,035
—
—
—
40,016
—
—
—
—
—
461
—
—
—
—
—
2,805,569
8,751,204
4,901,780
270,428,564 270,428,564 235,915,675 22,413,460
1,942,764
226,302
(750,369)
(750,369)
1,494,527
897,848
704,654
74,084
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 (Note 1)
Money held in trust
12,957
Securities
33,213,165 33,213,165 31,822,569
Loans and bills discounted
98,404,137 98,404,137 96,694,351
Foreign exchanges
1,942,764
1,942,764
Lease receivables and investment assets
226,302
226,302
Other assets
5,352,635
13,243,899 13,243,899
Tangible fixed assets
1,494,527
1,494,527
Intangible fixed assets
185,267
897,848
Net defined benefit asset
215,618
704,654
Deferred tax assets
34,067
74,084
Customers’ liabilities for acceptances and guarantees 13,693,771 13,693,771 13,693,310
Reserve for possible loan losses
(750,369)
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
158,770,253 158,770,253
13,025,555 13,025,555
2,569,055
16,772,716 16,772,716
1,521,271
2,349,956
8,066,745
13,674,830 13,674,830
1,465,847
424,000
10,365,003 10,365,003
2,413,464
11,923,748 11,923,748
96,254
3,307
35,449
1,133
28,659
10,845
128,378
3,902
265,354
27,952
13,693,771 13,693,771
257,637,458 257,637,458
96,254
3,307
35,449
1,133
28,659
10,845
128,378
3,902
265,354
27,952
1,521,271
2,349,956
8,066,745
1,465,847
424,000
2,413,464
2,569,055
—
2,928
—
—
—
—
— 8,373,336
— 1,327,441
—
—
— 4,779,599
—
—
—
—
—
—
—
—
—
—
— 3,456,398
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,928 17,936,775
— 158,767,325
—
— 13,025,555
—
— 2,569,055
—
— 8,399,380
—
—
193,830
—
— 2,349,956
—
395,649
— 8,066,745
— 13,674,830
—
— 1,465,847
—
—
424,000
—
— 10,365,003
—
— 2,413,464
—
— 8,467,349
—
96,254
—
—
3,307
—
—
35,449
—
—
1,133
—
—
28,659
—
—
—
10,845
—
128,378
—
—
—
3,902
—
265,354
—
—
27,952
—
—
—
— 13,693,771
— 8,066,745 236,806,256
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Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
(Millions of yen)
2. Main Sources of Differences between Regulatory Exposure Amounts and Carrying Values in Consolidated Financial Statements
LI1: Differences between accounting and
regulatory scopes of consolidation and
mapping of consolidated financial statement
categories with regulatory risk categories
As of March 31, 2022
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)
(Note 2)
Market risk
(Note 3)
Items not
subject to
capital
requirements
or subject to
deduction
from capital
74,792,123
1,965,134
6,035,507
5,649,632
5,370,377
7,351,878
310
38,538,724
90,834,056
2,812,104
228,608
10,175,873
1,457,254
898,817
623,045
66,720
11,722,239
(817,784)
Assets
74,792,123
Cash and due from banks
1,965,134
Call loans and bills bought
6,035,507
Receivables under resale agreements
5,649,632
Receivables under securities borrowing transactions
5,370,377
Monetary claims bought
7,351,878
Trading assets (Note 1)
310
Money held in trust
38,538,724
Securities
90,834,056
Loans and bills discounted
2,812,104
Foreign exchanges
228,608
Lease receivables and investment assets
10,175,873
Other assets
1,457,254
Tangible fixed assets
898,817
Intangible fixed assets
623,045
Net defined benefit asset
Deferred tax assets
66,720
Customers’ liabilities for acceptances and guarantees 11,722,239
(817,784)
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
13,069,796
1,129,999
19,359,965
1,580,580
1,866,366
6,377,968
18,877,990
1,216,893
442,000
9,808,107
2,443,873
8,415,621
89,894
4,064
40,864
1,087
25,000
5,767
135,084
3,902
275,570
29,193
11,722,239
148,585,460 148,585,460
13,069,796
1,129,999
19,359,965
1,580,580
1,866,366
6,377,968
18,877,990
1,216,893
442,000
9,808,107
2,443,873
8,415,621
89,894
4,064
40,864
1,087
25,000
5,767
135,084
3,902
275,570
29,193
11,722,239
245,507,293 245,507,293
74,792,123
1,965,134
3,242,722
—
—
— 6,035,507
— 5,649,632
—
—
—
—
— 2,127,655
—
—
—
—
—
—
—
—
—
—
87,129
— 7,351,878
— 3,629,942
—
—
—
—
148,327
—
— 1,025,539
36,723
—
— 1,114,983
—
—
—
—
—
—
—
—
— 1,027,561
28
4,054,583
—
—
—
—
726,800
—
—
—
432,092
—
—
—
53,996
—
—
—
—
—
387
—
—
—
—
—
2,512,631
7,351,878
4,268,595
19,369,666
310
37,364,857
89,682,349
2,812,104
228,608
5,093,699
1,457,254
172,017
190,952
12,724
11,721,852
(817,784)
257,704,625 257,704,625 227,918,926
—
2,690
—
—
—
—
— 12,318,326
— 1,528,379
—
—
— 3,200,262
—
—
—
—
—
—
—
—
—
—
— 2,585,681
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
19,632,649
2,690
—
—
—
—
—
—
— 6,377,968
—
—
—
—
—
165
—
—
—
—
—
—
—
—
—
—
—
165
— 148,582,769
— 13,069,796
— 1,129,999
— 7,041,639
—
52,200
— 1,866,366
183,179
— 18,877,990
— 1,216,893
—
442,000
— 9,808,107
— 2,443,873
— 5,829,773
89,894
—
4,064
—
40,864
—
1,087
—
25,000
—
5,767
—
135,084
—
3,902
—
275,570
—
—
29,193
— 11,722,239
6,377,968 222,877,260
(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, 2023
(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
267,622,995
235,915,675
22,413,460
4,901,780
8,751,204
20,831,201
2,928
17,936,775
—
8,066,745
246,791,794
235,912,746
21,588,505
13,660,974 (Note 1)
859,820
859,820 (Note 2)
4,476,685
7,022,364
—
7,865,093
(688,168)
231,294
276,648,339
—
8,670,123 (Note 3)
—
241,610
250,675,152
(688,168)
(10,316)
19,470,688
4,901,780
905,166
—
11,093
—
—
5,818,040
684,458
—
—
—
—
—
684,458
(Millions of yen)
As of March 31, 2022
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
255,191,993
227,918,926
19,369,666
4,268,595
7,351,878
22,630,033
2,690
19,632,649
165
6,377,968
232,561,960
227,916,236
18,645,139
12,227,177 (Note 1)
922,221
922,221 (Note 2)
(262,983)
5,587,886
—
7,944,895
3,143,353
533,179
263,750,748
—
7,600,880 (Note 3)
—
508,716
241,574,351
3,143,353
24,462
16,093,599
4,268,429
830,075
—
10,384
—
—
5,108,888
973,909
—
—
—
—
—
973,909
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.
Notes: 1. This mainly comprises exposures due to commitment lines.
2. This mainly comprises assets subject to the IRB approach added with specific reserve and partial direct write-offs.
3. This mainly comprises the aggregation of the addition of derivative liabilities and regulatory add-on amounts, and the deduction of regulatory netting effect.
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Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
Countercyclical buffer requirement by country or region
Indicators for assessing Global Systemically Important Banks (G-SIBs)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
■ Countercyclical buffer requirement by country or region
■ Indicators for assessing Global Systemically Important Banks (G-SIBs)
CCyB1: Countercyclical buffer (CCyB) requirement by country or region
GSIB1: G-SIB indicators
(Millions of yen, except percentages)
As of March 31, 2023
Geographical
breakdown
Australia
Germany
Hong Kong
Luxembourg
Sweden
U.K.
Subtotal
Total
a
Applicable CCyB ratio in
effect
1.00%
0.75%
1.00%
0.50%
1.00%
1.00%
b
RWAs used in the
computation of CCyB ratio
951,173
616,014
1,529,589
487,357
40,071
2,933,276
6,557,480
57,404,494
c
d
Bank-specific CCyB ratio
CCyB amount
0.10%
61,597
(Millions of yen, except percentages)
CCyB1: Countercyclical buffer (CCyB) requirement by country or region
As of March 31, 2022
Geographical
breakdown
Hong Kong
Luxembourg
Subtotal
Total
a
Applicable CCyB ratio in
effect
1.00%
0.50%
b
RWAs used in the
computation of CCyB ratio
1,608,333
343,523
1,951,856
55,344,904
c
d
Bank-specific CCyB ratio
CCyB amount
0.03%
17,800
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.
Basel III
Template
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
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 trading volume
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,
2023
As of March 31,
2022
86,194,529
73,695,197
291,673,049
51,152,083
25,471,036
33,447,629
16,110,817
73,516,381
67,596,129
278,082,730
42,247,617
22,611,775
30,555,904
14,481,827
5,454,562,907
4,344,694,781
5,084,242
11,135,703
102,325,402
125,298,442
1,603,772,144
1,085,323,445
506,004
495,618
12,007,752
12,004,699
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 or the standardized approach
for counterparty credit risk (SA-CCR) (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 or
SA-CCR 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
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Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
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 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. 11 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 or
SA-CCR 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. Item No. 10 “Substitutability/financial infrastructure – Total amount of trading volume” shall state the annual total amount of
trading volume of securities (gross basis) in the most recently ended fiscal year.
g. Financial institutions mentioned in Item No. 11 “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.
h. Item No.13 “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).
i. 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 [ - ].
j. In this form, all amounts shall be stated in the designated unit herein, and any fraction less than such unit shall be rounded
down.
k. This form shall be prepared only by a bank subject to the uniform international standards (excluding a bank that is a
consolidated subsidiary of a bank as well as a bank that is a consolidated subsidiary not of a bank but of a banking holding
company, and a 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.
■ Composition of Leverage Ratio
Corresponding line #
on Basel III disclosure
template (Table2)
Corresponding line #
on Basel III disclosure
template (Table1)
Items
On-balance sheet exposures (1)
(In million yen, %)
As of March 31,
2023
As of March 31,
2022
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)
175,221,153
210,008,235
166,341,091
197,228,681
—
—
—
—
34,787,082
30,887,589
1,735,746
173,485,406
1,526,382
164,814,709
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)
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
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))
Minimum leverage ratio requirement
Applicable leverage buffer requirement
Leverage ratio on a consolidated basis (including deposits with the Bank of Japan) (6)
(d)
(e)
(f)
Total exposures
The amount of deposits with the Bank of Japan
Total exposures (including deposits with the Bank of Japan)
Leverage ratio on a consolidated basis (including deposits with the
Bank of Japan) ((e)/(f’))
(f)
(f’)
4,790,390
3,527,325
5,435,663
981,452
5,084,780
1,111,871
—
—
145,156
457,683
1,330,211
1,168,020
11,224,540
11,362,558
—
453,886
1,226,418
1,099,912
9,392,799
11,685,139
—
1,137,324
81,463,037
75,178,234
48,472,455
46,127,804
32,990,581
29,050,429
11,548,912
229,516,974
5.03%
3.00%
0.50%
229,516,974
60,420,329
289,937,303
11,186,225
216,080,403
5.17%
3.00%
216,080,403
60,475,944
276,556,348
3.98%
4.04%
(c)
11,816,444
12,822,464
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
TLAC information
■ TLAC2: - Material subgroup entity - creditor ranking at legal entity level
Sumitomo Mitsui Banking Corporation
■ 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,
2023
As of
March 31,
2022
Preferred resolution strategy (1)
The SPE (Single Point of Entry) resolution strategy is considered to be the preferred resolution strategy for Sumitomo Mitsui Financial Group, Inc.
(SMFG) and its subsidiaries.
More concretely, at the time of a stress, following the relevant authority’s determination that one or more of the material sub-groups, i.e. Sumitomo
Mitsui Banking Corporation and SMBC Nikko Securities Inc., have reached the point of non-viability, losses incurred to them would be passed to
SMFG, the ultimate holding company. While this could lead to a resolution of SMFG, the material sub-groups are expected to continue their
business as usual under the Specified Bridge Financial Institution, etc. incorporated by the Deposit Insurance Corporation of Japan (DICJ) to
which SMFG transfers its business.
Regulatory capital elements of TLAC and adjustments (2)
1
2
3
4
5
6
7
8
9
10
11
Common Equity Tier 1 capital (CET1)
Additional Tier 1capital (AT1) before TLAC adjustments
AT1 ineligible as TLAC as issued out of subsidiaries to third parties
Other adjustments
AT1 instruments eligible under the TLAC framework ((B) - (C) - (D))
Tier 2 capital (T2) before TLAC adjustments
Amortised portion of T2 instruments where remaining maturity > 1 year
T2 capital ineligible as TLAC as issued out of subsidiaries to third parties
Other adjustments
T2 instruments eligible under the TLAC framework ((F) - (G) - (H) - (I))
TLAC arising from regulatory capital ((A) + (E) + (J))
Non-regulatory capital elements of TLAC (3)
(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
(I)
(J)
(K)
12
13
14
15
16
17
External TLAC instruments issued directly by the bank and subordinated to excluded liabilities
(L)
External TLAC instruments issued directly by the bank which are not subordinated to excluded
liabilities but meet all other TLAC term sheet requirements
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))
Non-regulatory capital elements of TLAC: adjustments (4)
18
19
20
21
22
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))
Risk-weighted assets and leverage exposure measure for TLAC purposes (5)
23
24
Total risk-weighted assets (RWA)
Total exposures
TLAC ratios and buffers (6)
25
25a
26
27
28
29
30
31
TLAC before deduction of CET1 specific buffer requirement (as a percentage of RWA) ((S) / (T))
TLAC (as a percentage of RWA)
TLAC (as a percentage of total exposures) ((S) / (U))
CET1 available after meeting the minimum capital requirements
CET1 specific buffer requirement
of which: capital conservation buffer requirement
of which: countercyclical buffer requirement
of which: G-SIB/D-SIB additional requirement
10,838,955
10,458,377
709,956
727,847
—
29,268
680,688
801,869
(373,829)
—
5,825
—
22,104
705,743
797,534
(242,608)
—
4,722
1,169,873
1,035,421
12,689,517
12,199,542
6,930,885
5,896,263
(M)
(N)
(O)
(P)
(Q)
(R)
(S)
(T)
(U)
2,704,976
9,635,862
2,532,252
8,428,515
22,325,379
20,628,057
—
315
—
—
—
—
22,325,063
20,628,057
77,285,048
72,350,071
229,516,974
216,080,403
28.88%
25.28%
9.72%
7.98%
3.60%
2.50%
0.10%
1.00%
28.51%
24.98%
9.54%
8.56%
3.53%
2.50%
0.03%
1.00%
Basel III
Template
No.
Items
1
2
3
4
5
6
7
8
9
10
11
Is the resolution entity the creditor/investor?
Description of creditor ranking
Total capital and liabilities net of credit risk
mitigation
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
As of March 31, 2023
Creditor ranking
2
3
No
Yes
Additional Tier 1
instruments
Yes
No
Tier 2 instruments
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
— 1,267,000
— 1,140,483
— 7,385,780
— 13,338,814
—
—
—
—
—
—
—
—
—
— 1,267,000
— 1,140,483
— 7,385,780
— 13,338,814
3,545,551
3,545,551
—
—
—
— 1,267,000
—
—
—
—
—
—
—
—
—
3,545,551
— 1,267,000
— 1,140,483
346,695
—
347,000
—
333,279
—
—
—
113,509
—
— 6,808,792
—
789,388
— 3,429,669
— 2,023,061
— 12,761,826
— 1,136,083
— 3,776,669
— 2,356,340
—
—
566,673
—
680,182
—
— 4,812,551
SMBC Nikko Securities Inc.
As of March 31, 2023
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
TLAC (as a percentage of total exposures) (including deposits with the Bank of Japan) (7)
Total exposures
The amount of deposits with the Bank of Japan
Total exposures (including deposits with the Bank of Japan)
(U)
229,516,974
216,080,403
60,420,329
60,475,944
(U’)
289,937,303
276,556,348
TLAC (as a percentage of total exposures) (including deposits with the Bank of Japan) ((S)/(U’))
7.69%
7.45%
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
Sumitomo Mitsui Banking Corporation
Basel III
Template
No.
Items
Is the resolution entity the creditor/investor?
Description of creditor ranking
As of March 31, 2022
Creditor ranking
2
3
No
Yes
Additional Tier 1
instruments
Yes
No
Tier 2 instruments
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
Total capital and liabilities net of credit risk
mitigation
(A)
3,545,551
— 1,235,000
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
—
—
—
— 1,235,000
— 1,235,000
—
—
—
—
—
—
—
—
—
3,545,551
— 1,235,000
—
—
—
—
—
—
—
—
—
996,519
— 6,834,878
— 12,611,948
—
—
—
—
—
996,519
996,519
—
574,217
318,253
104,048
—
— 6,834,878
— 12,611,948
— 5,898,275
—
530,502
— 2,758,104
— 2,084,896
— 11,675,346
—
530,502
— 3,332,322
— 2,403,149
—
—
524,771
—
628,820
—
— 4,780,551
1
2
3
4
5
6
7
8
9
10
11
SMBC Nikko Securities Inc.
As of March 31, 2022
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
■ 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 Excluding those owed to group companies
*2 Conservatively estimated in light of quantitative materiality
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 Excluding those owed to group companies
*2 Conservatively estimated in light of quantitative materiality
(A)
(B)
1
(most junior)
Common
share
capital
3,906,550
—
3,906,550
3,906,550
—
—
—
—
3,906,550
(A)
(B)
1
(most junior)
Common
share
capital
3,905,233
—
3,905,233
3,905,233
—
—
—
—
3,905,233
(Millions of yen)
As of March 31, 2023
Creditor ranking
2
3
4
(most senior)
Sum of
1 to 4
Additional
Tier 1
instruments
767,000
—
767,000
767,000
—
—
—
—
767,000
Tier 2
instruments
1,140,483
—
1,140,483
1,140,483
346,695
347,000
333,279
113,509
—
64,304
Unsecured
senior
bonds *1
7,585,036 13,399,070
64,304
7,520,731 13,334,765
6,943,743 12,757,777
1,205,583
3,813,408
2,381,667
683,567
— 4,673,550
858,888
3,466,408
2,048,388
570,058
(Millions of yen)
As of March 31, 2022
Creditor ranking
2
3
4
(most senior)
Sum of
1 to 4
Additional
Tier 1
instruments
735,000
—
735,000
735,000
—
—
—
—
735,000
Tier 2
instruments
996,519
—
996,519
996,519
—
574,217
318,253
104,048
—
50,392
Unsecured
senior
bonds *1
6,889,809 12,526,562
50,392
6,839,417 12,476,169
5,902,814 11,539,567
530,502
3,333,833
2,403,149
631,848
— 4,640,233
530,502
2,759,616
2,084,896
527,799
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
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 “Liquidity Ratio 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 Liquidity Ratio 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 Liquidity Ratio 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 Liquidity Ratio Notification. Meanwhile, Sumitomo Mitsui Financial
Group records “due to trust account,” etc. under “cash outflows based on other contracts” prescribed in Article 59 of the Liquidity Ratio
Notification.
■ Disclosure of Quantitative Information about Liquidity Coverage Ratio (Consolidated)
Item
High-Quality Liquid Assets (1)
1 Total high-quality liquid assets (HQLA)
Cash Outflows (2)
of which, Stable deposits
of which, Less stable deposits
2 Cash outflows related to unsecured retail funding
3
4
5 Cash outflows related to unsecured wholesale funding
6
7
of which, Qualifying operational deposits
of which, Cash outflows related to unsecured wholesale funding
other than qualifying operational deposits and debt securities
of which, Debt securities
8
9 Cash outflows related to secured funding, etc.
10
Cash outflows related to derivative transactions, etc. funding
programs, credit and liquidity facilities
of which, Cash outflows related to derivative transactions, etc.
of which, Cash outflows related to funding programs
of which, Cash outflows related to credit and liquidity facilities
11
12
13
14 Cash outflows related to contractual funding obligations, etc.
15 Cash outflows related to contingencies
16 Total cash outflows
Cash Inflows (3)
17 Cash inflows related to secured lending, etc.
18 Cash inflows related to collection of loans, etc.
19 Other cash inflows
20 Total cash inflows
Consolidated Liquidity Coverage Ratio (4)
21 Total HQLA allowed to be included in the calculation
22 Net cash outflows
23 Consolidated liquidity coverage ratio (LCR)
24 The number of data used to calculate the average value
(In million yen, %, the number of data)
Current Quarter
(From 2023/1/1
To 2023/3/31)
Prior Quarter
(From 2022/10/1
To 2022/12/31)
TOTAL
UNWEIGHTED
VALUE
61,179,680
19,349,431
41,830,248
91,220,784
—
80,150,918
TOTAL
WEIGHTED
VALUE
4,766,056
582,405
4,183,650
46,429,418
—
TOTAL
UNWEIGHTED
VALUE
60,870,757
19,176,770
41,693,987
91,315,452
—
79,404,764
TOTAL
WEIGHTED
VALUE
4,747,364
577,352
4,170,012
46,423,484
—
84,423,623
39,632,257
85,023,797
40,131,829
6,797,161
6,797,161
293,877
6,291,654
6,291,654
288,727
34,835,137
12,144,525
35,621,538
12,430,452
2,183,937
420,341
32,230,858
12,336,029
82,387,279
TOTAL
UNWEIGHTED
VALUE
7,951,685
14,665,456
4,657,445
27,274,587
2,399,495
357,150
32,864,892
11,507,657
83,476,054
TOTAL
UNWEIGHTED
VALUE
7,091,061
14,228,592
4,767,112
26,086,766
2,183,937
420,341
9,540,247
9,226,027
1,950,039
74,809,944
TOTAL
WEIGHTED
VALUE
858,311
9,705,732
2,830,310
13,394,354
80,150,918
61,415,590
130.5%
60
2,399,495
357,150
9,673,806
8,795,102
2,223,081
74,908,213
TOTAL
WEIGHTED
VALUE
834,733
9,494,856
2,893,902
13,223,492
79,404,764
61,684,720
128.7%
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 2023/1/1
To 2023/3/31)
Prior Quarter
(From 2022/10/1
To 2022/12/31)
(In million yen)
72,771,661
7,379,257
4,390,198
204,398
877,544
1,907,115
80,150,918
71,732,711
7,672,052
4,654,372
210,739
876,485
1,930,453
79,404,764
Note: The above amounts are those of high-quality liquid assets in accordance with the liquidity ratio regulation under the Basel III and do not correspond to the financial amounts.
The amounts stated are those after multiplying factors in the liquidity ratio regulation under the Basel III.
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Sumitomo Mitsui Financial Group
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
Net Stable Funding Ratio Information (Consolidated)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Since September 30, 2021, the “Net Stable Funding Ratio” (hereinafter referred to as “NSFR”), 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 NSFR 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 “Liquidity Ratio
Notification”).
■ Disclosure of Qualitative Information about Net Stable Funding Ratio
1. Intra-period Changes in Consolidated NSFR
As described on the following page, the NSFR has remained stable since the introduction of the liquidity ratio regulation on September 30,
2021.
2. Special Provisions Pertaining to Interdependent Assets and Liabilities
Sumitomo Mitsui Financial Group has not applied the “special provisions pertaining to interdependent assets and liabilities” prescribed in
Article 99 of the Liquidity Ratio Notification to its NSFR.
3. Other Information Concerning Consolidated NSFR
The Liquidity Ratio Notification stipulates the minimum requirement of the NSFR at 100%. The NSFR of Sumitomo Mitsui Financial
Group (consolidated) exceeds the minimum requirements of the NSFR, having no cause for concern. In terms of the future NSFR forecasts,
Sumitomo Mitsui Financial Group does not expect significant deviations from the disclosed ratios. In addition, the actual NSFR does not
differ significantly from the initial forecast.
■ Disclosure of Quantitative Information about Net Stable Funding Ratio (Consolidated)
Item
Current Quarter (From 2023/1/1 To 2023/3/31)
Prior Quarter (From 2022/10/1 To 2022/12/31)
Unweighted value by residual maturity
Unweighted value by residual maturity
No maturity < 6 months
6 months to
< 1 year
≥ 1 year
Weighted
value
No maturity < 6 months
6 months to
< 1 year
≥ 1 year
Weighted
value
(In million yen, %)
Available stable funding (ASF) items (1)
1 Capital; of which:
12,718,109
Common Equity Tier 1 capital,
Additional Tier 1 capital and Tier 2
capital (excluding the proportion of
Tier 2 instruments with residual
maturity of less than one year) before
the application of capital deductions
Other capital instruments that are
not included in the above category
2
3
4 Funding from retail and small
business customers; of which:
Stable deposits
5
6
Less stable deposits
7 Wholesale funding; of which:
8
Operational deposits
9
Other wholesale funding
10 Liabilities with matching
interdependent assets
11 Other liabilities; of which:
12
Derivative liabilities
All other liabilities and equity not
included in the above categories
13
14 Total available stable funding
Required stable funding (RSF) items (2)
15 HQLA
16 Deposits held at financial
institutions for operational purposes
Loans, repo transactions-related
assets, securities and other similar
assets; of which:
Loans to- and repo transactions
with- financial institutions
(secured by level 1 HQLA)
Loans to- and repo transactions
with- financial institutions (not
included in item 18)
Loans and repo transactions-
related assets (not included in
item 18, 19 and 22); of which:
With a risk weight of less than
or equal to 35% under the
Standardised Approach for
credit risk
Residential mortgages; of which:
With a risk weight of less than or
equal to 35% under the Standardised
Approach for credit risk
24
Securities that are not in default
and do not qualify as HQLA and
other similar assets
25 Assets with matching
interdependent liabilities
17
18
19
20
21
22
23
0
0
0
12,718,109
0
61,494,865
37,883
19,665,960
41,828,905
69,030,012
—
69,030,012
0
37,883
61,647,438
—
61,647,438
—
—
723,401
11,483,564
723,401
11,483,564
317,900
29,016
0
0
0
0
1,844,262
14,562,371
12,402,115
1,470,433
14,188,542
12,402,115
373,829
373,829
0
0
0
0
24,687
56,387,459
61,668,050
37,687
0
0
0
0
1,871,819
14,273,935
1,529,204
13,931,320
342,614
342,614
0
56,541,691
0
0
5,610,102
—
5,610,102
0
24,687
20,082,693
—
20,082,693
18,682,662
37,704,797
59,913,915
—
59,913,915
20,130,532
41,537,517
65,243,911
—
65,243,911
0
37,687
61,935,035
—
61,935,035
0
0
4,475,965
—
4,475,965
0
0
17,101,072
—
17,101,072
19,124,006
37,417,685
54,588,077
—
54,588,077
—
0
0
0
—
692,525
411,185
281,340
—
—
—
72,997
1,045,378
11,408,918
72,997
1,045,378
11,408,918
130,936,744
3,483,332
0
173,458
393,134
33,893
—
0
0
0
—
831,919
596,135
235,784
—
73,448
73,448
125,477,152
2,935,973
0
213,513
1,548,415
37,729,957
9,825,672
72,135,457
79,782,792
1,685,137
39,864,863
9,306,190
72,490,204
80,780,331
0
7,083,651
13,812
32,259
55,236
0
6,828,354
24,074
3,052
40,289
242,403
6,592,154
2,381,538
11,736,943
14,001,492
375,415
8,312,547
2,248,322
11,770,395
14,403,452
889,227
22,724,631
6,555,772
46,403,796
53,670,594
897,196
23,296,993
6,283,139
46,666,229
54,195,931
726
3,527,273
346,258
1,180,461
1,873,962
147
3,350,126
301,164
1,293,116
1,999,202
0
0
292,222
290,990
10,624,058
8,002,447
159,199
158,961
6,598,039
4,447,806
0
0
291,306
290,906
10,538,905
7,943,873
158,331
157,937
6,526,512
4,400,367
416,784
1,037,297
583,558
3,338,399
4,053,022
412,525
1,135,660
459,746
3,511,622
4,196,784
—
—
—
—
—
—
—
—
—
—
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26 Other assets; of which:
3,812,248
1,469,644
91,507
15,350,413
19,574,153
3,343,731
1,407,190
88,364
15,271,687
19,027,356
29
27
28
Physical traded commodities,
including gold
Assets posted as initial margin for
derivative contracts and contributions
to default funds of CCPs (including
those that are not recorded on
consolidated balance sheet)
Derivative assets
Derivative liabilities (before deduction
of variation margin posted)
All other assets not included in
the above categories
32 Off-balance sheet items
33 Total required stable funding
34 Consolidated net stable funding ratio (NSFR)
30
31
0
0
0
0
1,085,792
922,923
1,133,010
963,059
0
0
235,962
235,962
0
0
262,144
262,144
3,812,248
1,469,644
91,507
14,028,658
18,415,267
3,343,731
1,407,190
88,364
13,876,532
17,802,153
118,576,027
2,428,914
105,442,652
124.1%
115,951,984
2,433,315
105,390,490
119.0%
SMBC
Financial Highlights
Financial Data (Excerpt from Securities Report) of Sumitomo Mitsui Banking Corporation can be found on our website�
URL: https://www�smfg�co�jp/english/investor/library/annual/cy2023annu_eng_smfg�html
Sumitomo Mitsui Banking Corporation
Consolidated
Year ended March 31
For the Year:
2023
2022
Ordinary income ����������������������������������������������������������� ¥ 4,991,948
Ordinary profit ��������������������������������������������������������������
1,125,928
Profit attributable to owners of parent �������������������������
807,042
Comprehensive income �����������������������������������������������
952,014
¥ 2,990,450
867,849
568,244
327,943
At Year-End:
Millions of yen
2021
¥ 2,786,647
534,722
406,093
1,238,547
2020
2019
¥ 3,469,068
770,491
517,750
222,122
¥ 3,369,898
894,501
617,493
548,236
Total net assets ������������������������������������������������������������ ¥ 9,735,509
Total assets ������������������������������������������������������������������
252,567,523
Total capital ratio (BIS guidelines) ��������������������������������
Tier 1 capital ratio (BIS guidelines) �������������������������������
Common equity Tier 1 capital ratio
15.34%
14.15%
(BIS guidelines) ����������������������������������������������������������
Number of employees ��������������������������������������������������
12.43%
59,399
¥ 9,219,858
242,105,934
¥ 9,256,369
228,066,567
¥ 8,368,349
206,089,633
¥ 8,986,749
190,690,293
15�78%
14�53%
12�67%
58,041
17�72%
15�89%
13�98%
58,127
18�06%
15�80%
13�70%
57,961
20�32%
17�57%
15�17%
58,527
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.
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
SMBC
(Millions of yen, except percentages)
a
b
As of March
31,2023
As of March
31,2022
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)
7,694,942
7,351,294
3,526,676
4,239,771
—
71,505
—
—
1,821,091
3,527,198
3,867,551
—
43,455
—
—
1,695,697
1,404
1,231
(a)
6 Common Equity Tier 1 capital: instruments and reserves
(A)
9,517,439
9,048,223
Non-consolidated
Year ended March 31
For the Year:
2023
2022
Ordinary income ����������������������������������������������������������� ¥ 4,133,627
2,451
1,699,474
883,603
Trust fees �����������������������������������������������������������������
Gross banking profit (A) �����������������������������������������������
Expenses (excluding nonrecurring losses) (B) �������������
Overhead ratio (B) / (A) �������������������������������������������������
Banking profit
¥ 2,477,287
2,254
1,579,178
857,233
Millions of yen
2021
¥ 2,283,356
2,076
1,481,662
816,488
2020
2019
¥ 2,851,162
2,110
1,412,007
808,052
¥ 2,805,840
2,250
1,395,586
811,533
52.0%
54�3%
55�1%
57�2%
58�2%
(before provision for general reserve for possible
loan losses) ��������������������������������������������������������������
Core banking profit ������������������������������������������������������
Core banking profit (excluding gains or losses on
cancellation of investment trusts) ����������������������������
Banking profit ���������������������������������������������������������������
Ordinary profit ��������������������������������������������������������������
Net income �������������������������������������������������������������������
At Year-End:
815,871
902,618
863,278
797,003
865,797
634,154
Total net assets ������������������������������������������������������������ ¥ 7,394,955
Total assets ������������������������������������������������������������������
235,337,464
Deposits �����������������������������������������������������������������������
149,948,880
Loans and bills discounted ������������������������������������������
94,307,397
Securities ���������������������������������������������������������������������
32,210,394
Trust assets and liabilities ��������������������������������������������
5,108,905
Loans and bills discounted ��������������������������������������
1,070,590
Securities in trust account (excluding
721,944
764,309
722,805
715,731
745,950
546,294
665,173
585,189
551,401
502,679
436,062
338,036
603,955
529,752
505,785
586,741
483,944
317,381
584,053
581,176
535,229
584,053
649,647
477,367
¥ 7,546,483
227,964,729
141,015,245
87,671,294
38,238,579
4,622,304
751,760
¥ 8,065,866
215,846,732
134,685,582
81,937,725
36,487,225
4,484,901
671,654
¥ 7,496,219
193,963,791
119,973,324
80,187,382
27,058,633
4,261,245
662,844
¥ 7,962,185
179,348,654
116,091,103
76,401,807
24,336,638
3,842,641
477,094
performance-guarantee crypto-assets ��������������
—
—
—
—
—
Electronically recorded transferable rights on
securities in trust account �����������������������������������
Capital stock ����������������������������������������������������������������
—
1,770,996
—
1,770,996
—
1,770,996
—
1,770,996
—
1,770,996
Number of shares issued (in thousands)
Common stock ����������������������������������������������������
Preferred stock ����������������������������������������������������
Dividend payout ratio ���������������������������������������������������
Total capital ratio (BIS guidelines) ��������������������������������
Tier 1 capital ratio (BIS guidelines) �������������������������������
Common equity Tier 1 capital ratio
(BIS guidelines) ��������������������������������������������������������
Number of employees ��������������������������������������������������
106,248
70
73.46%
13.97%
12.63%
10.81%
27,839
106,248
70
70�61%
14�77%
13�49%
11�53%
27,851
106,248
70
77�79%
16�96%
15�08%
13�09%
28,104
106,248
70
167�61%
17�61%
15�23%
13�01%
27,957
106,248
70
73�09%
20�28%
17�37%
14�85%
28,482
Notes: 1. Core banking profit = Banking profit (Before provision of 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.
electronically recorded transferable rights on
securities in trust account) ���������������������������������
Crypto-assets in trust account and
900,799
889,179
922,114
1,164,251
1,330,384
27
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
254,563
228,199
3,801
250,761
6,003
222,195
1,292
4,452
(77,631)
—
52,939
45,592
485,094
—
—
(73,356)
—
56,744
22,099
427,347
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
761,851
665,487
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
8,755,588
8,382,735
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SMBC
Basel III Information
Basel III Information
SMBC
Basel III
Template No.
Items
Additional Tier 1 capital: instruments (3)
(Millions of yen, except percentages)
a
b
As of March
31,2023
As of March
31,2022
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
—
—
—
—
1,267,000
1,235,000
—
—
23,597
20,588
—
—
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)
—
—
1,290,597
—
—
1,255,588
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)
—
—
—
—
—
—
82,978
25,525
—
—
82,978
25,525
1,207,618
1,230,062
(E)
(F)
(G)
9,963,206
9,612,798
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)
—
—
—
—
766,614
753,772
—
—
4,491
4,365
—
—
—
—
108,065
17,293
90,771
879,171
—
—
102,903
11,647
91,255
861,041
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 ratios (consolidated) (7)
(Millions of yen, except percentages)
a
b
As of March
31,2023
As of March
31,2022
c
Reference
to Template
CC2
—
—
—
—
—
—
40,062
36,723
40,062
36,723
839,109
824,318
(I)
(J)
(K)
10,802,315
10,437,117
(L)
70,401,996
66,120,492
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”)
12.43%
14.15%
15.34%
12.67%
14.53%
15.78%
532,660
623,375
597,865
534,426
—
—
48,842
27,386
17,293
30,464
90,771
11,647
23,965
91,255
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
296,379
292,945
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”)
—
—
—
—
—
—
—
—
Items
Required capital ((L) ✕ 8%)
(Millions of yen)
As of March
31,2023
5,632,159
As of March
31,2022
5,289,639
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■ 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
Non-controlling interests
Total net assets
Total liabilities and net assets
a
b
c
(Millions of yen)
Consolidated balance sheet as
in published financial
statements
As of March 31,
2023
As of March 31,
2022
Reference to
Template CC1
Reference to
appended table
73,403,912
6,374,812
4,603,145
1,612,415
5,549,887
4,084,755
0
32,074,167
99,823,911
1,940,736
226,302
8,753,186
1,337,805
354,939
698,974
57,428
12,278,891
(607,747)
252,567,523
159,251,139
13,252,060
786,055
14,194,027
438,094
2,320,969
4,234,268
22,246,521
1,496,765
681,821
2,413,464
8,811,706
52,102
1,623
6,367
596
1,140
10,845
325,598
27,952
12,278,891
242,832,013
1,770,996
1,965,682
4,239,771
(210,003)
7,766,447
972,941
(15,964)
35,005
697,887
131,222
1,821,091
147,969
9,735,509
252,567,523
72,742,334
3,265,134
3,856,984
1,874,221
5,363,980
3,780,424
0
37,465,859
92,472,845
2,799,157
228,608
6,312,402
1,297,011
314,145
616,206
52,543
10,342,818
(678,743)
242,105,934
149,249,696
13,460,296
704,999
16,350,836
305,779
1,856,909
2,788,884
26,887,509
1,265,002
812,303
2,443,873
5,980,727
44,526
1,497
10,985
580
870
5,767
343,017
29,193
10,342,818
232,886,075
1,770,996
1,966,205
3,867,551
(210,003)
7,394,750
1,253,370
(74,044)
36,320
361,502
118,548
1,695,697
129,411
9,219,858
242,105,934
(a)
6-a
2-b,6-b
6-c
6-d
2-a
3
4-a
6-e
8-a
8-b
6-f
4-b
4-c
1-a
1-b
1-c
1-d
5
7-b
Note: The regulatory scope of consolidation is the same as the accounting scope of consolidation.
(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, 2023
As of March
31, 2022
1,770,996
1,770,996
1,965,682
1,966,205
4,239,771
3,867,551
(210,003)
(210,003)
7,766,447
7,394,750
(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, 2023
As of March
31, 2022
Remarks
Basel III Template
No.
Directly issued qualifying common share capital plus
related capital surplus and retained earnings
7,766,447
7,394,750
of which: capital and capital surplus
of which: retained earnings
of which: treasury stock (–)
of which: other than the above
Directly issued qualifying Additional Tier 1
instruments plus related capital surplus of which:
classified as equity under applicable accounting
standards and the breakdown
2. Intangible fixed assets
(1) Consolidated balance sheet
Consolidated balance sheet items
Intangible fixed assets
Securities
of which: goodwill attributable to equity-
method investees
3,526,676
4,239,771
—
—
3,527,198
3,867,551
—
—
—
—
As of March
31, 2023
As of March
31, 2022
354,939
314,145
32,074,167 37,465,859
3,801
6,003
Income taxes related to above
104,177
91,950
Stockholders’ equity attributable to
common shares (before adjusting
national specific regulatory adjustments
(earnings to be distributed))
Stockholders’ equity attributable to
preferred shares with a loss
absorbency clause upon entering into
effectively bankruptcy
(Millions of yen)
Remarks
1a
2
1c
31a
Ref. No.
2-a
2-b
As of March
31, 2023
As of March
31, 2022
3,801
6,003
(Millions of yen)
Remarks
Basel III Template
No.
8
(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
250,761
222,195 Software and other
—
—
—
—
—
—
—
—
Consolidated balance sheet items
Net defined benefit asset
As of March
31, 2023
As of March
31, 2022
698,974
616,206
Income taxes related to above
213,879
188,858
(Millions of yen)
Remarks
9
20
24
74
Ref. No.
3
280
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(2) Composition of capital
Composition of capital disclosure
Net defined benefit asset
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, 2023
As of March
31, 2022
485,094
427,347
(Millions of yen)
Remarks
Basel III Template
No.
15
As of March
31, 2023
As of March
31, 2022
57,428
325,598
27,952
52,543
343,017
29,193
104,177
213,879
91,950
188,858
(Millions of yen)
Remarks
Ref. No.
4-a
4-b
4-c
(Millions of yen)
Composition of capital disclosure
As of March
31, 2023
As of March
31, 2022
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability
excluding those arising from temporary differences
(net of related tax liability)
1,292
4,452
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)
48,842
27,386
—
—
—
—
48,842
27,386
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
As of March
31, 2023
As of March
31, 2022
(15,964)
(74,044)
(2) Composition of capital
Composition of capital disclosure
As of March
31, 2023
As of March
31, 2022
Net deferred gains or losses on hedges
(77,631)
(73,356)
6. Items associated with investments in the capital of financial institutions
(1) Consolidated balance sheet
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.
10
21
25
75
(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”
Ref. No.
5
Basel III Template
No.
11
(Millions of yen)
Remarks
Ref. No.
Consolidated balance sheet items
Trading assets
Securities
Loans and bills discounted
Other assets
Trading liabilities
Other liabilities
As of March
31, 2023
As of March
31, 2022
4,084,755
3,780,424
Including trading account securities
and derivatives for trading assets
32,074,167 37,465,859
99,823,911 92,472,845 Including subordinated loans
8,753,186
6,312,402 Including derivatives
4,234,268
8,811,706
2,788,884
Including trading account securities
sold and derivatives for trading
liabilities
5,980,727 Including derivatives
6-a
6-b
6-c
6-d
6-e
6-f
As of March
31, 2023
As of March
31, 2022
Remarks
Basel III Template
No.
(Millions of yen)
(2) Composition of capital
Composition of capital disclosure
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)
7. Non-controlling interests
(1) Consolidated balance sheet
Consolidated balance sheet items
Non-controlling interests
(2) Composition of capital
Composition of capital disclosure
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
532,660
623,375
—
—
—
—
—
—
532,660
623,375
720,906
596,675
—
—
—
—
82,978
40,062
25,525
36,723
597,865
534,426
As of March
31, 2023
As of March
31, 2022
147,969
129,411
As of March
31, 2023
As of March
31, 2022
(Millions of yen)
(Millions of yen)
Remarks
Remarks
Amount allowed in group CET1
1,404
1,231
Qualifying Additional Tier 1 instruments plus related
capital surplus issued by special purpose vehicles
and other equivalent entities
—
—
Amount allowed in group AT1
23,597
20,588
Qualifying Tier 2 instruments plus related capital
surplus issued by special purpose vehicles and other
equivalent entities
—
—
Amount allowed in group T2
4,491
4,365
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)
16
37
52
17
38
53
18
39
54
72
19
23
40
55
73
Ref. No.
7-b
Basel III Template
No.
5
30-31ab-32
34-35
46
48-49
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8. Other capital instruments
(1) Consolidated balance sheet
Consolidated balance sheet items
Borrowed money
Bonds
Total
(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, 2023
As of March
31, 2022
22,246,521 26,887,509
812,303
22,928,343 27,699,812
681,821
As of March
31, 2023
As of March
31, 2022
1,267,000
1,235,000
766,614
753,772
(Millions of yen)
Remarks
Ref. No.
8-a
8-b
(Millions of yen)
Remarks
Basel III Template
No.
32
46
■ Composition of Leverage Ratio
Corresponding line #
on Basel III disclosure
template (Table2)
Corresponding line #
on Basel III disclosure
template (Table1)
Items
On-balance sheet exposures (1)
(In million yen, %)
As of March 31,
2023
As of March 31,
2022
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)
166,362,969
193,518,055
159,674,384
182,384,803
—
—
—
—
27,155,086
22,710,418
823,929
165,539,040
685,525
158,988,858
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
4,065,961
3,052,855
4,495,701
3,989,441
864,127
975,368
—
—
145,156
465,971
73,650
—
44,354
—
9,354,284
7,596,048
6,215,561
—
299,578
5,731,206
—
251,370
Exposures related to repo transactions (3)
12
13
14
15
16
The amount of assets related to repo transactions, etc.
The amount of deductions from the assets above (line 12) (-)
The exposures for counterparty credit risk for repo transactions, etc.
The exposures for agent repo transaction
Total exposures related to repo transactions, etc.
5
Exposures related to off-balance sheet transactions (4)
17
18
19
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
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))
Minimum leverage ratio requirement
Leverage ratio on a consolidated basis (including deposits with the Bank of Japan) (6)
Total exposures
The amount of deposits with the Bank of Japan
Total exposures (including deposits with the Bank of Japan)
Leverage ratio on a consolidated basis (including deposits with the
Bank of Japan) ((e)/(f’))
(c)
6,515,139
5,982,576
75,774,180
69,458,000
45,111,909
42,604,277
30,662,270
26,853,722
9,963,206
212,070,734
4.69%
3.00%
212,070,734
59,049,467
271,120,202
9,612,798
199,421,206
4.82%
3.00%
199,421,206
59,721,131
259,142,337
3.67%
3.70%
(d)
(e)
(f)
(f)
(f’)
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SMBC
Basel III Information
Basel III Information
SMBC
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 “Liquidity Ratio 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 Liquidity Ratio 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 Liquidity Ratio
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 Liquidity Ratio Notification. Meanwhile, SMBC records “due to trust account,” etc.
under “cash outflows based on other contracts” prescribed in Article 60 of the Liquidity Ratio Notification.
■ Disclosure of Quantitative Information about Liquidity Coverage Ratio (Consolidated)
Item
High-Quality Liquid Assets (1)
1 Total high-quality liquid assets (HQLA)
Cash Outflows (2)
of which, Stable deposits
of which, Less stable deposits
2 Cash outflows related to unsecured retail funding
3
4
5 Cash outflows related to unsecured wholesale funding
6
7
of which, Qualifying operational deposits
of which, Cash outflows related to unsecured wholesale funding
other than qualifying operational deposits and debt securities
of which, Debt securities
8
9 Cash outflows related to secured funding, etc.
10
Cash outflows related to derivative transactions, etc. funding
programs, credit and liquidity facilities
of which, Cash outflows related to derivative transactions, etc.
of which, Cash outflows related to funding programs
of which, Cash outflows related to credit and liquidity facilities
11
12
13
14 Cash outflows related to contractual funding obligations, etc.
15 Cash outflows related to contingencies
16 Total cash outflows
Cash Inflows (3)
17 Cash inflows related to secured lending, etc.
18 Cash inflows related to collection of loans, etc.
19 Other cash inflows
20 Total cash inflows
Consolidated Liquidity Coverage Ratio (4)
21 Total HQLA allowed to be included in the calculation
22 Net cash outflows
23 Consolidated liquidity coverage ratio (LCR)
24 The number of data used to calculate the average value
(In million yen, %, the number of data)
Current Quarter
(From 2023/1/1
To 2023/3/31)
Prior Quarter
(From 2022/10/1
To 2022/12/31)
TOTAL
UNWEIGHTED
VALUE
61,179,751
19,349,485
41,830,265
90,957,552
—
78,518,496
TOTAL
WEIGHTED
VALUE
4,766,059
582,406
4,183,652
46,164,754
—
TOTAL
UNWEIGHTED
VALUE
60,870,837
19,176,830
41,694,007
91,516,907
—
77,855,627
TOTAL
WEIGHTED
VALUE
4,747,368
577,354
4,170,014
46,623,860
—
84,338,876
39,546,079
85,336,461
40,443,414
6,618,675
6,618,675
137,940
6,180,445
6,180,445
142,636
34,609,764
11,851,365
35,454,454
12,181,522
1,845,585
420,341
32,343,837
8,954,089
78,086,576
TOTAL
UNWEIGHTED
VALUE
3,013,872
15,764,663
3,452,595
22,231,131
2,096,001
357,150
33,001,302
8,350,390
79,134,419
TOTAL
UNWEIGHTED
VALUE
2,879,226
14,945,294
3,769,357
21,593,878
1,845,585
420,341
9,585,438
6,309,664
1,821,550
71,051,335
TOTAL
WEIGHTED
VALUE
106,042
11,161,766
1,798,551
13,066,360
78,518,496
57,984,975
135.4%
60
2,096,001
357,150
9,728,370
6,044,471
2,095,533
71,835,392
TOTAL
WEIGHTED
VALUE
67,123
10,547,455
2,005,317
12,619,896
77,855,627
59,215,495
131.4%
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 2023/1/1
To 2023/3/31)
Prior Quarter
(From 2022/10/1
To 2022/12/31)
(In million yen)
71,815,706
6,702,790
4,369,849
115,629
869,527
1,347,783
78,518,496
70,791,062
7,064,564
4,640,745
185,908
870,959
1,366,950
77,855,627
Note: The above amounts are those of high-quality liquid assets in accordance with the liquidity ratio regulation under the Basel III and do not correspond to the financial amounts.
The amounts stated are those after multiplying factors in the liquidity ratio regulation under the Basel III.
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SMBC
Basel III Information
Basel III Information
SMBC
Net Stable Funding Ratio Information (Consolidated)
Sumitomo Mitsui Banking Corporation and Subsidiaries
Since September 30, 2021, the “Net Stable Funding Ratio” (hereinafter referred to as “NSFR”), 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 NSFR
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 “Liquidity Ratio Notification”).
■ Disclosure of Qualitative Information about Net Stable Funding Ratio
1. Intra-period Changes in Consolidated NSFR
As described on the following page, the NSFR has remained stable since the introduction of the liquidity ratio regulation on September 30,
2021.
2. Special Provisions Pertaining to Interdependent Assets and Liabilities
SMBC has not applied the “special provisions pertaining to interdependent assets and liabilities” prescribed in Article 101 of the Liquidity
Ratio Notification to its NSFR.
3. Other Information Concerning Consolidated NSFR
The Liquidity Ratio Notification stipulates the minimum requirement of the NSFR at 100%. The NSFR of SMBC (consolidated) exceeds
the minimum requirements of the NSFR, having no cause for concern. In terms of the future NSFR forecasts, SMBC does not expect
significant deviations from the disclosed ratios. In addition, the actual NSFR does not differ significantly from the initial forecast.
■ Disclosure of Quantitative Information about Net Stable Funding Ratio (Consolidated)
Item
Available stable funding (ASF) items (1)
1 Capital; of which:
Common Equity Tier 1 capital,
Additional Tier 1 capital and Tier 2
capital (excluding the proportion of
Tier 2 instruments with residual
maturity of less than one year) before
the application of capital deductions
Other capital instruments that are
not included in the above category
2
3
4 Funding from retail and small
business customers; of which:
Stable deposits
5
6
Less stable deposits
7 Wholesale funding; of which:
8
Operational deposits
9
Other wholesale funding
10 Liabilities with matching
interdependent assets
11 Other liabilities; of which:
12
Derivative liabilities
All other liabilities and equity not
included in the above categories
13
14 Total available stable funding
Required stable funding (RSF) items (2)
15 HQLA
16 Deposits held at financial institutions
for operational purposes
Loans, repo transactions-related
assets, securities and other similar
assets; of which:
Loans to- and repo transactions
with- financial institutions
(secured by level 1 HQLA)
Loans to- and repo transactions
with- financial institutions (not
included in item 18)
Loans and repo transactions-
related assets (not included in
item 18, 19 and 22); of which:
With a risk weight of less than or
equal to 35% under the Standardised
Approach for credit risk
Residential mortgages; of which:
With a risk weight of less than or
equal to 35% under the Standardised
Approach for credit risk
24
Securities that are not in default
and do not qualify as HQLA and
other similar assets
25 Assets with matching
interdependent liabilities
17
18
19
20
21
22
23
Current Quarter (From 2023/1/1 To 2023/3/31)
Prior Quarter (From 2022/10/1 To 2022/12/31)
Unweighted value by residual maturity
Unweighted value by residual maturity
No maturity < 6 months
6 months to
< 1 year
≥ 1 year
Weighted
value
No maturity < 6 months
6 months to
< 1 year
≥ 1 year
Weighted
value
(In million yen, %)
9,617,033
9,617,033
0
0
0
0
61,510,742
37,883
19,681,837
41,828,905
69,537,380
—
69,537,380
0
37,883
55,372,729
—
55,372,729
—
—
802,710
4,517,587
802,710
4,517,587
317,900
29,016
0
0
0
0
2,444,042
12,061,076
9,173,127
2,070,174
11,687,207
9,173,127
373,868
373,868
0
0
0
0
24,687
56,402,542
61,675,534
37,687
0
0
0
0
0
0
5,465,886
—
5,465,886
0
24,687
19,879,733
—
19,879,733
18,697,745
37,704,797
59,655,637
—
59,655,637
20,130,591
41,544,943
65,535,019
—
65,535,019
0
37,687
57,586,889
—
57,586,889
0
0
4,330,130
—
4,330,130
—
0
0
0
—
894,690
701,452
193,238
—
—
—
118,476
1,128,670
4,361,561
118,476
1,128,670
4,361,561
128,237,733
2,863,005
0
173,458
393,134
33,893
—
0
0
0
2,325,565
11,498,692
1,982,859
11,155,986
342,705
342,705
0
56,548,429
0
0
16,959,961
—
16,959,961
—
1,078,679
938,173
19,124,061
37,424,368
54,390,968
—
54,390,968
—
121,511
140,505
121,511
122,559,601
2,706,479
0
213,513
1,548,545
37,683,253
10,268,519
69,221,030
77,883,555
1,685,192
40,324,132
9,564,493
69,956,569
79,266,461
0
4,751,498
13,812
51,622
89,656
0
4,081,277
24,074
3,052
68,393
242,534
9,348,002
2,838,124
10,461,698
13,368,048
375,469
11,792,942
2,517,695
10,723,504
14,013,362
889,227
21,962,713
6,545,211
45,052,240
52,494,030
897,196
22,728,144
6,273,113
45,358,730
53,051,741
726
2,784,708
346,258
1,180,461
1,861,178
147
2,795,620
301,164
1,293,116
1,978,570
0
0
292,222
290,990
10,624,058
8,002,447
159,199
158,961
6,598,039
4,447,806
0
0
291,306
290,906
10,538,905
7,943,873
158,331
157,937
6,526,512
4,400,367
416,784
1,328,816
580,379
3,031,409
3,929,371
412,525
1,430,460
458,702
3,332,375
4,189,089
—
—
—
—
—
—
—
—
—
—
26 Other assets; of which:
3,805,991
934,490
91,507
7,680,326
11,921,967
3,301,577
794,524
88,364
7,671,495
11,477,851
27
29
28
Physical traded commodities,
including gold
Assets posted as initial margin for
derivative contracts and contributions
to default funds of CCPs (including
those that are not recorded on
consolidated balance sheet)
Derivative assets
Derivative liabilities (before deduction
of variation margin posted)
All other assets not included in
the above categories
32 Off-balance sheet items
33 Total required stable funding
34 Consolidated net stable funding ratio (NSFR)
30
31
0
0
0
0
923,316
784,818
0
0
230,373
230,373
953,783
810,716
0
0
153,375
153,375
3,805,991
934,490
91,507
6,526,636
10,906,775
3,301,577
794,524
88,364
6,564,336
10,513,759
112,878,664
2,279,288
95,121,276
134.8%
110,235,400
2,282,782
95,947,088
127.7%
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Basel III Information
Basel III Information
SMBC
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
31,2023
As of March
31,2022
c
Reference
to Template
CC2
(a)
6,540,958
6,371,952
3,335,548
3,276,915
—
71,505
—
—
782,492
7,323,450
3,335,548
3,079,860
—
43,455
—
—
1,131,074
7,503,027
198,417
173,276
—
198,417
—
173,276
0
—
(344,457)
—
52,939
32,631
344,352
—
—
(182,290)
—
56,744
16,670
297,060
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Basel III
Template No.
Items
Additional Tier 1 capital: instruments (3)
(Millions of yen, except percentages)
a
b
As of March
31,2023
As of March
31,2022
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
—
—
—
—
1,267,000
1,235,000
—
—
—
—
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)
1,267,000
1,235,000
—
—
—
—
—
—
82,978
25,525
—
—
82,978
25,525
1,184,021
1,209,474
(E)
(F)
(G)
8,223,587
8,351,039
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)
—
—
—
—
766,614
753,772
—
—
148,246
—
148,246
914,860
—
—
75,445
—
75,445
829,217
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
283,884
361,462
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
7,039,566
7,141,565
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SMBC
Basel III Information
Basel III Information
SMBC
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 ratios (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”)
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
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”)
Items
Required capital ((L) ✕ 8%)
(Millions of yen, except percentages)
a
b
As of March
31,2023
As of March
31,2022
c
Reference
to Template
CC2
—
—
—
—
—
—
40,062
36,723
40,062
36,723
874,798
792,494
(I)
(J)
(K)
9,098,386
9,143,534
(L)
65,103,047
61,895,306
10.81%
12.63%
13.97%
11.53%
13.49%
14.77%
526,616
591,649
271,975
297,088
—
61
—
—
—
5,010
—
2,638
148,246
75,445
291,919
293,978
—
—
—
—
—
—
—
—
(Millions of yen)
As of March
31,2023
5,208,243
As of March
31,2022
4,951,624
■ 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
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
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets
Note: The regulatory balance sheet is the same as the accounting balance sheet.
a
b
c
(Millions of yen)
Balance sheet as
in published financial
statements
As of March 31,
2023
As of March 31,
2022
Reference to
Template CC1
Reference to
appended table
70,818,701
5,285,838
1,437,595
1,598,124
1,944,291
2,379,930
32,210,394
94,307,397
1,824,364
7,129,287
737,253
285,986
496,328
15,405,856
(523,888)
235,337,464
149,948,880
12,929,824
774,968
12,041,367
370,514
1,292,198
1,643,213
21,905,262
1,516,160
641,410
2,277,046
6,991,747
13,542
1,202
1,140
9,998
150,223
27,952
15,405,856
227,942,508
1,770,996
1,774,554
3,276,915
(210,003)
6,612,463
1,040,472
(282,793)
24,813
782,492
7,394,955
235,337,464
70,840,809
2,234,818
1,645,410
1,863,080
2,290,607
2,025,767
38,238,579
87,671,294
2,721,735
5,291,974
766,477
249,750
428,164
12,285,466
(589,208)
227,964,729
141,015,245
13,108,797
680,893
14,626,237
305,779
1,229,180
1,558,679
26,700,215
1,339,163
720,847
2,321,699
4,255,764
12,584
1,150
870
4,974
221,503
29,193
12,285,466
220,418,246
1,770,996
1,774,554
3,079,860
(210,003)
6,415,408
1,288,414
(182,902)
25,563
1,131,074
7,546,483
227,964,729
(a)
6-a
6-b
6-c
6-d
2
3
6-e
7-a
7-b
6-f
4-a
4-b
1-a
1-b
1-c
1-d
5
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SMBC
Basel III Information
Basel III Information
SMBC
(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, 2023
As of March
31, 2022
1,770,996
1,770,996
1,774,554
1,774,554
3,276,915
3,079,860
(210,003)
(210,003)
6,612,463
6,415,408
(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, 2023
As of March
31, 2022
Remarks
Basel III Template
No.
Directly issued qualifying common share capital plus
related capital surplus and retained earnings
6,612,463
6,415,408
of which: capital and capital surplus
of which: retained earnings
of which: treasury stock (–)
of which: other than the above
Directly issued qualifying Additional Tier 1
instruments plus related capital surplus of which:
classified as equity under applicable accounting
standards and the breakdown
3,335,548
3,276,915
—
—
3,335,548
3,079,860
—
—
—
—
Stockholders’ equity attributable to
common shares (before adjusting
national specific regulatory adjustments
(earnings to be distributed))
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
As of March
31, 2023
As of March
31, 2022
285,986
249,750
(Millions of yen)
Remarks
1a
2
1c
31a
Ref. No.
2
Income taxes related to above
87,569
76,473
(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
As of March
31, 2023
As of March
31, 2022
—
—
(Millions of yen)
Remarks
Basel III Template
No.
8
198,417
173,276 Software and other
—
—
—
—
—
—
—
—
As of March
31, 2023
As of March
31, 2022
496,328
428,164
(Millions of yen)
Remarks
9
20
24
74
Ref. No.
3
Income taxes related to above
151,975
131,104
(2) Composition of capital
Composition of capital disclosure
Prepaid pension cost
As of March
31, 2023
As of March
31, 2022
344,352
297,060
(Millions of yen)
Remarks
Basel III Template
No.
15
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, 2023
As of March
31, 2022
150,223
27,952
221,503
29,193
87,569
151,975
76,473
131,104
(Millions of yen)
Remarks
Ref. No.
4-a
4-b
(Millions of yen)
Composition of capital disclosure
As of March
31, 2023
As of March
31, 2022
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)
0
61
—
—
61
—
—
—
—
—
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, 2023
(282,793)
As of March
31, 2022
(182,902)
Composition of capital disclosure
As of March
31, 2023
As of March
31, 2022
Net deferred gains or losses on hedges
(344,457)
(182,290)
6. Items associated with investments in the capital of financial institutions
(1) Balance sheet
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.
10
21
25
75
(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”
Ref. No.
5
Basel III Template
No.
11
(Millions of yen)
Remarks
Ref. No.
Balance sheet items
Trading assets
Securities
Loans and bills discounted
Other assets
Trading liabilities
Other liabilities
As of March
31, 2023
As of March
31, 2022
2,379,930
2,025,767
Including trading account securities
and derivatives for trading assets
32,210,394 38,238,579
94,307,397 87,671,294 Including subordinated loans
7,129,287
5,291,974 Including derivatives
1,643,213
6,991,747
1,558,679
Including trading account securities
sold and derivatives for trading
liabilities
4,255,764 Including derivatives
6-a
6-b
6-c
6-d
6-e
6-f
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Basel III Information
Basel III Information
SMBC
(Millions of yen)
■ Composition of Leverage Ratio
(2) Composition of capital
Composition of capital disclosure
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)
7. Other capital instruments
(1) Balance sheet
Balance sheet items
Borrowed money
Bonds
Total
(2) Composition of capital
As of March
31, 2023
As of March
31, 2022
Remarks
Basel III Template
No.
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
526,616
591,649
—
—
—
—
—
—
526,616
591,649
395,016
359,337
—
—
—
—
82,978
40,062
25,525
36,723
271,975
297,088
16
37
52
17
38
53
18
39
54
72
19
23
40
55
73
As of March
31, 2023
As of March
31, 2022
21,905,262 26,700,215
720,847
22,546,672 27,421,062
641,410
(Millions of yen)
Remarks
Ref. No.
7-a
7-b
(Millions of yen)
Composition of capital disclosure
As of March
31, 2023
As of March
31, 2022
Remarks
Basel III Template
No.
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
1,267,000
1,235,000
766,614
753,772
32
46
Corresponding line #
on Basel III disclosure
template (Table2)
Corresponding line #
on Basel III disclosure
template (Table1)
Items
On-balance sheet exposures (1)
(In million yen, %)
As of March 31,
2023
As of March 31,
2022
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)
151,924,241
177,795,337
148,005,600
169,370,816
25,871,095
21,365,216
625,749
151,298,492
495,863
147,509,736
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
1,984,843
1,823,389
3,326,932
799,059
2,623,161
1,075,654
—
—
99,504
688,742
—
—
—
—
6,011,330
4,833,463
3,035,720
—
239,786
3,508,491
—
209,839
Exposures related to repo transactions (3)
12
13
14
15
16
The amount of assets related to repo transactions, etc.
The amount of deductions from the assets above (line 12) (-)
The exposures for counterparty credit risk for repo transactions, etc.
The exposures for agent repo transaction
Total exposures related to repo transactions, etc.
5
Exposures related to off-balance sheet transactions (4)
17
18
19
Leverage ratio (5)
20
21
22
6
8
Notional amount of off-balance sheet transactions
The amount of adjustments for conversion in relation to off-balance
sheet transactions (-)
Total exposures related to off-balance sheet transactions
The amount of capital (Tier 1 capital)
Total exposures ((a)+(b)+(c)+(d))
Leverage ratio ((e)/(f))
Minimum leverage ratio requirement
Leverage ratio (including deposits with the Bank of Japan) (6)
Total exposures
The amount of deposits with the Bank of Japan
Total exposures (including deposits with the Bank of Japan)
Leverage ratio (including deposits with the Bank of Japan) ((e)/(f’))
(c)
3,275,507
3,718,330
70,838,317
81,550,515
39,153,765
52,501,700
31,684,551
29,048,815
8,223,587
192,269,881
4.27%
3.00%
192,269,881
57,542,126
249,812,008
3.29%
8,351,039
185,110,346
4.51%
3.00%
185,110,346
58,593,913
243,704,259
3.42%
(d)
(e)
(f)
(f)
(f’)
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SMBC
Basel III Information
Basel III Information
SMBC
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 “Liquidity Ratio 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 since the introduction of the liquidity ratio regulation on March 31, 2015.
2. Assessment of Non-consolidated LCR
The Liquidity Ratio Notification stipulates the minimum requirement of the LCR at 100%. The LCR of SMBC 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), 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 Liquidity Ratio
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 Liquidity Ratio Notification. Meanwhile, SMBC records “due to trust account,” etc.
under “cash outflows based on other contracts” prescribed in Article 60 of the Liquidity Ratio Notification.
■ Disclosure of Quantitative Information about Liquidity Coverage Ratio (Non-Consolidated)
Item
High-Quality Liquid Assets (1)
1 Total high-quality liquid assets (HQLA)
Cash Outflows (2)
of which, Stable deposits
of which, Less stable deposits
2 Cash outflows related to unsecured retail funding
3
4
5 Cash outflows related to unsecured wholesale funding
6
7
of which, Qualifying operational deposits
of which, Cash outflows related to unsecured wholesale funding
other than qualifying operational deposits and debt securities
of which, Debt securities
8
9 Cash outflows related to secured funding, etc.
10
Cash outflows related to derivative transactions, etc. funding
programs, credit and liquidity facilities
of which, Cash outflows related to derivative transactions, etc.
of which, Cash outflows related to funding programs
of which, Cash outflows related to credit and liquidity facilities
11
12
13
14 Cash outflows related to contractual funding obligations, etc.
15 Cash outflows related to contingencies
16 Total cash outflows
Cash Inflows (3)
17 Cash inflows related to secured lending, etc.
18 Cash inflows related to collection of loans, etc.
19 Other cash inflows
20 Total cash inflows
Non-Consolidated Liquidity Coverage Ratio (4)
21 Total HQLA allowed to be included in the calculation
22 Net cash outflows
23 Non-consolidated liquidity coverage ratio (LCR)
24 The number of data used to calculate the average value
(In million yen, %, the number of data)
Current Quarter
(From 2023/1/1
To 2023/3/31)
Prior Quarter
(From 2022/10/1
To 2022/12/31)
TOTAL
UNWEIGHTED
VALUE
57,765,469
18,828,281
38,937,187
86,246,864
—
70,823,624
TOTAL
WEIGHTED
VALUE
4,459,193
564,848
3,894,344
44,088,998
—
TOTAL
UNWEIGHTED
VALUE
57,449,310
18,647,167
38,802,142
86,824,411
—
69,984,803
TOTAL
WEIGHTED
VALUE
4,440,242
559,415
3,880,827
44,674,151
—
79,669,435
37,511,568
80,673,098
38,522,837
6,577,429
6,577,429
137,940
6,151,313
6,151,313
142,636
30,713,064
10,378,354
31,290,996
10,452,030
767,705
420,341
29,525,016
8,630,597
79,179,825
TOTAL
UNWEIGHTED
VALUE
957,276
16,192,531
2,223,445
19,373,252
787,705
357,150
30,146,140
8,106,941
80,387,988
TOTAL
UNWEIGHTED
VALUE
1,067,210
15,229,605
2,446,635
18,743,451
767,705
420,341
9,190,306
4,694,900
1,747,753
65,507,140
TOTAL
WEIGHTED
VALUE
60,272
11,926,675
1,385,816
13,372,765
70,823,624
52,134,375
135.8%
60
787,705
357,150
9,307,174
4,439,636
2,021,169
66,169,867
TOTAL
WEIGHTED
VALUE
41,850
11,224,146
1,411,889
12,677,886
69,984,803
53,491,980
130.8%
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 2023/1/1
To 2023/3/31)
Prior Quarter
(From 2022/10/1
To 2022/12/31)
(In million yen)
65,616,580
5,207,044
3,337,964
74,709
446,586
1,347,783
70,823,624
64,354,797
5,630,005
3,804,778
143,986
314,290
1,366,950
69,984,803
Note: The above amounts are those of high-quality liquid assets in accordance with the liquidity ratio regulation under the Basel III and do not correspond to the financial amounts.
The amounts stated are those after multiplying factors in the liquidity ratio regulation under the Basel III.
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SMBC
Basel III Information
Basel III Information
SMBC
Net Stable Funding Ratio Information (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Since September 30, 2021, the “Net Stable Funding Ratio” (hereinafter referred to as “NSFR”), 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
NSFR 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 “Liquidity Ratio Notification”).
■ Disclosure of Qualitative Information about Net Stable Funding Ratio
1. Intra-period Changes in Non-consolidated NSFR
As described on the following page, the NSFR has remained stable since the introduction of the liquidity ratio regulation on September 30,
2021.
2. Special Provisions Pertaining to Interdependent Assets and Liabilities
SMBC has not applied the “special provisions pertaining to interdependent assets and liabilities” prescribed in Article 101 of the Liquidity
Ratio Notification to its NSFR.
3. Other Information Concerning Non-consolidated NSFR
The Liquidity Ratio Notification stipulates the minimum requirement of the NSFR at 100%. The NSFR of SMBC (non-consolidated)
exceeds the minimum requirements of the NSFR, having no cause for concern. In terms of the future NSFR forecasts, SMBC does not expect
significant deviations from the disclosed ratios. In addition, the actual NSFR does not differ significantly from the initial forecast.
■ Disclosure of Quantitative Information about Net Stable Funding Ratio (Non-consolidated)
Item
Available stable funding (ASF) items (1)
1 Capital; of which:
Common Equity Tier 1 capital,
Additional Tier 1 capital and Tier 2
capital (excluding the proportion of
Tier 2 instruments with residual
maturity of less than one year) before
the application of capital deductions
Other capital instruments that are
not included in the above category
2
3
4 Funding from retail and small
business customers; of which:
Stable deposits
5
6
Less stable deposits
7 Wholesale funding; of which:
8
Operational deposits
9
Other wholesale funding
10 Liabilities with matching
interdependent assets
11 Other liabilities; of which:
12
Derivative liabilities
All other liabilities and equity not
included in the above categories
13
14 Total available stable funding
Required stable funding (RSF) items (2)
15 HQLA
16 Deposits held at financial
institutions for operational purposes
Loans, repo transactions-related
assets, securities and other similar
assets; of which:
Loans to- and repo transactions
with- financial institutions
(secured by level 1 HQLA)
Loans to- and repo transactions
with- financial institutions (not
included in item 18)
Loans and repo transactions-
related assets (not included in
item 18, 19 and 22); of which:
With a risk weight of less than or
equal to 35% under the Standardised
Approach for credit risk
Residential mortgages; of which:
With a risk weight of less than or
equal to 35% under the Standardised
Approach for credit risk
24
Securities that are not in default
and do not qualify as HQLA and
other similar assets
25 Assets with matching
interdependent liabilities
17
18
19
20
21
22
23
Current Quarter (From 2023/1/1 To 2023/3/31)
Prior Quarter (From 2022/10/1 To 2022/12/31)
Unweighted value by residual maturity
Unweighted value by residual maturity
No maturity < 6 months
6 months to
< 1 year
≥ 1 year
Weighted
value
No maturity < 6 months
6 months to
< 1 year
≥ 1 year
Weighted
value
(In million yen, %)
7,394,955
7,394,955
0
0
0
0
57,936,395
37,883
19,097,901
38,838,494
68,132,136
—
68,132,136
0
37,883
49,404,973
—
49,404,973
—
—
872,026
1,553,904
0
0
0
0
0
0
5,290,107
—
5,290,107
—
2,524
872,026
1,553,904
2,524
329,735
0
0
2,484,223
9,879,179
7,025,006
2,110,355
9,505,311
7,025,006
373,868
373,868
0
0
0
0
24,695
53,156,441
58,147,184
37,687
0
0
0
0
2,380,508
9,405,515
2,037,802
9,062,809
342,705
342,705
0
53,344,449
0
24,695
19,801,110
—
19,801,110
18,143,006
35,013,435
56,867,665
—
56,867,665
19,561,277
38,585,907
63,866,174
—
63,866,174
0
37,687
51,806,161
—
51,806,161
0
0
4,103,123
—
4,103,123
0
0
16,907,905
—
16,907,905
18,583,213
34,761,235
51,406,623
—
51,406,623
—
11,577
11,577
0
0
—
—
—
1,262
1,129,949
1,677,188
1,262
1,129,949
1,677,188
119,904,549
2,847,314
164,867
414,795
0
—
0
0
0
—
0
0
0
—
0
0
114,156,588
2,685,090
0
207,397
1,513,028
33,860,902
9,455,543
66,020,875
73,863,596
1,592,048
37,139,916
9,024,591
66,197,721
74,775,000
0
1,974,750
5,542
0
2,771
0
1,750,504
0
0
6,435
231,235
11,043,763
2,903,814
11,493,136
14,667,703
294,599
13,918,733
2,714,004
11,733,681
15,307,343
865,008
19,278,512
5,805,311
41,416,700
47,779,705
884,923
19,808,319
5,611,029
41,160,944
47,828,858
726
2,140,746
319,619
948,512
1,372,676
147
2,015,704
298,151
995,664
1,391,327
0
0
292,102
290,846
10,416,813
7,867,606
159,189
158,928
6,390,795
4,313,075
0
0
291,296
290,875
10,334,580
7,811,041
158,321
157,906
6,322,187
4,267,535
416,784
1,271,773
450,028
2,694,225
3,545,809
412,525
1,371,062
408,682
2,968,515
3,821,321
—
—
—
—
—
—
—
—
—
—
26 Other assets; of which:
7,884,646
461,276
81,100
2,867,123
11,130,938
7,872,859
537,636
74,423
2,930,077
11,087,337
29
28
27
Physical traded commodities,
including gold
Assets posted as initial margin for
derivative contracts and contributions
to default funds of CCPs (including
those that are not recorded on
consolidated balance sheet)
Derivative assets
Derivative liabilities (before deduction
of variation margin posted)
All other assets not included in
the above categories
32 Off-balance sheet items
33 Total required stable funding
34 Non-Consolidated net stable funding ratio (NSFR)
30
31
0
0
0
0
548,216
465,984
0
0
100,493
100,493
522,952
444,509
50,120
50,120
109,015
109,015
7,884,646
461,276
81,100
2,218,413
10,564,460
7,872,859
537,636
74,423
2,247,989
10,483,692
110,972,819
2,166,577
90,173,294
132.9%
108,676,241
2,189,870
90,944,697
125.5%
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Basel III Information
Sumitomo Mitsui Financial Group
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.
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 credit
equivalent amounts by the risk-weight designated by the authorities for
each obligor classification (corporates, financial institution, sovereign,
retail, etc.).
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.
Sumitomo Mitsui Financial Group
Basel 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.
Liquidity Ratio Notification
Administrative action and written ordinance for official notification to the
general public of regulations concerning the LCR and NSFR of financial
institutions in Japan which are decided by the Japanese Financial Ser-
vices 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.
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.
Square-root-of-time rule
A method of converting the maximum loss estimated as value at risk
(VaR) for a specific holding period into the maximum loss for a shorter or
longer time period using statistical assumption.
Securitisation transaction
It is a transaction which stratifies the credit risk for the underlying assets
into more than two exposures of senior/subordinated structure and has
the quality of transferring part of or entire exposure to the third party.
Servicer risk
The risk of becoming unable to claim for the collectives, in cases of
which bankruptcy of the supplier/servicer occurs prior to collecting
receivables, in securitisation and purchased claims transactions.
Simple risk weight method
One of market-based approaches for calculating the risk-weighted asset
amount for the equity exposure, etc. by multiplying the listed shares and
unlisted shares with the risk weights of 300% and 400%, respectively.
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Sumitomo Mitsui Financial Group
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 SMBC Bank International plc, 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, 2022 to March 31, 2023)
7
4
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.
304
SMBC GROUP ANNUAL REPORT 2023
Compensation
Sumitomo Mitsui Financial Group
■ 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.
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 vi-
sion.
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 finan-
cial 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 the group, the
Programme targets the variable compensation component of total remuneration at 40%, if paid at standard levels. Corresponding
with performance of SMBC Group and the degree of contribution to realization of a sustainable society, the variable component
could range from 0% to 150% of the standard levels, which shall be determined by corporate titles of the Executives.
In order to enhance shareholding of the Executives and align their interests with shareholders, the Programme targets its stock-
based compensation components at 25% of total remuneration, if paid at standard levels.
II.
III.
VI.
IV. The above target levels shall be appropriately set in accordance with the roles, responsibilities, etc. of each Executive.
V.
Base salary shall be periodically paid in cash and shall be, in principle, determined by the corporate titles of each Executive, reflect-
ing the roles, responsibilities, etc.
Annual incentives shall be determined based on the performance of previous fiscal year of SMBC Group and the business unit each Execu-
tive is accountable for, the degree of contribution to realization of a sustainable society, as well as on the performance of each Executive re-
viewed both from short-term and medium-/long-term perspectives. 70% of the determined amount shall be, in principle, paid as a cash
bonus and the remaining 30% shall be paid under Stock Compensation Plan II (annual performance share plan).
a. Weight by each target index is as follows:
SMBC Banking profit*1
SMBC Net income (Pre-Tax)*2
SMFG Net income*3
Annual growth/Target achievement
Annual growth/Target achievement
Annual growth/Target achievement
Target index
Weight
50%
25%
25%
*1 Adding cooperated profit and loss recorded by SMBC Group companies, etc. in a managerial accounting basis to business profit at Sumitomo Mitsui Banking Corporation.
*2 Income before income taxes at Sumitomo Mitsui Banking Corporation.
*3 The Group’s profit attributable to owners of parent.
* If the Compensation Committee recognizes any element other than the above mentioned target indexes which should be taken into consideration, the Compensation
Committee will, if appropriate, judge the circumstances comprehensively and may adjust the compensation to be paid to the employee by a maximum of 5%, plus or
minus.
b. The degree of contribution to realization of a sustainable society shall be reflected as an adjustment to the score determined in a.,
by a maximum of 10%, plus or minus, based on the annual progress of KPIs and results of major ESG ratings.
VII. Stock compensation plans consist of Stock Compensation Plan I (the “Plan I”), under which the remuneration of the Executives
shall be determined based on the Group’s medium-term performance, etc., Stock Compensation Plan II (the “Plan II”), determined
based on the Group’s annual performance, etc. and Stock Compensation Plan III (the “Plan III”), determined based on corporate ti-
tles, etc.
a. Under the stock compensation plans, the Executives shall receive remuneration via shares of the Company’s common stock. The
transfer of such stock shall be restricted for appropriately defined periods.
b. Remuneration under Plan I shall be determined based on the Group’s performance against the Medium-Term Management Plan,
performance of the Company’s shares, and the percentage of achievement of KPIs with respect to creating social value after the
term the Group’s Medium-Term Management Plan ends. 70% of the evaluation index is determined based on financial index
(Medium-Term Management Plan target), 15% is determined based on share index, and 15% is determined based on non-finan-
cial index. Weight by each evaluation index is as follows:
Evaluation index *1, 2, 3
Financial index
Share index
Non-financial index
ROCET1*4
Base expense*5
Gross profit*6
Net income
TSR (Total shareholder return)
Create social value
Weight
20%
20%
15%
15%
15%
15%
*1 The Compensation Committee determines the evaluation with respect to “Create social value” based on the percentage of achievement of KPIs related to the environ-
ment (FE reduction and amount of sustainability financing provided) and employees (employee engagement and DE&I) as well as the progress of initiatives with re-
spect to the materialities identified by the Group (“Environment,” “DE&I/Human Rights,” “Declining Birthrate & Aging Population,” “Japan’s Regrowth,” and
“Poverty & Inequality”).
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Sumitomo Mitsui Financial Group
Compensation
Compensation
Sumitomo Mitsui Financial Group
*2 (Qualitative evaluation) The Compensation Committee determines the score of maximum 5% plus or minus such figure taking into account comprehensively two
items, which are “Initiatives in new business areas” and “Compliance, customer-oriented initiatives, and risk management.”
*3 (Knock-out provision) In case “CET1 ratio (Post-Basel III reforms basis, excludes net unrealized gains (losses) on other securities)” falls below a designated level at the
end of each fiscal year, “Plan I” for the respective fiscal year becomes null and void.
*4 Post-Basel III reforms basis, excludes net unrealized gains (losses) on other securities
*5 General and administrative expenses excluding “revenue-linked cost,” “prior investment cost” and others
*6 The Company’s consolidated gross profit
c. Remunerations under Plan II shall be determined based on the performance of the previous fiscal year of SMBC Group and the
business unit each Executive is accountable for, the contribution to a sustainable society, 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 above, if the Compensation Committee determines that it is not appropriate to apply the above matters due to the
role of an Executive in each Group company or other reasonable circumstances, or if the Compensation Committee determines that it is
not appropriate to apply the above matters to an Executive domiciled outside Japan, compensation shall be designed on an individual basis
and determined not only in accordance with the above Core Principles, but also with consideration to local regulations, guidelines, and
other local market practices, whilst ensuring the compensation should not incentivize for excessive risk-taking.
Sumitomo Mitsui Financial Group, as a Company with a Nomination Committee, establishes a “Compensation Committee” to resolve
the following:
• The Policy, executive compensation programme including the aforementioned compensation programme and regulations concern-
ing 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 with the President, delegated by the Board of Directors, determining the details of
compensation for each individual, reflecting the assigned roles and responsibilities as well as achievements at SMBC, in light
of the deliberations of the SMFG Compensation Committee.
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
and paid each fiscal year based on the Group’s performance in the previous year, as well as on the performance of the
respective Executive reviewed both from short-term and medium-/long-term perspectives. Stock compensation is determined
and paid based on the progress of targets during the period 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 em-
ployees of certain major consolidated subsidiaries.
■ Type, Total Amount Paid, and Payment Method of Compensation for Officers, Employees and Others of Sumitomo
Mitsui Financial Group and Its Group Companies
Compensation, etc. allocated to the applicable fiscal year
Item
No�
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Number of applicable officers, employees and others
Total fixed compensation (3+5+7)
of which: cash compensation
of which in 3: deferred amount
Fixed compensation
of which: amount of stock compensation or stock-linked
compensation
of which in 5: deferred amount
of which: other compensation
of which in 7: deferred amount
Number of applicable officers, employees and others
Total variable compensation (11+13+15)
of which: cash compensation
of which in 11: deferred amount
of which: amount of stock compensation or stock-linked
compensation
of which in 13: deferred amount
of which: amount of other compensation
of which in 15: deferred amount
Number of applicable officers, employees and others
Amount of retirement allowance
of which: deferred amount
Number of applicable officers, employees and others
Amount of other compensation
of which: deferred amount
Variable
compensation
Retirement
allowance
Other compensation
Total compensation, etc� (2+10+18+21)
(Headcount, millions of yen)
(a)
Officers
(b)
Employees and
others
19
1,142
1,039
—
62
62
40
—
16
752
350
—
402
402
—
—
—
—
—
—
—
—
1,895
440
19,677
18,971
—
384
384
321
—
440
16,610
14,990
3,308
1,619
1,002
—
—
365
1,574
27
29
345
—
38,208
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
—
32
Total amount
—
1,744
One-off recruitment payment
Headcount
Total amount
—
21
—
4
Additional retirement allowance
Total amount
Headcount
—
288
—
8
■ Other Information Regarding Compensation Structures of Sumitomo Mitsui Financial Group and its Group
Companies
Deferred compensation, etc.
(a)
Balance of
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
—
1,666
—
4,998
3,491
12
10,169
(b)
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
—
1,359
—
752
3,424
12
5,548
—
—
—
—
—
—
(d)
With respect to post
allocation
compensation, amount
of fluctuation after
adjustment linked to
fluctuations of criteria
in the applicable fiscal
year
(Millions of yen)
(e)
Amount of
deferred
compensation,
etc� paid in the
applicable fiscal
year
—
—
—
—
—
—
—
—
192
—
1,518
635
10
2,356
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SMBC
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
■ Assessment of Design and Operation of Compensation Structure
Compensation Policy
Compensation Policies for Officers, Employees and Others
Officers subject to compensation disclosure are directors and corporate auditors of SMBC during the fiscal year under review.
(1) For Officers
Compensation
SMBC
(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 SMBC Bank International plc 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
(1) Determination of compensation for officers
Compensation for SMBC’s Directors (excluding members of the Audit and Supervisory Committee) is determined within the limit
approved at a shareholders’ meeting with the President, delegated by the Board of Directors, determining the amount of compensation
for each individual, reflecting the assigned roles and responsibilities as well as achievements at SMBC, in light of the deliberations of the
SMFG Compensation Committee.
The details of the above determination are reported to SMBC’s Audit and Supervisory Committee.
Individual compensation for Directors who are members of the Audit and Supervisory Committee is determined within the scope
approved at a shareholders’ meeting, through discussion by Directors who are members of the Audit and Supervisory Committee.
(2) Determination of compensation for employees
Compensation for employees 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 (2) For Employees and Others” on page 304).
Sumitomo Mitsui Banking Corporation 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
Group Mission while materializing our medium-/long-term vision.
Executive compensation at SMBC shall be determined based on the following concept.
I.
II.
III.
IV.
V.
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 realization of
sustainable 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.
Both external and internal regulations/guidelines on executive compensation shall be observed and respected.
VI.
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.
II.
III.
IV.
V.
VI.
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 the group, the
Programme targets the variable compensation component of total remuneration at 40%, if paid at standard levels. Corresponding
with performance of SMBC Group and the degree of contribution to realization of a sustainable society, 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 of Sumitomo Mitsui Financial Group
(“SMFG”), the parent, the Programme targets its stock-based compensation components of SMFG stocks at 25% of total
remuneration, if paid at standard levels.
The above target levels shall be appropriately set in accordance with the roles, responsibilities, etc. of each Executive.
Base salary shall be periodically 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 performance of previous fiscal year of SMBC Group and the business unit each
Executive is accountable for, the degree of contribution to realization of a sustainable society, as well as on the performance of each
Executive reviewed both from short-term and medium-/long-term perspectives. 70% of the determined amount shall be, in
principle, paid as a cash bonus and the remaining 30% shall be paid under Stock Compensation Plan II (annual performance share
plan).
a. Weight by each target index is as follows:
308
SMBC GROUP ANNUAL REPORT 2023
Target index
SMBC Banking profit*1
SMBC Net income (Pre-Tax)*2
SMFG Net income*3
Annual growth/Target achievement
Annual growth/Target achievement
Annual growth/Target achievement
Weight
50%
25%
25%
*1 Adding cooperated profit and loss recorded by SMBC Group companies, etc. in a managerial accounting basis to business profit at and Sumitomo Mitsui Banking
Corporation.
*2 Income before income taxes at Sumitomo Mitsui Banking Corporation.
*3 The Group’s profit attributable to owners of parent.
* If the SMFG Compensation Committee recognizes any element other than the above mentioned target indexes which should be taken into consideration, the SMFG
Compensation Committee will, if appropriate, judge the circumstances comprehensively and may adjust the compensation to be paid to the employee by a maximum
of 5%, plus or minus.
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SMBC
Compensation
Compensation
SMBC
b. The degree of contribution to realization of a sustainable society shall be reflected as an adjustment to the score determined in a.,
by a maximum of 10%, plus or minus, based on the annual progress of KPIs and results of major ESG ratings.
VII. Stock compensation plans consist of Stock Compensation Plan I (the “Plan I”), under which the remuneration of the Executives
shall be determined based on the Group’s medium-term performance, etc., Stock Compensation Plan II (the “Plan II”), determined
based on the Group’s annual performance, etc. and Stock Compensation Plan III (the “Plan III”), determined based on corporate ti-
tles, etc.
a. Under the stock compensation plans, the Executives shall receive remuneration via shares of the SMFG’s common stock. The
transfer of such stock shall be restricted for appropriately defined periods.
b. Remuneration under Plan I shall be determined based on the Group’s performance against the Medium-Term Management Plan,
performance of the Company’s shares, and the percentage of achievement of KPIs with respect to creating social value after the
term the Group’s Medium-Term Management Plan ends. 70% of the evaluation index is determined based on financial index
(Medium-Term Management Plan target), 15% is determined based on share index, and 15% is determined based on non-finan-
cial index. Weight by each evaluation index is as follows:
Evaluation index *1, 2, 3
Financial index
Share index
Non-financial index
ROCET1*4
Base expense*5
Gross profit*6
Net income
TSR (Total shareholder return)
Create social value
Weight
20%
20%
15%
15%
15%
15%
*1 The Compensation Committee determines the evaluation with respect to “Create social value” based on the percentage of achievement of KPIs related to the environ-
ment (FE reduction and amount of sustainability financing provided) and employees (employee engagement and DE&I) as well as the progress of initiatives with re-
spect to the materialities identified by the Group (“Environment,” “DE&I/Human Rights,” “Declining Birthrate & Aging Population,” “Japan’s Regrowth,” and
“Poverty & Inequality”).
*2 (Qualitative evaluation) The Compensation Committee determines the score of maximum 5% plus or minus such figure taking into account comprehensively two
items, which are “Initiatives in new business areas” and “Compliance, customer-oriented initiatives, and risk management.”
*3 (Knock-out provision) In case “CET1 ratio (Post-Basel III reforms basis, excludes net unrealized gains (losses) on other securities)” falls below a designated level at the
end of each fiscal year, “Plan I” for the respective fiscal year becomes null and void.
*4 Post-Basel III reforms basis, excludes net unrealized gains (losses) on other securities
*5 General and administrative expenses excluding “revenue-linked cost,” “prior investment cost” and others
*6 The Company’s consolidated gross profit
c. Remunerations under Plan II shall be determined based on the performance of the previous fiscal year of SMBC Group and the
business unit each Executive is accountable for, the contribution to a sustainable society, as well as on the performance of each
Executive reviewed both from a short-term and medium-/long-term perspectives. Remuneration paid by restricted shares, they
shall effectively act as deferred compensation.
d. Remuneration under Plan III shall be determined based on corporate titles, roles, and responsibilities, etc.
VIII. In the event of material amendments to the financial statements or material reputational damages caused by the Executives, remu-
IX.
nerations under the Plans could be reduced or fully forfeited.
Notwithstanding the above, if the SMFG Compensation Committee determines that it is not appropriate to apply the above matters due
to the role of an Executive in each Group company or other reasonable circumstances, or if the SMFG Compensation Committee deter-
mines that it is not appropriate to apply the above matters to an Executive domiciled outside Japan, compensation shall be designed on an
individual basis and determined not only in accordance with the above Core Principles, but also with consideration to local regulations,
guidelines, and other local market practices, whilst ensuring the compensation should not incentivize for excessive risk-taking.
I.
This Policy is determined at SMBC’s Board of Directors in light of the “Executive Compensation Policy” determined by SMFG
Compensation Committee.
Compensation for SMBC’s Directors (excluding members of the Audit and Supervisory Committee) is determined within the limit
approved at a shareholders’ meeting with the President, delegated by the Board of Directors, determining the amount of compensa-
tion for each individual, reflecting the assigned roles and responsibilities as well as achievements at SMBC, in light of the delibera-
tions of the SMFG Compensation Committee.
The details of the determination in II above are reported to SMBC Audit and Supervisory Committee.
The specific amount, payment period, and method of compensation for SMBC’s executive officers is determined by the President,
reflecting the assigned roles and responsibilities as well as achievements at SMBC.
Individual compensation for Directors who are members of the Audit and Supervisory Committee is determined within the limit
approved at a shareholders’ meeting, through discussion by Directors who are members of the Audit and Supervisory Committee.
II.
III.
IV.
V.
■ 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
17
977
879
—
54
54
43
—
14
591
277
—
314
314
—
—
—
—
—
—
—
—
1,569
436
19,373
18,689
—
364
364
318
—
436
16,483
14,850
3,283
1,633
1,016
—
—
364
1,547
—
29
345
—
37,749
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
—
32
Total amount
—
1,744
Officers
Employees and others
(c)
(d)
(e)
(f)
(Headcount, millions of yen)
One-off recruitment payment
Headcount
Total amount
—
21
—
4
Additional retirement allowance
Total amount
Headcount
—
288
—
8
■ 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 306).
310
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SMBC
Compensation
Compensation
SMBC
1. Compensation Allocated in the Applicable Fiscal Year (SMBC non-consolidated)
■ Other Information Regarding Compensation Structures of Sumitomo Mitsui Financial Group and its Group
(Headcount, millions of yen)
(a)
Officers
(b)
Employees and
others
Companies
Amount of Deferred Compensation, Etc. (SMBC consolidated)
Deferred compensation, etc.
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)
17
977
879
—
54
54
43
—
14
591
277
—
314
314
—
—
—
—
—
—
—
—
1,569
436
19,373
18,689
—
364
364
318
—
436
16,483
14,850
3,283
1,633
1,016
—
—
364
1,547
—
29
345
—
37,749
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
—
32
Total amount
—
1,744
Officers
Employees and others
(c)
(d)
(e)
(f)
(Headcount, millions of yen)
One-off recruitment payment
Headcount
Total amount
—
21
—
4
Additional retirement allowance
Total amount
Headcount
—
288
—
8
(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
—
1,380
—
4,815
3,588
12
9,796
—
1,155
—
752
3,468
12
5,388
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
157
—
1,518
642
10
2,328
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
—
1,380
—
4,815
3,588
12
9,796
—
1,155
—
752
3,468
12
5,388
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
157
—
1,518
642
10
2,328
312
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SMBC Group Home Page
https://www.smfg.co.jp (Japanese)
Medium-Term Management Plan
https://www.smfg.co.jp/company/strategy/ (Japanese)
https://www.smfg.co.jp/english/ (English)
https://www.smfg.co.jp/english/company/strategy/ (English)
Investor Relations
https://www.smfg.co.jp/investor/ (Japanese)
https://www.smfg.co.jp/english/investor/ (English)
Beyond SMBC Group
https://www.smfg.co.jp/beyond/
Sustainability
https://www.smfg.co.jp/sustainability/ (Japanese)
https://www.smfg.co.jp/english/sustainability/ (English)
DX-link
https://www.smfg.co.jp/dx_link/
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SMBC GROUP ANNUAL REPORT
SMBC GROUP ANNUAL REPORT
2023
2023
YEAR ENDED MARCH 31, 2023
YEAR ENDED MARCH 31, 2023
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