YEAR ENDED MARCH 31, 2024
SMBC GROUP ANNUAL REPORT
2024
“Our Group Mission,” which serves as the foundation for all of our corporate activities,
portrays our mission toward stakeholders.
“Vision” is our medium- to long-term aim for the Group.
“Five Values” represent the core values we share with all SMBC Group employees.
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.
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.
A trusted global solution provider committed to the growth of
our customers and advancement of society
VISION
FIVE VALUES
MISSION
MISSION &
VISION &
FIVE VALUES
FIVE VALUES
MISSION
VISION
SMBC GROUP REPORT 2024 001
048
Become a Leading Company in Creating Social Value
050
The Vision We Seek through Creation of Social Value
Strategies of Business Units
070 Retail Business Unit
074 Wholesale Business Unit
078 Global Business Unit
082 Global Markets Business Unit
086
Creating Social Value through Digital
Special Content
090
Special Content 1 Multi-Franchise Strategy
098
Special Content 2 Evolving Olive
102
Special Content 3 Well-Timed Capital Funding
106
Aiming to Make the Leap to Asset Management
Solutions Provider
Editorial Policy
SMBC GROUP ANNUAL REPORT 2024 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 our sustainability initiatives can be found on the
Company’s 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
expectations 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 “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,”
“probability,” “risk,” “project,” “should,” “seek,” “target,” “will” and similar expressions.
Such forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and actual results may differ from those expressed in or implied
by such forward-looking statements contained or deemed to be contained herein. The
risks and uncertainties which may affect future performance include: deterioration of
Japanese and global economic conditions and financial markets; declines in the value
of our securities portfolio; incurrence of significant credit-related costs; our ability to
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:
FY2023 (April 2023 to March 2024)
Some subsequent information is also included.
Organizations covered:
Sumitomo Mitsui Financial Group and its subsidiaries and affiliates
Published:
August 2024
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.
“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.
Contents
P.004
P.026
P.046
P.108
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
004
A History of Standing Side-by-Side with
Customers and Society
006
Message from Group CEO
016 Interview with Chairperson of the Nomination
Committee
018 Pursuing Further Growth based on the
Foundation Laid by Former Group CEO Ohta
020
Message from Group CFO
026
SMBC Group's Value Creation Process
028
Group Structure
029
Communication with Stakeholders
030
Financial / Non-Financial Highlights
032
Round-Table Discussion with Outside Directors
038
Human Resource Strategies
110
Corporate Governance
126
Risk Management
130
Compliance
132
Customer-Oriented Initiatives
135
Response to Administrative Actions and
Efforts to Prevent Recurrence
136
IT Governance
138
Cybersecurity
140
Internal Audit
141
Sustainability information
142
Financial Review
SMBC GROUP REPORT 2024 003
002
An Era of
Stagnation
An Era of
Fulfilled Growth
In the wake of the era of economic growth and the era
of stagnation mired in bursting of the Bubble Economy
and deflation, the social issues humanity faces today,
including global warming, violations of human rights,
and the spread of poverty and inequality, keep growing
in scale and severity. SMBC Group will leverage the
business infrastructure to contribute to “Fulfilled
Growth” where people feel fulfilled as economic growth
accompanies the resolution of social issues.
2000’s ~ 2010’s
2001 Sumitomo Mitsui Banking
Corporation established
2002 Sumitomo Mitsui Financial
Group established
2004 Promise (now SMBC Consumer Finance)
becomes an equity-method affiliate
2009 Nikko Cordial Securities
(now SMBC Nikko Securities)
becomes a subsidiary
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
disconsolidated, and becomes an
equity-method affiliate
2019 Bank BTPN becomes a subsidiary
Sumitomo Mitsui DS Asset
Management established
2020’s
Although the bursting of the Bubble Economy
turned the disposal of bad loans into a major
challenge for banking management, the “Japanese
Big Bang” expanded the scope of banks’ operations.
Banks began to draw up growth strategies taking
advantage of this expanded scope of business, while
strengthening defenses against financial instability.
Sakura Bank and Sumitomo Bank also steered a
course toward merger.
Sumitomo Mitsui Financial Group, following the
establishment, added new functions to the Group in
the areas of consumer finance and securities, and
spread our operational and geographic wings to work
toward top-line growth. The non-performing loan
ratio, which had weighed heavily on our business,
was reduced by half after the merger, and public
funds were fully repaid in 2006.
At the same time, we were forced to adapt to
changes of the environment, including a global
financial crisis, negative interest rate policy in
Japan, and the resolution of Base III finalization.
1990’s
1960’s
1980’s
Japan entered an era of rapid economic
growth with an average real GDP growth rate
of 10%. Mitsui Bank and Sumitomo Bank, the
predecessors of Sumitomo Mitsui Banking
Corporation, supported this growth through
the proactive supply of financing.
Corporates expand their capital expenditures and
financial operations by low interest rates and low-cost
financing from capital markets with the arrival of the
Bubble Economy. At the same time, the competitive
environment for banks intensified, as a result of
interest rate liberalization, etc. Banks increased
high-risk, high-return lending such as real estate
investment and financial engineering.
An Era of
Economic
Growth
A History of Standing
Side-by-Side with
Customers and
Society
SMBC Group has long 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.
2021 Invested in RCBC
Invested in Jefferies
FE Credit becomes an equity-method affiliate
Fullerton India (now SMFG India Credit Company)
becomes a subsidiary
2022 Invested in SBI Holdings
2023 CCCMK Holdings
becomes an equity-method affiliate
RCBC becomes an equity-method affiliate
VPBank becomes an equity-method
affiliate
2024 OTO/SOF becomes a subsidiary
MITSUI
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”
Innovation of Business Practices
Achieved better life for people in the
city of Edo by anticipating potential
needs
SMBC GROUP REPORT 2024 005
004
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Management Messages
Create Social Value / Pursue Economic Value
Message from group CEO
Make a
breakthrough.
O
ffload Pass. In rugby, this is a maneuver in
which the player with the ball, while being tack-
led, hands it off to his teammate running be-
hind him. The player releases the ball with an unwavering
trust that his teammate will successfully receive the pass
and continue the play. My predecessor, Jun Ohta, never
gave up in his battle against his illness and kept on pushing
forward until the very end. He passed away on November
25, 2023, while still pushing forward and firmly passed the
ball of corporate leadership to the next generation.
For many years, I ran side-by-side with Mr. Ohta and
witnessed firsthand his powerful drive and commitment
as SMBC Group made great progress as a consolidated
financial group under his leadership. He was a business
leader who embodied the “Think Big, Start Small” mentali-
ty. When making an important decision, he always applied
a bird’s-eye view while considering relevant matters from
a long-term perspective. After deciding upon a direction,
Mr. Ohta would focus on producing the expected results.
By continuously applying this mentality, he was able to
build an impressive track record. He was also a business
leader who had a big heart. Whenever I was unsure how to
proceed with a certain matter and consulted with Mr. Ohta,
he would always encourage me by saying, “Don’t worry so
much. Do your best.”
I was officially appointed as the successor and Group
CEO on December 1 after taking on the role of acting
president, entrusted with the ball of corporate leadership
that Mr. Ohta had carried. I was filled with deep sorrow,
and I would be lying if I said I wasn’t nervous about taking
on this critical role in such an unexpected and sudden
manner. However, we cannot stop while the ball is still in
play. I committed myself to pushing forward, keeping firmly
in mind the responsibility of carrying on his vision.
Toru Nakashima
Director President and Group CEO
The Responsibility and Determination Necessary to
Inherit the Ball of Corporate Leadership
SMBC GROUP REPORT 2024 007
006
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Management Messages
Create Social Value / Pursue Economic Value
My First Step as Group CEO
My Vision for SMBC Group
Keeping this ball, containing the assets and strengths
built up by our predecessors, close to our hearts,
we will pursue SMBC Group’s 2030 Vision of becoming
“a trusted global solution provider committed to the growth of
our customers and advancement of society.”
T
he first thought that came to my mind was that
Mr. Ohta’s sudden passing would have been
received as complete surprise both internally
and externally, and there were sure to be stakeholders
who felt uneasy about SMBC Group’s business directions,
etc. As such, after being named Group CEO I immediately
communicated with our stakeholders to reassure them
that there would be no change in SMBC Group’s business
directions and strategies in spite of a change in leadership.
I particularly focused on quickly removing any
confusion and unease among SMBC Group employees,
as it was essential to prevent any disruption to the quality
of service we provide to our customers. On December 8,
the week following my official designation as Group CEO, I
communicated with our senior managers via the Executive
Officers Meeting, and on December 11, I sent out a Group-
wide email to all of our employees. Through such efforts,
I conveyed the message that we will join together and
overcome any challenges we may face.
For our shareholders and investors, in addition to
holding an investors meeting on December 18, I traveled
to Europe, including the UK, in January and met with
major investors to directly convey my vision and thoughts
I
n the six months that have passed since I became
Group CEO, I have spent a lot of time thinking
about the ball passed to me by Mr. Ohta. I have also
carefully considered my vision for SMBC Group, which I
am striving to realize while working each day to ensure the
smooth transition of our management team.
What does the ball I inherited consist of? One key
component is the unwavering trust of our stakeholders that
our predecessors and employees have built over the years.
It goes without saying that this is SMBC Group’s most
important asset. I believe this trust is built upon our cor-
porate DNA as merchants, which has been passed down
through the centuries by our predecessors at Mitsui and
as the new Group CEO. At the same time, I spoke with key
customers and business partners with whom Mr. Ohta had
developed direct ties to request their continued support
and coordination. On March 7, we held a special ceremony
to pay our final respects to Mr. Ohta.
By communicating with our stakeholders, I was able
to maintain our momentum and bring FY2023 to a strong
finish. Thanks to our various stakeholders, we were able to
declare a record profit for Mr. Ohta’s final year as Group
CEO. I would like to take this opportunity to once again
express my sincere appreciation.
Sumitomo. These two companies, which began as kimono
merchants and copper smelters respectively, both have
a history of growth and development spanning more than
300 years. Our corporate DNA, as excellent merchants,
made this story of growth and success possible. Our
forebears thought for themselves, displayed courage, and
acted boldly when required. Rather than being blinded by
self-interest, they carefully nurtured their businesses in the
spirit of sampo-yoshi – valuing actions that benefit not only
the company but society and customers as well.
Another item I inherited is the two “wings” -- business
scope and operating region -- that have grown over the
past 20-odd years since the launch of SMBC Group. Estab-
lished in 2002, we have steadily expanded our presence in
terms of both business scope and operating region, grow-
ing from a domestic, commercial bank centered business
model in response to the changing business environment
and the needs of customers and society. In terms of our
business scope, we have grown into a top-level financial
conglomerate in Japan by acquiring and developing credit
card, leasing, IT/think tank, consumer finance, securities,
trust banking, and asset management businesses. As for
our operating region, in addition to our traditional focus
of supporting Japanese corporations to expand overseas,
we have focused on deepening transactions with foreign
corporations and strengthening our capabilities in project
finance and other businesses requiring high levels of
expertise. At the same time, through investments and
acquisitions, we have established a presence in aircraft
leasing, overseas securities, and Asian commercial banks/
non-banks. We are now a global financial institution in
which more than half of our employees are stationed out-
side of Japan. By expanding our two wings in this manner,
SMBC Group has been able to considerably increase
our market capitalization by meeting and exceeding the
market’s expectations while enhancing our status within
Japan’s financial sector and among Japan’s megabanks.
Keeping this ball, containing the assets and strengths
built up by our predecessors, close to our hearts, we will
pursue SMBC Group’s 2030 Vision of becoming “a trusted
global solution provider committed to the growth of our
customers and advancement of society.” This Vision was
established in 2019 when Mr. Ohta was named Group CEO,
and I assumed the position of Group CFO and CSO. The
concept of "trusted" stated at the beginning of our Vision
has been passed down as a basic management principle
since the establishment of SMBC Group. I want to make
sure that this “trust” continues to be passed on, and I
want us to fulfill our responsibilities as a public institution
“committed to the growth of our customers and society” as
stated in our Vision. By doing so, I want to establish SMBC
Group as the most trusted brand in its field.
The word “global solution provider” represents two
thoughts. The first is “global.” This means becoming a
player that has a solid presence and track record in the
global market based on a robust management foundation
in Japan. The second is “solution provider.” This reflects
our belief that it is no longer enough to stay within the
framework of financial institutions to solve the problems
of our customers and society. I want to make SMBC Group
soar to new heights by further expanding and strengthen-
ing our two wings.
My vision cannot become a reality by my efforts alone.
As in rugby, teammates who share the same vision are
essential to success. SMBC Group has more than 120,000
talented employees spread across 38 countries and re-
gions who share the same aspirations. Social and econom-
ic value that SMBC Group creates is the result of each one
of our 120,000 employees, who come from a diverse range
of backgrounds, creating their own unique value. As Group
CEO, I want our employees to place great value on “Integ-
rity,” “Passion,” and “Solidarity.” “Integrity” reflects our
desire to become true professionals who go beyond com-
SMBC GROUP REPORT 2024 009
008
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Management Messages
Create Social Value / Pursue Economic Value
Enhancing SMBC Group’s Corporate Value
plying with the applicable rules and regulations. We must
face our customers head-on in a fair and sincere manner
and win in a proper way in the arena of business. “Passion”
reflects our unwavering commitment and desire to contrib-
ute to our customers and society, and our desire to proac-
tively take appropriate risks that will lead to the growth of
our customers and of SMBC Group. “Solidarity” reflects our
commitment to creating a strong “One Team.” That means
gathering our diverse strengths together into a scrum and
drawing out each other’s strengths by helping, supporting,
and competing together. In addition, I established “Make a
breakthrough.” as the shared slogan of SMBC Group. This
carries on the essence of Mr. Ohta’s slogan “Break the
Mold,” which reflected his desire to transform our mindsets
by getting rid of stereotypes, as well as our focus on the
logic of precedent and organization. My slogan reflects my
desire to have the courage to take this transformation even
further via concrete actions. I want each of our employees
to have the “Make a breakthrough.” mentality and work
together to realize our Vision.
T
he first step in realizing my vision and enhancing
our corporate value is to bring our Medium-Term
Management Plan that launched last year to a
successful conclusion.
We focused on discipline and accumulated capital
during the Plan, which covered FY2017-2019, with the
negative interest rate environment and the enhanced
capital requirements of Basel III finalization. In the next
Plan, covering FY2020-2022, given our increased financial
soundness, we shifted our focus to “Transformation &
Growth.” Our goal in the current Plan is to further accel-
erate the good momentum that we have developed so far
while at the same time upgrading our various initiatives.
SMBC Group will strive to realize “Fulfilled Growth” by
following our core policies of “Create Social Value,” “Pursue
Economic Value,” and “Rebuild Corporate Infrastructure.”
Our Environment
The current Medium-Term Management Plan started
under a cloud of uncertainty triggered by the bank failures
in the U.S. However, our business environment has
developed into a more positive one than initially projected
with the yen’s depreciation, the rising stock markets, and
the plateauing of high interest rates in the U.S. acting as
tailwinds for our profitability.
If we turn our attention overseas, the Russia-Ukraine
war and the conflict in the Middle East show no sign of
coming to any form of conclusion, and there are increasing
concerns about a slowdown in China’s economy. In
addition, we must pay close attention to the fiscal policies
and the health of the major economies, the outcome of key
elections and their impact on politics, and heightening geo-
political risk. However, the strength of the U.S. economy
continues to exceed expectations, despite the current high
inflation, and we expect a soft landing.
In Japan, the negative interest rate regime that lasted
eight years has been discontinued, and we are finally
moving toward the nation’s re growth. In the corporate
sector, it is clear that many corporations have undertaken
bold investments for growth and daring business structure
reforms with the aim of enhancing their global competi-
tiveness. Many corporations are also engaging in earnest
efforts to realize a sustainable society. As for individuals,
we expect to see an expansion in consumption resulting
from rising wages and an acceleration in the trend of “from
savings to asset formation” with the introduction of the new
NISA framework and a robust market environment.
SMBC Group, under the healthy business environ-
ment, is determined to contribute to Japan’s regrowth by
supporting the forward-looking activities of corporate and
individual customers. We will proactively engage in healthy
risk taking by making bold decisions and carefully judging
risks as financial professionals while walking hand-in-hand
with our customers.
Pursue even greater heights
While engaging in communications with our investors as
Group CEO, I strongly felt the importance of accurately
conveying our direction and goals to investors.
Traditionally, SMBC Group has set financial targets as
the minimum benchmarks we have to accomplish even in
downside scenarios. We would revise our forecasts upward
during the fiscal year if the risks we initially assumed did
not arise. Especially for FY2023 and the current Medi-
um-Term Management Plan, we set quite conservative
assumptions given the backdrop of high uncertainty in
global financial markets. As a result, not only did we revise
our bottom-line profit target upwards by ¥100 billion during
the fiscal year, we exceeded the revised target by more
than ¥40 billion. This meant that we had exceeded the
Plan’s final year’s profit target in the first year.
While announcing conservative forecasts at the start
of the fiscal year helps us to prevent investors from being
exposed to the negative surprise of not achieving targets,
it can also convey a lack of confidence or the misunder-
standing that there are undisclosed risks. Therefore, for
FY2024 we based our forecasts on “most likely” scenarios
and revised the preconditions on which our business plans
had been formulated based on the assumption that the
current robust business environment would continue. In
my job isn’t going well or when I’m about to give up.
In addition, the values of “Integrity, Passion, and
Solidarity” that I communicated to our Group employees
are something I borrowed from the core values of World
Rugby. Mr. Tetsunosuke Onishi, the father of Japanese
rugby, believed the game provided the opportunity to learn
fairness and honesty. He repeatedly told his players: “Be
fair, be honest” and “There is no meaning in victory if we
injure our opponents, even if the rules allowed the play,”
even when victory was on the line and both teams were
playing intensely. This episode made a lasting impression
on me, and I summarized this impression in the value of
“Integrity,” which I constantly kept in mind as I carried out
my professional duties and share this with our employees.
The finals of the Japan Rugby League One play-off
tournament took place in May. Mr. Shota Horie, who
retired following the season, said in the post-match
interview: “I will not play rugby again, even if I am reborn.”
His words remain in my heart. He had truly given 100%.
I believe Horie was able to say those words because he
had consistently given his all to rugby over the years and
he truly had no regrets. I want to be in such a state of
mind when I pass the ball I inherited from Mr. Ohta to the
next successor. I want to give my whole body and soul to
leading SMBC Group.
I spent my seven years of high school and university im-
mersed in rugby. My experiences during those years form
the basis of who I am today.
During my high school days, we did not win many
games, even though we trained very hard. That was a very
frustrating experience for me. One memory that particu-
larly stands out is when we lost a match that we absolutely
did not want to lose, and we were in tears. Our coach
told us: “You should be embarrassed for crying because
you lost. You should be thinking about how to get better
instead of crying.” My feeling of frustration and determina-
tion to win taught me to keep on going and try harder when
Rugby and Me
Column
SMBC GROUP REPORT 2024 011
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Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Management Messages
Create Social Value / Pursue Economic Value
While financial institutions’ share prices are
quite susceptible to changes in the macro-environment,
we will strive to raise both our ROE and PER
so that we are able to maintain a PBR over 1.0,
even under a challenging business environment.
addition, by further advancing the initiatives established
under the Medium-Term Management Plan, we are aiming
to once again exceed our past profit record, and achieve,
for the first time as SMBC Group, a bottom-line profit of
more than ¥1 trillion.
At the same time, we have increased our five-year
ROE (Return on Equity) target, a timeframe which
encompasses the next Medium-Term Management Plan.
Last year, we brought forward the Tokyo Stock Exchange
standard ROE target of 8% that had originally been
planned as the goal for the next Medium-Term Manage-
ment Plan. We will strive to reach an ROE of 8% by the
final year (FY2025) of the current Plan and an ROE of 9%
by the final year (FY2028) of the next Medium-Term Man-
agement Plan. In order to realize this goal, we will strive to
increase our bottom-line profit, the numerator, to a level
well above ¥1 trillion.
Strive to enhance ROE
Our share price has risen significantly over the past year,
and our PBR (Price to Book Ratio) recovered from 0.58 as
of the end of FY2022 to 0.86 as of the end of FY2023. Fur-
thermore, it reached to 1.0 in July 2024. However, as Group
CEO, I firmly believe that this is an issue I must continue to
improve. While financial institutions’ share prices are quite
susceptible to changes in the macro-environment, we will
strive to raise both our ROE and PER (Price Earnings Ratio)
so that we are able to maintain a PBR over 1.0, even under
a challenging business environment.
As for our ROE, we must grow our bottom-line profit,
the numerator. We will focus on enhancing asset light
businesses which do not rely on our balance sheet,
realizing the upside of existing growth investments, and
controlling expenses.
On the domestic front, given our expectations that
interest rates will rise, we will rebuild our retail business
model into a stabler and more efficient one. We will do this
through the digital transformation of our business model
with Olive as the cornerstone and by working to create and
deploy a consolidated SMBC Group channel that merges
our commercial banking, trust banking, and securities
capabilities. Through such efforts, we will strive to become
No.1 in the domestic retail business sector. Furthermore,
in our domestic wholesale business, we will enhance prof-
itability by strengthening our commission-based business
that leverages SMBC Group’s comprehensive capabilities.
An example is enhancing our sector capabilities and
global coordination in our domestic CIB (Corporate and
Investment Banking) business with large corporations, real
estate brokerage, and corporate settlements.
Overseas, we will strive to further enhance our
business’ position as the growth driver of SMBC Group by
building a growth-oriented portfolio. Some examples of
these efforts include strengthening our global CIB business
through our partnership with Jefferies in the U.S. market,
which is not only the largest market in the world but also
stable, and realizing the anticipated revenue from our
Multi-Franchise Strategy, a strategy in which we aim to
create a second and third SMBC Group in the four Asian
countries of India, Indonesia, Vietnam, and the Philippines.
As for cost control, we will apply firm control over base
expenses by continuing ongoing efforts to reduce costs via
the transformation of our domestic business model, con-
solidating Group functions, and enhancing the efficiency
of our overseas business. In addition, we will replace the
components of our business portfolio to enhance capital
efficiency, shift from low profit to high profit assets, and sell
assets with unrealized gains.
Increase PER
To improve PBR, we have to improve PER in addition to
boosting ROE. We will further evolve our policy of “Transfor-
mation & Growth” which continues from the previous Plan
and focus on businesses that will lead to medium- to long-
term growth, for example Olive, the global CIB business,
and our Multi-Franchise Strategy. Through these efforts
we will expand our growth momentum and increase our
expected growth rate.
In addition, we must control our capital costs to im-
prove our PER and rebuilding our corporate infrastructure
is a key part of this initiative. To realize “Quality builds
Trust,” a key phrase that reflects our commitment to
enhancing the quality of our operations to a level that wins
the trust of our stakeholders, we will work to improve our
governance and compliance capabilities -- both important
prerequisites for running a business, and embed a healthy
culture in all corners of our organization. In FY2023, Ms.
Jenifer Rogers and Mr. Charles D. Lake II joined the Board
of Directors, and we have been engaging in lively discus-
sions. From FY2024 the ratio of Outside Directors exceeds
50%, and we will continue to enhance our governance
capabilities by further expanding our diversity.
We will proactively invest in IT from the two per-
spectives of building a stable, reliable IT framework and
creating new businesses. Generative AI is an important
technology that could bring about major change to how
business is conducted in finance, and I want to promote
its use from the top. An environment already exists in
SMBC Group in which many employees use AI, as we are
conducting training sessions to instill the skills necessary
to apply AI to employees’ tasks. Our call centers are also
undergoing an increase in efficiency due to the application
of AI. While AI is a major pillar in our efforts to enhance
efficiency, at the same time we are studying initiatives to
use AI to increase our top-line revenue. For example, if
an AI-equipped avatar were able to provide our individual
customers with investment advice online regarding mutual
funds, insurance, and other financial products, I believe
our asset management business model would undergo a
major transformation.
In addition, we will expand investments in our per-
sonnel, which forms the basis of our competitiveness, and
carry out Human Capital Management. In a world where
views on work and lifestyles are continuously evolving, it is
crucial for SMBC Group to be the company of choice for
diligent and hardworking professionals. As Group CEO, I
will support our employees as they take bold new steps. My
goal is to foster an environment where each employee can
achieve self-actualization through their work, driven by a
passionate desire to contribute to customers and society.
Regarding our equity holdings, our clients’ attitude
has been changing with the backdrop of robust share
prices and investors’ demand for better governance. We
will push forward with our reduction efforts. In addition,
we will reduce capital costs by enhancing our information
disclosure to reduce the information gap, both financial
and non-financial, with investors.
See page 022 on “Financial Targets for FY2024 and Financial Results
to Achieve in Five Years Time.”
SMBC GROUP REPORT 2024 013
012
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Management Messages
Create Social Value / Pursue Economic Value
Create Social Value
In Closing
Capital Policy/Shareholder Returns
We will strive to create social value based on the mindset of
“full participation,” including myself, and create a framework that will give
birth to a positive environment to create social value by
collaborating with various stakeholders.
M
any social issues, including global warming,
human rights violations, and increasing pov-
erty/inequality have worsened, and measures
aimed at solving these issues are becoming a major theme
facing business leaders. I believe that efforts to resolve
these issues can lead to an improvement in PER through
enhanced expected growth rate and reducing capital costs.
The Medium-Term Management Plan has positioned
Create Social Value as one of the key pillars of our business
strategy, and we will proactively engage in these areas as
we believe it will contribute to profits over the long term.
We have established “Environment,” “DE&I/Human Rights,”
“Poverty & Inequality,” “Declining Birthrate & Aging Popu-
lation,” and “Japan’s Regrowth” as our materiality and set
goals for each materiality.
One year has passed since the current Plan was
launched and it has become clear how we need to ap-
proach these themes. This year, we will further develop and
refine the necessary frameworks/capabilities and begin our
efforts in earnest.
Considering that many first-class global companies
return about 1% of their profit to society, we have decided
to give back as well, with our belief that SMBC Group’s
success would not have been possible without the support
of customers and society, and that we should repay this
support. We will allocate ¥10 billion (about 1% of our bot-
tom line profit) to the creation of social value. In addition,
we have established an investment fund of ¥40 billion for
the purposes of creating and developing businesses with
“
I don’t believe in magic. I believe in hard work.”
These are the words of Richie McCaw, a rugby
legend who captained the All Blacks, New Zea-
land’s national rugby team, to back-to-back rugby world
championships in 2011 and 2015. I believe that this also
applies to running a business. There is no magic way to
become “a trusted global solution provider committed to
the growth of our customers and advancement of society.”
I strongly believe that the ongoing, everyday efforts of every
one of our employees is what will lead SMBC Group to
W
e will make sure our shareholders benefit
from the corporate value that has increased
via the various initiatives I have shared with
you. The optimal distribution of capital is an important
factor in enhancing ROE. We will pay even closer attention
to balancing shareholder returns and investment for
growth while maintaining financial soundness. Dividends
remain our principal approach to shareholder returns and
we will maintain our progressive dividend policy and divi-
customers, developing new technologies, and cultivating
new businesses.
Going forward, every one of SMBC Group’s employees
will contribute to customers, regions, and industries that
are facing various social issues, with passion and owner-
ship based on the mindset of “I want to help customers”
and “I want to contribute to society.”
We will strive to create social value based on the
mindset of “full participation,” including myself, and create
a framework that will give birth to a positive environment to
create social value by collaborating with various stakehold-
ers. I aim to soon make the impact that SMBC Group has
on society and the environment more visible.
SMBC Group will contribute to “Fulfilled Growth” so that
people can live their lives with happiness, by leading both
economic growth and supporting social advancements.
further growth and success.
I want to make SMBC Group a financial group that
fights and wins fairly while gaining the unwavering trust
of our customers and society in and outside of Japan. It
is with this mindset that I will stand at the forefront of our
120,000 employees as Group CEO and boldly walk the path
to realize this vision.
I would like to ask for the continued support and
understanding of all our stakeholders.
dend payout ratio target of 40% while realizing an increase
in dividend payments by growing our bottom-line profit. We
have increased our dividend forecast for FY2024 by ¥60,
from ¥270 to ¥330 per share to maintain a dividend payout
ratio of 40% based on our bottom-line target over ¥1 tril-
lion. Under a policy of engaging in flexible share buybacks,
we announced a buyback program of ¥100 billion in May
2024. We will consider additional share buybacks during
the fiscal year based on various factors.
SMBC GROUP REPORT 2024 015
014
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Management Messages
Create Social Value / Pursue Economic Value
Mr. Toru Nakashima was selected as the new
Group CEO following Mr. Jun Ohta’s sudden and
unexpected passing. What sort of discussions did
the Nomination Committee engage in during the
selection process?
I was deeply saddened by Mr. Ohta’s passing, and I would
first like to express my deepest condolences to his family,
friends, and colleagues.
The Nomination Committee of SMBC Group engages
in regular discussions regarding the succession plan,
including a contingency plan to address unforeseen
circumstances, and plans activities from an early stage.
We commenced discussions in earnest regarding potential
successors in 2021, and in 2022 we clearly stipulated the
qualities we felt a successful leader would need. Following
this, based on recommendations from the executive side,
we identified candidates and discussed who was best
qualified to become a top management of SMBC Group
based on their career, track record, personality, etc. We
held careful discussions for more than two years. As such,
What do you expect from Mr. Nakashima as he
leads SMBC Group to further growth?
In a nutshell, we expect to see Mr. Nakashima lead efforts
to increase SMBC Group’s corporate value. As a first step it
is crucial that the strong momentum and direction estab-
lished under the leadership of Mr. Ohta in terms of strategy
and financial results are strengthened. Specifically,
executing the Multi-Franchise Strategy in Asia, promoting
alliances both in and outside of Japan, enhancing the
domestic wholesale business, and further strengthening
Olive, SMBC Group’s comprehensive financial service for
individual clients. Such efforts will allow SMBC Group to
further enhance its business performance. In addition,
we expect SMBC Group to give every effort to support the
realization of Japan as a leading asset management center,
a national policy announced by the Japanese government
in December 2023, in addition to engaging in a variety of
other efforts to create social value.
There have been numerous discussions at Board of
Directors meetings concerning Create Social Value, and
SMBC Group’s vision is gradually taking shape. The most
important factor identified during the discussions was
our employees. For SMBC Group to successfully create
social value, it is vital for every employee to go beyond the
boundaries of their respective responsibilities, raise their
awareness regarding social value, and take part in efforts
to create social value. To make this a reality, I believe the
focus cannot solely be internal. Rather, a high level of
sensitivity must be developed and maintained regarding
the mindset and expectations of external parties and of
society. Having all SMBC Group employees take part and
respecting their diverse values and opinions will help the
Group well understand the views of those outside the
company or in society.
Of course, it goes without saying that Create Social
Value does not simply mean contributing to society. It
is important to pay careful attention to how activities
aimed at creating social value can also be tied to pursuing
economic value, thereby contributing to the enhancement
of SMBC Group’s corporate value. Solving social issues in
turn leads to SMBC Group’s development and the growth
of its employees, allowing for the Group, its employees,
I am confident that we were able to thoroughly discuss the
succession plan.
When discussing the qualities we felt top manage-
ment should possess, we focused on ability, behavioral
characteristics, and personality. For ability, we established
“broad perspective,” “deep insights,” “DX literacy,” “lead-
ership,” “risk sensitivity,” and “communication ability” as
key factors. For behavioral characteristics, in addition to
“customer-orientated attitude,” we established “attitude
toward sustainability,” “decision-making skills,” and “ability
to take the initiative and set examples” as key factors.
Finally, for personality, we identified “moral character,”
“ethics,” “courage,” and “patience” as important.
The Nomination Committee identified Mr. Nakashima
as an individual possessing the necessary character,
insights, and abilities. Not only does he possess these
necessary characteristics, but thanks to his experience as
Group CFO and Group CSO, he also has the ability to see
the big picture when planning strategies and boasts a wide
personal network spanning various groups.
and society to prosper together. This type of story needs
to become a reality. For example, decarbonization is
closely tied with SMBC Group’s main businesses. Through
sustainable finance, I hope to see the Group lead Japan’s
industrial sector’s self-driven decarbonization efforts.
Can you share with us the discussions by the
Nomination Committee regarding the develop-
ment and selection of the next generation of
management candidates?
SMBC Group did not suffer from any major upheaval when
it underwent its sudden and unexpected change in top
management. This reinforced the importance of having a
thorough, high-quality succession plan in place.
The Nomination Committee is discussing the develop-
ment and selection of the next generation of management
candidates. The selection criteria are, in essence, the
qualities I shared with you earlier. Successful candidates
must embody SMBC Group’s Mission, while also possess-
ing the necessary track record and experience. In addition,
as part of efforts to develop next generation managers,
third party assessment and coaching were introduced after
their merits were discussed by the Nomination Committee.
The purpose is to ensure the candidates understand how
they are viewed by an external party and provide them with
an opportunity to reflect on their characteristics. By doing
so, we want the candidates to develop a style of leadership
that fits those characteristics.
I strongly believe that the Group must avoid becoming
siloed, or bureaucratized, with its continued growth. If this
became a reality, it would interfere with Create Social Value
by encouraging the inward-looking mindset that I spoke of
before. This is why future members of the Group’s top and
senior management, much like Mr. Nakashima, Mr. Ohta,
and other past leaders, must engage in spirited discussions
that overcome the boundaries of position and Group
companies, and play a leading role in creating an open
environment in which the voices of each employee can be
heard. I will do my best as Chairperson of the Nomination
Committee to support SMBC Group in its efforts realize the
sustainable growth of its corporate value.
Outside Director
Chairperson,
Nomination Committee
Yoshinobu
Tsutsui
Q
Q
Q
Interview with
Chairperson of the
Nomination Committee
Selection Process of a New
CEO and Expectations for
Mr. Nakashima
SMBC GROUP REPORT 2024 017
016
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Management Messages
Create Social Value / Pursue Economic Value
Pursuing Further Growth based on the
Foundation Laid by Former Group CEO Ohta
Jun Ohta, who led SMBC Group since assuming the office of CEO in April 2019, passed away in November 2023.
He led SMBC Group with foresight and broad knowledge. Under the slogan “Break the Mold,” he created an
environment where all employees are able to take on challenges through unbound creativity and demonstrate their
abilities to the fullest, instilling the organization with a culture of transformation.
In the Medium-Term Management Plan “Plan for Fulfilled Growth” that began in FY2023, CEO Ohta made Create
Socail Value a pillar of management to contribute to “Fulfilled Growth” where people feel fulfilled as economic
growth accompanies the resolution of social issues.
SMBC Group will continue to pursue our “Plan for Fulfilled Growth” with a spirit of challenge and aim to grow even
more vigorously based on the foundation laid by former CEO Ohta.
Jun Ohta assumed the office of CEO in April 2019 and, under the slogan “Break
the Mold,” promoted transformation in line with the times through outside-the-box
thinking, not an extension of conventional thinking.
Medium-Term Management Plan “Plan for Fulfilled Growth” started in April 2023, made Create Social Value a pillar
of management and sets a goal of contributing to “Fulfilled Growth.”
Carrying this direction forward in a constructive manner, we will continue tackling solutions to social issues from
a medium- to long-term perspective, increase stakeholders’ growth expectations by achieving sustainable growth,
and pursue the enhancement of corporate value.
Former CEO Ohta put forth our new VISION of becoming “A trusted global solution provider committed to the
growth of our customers and advancement of society” in FY2020 toward 2030 and pursued growth.
He encouraged employees to tackle new businesses without
the constraints of precedents and fixed ideas under "Produc-
ing New CEOs."
Through initiatives such as internal SNS and a
free dress code policy, CEO Ohta advanced the
creation of an environment where all employees
can demonstrate their abilities to the fullest and
find motivation.
Under our Multi-Franchise strategy, He built a platform through invest in financial institutions in India, Indonesia, Vietnam, and the Philippines to capture
growth in the countries.
In the U.S., SMBC Group formed a capital alliance with Jefferies in July
2021, announced additional investment and strengthening the alliance in
April 2023, and continue to expand our partnership.
Discussion with Mr. Soh Kuramoto, the founder of Furano Field
Olive, integrated financial service for retail customers, was released in
February 2023.
1982 Joined Sumitomo Bank
2009 Executive Officer of SMBC
2012 Managing Executive Officer of SMBC
2013 Managing Executive Officer of the Company
2014 Senior Managing Executive Officer of the Company
Senior Managing Executive Officer of SMBC
Director of the Company
2015 Director and Senior Managing Executive Officer of SMBC
2017 Director and Deputy President of the Company
Resigned as Director of SMBC
Director Deputy President and Corporate Executive Officer of the
Company
2018 Director and Deputy President of SMBC
2019 Director President of the Company
Resigned as Director of SMBC
Pursue Economic Value
Rebuild
Corporate
Infrastructure
Growth
with
Quality
VISION
Transformation &
Growth
Quality
builds Trust
Create Social Value
Contribute to
“Fulfilled Growth”
A trusted global solution
provider committed
to the growth of
our customers and
advancement of society
SMBC GROUP REPORT 2024 019
018
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Management Messages
Create Social Value / Pursue Economic Value
FY2023 started under challenging circumstances with
uncertainties in markets arising from the bankruptcies of
financial institutions in the U.S. and concerns regarding a
slowdown in the global economy. However, Japan’s econ-
omy experienced a turnaround and overseas economies
proved to be more resilient than anticipated. In such an
environment, in Japan we expanded our retail client base
through Olive while also capturing opportunities arising
from the funding needs resulting from revitalized corporate
activities. Outside of Japan, we steadily carried out our
Multi-Franchise Strategy in Asia and strengthened our
CIB business via the partnership with Jefferies, a major
investment bank in the U.S.
As a result, all of our Business Units produced solid
growth, and combined with the positive environmental
factors, such as the yen’s depreciation, rising stock mar-
kets, and plateauing of high interest rates in the U.S., we
were able to generate consolidated net business profit of
¥1.5602 trillion, a year-on-year increase of ¥283.8 billion.
We will enhance our corporate value in a sustainable
manner by capturing opportunities arising from the
positive business environment, while making sure to
accelerate the execution of our initiatives, striving to
realize high profit growth, and enhancing our ROE.
This is a record figure for SMBC Group. Furthermore,
we increased our target profit attributable to owners
of parent during the fiscal year by ¥100 billion from
the initial target of ¥820 billion and achieved a record
figure of ¥962.9 billion, while proactively preparing for
risks. I believe this proves that our core earning power is
unquestionably improving.
In addition, our ROE has improved due to the
reduction in our equity holdings at a level which greatly
exceeded our initial target and the reorganization of our
business portfolio, including the sale of our U.S. freight
car leasing business. FY2023 marked a strong start to the
Medium-Term Management Plan.
In FY2023, under the Medium-Term Management Plan, dubbed the “Plan for Fulfilled Growth,” SMBC Group carried out vari-
ous initiatives to realize “Growth with Quality.” From the perspective of transforming our business portfolio, we implemented
measures to reduce low growth/profit assets, as well as assets for which the significance of holding them had decreased due
to changes in the business environment. At the same time, we accelerated our strategies for growth by making sure we allo-
cated the necessary management resources to key strategic areas. Furthermore, to push forward efforts to shift management
resources toward initiatives aimed at enhancing ROE and controlling cost, we conducted our operations with an even greater
focus on capital efficiency and worked to enhance our business management.
In FY2024, we will aim for even greater heights by continuing to balance our strategies for growth and sound financial/
capital management.
Message from group CFO
Overview of FY2023
Group CFO & CSO
Director Senior Managing Executive Officer
Fumihiko Ito
(JPY bn)
Result
FY3/24
Target
FY3/25
YoY
Consolidated net business profit
1,560.2
1,620
+59.8
Credit cost
274.0
260
(14.0)
Ordinary profit
1,466.1
1,560
+93.9
Profit attributable to owner of parent
962.9
1,060
+97.1
SMBC GROUP REPORT 2024 021
020
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Management Messages
Create Social Value / Pursue Economic Value
Our FY2024 targets for consolidated net business profit
and profit attributable to owners of parent are ¥1.62 trillion
and ¥1.06 trillion, respectively. If we are successful in our
efforts, this will be the first time SMBC Group’s profit attrib-
utable to owners of parent exceeds the ¥1 trillion mark.
While we must continue to pay careful attention to
volatility in the financial/economic environments and
rising geopolitical risks, based on our desire to accurately
communicate our goals in response to the feedback we
have received from investors, we have set our financial
targets for FY2024 with a mindset that we will proactively
pursue upside opportunities under the assumption that
the current robust business environment will continue.
With the goal of achieving our financial targets, we will
steadily carry out the various initiatives established under
the Medium-Term Management Plan and further enhance
our earning power while at the same time continuing to
proactively address any applicable risk factors.
In addition, we are further raising our target of
improving ROE given our current financial results and
business environment, which is also a key theme in our
Plan. Specifically speaking, we will aim to accomplish an
ROE target of 8%, a target which was planned to be set for
the final year of the next Medium-Term Management Plan,
by FY2025, the final year of the current Plan. For FY2028,
the final year of the next Plan, we will strive to achieve an
ROE of 9%. As for profit attributable to owners of parent,
the numerator of ROE, we will aim to achieve the mid- ¥1.1
trillion range by FY2025 and will strive to significantly
exceed ¥1 trillion by FY2028.
Increasing SMBC Group’s corporate value is one of our
most important responsibilities. We will increase ROE by
improving our Return on Risk-Weighted Assets (RORA)
and controlling our financial leverage, while at the same
time raising our PER by increasing our expected growth
rate and controlling capital cost. Through such efforts, we
will aim for a minimum PBR of one, with the intention to go
even higher.
Financial Targets for FY2024 and Financial Results to Achieve in Five Years Time
Enhancing Corporate Value
(1) ROE Focused Business Operations
To improve our ROE, we need to grow bottom-line profit,
the numerator, while also controlling risk-weighted assets
and applying our capital more efficiently by undertaking the
dynamic reallocation of our business portfolio and optimizing
capital allocation.
First, for growing bottom-line profit, we will focus on
enhancing asset-light businesses which do not rely on our
balance sheet, realizing the upside of existing growth invest-
ments, and controlling costs.
To enhance our asset-light businesses, on the domestic
front we will expand and strengthen our finance/commis-
sion-based income while also acquiring liquid deposits by
expanding our customer touchpoints and our customer base
through a hybrid strategy which combines Olive and STOREs.
In our wealth management business, we will increase
assets under management by leveraging SMBC Group’s
comprehensive capabilities by establishing a Group-wide
control tower function that covers the entire value chain,
from investment to consulting, so that we are able to capture
the increasing opportunities arising from the growing trend
of “from savings to asset formation.” For our overseas
business, we will strengthen our CIB business by expanding
collaborations with Jefferies to build a steady track record of
collaborated deals.
In terms of our Multi-Franchise Strategy in Asia, we have
reached the phase in which we must realize the benefits
of the growth investments we have made so far. In the four
target countries of the Strategy (India, Indonesia, Vietnam,
and the Philippines) we will focus on the Post-Merger Integra-
tion(PMI)of our partner firms and strive to become a top-tier
financial institution which has a firmly embedded, long-term
presence in the respective countries.
In terms of cost control, the environment is becoming
more challenging due to the yen’s depreciation and inflation,
but there is no change in our policy of controlling our costs
in a disciplined manner. To accelerate our business growth
by allocating the necessary capital and expenses, we have
increased the budgeted base-expense for the three-year
period covered by the Medium-Term Management Plan from
¥130 billion to ¥160 billion. We are working on the reform of
our domestic banking branches, consolidating shared Group
functions, and applying AI to increase productivity and have
also increased our planned cost reductions by ¥30 billion.
Through such efforts, we plan to keep net base expenses flat
over the Medium-Term Management Plan. In addition, we
FY3/23
9.4%
10.5%
11%
12%
7.5%
8.3%
9%
ROE
excl. unrealized gains
10%
6.5%
7.0%
8%
9%
9%
FY3/24
FY3/25
FY3/26
Mid-1,100 bn
FY3/29
JPY 805.8 bn
962.9 bn
1,060 bn
JPY
Interest rate
Stock price
Bottom-line profit
JPY
Interest rate
Stock price
ROE
ROCET1
Final year of the next Medium-Term
Management Plan
ROE of
9%
JPY 1 tn
Bottom-line profits far exceeding
Assumption
FY3/26
FY3/29
Policy
rate
(max)
Japan
0.1%
0.1-0.5%
U.S.
4.5%
2.0-3.0%
FX
USD
140
120-140
Improve PBR
12.5
11.1
12.3
8.8
6.5 7.0 8.0
9.0
PBR1x
Mar.23
0.58x
Mar.24
0.86x
ROE(%)
PER(x)
PBR
ROE
PER
Improve expected
growth rate
Improve RORA
Bottom-line growth
Financial leverage
Bottom-line profit
Stock price
Cost of capital
c.8%
Bottom-line profit
Reallocate business portfolio
Rebuild corporate infrastructure
Appropriate capital allocation
Create social value
Enhance shareholder returns
Mitigate information asymmetry
Enhance asset light businesses
Realize profit from past investments
Cost control
RWA
Capital
Bottom-line profit
Lower cost of capital
RWA
Capital
SMBC GROUP REPORT 2024 023
022
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Management Messages
Create Social Value / Pursue Economic Value
will carefully study the benefits of the allocated expenses to
ensure that they lead to future top-line growth.
Regarding transforming our business portfolio and
realizing the optimal allocation of capital, we will spread the
mindset of improving ROE to all corners of SMBC Group and
accelerate the reduction of equity holdings and low-profit
assets. We will concentrate the resources that have been se-
cured through these initiatives in strategic areas with growth
potential (business with large and mid-sized corporations that
will benefit from Japan’s regrowth, etc.) and strive to grow our
business by proactively engaging in healthy risk-taking.
(2) Enhancing Our Expected Growth Rate and
Controlling Capital Cost
Regarding enhancing our expected growth rate, a com-
ponent of PER, we will focus on the payment business,
Multi-Franchise Strategy in Asia, overseas CIB business, and
other businesses where we can expect medium- to long-term
growth while at the same time carefully explaining the prog-
ress and results of our respective initiatives and profit level
goals to investors.
Regarding capital cost, we recognized it is approximate-
ly 8%, yet we are aware that market expectations are of an
even higher level. We will address this gap by rebuilding our
corporate infrastructure and creating social value.
To build robust corporate infrastructure, it is vital that
we build stable IT infrastructure, promote Human Capital
Management, and enhance our compliance/governance
capabilities. For IT investment, we have increased the
three-year budget of the Medium-Term Management Plan
from ¥650 billion to ¥750 billion. We will proactively work to
develop and adopt generative AI and other new technologies,
while also making sure that we engage in the necessary
investments for growth to develop new businesses and
allocate the necessary resources to stabilize our IT systems.
Investments in human capital for FY2024 at Sumitomo Mitsui
Banking Corporation are expected to increase by 7% on a
year-on-year basis. We will maximize our human resources by
allocating resources to growth areas and securing personnel
with the necessary expertise, strengthening training pro-
grams, and improving DE&I throughout our organization.
Create Social Value is also an initiative that contributes
to the control of capital cost. The Medium-Term Management
Plan has positioned Create Social Value as one of the key
pillars of our business strategy, and we have established
“Environment,” “DE&I/Human Rights,” “Poverty & Inequality,”
“Declining Birthrate & Aging Population,” and “Japan’s
Regrowth” as our materiality. In FY2024, we will further
develop the necessary frameworks and have set an expense
budget of ¥10 billion and an investment budget of ¥40 billion.
By continuing to allocate a portion of our profit to initiatives
to create social value, we will create a virtuous cycle with the
pursuit of economic value .
Furthermore, we will consider enhancing our informa-
tion disclosure, including our non-financial initiatives, to
reduce the asymmetry of information through productive
communications with investors.
Enhancing Shareholder Returns
Dividends are our principal approach to shareholder re-
turns. We will maintain a dividend payout ratio of 40% and
continue to pursue a progressive dividend policy, which
is to at least maintain, if not increase, dividend payments.
Furthermore, we will increase our dividend payout by
growing our bottom-line profit. Our dividend forecast for
FY2024 is ¥330, a year-on-year increase of ¥60, SMBC
Group’s largest annual dividend increase to date. In May
2024, we announced a share buyback program of ¥100
billion. We will consider additional share buybacks during
the fiscal year based on our progress toward our financial
targets, the status of our capital, opportunities for invest-
ment for growth, SMBC Group’s share price, and various
other factors.
Investment for Growth
For our investment for growth, we will pay careful atten-
tion to capital efficiency, and focus on allocating assets
to strategic areas that we expect to undergo high levels
of growth. There is no change in our inorganic strategy’s
two investment targets: “Investments with high capital/
asset efficiencies” and “Investments that contribute to
build a business platform to realize medium- to long-term
growth.” In FY2023, we deepened our partnership with
Jefferies and built up a healthy track record of successful
collaborations. Regarding our Multi-Franchise Strategy
in Asia, we built the foundations of our growth in the four
target countries and will focus on PMI going forward. We
will proactively pursue opportunities that will allow us to
invest in the further growth of these platforms.
Capital Policy
Communicating with Stakeholders
Basic Capital Policy
We will balance strengthening shareholder returns and investing
for growth while maintaining financial soundness. Our Common
Equity Tier 1 (CET1) ratio target, an indicator of financial sound-
ness, has been set at 10%. Please note that this figure has been
calculated taking into account the full implementation of Basel
III reforms and excludes net unrealized gains on other securities.
Achieving a 10% CET1 ratio will provide us with a buffer of 2% as
it allows us to maintain the required 8% ratio under a variety of
stress scenarios. The optimal allocation of capital is not only a
key point in differentiating SMBC Group from our competitors in
this robust business environment, but it is also an important fac-
tor in improving our ROE. Our CET1 ratio was 9.9% as of the end
of March 2024, well within our target range, and we will continue
to allocate our capital in a flexible and effective manner.
Engaging in constructive discussions with investors and
other stakeholders is an important mission for me as Group
CFO because it provides me with the opportunity to identify
matters that our stakeholders are interested in. The
feedback I receive is shared with the Board of Directors
and senior management team, and the Medium-Term
Management Plan reflects this feedback. We also updated
our strategies and disclosures based on the opinions, etc.,
we have received since the official release of the Plan. In
addition, we will continue to expand and strengthen our
initiatives aimed at creating social value by enhancing
our disclosure concerning natural capital, human rights,
climate change, and other non-financial information.
We will realize the sustainable growth of SMBC
Group’s corporate value as a result of engaging in mutual
communication and the proactive, timely disclosure in an
easy-to-understand manner of topics in which stakeholders
have a strong interest.
Reducing Equity Holdings
In the Medium-Term Management Plan, we set a goal
to reduce our equity holdings by ¥200 billion over the
Plan’s three years. In FY2023, the first year of the Plan, we
succeeded in reducing our equity holdings by ¥134 billion.
In FY2024, we will maintain this momentum and strive to
reduce our equity holding by a minimum of ¥100 billion
with the intention of achieving the Plan’s reduction target
during the fiscal year. In addition, we will launch discus-
sions regarding a plan to further reduce our equity holdings
and make an official announcement during FY2024.
Furthermore, we will accelerate the pace of our
reduction efforts so that we can reduce the market value
of equity holdings to consolidated net assets ratio to below
20%, even though stock markets remain elevated.
Progressive dividends policy
+flex share buybacks
Shareholder returns
Dividends
Share buyback
Transform business model
and invest in growth areas
Investment for growth
Financial soundness
CET1 ratio target:
c.10%
Organic
Inorganic
Remains unchanged
without changes in
regulations and
environment
Reduce unprofitable assets
to invest in areas with
growth potential
Progressive dividend policy
with 40% payout ratio
lncrease DPS by
bottom-line profit growth
Consider if there are good
opportunities
Divest unprofitable assets /
businesses
Implement flexibly
Consider based on business
performance, capital
position, M&A
opportunities, etc.
Growth with Quality
Mar.24
(JPY bn)
Mar.25
1,060
430
100
9.9%
c.10%
Bottom-line
profit
Dividend
Shareholder
Returns
Resource Shift
Share
buybacks
Organic
RWA
reduction
Inorganic
CET1
ratio
Unprofitable assets
Acceleration of selling equity holdings
Review significance of holdings, etc.
DPS (JPY)
+60
170
180
190
190
210
240
270
330
FY3/18
3/19
3/20
3/21
3/22
3/23
3/24
3/25E
Share
buybacks
(JPY bn)
-
70
100
-
-
138.7
211.3
100
+
Total payout
ratio (%)
33
44
51
51
41
58
59
50
+
SMBC GROUP REPORT 2024 025
024
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Management Messages
Create Social Value / Pursue Economic Value
“Fulfilled Growth”
People feel fulfilled as
accompanies the resolution
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Value Creation Story
Create Social Value / Pursue Economic Value
Communication with Stakeholders
Engagement with Customers
Engagement with Employees
Engagement with Shareholders
and the Markets
Engagement with Society
Value We Provide: More valuable services
Value We Provide: A workplace where employees realize
full potential
Value We Provide: Continuous growth of shareholder value
Value We Provide: Contribution to a sustainable society
SMBC Group aims to contribute to “Fulfilled Growth” by providing greater value to various stakeholders, while work-
ing to build relationships with them: "Customers," "Employees," "Shareholders and the markets," and "Society."
Under “Customer First,” one of our “Five Values”, we en-
gage in marketing activities from customers’ perspectives
to provide service that has value.
See page 132 for more information on our customer-oriented initiatives.
Under our Business Unit system, develop group-wide busi-
ness strategies that are optimal for each customer segment
See page 070 for more information on Strategies of Business Units.
Following the release of the Olive integrated financial ser-
vice for retail customers in March 2023, collect customer
feedback and continue to update the service toward
greater convenience
See page 098 for more information on Olive.
To maximize the human resource capabilities that support
SMBC Group’s management strategy, we are working to
foster an organizational culture and create an environ-
ment that supports the growth of employees.
To enhance employees’ mindset of participation in man-
agement, establish varied opportunities for dialogues with
top management, such as seminars and luncheons
Sumitomo Mitsui Banking Corporation hold meetings for
exchanges among mid-career retirees and active employ-
ees to build networks
and invigorate the
organization
Human capital invest-
ment at Sumitomo
Mitsui Banking Corpo-
ration in FY2024: +7%
year on year
See page 038 for more information on Human Resource Strategies.
With fair disclosure as a given, we strive to accurately
disclose information on our management strategy and
financial situation through investor meetings, one-on-one
meetings, and other means.
Actively reflect feedback obtained through engagement
with institutional investors and analysts in our manage-
ment strategies and information disclosure
Each share of common stock will be split into 3 shares per
share in October 2024 to seek to develop a more inves-
tor-friendly environment and expand the investor base.
Positioning Create Social Value as a pillar of our manage-
ment strategy, we are making efforts to resolve our five
materialities from a medium- to long-term perspective.
Expand information disclosure through investor meetings
focused on sustainability, reports (TCFD, TNFD, Human
Rights Reports), etc.
Promote the spread of understanding within the Group
and enhance capabilities for social value creation,
through means such as releasing engagement books for
employees and holding events
See page 050 for more information on Create Social Value.
Group Structure
SMBC Group is a global financial group that develops operations in a wide range of fields, including banking, leas-
ing, 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-wide strategies for each customer seg-
ment. At the Head Office, we have clarified the managers responsible for specific areas of Group-wide management
and planning under the CxO system, and are taking steps to share management resources and optimize the alloca-
tion of resources.
Group-Wide Business Units
and CxO System
Business Units
Retail
Wholesale
Global
Market
Banking
Sumitomo Mitsui
Banking Corporation
SMBC Trust Bank
Leasing
Sumitomo Mitsui
Finance and Leasing
Securities
SMBC Nikko
Securities
Credit Cards and
Consumer Finance
Sumitomo Mitsui
Card Company
SMBC Consumer
Finance
Other Business
Japan Research
Institute
Sumitomo Mitsui DS
Asset Management
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
CISO
Chief Information Security
Officer
CDAO
Chief Data and Analytics
Officer
CDIO
Chief Digital Innovation
Officer
CSuO
Chief Sustainability
Officer
CAE
Chief Audit
Executive
Alumni meeting for mid-career retirees and
active employees
General meeting of shareholders
Participants: 1,145*
IR meetings for institutional investors and analysts
17 meetings
One-on-one meetings with institutional
investors and analysts
554 meetings
Of which, implemented by managements
132 meetings
Of which foreign investors
340 meetings
Of which SR interviews
20 meetings
Conferences held by securities companies
5 conferences
Large meetings for individual investors
2 meetings
Activities (FY2023)
* Including 664 viewers of simultaneous Internet broadcast
SMBC GROUP REPORT 2024 029
028
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Value Creation Story
Create Social Value / Pursue Economic Value
500
1,000
962.9
10.5
7.0
(FY)
0
12
6
12.9
9.9
(FY)
0
10
20
0
’19
’20
’21
’22
’23
’19
’20
’21
’22
’23
Mar.20 Mar.21 Mar.22 Mar.23 Mar.24
330
60.2
Profit recorded a new high due to strong performance of Business Units, in
addition to a favorable environment including depreciation of the yen and rising
U.S. interest rates, while gains on stocks increased under accelerated sales of
equity holdings.
(JPY bn)
ROCET1 and ROE including OCI. improved due to increase of profit attributable to
owners of parent under business operations emphasizing capital effciency and
profitability.
(%)
ROCET1
ROE including OCI
60
80
(FY)
0
’19
’20
’21
’22
’23
The overhead ratio decreased year-on-year as consolidated gross profit recorded
a new high, while expenses increased year-on-year due to factors including
depreciation of the yen, inflation, and higher variable marketing cost.
Overhead ratio
(%)
External ratings (As of June 30 2024)
200
400
’20
’21
’22
’23
’24 Forecast
(FY)
0
Forecast of dividend per share in FY2024 is ¥330 increased by ¥60, in line with our
policy under the Medium-Term Management Plan of maintaining a dividend payout
ratio of 40% and achieving dividend increases through bottom-line growth.
Dividend per Share of Common Stock
(yen)
(%)
Our CET1 ratio remains well above the mandated level of 8%, although
risk-weighted assets increased due to the start of phased implementation of
Basel III finalization from the end of March 2024. Our CET1 ratio on a financial
target basis is 9.9%, maintaining soundness within the target of c. 10%.
* Post-Basel III basis, excluding net unrealized gains (losses) on other securities
Common equity Tier 1 capital ratio (CET1 ratio)
Profit attributable to owners of parent
Capital eciency
Common equity Tier 1 capital ratio
Financial target basis*
Financial Highlights
Non-Financial Highlights
Holding company
Sumitomo Mitsui
Banking Corporation
Long-term
Short-term
Long-term
Short-term
Moody’s
A1
P-1
A1
P-1
S&P
A-
—
A
A-1
Fitch
A-
F1
A
F1
R&I
AA-
—
AA
a-1+
JCR
AA
—
AA
J-1+
Environment
Target (FY2020–FY2029)
¥50 trillion
¥24 trillion
FY2023
Poverty & Inequality
Target (FY2025)
+800K people +153K people
FY2023
DE&I/Human Rights
Target
70 maintain at least
72
FY2023
Japan’s Regrowth
Target (FY2023–FY2025)
¥135 billion
¥79.2 billion
FY2023
Declining Birthrate & Aging Population
Target (FY2025)
¥18 trillion
¥17 trillion
FY2023
(compared to FY2022)
Sustainable
finance
Engagement
score
AM/foreign
currency balance
Number of
microfinance borrowers
Investment and loans
for startups
SMBC GROUP REPORT 2024 031
030
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Value Creation Story
Create Social Value / Pursue Economic Value
Round-Table Discussion with Outside Directors
Meet Shareholders’ Expectations and
Enhance SMBC Group’s Corporate
Value Through Sustainable Growth
Ito One year has passed since
the launch of the Medium-Term
Management Plan “Plan for Fulfilled
Growth.” Today, we will look back
over the past year and hear opinions
and thoughts from Ms. Sakurai,
Chairperson of the Sustainability
Committee, Mr. Lake, and Ms. Rog-
ers, Outside Directors from FY2023,
about SMBC Group’s governance
and efforts to enhance corporate
value and create social value.
Lake At the Board of Directors
(“BoD”) meetings over the past year,
I have shared various thoughts on
“sustainable growth” and “increasing
corporate value over the mid- to
long-term.” From that perspective,
I have raised matters including
regarding SMBC Group’s corporate
governance and risk management
systems, which enable robust and
proactive governance and promote
a strong corporate culture. The BoD
and internal committees engage
in free, open, and constructive
discussions, which allow for effective
engagement. To make such discus-
sions constructive, it is of course
necessary for each director to pos-
emissions of a corporation’s entire
supply chain and manages the whole
reduction process from planning to
execution through cloud services.
More than 1,900 corporations have
adopted Sustana. I expect DX to play
a major role in not only enhancing
operational efficiency, but also in
generating new revenue streams.
Sakurai Given SMBC Group’s need
to pay careful attention to global
trends, I feel that discussions at BoD
meetings have deepened with Mr.
Lake’s and Ms. Rogers’ extensive
sess certain skill sets, but it is also
necessary for the operations side to
demonstrate a firm commitment to
leveraging these discussions and the
BoD’s role. In that sense, the SMBC
Group BoD and operations side are
able to share information as they
strive towards the ideal, allowing
them to engage in real discussion on
substance rather than just following
formality. Overall, I believe the SMBC
Group has established a high-level
corporate governance system.
Rogers I am of the same opinion as
Mr. Lake, as I believe that BoD mem-
bers are leveraging their respective
skill sets to actively exchange views.
The make-up of the BoD changed
following the June 2024 General
Shareholders’ Meeting resulting
in an increase in the ratio of both
non-Japanese and female directors.
While this has enhanced the diversity
of the BoD, there is still room for
improvement. The BoD engaged
in various discussions regarding
Create Social Value, DX, and the
utilization of human resources in
FY2023. However, from an overall
perspective, I felt that the initiatives
aimed at growth were somewhat
conservative. In order to achieve
SMBC Group’s medium- to long-term
vision of becoming “A Trusted Global
Solution Provider,” we must achieve
further growth with a greater sense of
speed. The development and de-
ployment of global human resources
is an especially pressing matter
to be discussed continuously. The
promotion of DX is also an urgent
issue. For example, Sumitomo Mitsui
Banking Corporation launched Sus-
tana in 2022. This service enables
corporations to calculate the CO2
knowledge of U.S. financial markets
and other key global topics. There
are many things to learn from Mr.
Lake given his experience in running
businesses both in the U.S. and
Japan, in addition to his expertise
in financial markets. Ms. Rogers,
with her career experience at a
U.S. financial institution, as well as
experience in senior legal roles at
global corporations and experience
as an outside director at numerous
Japanese firms, has provided
valuable advice regarding equity
holdings and other key issues facing
the Japanese corporate sector. I still
clearly remember Ms. Rogers taking
the lead in asking questions about
the first agenda item raised at her
first BoD meeting. I always feel great
confidence in Ms. Rogers’ efforts to
deepen our discussions.
Ito Ms. Rogers pointed out that our
FY2023 business plan, released with
the Medium-Term Management Plan,
could be considered conservative by
capital markets, which in turn could
lead to the underperformance of
SMFG’s share price. In addition, she
SMBC GROUP REPORT 2024 033
032
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Value Creation Story
Create Social Value / Pursue Economic Value
expressed the opinion that SMBC
Group needed to expand invest-
ments in DX in order to enhance our
corporate value. Finally, we set more
challenging targets for our FY2024
business plan and increased our
budget for IT investments by ¥100
billion from ¥650 billion to ¥750
billion based on the BoD’s advice
including Ms. Rogers’.
As you can see, we have
launched initiatives based on various
opinions, including from Outside
Directors. However, unresolved
issues remain. For example, from the
perspective of enhancing our cor-
porate value, our PBR still remains
below 1 (as of the end of June 2024).
Lake To meet the expectations
of various stakeholders, including
investors, it is important to achieve
a PBR of at least 1. This, however,
is just a starting point as capital
markets have higher expectations.
To meet such expectations, in
addition to improving ROE, the
SMBC Group must communicate
with its stakeholders and leverage
such discussions to further stimulate
BoD deliberation. I also recognize
that investors are concerned with
how SMBC Group will address its
equity holdings to further increase
corporate value. Elimination of
equity holdings has long been an
issue for Japanese companies, but
Japan’s capital markets are on the
brink of major change, boosted by
the widespread adoption of the
Corporate Governance Code – jointly
developed by the Financial Services
Agency and Tokyo Stock Exchange –
as well as by major non-life insurance
companies announcing plans to
reach “zero” equity holdings. SMBC
Group has publicly announced its
plan to reduce its equity holdings,
but in light of these changes, should
seriously consider accelerating its
plan. When reducing equity holdings,
the SMBC Group should not simply
Ito In the Medium-Term Man-
agement Plan, SMBC Group has
established Create Social Value as
a basic policy as we strive to con-
tribute to “Fulfilled Growth.” This is
a major difference from past Medi-
um-Term Management Plans. Could
you share with us your thoughts on
this matter?
Sakurai The Medium-Term
Management Plan is off to a strong
start with record profits declared for
FY2023, and I believe that SMBC
Group managed to exceed expecta-
tions in terms of Create Social Value.
SMBC Group is focusing on financial
education, supporting corporate
clients, and other related activities to
create social value. As Chairperson
of the Sustainability Committee,
I have repeatedly stated at BoD
meetings that we must create a
framework in which all SMBC Group
employees can independently take
part in such efforts through “uni-
versal participation.” Looking over
the first year of the Plan, Sumitomo
Mitsui Banking Corporation’s retail
branches and Group companies
held a variety of workshops and
study sessions, in which employees
engaged in discussions about how
they could connect “Create Social
Value” to enhancing SMBC Group’s
strengths. This is only one example
of SMBC Group’s many efforts.
SMBC Group is off to a good start in
developing employees’ awareness.
Rogers Mr. Paul Polman, an SMBC
Group Global Advisor, and other
well-known experts took part in
various meetings including the one
Ms. Sakurai mentioned. I believe
that the participants were able to
successfully leverage their knowl-
edge of sustainability to make valu-
able contributions. By continuing to
hold such sessions, I believe that
SMBC Group’s overall competency
level concerning sustainability will
be enhanced. The Sustainability
Committee recognizes initiatives
reduce the shareholdings as a
formality, but should carefully assess
the rationale for each sale, while
keeping development of the SMBC
Group and Japan capital markets in
mind. In addition, it is also important
to consider how to use the capital
gained from the sales. Considering
Corporate Governance Code require-
ments, it is necessary to continue to
have these discussions at the BoD.
Rogers In terms of SMBC Group’s
plan to reduce its equity holdings, I
personally feel that the pace of exe-
cution is too slow. SMBC Group was
able to reduce its equity holdings
at a pace that exceeded the plan
in FY2023, which I acknowledge as
progress. However, I believe that the
pace of the plan’s execution needs
to be accelerated further. As Mr.
Lake stated, Japan’s capital markets
are undergoing change, and external
pressure, including from investors,
is expected to increase even more.
Also, in regard to reducing its equity
holdings, SMBC Group must pay
close attention to capital allocation
in addition to governance. The
importance of capital allocation will
continue to increase in the future as
it is critical to secure the necessary
resources to realize SMBC Group’s
various growth strategies. Of course,
while this is an issue that cannot be
resolved by SMBC Group alone, I
want to continue discussions at BoD
meetings on this as it is a key issue.
aimed at addressing climate change
as one of its key themes, and we
continue discussions on this matter.
Many corporations are now advo-
cating carbon neutrality and proac-
tively carrying out related initiatives.
However, this is not a matter which
can be achieved in one simple step.
This has led to increased attention
and demand for Transition Finance.
Transition Finance is a new form
of financing that supports corpora-
tions’ long-term reduction strategies
of greenhouse gas (GHG) emissions
to achieve carbon neutrality.
Furthermore, from the standpoint of
realizing SMBC Group’s medium- to
long-term growth, it will become
increasingly important to provide
financial solutions that support
corporations’ efforts to address
climate change and strive for car-
bon neutrality.
Lake As you both mentioned,
creating social value is essential
for achieving medium- to long-term
corporate growth. However, since we
are approaching this as a business
rather than a charity, it is important
that we also pursue economic value
and, to ensure effectiveness, we
need to further strengthen manage-
ment’s foundation and capacity. As
a member of the Risk Committee, I
have shared various thoughts about
how management systems, includ-
ing a risk management system,
can be enhanced to balance social
and economic value. This concept,
however, is nothing new and if you
Fumihiko Ito
Group CFO & CSO
Director Senior Managing Executive Officer
Charles D. Lake II
Outside Director
SMBC GROUP REPORT 2024 035
034
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Value Creation Story
Create Social Value / Pursue Economic Value
look back over SMBC Group’s histo-
ry, you can see that both Mitsui and
Sumitomo created social value for
generations through their respective
businesses. Financial institutions
play a significant role in addressing
social issues and I believe this will
remain unchanged into the future.
I look forward to SMBC Group
continuing to create social value
into the future by building on the
corporate culture it has cultivated
over its long history.
Ito In a medium- to long-term
timeframe, it is possible to increase
economic value through the creation
of social value, and more and more
people are accepting this mindset.
However, if we only think about
matters based on a short-term
perspective, we cannot deny that
certain conflicts do arise between
social and economic value.
Ms. Sakurai mentioned the need
for everyone to participate, in other
words “universal participation,” and
therein lies the difficulty of address-
ing Create Social Value as the top
priority. As such, I have repeatedly
called out at various opportunities
for the entire SMBC Group to think
about whether our solutions and
products are really contributing to
the resolution of social issues, and
whether they were having a positive
impact on our stakeholders as a
key factor in our decision-making
process. When I visited our front
office departments and talked with
young employees, I noticed that the
mindsets of “I want to help custom-
ers” and “I want to provide services
that contribute to the resolution of
social issues” are becoming stronger.
Although many hurdles remain in
regard to realizing “universal partic-
ipation,” we will continue our efforts
while receiving advice and guidance
from Outside Directors.
While we cannot disclose quan-
titative data regarding Create Social
Value right now, we are currently
deciding how to disclose the impact
of our efforts to create social value.
We are still trying to come to a con-
clusion, but as a first step we will pick
some sample cases in which SMBC
Group’s efforts are having a positive
impact on Create Social Value and
disclose quantitative data regarding
those cases.
Finally, I would like to ask
Outside Directors to share what
they expect to be key issues going
forward.
Sakurai When we launched the
Sustainability Committee in 2021,
addressing climate change was
one of particular topics of focus.
So we invited Ms. Yukari Takamura
and Mr. Eiichiro Adachi, both
leading Japanese experts on climate
change, to become outside experts
of SMBC Group, while Outside
Directors including myself worked to
deepen our knowledge of the matter.
The Committee has provided the
executive side with various advice,
for example recommending the
hiring of an individual with hands-on
experience in the energy sector to
collect the appropriate data and
correctly analyze it. The executive
side is also proactively adopting this
advice. We also conduct sessions
where Outside Directors and SMBC
Group’s corporate clients meet
and discuss climate change. The
Sustainability Committee will engage
in the various sustainability-related
issues we face, while overseeing the
executive side and providing advice,
by acquiring sustainability-related
knowledge as an Outside Director
through such efforts. I will place
special focus on climate change,
since it is a topic on which we must
take immediate action.
Lake As I mentioned earlier, I also
serve as a Risk Committee member,
where I have focused on providing
views on global geopolitical risks and
U.S. current events. In the current
business environment, companies
find themselves in an ultra VUCA
era (volatile, uncertain, complex,
and ambiguous), which is difficult
to predict, even for experts. In such
an environment, companies must
establish risk management systems
that enable the robust and proactive
governance, which I mentioned
earlier, and respond flexibly and
rationally, based on substance rather
than just form. For this to happen, it
is important to place risk manage-
ment at the center of management
strategy and work even harder to
achieve a higher level of free, open,
and constructive discussions. Draw-
ing on my past experience, I want
to help further strengthen SMBC
Group’s governance framework.
Shingen Takeda, a famous lord
from Japan’s medieval period, left
behind the famous saying: “The
people are the castles, people are
the stone walls, and people are the
moats.” I believe the same applies
to management. SMBC Group will
place human capital at the center
of its management infrastructure
and strive to realize a workplace and
team where employees can continue
to challenge themselves and feel a
strong sense of fulfilment.
Furthermore, we have put in
motion the creation of systems – as
a central management theme – that
enable our human capital to demon-
strate their capabilities to foster a
corporate culture befitting of a global
company, and we are making every
effort to incorporate best practices
from a global perspective. For
example, the Nomination Committee
is taking a sophisticated approach to
succession planning. As competition
for talent intensifies, I, as an Outside
Director, will provide a fresh per-
spective on best practices, including
as it relates to human capital, and
support SMBC Group's growth over
the medium- to long-term.
Rogers In response to the market
manipulation case at SMBC Nikko
Securities in 2022, SMBC Group is
engaging in Group-wide efforts on
the implementation of preventative
measures. SMBC Group carried out
a variety of initiatives, for example
holding town hall meetings for the
purpose of engaging employees in
developing a compliance culture,
while pursuing the development of
its enhanced compliance framework.
However, the key factor is not the
implementation of short-term
solutions. Rather, it is how to embed
a robust compliance culture on both
a group and global basis over the
long-term, and we have just reached
the starting point. This also ties in
with “Integrity,” one of SMBC Group’s
Five Values, and the BoD should
engage in more in-depth discussions
regarding that. I firmly believe that
it is one of the key responsibilities of
an Outside Director to provide frank
opinions during such discussions,
and I will continue to offer my honest
views regarding a variety of matters.
Eriko Sakurai
Outside Director
Jenifer Rogers
Outside Director
SMBC GROUP REPORT 2024 037
036
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Value Creation Story
Create Social Value / Pursue Economic Value
Takashi Kobayashi
Senior Managing Executive Officer
Group CHRO
People are our foundation for our
competitiveness
Even as SMBC Group’s environment and the values and
lifestyles of individuals undergo rapid change and diversi-
fication, the importance of people to SMBC Group never
changes. Rather, in this era of drastic change, it is critical
that the employees of our Group, over 120,000, exert their
abilities and align their direction with a sense of unity. As
a symbol to guide this action, we established the “SMBC
Group Talent Policy” (hereinafter “Talent Policy”).
To the creation of value through the
maximization of human resource
Our Talent Policy sets out what we expect employees to be
(Professional, Collaborative, Agile) and our value proposi-
tion to employees (Be Yourself, Make a Difference, Build
Your Career). These items are imbued with values that
SMBC Group feels are vital. These values are also present
in the DNA and the business spirit that Mitsui and Sumito-
mo have inherited through our long histories: refining per-
sonal capabilities, uniting as a team, and contributing to
the advancement of society and the businesses of our cus-
tomers and ourselves.As CHRO, I will position our Talent
Policy as the foundation underlying our human resources
measures, and will maximize our human resource capabil-
ities and achieve the creation of social value and pursuit of
economic value set forth in our management strategy.
To achieve our management strategy
To achieve the human resources strategy linked to our
management strategy, it is essential that we possess a
human resources platform and an organizational culture
by which employees holding diverse career backgrounds
and values can play active roles. At the same time, it is also
important that the values of the Company and of individu-
als overlap and resonate with each other.
To that end, we will swiftly accelerate the transforma-
tion of our frameworks for personnel evaluations, com-
pensation, and careers, while continually providing oppor-
tunities for internal communication through dialogues in
town hall meetings, seminars, and small-group sessions to
ensure that the thinking and backgrounds embedded in
our human resources strategy are properly communicated.
We believe that realizing employees’ diverse aspi-
rations will connect to our growth and competitiveness,
increase employees’ identification with the Company, and
give rise to further endeavors and successes for employ-
ees. This virtuous cycle represents the human resource
management and the maximization of human resource
power that I aim to achieve.
As CHRO, I will continue challenging myself whole-
heartedly to create a compelling environment where
diverse human resources can play active roles in their own
way through various initiatives that lead to transformation.
The SMBC Group Talent
Policy and Human Capital
Management Model
SMBC Group’s 120,000 diverse employees work
within a deep-rooted culture that nurtures human resourc-
es and creates value. Our Human Capital Management
Model, based on our Talent Policy, promotes three main
strategies aimed at maximizing human resource capabili-
ties group and global wide, and connects these strategies
to value creation. While instilling our Talent Policy through
various opportunities, we are actively communicating
with employees leveraging visuals and icons created in
cooperation with the in-house design team. SMBC Group
has created measures to achieve the items listed in our
Talent Policy, and verifies progress toward these through
fixed-point observation of quantitative figures. Quantitative
results for our main strategies are as shown at right.
The SMBC Group Human Capital Management Model
Empowering individuals to be resilient and strong.
Becoming a power for society.
Message from CHRO
Human Resource
Strategies
Quantitative results for our main strategies*1 (FY2023)
72
Overall
score
Overall
Managerial
positions
67
*1 Unless otherwise noted, calculations are for employees of 8 major Group companies
hired in Japan
*2 Ratio of number of candidates to target number for post
*3 As of February 2024. 8 major Group companies, excluding Sumitomo Mitsui
Finance and Leasing and Sumitomo Mitsui DS Asset Management.
*4 Percentage of employees of consolidated SMBC Group
*5 Ratio of locally hired employees in management positions at overseas offices
67
Challenging
culture
71
Opportunities
for self-growth
Results of investment in focus areas
Number of candidates for succession within 5 years /
Degree of preparation for succession*2
600 persons
279 persons
7 x
Female
48 %
20%
Career
41 %
19%
Rate of use of paid leave
85 %
Engagement score (Japan and overseas)
Foreign
nationals
50 %
93 %
*4
*5
Degree of
realization of
Talent Policy*3
Creating a
human
resources
portfolio that
supports our
strategies
Supporting
employee
growth and
well-being
Maximizing
team
performance
Ratios of female, Mid-career Recruitment, and foreign nationals
Maximize human
resources capabilities
Human
capital
investment
Realization of
management
strategies
Realizing our management
philosophy
Economic
value
Social value
A deep-rooted culture that
nurtures human resources
and creates value
Professional
Collaborative
Agile
Be Yourself
Build Your Career
Make a
Difference
Creating a human
resources
portfolio that
supports our
strategies
Supporting
employee growth
and well-being
Maximizing
team
performance
SMBC Group
Talent Policy
What SMBC Group
expects employees to be
Employee Value
Proposition
Realization of
employee’s
aspirations
SMBC GROUP REPORT 2024 039
038
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Value Creation Story
Create Social Value / Pursue Economic Value
Expansion of human resources
in focus areas
Key investments in Focus Areas
We actively hire new employees and optimize staffing
through the creation of a human resources portfolio to
achieve our Medium-Terms Management Plan. In FY2024,
we will allocate 550 persons to our strategic areas, such
as digital domain that promotes “Olive” and wholesale
business area in which our customers’ business activities
are agile, in response to changes in the yen-denominated
interest rate environment.
We have launched a new department to advance the
creation of social value. Furthermore, additional 250 per-
sons will be secured to strengthen our corporate infrastruc-
ture, including IT investment, compliance and risk manage-
ment structures.
Focus areas
Human resources planning (3 years)
Of which, FY2023
results
Legal affairs, compliance,
risk management, IT
+400 persons
+1,000 persons
DX, analytics
+150 persons
+300 persons
Global
+50 persons
+100 persons
New graduate and mid-career recruitment
For new graduate recruitment, we aim for optimal hiring
through “open recruitment” targeting undergraduates who
are willing to gain experience in a wide range of business
fields and “course-specific recruitment” targeting who are
willing to cultivate high levels of expertise in a particular
area. As an example, SMBC and SMBC Nikko Securities
have launched Group Retail Course for group joint recruit-
ment of human resources involved in a field of wealth man-
agement business. Through this course, we develop human
resources with knowledge and experiences in both banking
and securities, and meet wide-ranging needs including
asset management, inheritance, and succession. We have
a total of 25 courses across the Group. For mid-career
recruitment, we hire human resources who possess diverse
knowledge regardless of industry, with the aim of creating
an organization more conductive to innovation.
Succession planning and
human resource exchanges
Management and development of Group manage-
ment human resources
We formulate succession plans for vital Business Units and
for key CxO positions. Through transfers and human re-
source exchanges within the Group, we provide employees
who are named in such succession plan with opportunities
to overcome personal challenges, broaden their manage-
ment perspectives, and form cross-Group networks. We
incorporate candidates who demonstrate particularly high
performance into succession planning in anticipation of
their future role in management.
We actively invest in education at every level employ-
ees, from mid-level to the officer level, and provide various
opportunities including training, secondment, or talent
exchange to candidates for our future management so that
they gain experiences not only within but also outside the
Group. Our management, including CEO and outside direc-
tors, also participate in these opportunities and commu-
nicate with the participants to encourage them to develop
their mindsets as future leaders.
Creating a Human Resources Portfolio
that Supports Our Strategy
We are also strengthening our organizational structure
for smoothly fit mid-career recruits in the office to maximize
their performance early. As an example, We provides new
employees a Buddy System that supports from job offer
acceptance to the end of the first year in SMBC, an On-
boarding Handbook that complies feedback from mid-ca-
reer recruits and highlights key points of support, as well as
organizing exchange events aimed at networking.
0
100
200
300
400
’23
’24
’25
Number of new graduate hires by course
105
148
325
(FY)
(persons)
Plan
Number of mid-career hires
487
927
0
’22
’23
’24
(FY)
(persons)
200
400
600
1,000
800
Plan
(same level as
previous year)
Certifying specialists
We secure and develop professionals in specific domains
by evaluating and rewarding their expertise in focus areas.
As an example, SMBC has established an Expert Certifica-
tion System covering 31 areas, the Japan Research Insti-
tute has introduced an IT Professional Certification System,
and Sumitomo Mitsui Card Company has introduced a
Digital & Marketing Skill Certification System. SMBC Nikko
Securities offers reward systems and career paths specific
to the investment banking and markets divisions for em-
ployees who demonstrate high expertise.
Number of subject matter experts across the group
Mar.22
Mar.23
Mar.24
Investment banking
Digital
Governance
Other
1,230
1,652
1,703
(persons)
0
350
700
1,050
1,400
1,750
Inclusion of locally hired overseas employees
As our business outside Japan is leading our growth, we
are fostering a culture that both Japan hired employees
(“JH”) and locally hired employees (“LH”), employees
who are hired and work outside Japan, can experience
and understand diversity of SMBC Group and transform
this culture into our competitiveness. For example, we are
providing over 60 LHs with mid/long -term work experience
at Tokyo head office for mid/long term or offering joint
training opportunities with JHs. These employees build
relationships with colleagues across departments and
regions to share their knowledge and practices from each
region, as well as to gain a better understanding of the
headquarters' strategy.These opportunities/programs also
promote globalization at the offices located in Japan, and
creating an environment where business can be conduct-
ed more effectively in collaboration even after the end of
the placement.
We also continue to conduct varied forms of joint
training aimed at enhancing business skills and top man-
agement skills at the global level.
0
100
200
300
400
0
2
4
6
8
10
3.2
128
151
339
3.8
8.5
Succession Planning
Number of candidates
Ratio of number of candidates to target number for post
Immediately ready
Within 5 years
Future candidates
(persons)
(multiple)
1
“Global Japan Program”, the short term training for locally hired overseas
employees in Japan
SMBC GROUP REPORT 2024 041
040
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Value Creation Story
Create Social Value / Pursue Economic Value
Building an environment for
self-motivated learning
An online learning platform connecting the Group
SMBC Group uses the SMBC Group eCampus shared
online learning platform to promote self-motivated learn-
ing by employees. Containing about 1,700 content items,
the platform offers learning materials in wide-ranging
fields including business, work knowledge, compliance,
and messages from top management. Along with learning
content, SMBC Group eCampus offers features including
training sign-up, tests, and questionnaires. It supports
and deepens employees’ self-motivated learning activities
through linkage with personnel data. Logins to the system
averaged over 3,000 per day in FY2023, and have reached
as high as 1.1 million in a year as use of the platform
spreads among employees.
In particular, content provided by our Digital Univer-
sity in-house digital IT education organization has greatly
contributed to enhancing employees’ digital literacy. To
improve the environment for achieving self-directed career
development, we will further make use of the platform’s
features to build personalized UI and strengthen content.
Initiatives to support self-
directed career development
Engaging with careers and encouraging new
challenges
We support employees’ initiatives to support self-directed
career development through our internal job posting sys-
tem for applying to positions across the Group.
We also make efforts toward career education by
which companies conduct career training according to age
group, with career consulting available across the Group.
For example, SMBC emphasizes communication between
employees and the human resources department, engag-
ing in about 7,000 hours per year for touch-points with
employees, including interviews.
In addition, we regularly holds “job forum” explanatory
Creation of an environment
that supports endeavors
Endeavors through “Producing New CEOs”
We allocate budget and personnel to employees who have
unique business ideas that can support SMBC Group’s
growth, creating an environment allowing these employees
to demonstrate their abilities to the fullest.
For some business ideas, we may even launch a new
in-house venture beyond the framework of the company,
selecting an employee as “president.” In FY2023, we turned
out 11 “presidents” of new businesses selected through
pitch contests and open recruitment. We continue support-
ing employees of any age and experience level who tackle
challenges with “Make a breakthrough” to see them through.
SMBC Wevox President Hidekazu Sugimoto
(photo, right)
SMBC Wevox Director Satoshi Fusho
(photo, left)
BPORTUS President
Kazuki Tanaka
Creating co-creation opportunities across Group
companies
SMBC Group carries out a variety of measures offering
opportunities for co-creation by Group companies.
We have established a Group commendation system
that recognizes outstanding initiatives enabled by collabo-
ration within the Group.
There are also numerous cases of project teams that
cross the boundaries of Group companies, formed with the
aim of enhancing speed and customer response capabil-
ities. We adopt the “Squad” method of flexible member
assignment to undertake creation of value, as in the case
of Olive.
Support for Employee Growth
and Well-Being
sessions to communicate the appeal of departments and
creates job maps to deepen employees’ understanding of
the content and the appeal of work at other departments,
along with required skills and qualifications.
Sumitomo Mitsui Finance and Leasing also has a
unique initiative called Job Shadow, by which employees
experience the work of another department for a day.
Sumitomo Mitsui Card Company supports indepen-
dent career development through “career meetings” in
which superiors formulate and share career plans based
on employees’ career prospects, and a “career challenge
(FA system)” program by which employees can apply for
desired posts and work.
Through these diverse initiatives, we support the
career formation of all employees and promote individual
growth.
Total annual training costs
FY2022
FY2023
Total annual training costs
¥4.0 billion
¥4.7 billion
Initiatives to support Initiatives to support self-directed
career development
FY2021
FY2022
FY2023
Number of applicants for open
recruitment system
1,595
1,693
1,870
Number of users of side job system
(Of which, internal)
183
318
699
Growth through external dispatch and in-house
side jobs
We promote the acquisition of diverse work skills and
experiences through an external dispatch entry system
for the accumulation of experience for a period outside of
SMBC Group, and through in-house side jobs that allocate
a portion of work hours to work in the side job department.
Mitsui Sumitomo Card Company and SMBC Nikko
Securities also approve external side jobs aimed at sup-
porting independent endeavors and creating innovation
through personal network formation and the spreading of
values.
Health and productivity
management
Ensuring mental and physical health to support
employees’ growth
Our subsidiaries have issued a “ Health and Productivity
Management Declaration” and are committed to health
and productivity management with the aim of invigorating
their organizations by enhancing employees’ vitality and
productivity. Under the leadership of the Chief Health
Officer, the companies, health insurance associations, and
occupational health staff work collaboratively to implement
measures including improvements of office environments
and the development of support systems and work systems
appropriate for the stages of primary to tertiary prevention.
In FY2023, we designated November as “Wellness
Month” to intensively focus on health management. The
Group as a whole organized running and walking events
around the Imperial Palace, aiming to foster exercise habits
and enhance communication through interactions between
Group companies’ employees and disabled athletes. In rec-
ognition of these efforts, our company was certified as one
of the Health and Productivity Management Outstanding
Organizations “White 500” (Large Enterprise Category).
(Persons)
Primary prevention
Training and seminars
Smoking cessation program
Introduction of lifestyle improvement support apps
Installation of running stations, massage rooms, etc.
Secondary prevention
Recommendations for secondary medical checkups,
gynecological checkups, etc.
Tertiary prevention
Counseling to support return to work
Trial work system, work restrictions, etc.
Key initiatives
Rate of use of paid leave
FY2021
79 %
FY2022
80 %
FY2023
85 %
KPI
or higher
FY2025
85%
2
SMBC GROUP REPORT 2024 043
042
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Value Creation Story
Create Social Value / Pursue Economic Value
Maximizing Team Performance
DE&I as an important strategy for growth
SMBC Group positions Diversity, Equity & Inclusion
(“DE&I”) as an important strategy for growth. We aim to
enhance our organizational performance and maximize
value creation by fully leveraging the capabilities of our
diverse human resources. In FY2023, we revised our “DE&I
Statement” to further clarify the commitment of our top
management.
DE&I Committee and Group Management Committee
discuss KPI settings and measures, and we also hold study
sessions for managers, incorporating the latest external
insights.
Promotion of DE&I
Enhancing employees’ sense of
participation in our strategy
Interaction with top management
Through several event including seminars, lunch meetings,
and training, we provide opportunities for employees to
interact and dialogue with top management. In FY2023, we
launched a channel to stream interviews with Group com-
pany presidents and show the daily life of the Group CEO
on our in-house social networking service “Midoriba.” We
will continue to provide opportunities for communication
through varied approaches and to reform our organization-
al culture through internal invigoration.
“CEO Seminar”, where the Group CEO and employees discuss topics including SMBC
Group direction and strategies
Employee shareholding association
SMBC Group has introduced an employee stock ownership
plan. This plan promotes medium- to long-term asset for-
mation by employees, supports financial well-being, and,
as a component of our human capital investment, leads to
opportunities to enhance employees’ awareness of their
participation in management.
At SMBC, boosting incentives increased participation
in the plan by 38% and amount of contribution by about
20% in FY2023. We will continue creating mechanisms to
enhance this awareness on the part of employees.
Introduction of stock plan for employees
In FY2024, SMBC established a stock plan for employees
to strengthen the commitment of employees and top
management in working as one to enhance our corporate
value. By linking compensation to the company’s stock
price over the medium to long term, the plan functions as
incentive for employees to enhance the corporate value of
SMBC Group overall. We plan to gradually expand it be-
yond Sumitomo Mitsui Banking Corporation to other Group
companies.
Enhancement of engagement
Situational assessment through Wevox and 1-on-1
meetings
SMBC Group uses Wevox, a tool for fixed-point observation
of the state of organizational and employee engagement to
support improvement actions by headquarters and man-
agement. After introducing Wevox at SMBC in FY2019, we
moved ahead with rollout at other Group companies.
As of April 2024, nearly all major companies in our
Group have adopted Wevox. Results obtained through
measurement of engagement are shared within organiza-
tions and are reflected in our business operation.
In Japan, we have also used Wevox since FY2023 to
measure degree of achievement of our Talent Policy. We
reference this measure as an indicator of the effectiveness
of the value provided by our Company and use it as an aid
in improving measures.
We also work to enhance employee engagement and
performance by setting up regular dialogues and 1-on-1
opportunities.
Engagement Score
Mar.22
Mar.24
Comprehensive score
Challenging culture
72
67
73
KPI
70
67
72
Mar.23
69
Enhancement of Diversity at Decision Making Levels
KPIs related to ensuring diversity at Decision Making
Levels have been set on a Group wide basis. In FY2024,
in addition the previously set KPIs on Gender, Mid-career
recruitment and foreign nationals, we have introduced a
new KPI on Female in the Senior Management Position on
an entire global basis including locally hired employees at
overseas offices.
Promoting work-life integration and supporting
paternal participation in childcare
We are committed to realize workplace where our
employees can effectively balance their work and family,
according to their lifestyles, and find fulfillment in their work.
In FY2023, we have set goals: achieving Childcare leave
usage by male employees: 100%, as well as Number of days
of childcare leave by male employees: an average of 30 days
or more. We will continue to encourage greater utilization of
paternity leave benefits, as means to promote the Paternal
participation in Childcare.
Group joint training for developing female managers
To cultivate qualities required for executive officers and aid
career development, we conduct training for mid-career
female employees. In this training, officers of the Group,
including the CEO, conduct reviews and provide opportuni-
ties for dialogue to elevate the perspectives of candidates.
We also conduct external lectures and round-table
discussions with female managers to help overcome chal-
lenges faced at every stage, from young employees to top
management. Through such initiatives, we support female
employees in actively tackling roles after being promoted
and in aiming for higher positions.
3
FY2025
FY2030
NEW
NEW
Number of female
executive officers
30 persons
Ratio of female
managers*1
25%
30 %
Ratio of female in senior
management position*2
Ratio of female
managers*1
30%
35%
Ratio of female in senior
management position*2
30 %
Ratio of female in
the Board of
Directors
*1 Calculate based on the definition required by the Act on the Promotion of Female
Participation and Career Advancement in the Workplace
*2 Calculate by combining number of "Female managers*1“ and number of those equiva-
lent to Director & above at overseas locations.
* The paternity leave take-up rate may exceed 100% in the case employees who take
paternity leave beyond fiscal years.
Average number of days and take-up rate of paternity
leave
FY2022
FY2023
Average number of days of paternity leave
8.2 days
11.5 days
Rate*
89%
116%
Diversity, Equity & Inclusion Committee
Chairman
Vice chairman
Members
Group CEO
Group CHRO
Presidents of 8 major SMBC Group
companies
Board of Directors / Management Committee
SMBC GROUP REPORT 2024 045
044
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Value Creation Story
Create Social Value / Pursue Economic Value
048
Become a Leading Company in Creating Social Value
050
The Vision We Seek through Creation of Social Value
Strategies of Business Units
070 Retail Business Unit
074 Wholesale Business Unit
078 Global Business Unit
082 Global Markets Business Unit
086
Creating Social Value through Digital
Special Content
090
Special Content 1 Multi-Franchise Strategy
098
Special Content 2 Evolving Olive
102
Special Content 3 Well-Timed Capital Funding
106
Aiming to Make the Leap to Asset Management Solutions Provider
Create Social Value
Pursue Economic Value
Create Social Value / Pursue Economic Value
SMBC GROUP REPORT 2024 047
046
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Become
a Leading Company
in Creating Social Value
Ito In the Medium-Term Management Plan which
launched in FY2023, SMBC Group established Create
Social Value as a core policy of its business strategy. I
believe that many corporations have yet to position the
resolution of social issues through sustainability-related
initiatives as a key part of their business strategy. As an
SMBC Group Global Advisor, what are your thoughts on the
current Medium-Term Management Plan?
Polman I think it is wonderful that SMBC Group has
established Create Social Value as a key policy of its
business strategy. In the revised materialities “Poverty
& Inequality,” etc. were added to “Environment,” which
clearly reflects SMBC Group’s commitment to tackling
important global issues. Furthermore, SMBC Group has a
long history of conducting business both in and outside
of Japan, and its core business foundations incorporate a
variety of stakeholders. As such, I believe SMBC Group is
in a good position to leverage its robust corporate infra-
structure to address social issues. We are also witnessing
the expansion of the sustainability business sector in nu-
merous parts of the world, leading to increased demand
for new financial products and services. I hope to see
SMBC Group drive forward the development of the sector
by using its proven track record and the trust it has won
from various stakeholders to lead this transformation.
Ito Thank you. As Group CFO I am in almost daily commu-
nication with investors. While there are demands regarding
short-term, financial results, we are very well aware the
importance of the management team also maintaining a
long-term perspective so that we are able to create social
value. During your time as CEO of Unilever, you applied a
long-term perspective to your management style. Where
there any particular items you focused on in order to obtain
the understanding of investors and employees?
Polman A short-term approach focusing on quarterly
financial results is not always in the best interests of soci-
ety as a whole. When I was appointed as CEO of Unilever,
I switched from announcing our financial results on a
quarterly basis to a biannual basis. At the same time, I
established a long-term growth strategy that aimed to solve
social issues while also realizing economic growth, and I
communicated closely with shareholders to deepen their
understanding of this strategy. The strategy was initially
met with skepticism by financial markets. However, after
producing successful results, including financial results,
investors warmed to this approach which in turn caused an
increase in Unilever’s share price. Unfortunately, not many
corporations followed in Unilever’s footsteps, but I became
certain that it was possible to increase corporate value
while working to solve social issues if we adopted a long-
term perspective and developed a healthy relationship with
investors. Furthermore, all employees must take part if a
company is to successfully bring about change by address-
ing social issues. By positioning the resolution of social is-
sues at the center of Unilever’s business strategy, we were
also able to see our employees undergo positive transfor-
mation. For example, the educational activities undertaken
by the marketing department regarding the correct way to
wash your hands using Unilever’s soap products not only
contributed to the prevention of infectious diseases and
the resolution of other health and sanitary issues it also led
to new business opportunities.
Ito I agree. In order to promote the core policy of Create
Social Value we must apply both top-down and bottom-up
approaches. For a top-down approach to succeed, the
management must possess a long-term perspective and
show a strong commitment to the resolution of social
issues. In order for a bottom-up approach to succeed,
Group-wide efforts will be required so that employees
can proactively take part in projects that are key to the
business strategy. I want to convey to all SMBC Group
employees that our corporate value will increase if we
take part in efforts to create social value based on a
long-term perspective.
Polman Typically speaking, I believe the majority of social
value created by a company is done over the long-term,
that is to say, it takes a period of five to ten years for that
value to be created. It goes without saying that a long-term
approach is required to solve climate change, food secu-
rity, inequality, and other social issues. In addition, cutting
edge, environmentally friendly technology is being devel-
oped on a daily basis while stakeholders’ mindsets are also
undergoing change. As such, the undertaking of sustain-
ability-related initiatives does not always equal the sacrifice
short-term financial success for a company. Speaking from
my own experiences, by striving to solve social issues and
engaging in business based on a long-term perspective, at
the end of the day it is possible to generate greater value
than when short-term approaches are applied and as a
result will drive your share price higher.
Ito I agree. I firmly believe that establishing Create Social
Value as a key policy of our business strategy will lead
to increased medium- to long-term corporate value. In
addition to increasing expectations for growth by steadily
increasing revenue, I want to enhance SMBC Group’s PER,
in other words our expected future growth rate, by creating
social value through the resolution of social issues while
adapting to changes in the environment.
Based on the valuable feedback we have received
today, SMBC Group will strive to become a leading com-
pany in creating social value by continuing to conduct our
business based on a long-term perspective.
Mr. Paul Polman, an SMBC Group Global Advisor,
and Mr. Fumihiko Ito, Group CFO & CSO,
exchanged thoughts on enhancing corporate value
through the realization of Create Social Value.
Right
Paul Polman
Paul Polman was appointed as an SMBC Group Global Advisor on March
2023. During his time as CEO of Unilever PLC ("Unilever"), Mr. Polman
introduced “Unilever Sustainable Living Plan (USLP),” a business plan that
positioned the solving of social issues as a key pillar and endeavored to
balance sustainability and corporate growth.
profile
Left
Fumihiko Ito
Group CFO & CSO
Director Senior Managing Executive Officer
SMBC GROUP REPORT 2024 049
048
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Enhancement of
corporate value
Create
Social Value
Collaboration
with stakeholders
Participation by
all employees
Sustainability efforts of Mitsui and
Sumitomo over long years
Japan’s Regrowth
Japan’s nominal GDP per-capita:
34th*8
Depopulated regions in Japan
approx. 60%*9
Declining Birthrate & Aging Population
Outlook for ratio of population of age 65
and older in Japan
1/3 (2038)*6
Population decline in Japan
(October 2022-September 2023)
approx. 600,000 people*7
Poverty & Inequality
Relative poverty rate of children in Japan
11.5%*4
Number of people in extreme
poverty worldwide
approx. 700 million*5
DE&I/Human Rights
Need for a corporate culture
that allows diverse human talents
to work with motivation
Children engaged in child labor worldwide
approx. 1 in 10 children*3
Environment
Average global temperature in 2023
(compared to pre-Industrial Revolution)
approx. 1.5°C*1
Number of extinct species since 1975
approx. 40,000 per year*2
The social issues faced by the world have become increas-
ingly diverse and severe in recent years, and the mindset
of stakeholders is steadily changing. Amid growing expec-
tations toward companies to proactively and concretely
contribute to solving social issues, in our Medium-Term
Management Plan that began in April 2023, SMBC Group
set forth “Create Social Value” as one pillar of our man-
agement and established “Environment,” “DE&I/Human
Rights,” “Poverty & Inequality,” “Declining Birthrate & De-
clining Population,” and “Japan’s Regrowth” as five priority
issues (materialities). Under this framework, our Group has
begun working as one to solve social issues.
Many employees endorsed our aim of creating social
value upon the release of the Medium-Term Management
Plan, yet some expressed uncertainty over what specifi-
cally should be done. To first ensure that employees solidly
understand and agree with our aims, we held town hall
meetings at sites in Japan and overseas, repeatedly dis-
cussed the background behind our addressing the creation
of social value and our specific actions, and incorporated
efforts to create social value into our evaluation system for
all departments and employees.
To further back up our employees, in FY2024 we put
forth a slogan of “Participation by all” for the 120,000
employees in our Group, under which we are energetically
advancing measures that include support for activities
and expansion of opportunities to be part of the creation
of social value. Specific actions include setting an expense
budget of ¥10 billion and an investment fund of ¥40 billion,
creation of materials for use by employees in discuss-
ing social issues with customers, and expansion of our
pro-bono work and commendation systems. Our measures
are yielding results, with our most recent questionnaire
showing over 60% of employees responding positively that
they’ve undertaken actions to solve social issues in con-
junction with their own work.
Through our initiatives under participation by all
employees and leveraging our extensive customer base
and our wide-ranging points of contact with society, we will
cooperate with partners in tackling solutions to even more
social issues.
On the topic of environmental issues, the correla-
tion between climate change and natural capital and the
impacts of climate change on social issues such as human
rights and health are pointed out. The company of climate
change issues have become apparent. We intend to make
the greatest possible contribution as a global financial
group to address this major challenge. Specifically, we are
focusing on initiatives such as, financial and non-finan-
cial support for decarbonization efforts by domestic and
overseas customers, raising our level of risk-taking for new
energy and other new technologies such as offshore wind
power and hydrogen-reduced iron, and providing transition
finance. While transitions in Asia are particularly difficult
from the “Just Transition” perspective, as a financial insti-
tution pursing a multi-franchise strategy in Asia and aiming
for sustainable growth together with regional economies,
we are commited to responding effectively. Given that the
climate change presents us with not only business oppor-
tunities but also risks, we will strive to constantly raise the
level of our governance.
We are also promoting visualization of our efforts
aimed at creation of social value and have decided to pub-
lish details in our Impact Report. As the creation of social
value becomes more important, we believe that along
with financial indicators, positive and negative impacts
on society and the environment will grow in importance
as new metrics for measuring corporate value. By making
these impacts visual, we will work toward the expansion
of relevant solutions, enhancement of employees’ under-
standing, and objective and transparent disclosure toward
stakeholders.
As Group CSuO, I will make every effort to ensure that
SMBC Group executives and employees continue working
as one to take the lead in solving social issues, and connect
our action to the creation of social value and further to the
enhancement of our corporate value.
The Vision We Seek through
Creation of Social Value
Executive Officer
Group CSuO
Message from
Group CSuO
Masayuki
Takanashi
*1 Copernicus Climate Change Service survey (2024) *2 “White Paper on the Environment, the Sound Material-Cycle Society, and Biodiversity in Graphs”, Japanese Ministry of the
Environment (2010) *3 UNICEF survey (2021) *4 “Comprehensive Survey of Living Conditions”, Japanese Ministry of Health, Labour and Welfare (2023) *5 World Bank statistics (2022)
*6 “Annual Report on the Ageing Society”, Japan Cabinet Office (2023) *7 “Population Estimates”, Japanese Ministry of Internal Affairs and Communications (2023)
*8 IMF statistics (2023) *9 “Current Status of Depopulation Measures”, Japanese Ministry of Internal Affairs and Communications (2021)
SMBC GROUP REPORT 2024 051
050
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Our initiatives on Materiality Aimed at
the Creation of Social Value
Materiality identification process
SMBC Group has selected five priority issues (materialities) to be proactively addressed: “Environment,”
“DE&I/Human Rights,” “Poverty & Inequality,” “Declining Birthrate & Aging Population,” and “Japan’s Regrowth.”
We are also promoting initiatives toward the creation of social value under ten goals along with key performance
indicators (KPIs).
We identified 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 as well as global issues and efforts by Japan’s government.
We added KPIs associated with our materialities and targets, with decisions made by the Board of Directors following deliberation by the
Management Committee.
Approximately 20,000 employees in Japan and overseas responded to a questionnaire survey on social issues on which SMBC Group should
focus.
In addition to Management Committee meetings, Diversity Committee meetings, and other meetings on the executive side, discussions were
held in Board of Directors meetings and Sustainability Committee meetings on the supervisory side.
We selected five materialities and ten goals based on the results of the employee survey and on opinions from both the supervisory and
executive sides (including the opinions of external committee members).
Identification of social issues to be addressed
Institutional decisions
Discussion and examination
1
3
2
Materiality
10 goals
Key performance indicators (KPIs)
Reference: FY2023 results
Directions for action
Related SDGs
Environment
Support transition to achieve a
decarbonized society
Sustainable finance
¥50 trillion (FY3/21-30)
¥24 trillion (FY3/21-24)
Working to support customers’ transition to net zero and technological innovations
in order to contribute maximally to decarbonization
Working to create more advanced solutions for customers, such as risk analysis and
financing, based on the importance of preserving and restoring natural capital
Contribute to the conservation and the
restoration of natural capital
DE&I/Human
Rights
Realize a workplace where employees
enjoy high job satisfaction
Engagement score
Maintain at least 70
72
Developing a group-wide framework to ensure the human rights of everyone involved
with SMBC Group are respected
To ensure diversity, respecting the individuality of every employee. Providing
programs to enable work styles and lifestyles that match individual values
Encouraging highly motivated employees to collaborate with relevant parties in and
outside the company to further promote social issue solutions, as part of their job.
Creating an environment for these activities that is supported by their managers and
colleagues
Creating programs that allows all employees to grow and demonstrate their abilities
Respect for human rights throughout the
supply chain
Poverty &
Inequality
Break the cycle of poverty and inequality
for the next generation
Number of microfinance borrowers
+800,000 people
(FY3/26, compared to FY3/23)
+153,000 people
(compared to FY3/23)
Creating societies where people with abilities are given opportunities to grow,
demonstrate their full potential, and play active roles. Regardless of the environment
in which they were born, we want children to have hope for the future
Contribute to financial inclusion
in developing countries
Declining
Birthrate
& Aging
Population
Relieve anxiety about the 100-year life
era
AM/foreign currency balance
¥18 trillion (FY3/26)
¥17 trillion
Working to relieve various anxieties about the era of 100-year life by collaborating
across industries and enhancing products and services, including non-financial
ones, to meet various customer needs
Working to leverage digital technology to provide user-friendly financial services
accessible anytime, anywhere to all customers
Build user-friendly infrastructure to
support a society with a declining
population
Japan’s
Regrowth
Support customers' business model
transformation
Investment and loans for startups
¥135 billion (FY3/24-26)
¥79.2 billion
Finance supporting matched to growth stages, building and catalyzing ecosystems
for startups, supporting new technology development for GX and DX, assisting with
transitions related to climate change, and more
Working to provide opportunities related to sports, arts, and other areas to provide
opportunities broadly to youth with a promising future
Create innovation and foster new
industries
SMBC GROUP REPORT 2024 053
052
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
• Expanding opportunities for employees'
participation
The SMBC Group Pro Bono Work Project allows the alloca-
tion of up to 20% of employees’ working hours to activities
such as work with NPOs. In the fiscal year 2024, we expect
participation to outnumber that of the previous year.
We also plan meetings directly under the Group CEO aimed
at turning ideas for the creation of social value into proj-
ects, as well as events for addressing social value creation
at all of our offices in Japan and overseas.
• Supporting employees' initiatives
Accelerating the creation of social value requires that
employees personally identify with this goal and address
it on their own. As a mechanism to support autonomous
activities by employees, SMBC Group has established an
expense budget of ¥10 billion and an investment fund
of ¥40 billion for use in initiatives to create social value,
and has developed in-house training and commendation
systems as well. We will continuously invest management
resources in measures for the creation of social value while
solidly backing up employees’ efforts.
• Enhancing capabilities of executives and
employees
While further enhancing the expertise of our executives, we
work to enhance the capabilities of employees through the
systematization and expansion of sustainability training.
Among our ongoing efforts to foster awareness, we conduct
study sessions led by the Group CSuO and round-table
discussions titled “Social Value Creation Caravan,” distrib-
ute booklets to all Group employees, and communicate
through newsletters and messages from top management.
CSuO Channel
Social Value Creation Caravan
2,000 participants
Cumulative total
196 offices
Japan and overseas
Even before the realization of short-term profits, efforts
to create social value contribute to the enhancement of
corporate value by influencing Price-to-Earnings Ratio
(PER) through improvement of expected growth rate and
lowering of cost of capital.
SMBC Group has set forth three pillars for our creation
of social value. The first pillar is the “Creation of a system
toward full participation”. By personally identifying with the
solving of social issues and by tackling solutions autono-
mously, all of our approximately 120,000 employees can
yield enormous impacts.
The second pillar is “initiatives that create a virtuous
cycle toward social value creation”. We will work to solve
even more social issues not only through our own initiatives
but also through collaboration with customers and society.
The third pillar is “information disclosure that an-
ticipates changes in the “metrics”.” To enhance our cor-
porate value by appealing our efforts externally, we will
also tackle measurement and advanced disclosure of the
impacts we have on society and the environment through
our initiatives.
• A framework for facilitating funds to solving social
issues
As a financial institution, SMBC Group financially connects
customers who are tackling social issues and customers
who wish to contribute to such efforts. By doing so, we aid
the creation of mechanisms that promote the circulation of
funds for solving social issues. In 2024, we launched social
deposits aimed at relieving poverty and inequality,etc.,
along with impact investments in startups. In impact in-
vestment, we go beyond funding alone to share know-how
and provide other support.
SMBC Group
Balance sheet
Motivated to
contribute
to society
Companies
Individuals
Green deposits
Social deposits
Other deposits
Net worth
Sustainable finance
Impact investing
Donations, etc.
…
Companies
Organizations
Working
to solve
social issues
Philanthropy advisory
• Platforms created with partners
Creation of social value cannot be achieved by SMBC
Group acting on its own. As cooperation with customers,
society, and other stakeholders is vital in creating social
value, we operate a business operator community for
industry-academia collaboration and for solving social
issues. With the endorsement of over 1,700 companies,
the GREEN x GLOBE Partners business community imple-
ments support programs for the creation of social value.
Through such platforms, we will continue undertaking the
creation of social value.
Enhancement of corporate value through
the creation of social value
To continuously raise the level of our sustainability man-
agement, SMBC Group has established a Sustainability
Committee and Corporate Sustainability Committee from
both supervisory and executive aspect. In April 2024, we
established the Sustainability Division for Fulfilled Growth
to further strengthen our group-wide efforts for the creation
of social value.
Creation of a system toward
“Full participation”
Initiatives to create a virtuous cy-
cle toward social value creation
Promotion structure
Organization & Employees
Expanding opportunities for
employees' participation
Supporting employees' initiatives
Enhancing capabilities of
executives and employees
Bottom line growth
Approach to PER
Expected growth rate
Cost of capital
Impact-based information disclosure
Creation of a system toward
"Full Participation"
A framework for facilitating funds to
solving social issues
Platforms created with our partners
Mid-to-long term initiatives for
social issues
Initiatives to create a virtuous cycle
toward social value creation
Customers & Society
Investors, etc.
Information disclosure anticipating
changes in the "metrics"
Supervision
Board of Directors
Execution
Nomination Committee
Audit Committee
Compensation Committee
Risk Committee
Sustainability Committee
Corporate Sustainability Committee
Group CSuO
Established in July 2021
Established in October 2018
Established in April 2021
Established in April 2024
Sustainability Division for Fulfilled Growth
Internal committee
SMBC GROUP REPORT 2024 055
054
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Visualization
Products/services
Positive impact
finance
Impact IPO, etc.
Employees
Visualization of
results
Willingness to engage
Investors, etc.
Quantitative
grasp of
initiative progress
Impacts on society and the environment
through SMBC Group’s initiatives aimed at realizing
an era of “Fulfilled Growth”
Avoided
emissions
Emission
volume
(past)
Emissions projection
with support
Emissions
Emissions projection
without support
The percentage of customers
below the poverty line
Microfinance by BTPN Syariah, etc.
Poverty & Inequality
Environment
Avoided emissions (GHG)
Project finance for renewable energy projects
3 years after
the start of using
our services
(FY2023)
(FY2022)
11.1 %
19 million
t-CO2
Reduction
by
• Impacts envisioned by SMBC Group and the significance of visualization
• Existing impact indicators
Examples of indicators
Impacts as viewed by SMBC Group
Information disclosure anticipating changes in the “metrics”
For a number of our initiatives, SMBC Group has already
set impact indicators that we measure and disclose.
As an example, BTPN Syariah supports social inde-
pendence by serving underprivileged persons, including
women running family businesses in agricultural areas,
with microfinance and other financial and non-financial
services. To evaluate the effectiveness of these efforts, we
work with an external organization to measure the ratio of
customers with income below the poverty line. This indi-
cator declined by 11.1% in 2023 for customers who had
begun using our services three years earlier.
With regards to decarbonization efforts, we calculated
the avoided emissions for finance related to renewable
energy projects. In FY 2022, SMBC contributed to the re-
duction of CO2 emissions* totaling 19 million t-CO2 through
project financing for renewable energy projects.
As creation of social value becomes more important, not
only financial indicators but also positive and negative
impacts on society and the environment will grow in impor-
tance as new metrics for measuring corporate value.
Realizing an era of “Fulfilled Growth” will require that
we maximize positive impacts while reducing adverse
impacts. We believe that visualizing and properly managing
impacts will lead to achieving the abovementioned goal.
Visualization of impacts also enables expansion of
related solutions and impresses on employees the signifi-
cance of undertaking social value creation. Moreover, we
believe that this will contribute to the evaluation of our me-
dium- to long-term corporate value by allowing investors
and other stakeholders to quantitatively and objectively
understand the status of our initiatives.
For details of our efforts toward visualization of im-
pacts, please see our new Impact Report.
We first identify social issues that pertain to our material-
ities. We next analyze the scale of stakeholders that seek
solutions to the issues, the effects of solutions, and the
possibilities for SMBC Group to contribute to solutions.
Based on the analysis, we also identify efforts that make
impacts visual.
As an example, we are working on the materiality
“Japan’s Regrowth,” as shown at right.
A logic model is a tree-type diagram that clarifies to whom
and what results (outputs) are to be brought and what
changes and outcomes (outcomes/impacts) are to be
aimed through inputs and activities.
As an example, looking at the SMBC Elder Program
that supports customers’ longevity in the era of 100-year
lifespans, we capture how the activity of offering the pro-
gram leads to the output of an increase in program users.
We also clarify the causal relationship between the out-
come of changes in customers and the impact of changes
in society.
In FY2023, SMBC Group began efforts aimed at the visualization of impacts. We first aim to organize steps
–
leading to
visualization, take action according to these steps, and finally measure and disclose indicators. We will continue working on
these steps, revising them as necessary.
* Calculated as GHG reduction effects for projects overall
• Steps in visualization of impacts, and efforts by SMBC Group
1
Identifying topics for making impact
visible
Specifying topics based on the impact brought by
initiatives
Evaluation items
Stakeholders
(examples)
Effects
(examples)
Possibilities
to contribute
(examples)
Labor
market
Worsening of human
resource shortages
Companies
Sustainable
growth of
companies
DX Solution
Working
environment
Poor working
environment for diverse
human resources
Workers
Demonstration
of workers’
capabilities
Consulting
Human
capital
Insufficient investment
in human capital
Companies
Sustainable
growth of
companies
HR Solution
Technology
development
Delay in practical
application of advanced
technology
Companies
Increase in
sales and
profitability
M&A
Productivity
Low productivity due to
insufficient investment
in digital technology
Companies
Productivity
enhancement
DX Solution
Industrial
metabolism
Growth of startups
Companies
Development
and growth of
companies
Finance
...
...
...
...
...
In-depth analysis of Materiality
Analyzing the factors of the issues and
our initiatives
Step
2
Step
Developing logic models
Logically explaining the relations between
initiatives and our goals
Logic model of SMBC Elder Program (conceptual image)
Solving health
and life troubles
Enriching life
experiences
Reducing
concerns
regarding wills
and end-of-life
preparation
Enriching the
experience of
aging in Japan
• Extension of
healthy life
expectancy
• Enhancement
of life
satisfaction
• Progress in
asset transfer
Activities
Business
activities
Output
Direct
results
Outcomes
Changes in
customers, etc.
Impacts
Change in
society
Increase in
the number of
program users
Providing
a program
Concierge
3
Step
Setting impact-based metrics
Establishing measurable metrics to show the impact
Measurement and disclosure
Measuring and disclosing data
4
Step
5
Step
Social issues related to “Japan’s Regrowth” (examples)
SMBC GROUP REPORT 2024 057
056
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
1
2
3
4
5
Coexist
Considerations
Main items
Policy
Portfolio
Management
Customer/Project
Management
Policies for
Specific Businesses
and Sectors
Phase-out Strategy
Environment/Social
Risk Assessment
Environmental and
Social Due Diligence
Climate-related RAF
Supporting Transition in
the world, including
Japan/Asia
Risk-taking in new energy
and new technologies
Visualization of ESG related
challenges within the whole
supply chain
Co-creation of businesses
with our customers
towards decarbonization
Offering diverse and
group-based solutions
1980s onward
2020s onward
Foundations of socio-economic advancement
New energy, new technologies
Power
Natural
resources
Theme
parks
Infrastructure
PFI
Chemical
Onshore and
offshore
wind power
Hydrogen-
reduced
iron
Solar
Power
Storage
battery
Green
hydrogen
Americas
Data center deal
Japan
Australia
Appointment as financial advisor for
green hydrogen project
Europe
World’s first large-scale
green steel project
Green data
center
Investment fund for hydrogen
Scheduled for establishment
in the first half of FY2024
Japan Hydrogen Association
Contributing to Decarboniza-
tion of the Real Economy
Achieving Net Zero within
SMBC Group
Summary of our Transition Plan for Achieving Net Zero
Contribution to decarbonization of the real
economy
SMBC Group will endeavor to introduce new energy sourc-
es such as hydrogen and new technologies for decarbon-
ization. Doing so, we will make maximum contributions as a
financial institution to achieving decarbonization of the real
economy.
1. Risk-taking in new energy and new
technologies
Over the short term, the development of new energy and
new technologies, in addition to the wider adoption of
existing technologies and reduction of costs, will be import-
ant for achieving net zero. SMBC has long demonstrated
its strengths as a pioneer in the field of large-scale project
financing for power plants and other infrastructure sup-
porting socio-economic advancement. Taking advantage of
this know-how, we are leading the market in participation
in advanced projects, including the world’s first large-scale
green steel project. We will continue to resolutely tackle the
areas of new energy and new technologies.
Sustainable finance
To achieve a net zero society, we actively provide financial
support for technological innovation and large-scale capi-
tal investments aimed at medium- to long-term reduction
of GHG emissions. SMBC Group has set a cumulative ¥50
trillion as our target for sustainable finance for the 10 years
from FY2020 to FY2029. The amount allocated to initia-
tives is progressing steadily, reaching a cumulative ¥24
trillion in FY2023.
We define sustainable finance strictly in accordance
with the Green Bond Principles and Social Bond Principles
of the International Capital Market Association (ICMA, and
others).
SMBC Group aims to achieve net zero in our own GHG emissions (hereinafter “Scope 1 and 2 emissions”) by 2030 and net
zero GHG emissions throughout our investment and loan portfolio (hereinafter “Scope 3 emissions”) by 2050. We have sys-
temized the goals and actions leading to this achievement as our Transition Plan for Achieving Net Zero.
Climate change response
Climate change is one of the most important social issues
that the world must urgently address. SMBC Group be-
lieves that contribution to decarbonization of the real econ-
omy is the biggest role that financial institutions should
play in achieving net zero emissions. We aim to achieve this
alongside SMBC Group’s own achievement of net zero.
There is no single optimal path to decarbonization; the
path varies by country and sector. Accordingly, rather than
merely withdrawing funding from high-emission sectors,
SMBC Group will support customers’ transitions and tech-
nological innovation with understanding of their individual
circumstances. We engage in support that leverages our
strengths, matched to customers’ strategies and needs.
Environment
’20
’21
’22
’23
10-year
cumulative total
(’20–’29)
(FY)
(JPY tn)
Single fiscal year results
3
5
7
9
8
15
24
50
KPI
Amount of Sustainable finance (cumulative)
Foundation
Corporate policy on climate
change and the approach for
initiatives
• “SMBC Group Statement on Sustainability” “Group Environmental Policy”
• Net zero Scope 1 and 2 emissions by 2030, net zero Scope 3 emissions by 2050
Governance
Strengthening governance on
climate change
• Supervision by the Board of Directors, internal committees including the Sustainability Committee; overall oversight and
promotion by the Group CSuO
• More advanced of executive compensation system; internal control process management
• Capability building for directors and employees
Implementation
strategy
Products and services related to
climate change
• Enhancement of decarbonization solutions, business co-creation aimed at decarbonization, expansion of sustainable
finance
Climate-related risk assessment
and management
• Strengthen Policies for specific Business and Sectors; introduction of environmental and social due diligence
Scope 3
• Expansion of portfolio GHG calculation and target setting; development of targets and indicators to support
decarbonization of real economy
Scopes 1 and 2
• Switching to renewable electricity and company cars to EVs
Engagement
Strategy
Customers
• Established Transition Finance Playbook
• Introduced company-specific assessment framework on transition plan
Industry
• Participate in initiatives such as GFANZ, NZBA, NZAMI, PCAF, IIF, Japan Hydrogen Association (JH2A) , etc.
The Government
• Participate in committees held by the Government of Japan
Metrics and
Targets
Sustainable finance
• Cumulative ¥50 trillion by FY3/30
Scope 3
• Setting targets on power, coal, oil & gas, steel, automobile, and real estate sectors
• Setting KPIs related to transitions
Scopes 1 and 2
• 40% and 55% decrease in FY25 and FY26 respectively from FY21
SMBC GROUP REPORT 2024 059
058
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Transition Finance Playbook
Summary
Shows SMBC Group's definition and criteria of Transition
Finance and its decision-making process
Goals
Results
1 Develop an objective and rational criteria
Engaged
meetings
2 Ensure accountability towards stakeholders
3 Utilize the Playbook within customer engagement
100
Approved
deals
21
2. Supporting transitions in the world,
including Japan/Asia
Transition finance
Support for hard-to-abate sectors is vital for achieving
worldwide carbon neutrality at an early stage. This is
because technical and economic alternatives for achieving
decarbonization are often limited, and they face challenges
to leapfrog to a low carbon economy. We financial institu-
tions play a role in providing transition finance that pro-
motes sustainable decarbonization and energy transition.
As the definition of transition is not unified globally, SMBC
Group acted ahead of many other financial institutions to
set a definitions for transition finance for our Group in our
“Transition Finance Playbook.” The Playbook is based on
principles/guidance of interna-
tional transition finance, as well as
national and regional policies and
regulations. Using the Playbook,
in FY2023 we carried out over
100 meetings with customers and
approved 21 transition finance
deals.
Identified issues and our responses
In dialogues with customers, the following transition fi-
nance-related issues have come into view.
1) Although transition finance contributes to decarboniza-
tion of the real economy, “finance providers'” Scope 3
emissions temporarily increase
2) There is insufficient discussion surrounding the massive
cost burden necessary for transition
Recognizing these issues, we plan to release a progress
report on transition finance in the first half of FY2024,
summarizing insights and recommendations obtained
from projects. To solve these issues, we will collaborate
with customers and government authorities on initiatives to
promote global transitions.
Contribution to decarbonization in Asia
While the world seeks to realize net zero emissions, many
companies in Asian nations that are highly dependent on
fossil fuels face circumstances that complicate the formu-
lation of transition plans. SMBC Group will play a vital role
in providing support that encompasses such companies as
we work to achieve the goals of the Paris Agreement.
We have carried out a number of transactions to
promote energy transitions, including support for the
early retirement and decommissioning of coal-fired power
plants, and will continue making contributions to decar-
bonization in Asia.
We also participate in industry-academia-govement
initiatives including Glasgow Financial Alliance for Net Zero
(GFANZ) and the Asia Zero Emission Community (AZEC),
and are actively involved in the process of formulating
global rules for energy transitions and net zero emissions
in Asia.
3. Visualization of ESG related challenges
within the whole supply chain
The “Sustana” cloud service developed by SMBC uses a
variety of business data held by customers to calculate
GHG emissions and support information disclosure. The
service is also equipped with functions for recommending
reduction measures, including those involving Scope 3
emissions. Since the service’s launch in 2022, number of
user companies have exceeded 1,900.
We also engage in data cooperation with companies
such as Zeroboard and NEC, and are fielding an increas-
ing number of requests for consultation from companies
regarding the use of visualized GHG-related data and
specific actions to reduce emissions. To align ourselves
more closely with these companies’ issues, we will strive
to expand the solutions we offer by means including
co-creation with external partners.
In recent years, companies face requirements to
enact measures against climate change while undertaking
ESG management throughout the supply chain. In Octo-
ber 2023, SMBC Group launched a business alliance with
Asuene inc. to jointly offer the Asuene ESG cloud service
that supports the identification and solving of ESG issues
in the supply chain. This series of services marks the first
such undertaking by a financial institution in Japan.
By providing DX-based solutions, SMBC Group will
continue to support customers in their decarbonization
management.
4. Co-creation of business with our customers
towards decarbonization
SMBC is also actively working on business co-creation that
connects customers who have decarbonization technolo-
gies with customers who have decarbonization needs. This
effort contributes to reducing customers’ GHG emissions
while also generating new business opportunities for us
as a financial institution. Leveraging our global customer
base, our extensive experience in decarbonization-related
technologies, and the knowledge of our in-house experts,
we will continue to co-create businesses with customers to
generate new value as we contribute to realizing net zero
emissions.
Companies with
technology for
decarbonization
Sumitomo Mitsui Banking Corporation
Connect
Companies with
decarbonization needs
Global
customer base
Deep insights in
decarbonization
In-house sector
experts
5. Offering diverse group-based solutions
SMBC Group offers a variety of solutions across the Group
as part of our end-to-end support for customers’ decarbon-
ization efforts.
As an example, SMFL MIRAI Partners Company,
a strategic subsidiary of Mitsui Sumitomo Finance and
Leasing, offers the grid storage battery business and the
renewable energy power generation business. In addition
SMBC engages in initiatives that cross the conventional
boundaries of financial institutions, including support for
the sale and development support of carbon credits.
SMBC GROUP REPORT 2024 061
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Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
’40
Mar.23
(FY)
Zero
balance
(JPY bn)
100
0
200
300
Project finance
Corporate finance
(portion tied to facilities)
Mar.23
’40
’30
(FY)
(JPY bn)
20
0
40
60
80
Non-OECD countries
OECD countries
Thermal coal mining projects, and companies whose main businesses
are thermal coal mining
Target sectors
Target sectors
Loans (Total for corporate finance and project finance)
Target assets
Target assets
Zero balance
Zero balance
Considerations
Policy
Portfolio Management
Customer/Project
Management
Main Items
Policies for Specific Businesses and Sectors
Phase-out Strategy
Climate-related RAF
Environmental/Social Risk Assessment
Environmental and Social Due Diligence
1. Policy
• Policies for Specific Business and Sectors
SMBC Group has established Policies for Specific Business
and Sectors that present significant potential impacts on
the environment and society. In FY2023, we strengthened
our policies regarding coal-fired power generation and
thermal coal mining, and established new policies regard-
ing the biomass power generation business.
Coal-fired power generation and thermal coal mining
(coal-related sectors)
We are working to tighten our loan policies and to formu-
late phase-out strategies. Specifically, we have clearly
stated our intent to not support newly planned/expansion
of projects and have set a target of a zero loan balance, as
indicated at right.
Biomass power generation business
We established new policies for this area in FY2023, con-
firming the use of sustainable combustion materials in new
construction and expansion of the woody biomass energy
generation plants.
• Risk Appetite Framework (RAF)
In FY2023, we established a new climate-related category within our RAF, which is the framework for our group-wide risk
management. Within this framework, we have set indicators related to Scope 3 emissions with a focus on sectors for which
we have set mid-term reduction targets, and are raising the level of our management to achieve these targets.
We aim to achieve net zero emissions for Scope 3 by 2050.
SMBC Group is a member of the Net-Zero Banking Alliance
(NZBA). In accordance with NZBA guidelines, we complet-
ed the setting of medium-term reduction targets for the six
carbon-intensive sectors of power, oil and gas, coal, auto-
mobiles, steel, and real estate. GHG emissions from these
3. Individual customer and project management
• Environmental/social risk assessment
In our support for large-scale projects, we conduct environmental/social risk assessments and reflect the findings in our
decisions on financing projects.
• Introduction of environmental and social due diligence
As a part of SMBC’s efforts to assess the status of customers’ actions with regard to environmental and social risks, in
FY2024 we introduced environmental and social due diligence that integrates past related efforts. We will use this due dili-
gence to raise the level of our credit evaluations and in our engagement with customers.
SMBC Group’s initiatives to achieve net zero
SMBC Group engages in appropriate management of
policy, portfolios, individual customers, and projects to
achieve our net zero targets.
Loans for coal-fired power generation*1
Loans for thermal coal mining*1, 2
sectors account for about 70% of SMBC Group’s Scope 3
emissions. In these carbon-intensive sectors, we will first
firmly outline a path toward reduction by 2030 and will aim
to achieve net zero emissions across our investment and
loan portfolio by 2050.
2. Portfolio management
Setting of interim reduction targets
* Domestie commercial real-estates(non-recourse loans and REITs), inclouding Scope 3 Category 13 for REITS
While steadily supporting customers’ efforts aimed at transition and
technological innovation, SMBC Group is working earnestly to reduce
GHG emissions in line with the targets of the Paris Agreement. For
Scope 1 and 2 emissions, we have set targets of net zero by 2030.
To achieve the interim goals that we set in FY2023, we are working
for initiatives, such as transition to renewable energy sources for
electricity at our properties in Japan. In FY2023, we achieved a 32%
year-on-year reduction in emissions (preliminary data).
Scope 1 and 2 emissions-related initiatives
’21
’22
’25
’26
’30
(FY)
(1,000t-CO2e)
180
152
’23
103
-40%
(Compared to
FY2021)
-55%
(Compared to
FY2021)
Net zero
* Data is changed beginning in Annual Report 2023 to reflect
refinements in FY2021 data and changes from preliminary to
confirmed figures in FY2022 data
Sector
Scope of
Emissions
Metric
Mid-term target for
FY3/31
FY3/23
results
FY3/22
results
Baseline
(Base year)
vs. baseline
Power
Scope 1
Carbon intensity
(g-CO2e/kWh)
138–195
292
-12%
320
332
(FY2020)
Oil and gas
Scope1,2, and 3
Absolute emissions
(Mt-CO2e)
-12–29%
(Compared to FY2020)
23.9
-41%
33.3
40.8
(FY2020)
Coal
Scope1,2, and 3
Absolute emissions
(Mt-CO2e)
-37–60%
(Compared to FY2020)
4.4
-68%
7.4
13.6
(FY2020)
Automobiles
Scope1,2, and 3
Carbon intensity
(g-CO2e/vkm)
120–161
196
-4%
205
205
(FY2021)
Steel
Scopes 1 and 2
Carbon intensity
(t-CO2e/t-Steel)
1.2–1.8
2.0
-
2.0
2.0
(FY2021)
Real estate
Scopes 1 and 2*
Carbon intensity
(kg-CO2e/m2)
33.1–42.9
79.8
-1.5%
81.0
81.0
(FY2021)
*1 Calculated using end-of-period exchange rates
*2 The definition has been changed from data in TCFD Report 2023 and the scope of
aggregation has been expanded
SMBC GROUP REPORT 2024 063
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Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Examples of support for achieving “nature positive”
Respect for human rights
Prevention, mitigation,
and remedying of adverse
impacts on human rights
Responsibilities regarding
respect for human rights
SMBC Group
Customers
Investors
Employees
NGO
Suppliers
Interview
The goal of promoting DE&I is not to ensure diversity in attributes. Through the fair
provision of opportunities and resources required by diverse individuals, we aim
to maximize every individual’s capabilities and connect this to value creation and
achievements in business. To achieve this, SMBC Group strives to develop work styles
and a workplace culture that let individuals work with motivation.
Humans are prone to unconscious biases in how we see and perceive things.
Even when talented people come together, if the organization is highly homogeneous,
the likelihood of failing to notice shared blind spots may increase.
By incorporating diverse perspectives into our decision-making, SMBC Group hopes
to be a flexible, strong company even in an era of rapid change.
DE&I exists to provide fair opportunities for all employees to
strengthen the organization.
Chisa Kobuchi
Deputy General Manager
Diversity, Equity & Inclusion Deft.
Planning Group
Human Resources Dept.
Contribution to the conservation and
restoration of natural capital
Interview
Finance Alliance for Nature Positive Solutions(FANPS)
In February 2023, SMBC Group, MS&AD Insurance Group Holdings, Development Bank
of Japan, and the Norinchukin Bank established the Finance Alliance for Nature Positive
Solutions (FANPS) to promote and support the nature positive transformation of corpo-
rate activities. FANPS provides solutions catalogs as well as TNFD support services to
support customers’ nature positive management.
SMBC Group positions Diversity, Equity & Inclusion (“DE&I”) as a component of our growth strategy. We seek to
enhance our organizational performance and maximize value creation through maximization of the capabilities of
diverse human resources. In FY2023, we revised our “DE&I Statement” to further clarify the commitment by our
top management.
The present-day economic system, built on mass production, mass consumption, and mass disposal, is worsening a variety of
problems such as climate change, resource depletion, and plastic pollution. In addition to the conventional “3 Rs” of Reduce,
Reuse, and Recycle, importance is being placed on a shift to a circular economy that makes effective use of existing stocks
and creates added value through the change from stocks to services while reducing inputs and consumption of resources.
SMBC Group will bring together the Group’s strengths in finance, leasing, consulting, and more to raise the level of our
initiatives throughout the arterial and venous value chains.
Our basic approach to human rights
Based on our “Statement on Human Rights,” SMBC Group
respects the human rights of customers, suppliers, em-
ployees, investors, and other stakeholders and fulfills our
responsibilities regarding respect for human rights. In our
initiatives aimed at respect for human rights, we identify
adverse impacts that we may impose on the human rights
of stakeholders, and strive to prevent, mitigate, and rem-
edy them. We believe that by fulfilling our responsibilities
regarding respect for human rights through such initiatives,
SMBC Group can secure the trust from society, enhance
our corporate value, and contribute to the creation of posi-
tive impacts in society.
SMBC Group believes that the achievement of “nature positive” is essential to halting and recovering from the loss of natural
capital in order to preserve the global environment. We are registered as a Taskforce on Nature-related Financial Disclosures
(TNFD) Adopter, an organization that supports the TNFD framework for properly evaluating and disclosing risks and opportu-
nities related to natural capital. We are strengthening our information disclosure based on TNFD while offering services that
support customers’ efforts.
See p. 038 “Human Resources Strategy” for details.
Ryoi Takahashi
Vice President
corporate planning Dept. / Sustainability
Promotion Dept.
Sumitomo Mitsui Finance and Leasing Co.
Human rights due diligence
SMBC Group prohibits support for projects that are rec-
ognized to involve child labor, forced labor and/or human
trafficking. To prevent and mitigate the risk of involvement
in human rights violations within customers’ supply chains,
SMBC conducts checks of whether existing or potential
lending customers are taking appropriate action on human
rights issues.
The circular economy is an area of focus in our Medium-Term Management Plan. We
are expanding our business domains into second-hand sales of equipment and ma-
chinery following the expiration of lease periods, emissions compliance management
services, and primary contracting for equipment and plant decommissioning, among
our initiatives to achieve an economy with circular “arterial” and “venous” functions.
Many of the projects we are undertaking are in their early stage, but we aim for
creating successful cases over the next few years and will advance these initiatives to
earn the image of SMFL/SMBC Group as a leader in the circular economy.
Aiming to be the leader in the circular economy
Contribution to the Circular Economy
DE&I/Human Rights
SMBC GROUP REPORT 2024 065
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Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Photo: @Natsuki Yasuda
Class held through the use of study coupons
KPI: Number of microfinance borrowers
Interview
SMBC Group is working to eliminate poverty and inequality from a medium- to long-term perspective. Taking action
as a corporate citizen, we aim to create social value by breaking the negative cycle for the next generation and by
contributing to financial inclusion in emerging countries.
Efforts to aid the next generation of children
In Japan, relative poverty of children is a serious social
issue. Children in economically disadvantaged households
often have fewer opportunities for education and extra-
curricular learning, making development of their innate
potential difficult. If these children cannot escape from
poverty before becoming adults, their children will also
tend to be born into poverty, in what is known as an inter-
generational cycle of poverty. SMBC Group has worked to
solve this issue in cooperation with companies and NPOs
since FY2023. Leveraging knowledge gained through
this, we aim to make our project to eradicate poverty and
inequality a reality.
• Learning support in cooperation with NPOs
In May 2023, SMBC Group partnered with Chance for
Children Inc. (“CFC”) to provide educational opportunities
to children who lack access for learning and higher edu-
cation due to economic reasons. To offer opportunities for
learning, CFC issues “study coupons” that children from
economically challenged families can use for supplemen-
tary schooling, lessons, and other extracurricular educa-
tion. SMBC Group has launched its “SMBC Group Study
Coupon” project in cooperation with CFC. We are providing
¥300 million over three years while dispatching staff to CFC
to support children in expanding their potential.
As aid for people affected by the 2024 Noto Peninsula
Earthquake, we provided new funding of about ¥10 million
for emergency aid coupons that children affected by the
disaster can use to cover costs of supplementary school-
ing, prep schools, and lessons.
The Rural Business of SMFG India Credit Company (SMICC) flexibly addresses di-
verse needs daily through over 550 branches in India, placing primary focus on un-
derserved female customers in rural areas. Customers use funds obtained through
rural finance to create new livelihoods through businesses such as food and clothing
sales, leading to increased income and improvement in their quality of life. Stability
in daily life also makes children’s education possible.
SMICC goes beyond financial services to support local communities through
various CSR programs including health check-ups with mobile health vans, vision
care, financial education, and cattle care camps.
These initiatives secure the trust of customers and the community. We will
accelerate business growth by expanding our branch network and diversifying the
products and services.
Initiatives for financial inclusion
To expand the provision of financial products and services to unbanked individuals and businesses that face difficulty in
accessing financial services, primarily in countries targeted by our multi-franchising strategy (India, Indonesia, Vietnam, and
the Philippines), SMBC Group makes active efforts to promote financial inclusion.
• Initiatives in Asia
SMBC Group is strengthening its initiatives aimed at boosting financial inclusion
in emerging Asian countries. Through investee companies in Asia, we are provid-
ing financial support for small and medium-sized companies, expanding financial
approaches to unbanked individuals, popularizing mobile banking accessible even in
areas with no bank branches, and offering educational programs to enhance finan-
cial literacy. By the end of FY 2025, we aim to increase the number of microfinance
borrowers by 800,000 compared with FY2022. Through these initiatives, we are
committed to contribute to the well-being and prosperity of society and people.
• Collaboration with Gojo & Company, Inc.
SMBC partners with Gojo & Company, Inc. (“Gojo”), which provides microfinance to
primarily small and micro businesses run by women in India. In 2023, we decided to
invest ¥1.35 billion in a venture capital fund working on financial inclusion in India,
established by Gojo and its founding members. We are deepening our partnership
with Gojo by dispatching employees to the company as well as providing ¥9 billion in
social loans to its group companies to expand financing for woman-run businesses in
agricultural areas of India.
We also provide financial literacy education and
career experience opportunities to children who attend
after-school programs operated by the non-profit organiza-
tion Chance For All.
We will continue our initiatives to provide children with
opportunities for learning and experiences through cooper-
ation with NPOs.
• Learning support in cooperation with a major
educational institution
In May 2023, SMBC Group teamed up with Kumon Insti-
tute of Education Co., Ltd. on initiatives to provide children
who will lead the next generation with opportunities to
receive education and take on challenges. In addition to
the provision of Kumon-style education for children living
in children’s homes, we support future independence for
the children through financial and economic education
by employee volunteers and provide tablets required for
digital learning.
Poverty & Inequality
Ravikumar Doddala
General Manager & Head of Rural Business
SMFG India Credit Company
’23
’25
(FY)
(10,000 people)
+15.3
+80
Target
SMBC GROUP REPORT 2024 067
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Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
able to support the customer by putting together a syndi-
cated loan as arranger.
Koyoshi: Bank loans conventionally rely on financial
statements and other historical performance data, which
means they typically face difficulties in supporting start-
ups. I believe that our development of a credit assessment
system that emphasizes evaluation of business feasibility
helped enable financing to the company.
From here on out, we hope to contribute to the cre-
ation and advancement of new industries in Japan, and
thereby contribute to Japan’s Regrowth.
Interview
Interview
In the era of 100 year lifespans, an increasing-number of people are facing concerns about financial security in
retirement, maintaining health, and the lack of nearby support for elderly individuals Iiving alone. Additionally,
there is a growing issue of regional disparities, where people in depopulated areas cannot access the same services
as those in urban centers. To address these concerns, the SMBC Group offers a comprehensive range of services
across its group companies.
Following Japan’s transition from its period of high economic growth and the collapse of its bubble economy,
low growth continued for a long time. Now, though, Japan faces a great opportunity to align itself toward regrowth.
At this turning point, SMBC Group is actively undertaking medium- to long-term projects that originate in social
issues and that would contribute to sustainable growth in Japan. These include support for startups and venture
companies, initiatives aimed at regional revitalization, provision of opportunities through sports, and other wide-
ranging activities.
Koyoshi: SMBC Group is actively addressing the space
industry as a growth industry. As an example, the Group as
a whole is providing support to ispace, a company engaged
in the private sector-led lunar transport business.
Fukushima: At the time the company was listed, SMBC
Nikko Securities served as the lead arranger of the IPO, This
was its first listing of a space startup, so the project was an
unprecedented and challenging one. But we studied the
business’s growth potential, feasibility, risks, and other fac-
tors together with experts, and made every effort to gain the
understanding of the Tokyo Stock Exchange and investors.
Nakamura: I have worked in the Corporate Business offices
since joining the bank, but this was my first experience in
charge of a space startup. Although we faced uncertainties
at first, we’re deepening our understanding of the business
through dialogue with customers and providing ongoing
support through the collective capabilities of our Group.
When additional financing became necessary, I was deeply
impressed that Sumitomo Mitsui Banking Corporation was
Support for a space technology startup
and contribution to the creation and
advancement of new industries in Japan
Takuya
Fukushima
Private Corporate
Advisory II Dept.
SMBC Nikko
Securities Inc.
Tomoki
Koyoshi
Growth Business
Development Dept.
Sumitomo Mitsui
Banking Corporation
Shota
Nakamura
Hibiya Corporate
Business office-2
Sumitomo Mitsui
Banking Corporation
Ikuko Tomioka
Chief
Business Development & Innovation
Team
Marketing Planning Department
Sumitomo Mitsui DS Asset Management
Company, Limited
Marie Hashimoto
In May 2023, we began offering GBA in partnership
with a regional financial institution. Sales representatives
from partners have come back with many positive re-
ports, including greater ease of making proposals aligned
with customers. We believe that we can build a win-win
relationships with partner financial institutions, including
increased profits through growth in customers’ assets.
I hope to open up a better sustainable future through our
asset management business.
Hashimoto: In the era of 100-year lifespans, people’s post-
career “second lives” are naturally lengthening. Our new
Goal-Based Approach Fund Wrap (“GBA”) offers advice
and after-sales follow-up for setting goals, formulating
asset management plans, and achieving goals, based on
customers’ life plans. Its unique point of difference from
conventional products is that it takes setting the customer’s
goals as its first step. When the amount of funds for the goal
has been made clear, funds necessary for the future and
funds available for consumption become clear as well. We
believe that this optimizes the customer’s assets overall
while also relieving anxiety.
Tomioka: GBA was an unprecedented service, so in the
launch we drew on the cooperation of many people inside
and outside the Company. Five companies, including
ours, participated in the implementation project. We
faced numerous challenges including task management,
coordination of opinions, and alignment of understanding.
Declining Birthrate & Aging Population
Japan’s Regrowth
Support for startups
Incubation of drug discovery seeds
(Photo: Shonan Health Innovation Park)
A Goal-Based Approach Fund Wrap to
better meet customer needs in the era
of 100-year lifespans
The role of
SMBC Group
Wealth Building Support
Life Shift Service
Digitalization of
Financial Infrastructure
Promoting NISA and investment
products, as well as digital
consultations tailored to customers'
life stages
Set "enriching the experience of
aging” as the business purpose
Through Olive, providing a wide range of
financial Services regardless of regions
Innovation hubs
Startup investment funds
Japan
hoops link tokyo
SMBC Asia
Rising Fund
U.S.
Silicon Valley Lab
Enhance value of
our investees in Asia
Singapore
Asia Innovation Centre
200 USD mn
Growth fund
Support to incubate unicorns in Japan
30 JPY bn
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Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Senior Managing
Executive Officer
Head of Retail
Business Unit
Takashi
Yamashita
I
n the Retail Business Unit, top-
class companies in their indus-
tries offer services that leverage
the combined strength of the Group in
key fields including the wealth manage-
ment business, payment business, and
consumer finance.
In FY2023, AM/foreign currency
balance in the asset management
business increased by ¥3.7 trillion to
¥17.2 trillion through integrated con-
sulting by bank, securities firm, and trust
company. In the payment business, sales
handled increased by ¥4.6 trillion to
¥34.8 trillion, and in consumer finance,
the finance balance increased by ¥0.2
trillion to ¥2.6 trillion amid recovery in
consumption. Each of these businesses
significantly expanded its results.
In FY2024 too, we will steadily enact
measures in our major businesses to
achieve our current Medium-Term Man-
agement Plan.
As we expect increased profitability
from deposits due to higher interest
rates, we will work to further expand
our customer base and deposit balance
through Olive, which has had a major
social impact and for which we expect
use to grow.
Our tackling of the Retail Business
We will solve social issues through our business and pursue
the achievement of both social value and economic value.
We will contribute to the realization of “rich lives” and
“Fulfilled Growth” for customers as we aim to be the
financial group that people trust most in times of need.
equates to creating social value and
solving social issues associated with
changes in Japan, such as the promotion
of asset formation to boost asset man-
agement, the advance of a cashless soci-
ety, and the arrival of the era of 100-year
lifespans among the aging population.
In the asset management business, we
will back up healthy asset formation by
individuals through the promotion of
New Nippon Individual Savings Accounts
(NISA) and finance/economics edu-
cation seminars, while supporting the
sustainable growth of Japan by supply-
ing money to markets.
In the payment business, we will
solve payment issues faced by business-
es and consumers through “stera” and
the new “V POINT” and, looking ahead
to fully cashless payments at EXPO 2025
in Osaka, Kansai, will further raise the
cashless ratio in Japan.
In the life shift business, we will
eliminate the increasingly diverse con-
cerns of elderly customers through our
SMBC Elder Program and will solve
social issues in the era of 100-year
lifespans.
Through such efforts, we will con-
tribute to “rich lives” for our customers
and the realization of “Fulfilled Growth.”
Key strategies
Retail Business Unit results
FY2023
YoY*
Gross profit
¥1,290.0 billion
+¥120.0 billion
Expenses
¥1,079.9 billion
+¥83.2 billion
Base expenses
¥751.3 billion
+¥1.4 billion
Net business profit
¥215.7 billion
+¥37.7 billion
Net income
¥38.0 billion
(¥23.9) billion
ROCET1
3.0%
(2.0) %
Risk-weighted assets (RwA)
¥14.4 trillion
+¥0.9 trillion
* Figures are after adjustments for exchange rate impacts, etc.
Further expansion of the retail business with a focus
on Olive
Strengthening of payment business and consumer
finance on a group-wide basis
Hybrid channel strategy through Digital and
face-to-face
Strengthening of competitiveness and differentiation
of group-based wealth management business
1 4
Retail Business Unit
Strategies of Business Units
SMBC GROUP REPORT 2024 071
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Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
* Mutual funds, fund wraps, etc.
(We changed definitions in FY2023 and retroactively adjusted
FY2022 results.)
Integration with
T POINT
Number of accounts
(March 2023–
March 2024)
(April 2024)
2.3 million
accounts
Further expansion of the Group’s business centered on Olive
Olive accounts surpassed 2.3 million in the year since the service’s
release, contributing to the expansion of our group-wide customer base.
In April 2024, we integrated the T POINT and V POINT programs to begin
providing one of Japan’s largest new shared point services fusing points
and payment. As acquiring deposits will increase in importance under
shifts in monetary policy, we will continue working to provide convenient
services and further expand our customer base and deposit balance.
In our lineup of services for business customers in the payment
business, we supplemented our all-in-one “stera terminal” with another
two types of terminals selectable according to business type. Adapting
to varied usage scenarios and advancing support for business DX and
streamlining, we will expand our acquiring business.
In the consumer finance business, we seek to expand our finance
balance through the enhancement of brand recall, landing page im-
provements, and other upgrades to our web marketing.
Hybrid channel strategy through Digital and face-to-face
We aim to serve as a bank that is safe, secure, and convenient in daily
life and dependable in times of need by developing a hybrid channel
strategy that offers Olive digital transactions to customers in daily life,
while supporting inheritance consultation and digital operation guid-
ance at physical bank branches.
We have set up new “STORE” branches, a model based on digital
and face-to-face interaction, in commercial facilities with expanded
business hours and more convenient access than ever. Visitors have
increased significantly, including customers in their 20s, 30s, and 40s
for whom visits to branches had normally been difficult. STORE branch-
es further achieve lower cost operation than existing branches, owing to
their space-saving and efficient structure.
By expanding Olive and rolling out STORE branches, we aim to pur-
sue economic value by expanding our customer base through enhanced
convenience and to create social value by meeting the need for face-to-
face consulting.
See page 098 for more information on Olive.
Strengthening of competitiveness and differentiation of group-
based wealth management business
Drawing on the combined strength of the Group through collaboration
among bank, securities firm, and trust company, we provide total con-
sulting matched to diverse needs such as advanced portfolio proposals,
inheritance, succession, and business loans. We will powerfully support
the shift from savings to investment and asset formation, with the aim of
boosting asset management in Japan.
In fund wraps, we worked toward differentiation from other companies
through attentive after-sales follow-up and achieved an industry-leading
balance. In the area of new NISA, we are promoting proliferation of the
accounts group-wide and are expanding our asset management base.
In the foreign currency business, we established the PRESTIA Busi-
ness Division and the PRESTIA Sales Department within Sumitomo Mitsui
Banking Corporation, strengthened promotion of Group operations, started
flexible management of foreign currency interest rates, and otherwise de-
veloped the business structure. The foreign currency denominated assets of
the Group as a whole have increased significantly. We lead Japan’s foreign
currency business as the country’s number one foreign currency Group.
In the inheritance business, we will promote asset consolidation and
the capture of transactions with the next generation by strengthening
SMBC Nikko Securities’ capabilities in the business and by providing life
shift solutions.
Retail Business Unit
Mar.23
Mar.24
Mar.26
13.5
17.2
AM*/Foreign Currency Balance
(JPY tn)
+5 JPY tn
3-year increase
0
5
10
15
20
Prior to conversion to Store,
one-week average
Average for one week
following conversion to Store
one-week average
Number of Store Visitors*
(from opening through March 2024)
(people)
0
50
100
200
150
250
2.7 x
’22
’23
’25
30.2
34.8
Sales Handled
(JPY tn)
(FY)
+18 JPY tn
3-year increase
0
20
10
30
40
50
* Average of 30 branches opened through March 2024 (Number of
persons visiting for consultation, investment management, and
notifications; excluding visits for deposits, withdrawals, transfers, etc.)
Initiatives aimed at the era of 100-year lifespans
Through high value-added services that go beyond the frameworks of
conventional financial institutions, we will address the diversifying anxi-
eties of customers in the era of 100-year lifespans.
We will support enriched lives for customers and their families
through our SMBC Elder Program, by which full-time concierges sup-
port customers through their long lives; SMBC Digital Safety Box, which
stores customers’ vital digital information; and Family Network Service,
which supports peace of mind and communication for family members
separated by distance.
By engaging in group-wide financial and economic education, such
as providing schools with game educational materials that offer money-
related experiences to children, we will contribute to the realization of
a society in which all can gain accurate financial knowledge and enjoy
worry-free living.
SMBC Elder Program
A dedicated concierge service that brings
peace of mind and comfort to customers’ lives
A new form of peace of mind that
keeps and connects customers’
important information.
Digital version ending note
An app that lets users check on the
money, health, and daily life of family
members living apart
SMBC Digital Safety Box
Family Network Service
SMBC GROUP REPORT 2024 073
072
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Deputy President and
Executive Officer
Head of Wholesale
Business Unit
Muneo
Kanamaru
U
nder environmental changes
on the scale of a paradigm
shift, companies are ramping
up their corporate actions. Amid this,
we thoroughly addressed customers’
increasingly complex and sophisticated
management issues to offer group-
wide solutions, resulting in a significant
increase in FY2023 profit. ROCET1 was
also higher than initially planned due
to our promotion of high value-added,
highly profitable businesses such real
estate and PE funds.
We expect that current environmen-
tal changes will continue to progress,
and expect numerous business opportu-
nities for SMBC Group. To maintain and
increase our strong momentum, we will
deepen cooperation within the Group as
we aim to offer higher-value-added solu-
tions to customers. In addition to aptly
meeting diversifying needs for invest-
ment management and financing, we
will strengthen our risk-taking in growth
areas. We will steadily carry out the
Medium-Term Management Plan that
started in 2023 and build up medium- to
long-term core businesses.
We believe that promoting business
transformation for customers group-wide
and driving Japan’s Regrowth will lead to
the creation of social value. By support-
ing customers’ efforts to tackle issues
such as decarbonization and transition
and by solving issues through co-
creation with customers, we will work to
create social value for both customers
and SMBC Group. Toward that end, we
will engage in close dialogues with our
customers on what social value means
to them. We believe that such efforts will
lead to sustainable growth for custom-
ers, and that the construction of ongoing
relationships with those customers will
allow us to also pursue economic value
for SMBC Group. By orienting ourselves
at an even higher level of inseparable
social value and economic value, we will
aim for even greater enhancement of our
corporate value.
The Wholesale Business Unit contributes to Japan’s
regrowth through the Group-wide provision of solutions
that meet domestic companies’ diverse needs related to
financing, asset management, payments, M&A advisory,
leasing, and real estate brokerage services.
Key strategies
Wholesale Business Unit results
FY2023
YoY*
Gross profit
¥835.2 billion
+¥93.2 billion
Expenses
¥311.0 billion
+¥24.8 billion
Base expenses
¥294.3 billion
+¥12.6 billion
Net business profit
¥632.1 billion
+¥74.8 billion
Net income
¥576.2 billion
¥120.6 billion
ROCET1
15.0%
+3.0%
Risk-weighted assets (RwA)
¥36.1 trillion
+¥0.7 trillion
* Figures are after adjustments for exchange rate impacts, etc.
Creating and honing the Group’s edge by
strengthening expertise
Building a new marketing structure that fully
utilizes digital
Building a high-ROE business portfolio that
adapts to changes
24
Wholesale Business Unit
Strategies of Business Units
SMBC GROUP REPORT 2024 075
074
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Strengthening our response to needs of asset
management and financing in line with changes
of interest rate
As the interest rate environment undergoes significant
change, it will become even more vital that we solid-
ly address customers’ investment management and
financing needs, provide higher value-added solutions
across the Group and across units, and work to enhance
profitability.
By supporting customers’ commerce through
SMBC Group’s payment solutions, we will make efforts
to capture transaction deposits offering high profitability
and retention.
In response to financing needs, we will strategically
invest assets in high-interest products such as LBOs and
real estate financing while continuing to identify risks. At
the same time, through discussions with customers on
appropriate interest rate levels during a phase of rising
rates, we will work to capture business opportunities,
secure profit, and increase ROCET1.
Building medium- to long-term core
businesses
By executing the Medium-Term Management Plan, we
will build medium- to long-term core businesses and
ensure competitiveness. Decarbonization initiatives in
particular are becoming a major requisite for corporate
management. There is a rapidly growing need to meet
customers’ demands for disclosure and reduction of
greenhouse gas emissions throughout the supply chain.
By tackling the development and provision of decar-
bonization solutions that concentrate the collective
strength of SMBC Group, we seek to be a “management
partner for a decarbonized society.” We will make
further use of the “Transition Finance Playbook” that
has been expanded to cover wider target sectors from
FY2024, and will promote engagement with customers
to solve social issues.
To realize the materiality of “Japan’s Regrowth”
and create social value, we are actively undertaking
business in related areas. With regard to startup com-
panies, we will strengthen our measures to support
growth strategies, centered on debt equity. In addition
to equity-based financing, under an environment of rap-
idly growing need for debt we will expand the scope of
our support to span all stages from start-up to post-IPO.
For our customers who have strong needs with regard to
DX, along with the continuation of our medium- to long-
term perspective approaches, we will strengthen our
co-creation business that studies DX-based operational
efficiency support measures.
Strengthening further risk-taking aimed at growth
We will enhance SMBC Group’s risk-taking to reinforce
our ability to address the increasingly complex and
sophisticated needs of customers.
Amid environmental changes including the end of
the Tokyo Stock Exchange market reform transitional
measures in March 2025 and the growing attention di-
rected to corporate governance, companies are increas-
ing their corporate actions. Our Wholesale Business Unit
will take these movements as business opportunities,
review our structure of concurrent executive positions
in banks and securities firms, advance structural devel-
opment in the PE fund business, real estate business,
and other businesses, and undertake further risk-taking
aimed at growth. To address the growing need for equity
financing against a backdrop of strong stock prices, we
will also enhance the solutions functions of SMBC Nikko
Securities.
Wholesale Business Unit
SMBC Trust Bank
Renewable
energy trusts
SMBC Nikko
Securities
SDGs bond
underwriting
Sumitomo Mitsui
Finance and
Leasing Co.
SDGs leasing
Japan Research
Institute
Sustainability
consulting
Sumitomo Mitsui
Card Company
Corporate cards
Sustana
collaboration
SMBC Group
sustainable
solutions
0
0
40
20
60
0.55
0.60
0.65
Mar.21 Mar.22 Mar.23 Mar.24
Loan balance/Spread
(JPY tn)
(%)
Loan balance
Spread
’23
’24
’25
79.2
Target
Three-year
cumulative total 135
Twice
vs plan
Startup Investment and Loan Values
(JPY bn)
(FY)
Real estate
PE fund
Startups
Company owner business
Growth
Group payment solutions
Supply chain business
Turnaround
Asset backing / Corporate management
New business
creation
Sustainability / Decarbonization
DX
Shift to cashless payment
Transformation
Strengthening further risk-taking aimed at growth
Building medium- to long-term core businesses
SMBC GROUP REPORT 2024 077
076
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Senior Managing
Executive Officer
Global Business Unit
Co-Head of Global
Business Units
Yoshihiro
Hyakutome
Senior Managing
Executive Officer
Global Business Unit
Co-Head of Global
Business Units
Keiichiro
Nakamura
T
he business environment
remained volatile in FY2023
amid an environment of
ongoing inflation and high interest rates
in excess of expectations, along with
the rise of geopolitical risks such as the
prolonged Russia and Ukraine situation
and destabilization in the Middle East.
At the same time, as the first year of
our Medium-Term Management Plan,
we were able to lay a foundation for
further growth in FY2023. Specifically,
we steadily strengthened our Global CIB
business by expanding our areas of col-
laboration with Jefferies and enhancing
our securities products. In our U.S. busi-
ness, key area of focus, we also opened
the digital bank “Jenius Bank” in July
2023 and launched the retail business.
In this way, we are capturing growth
areas and steadily promoting business
diversification. In our multi-franchise
strategy, we successfully strengthened
our platform in target countries. We
made SMFG India Credit Company, a
non-bank business with an extensive
network of sites in suburban and agri-
cultural areas of India, a wholly-owned
subsidiary.
Key strategies
Global Business Unit results
FY2023
YoY*
Gross profit
¥1,375.9 billion
+¥159.7 billion
Expenses
¥809.3 billion
+¥101.3 billion
Base expenses
¥746.8 billion
+¥58.2 billion
Net business profit
¥644.9 billion
+¥121.2 billion
Net income
¥318.2 billion
+¥27.6 billion
ROCET1
6.3%
+0.3%
Risk-weighted assets (RwA)
¥48.8 trillion
+¥0.1 trillion
* Figures are after adjustments for exchange rate impacts, etc.
While making such efforts toward
growth, we are also steadily advancing
initiatives to prepare resources for
growth accompanied by quality, includ-
ing selling shares of U.S.-based freight
car leasing company SMBC Rail Services
and major Vietnamese commercial bank
Eximbank as components of our port-
folio review. Through such efforts, we
achieved revenue, profit, and ROCET1
growth in FY2023, along with steady
progress in infrastructure improvements
that will lead to future growth. I feel that
our efforts are yielding fruit.
To achieve growth in excess of initial
plans, in FY2024 we will continue invest-
ing resources in priority areas and will
agilely move forward with reviews of our
business portfolio and business model
in response to changes in the business
environment. As our business scale ex-
pands, so do stakeholders’ expectations
toward solutions to global social issues.
To address issues including the envi-
ronment, poverty and inequality, DE&I,
and human rights, we aim to maximize
our impacts on society by accumulating
knowledge across the Group and collab-
orating to leverage that knowledge.
Reinforcement of global CIB and S&T
Realizing growth through our multi-franchise
strategy
Creation of businesses that contribute to medium-
to long-term growth
Building infrastructure linked to the increasing
diversity and complexity of business
We will strengthen our extensive business portfolio,
including global CIB and multi-franchise strategy, and
invest resources in priority areas to lead the Group as a
growth driver.
We aim to be a global solutions provider that contributes
to both our domestic and overseas customers on group-
wide basis.
3 4
Global Business Unit
Strategies of Business Units
SMBC GROUP REPORT 2024 079
078
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Strengthening of global CIB
To accelerate our evolution into a global solutions provider, we will strengthen our provision of complex solutions that fully
leverage our coverage team and will expand Group and global collaboration.
In our partnership with Jefferies, a pillar of our business, in FY2023 we expanded our areas of collaboration to the
M&A advisory business and the equity and debt capital markets business. We are also steadily deepening the partnership
through the expansion of target regions from the United States to Europe and Canada, and plan to continue widening such
areas of cooperation.
We will also continue our efforts to expand business through the
acceleration of primary and secondary cooperation and the strengthen-
ing of products. Our corporate bond underwriting was strong in FY2023.
In addition to expanding our acquisition of mandates in Yankee bonds
and Samurai bonds, we maintained our position at the top of the league
table in the U.S. business development company (BDC, an investment
company that funds unlisted mid-sized and emerging companies)
market.
We are enhancing our solutions in the fields of the environment and
climate change as well. While engaging with customers in sectors with
high carbon intensity and effecting a transition toward decarbonization,
we will also advance initiatives in the new energy sector and lead the
field of sustainability.
Achieving growth in our multi-franchise strategy
Under a strategy of creating a “second and third SMBC Group” in the
four fast-growing Asian countries of India, Indonesia, the Philippines,
and Vietnam, we have advanced investment alliances with financial
institutions in these countries to build a multi-franchise platform.
We will support business expansion of investee companies through
capital increases and enhancement of governance, and will create syn-
ergies through knowledge sharing and business collaboration between
SMBC Group and those companies, with the aim of becoming a top-tier
financial institution in each of these countries.
To solve social issues, we are tackling the elimination of poverty and
inequality by providing microfinance in India and Indonesia. Our Medi-
um-Term Management Plan sets out a goal of increasing microfinance
borrowers by another 800,000 in the two countries combined. To elim-
inate poverty and inequality throughout society as a whole, we are also
developing social contribution programs such as education on financial
basics and seminars for small and medium-sized business owners, not
limited to SMBC Group customers.
See page 090 for more information on our multi-franchise strategies.
Corporate infrastructure development
As geopolitical risks, climate change risks, market fluctuation risks, and
regulatory strengthening advance, it is increasingly important that we
capture early signs of these and respond with agility. With this in mind,
we will expand our overseas business while also further reinforcing our
corporate infrastructure.
As a concrete action, we opened a representative office in Washington
DC in October 2023. Through this office, we will undertake relationship
building with a wide range of stakeholders, including financial authorities
and government-related organizations, and will strengthen our capabil-
ities for information collection and communication. To accelerate agile
and efficient input of resources in response to changes in the business
environment, we will develop data and business infrastructure to enable
higher-level, clearer management of revenue and profit indicators in every
business segment. We will also utilize the expertise of our diverse human
resources to reinforce governance and compliance that support the growth
of increasingly diversified and complex businesses, and to raise the level
of our risk management. While continuing the active promotion of locally
hired overseas employees, we are enhancing our global human resources
structure through means including the setting of gender KPIs to increase
the number of women on our global management team to achieve diversity.
Expanding and deepening our U.S. business
We will further concentrate Group resources in the U.S. market, the
world’s largest and most stable market, with the aim of driving the
Group’s growth.
In the wholesale business, we will continue to expand the Global
CIB and S&T businesses while making a full-scale entry into the retail
business to achieve medium- to long-term growth. The digital bank
Jenius Bank, which we opened in July 2023 has begun offering savings
deposits, personal loans, and other products to U.S. residents. In less
than a year since its launch, it has surpassed $1 billion in deposit bal-
ance and $700 million in loan balance. Our policy from here on out will
be to grow the business while increasing its product offerings to sup-
port customers at every stage of life. We will create differentiation from
traditional banking services by introducing cutting-edge systems that
enable quick and flexible addition of changes and by quickly reflecting
feedback from customer analysis in products and services.
Global Business Unit
’22
’23
’25
1,583
1,583
(FY)
0
500
1,000
1,500
2,000
Net Business Profit from Americas Division
(USD mn)
1,344
’22
’23
’25
0
590
590
U.S. digital banking assets
(USD mn)
(FY)
0
1,000
2,000
3,000
(%)
0
1.0
2.0
3.0
4.0
5.0
2.3
0.5
3.6
1.0
’22
’23
’25
Share of U.S. IG/DCM issuance
Corporate
Financial institutions
(FY)
Financial services
Support for social self-sufficiency
Deposits
Finance and
economics
education
Microfinance
Support for
entrepre-
neurs
Health and
welfare
Job training
Payment
India
Vietnam
Indonesia
Philippines
’23
Global Business Unit Net Business Profit*
(JPY bn)
(FY)
0
200
400
600
800
1,000
Changes in
the business
environment
Geopolitical risks
Climate
change risks
Market fluctuations
Strengthening
of financial
regulations
Enhancement of
corporate governance
Review of portfolio
Reinforcement of
compliance
Enhancement of human
resources programs
Agile
response
Strengthening of risk
management functions
’25
’28
* Calculated as $1 = ¥120
SMBC GROUP REPORT 2024 081
080
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Deputy President and
Executive Officer
Head of Global Markets
Business Unit
Masamichi
Koike
T
he 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 con-
trol balance sheet liquidity risks and
market risks.
Our emphasis in this work is on
analyzing the various phenomena that
occur throughout the world based on
the Three “I” s of Insight, Imagination,
and Intelligence in order to forecast the
market trends that will emerge in the
future. In short, we emphasize the ca-
pacity to discern the underlying essence
of world affairs.
Under paradigm shifts taking
place against the backdrop of global
fragmentation, everyone now faces a
market environment of the like not seen
for over three decades. Under a variety
of scenarios, it is assumed that conven-
tional ways of thinking will not hold. By
adapting flexibly to this new environ-
ment and undertaking bold action with
our gaze on the future, we will continue
our unending evolution.
Key strategies
Global Markets Business Unit results
FY2023
YoY*1
Gross profit
¥526.2 billion
+¥64.4 billion
Expenses
¥165.3 billion
+¥14.8 billion
Base expenses
¥98.5 billion
+¥3.2 billion
Net business profit
¥389.9 billion
+¥49.8 billion
Net income
¥272.9 billion
+¥34.8 billion
ROCET1*2
17.8%
+2.1%
Risk-weighted assets (RwA)
¥7.9 trillion
+¥1.9 trillion
*1 Figures are after adjustments for exchange rate impacts, etc.
*2 Incl. impact from the interest-rate risk associated to the banking account.
In FY2023, as the policy rate
stopped rising in the U.S. and Europe
while Japan steered its course toward
the normalization of monetary policy,
interest rates and stock prices fluctuat-
ed wildly in developed countries due to
factors including market player expec-
tation. Amid this, our portfolio man-
agement steadily captured investment
opportunities while properly controlling
risks, recording a profit as a result. We
also supported customers’ funding
needs through stable foreign currency
funding and strengthened our S&T glob-
al collaboration to provide customers
with optimal solutions.
We will actively engage in not only
pursuing such economic value but also
creating social value. In addition to GX
support, as exemplified by the green
bond issuances we have been offering,
we will support “Fulfilled Growth” for
customers and employees by under-
taking initiatives in new fields including
enhancement of financial literacy for
society overall and revitalization of the
asset management industry.
Discerning the essence and the trends of the world
through the Three “I”s
Dynamic adjusting our portfolio to maximize
earnings
Addressing to increasingly complex and sophisticat-
ed customer needs
Detecting changes in the financing environment
caused by varied factors
Operation with a focus on ensuring balance sheet
stability
As market risk professionals, we aim to enhance our own
risk-taking skills while continuously offering customers
high added value.
44
Global Markets Business Unit
Strategies of Business Units
SMBC GROUP REPORT 2024 083
082
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Dynamic portfolio management in response to market changes
The strength of the Global Markets Business Unit lies in its ability to
dynamically adjust its portfolio and maximize earnings by accurately
capturing market trends through proactive observation of market fluc-
tuations.
Through the Three “I”s, members of the Unit collect, analyze, and
thoroughly discuss information on phenomena occurring every day,
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.
Recognizing that ongoing paradigm shifts have placed us in a
market environment completely different from that of the past, we will
continue to aptly capture opportunities for profit.
We have also begun to manage an investment fund adopting an
absolute return-oriented global macro strategy at Sumitomo Mitsui DS
Asset Management, taking advantage of the operational capabilities
that are our strength. Through such initiatives, we will create social val-
ue by promoting the shift from savings to investment, supporting higher
financial literacy, and helping to lift the status of the asset management
industry as a whole.
Development of a robust foreign currency funding base
The Global Markets Business Unit is taking steps regarding foreign currency funding to balance assurance of stability with
pursuit of cost efficiency, so that we can continue supporting customers’ businesses through lending.
We strategically carry out funding fitted to SMBC Group’s balance sheet composition and the market environment, with
seeking to expand our investor base and diversify funding methods. Initiatives in this area have included the issuance of cov-
ered bonds and cross-currency repo initiatives (foreign currency procurement using government bonds, etc. as collateral),
along with the issuance of regular foreign currency-denominated straight bonds.
Although the funding environment will continue to face headwinds in the form of ongoing tight monetary policy in areas
including Europe and the U.S., regulatory strengthening and tightening, and the emergence of geopolitical risks, we will
respond pro-actively from a long-term perspective and engage in stable balance sheet control through global collaboration.
The Global Markets Business Unit regularly issues green bonds, the funds from which are used only for renewable
energy or other eco-friendly projects. In October 2015, we became the first Japanese private financial institution to issue US
dollar-denominated green bonds. In the years that followed, we pro-
ceeded to expand the scope of investors served by our green bonds,
becoming the first private company in Japan to issue green bonds
for individual investors in December 2018 and issuing green bonds
through a public offering in the U.S. in January 2021. To date, we have
floated eight green bond issues in Japan and overseas, raising a total of
approximately US$3.6 billion. In these issues, we carefully explain our
sustainability initiatives to investors to foster mutual understanding.
We will continue contributing to the further development of mar-
kets and to the preservation and improvement of the environment as
one of Japan’s leading issuers of green bonds, thereby creating social
value.
Reinforcement of our ability to provide solutions through
marketable financial products
Paradigm shifts are also affecting customers in many ways. To address
the risk hedging needs arising in customers’ businesses and balance
sheets along with the risk-taking needs accompanying investing and
investment management, we are accelerating our globally integrated
management and enhancing our ability to provide solutions.
Specifically, we are utilizing diverse data to actualize customers’
latent needs and are honing our ability to deliver custom-made propos-
als to appropriately address diverse needs. In the future, we will also
promote more sophisticated analysis through means including linkages
with digital platforms. By providing unique solutions, we are taking on
the challenge of supporting customers’ management strategies from
non-conventional approaches.
In this way, by supporting “Japan’s Regrowth” from a starting point
in our customers’ businesses, we will create social value.
Global Markets Business Unit
Increased efficiency of funding and
collateral management
Medium- to long-term funding strategy
tailored to environment
Global ALM management
Fed
ECB
BOJ
¥
€
Increasing
correlation
Effects of monetary tightening
Change in credit cycle
Regulatory strengthening
and tightening
Turning point of trend
Dynamic portfolio
rebalancing
Turning point of trend
Carefully-created
risk control
Overview of Portfolio Rebalancing
Enhancement
of customer
satisfaction
Provision of solutions
Bonds
Spot goods, repo
Derivatives
Stocks
Foreign exchange
Utilization
of data
Materialization
of needs
Japan’s Regrowth / Poverty & Inequality / Declining Birthrate & Aging Population
DE&I
Environment
Supply of asset
management human
resources
Raising the status
of the asset
management industry
Endowed courses
Sustainable
finance
Materiality
initiatives
Return to society
Enhancement of
engagement
Pride
in work
Enhancement of
financial literacy
Support for
asset formation
Support for the
advancement of Japan’s
financial industry
Support through green
procurement and
customer seminars
SMBC GROUP REPORT 2024 085
084
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Supplier portals, marketplaces, ESG traceability
Supply Chain Management Optimization Solution from SMBC
SMBC Asia Rising
Fund investee
companies
Digital wallet
Data visualization,
analysis, sales
forecasting, etc.
Anchor company
kick dealer finance
Deep tier supplier
finance
ERP solution
recovery work
streamlining
Sales and procurement
management process
automation
Cross-border
digital payments
Marketing data
Suppliers
(primary, secondary...)
Global companies
(anchor companies)
Distributors
(primary, secondary...)
End users
Multi-franchise
partners
FinTech,
technology partners
CHECK
REVIEW
ACTION
1
Measure
organizational status
Achieve high response
rate by minimizing
burden on employees
Conduct pulse survey
in 2-3 minutes
2
Know organizational
status
State of the organization
immediately after
responding can be
assessed
3
Execute
measures
Start from examples
displayed in Wevox
system
Automated
aggregation and
analysis
Clarification of issues
Promote improvement
measures
Extensive examples
of improvement at
other companies
T O P I C S
T O P I C S
I
am deeply committed to the creation of social value
through digital innovation.
While using digital technology to promote digital
transformation in our existing financial businesses, as
Group CDIO I undertake the creation of new business
models and solutions with utmost effort that go beyond
the framework of a financial institution.
Our keywords are “Beyond & Connect” and “Empow-
er Innovation.”
Our Company engages in business development that
integrates the financial and non-financial across regions,
based on collaboration with partner companies of differing
types by making use of digital technologies (Beyond &
Connect). As a global solutions provider, we offer custom-
ers added value that goes beyond our financial business,
while creating, developing, and nurturing businesses that
“Beyond” expresses our stance of expanding our range of
business beyond the boundaries of financial/non-financial,
industries, and national borders, while “Connect” embod-
ies our intent to create new added value through active
cooperation with different partners. Under this approach,
we aim to transform SMBC Group’s business model by
pioneering new businesses not yet undertaken by conven-
tional financial institutions.
Provision of digital solutions for
supply chain management in Asia
In the Asian-Pacific region, we develop and promote solu-
tions that support the optimization of companies’ supply
chain management, such as a digital platform for supply
chain finance and a “CFO Dashboard” for visualization
and analysis of integrated cash flow and finances. We have
introduced such solutions to about 100 companies so far.
SMBC Group was nominated among “DX Brands 2024” by the Ministry of Economy, Trade and Industry,
the Tokyo Stock Exchange, and the Information-technology Promotion Agency (IPA). This award was
in recognition of our digital-related initiatives, including our Olive integrated financial service for retail
customers and our non-financial businesses under the “Producing new CEOs” initiative.
Beyond & Connect
will lead to the future transformation of SMBC Group’s
business model.
In creating new businesses, it is vital that we have a
framework to promote innovation (Empower Innovation).
To accelerate the strengthening of business development
in cooperation with startups in the fast-growing Asian
region, we have established corporate venture capital and
prepared functions for the promotion of digital innovation.
In the area of “Producing new CEOs,” we actively promote
employees with vision and ambition to the position of
president of new business companies, engage in ongo-
ing efforts aimed at transformation of our culture such
as internal social media networks, and are accelerating
the creation of mechanisms for generating new business
seeds inside and outside the company.
SMBC Wevox
In a joint venture with Atrae, Inc., we established a new
company to provide a platform that offers corporate cus-
tomers timely visualization of employee engagement and
motivation, supporting the enhancement of organizational
strength. SMBC Group has been using Atrae’s Wevox in-
ternally since 2020. Drawing on the experience and refine-
ments we have accumulated for effective use of Wevox, we
will provide new added value to our customers.
In addition to the initiatives introduced on this page,
the owned-media DX-link operated by SMBC Group
communicates information such as examples of
co-creation with partner companies and examples of
specific initiatives by customers undertaking DX.
Creating Social Value through Digital
Akio Isowa
Senior Managing
Executive Officer
Group CDIO
SMBC GROUP REPORT 2024 087
086
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
SMBC Cloud Sign
Avatar business
Initiatives in new domains
(FY)
’19
’21
’22
’20
’23
200
0
400
600
800
1,000
8.8 x
Sales
Compared to FY2020
(JPY mn)
Sales
Operating profit (loss)
iB-tle corporate web payment service
Billing
company
Sales/billing
data entry
Transacting
companies
Receipt of
payment data
(notification
by email)
Automatic withdrawal on payment due date
Company A
Company B
Company C
1
5
2
3
4
Billing data list
Company A
500 MM DD
Company B
300 MM DD
Company C
400 MM DD
Amount
Payment
date
Confirm and
approve amount
and date of payment
Withdrawal from transacting
account can be confirmed
T O P I C S
To achieve further proliferation of the SMBC Cloud Sign
electronic contract service already used by many small
and medium-sized enterprise customers, we have begun
providing the service free of charge to all corporate cus-
tomers who have a savings account with Sumitomo Mitsui
Banking Corporation. We intend to add new functions for
contract conclusion as well as contract management.
We have begun studying collaboration with AVITA, Inc.,
a company specializing in avatar and AI technologies.
Avatars hold potential for creating worlds in which people
can go beyond constraints such as outward appearance
and location to engage in work. We are considering the use
of avatars in our financial business and in collaborations
with corporate customers.
Through collaboration with JP UNIVERSE, we have begun
a proof-of-concept trial to examine business potential in
the area of the metaverse, which is expected to see use
by individuals and companies. We are also conducting
demonstrations with HashPort Inc. in the area of non-
fungible tokens (NFTs).
“Empower Innovation” indicates the creation of means
and mechanisms for accelerating innovation. By fostering
a corporate culture that encourages tackling challenges
with “the courage to carry through,” we are giving rise to a
succession of new businesses and advancing transforma-
tion for SMBC Group.
CDIO meetings
We hold monthly CDIO meetings as venues for speedy
decision-making. We have also readied a framework for
agilely securing budgets. As an example, SMBC Wevox lev-
eraged this framework to move from the start of planning to
business launch in about half a year.
Stock options for digital subsidiaries
We have begun granting stock options to the management
teams of subsidiaries created through our in-house entre-
preneurship. We expect these subsidiaries to demonstrate
significant growth beyond the framework of SMBC Group,
and will promote the transformation of our corporate cul-
ture into one that continually turns out employees who take
on the challenges of in-house entrepreneurship.
Corporate Venture Capital (CVC)
SMBC Asia Rising Fund
In May 2023, we launched a CVC totaling US$200 million
to strengthen our multi-franchise strategy and promote
digital transformation in cooperation with startups in the
fast-growing Asian region. To date, we have made decisions
to invest in four startups in Asia, spanning fields including
supply chain finance, electronic invoices, and personal
loans.
Global expansion of our digital strategy
To roll out our digital initiatives on a global basis, we have
established the SMFG Silicon Valley Innovation Lab in the
United States and the Asia Innovation Center in Singapore.
At these locations, we are tackling technology-based new
business development in cooperation with business part-
ners and startups in the regions.
In SMBC Group’s aim to create social value, the use of
digital technologies is indispensable. The wide-ranging
digital services that we develop will further connect to the
creation of social value in a number of ways.
SMBC Wevox contributes to realizing DE&I through
solutions that support visualization of employee engage-
ment and enhancement of organizational capabilities for
corporate customers. Plusmedi, a provider of services
Empower Innovation
supporting hospital visits by patients and solutions for the
management of personal health data, aims to solve issues
in the health care field. SMBC’s Cloud Sign electronic
contract service contributes to solving varied social issues,
such as addressing environmental issues through paper-
less work. We are also working to address the declining
birthrate and aging population in collaboration with avatar
business experts AVITA, Inc.
Initiatives to Create Social Value
In February 2023, we launched the “iB-tle” web payment
service for corporate customers. Invoicing companies and
paying companies are able to perform and manage opera-
tions from billing to payment reconciliation, as well as early
financing, all through one service. This offers support for is-
sues that are increasingly important to companies, such as
reducing promissory notes and adapting to the revised Law
on Book and Record Keeping through Electronic Methods.
"hoops link tokyo", an open innovation hub opened in Shibuya in 2017, celebrated its
6th anniversary. The facility continually creates opportunities for new experiences and
encounters, including the “Manager Dojo” for interacting with startup managers and
the issuance of membership cards using blockchain technology.
©JP UNIVERSE Inc.
All rights reserved.
SMBC GROUP REPORT 2024 089
088
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Multi-Franchise
Strategy
in
India
SMBC Group has set out a “multi-franchise strategy”
targeting India, Indonesia, Vietnam, and the Philippines.
We aim to create a “second and third SMBC Group” by
developing full-line banking services, including retail
operations, in emerging Asian countries where high growth
is expected.
Under our previous Medium-Term Management Plan,
we invested in and acquired partner companies overseas
and laid a foundation for growth in all of the target coun-
tries. To solidly harvest the fruits of future growth, under
our current Medium-Term Management Plan we will draft
and implement appropriate strategies rooted in local areas.
To accelerate the realization of our multi-franchise
strategy, in FY2023 we brought Fullerton India under the
SMFG brand through a change of name to SMFG India
Credit Company, and made the company a wholly owned
subsidiary through additional investment. We made RCBC
in the Philippines and VPBank in Vietnam equity-method
affiliates through additional investment, and made auto loan
company OTO/SOF in Indonesia a consolidated subsidiary.
We will continue to focus on post-merger integration
(PMI) to draw out the countries’ high growth potential. In
business aspects, we will go beyond one-on-one collabo-
ration between SMBC Group and investee companies to
further tackle the creation of synergies by means including
SMBC Group financing support and two-way customer re-
ferrals, collaboration on products for which Sumitomo Mitsui
Banking Corporation enjoys global strengths, and knowledge
sharing and human resource development support.
In the area of governance, we dig deeply into local
companies’ management and build governance structures
through the dispatch of personnel from Sumitomo Mitsui
Banking Corporation and through participation in compa-
nies’ Boards of Directors. We also introduce global standards
while respecting local legal systems and business customs.
Through such measures, we will pursue sustainable
growth and further contributions to profit. Under our
multi-franchise strategy, we will tackle the creation of value
by supporting social self-sufficiency and promotion of finan-
cial inclusion for the poor in emerging countries through
microfinance, financial education, and other means.
S
MBC Group operates SMBC branches in India, offering wholesale bank-
ing services with focus on large corporates. India became the world's
largest population in 2023 and expected to achieve average annual
GDP growth of about 7% through 2030. India is expected to be the world’s 3rd
largest economy in 2028 SMFG India Credit Company Limited (“SMICC”) is a
non-banking financial company (“NBFC”), having a subsidiary Home Finance
Company, and provides financial services to small and medium-sized enterpris-
es and individuals. SMBC Group made SMICC a consolidated subsidiary in 2021
and a wholly owned subsidiary in 2024 to capture opportunities for growth in
small and medium-sized enterprises, retail markets, and expand our business in
India. SMBC Group will contribute to further advancement of financial industry
in India through this action, while working on building the platform of a full-line
financial service that includes retail business.
The article in next page features a dialogue between Shantanu Mitra,
SMICC CEO, and Takeshi Kimoto, Head of Asia Business Development Division,
about SMICC's strengths, future business prospects in India and collaboration
with SMBC Group.
profile
Capturing Economic Growth to
Accelerate Multi-Franchise Strategy
Left
Takeshi Kimoto
Managing Executive Officer
Head of Asia Business Development Division
Right
Shantanu Mitra
SMICC CEO and Managing Director
Multi-Franchise Strategy that
Supports Future Growth
Multi-Franchise
Strategy
Special Content
1
’22
’23
’24
’25
’28
(0.4)%
28
(1)
4
0.7%
44
50
90
>120
>85
(42)
9.5%
(FY)
Contribution to
bottom-line profit (JPY bn)
Target
After FE Credit
impairment of goodwill
Before amortization of goodwill
After amortization of goodwill
ROE
• Commercial banking
• Digital bank
• Auto loans
• Unsecured loan
• Mortgages
• Non-bank
• Non-bank
• Commercial banking
• Leasing
Indonesia
India
Vietnam
Philippines
Large corporates
SMEs / Micro
High-net-worth
91.1%
49.0%
Consolidated
(Mar. 24)
35.1% 51.0%
Rebranded (May 23)
Increased ownership (Mar. 24)
74.9% 100%
Equity method affiliate
(Oct. 23)
Equity method affiliate
(Jul. 23)
Sold (Jul. 23)
Wholesale
Middle / Mass
Retail
• Microfinancing
• Commercial banking
15.0%
20.0%
Investment ratio
SMBC GROUP REPORT 2024 091
090
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Shantanu: India's economy has made a strong recovery
from COVID-19, and high economic growth is expected
from here on. We believe that non-banks will play a major
role in supporting the small and medium-sized enterprises
and individual consumers driving this economic growth.
India is a diverse nation comprising 28 states and 8
union territories, each of which embraces different cultures
and languages. SMICC is one of the top 10 diversified
NBFCs in India. It has been operating for more than 15
years and has specific business models designed to serve
rural and urban retail consumers, small businesses and
affordable home loan seekers. As a non-bank, SMICC plays
an important role that supplement the country's network of
banks in addressing the diversity of regions and in making
financial services available to all.
SMICC provides financial services in the four seg-
ments of urban, rural, digital, and home finance, with about
70% of our branches located in cities with a population
of less than 100K. Our strength lies in establishing a
business model with deep local roots. SMICC also places
a strong focus on training of employees and providing
fast and seamless credit closely aligned with customers
in semi-urban and rural areas. Through many years of
lending experience rooted in local communities, we have
built unique knowledge and know-how while differentiating
ourselves from our competitors.
Kimoto: Rising income and consumption among individ-
uals and business expansion by small and medium-sized
enterprises are expected to drive the growth of India's
economy. In this context, SMICC aims to serve customers
across all of India, including rural areas, and through
this, SMBC Group also aspires to grow alongside India. To
achieve this, SMBC group will support the enhancement
of SMICC’s funding capabilities and leverage the Group's
customer base to promote SMICC's financial services
to increase our competitiveness in India. In doing so, we
recognize that one sector with particularly high growth
potential in India is digital business, an area in which
SMICC is also active. What are your thoughts on the growth
potential of the digital field in India?
Shantanu: Digitalization is progressing steadily in India
across sectors and specifically in financial services. A trig-
ger for this was the identity verification system introduced
by the government in 2009, under which every citizen
is issued a unique ID. Building on the foundation of this
system, the digitalization of economic activity has made
great progress, and cashless payments have become
widespread. Supported by this, digital lending in India is
expected to keep on growing.
SMICC actively promotes collaboration with reputed
financial technology companies. Drawing on customer
databases aggregated by partner companies, we can
now more easily acquire new customers and provide loan
services. We are putting the digital solutions of financial
technology companies to good use in offering our financial
services to a wide range of customers.
Kimoto: As you suggest, it is very good that people in areas
where financial services have not been readily available
are now able to tap into those services through the use of
digital and technology. SMBC Group's Medium-Term Man-
agement Plan includes "Poverty & Inequality" among the
materialities that we need to proactively address. SMICC's
services can be seen as truly supporting financial inclusion.
SMBC Group, too, hopes to contribute to solving social
issues by working with SMICC to enhance the convenience
of digital platforms and provide microfinance to rural areas.
Shantanu: I appreciate you saying that. We also recognize
the improvement of financial literacy, the employment of
women, and the solving of environmental and social issues
as important parts of our mission as a company. I think
that these are shared in part with the material issues that
the SMBC Group plans to address. As one of our social
contribution initiatives, we supports health maintenance
for cattle to stabilize the income and improve the lives
of families engaged in dairy farming. We are also making
efforts in the creation of employment opportunities for
women in rural areas and contribute to the mission of
elimination of poverty and inequality. Solutions to environ-
mental issues, such as mangrove tree planting, are another
area of focus for us. We are convinced that every such
effort will contribute to our vision - Create Social Value.
Kimoto: In 2024, SMBC established "social deposits,"
by which funds deposited by customers are allocated to
projects that address social issues, such as projects to
improve health care or reduce poverty. Although we have
just begun with these efforts, we believe that including
such activities of SMICC will help in realizing Create Social
Value on a global scale. As such, we will continue explor-
ing new opportunities to offer support in our collaboration
with SMICC.
Shantanu: I am pleased that SMBC Group and SMICC are
able to have synergies in the creation of social value as
well as in the pursuit of economic value, supporting the
advancement of the financial industry in India. In terms
of economic value, we intend to leverage SMBC Group's
customer base to advance solutions such as supply chain
finance to corporate customers that have supply chains
in India. Overall, we plan to double our loan assets over
the next three years and raise our ROE from about 12% in
FY2023 to over 18% in FY2024.
SMICC follows a very customer-centric approach. The
products cater to the unique needs of the respective cus-
tomer segment. The branch network and the distribution
channels are also aligned to the customer segment. We
plan to continue to expand our network of branches and be
present in every local market relevant to lending business.
Kimoto: Through regular communication with SMICC's
leadership team, we share insights gained domestically
and internationally and seek best practices, which I feel
has deepened our group collaboration over the years.
SMBC Group will continue accelerating our collaboration
with SMICC as we aim for realization of growth with quality.
In the area of contribution to profit (before amortization
of goodwill) from multi-franchise partner companies in
Asia, we aim to achieve ¥120 billion by FY2028. SMICC is
expected to play a central role in this effort, contributing
30-40% to the goal. Toward the achievement of this target,
SMBC Group will proactively collaborate as both a share-
holder and a business partner.
“Pashu Vikas Day” cattle healthcare event in agricultural areas of India
Loan
Breakdown
(Dec.23)
Secured loans
29%
Business loans
12%
Personal loans
16%
Group loans
8%
Housing Loan
11%
Digital
18%
Others
(vehicles/motorcycle
loans, etc.)
6%
Financial results
(JPY bn)
2020
2021
2022
2023
Gross profit
48.1
40.8
58.8
91.3
Expense
18
23.5
33.9
51.7
Credit cost
54.4
15.5
9.5
23.2
Net business profit
(18.3)
1.2
11.6
12.1
ROE
(23.8)%
1.9%
14.7%
12.2%
Loans
378.2
411.4
596.8
822.5
Total assets
419.3
441.4
666.7
877.6
* Calculated using end-of-period exchange rates
SMBC GROUP REPORT 2024 093
092
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Loan
Breakdown
(Dec.23)
Loan
Breakdown
(Dec.23)
• Retail
47%
• Wholesale
42%
• SME
10%
• Others
1%
• Credit cards
57%
• Unsecured loans
37%
• Motorcycle loans
4%
• Installment
2%
T h e C o l u m n
I
n Vietnam, we made FE Credit’s parent company
VPBank an equity-method affiliate in October 2023
through a 15% investment.
FE Credit is an equity-method affiliate in which we invest-
ed in October 2021. The firm’s credit-related expenses
increased and its new lending decreased under economic
slowdown in Vietnam, but SMBC Group is providing ongo-
ing support by strengthening cooperation with FE Credit’s
parent company VPBank. We will continue to strengthen
financing capabilities by drawing on the creditworthiness
of SMBC Group and to strengthen governance through
personnel support, and will work with VPBank to support
reinforcement of FE Credit’s management foundation.
We have introduced VPBank to SMBC's customers
that are Japanese multinationals doing businesses in
Vietnam. We provide customers with services unique to
local financial institutions, such as supply chain finance
and dealer finance, and support the expansion of VPBank’s
business.
We will continue to deepen collaboration between
SMBC Group and both VPBank and FE Credit, with the aim
of strengthening our business foundation and expanding
our presence in Vietnam.
SMBC Group’s Business
Strategy in Asia Pacific
S
MBC Group operates
an extensive network of
branches, bank subsidiaries
and securities and leasing entities
in Asia Pacific. In the last five years,
we doubled our region’s top line by
leveraging our network and providing
value-added solutions to our
corporate and institutional clients.
By deepening client relationships
and enhancing sector expertise, we
increased both lending and non-
lending revenue in Asia Pacific, the
fastest-growing region globally.
As a market leader in ESG,
we are dedicated to helping our
clients achieve their sustainability
goals while expanding our green
finance portfolio. Data and digital
innovation remain as key drivers for
enhancing operational efficiency
and client engagement across our
operations. We are committed to
fostering economic stability and
environmental sustainability for both
today’s and future generations.
Through our investments into
our multi-franchise entities in India,
Indonesia, Vietnam and Philippines,
we have expanded our customer
base to retail and SME segments
and enhanced solutions for our core
clients. We anticipate increased
collaboration and synergies across
our internal ecosystem enabling swift
market expansion, ROE-accretive
growth and meaningful social value
creation ahead.
Collaboration between SMBC’s
Branches and Multi-Franchise
Entities
Our aim is to build a more granular
support system for our customers
seeking to expand their business
in Asia Pacific. By strengthening
cooperation with our multi-franchise
entities, we will have an expanded
service offering including supply
chain financing for our corporate
clients, pay-roll management, dealer,
equipment and vehicle financing.
Recognizing the importance
of innovation, we launched the Asia
Rising Fund to provide early-stage
funding to regional ventures and
catalyze collaborations with our multi-
franchise entities. This drives digital
innovation and supports the financial
sector’s growth in the region.
Message as Chairman of the
Board of SMICC
As a young banking professional in
India before joining SMBC in 1997, I
am proud to be part of the Group’s
development in Asia Pacific. I am
also excited by SMBC Group’s
growth aspirations in India, driven
by economic factors like a growing
middle class and expanding trade
and investment flows.
Having completed 100%
acquisition of shares in March
2024, SMICC along with the
branch banking platform will be
our twin engines of growth in India.
As a provider of loan and credit
services for retail, housing and SME
segments, SMICC aspires to become
one of the top NBFCs in India.
In mid-2024, SMICC launched
its new brand campaign “Pragati hi
Aapki Nayi Shakti Hai” (progress is
your new power) emphasizing their
commitment to empower progress
seekers. This resonates with SMICC’s
philosophy of supporting aspirations
in rural and urban communities
through various loan options to
support their advancement.
Multi-Franchise
Strategy
in
Vietnam
Rajeev Kannan
Managing Executive Officer
Co-Head of Asia Pacific Division
Chairman of the Board of SMICC
Message from
Co-Head of
Asia Pacific Division
* Calculated using end-of-period exchange rates
* Calculated using end-of-period exchange rates
VPBank results
(JPY bn)
2020
2021
2022
2023
Gross profit
175.6
221.5
323.7
303.4
Expense
51.3
53.6
79.0
85.0
Credit cost
65.8
96.1
125.8
152.5
Net business
profit
46.9
57.4
94.7
51.8
ROE
22.0%
18.1%
20.3%
9.3%
Loans
1,453.0
1,920.1
2,686.6
3,656.7
Total assets
1,885.6
2,737.0
3,533.7
4,987.2
FE Credit results
(JPY bn)
2020
2021
2022
2023
Gross profit
78.4
76.6
84.9
81.0
Expense
22.7
23.4
34.3
28.0
Credit cost
42.7
57.8
75.3
75.6
Net business
profit
13.4
0.6
(13.3)
(18.0)
ROE
21.2%
0.8%
(16.5)%
(25.2)%
Loans
297.2
377.1
385.4
343.5
Total assets
330.3
388.1
428.2
384.7
SMBC GROUP REPORT 2024 095
094
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
• Large corporate
47%
• SME
20%
• Auto loans
7%
• Housing loans
14%
• Credit cards
12%
• Large corporate
57%
• SME
7%
• Retail
15%
• Syariah
6%
• OTO/SOF
15%
I
n Indonesia, we made Bank BTPN, the foothold
for our multi-franchise strategy, an equity-method
affiliate in 2013. In 2019, we made Bank BTPN a
consolidated subsidiary through merger with Bank Sumito-
mo Mitsui Indonesia, which has strengths in the wholesale
business, and thereby created a full-line commercial bank.
It has since grown to the 10th largest bank in Indonesia,
with total assets approaching ¥2 trillion.
We are currently accelerating digital strategies in-
cluding our digital banking service “Jenius” and our digital
service for SME customers “TouchBiz.” In March 2024, we
made auto loan company OTO/SOF a consolidated sub-
sidiary and will also strengthen the retail business through
joint financing, mutual customer referrals, and other
means with OTO/SOF.
We will expand business in other countries by de-
ploying our multi-franchise strategy know-how gained in
Indonesia, including know-how of processes for enhancing
governance structure and the supply chain business draw-
ing on the corporate customer base of SMBC Group.
W
e made our first investment in RCBC in the
Philippines in 2021, followed by addition-
al investment in July 2023 that made the
company an equity-method affiliate. The capital increase
and financing support by SMBC Group have yielded fruit.
RCBC’s lending balance increased steadily in FY2023,
achieving revenue and profit growth.
We are meeting a wide range of needs through co-
operation with RCBC, including the proposal of solutions
involving RCBC to SMBC Group customers that require
local financial services in the Philippines.
As an example, RCBC has introduced captive finance
campaigns and residual value-based auto loans planned
and developed with SMBC Group, and is steadily growing
its number of contracts.
Together with SMBC Group, we are also undertaking
social contribution activities such as financial literacy
enhancement programs for the employees of business
partners.
We will continue invigorating collaboration with SMBC
Group to further expand our presence in the Philippines.
Multi-Franchise
Strategy
in
Indonesia
* Calculated using end-of-period exchange rates
* Calculated using end-of-period exchange rates
Multi-Franchise
Strategy
in
The Philippines
Loan
Breakdown
(Mar.24)
Loan
Breakdown
(Dec.23)
BTPN results
(JPY bn)
2020
2021
2022
2023
Gross profit
91.1
106.2
116.1
127.8
Expense
50.9
56.6
60.9
67.8
Credit cost
20.7
17.1
15.6
27.8
Net business
profit
12.9
21.6
26.3
22.2
ROE
6.1%
8.6%
9.6%
6.3%
Loans
1,008.0
1,098.4
1,242.0
1,424.7
Total assets
1,355.4
1,554.5
1,777.9
1,833.8
RCBC results
(JPY bn)
2020
2021
2022
2023
Gross profit
81.9
81.9
105.8
127.9
Expense
47.6
50.7
59.7
75.8
Credit cost
20.3
13.6
13.6
17.7
Net business
profit
10.8
15.9
28.8
31.3
ROE
5.5%
6.7%
11.2%
9.5%
Loans
1,061.2
1,211.2
1,330.1
1,663.8
Deposits
1,157.3
1,513.0
2,040.2
2,449.2
Total assets
1,667.7
2,158.0
2,746.8
3,170.1
SMBC GROUP REPORT 2024 097
096
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
SMCC Aoba
I’m in charge of mass promotion overall for Olive. As Olive is
a service with an entirely new concept, immediately grasp-
ing the whole picture can be difficult for customers. Howev-
er, there are a lot of elements that they find appealing.
In the launch, SMBC and SMCC initially highlighted
the service’s unprecedented unique worldview, its world
first flexible payments, the high rate of point earning, and
so on in television commercials in the same frame, with an
emphasis on impact. A large-scale presentation was also
held during the press release. Then-CEO Ohta of Sumitomo
Mitsui Financial Group and top leaders from SMCC, VISA,
and SBI Securities took the stage at the event. PR activities
were of an unusual scale for a financial service, attracting
major coverage on TV, in newspapers, online, and in other
media. The result was a huge response from customers,
with plenty of activity in campaigns and social media posts.
I think the new service launched amid a lot of buzz.
SMBC Yamada
I’m involved in market research related to Olive. Since the
press release, I’ve collected and analyzed about 10,000
questionnaires every month. From a state of 0% aware-
ness upon release, Olive’s recognition is now close to 60%
thanks to the success of promotions. Although this was as
expected, the level of understanding remained lower than
the level of awareness, and account openings struggled.
While the service’s innovation and multi-functionality are
compelling, these same features can also make it difficult
to understand. Immediately after the launch in particular,
we saw this trend in female users. From here on out, I think
it will be important that we communicate in a way so that
people not only know about the service but also under-
stand its functions and value and want to use it. In other
words, our approach has to go a step ahead beyond mere
recognition.
SMCC Aoba
Forming an early image as an innovative product is im-
portant, but as our next step, we took action so that not
only customers highly attuned to information but also
more general customers could personally grasp Olive. As
an example, we used advertisements proposing Olive in
lifestyles involving young people, housewives, business-
persons, and so on. In TV commercials, we had actress
Yuriko Yoshitaka play the role of a prospective Olive user.
We also tried to build good buzz through PR and hit prod-
uct rankings. Account openings gradually increased, not
only among early adopters with a high interest in financial
services but also among the majority demographic.
SMCC Tsujioka
I was involved in the development of the Vpass app and
was in charge of system linkage with the SMBC app for
Olive launch. Olive allows access to services from either
app. Originally, the SMBC app was suited to use by bank
account holders and the Vpass app by credit card cus-
tomers. Olive is an integrated financial service that spans
both, so a redesign was needed to avoid any incongruity
when using either app. We communicated closely with the
people in charge of the SMBC app on matters including
(bottom left) Sumitomo Mitsui Card Company (SMCC)
Marketing Unit
Olive Mass Promotion SQ Product Owner (PO) and
SMCC Brand Supervisor SQ PO
Wataru Aoba
In charge of mass promotion of V POINT NL cards, etc. in addition to Olive
(top left) Sumitomo Mitsui Banking Corporation (SMBC)
Retail Marketing Department
Mass Promotion SQ
Maya Yamada
In charge of mass promotion, market research, etc. for Olive and
Olive LOUNGE
(bottom right) Sumitomo Mitsui Banking Corporation (SMBC)
Retail IT Strategy Department and Retail Marketing Department
Strategy of Switching to Olive SQ Product Owner (PO)
Kazuya Hashimoto
In charge of formulation and execution of marketing measures related
to Olive
(top right) Sumitomo Mitsui Card Company (SMCC)
IT Strategy Unit (at the time)
Digital Strategy SQ and Point Integration SQ
Haruto Tsujioka
In charge of planning and development of SMCC’s Vpass app and
V POINT Pay App
A year has passed since we launched Olive service in March 2023.
Four members of the project team explain how they promoted the use
of service.
Contributing to
“Fulfilled Growth” through
Olive integrated financial service
Olive, our integrated financial service for retail cus-
tomers seamlessly combines features including bank
account, card payment, online securities, and online
insurance in app.
Users can access services from both the SMBC
app and the Vpass app, to manage everyday payments,
balances, and statements balances and statements for
services including, asset formation and asset manage-
ment, all in one place. The app also features the world’s
first flexible payment using new functions developed
by Visa that allow switching among cash card, credit,
debit, and point payment services through the app. Users
can earn points at a high rate, depending on service
usage status, for use at eligible convenience stores and
restaurants.
Evolving Olive
Special Content
2
SMBC GROUP REPORT 2024 099
098
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
detailed functions and designs. We held discussions to
achieve user interfaces (UI) and experiences (UX) that are
comfortable for users of either app, and reflected these in
the specifications of the respective apps while aligning our
efforts.
SMBC Hashimoto
I joined SMBC in 2021 as a mid-career hire. I’ve been
consistently involved in work related to Olive, so I have a
great attachment to the product. Recently, I’ve been in
charge of managing measures to capture switchers from
existing bank accounts, and I’m responsible for achieving
our target of 12 million Olive accounts in five years.
In FY2023, the year of launch, we rolled out a new
accounts promotion with a target of two million accounts
in one year. We began a referral program by which, when
a customer opened an account through a referral from an
existing Olive account holder, both customers received
points. In the first fiscal year, nearly 10% of new accounts
came through the referral program. We evaluated the
program as having functioned to increase the number of
accounts opened by the majority demographic.
Through such efforts, we were able to achieve our
goal of two million accounts in one year. Actually, toward
the end of the fiscal year, projections suggested that we
wouldn’t reach the initial goal. However, the year was a vital
start toward our grand target of 12 million accounts in five
years, and we were determined to achieve that no mat-
ter what. With SMBC account holders switching to Olive
accounts as our main goal, and as a result of many actions
both in the digital area and at branch counters, we were
able to rack up about 30,000 new accounts in a final push.
We achieved this through the cooperation of the project
members as well as all members involved in Olive, and I’m
very pleased with the outcome.
SMCC Tsujioka
One catalyst for further capturing new accounts is the
integration of V POINT and T POINT that we implemented
in April 2024. Following the integration, we unified the two
into a blue and yellow V POINT card. The former V POINT
operated by SMCC had about 16 million members, while
the former T POINT operated by CCCMK Holdings (CCCM-
KHD) had about 70 million members. For SMBC Group, the
number of point members expanded hugely. I was involved
in the system development project for the point integra-
tion, and had many discussions with persons in charge at
CCCMKHD about the UI and UX of the respective apps.
There were some clashes of opinions, but placing custom-
ers first and setting a shared goal of creating a truly easy-
to-use app, we aligned our efforts and built the app.
SMBC Yamada
From questionnaire surveys, the effect of the name value
inherent in the old T POINT came out beautifully as data.
We could see that the recognition rate and utilization rate
of V POINT jumped up with the point integration. Opening
a new account or creating a credit card presents a certain
mental barrier for customers. We first want customers to
feel the benefits and the convenience of easily earning
and using V POINT in everyday shopping. We expect that
this will lead to their recognizing the appeal of Olive, which
allows earning the same V POINT.
SMBC Hashimoto
In January 2024, the Nippon Individual Savings Account
(NISA) scheme was significantly expanded and the “new
NISA” scheme began. This resulted in an increased num-
ber of new Olive accounts. This is an example of how the
linked features and services of Olive and online securities
have been well received.
Olive is a service that holds great potential. Through
the addition of more features and enactment of other
measures, it has plenty of room to evolve. Our target of
12 million accounts in five years is not an easy one, but I
personally hope that we will exceed 15 million and even 20
million in the future and help enrich customers’ lifestyles
through Olive.
SMBC Yamada
I currently belong to the Retail Marketing Department. I
was originally involved in sales at a bank branch, so I also
understand the sales side. We can communicate the ap-
peal of Olive from a number of approaches. In promotions,
I want to make use of knowledge from market research as
well as my work experience gained at the sales branch.
SMCC Tsujioka
Olive may appear to be a completed service, but it’s not yet
complete and there are still places to be upgraded. I want
to review its services and systems while listening to what
customers are saying. In the process, we’ll have to cooper-
ate not only with finance but also with concerned parties
from a variety of industries. I plan to keep on studying hard
so I can contribute to the evolution of Olive, valuing ideas
not bound by the framework of finance.
SMCC Aoba
SMBC Group is a large corporate body backed by tradition,
so the world tends to view it as conservative. However,
being involved in Olive and listening to the opinions of indi-
vidual customers and companies, I can see that they view
Olive as innovative and challenging initiative. SMBC Group
aims to contribute to “Fulfilled Growth” as a basic policy
in our Medium-Term Management Plan. I myself hope to
enrich customers’ lifestyles through the financial-based
infrastructure of Olive. As a “NEW STANDARD that contin-
ues to evolve”, Olive can widely deliver value to the world.
Our team will exert its maximum strength in our ongoing
efforts to promote it.
Projects related to Olive were advanced mainly through
flexible organizations called “Squad (SQ).”
Originally, projects operated on the basis of
company, division, and department. To strengthen
our ability to address needs and to improve speed, we
adopted agile organizations at the level of Squads, and
moved to a structure that enables execution of work on
an ad hoc basis.
By building flexible personnel rights and linear
decision-making processes and by advancing delega-
tion of authority, we achieve timely response to new
customer needs and issues without being constrained
by the boundaries of organizations.
For shared missions and KPIs, members with dif-
ferent know-how and skills have been brought together
across the boundaries of companies and departments
to plan, develop, and continually upgrade Olive.
Promoting projects through the
flexible organizations “Squad”
V POINT and T POINT were integrated in April 2024
SMBC GROUP REPORT 2024 101
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Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Success in first issuance of perpetual subordi-
nated bonds (Additional Tier1 bonds) among
G-SIBs (Global systemically important banks)
in the face of headwinds from the write-down of
AT1 bonds at a major Swiss financial institution
Mizuno: Amid growing concerns of AT1 bonds, our issu-
ance attracted strong media attention and we fielded daily
requests for coverage, which really
seemed heated.
On the other hand,
our marketing activities
were worthwhile, and
investors came to under-
stand the differences be-
tween the Swiss and the
Japanese AT1 schemes.
We were able to confirm a reasonably calm market recep-
tion and decided to issue the bonds as originally planned.
Furusawa: We made timely reports to management about
the project. Both CEO and CFO backed us up by saying that
the project was important to the financial industry overall
in stabilizing the domestic AT1 bond market, and gave us
the go-ahead. This really encouraged us.
Morimoto: Ultimately, we were able to raise a total of ¥140
billion under interest rates of 1.879% which non-call period
is five years and 2.180% which non-call period is 10 years.
We accumulated substantial demand at interest rate levels
close to those of AT1 bonds traded in the secondary market
at that time, without excessive premiums. When this hit
the front page of The Nikkei, I realized that we had accom-
plished a highly influential project with social significance.
Tackling our first US dollar-denominated
AT1 bonds
Furusawa: To expand our investor base and diversify our
funding currencies, in February 2024 we issued our first
US dollar-denominated AT1. As this was a new product
requiring careful preparation, we set up a subcommittee
in-house and sorted out issues on the basis of the experi-
ence we gained through yen-denominated AT1 bonds. At
the same time, we created roadshow materials narrowing
down key points to give overseas investors a correct under-
standing of the characteristics of Japanese AT1 bonds.
Morimoto: In the roadshow, We held web conferences
with over 130 investors, spanning Asian to U.S. time zones.
Explaining the AT1 scheme to overseas investors is fairly
The first issuance of AT1 bonds among
G-SIBs after the Credit Suisse crisis
Mizuno: In March 2023, we announced the issue of
yen-denominated AT1 bonds scheduled in April 2023.
However, Credit Suisse, major Swiss financial institution,
then fell into a management crisis and was acquired by
UBS in a rescue deal, with the result that Credit Suisse’s
AT1 bonds were written down to zero value. This caused
a spike in concerns over AT1 bonds in bond market, and
forced us to make a decision on whether to continue our
issuance.
Morimoto: Given the unclear environment, we faced the
risk of failing to raise sufficient funds, and so considered
postponing the bond issuance. At the same time, there
were concerns that postponement would stoke domestic
investors’ distrust of AT1 bonds.
Furusawa: We moved forward with marketing activities to
thoroughly investigate the reactions of investors before
making a decision on the bond issuance. In the past, we
had often engaged in dialogue with investors through se-
curities companies. This time, however, we received many
inquiries directly from investors about the scheme of AT1
bonds and held face-to-face meetings in response.
Morimoto: In the Credit Suisse case, it’s thought that the
AT1 bonds were written down because they fell under a
debt write-down clause due to the receipt of extraordinary
government support from Swiss authorities. Conversely,
in Japan, the conditions for the recognition of non-viability
which cause write-down of AT1 bonds are clearly specified
in law, with government support not among the conditions.
We made efforts toward dialogue with investors to gain a
correct understanding of the scheme and the risks of AT1
bonds under Japanese laws.
Furusawa: We responded sincerely to every question from
investors, that resulted in building relationships of trust and
gaining feedback that yielded suggestions. I realized the
importance of increasing points of contact with investors
and deepening their understanding of our company. Based
on this, we’re working to actively create opportunities for
face-to-face meetings in later domestic AT1 bond issu-
ances. We are also focusing to expand investor base even
making visits to investors in regional areas.
AT1 bonds are securities equipped with a loss absorbing mechanism by which the bonds are subordinated to other
debts in the event of a financial institution’s bankruptcy. They are included as “Additional Tier 1 Capital” under
Basel regulations. G-SIBs are required by regulation to meet specified capital ratios. AT1 bonds are one important
funding tool for the maintenance of soundness.
In March 2023, a management crisis at Credit Swiss, a major Swiss financial institution, led the write-down of
their AT1 bonds. Amid growing concern over AT1 bonds, we acted ahead of other G-SIBs to issue AT1 bonds in April
2023. We also issued our first US dollar-denominated AT1 bonds in February 2024.
Investor Relations Dept.
(center)
Toya Morimoto
(left)
Erika Mizuno
(right)
Kensuke Furusawa
profile
Well-Timed Capital
Funding
Special Content
3
SMBC GROUP REPORT 2024 103
102
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
T h e C o l u m n
Receipt of “Yen Bond of the Year” award from IFR
Corporate bond underwriting is generally carried
out under stable market conditions, with risk events
avoided to the extent possible. The AT1 bond issuance
by Sumitomo Mitsui Financial Group occurred imme-
diately after the risk event in which Credit Suisse’s
AT1 bonds wrote down, so we had considerable initial
worries over what kind of offering we should make
as the lead underwriter. However, Sumitomo Mitsui
Financial Group made the decision to execute based
on impacts not only on the company but on the AT1
bond market overall, taking into account the risk that
avoiding the issuance could lead to stagnation in the
AT1 market. As the lead underwriter, SMBC Nikko
account the market environment, investor demand, our
strategy, and other factors.
Receipt of prestigious awards
at home and abroad
Morimoto: Our yen-denominated AT1 bond issuance in
April 2023 was highly regarded by prestigious Japanese
and overseas institutions including global financial mag-
azine IFR, Capital Eye, and DealWatch sponsored by the
London Stock Exchange Group (LSEG). The issuance won
awards, including an award for best yen bond deal of the
year.
In SMBC Group, even young employees can be en-
trusted with work en-
tailing responsibilities.
When problems come up,
though, bosses and senior
employees reach out to
help. I was in my fourth
year with the company
at the time, but with the
help of people inside and
outside the company, I was happily able to bring a project
commanding high global attention to fruition.
Furusawa: The US dollar-denominated AT1 bond issuance
was a project involving over 100 people, including experts
from securities companies and legal experts. We were able
to fully draw out the power of the team and execute our
first deal. Further changes in the environment are expect-
ed from here on out. By flexibly taking action based on this
experience, I want to further plan and execute timely and
appropriate capital funding.
Mizuno: For both the first yen-denominated AT1 bond issu-
ance by a major international bank after the Credit Suisse
crisis and our first US dollar-denominated AT1 bond issu-
ance, we took action while interacting with daily shifting
markets and undertook agile responses and decision-mak-
ing, all amid an unclear future. I consider these cases as
embodying the “Proactive & Innovative” and “Speed &
Quality” values inherent in SMBC Group. We will continue
to demonstrate the values and strengths of SMBC Group to
agilely raise capital while maintaining the soundness that is
a key premise for the work of financial institutions.
difficult, but I did so by making use of my experience with
overseas business trips for debt IR. With Ms. Mizuno, Mr.
Furusawa, and other IR members taking turns with me in
meetings, we explained the funding strategy and scheme
behind our AT1 bonds.
Furusawa: The response from investors in the meetings
was positive, and we confirmed their favorable investment
stance. Even during the process of determining issuance
conditions, strong demand by investors grew, and we
were ultimately able to issue the bonds under interest rate
conditions nearly flat to those of our yen-denominated AT1
bonds when converted.
I believe that this was
the result of overseas
investors gaining under-
standing of Japanese AT1
bonds through deal road
shows, as well as recog-
nition of our creditworthi-
ness. Persons with long
experience in the domestic and overseas corporate bond
business also praised this as a “great deal."
Mizuno: Our US dollar-denominated AT1 bond issuance
was the second by a Japanese bank. When we began our
study, there had been no case of issuance by a Japanese
bank, so the difficulty of setting appropriate interest rate
conditions was one point of discussions. Under these
circumstances, we carefully measured the timing for the
issuance in pursuit of a better price, despite it being a bold
first for a Japanese bank.
It seems as contrasted to our yen-denominated
AT1 bonds issuance in April 2023 which was first among
G-SIBs after the Credit Suisse crisis. However, we agilely
carried out capital funding by comprehensively taking into
Throwing away
preconceptions to
open up a new path
Delivering proposals
that exceed the issuer’s
expectations
Kiyoshiro Inoue
Director, FIG Origination Group, Debt Capital Markets,
SMBC Nikko Securities
Yusuke Matsui
Vice President, FIG Origination Group, Debt Capital Markets,
SMBC Nikko Securities
While an issuer is a customer, I personally work with a
mindset of acting as a “guide runner” who accompa-
nies the issuer in moving toward a shared goal. The US
dollar-denominated AT1 bond issuance was a first for
Sumitomo Mitsui Financial Group. We built it up from
scratch together with Mr. Furusawa, including working
together on points that appeal to overseas investors.
There were a lot of points for discussion that differed
from existing products, and these had to be addressed
one by one between the issuer and the lead under-
writer. By working closely with Mr. Furusawa, we were
Securities also remained aware of its position between
investors and the issuer, and closely shared informa-
tion on daily market conditions and comments from
investors so we could address wishes for the future
development of the AT1 market. I believe that a major
reason behind the success of the bond issuance was
a spirit of challenge that threw out preconceptions of
“it can’t be done” and opened up a new path despite
difficult conditions. I want to tackle new fields such as
composing new products, and hope to be actively in-
volved across organizations in expanding our breadth
of business and contributing to the development of
SMBC Group.
able to accurately grasp the intent of the issuer and
smoothly move the deal forward. In tackling work as
professionals with a high sense of ethics, we value the
word “Integrity” in our company. We kept this word
foremost in mind during the project and, as profes-
sionals, strove to make proposals that exceed expec-
tations to prepare the optimal issuance conditions
sought by the issuer. Drawing on this experience, we
will continue to tackle new currencies and products as
we aim to be bankers offering depth and breadth.
SMBC GROUP REPORT 2024 105
104
Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
104
Aiming to Make
the Leap to Asset
Management
Solutions Provider
The “Policy Plan for Promoting Japan as a Leading Asset Man-
agement Center” was announced by the Japanese Govern-
ment as an economic policy to strongly push asset formation.
In response to this policy and other factors, the field of asset
management is entering a period of full-scale transformation,
and the flows of money into investment, particularly from retail
investors, have increased significantly.
SMBC Group has long been working to help customers
create fulfilled lives through medium- to long-term asset forma-
tion, under our basic policies including “Create Social Value”
and “Pursue Economic Value” in our Medium-Term Manage-
ment Plan.
In asset management, factors including investment
objectives, acceptable degrees of risk, and assumed periods
of investment vary from customer to customer, and a certain
product can be considered either a benefit or a risk, de-
pending on the person. For this reason, SMBC Group’s most
important guiding principle is our fiduciary duty to act in our
customers’ interests first.
Accordingly, we have set the goal of becoming Japan’s
No. 1 asset management solutions provider, bringing together
the collective power of SMBC Group to provide optimal plans
while aligning ourselves with the diverse needs of our custom-
ers. By doing so, we aim to grow together with our customers.
As we continue to provide outstanding wealth manage-
ment products, we are more committed than ever to propos-
ing optimal plans for each and every customer by strictly and
continuously assessing the quality of the wealth management
products handled by the Group and by strengthening our
system for providing information and advice that contributes
to asset formation.
Development of an asset management
solutions-oriented proposal system
On September 29, 2023, SMBC Group reorganized Nikko
Global Wrap, which has considerable expertise in fund se-
lection, analysis, and evaluation, and placed it directly un-
der the Sumitomo Mitsui Financial Group to provide more
impartial, high-value-added asset management services.
We plan to change the name of Nikko Global Wrap
to “SMBC Global Investment & Consulting” on October
1, 2024, and position this as the Group’s core engine
engaged in the asset management business. Through
this new brand, we plan to offer services from a neutral
standpoint including (1) evaluation and monitoring of
funds adopted by the Group, (2) allocation of assets in fund
wraps, and (3) provision of macroeconomic and market
outlooks. The new brand will also be entrusted with the role
of (4) acting as a “command tower” that actively engages
in advice and quality control for companies in the Group.
Eliminating resistance to investment and
promoting continuous asset formation
At present, we have positioned our response to the new
NISA scheme as a priority measure for the Group. We will
work to help customers understand the importance of
medium-to long-term diversified investment through digital
and face-to-face consulting centered on Olive, thereby
contributing to the expansion of the asset formation base.
Through our face-to-face consulting, we will make
further use of digital tools and a consulting process that
covers assessment of customers’ situations, investment
management proposals matched with their goals, and
follow-up services. These will enable us to enhance the
quality of our investment management proposals and sup-
port our customers as a helpful “running partner.”
Through ongoing financial and economic education,
we are also working to raise customer's financial literacy
and eliminate resistance to investing.
Accelerating the use of capabilities inside and
outside the Group to further strengthen our
investment management capabilities
Under the service brand “Be Active.”, Sumitomo Mitsui DS
Asset Management strives to nurture professionals through
various means including the adoption of an investment
management professional job position program. Further-
more, by enlisting talented personnel from outside the
Group, the company is building a team of professionals in
active investment management.
SMBC Group will launch its version of the Emerging
Manager Program (EMP) during FY2024, with plans to
contribute a total of ¥50 billion in investment funds to train
the next generation of motivated asset managers and to
expand investment management strategies.
Managing Executive Officer
Group Deputy CSO
Hideyuki
Omokawa
Active-to-Passive Ratio in Sumitomo Mitsui DS
Asset Management’s Investment Trusts*2
*2 As of the end of December 2023
A core engine that connects investment
management and sales functions
Focus on active investment management
SMBC Group
Integrated operation of banks, trusts, and securities
50 JPY bn
Sumitomo Mitsui DS
Asset Management
SMBC Group
Emerging Manager
Program
Function consolidation and
strengthening of structures
Fund DD
Fund monitoring
Asset allocation
House View
TT International
Target
Expansion of asset classes
Strengthening of engagement with investee companies
Diversification of alternative investment management business
Integrated Group
channels
Utilization of
digital tools
Eliminating customer anxieties
Investment management
3
1
Consulting
2
SMBC Global
Investment &
Consulting
Portfolio-oriented
consulting
Eliminating
resistance
to investment
• Active funds
81.6%
• Passive funds
18.4%
Mar.23
Mar.24
Dec.27 (Target)
Number of NISA Accounts*1
(10,000 accounts)
0
200
400
600
134
177
510
510
*1 Number of accounts at Sumitomo Mitsui Banking Corporation, SMBC Nikko
Securities, and SBI Securities (mediation)
SMBC GROUP REPORT 2024 107
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Management Messages
Value Creation Story
Rebuild Corporate Infrastructure
Create Social Value / Pursue Economic Value
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
110
Corporate Governance
126
Risk Management
130
Compliance
132
Customer-Oriented Initiatives
135
Response to Administrative Actions and
Efforts to Prevent Recurrence
136
IT Governance
138
Cybersecurity
140
Internal Audit
141
Sustainability information
142
Financial Review
Rebuild Corporate
Infrastructure
SMBC GROUP REPORT 2024 109
108
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
2010
• Listing of shares on the New York Stock Exchange to
improve transparency of financial reporting, increase
convenience for investors, and diversify fund procure-
ment methods
2002
• Establishment of Sumitomo Mitsui Financial Group
(“the Company”)
• Establishment of voluntary Nominating Committee,
Compensation Committee, and Risk Committee as
internal committees of the Board of Directors
Initiatives for Improving Corporate
Governance
2005
• Establishment of voluntary Audit Committee as internal
committee of the Board of Directors
2006
• Formulation of “Basic Policy on Internal Control Systems”
through resolutions on internal control based on “Our
Mission” and “Code of Conduct” in order to establish
frameworks for ensuring appropriate operations
2015
• Establishment of the “SMFG Corporate Governance
Guidelines”
• Increase in the number of outside directors to five and in
the number of outside corporate auditors to three
2016
• Commencement of evaluations of the effectiveness of
the Board of Directors
2017
• Transition to a Company with Three Committees;
increase in the number of outside directors to seven;
establishment of voluntary Risk Committee together
with legally mandated Nomination Committee,
Compensation Committee, and Audit Committee; and
appointment of outside directors as chairmen of three
legally mandated committees
• Institution of new Group governance system through
introduction of group-wide Business Units and CxO
system
2019
• Transition to 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
2023
• Establishment of Group Business Management
Department
2024
• Change making outside directors a majority on the
Board of Directors
2021
• Appointment of Group CSuO
• Establishment of voluntary Sustainability Committee
(chaired by an outside director)
Takeshi Kunibe
Toru Nakashima
Teiko Kudo
Fumihiko Ito
Toshihiro Isshiki
Yoshiyuki Gono
Shozo Yamazaki
Sonosuke
Kadonaga
Yoshinobu
Tsutsui
Katsuyoshi
Shinbo
Eriko Sakurai
Charles D.
Lake II
Jenifer
Rogers
Nomination
Committee
Compensation
Committee
Audit
Committee
Risk Committee
Sustainability
Committee
Hirohide
Yamaguchi*1
Tatsuo
Yamasaki*2
Yukari
Takamura*3
Eiichiro
Adachi*4
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 build
a corporate governance system that is globally recognized
and is aligned with international banking regulations and
supervision requirements, as well as to achieve enhanced
oversight of the exercise of duties by the Board of Directors
and to expedite the exercise of duties. Core subsidiaries
SMBC and SMBC Nikko Securities employ the Company
with Audit and Supervisory Committee system described in
the Companies Act.
Corporate Governance System
Board of Directors Focus on supervision of executive officers’ and directors’ execution of duties
*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
SMBC Group Management Committee
Business execution decisions
Departments
Audit Dept.
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.
Director
Other experts
Internal
Committees
Reporting line
Basic 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.
To achieve the approach outlined in “Our Mission,”
we consider the strengthening and enhancement of
corporate governance a top-priority issue as we pursue
effective corporate governance.
Corporate
Governance
SMBC GROUP REPORT 2024 111
110
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
• Role of the Board of Directors
The Board of Directors of the Company is primarily respon-
sible for making decisions on basic management policies
and other matters that are within its legally mandated
scope of authority, as well as overseeing the exercise of
duties of executive officers and directors. Authority for
decisions on execution of work other than decisions legally
required of the Board of Directors will, in principle, be del-
egated to executive officers. The purpose of 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.
The Board of Directors is also responsible for es-
tablishing an environment that supports appropriate risk
taking by executive officers. It is developing systems 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 exercis-
ing highly effective oversight of executive officers from an
independent and objective standpoint. Accordingly, the
Board of Directors endeavors to appropriately evaluate
company performance and to reflect these evaluations in
its assessment of executive officers.
• Composition of the Board of Directors
The Board of Directors is composed of directors of varied
backgrounds and diverse expertise, experience, genders,
and nationalities.
As of June 27, 2024, the Board of Directors is com-
posed of 13 members. A majority of these, seven directors,
are outside directors. The chairman of the Board of Sumi-
tomo 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 supervision of the exercise of duties by
executive officers and directors.
%
54
13
Number of directors
Internal directors
(executive)
Internal directors
(non-executive)
Outside directors
designated as
independent
directors
Composition
of the Board
of Directors
7
3
3
Board of Directors
Outside directors serve as chairmen and members
of the Company’s legally mandated and voluntarily estab-
lished committees. When necessary, outside directors re-
quest reports on compliance, risk management, and other
matters from relevant departments to promote appropriate
coordination and supervision.
• Succession planning for top management
One of the matters discussed by the Nomination 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 time to systematically
form a candidate pool through tough work assignments
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.
• Processes for the selection and dismissal of
directors and executive officers
We expect our directors and executive officers to embody
the values expressed in “Our Mission” at a high level, to
possess a wealth of practical experience and high lev-
els of ability and insight, and to contribute to the further
development of SMBC Group. In selecting directors, the
Nomination Committee spends ample time deliberating on
whether a candidate can meet these expectations. Where
it is difficult for directors or executive officers to perform
their duties effectively, the Group will consider dismissal.
* The items listed in “Skills Matrix of Directors” are areas particularly expected of the relevant directors and do not represent the entirety of the knowledge and experience possessed by the
directors.
• Skills Matrix of Directors
A skills matrix is developed following deliberations by the Nomination Committee as to the knowledge and experience expected
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.
See Reference 4 and Reference 5 in “SMFG Corporate Governance
Guideline” for details.
https://www.smfg.co.jp/english/aboutus/pdf/cg_guideline_e.pdf
Top management selection process
Formation of a candidate pool and candidate development
Assessment
of candidate
qualifications
Top
management
selection
Review of the
succession
planning process
Discussion of the
qualities required of
top management
Examples of matters discussed by the Board of Directors
• Progress of the Medium-Term Management Plan and business
plans
• Global strategy/inorganic strategy
• Digitalization initiatives
• Human resources initiatives (Human capital investment)
• System strategy policy
• Global compliance
• Policy for equity holdings
• Focused supervision of SMBC Nikko Securities in light of the
administrative action taken by the Financial Services Agency
• Initiatives to create social value
(including sustainability promotion)
• Capital policy (ROE and PBR improvement)
• Response to geopolitical risks
Expected knowledge and experience in particular*
Appointed
Corporate
management
Finance
Global
Legal affairs/Risk
management
Financial
accounting
IT/DX
Sustainability
Takeshi Kunibe
2007
Toru Nakashima
2024
Teiko Kudo
2021
Fumihiko Ito
2023
Toshihiro Isshiki
2021
Yoshiyuki Gono
2023
Shozo Yamazaki
2017
Sonosuke Kadonaga
2024
Yoshinobu Tsutsui
2017
Katsuyoshi Shinbo
2017
Eriko Sakurai
2015
Charles D. Lake II
2023
Jenifer Rogers
2023
SMBC GROUP REPORT 2024 113
112
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Corporate Governance
• 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 human resources measures in the
Medium-Term Management Plan period and the businesses of Group
companies
• Explanatory sessions on Board of Directors’ meeting agenda items
prior to board meetings to assist in the understanding of items
• Study sessions led by external experts on topics including sustainabili-
ty, the use of generative AI, dialogues with shareholders, and diversity
• Timely and effective provision of information on the proceedings of
internal meetings, etc. to outside directors
• Outside directors-only meetings
Internal Committees
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 business activity infor-
mation and insights that are necessary to super-
vise management while also providing them with
the opportunities needed to fulfill their roles.
In FY2023, we carried out the initiatives
indicated at right.
Study sessions on sustainability for directors
See Reference 6 in “SMFG Corporate Governance Guideline” for details.
https://www.smfg.co.jp/english/aboutus/pdf/cg_guideline_e.pdf
Main role
Number of meetings in
FY2023
(average attendance rate)
Activities in FY2023
Nomination
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. The committee
also deliberates on matters regarding personnel
decisions pertaining to officers of the Company
and major subsidiaries and on the selection of
successors to the presidents of the Company,
SMBC, and SMBC Nikko Securities.
7 meetings (100%)
• Held ongoing discussions concerning succession
planning for the president of the Company
and the president of SMBC Nikko Securities,
reaching consensus on the appointment of new
presidents for both companies.
• Deliberated on and reworked the composition of
the Board of Directors to make outside directors
the majority.
Compensation
Committee
The Compensation Committee is responsible for
setting policies for determining the compensation
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. The committee
also deliberates on policies for setting the
compensation of the executive officers of major
subsidiaries and the compensation amounts of
individual executive officers of the Company.
7 meetings (100%)
• Conducted a review of the balance between
variable and stock-based compensation for
executive officers of the Company and SMBC
to motivate officers to further contribute to the
Medium-Term Management Plan.
• Conducted a review of target indices for the
single-year variable compensation of executive
officers of the Company, taking into account the
increasing degree of contribution by subsidiaries
other than SMBC within SMBC Group.
Audit
Committee
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 proposals
for election, dismissal, or non-reelection of the
accounting auditor to be submitted to the general
meeting of shareholders. Committee members
appointed by the committee perform audits of
the operations and assets of the Company and its
subsidiaries.
15 meetings (100%)
• In accordance with audit policy and audit plans,
audited the execution of duties by directors and
executive officers by attending key meetings,
interviewing executive officers and directors,
receiving reports from internal departments,
and visiting domestic and overseas offices.
• Provided summaries of the results of
deliberations in the Audit Committee to the
Board of Directors and issued recommendations
and opinions to executive officers, etc. where
necessary.
Risk
Committee
The Risk Committee is responsible for deliberation
on matters relating to environmental and risk
awareness, operation of the Risk Appetite
Framework, and implementation of risk
management systems, as well as other important
matters pertaining to risk management, and
provides counsel to the Board of Directors on
these matters.
4 meetings (100%)
• Held deliberations on environmental and risk
recognition, including geopolitical risks and
trends in monetary policy across Europe, the
U.S., China, and Japan.
• In preparation for formulating business plans,
discussed risk appetite and policy for addressing
risk scenarios when they materialize, based on
the top risks and stress test results.
• Also engaged in deliberation on the enhancement
of SMBC Group’s risk management structure,
including the strengthening of global-based risk
management, reputational risk management, and
operational resilience.
Sustainability
Committee
The Sustainability Committee is responsible for
deliberating on matters related to the progress
of measures to create social value including
promotion of sustainability and materiality
initiatives, matters related to domestic and
overseas conditions surrounding sustainability,
and other important matters related to the
creation of social value. It regularly reports to, and
advises, the Board of Directors.
2 meetings (100%)
• Reviewed the Company’s overall sustainability
efforts and the external environment, deliberated
on actions to accelerate initiatives related to
creating social value, and deliberated on key
considerations and directions concerning focus
areas in FY2024.
In order to be classified as independent, an outside director of the Company must not fall under, or have recently fallen under, any of the following categories:
Major business
partner
• 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 the business of such an entity
• An entity that is a major business partner of the Company or SMBC, or an executive director, officer, or other person engaged in the
execution of the business of such an entity
Specialist
• A legal expert, accounting expert, or consultant who has received money or other property from the Company or SMBC averaging over
¥10 million per year over the last three years, in addition to any compensation received as a director or corporate auditor
• A member of a Juridical Person, etc. or other organization that provides specialist services, such as a law firm, accounting firm, or
consulting firm, which has received large amounts of money or other property from the Company or SMBC
Donations
• A person who has received donations or other payments from the Company or SMBC averaging more than ¥10 million per year or 2% of
the recipient’s annual revenue, whichever is greater, over the last three years, or an executive director, officer, or other person engaged
in the execution of business of an entity which has received the same
Major
shareholder
• A major shareholder of the Company or an executive director, officer, or other person engaged in the execution of business of a major
shareholder (including anyone who has been a major shareholder, or an executive director, officer, or other person engaged in the
execution of business of a major shareholder, within the last three years)
Close relative
• A close relative of any person (excluding non-material personnel) who falls under any of the following:
(1) A person who falls under any of 1 through 4 above; or
(2) A director, corporate auditor, executive officer, or other person engaged in the execution of business of the Company or a subsidiary
thereof
Outside Director Independence Standards
SMBC GROUP REPORT 2024 115
114
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Corporate Governance
The “SMFG Corporate Governance Guideline” contains
provisions on evaluating the effectiveness of the Board of
Directors. In accordance with these provisions, the Board
of Directors conducts annual analysis and evaluation to
determine whether it is executing its duties in line with the
guideline, and discloses the findings of these.
In FY2023, the evaluation focused on the three areas
described below, for which provisions exist in Japan’s
Corporate Governance Code and the “SMFG Corporate
Governance Guideline.” All seven outside directors were
asked for their opinions regarding these areas at meet-
ings of the Board of Directors held in April and May 2024,
with interviews of internal directors conducted thereafter.
Discussions were held at Board of Directors’ meetings in
June based on the findings of these interviews with inter-
nal directors, after which analyses and evaluations were
Overview of Results of Evaluation of the Effectiveness of the Board of Directors
In FY2023, the Board of Directors was assessed to be sufficiently effective and to have improved its effectiveness, as a result of
efforts to raise the level and effectiveness of deliberations at Board of Directors meetings following appropriate actions taken
in response to the findings of the previous effectiveness evaluation. Based on the results of the latest effectiveness evaluation,
along with diverse opinions by directors and recommendations by external experts gathered through the series of processes, the
Board of Directors is working to further enhance its effectiveness by promoting mutual understanding between outside directors
and internal officers and employees and by discussing fundamental issues aimed at enhancing corporate value.
carried out to determine whether the Board of Directors
is executing its duties in line with the “SMFG Corporate
Governance Guideline.” Reviews by knowledgeable experts
from developed nations are received at each stage of the
evaluation process.
• Policy for Equity Holdings
(1) In principle, SMBC Group does not hold shares of other
companies except in cases in which a rationale for hold-
ing shares is recognized. This policy exists to maintain
SMBC Group’s financial soundness, taking into consid-
eration the standards of globally operating financial insti-
tutions and our proactive response to global regulation.
(2) We deem cases in which shareholding will contribute to
the enhancement of SMBC Group’s corporate value over
the medium to long term to be cases in which a ratio-
nale for holding shares is recognized. We determine this
through comprehensive consideration based on (a) prof-
itability, through an appropriate assessment and under-
standing of relevant factors including associated risks
and the costs and returns of the holding; (b) the objec-
tives for holding, such as maintaining and strengthening
business relationships, capital and business alliances,
and restructuring support; and (c) other relevant factors.
(3) We examine rationale for holding shares on a regular
basis. We continue to hold shares when a rationale for
holding is recognized, and sell shares, with consideration
of factors including market impact and the financial
strategy of the issuer, when a rationale for holding is no
longer recognized.
• Plan for Reduction of Equity Holdings
SMBC Group engages in continuous efforts to reduce price
fluctuation risks in order to ensure a financial foundation
that allows us to sufficiently demonstrate our financial
intermediary functions even under a stressful environment
of drastically falling stock prices.
In May 2023, we announced a plan to reduce holdings
by ¥200 billion over three years from the end of March
2023, and achieved a reduction of ¥134 billion in the first
year of the plan (FY2023). In FY2024, we will achieve the
targets of the current plan ahead of schedule through a re-
duction of at least ¥100 billion, and will undertake further
reduction planning.
As a current target, our policy is to reduce the market
value of our equity holdings to less than 20% of our con-
solidated net assets during the period of the next Medi-
um-Term Management Plan.
Evaluation of the Effectiveness of the Board of Directors
See our website for more information.
https://www.smfg.co.jp/english/company/organization/governance/structure/hold.html
FY2023 Evaluation
FY2024 Priority Issues
Role of the Board
of Directors
• Steps are taken to invigorate discussions by drawing on the high-level expertise of the outside
directors, with the aim of medium- to long-term enhancement of corporate value based on the
interests of diverse stakeholders while incorporating important matters related to business
strategies to achieve the thinking outlined in “Our Mission.”
• In particular, in FY2023, sufficient discussions were held on key topics such as supervision
of the progress of our “Plan for Fulfilled Growth” Medium-Term Management Plan, including
sustainability promotion and other initiatives to create social value; ongoing supervision of
initiatives to address administrative disposition and prevent recurrence of related issues; and
the exerting of supervisory functions over major subsidiaries.
• Based on the executive-side discussions of the Management Committee, on several occasions
matters related to business plans and other basic management policies, as well as the status of
business execution, were discussed as agenda items, reported on, and appropriately discussed,
with oversight functions sufficiently exercised.
The Board of Directors will play an even more involved role
based on mutual understanding between outside directors
and internal officers and employees on matters including
addressing administrative action related to the market
manipulation case and otherwise exerting supervisory
functions over major subsidiaries, as well as raising the
level of our global governance stance in the Americas and
elsewhere. At the same time, the Board of Directors will
enhance its deliberations on supervising the progress of the
new Medium-Term Management Plan (“Plan For Fulfilled
Growth”) and on initiatives for promoting sustainability
and otherwise creating social value in response to growing
demands in Japan and overseas.
It will do so while maintaining awareness of environmental
changes including monetary policy trends, political
movements including the U.S. presidential election, market
demands regarding return on capital, and geopolitical risks.
Operation 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 at generally appropriate levels.
• Brisk discussions continued to be held through appropriate agenda management by the
chairperson.
• The Board of Directors continues to make agile management decisions amid the changing
operating environment. Members of the Board of Directors continue to be provided with the
information necessary for exercising their oversight function in a timely and appropriate manner.
• An appropriate structure has been constructed to support the Board of Directors in making
management decisions, with study sessions for outside directors and forums for discussions
among directors, executive officers, and accounting auditors, etc. appropriately in place.
In particular, understanding of Group companies’ operations was deepened and discussions
at meetings of the Board of Directors were invigorated through means including provision of
information on major Group companies and the setting of related meetings.
We will further raise the level of discussions by means
including further drawing on outside directors’ knowledge
and continuing to ensure sufficient time for deliberation of
important topics.
Composition
of the Board of
Directors
• As of June 30, 2024, the Board of Directors consisted of 13 directors, a majority (seven) of whom
were outside 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 operates in
an atmosphere conducive to outside directors voicing opinions regarding management.
The Nomination Committee will continue to examine and
review the ideal composition of the Board of Directors in light
of its role.
Expressions of opinion by outside directors
at meetings of the Board of Directors
Interviews with internal directors
Opinion-
gathering
interviews
Analysis and evaluation including reviews
provided by outside experts
Review of
the results of
evaluations
Discussions in Board of Directors meetings
Discussion of
the results
of evaluations
Process
Implementation overview
Self-assessments incorporating
the opinions of outside experts
*1 Excluding investments after the end of March 2020 for business alliance purposes *2 Including balance of deemed held shares
Book value of domestic listed stocks*1
Market value of equity holdings*2 ÷ consolidated net assets
30% range
(134.0) JPY bn
At least (100.0) JPY bn
Less than 20%
Apr.01
Mar.20
Mar.23
Mar.25
Mar.26
6.09
1.33
1.15
Mar.24
1.01
(JPY tn)
During the period of the next
Medium-Term Management Plan
Achieve ahead of schedule
(FY2026–FY2028)
¥200 billion reduction over three years
Current plan
State of reduction
FY2020
¥55 billion
FY2021
¥67 billion
FY2022
¥58 billion
FY2023
¥134 billion
Consent of sales
¥78 billion
Equity Holdings
Plan for Reduction of Equity Holdings
SMBC GROUP REPORT 2024 117
116
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Corporate Governance
• Executive Compensation Structure
In principle, executive compensation consists of base sala-
ry, bonuses and stock compensation. The performance-
linked portion, which fluctuates with the business environ-
ment and performance, accounts for approximately 40% to
60% of total compensation, depending on position.
Annual Performance-Linked Compensation
Bonuses (cash) and Stock-Compensation Plan II are paid
as annual performance-linked incentives. “SMFG Net In-
come,” which expresses the final outcome of management,
along with “SMBC Banking profit” and “SMBC Net income
(pre-tax),” which indicate the profitability of SMFG’s major
subsidiaries, were adopted as FY2023 performance indica-
tors. These enhance the connection between performance
and executive compensation, ensuring that compensation
functions as an appropriate incentive for performance.
FY2023 Results: Bonus (Cash) & Stock Compensation Plan II
Target Index
Weight
Actual per-
formance
Perfor-
mance
evaluation
coefficient
SMBC Banking profit
50%
57.1%
124%*
SMBC Net income (pre-tax)
25%
33.3%
SMFG Net income
25%
29.6%
ESG Evaluation
Weight
Evaluation
results
Progress of KPIs
±10%
+4.0%
Performances of ESG
ratings
* The final performance evaluation coefficient is determined by summing the actual per-
formance and the evaluation results and rounding down to the nearest whole number.
Taking into account the increasing degree of contribu-
tion by subsidiaries other than SMBC, in FY2024 we adopted
the two targets “SMFG Net income,” which expresses the
final outcomes of SMBC Group’s management, and “SMFG
Net business profit,” which expresses SMBC Group’s profit-
ability.
Medium-Term Performance-Linked Compensation
Stock Compensation I is paid as medium-term performance-
linked compensation. In order to improve accountability
incentives for our medium- and long-term performance
and to increase shareholder value, in addition to financial
indices such as ROCET1 and Base expenses, we have ad-
opted TSR as an share index and Create Social Value as a
non-financial index. Also, adjustment evaluation including
initiatives in new business areas and compliance, custom-
er-orientated initiatives, and risk management are consid-
ered to determine the medium-term performance-linked
compensation.
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.
• Evaluation of efforts to create social value
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. Spe-
cifically, the Compensation Committee evaluates the KPI
achievement rate for environmental and employee-related
initiatives, as well as efforts to address the five materialities
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
allocated 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.
Compensation Program
To facilitate the fulfillment of Our Mission and the realiza-
tion of Our Vision, SMBC Group’s medium- to long-term
vision, we developed a compensation program for Direc-
tors, Corporate Executive Officers and Executive Officers
(the “Executives”) and introduced Stock Compensation
Plans as a part of Executives’ compensation programs, for
the purpose of:
Providing appropriately functioning incentives for Execu-
tives, strengthening linkage with our short-, medium-, and
long-term performance, and
Further aligning the interests of Executives with those of
shareholders, by increasing the weight of stock compensa-
tion and enhancing the shareholding of our Executives.
Executive Compensation System (FY2024)
Compensation
Components
Payment Standards (Range of Variation) and Target Indices
Payment Method
Base salary
Fixed compensation
• Cash
Bonus (cash)
Compensation determined based on SMFG’s annual performance (0%−150%) *1
Standard levels × SMFG’s annual performance, progress of initiatives towards the
realization of sustainability, performance of the executive, etc.
• Cash: 70%
• Restricted stock: 30%
Bonus
(Stock
Compensation
Plan II)
Stock
Compensation
Plan I
Compensation deteminated based on SMFG’s medium-term performance
(0%−150%) *6
Standard levels × SMFG’s medium-term performance, etc.
• Restricted stock
Stock
Compensation
Plan III
(Promotion reward plan)
• Restricted stock
Target Index*2
Weight
SMFG
Net business profit*3
Annual growth/
Target achievement
50%
SMFG
Net income*4
Annual growth/
Target achievement
50%
ESG Evaluation
Weight
Progress of KPIs*5
±10%
Performances of
ESG ratings
Evaluation Index
Weight
Financial index
ROCET1*7
20%
Base expenses*8
20%
SMFG Gross profit*9
15%
SMFG Net income*4
15%
Share index
TSR (Total shareholder return)*10
15%
Non-financial index
Create Social Value*11
15%
Adjustment evaluation
Initiatives in new business areas, compliance,
customer-orientated initiatives, and risk management
±5%
Foster a prudent risk culture
expected of a financial institution
*1
Compensation amounts for each fiscal year are determined by the Compensation Committee
*2
If the Compensation Committee recognizes any element other than the above mentioned
target indices 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
*3
The Company's consolidated net business profit
*4
The Company’s consolidated profit attributable to owners of parent
*5
Performances of annual progress of KPIs in the “SMBC Group GREEN×GLOBE 2030,” such as
the reduction of greenhouse gas emissions
*6
Compensation amounts determined by the Compensation Committee at the conclusion of the
Medium-Term Management Plan
*7
Post-Basel III reforms basis, excludes net unrealized gains (losses) on other securities
*8
General and administrative expenses excluding “revenue-linked cost,” “prior investment cost” and others
*9
The Company’s consolidated gross profit
*10 The Compensation Committee determines progress of performance by relative evaluation of TSR during the term of the Group’s Medium-Term Management
Plan
*11 The Compensation Committee evaluates the achievement of KPIs related to the environment (FE reduction and amount of sustainability finance executed)
and employees (employee engagement and DE&I), as well as the status of efforts to address the five priority issues set forth by the Group (“Environment,”
“DE&I/Human Rights,” “Poverty & Inequality,” “Declining Birthrate & Aging Population,” and “Japan's Regrowth”)
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).
Cash compensation
Stock compensation
Variable compensation
Stock Compensation Plan I,
Stock Compensation Plan II, and
Stock Compensation Plan III are
applicable to malus and
claw-back provisions.
Portion of stock-based compensation: 25%–45%
Portion of variable compensation: 40%–60%
SMBC GROUP REPORT 2024 119
118
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Corporate Governance
We receive recommendations and counsel from SMBC Group Global Advisors based on global
corporate management perspectives, along with exchanges of information on changes in global
trends, regional political and economic situations, financial business trends, and other topics.
We also communicate advisors’ knowledge outside the Group. In FY2023, we held client
seminars on themes of sustainability and geopolitical risk to contribute to the formulation of
customers’ business strategies.
We appoint CTO-level representatives from information system-related companies as SMBC
Group Technology Advisors, and receive counsel and advice regarding IT-related outlooks and
directions for SMBC Group. In FY2023, discussions on the topics of generative AI and next-gen-
eration data center technologies addressed the current state of technology and future outlooks
based on recent social trends.
Vice President & CTO
IBM Japan, Ltd.
Norishige Morimoto
SMBC Group appoints experts in politics, economics, and global business as SMBC Group Global Advisors who serve as an
advisory body to the Group Management Committee, and regularly holds SMBC Group Global Advisory Meetings.
SMBC Group Global Advisors
2018–2024 Vice-Chair of the UN Global Compact
2009–2019 Chief Executive Officer, Unilever
Cesar V. Purisima
Andrew N. Liveris
Paul Polman
2010–2016 Secretary of Finance of the Republic of the
Philippines
2004–2005 Secretary of Trade and Industry of the
Republic of the Philippines
2017–2018 Executive Chairman, DowDuPont Inc.
2004–2017 Chairman and CEO, The Dow Chemical
Company
2017–Present Member of the Executive Council, Hong
Kong SAR
1993–2009
Chief Executive of the Hong Kong Mone-
tary Authority
Joseph Yam
The SMBC Group Technology Advisory Committee meets regularly to raise the level of IT-related initiatives.
SMBC Group Technology Advisors
Corporate Executive Vice President and CTO
President of Global Innovation Business Unit
NEC Corporation
Motoo Nishihara
Corporate Executive Officer, EVP
Head of Fujitsu Research
Fujitsu Limited
Seishi Okamoto
Vice President and Executive Officer, CTO, GM of the
Research & Development Group
Hitachi, Ltd.
Itaru Nishizawa
Director
National Technology Officer
Microsoft Japan Co., Ltd.
Kenzaburo Tamaru
SMBC GROUP REPORT 2024 121
120
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Corporate Governance
Sumitomo Mitsui Financial Group Directors
(as of June 27, 2024)
Director
Senior Managing Corporate
Executive Officer
Group CFO, Group CSO
Director and Senior Managing
Executive Officer of SMBC
Director President
(Representative Corporate
Executive Officer)
Group CEO
Director Deputy President and
Corporate Executive Officer
Group CCO
Director and Deputy President of
SMBC
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
Director Senior Managing Corporate
Executive Officer of the Company
(to present)
2024
Director and Senior Managing
Executive Officer of SMBC
(to present)
1986
Joined Sumitomo Bank
2014
Executive Officer of SMBC
2016
Managing Executive Officer of
SMBC
2017
Managing Executive Officer of the
Company
2019
Director and Managing Executive
Officer of SMBC
Senior Managing Corporate
Executive Officer of the Company
Director and Senior Managing
Executive Officer of SMBC
Director Senior Managing
Corporate Executive Officer of the
Company
2022
Resigned as Director of SMBC
2023
Director of SMBC
Deputy President and Corporate
Executive Officer of the Company
Director and Deputy President of
SMBC
President of the Company
Resigned as Director of SMBC
2024
Director President 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
Senior Managing Corporate
Executive Officer of the Company
Director Senior Managing
Corporate Executive Officer of the
Company
2024
Director Deputy President and
Corporate Executive Officer of the
Company
Director and Deputy President of
SMBC
Fumihiko Ito
Toru Nakashima
Teiko Kudo
Chairman of the Board
1976
Joined Sumitomo Bank
2003
Executive Officer of Sumitomo
Mitsui Banking Corporation
(“SMBC”)
2006
Managing Executive Officer of
SMBC
2007
Managing Executive Officer of the
Company
Director of the Company
2009
Director and Senior Managing
Executive Officer of SMBC
2011
President and Chief Executive
Officer of SMBC
2017
President of the Company
Resigned as Director of SMBC
Director President of the Company
2019
Chairman of the Board of the
Company (to present)
2021
Chairman of the Board of SMBC
2023
Resigned as Director of SMBC
Takeshi Kunibe
Director
Director
Director of SMBC
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)
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)
Yoshiyuki Gono
Toshihiro Isshiki
SMBC GROUP REPORT 2024 123
122
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Corporate Governance
* The seven directors Shozo Yamazaki, Sonosuke Kadonaga, Yoshinobu Tsutsui, Katsuyoshi Shinbo, Eriko Sakurai, Charles D. Lake II,
and Jenifer Rogers are outside directors as provided for in Article 2, Item 15 of the Companies Act.
1984
Registered as an attorney at law
(to present)
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
Katsuyoshi Shinbo
See page 179 of the Appendix for information on SMBC’s directors and members of the Audit and Supervisory Committee.
Outside director
Representative of Intrinsics
Outside director
Certified public accountant
Sumitomo Mitsui Financial Group Directors
(as of June 27, 2024)
Outside director
Attorney at law
Outside director
Chairman of Nippon Life Insurance
Company
1977
Joined Nippon Life Insurance
Company
2004
Director of Nippon Life Insurance
Company
2007
Director and Executive Officer of
Nippon Life Insurance Company
Director and Managing Executive
Officer of Nippon Life Insurance
Company
2009
Director and Senior Managing
Executive Officer of Nippon Life
Insurance Company
2010
Representative Director and Senior
Managing Executive Officer of
Nippon Life Insurance Company
2011
President of Nippon Life Insurance
Company
2017
Director of the Company
(to present)
2018
Chairman of Nippon Life Insurance
Company (to present)
Yoshinobu Tsutsui
1976
Joined Chiyoda Corporation
1986
Retired from Chiyoda Corporation
Joined McKinsey & Company, Inc.,
Japan
1992
Principal (Partner) of McKinsey &
Company, Inc., Japan
1999
Director (Senior Partner) of
McKinsey & Company, Inc., Japan
2009
Representative of Intrinsics
2017
Director of SMBC
2024
Director of the Company
(to present)
Resigned as Director of SMBC
1970
Joined Tohmatsu Awoki & Co.
(currently Deloitte Touche
Tohmatsu LLC)
1974
Registered as a certified public
accountant (to present)
1991
Representative Partner of Tohmatsu
& Co. (currently Deloitte Touche
Tohmatsu LLC)
2010
Retired from Deloitte Touche
Tohmatsu LLC
Chairman and President of The
Japanese Institute of Certified
Public Accountants
2013
Advisor of The Japanese Institute of
Certified Public Accountants
(to present)
2014
Professor of Tohoku University
Accounting School
2017
Director of the Company
(to present)
Sonosuke Kadonaga
Shozo Yamazaki
Outside 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.
Outside Director
Former President and Representative
Director of Dow Chemical Japan
Limited
Outside Director
General Counsel Asia of Asurion
Japan Holdings G.K.
Attorney at Law, admitted in New
York, the U.S.A.
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)
Jenifer Rogers
1990
Entered the Office of the U.S. Trade
Representative as Special Counsel
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)
Charles D. Lake II
1987
Joined Dow Corning Corporation
(currently Dow Silicones 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
(currently Dow Silicones 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
Eriko Sakurai
SMBC GROUP REPORT 2024 125
124
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Corporate Governance
the Board of Directors. These risk appetites are set based
on Top Risks that threaten to significantly impact manage-
ment 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 present
in new and existing business activities and for verifying the
adequacy of Top Risks, risk appetites, and business strat-
egies.
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
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 to business operations
• Top Risks
SMBC Group identifies risks that threaten to significantly
impact management as Top Risks.
The selection of Top Risks involves comprehensive
screening of risk factors, evaluation of each risk scenario’s
possibility of occurrence and potential impact on 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.
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.
World economic stagnation
Disasters such as large-scale earthquakes,
storms, and floods
Highly volatiile financial markets/sudden
deterioration of the foreign currency
funding conditions
Inadequate responses to Cyber-attacks
Manifestation of a global financial crisis
Changes in industrial structure due to tech-
nological innovation
Japanese economic stagnation
Inadequate responses to climate change
and conservation of natural capital
Japanese fiscal instability
Inadequate responses to human rights and
other social issues
The U.S.-China struggle for supremacy
Misconduct damaging customer protection
and market integrity
Growing tensions around Russia-
Ukraine conflict
Inadequate preparedness for AML/CFT
Unstable situations in Asia and the
Middle East
Inadequate responses to system failures
Political turmoil and social instability
Inadequate preparedness for heightened
regulatory and supervisory scrutiny
Outbreak of serious infectious disease
Difficulty in securing human resources
See page 153 of the Appendix for more information on top risks.
• Stress testing
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 sce-
narios including macroeconomic variables such as GDP,
equity prices, interest rates, and foreign exchange rates
based on the aforementioned Top Risks, discussions with
experts and related departments.
Risk Appetite Composition
Established for each category
Soundness
Risk Appetite Statement
Risk appetite Measures
Profitability
Liquidity
Market
Climate-related
Operational
Reputational
Conduct*1/Compliance
Credit
Categories
A qualitative explanation of our approach to
risk taking and risk management for various
risk categories
Quantitative Risk Appetite Measures that
function as benchmarks for risks that we are
considering taking and for risk/return
Risk 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.” Relevant concrete measures to foster a sound
risk culture include internal surveys for monitoring the
compliance awareness and risk sensitivity of our col-
leagues, as well as communication of messages from top
management to employees and internal training.
Risk Appetite Framework
SMBC Group has introduced a Risk Appetite Framework
for controlling group-wide risks that clarifies the types and
levels of risk that we are willing to take on or are prepared
to tolerate in order to grow profits (risk appetite).
The Risk Appetite Framework is one of two pivots of
our business management alongside business strategies.
It functions as a management framework for sharing
information on the operating environment and risks fac-
ing SMBC Group among management and for facilitating
appropriate risk taking based thereon.
Individual risk appetites have been established by
strategies for each business unit as necessary based on
the overall risk appetite of SMBC Group. Risk appetites
are decided during the process of formulating business
strategies and management policies with the approval of
*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.
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 Appetite Framework Positioning
Stress Testing
Risk Appetite Framework
Environment/Risk View
Business Strategies
Top Risks
Risk Register
KRE (Key Risk Events)
Two pivots of
our business
management
SMBC GROUP REPORT 2024 127
126
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
• Operational resilience
In recent years, the risk environment surrounding financial
institutions has been rapidly changing. This includes the
emergence of pandemics and increasingly sophisticated
cyberattacks, as well as reliance on IT systems and the
spread of cloud service use.
To adapt to this environment, in addition to our ex-
isting risk management framework, we recognize that
strengthening our capability for continued and prompt
restoration of critical operations on the assumption of busi-
ness interruptions—that is, our operational resilience—is
a key responsibility that we bear. We are addressing this as
follows.
We are striving to ensure effectiveness through reviews based
on the internal/external environment and operation of the
following cycle:
1. Identify critical operations that could pose significant risk
in the event of a disruption in service delivery
2. Set the tolerable time for interruption to critical operations,
taking into consideration alternative means, etc.
3. Identify management resources essential to the provision
of critical operations and organize their interdependencies
4. Conduct scenario testing to verify the 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
verifying and monitoring the effectiveness and appropri-
ateness of this process. Specifically, the groupwide basic
policies for risk management and the Risk Appetites for
the entire SMBC Group are determined by the Manage-
ment Committee and authorized by the Board of Direc-
tors. 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.
If the outlooks for the operating environment and
risks change drastically from the assumption in the be-
ginning 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
provisions in place, risk management sys-
tems have been established based on the
characteristics of particular businesses, and
measures are being put in place to strength-
en and improve the effectiveness of these
systems in accordance with these basic
policies for risk management.
Furthermore, SMBC Group is strength-
ening groupwide risk management systems
through the Group CRO Committee and the
Global CRO Committee.
When developing business strategies, we set out
scenarios assuming stressed business environments such
as serious economic recessions and market disruption
for the sake of assessing risk-taking capabilities at SMBC
Group and verifying whether adequate soundness can be
maintained under stress. For example, we are conducting
stress testing assuming the deepening of the real estate
crisis in China, the changes in monetary policies in Japan,
Europe, and the United States, the occurrence of a global
financial crisis, and the rise of fiscal concerns 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. For
example, we analyze liquidity risk under a severe scenario
that combines idiosyncratic factors of the SMBC Group
and market-wide factors.
We are also conducting scenario analyses on physical
and transition risks related to climate change.
• Risk register
A risk register is formulated by each business unit for
the purpose of realizing more sophisticated risk gover-
nance and enhancing business units’ risk ownership. In
formulating these registers, business units communicate
with risk management departments to identify the risks
present in their business, and these risks are reflected in
business strategies after they have been evaluated and
the adequacy of measures for controlling them has been
verified.
• Key risk events
Key Risk Events (KRE), external events that indicate the
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.
SMBC Group’s Risk Management System
External Audit
Holding Company (Sumitomo Mitsui Financial Group)
Group Companies
Departments Responsible for Risk Management
Group CRO
Risk Management
Committee
ALM Committee
Credit Risk Committee
Group CRO Committee
Global CRO Committee
SMBC Group Management Committee
Risk Committee
Audit Committee
Audit Dept.
Board of Directors
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.
Column
We recognize that the external environment surrounding us is extremely uncertain, given that numerous
elections will be held in 2024, including the U.S. presidential election, which is expected to change the political
environment globally, and that geopolitical risks, such as Russia's invasion of Ukraine and Middle East conflicts
involving Iran, Hamas, and Israel, continue to be of great concern.
We identify risks arising from such an environment as top risks and respond, following risk analysis,
including stress testing and discussions at the Management Committee, the Risk Committee, and the Board of
Directors.
We will ensure appropriate risk management by continuing to capture early signs of risk events through the
collection of information of external environment and by working closely and globally with relevant departments.
Proactive Risk Management in an Uncertain External Environment
Principal Organizations
Roles and Responsibilities
First Line
Business Units
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
Second Line
Risk Management
and
Compliance
Departments
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
Third Line
Audit Department
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.
SMBC GROUP REPORT 2024 129
128
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Risk Management Initiatives
Compliance Management
SMBC Group seeks to maintain a compliance system that
provides appropriate instruction, guidance, and monitor-
ing for compliance to ensure sound and proper business
operations on a Group-wide and global basis. We have put
measures in place for the prevention, early detection, and
correction of misconduct.
The Compliance Committee, chaired by the Group
CCO responsible for overseeing compliance matters,
broadly reviews and deliberates on operations within
SMBC Group from the standpoint of compliance. On a
Group-wide basis, it develops concrete implementation
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
by contacting outside professionals specializing in such
matters.
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 guide-
line for the entire Group regarding the proper protection
and use of customer information. All Group companies
adhere to these policies in developing frameworks for
managing customer information.
Group companies prepare frameworks for establish-
ing and disclosing privacy policies that serve as policy for
the proper protection and use of customer information,
individual numbers, and other information.
Initiatives for the Prevention of Bribery and
Corruption
To prevent business entertainment, the provision or receipt
of gifts, or other actions that violate laws, regulations, or so-
cial practices and customs, SMBC Group has established
the “SMFG Group Policies for Anti-Bribery Compliance and
Ethics.” Following these policies, Group companies develop
frameworks for the prevention of bribery and corruption.
The Compliance Department conducts annual bribery and
corruption risk assessments of the offices of major Group
companies to identify transaction and counterparty-
related risks and to inspect the effectiveness of controls.
Risk assessment findings are reported to the Compliance
Committee. Consultations are held with Group company
offices identified as being at high risk, and appropriate risk
mitigation measures are carried out at the companies and
offices in question.
Anti-Money Laundering (AML), Countering the
Financing of Terrorism (CFT) and Economic
Sanctions
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 international organizations (e.g. the United
Nations, the Financial Action Task Force Recommenda-
tions) and the laws/regulations of relevant countries includ-
ing 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
Holding Company (Sumitomo Mitsui Financial Group)
SMBC Group Management Committee
Group Companies
Board of Directors
Audit Committee
Compliance Dept.
Compliance Systems at SMBC Group
Audit Dept.
Group CCO
Compliance Committee
Initiatives for Achieving Healthy Risk Taking
and Appropriate Risk Management
For companies to coexist with society and develop sustain-
ably, it is crucial that they engage in sound risk taking and
maintain appropriate risk management, including assur-
ance of compliance. Financial institutions in particular
must place importance on compliance and risk manage-
ment in the execution of their business, given their public
mission and weighty social responsibility.
Based on this recognition, SMBC Group positions
the strengthening of compliance and risk management
as a priority issue in fulfilling our public mission and social
responsibilities. We strive for unending improving of the
relevant structures in order to establish ourselves as a truly
outstanding global group.
Specifically, SMBC Group has set forth its “Principles
of Action on Compliance and Risk” to serve as guidelines
for executives and employees in practicing compliance
and risk management. Through continuous review of these
principles, we work to confirm their effectiveness and
improve our compliance status.
plans to achieve compliance and develops company-
specific compliance structures, and performs unified man-
agement of overseas compliance structures at overseas
offices. In response to compliance-related consultations
and reports from Group companies and overseas offices,
the committee provides counsel and guidance as required
to ensure overall compliance within the Group and globally.
Compliance
Basic Approach
We position the strengthening of compliance and risk
management as a priority 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.
SMBC GROUP REPORT 2024 131
130
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Promotion Structure
We have established the CX Improvement Subcommittee
and the CX Improvement Committee as bodies through
which we advance initiatives, reinforce management
systems, and promote Group coordination related to
customer-oriented business operation.
The CX Improvement Subcommittee invites external
experts as advisors and engages in exchanges of opinions
for further entrenchment of customer orientation. The
CX Improvement Committee, which has members of the
Group Management Committee as its members, deliber-
ates on measures based on reports from the CX Improve-
ment Subcommittee.
The appropriateness and efficacy of customer-
oriented business operation is reviewed and assessed by
the Audit Department, which reports its findings regularly
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.
Policy on Specific Initiatives in the Retail
Business Unit
Based on Sumitomo Mitsui Financial Group’s “Basic Policy
for Customer-Oriented Business Conduct,” the Retail
Business Unit further sets policy on specific initiatives
for offering service as a retail company engaged in asset
management and asset formation for retail customers. The
Retail Business Unit acts under a Plan–Do–Check–Act
(PDCA) cycle that entails disclosing specific “Integrity Indi-
cators,” confirming and analyzing their status, and utilizing
them to improve business operation.
• Policy on Initiatives
1. Customer-Oriented Wealth Management Proposals
Based on Medium- to Long-Term Diversified Investment
With a focus on accurately addressing customers’ wealth
management needs for asset protection and formation,
we will offer customer-oriented wealth management
proposals based on medium- to long-term diversified
investment. Through this approach, we will focus on the
customer-oriented provision of financial products.
2. Improvement of our Products Lineup Based on Custom-
er-Oriented Business Conduct
We will enhance our product lineup through ongoing
revisions, utilizing third-party evaluations of our prod-
ucts and Group companies’ products as necessary, to
accurately address customers’ needs for asset protec-
tion or formation. We will also enhance the information
we provide to customers and take steps to make it easy
to understand.
3. Enhancement of Customer-Oriented After-Sales
Services
We will strive for attentive after-sales services to support
long-term holding of our wealth management products
with confidence.
4. Improvement of Customer-Oriented Performance
Evaluation Systems
We will improve our performance evaluation systems to
encourage employees in carrying out effective
customer-oriented sales activities.
5. Initiatives for the Improvement of Consulting Capabilities
We will continuously enhance our consulting capabil-
ities to ensure that we propose optimal solutions to
customers’ wide-ranging needs.
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.
CX Improvement Subcommittee
CX Improvement Committee
Report
Instruct
Holding Company (Sumitomo Mitsui Financial Group)
Customer
Group Companies
Report/Share
Verify
Information gathering
Feedback
Analysis
Improvement activities
Incorporation of Customer Feedback into
Management
Initiatives to Improve Product and Service
Quality
To provide products and services grounded in a customer-
oriented approach, SMBC Group always confirms that a
customer need for the products and services exists, and
that adequate assessments and responses to potential
risks are taken during the planning and development stag-
es. We also carry out periodic quality reviews of existing
services. The CX Improvement Subcommittee, composed
of external experts and heads of relevant departments,
reviews and discusses the efforts of Group companies to
improve the quality of products and services.
Customer-Oriented Business Conduct
Based on the “Principles for Customer-Oriented Business
Conduct” guidelines on fiduciary duties released by the
Financial Services Agency, SMBC Group has formulated its
“Basic Policy for Customer-Oriented Business Conduct”
and “Basic Policy for Customer-Oriented Business Conduct
in the Retail Business Unit.”
Customer-Oriented Initiatives
Basic Approach
“We grow and prosper together with our customers by
providing them with services of greater value.” Making
this commitment a component of “Our Mission,” we
work toward the enhancement of Customer Experience
(CX) and quality through collaboration among Group
companies.
* Group companies subject to the basic 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* (excerpt)
Initiatives for Customer-Oriented Business Conduct
SMBC Group will implement the following initiatives to
enforce customer-oriented business conduct.
1. Provision of Products and Services Suited to the
Customer
2. Easy-to-Understand Provision of Important Infor-
mation
3. Clarification of Fees
4. Management of Conflicts of Interest
5. Frameworks for Properly Motivating Employees, etc.
Through such initiatives, SMBC Group aims to facili-
tate the shift from savings to asset formation in Japan. To
facilitate customers’ understanding of SMBC Group’s initia-
tives, we will regularly disclose information on the status of
initiatives under our basic policy. To achieve better business
operation, we verify the status and outcomes of initiatives,
undertake revisions as necessary, and disclose details.
See pages 170 and 171 of the Appendix for more information on the
“Basic Policy for Customer-Oriented Business Conduct.”
SMBC GROUP REPORT 2024 133
132
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Number of customers holding wealth management
products (Integrity Indicator
)
We continue to increase the number of customers holding
wealth management products by working to accurately ad-
dress customers’ needs for asset protection or formation.
Number of investment trust and automatic foreign
currency deposit accounts (Integrity Indicator
)
To respond to the needs of customers seeking to begin ac-
quiring assets, we have been aggressively proposing invest-
ment trust products that allow for small-sum investments
as well as time-dispersed investments in automatic foreign
currency deposits. As a result, there has been steady
growth in the number of investment trust and automatic
foreign currency deposit accounts.
• Progress of main Integrity Indicators
Increase in balance of investment assets (Integrity Indicator
)
In FY2023, 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
customer-oriented initiatives focused on medium- to
long-term diversified investment.
Integrity Indicator*
Increase in balance of investment assets
Balance of investment trusts and fund wraps
Number of customers holding wealth management products
Sales ratio by wealth management product
Investment trust cancellation rate
Fund wrap contract and cancellation amounts
Amount of fixed-term foreign currency deposits, foreign
currency balance
Number of investment trust and automatic foreign currency
deposit accounts
Investment trust and automatic foreign currency deposit
amounts
Number of NISA Accounts
Lump-sum insurance product sales amounts by product
Ratio of investment trust products of Group companies
Investment trust (including fund wraps) sales (contract)
amounts (by monthly payment type or other)
Customer ratio by investment trust/fund wrap operation gain/loss
Cost and return of top-ranked (by balance) investment trust
products
Risk and return of top-ranked (by balance) investment trust
products
Customer ratio by foreign currency-denominated insurance
management rating
Cost and return by foreign currency-denominated insurance
products
Status of FP qualification holding
* Combined results for Sumitomo Mitsui Banking Corporation Retail Business Unit and
SMBC Nikko Securities Sales Division (Retail)
The balance of investment assets before FY2021 is calculated by deducting the increase
in the balance from the balance in FY2022."
* As of June 2024
Progress of Improvement Plan
In response to the market manipulation cases in which
former executive officers and employees of SMBC Nikko
Securities violated Article 159, Paragraph 3 (concerning
illegal stabilization transactions) of the Financial Instru-
ments and Exchange Act, as well as cases of exchange
of non-public information between executive officers and
employees of SMBC Nikko Securities and Sumitomo Mitsui
Banking Corporation (violations of regulations on the
firewall between banking and securities operations), the
Company, SMBC Nikko Securities, and Sumitomo Mitsui
Banking Corporation formulated and announced improve-
ment measures in November 2022 based on deliberations
by the Board of Directors to ensure that such incidents do
not recur.
Since then, we have worked to strengthen our busi-
ness management structure and internal control structure
and to foster a sound corporate culture through the steady
implementation of the improvement measures.
Formulation and construction of individual improve-
ment measures have generally progressed according to
plan, and steps through the verification of effectiveness of
individual improvement measures by internal auditors and
outside attorneys have been completed.
At the same time, as continuous efforts are required
for further communication and entrenchment of the
improvement measures, we will continue taking action as a
unified Group to enforce the improvement measures.
Response to Administrative Actions and
Efforts to Prevent Recurrence
November 2022: Formulate an improvement plan
Present
Verification of effectiveness by internal auditors and outside attorneys
Market
manipulation
cases
Strengthening of business management system
SMBC Nikko Securities
• Strengthening of supervision of management
execution
• Implementation of compliance training for
senior executives
• Resource allocation with priority on defense
Regular reviews of personnel and IT investment
status
• Strengthening of expertise in First and Second
Line
Active hiring of outside human resources
• Product and Services Council
Discuss risks, issues, and responses to these
among the First and Second Line of defense
Strengthening the Internal Control System
• Improve the effectiveness of the Three Lines of
Defense system
Implementation of target operating model
utilizing external knowledge
• Strengthening of functions of Compliance
Division
• Fraudulent Trade Prevention Committee
Deliberation by First and Second Lines on
unfavorable incidents in trade control, etc.
Fostering of sound corporate culture
• Communication and enforcement of new
corporate philosophy system
Ongoing meetings on “Our Mission” to
communicate the new corporate philosophy
• Town Hall meetings
Two-way discussions on improvement
measures, company directions, etc.
• “Day to Learn from Past Misconduct”
Establishment of a day for all executives and
employees to look back on past misconduct to
keep them fresh in memory
Sumitomo Mitsui Financial Group
• Strengthen involvement in SMBC Nikko
Securities’ executive personnel and resource
allocation plan, and verify its sufficiency
• Establishment of Group Business Management
Department
Strengthening of group-wide response to
emergencies
• Issue CEO message
Implementation at General Manager Meeting
of SMBC Nikko Securities and SMFG
Violation of
regulations
on the firewall
between
banking and
securities
operations
Strengthening of business management
system
• Implementation of compliance training for
senior executives
• Strengthening of SMFG’s Compliance
Department system
Strengthening of customer information
management system
• Enforcement of information management rules
• Strengthening of post-incident monitoring
Fostering of compliance awareness
• Study sessions at sales branches
• Expansion of training opportunities
Dissemination and Establishment
Implementation and verification of effectiveness
Formulation and construction of framework to prevent recurrence
’19
’22
’23
’21
’20
(FY)
(JPY tn)
0
31
32
35
34
33
Balance of investment assets
Of which, increase in balance of investment assets
Mar.21
Mar.24
Mar.23
Mar.22
Number of customers holding wealth management products
Of which, number of customers commencing new transactions
(10,000 people)
0
350
450
425
400
375
Mar.20
’19
’22
’23
’21
’20
(FY)
Number of investment trust and automatic foreign currency deposit accounts
Of these, number of customers in 50s or younger
(10,000 cases)
0
10
20
30
50
70
60
40
SMBC GROUP REPORT 2024 135
134
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Customer-Oriented Initiatives
To control AI-related risks, we enforce employee
discretion in judging the accuracy of AI responses, among
other guidelines, and collaborate with overseas offices on
dealing with AI risks, taking into account the latest devel-
opments in domestic and international regulations.
From the standpoint of data governance, we will
appoint a new Group CDAO* to strengthen our structure on
a Group and global basis. We will also raise the level of our
data management methods and advance the development
of our IT infrastructure.
* Chief Data and Analytics Officer
Contribution to Solving Social Issues and
Endeavors to Create New Social Value
As an initiative related to the environment, one of SMBC
Group’s materialities, the Group is taking action toward net
zero GHG emissions in 2030. SMBC Group’s data centers
account for about a quarter of our GHG emissions in Japan.
We are undertaking measures to save energy at existing
centers, including AI-driven air conditioning control optimi-
zation and expansion of solar power generation facilities,
and will further reduce environmental impacts through en-
ergy conservation at planned next-generation data centers.
In terms of contribution to “Japan’s Regrowth,” SMBC
Group provides a variety of in-house digital and IT train-
ing content which is planned and supervised by Digital
University, a digital and IT training organization within
SMBC Group, while creating extensive opportunities for
digital education. We will also agilely deploy IT resources in
initiatives that contribute to the creation of social value and
will contribute to solving social issues through the use of IT
across SMBC Group.
Initiatives to Strengthen Resilience that
Supports Stable IT systems Operation
In line with our progress toward digitalization, we are
working to expand both services and functional linkages
between internal and external systems to enhance cus-
tomer convenience. At the same time, we face the growing
possibility that system failures will have greater impacts on
customers, making stable systems operation increasingly
important. We are enacting measures to prevent system
failures, such as enhancement of system resources,
detection of early signs of system failures, and preventive
maintenance, while also working to strengthen resilience
in the event of a failure through ongoing improvements to
our contingency plans, systematization of non-automated
response to failures, and enhancement of training content
to minimize the effects of failures.
Use of Advanced Technologies and Steady
Response to Regulations
Digital technologies are essential to business. We make
effective and extensive use of advanced technologies.
As an example, taking an early interest in generative
AI technology that interprets intent in text and generates
naturally-worded sentences, we developed SMBC-GAI, an
AI tool for employees that runs in a dedicated environment.
“SMBC-GAI” reduces the time employees spend in han-
dling inquiries and creating documents. We also make wide
use of this tool in the areas of image recognition, voice
recognition, and advanced system development.
IT Investment Strategies
To fuel the further growth of SMBC Group and accelerate
our digital strategy in Japan and overseas, we have in-
creased our CEO budget by an additional ¥100 billion to
¥280 billion. This CEO budget can be used to agilely invest
in fields the Group CEO deems vital to business.
Through total IT investment of ¥750 billion under the
Medium-Term Management Plan, we will allocate resourc-
es with an emphasis on strategic investments, such as
implementation of business strategies, promotion of digita-
lization, and strengthening of internal controls, resilience,
and other aspects of our management foundation.
Enhancement of IT infrastructure through Aggressive
Investment
(JPY bn)
IT Governance
Basic Approach
We are reinforcing our resilience to protect our unchang-
ing value and to respond to new risks associated with the
provision of new value. We will pursue both social value
and economic value through an ongoing shift from people
to IT systems, the expansion of a development structure
to support this shift, and the improvement and control of
our IT systems architecture. As a financial mega-group
that plays a role in social infrastructure, we combine
stability and flexibility while leveraging digital technology
to drive our business.
FY2020–FY2022
FY2023–FY2025
535
750
CEO budget
280 JPY bn
(100 billion increase)
SMBC GROUP REPORT 2024 137
136
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Cybersecurity Management System
• Construction of management structure
Viewing cybersecurity risks as among the top risks faced by
our management, we continuously engage in cybersecurity
initiatives led by management under our “Declaration of
Cybersecurity Management.”
We manage cybersecurity risks within the framework
of company-wide risk management. The Cybersecurity
Management Department, a dedicated department for cy-
bersecurity, leads the formulation of basic policy on cyber-
security management, based on the external environment,
business strategy, and other factors.
The Group Management Committee regularly deliber-
ates on cybersecurity management to further strengthen
our system on the basis of the basic policy. In addition, the
Board of Directors and internal committees such as the
Risk Committee and the Audit Committee regularly delib-
erate cybersecurity management under the supervision of
Directors.
To clarify the role of promoting effective security
measures, we have put a Group CISO*1 in place under the
Group CIO and CRO. As the party responsible for general
oversight of cybersecurity, the Group CISO engages in su-
pervision and guidance for the development of Group and
global system and the promotion of measures at sites. Un-
der the leadership of the Group CISO, we have appointed
Group Deputy CISOs and regional CISOs, and have estab-
lished a cybersecurity management structure encompass-
ing over 600 people*2 on a Group and global basis.
*1 Chief Information Security Officer
*2 As of the end of March 2024
• Identification of cybersecurity risks
We conduct identification of cyber threats through means
including evaluations of cybersecurity-related structures.
Specifically, we undergo regular third-party evalua-
tions of the degree of maturity of our security countermea-
sures, based on international standards.
We also make active use of threat intelligence to
respond to the latest cyber threats. We collect and evaluate
information on matters including geopolitical happenings,
attack trends, and vulnerabilities, and apply this to our
cybersecurity environment and to threat detection and
defense.
We regularly conduct vulnerability diagnostics to deter
damage caused by attacks on vulnerabilities, as well as
threat-based penetration testing by which third parties
penetrate actual systems to evaluate security measures.
Based on the internal and external environment, we strive
to identify cyber threats related to our Company and to
further strengthen security measures.
• Defense against and detection of cybersecurity risks
To prepare against unauthorized access, denial of service
attacks, and other cyber attacks, we detect and block sus-
picious communications from the outside through varied
security measure services and systems in a multi-layered
defense structure.
We have also established a SOC*3, a dedicated or-
ganization for network monitoring and analysis, under a
24-hour, 365-day full-time monitoring system. Through
ongoing close collaboration with SOCs established in Eu-
rope, the U.S., and Asia, we will further strengthen security
surveillance on a Group and global basis.
*3 Security Operation Center
• Response to and recovery from cybersecurity risks
We have established a CSIRT*4 in preparation for cyber
incidents. By establishing a Cyber Fusion Center that inte-
grates domestic security functions and human resources,
we are working to enhance the efficiency of our manage-
ment system and create an environment enabling quick
response to incidents.
In preparation for cyber incidents, the CSIRT actively
collects information on attack vectors and on vulnerabili-
ties within and outside the Group, and shares this informa-
tion as necessary with national authorities and bodies such
as U.S.-based FS-ISAC*5 and Financials ISAC Japan.
In preparation against attacks, we are working to
further strengthen our cyber resilience through regular
participation in simulated attack exercises conducted
by outside experts and cyberattack response exercises
organized by the Financial Services Agency, Finances ISAC
Japan, and other bodies.
*4 Computer Security Incident Response Team
*5 Financial Service Information Sharing and Analysis Center
Cybersecurity-Related Awareness-Raising
Activities and Expert Human Resources
• Awareness-raising activities
To foster a culture enabling conscious tackling of security
measures, we conduct awareness-raising activities tailored
to roles and responsibilities within the company.
For top management, we regularly hold study sessions
on topics including management considerations in cyber-
security.
For executives and employees, we raise awareness of
security through targeted attack email training and other
actions, and use training to instill a “security by design”
philosophy for IT system planning staff.
• Expert human resources
We recognize that the development of expert human
resources is a vital issue in maintaining a medium- to
long-term cybersecurity management structure. We focus
on the development of core human resources through the
use of internal and external content, the introduction of a
program that supports obtaining qualifications, dispatch of
staff to graduate schools in Japan and abroad, and partici-
pation in external industry organizations.
We work to secure expert human resources through
mid-career recruitment, and have set up a cybersecurity
course for new graduate hires as a part of ongoing structur-
al strengthening.
Holding Company (Sumitomo Mitsui Financial Group)
SMBC Group Management Committee
Group Companies
Board of Directors
Audit Committee
Risk Committee
Cybersecurity Management Department
Group CISO
Regional CISO
Group CRO
Group CIO
Group Deputy CISO
Cybersecurity
Basic Approach
Amid accelerating digitalization and a changing environ-
ment for financial services, the posed by cyber threats
is growing increasingly serious. To provide safer, more
secure services to customers and achieve a society that
is resistant to cyber threats, SMBC Group will further
strengthen our cybersecurity.
SMBC Group’s Cybersecurity Management System
Global Information
Aggregation
Cyber Threat Information
Incident occurrence and
response status
Domestic Security
Function Consolidation
System Security Management
Support for Group Companies
Security Measures Planning
Cyber Threat Trend Analysis
Incident Response
Security Monitoring
SMBC
Group
CFC
etc.
etc.
SMBC GROUP REPORT 2024 139
138
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Incorporation into ESG Indices
SMBC Group has been included in the following major global ESG indices. (as of the end of June 2024)
Endorsement of Initiatives in Japan and Overseas
As a global corporate citizen fully aware of the social impact of financial institutions, SMBC Group endorses following initiatives in Japan and overseas (the action
guidelines for corporate activities and principles).
Accreditations
Sustainability Information
GPIF Selected Indices
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,
Business Unit and the departments responsible for risk
management 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 processes relating to governance, risk
management, and control processes, and providing assurance and recommendations
for improvement based on the results.
Overview of the Group’s 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. The Group CAE
oversees 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 on continuous monitoring of Group
companies’ internal auditing status and other activities.
The activities are based on the “Group Internal Audit Char-
ter” and the “Audit Policy and Strategy” formulated by the
Audit Committee and the Board of Directors.
Major audit findings and relevant informations 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
exchanges with external auditors.
*2 The Audit Committee holds the right to consent regarding personnel affairs of the Group
CAE.
Holding Company (Sumitomo Mitsui Financial Group)
Group Management Committee
Group Companies
Reporting line
Board of Directors
Audit Committee*2
Internal Audit Dept.
Internal Audit Framework
Group CAE
Enhancement and Effectiveness of Internal
Audit
The Department has adopted auditing methods in accor-
dance with the Institute of Internal Auditors (IIA) standards,
conducts risk-based audits on a Group and global basis.
To implement effective and efficient internal audits,
the Department conducts monitoring by attending im-
portant meetings and by obtaining internal management
documents of SMFG and Group companies. The Depart-
ment engages in a continuous two-way dialogue with each
Business Units, departments responsible for risk manage-
ment and compliance, and other departments as it strives
for an accurate understanding of risks in business. The
department also develops Group and global best practices
and undertakes audit activities that make use of technolo-
gies such as AI.
In addition, the Department strives to enhance
groupwide internal auditors’ expertise by holding training
programs, and encouraging auditors to obtain internal
auditor’s 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.
Internal Audit
Our Approach
As a part of SMBC Group’s internal control framework,
the Internal Audit Department (the Department) ver-
ifies the effectiveness of the internal controls of each
Business Unit, risk management and compliance de-
partments, and other departments from an independent
standpoint and pursues the quality of internal audits in
order to contribute to the development and the highest
trust across the entire SMBC Group.
Certified as a company exercising superior
health and productivity management
METI, Nippon Kenko Kaigi
Acquired Top Gold Rating in PRIDE index
evaluation for LGBTQ-related initiatives
work with Pride
Certified as a company engaged
in supporting the nurturing at
an even higher level*1
Ministry of Health, Labour and Welfare
*2 Seven major Group companies acquired
(Third rank: two companies,
second rank: five companies)
*1 Four major Group companies acquired
Certified as a company in enhancement
of productivity and sustainable growth
through workstyle reform
Nikkei
Certified as a company having excellent
initiatives to promote active participation by women*2
Ministry of Health, Labour and Welfare
SMBC GROUP REPORT 2024 141
140
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Financial Review
* SMFG changed accounting treatment for installment sales transactions in FY2020; figures for FY2019 have been restated to reflect this change.
Principal Financial Data
Consolidated Performance Summary
(JPY bn)
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019*
FY2020
FY2021
FY2022
FY2023
Consolidated gross profit
2,980.4
2,904.0
2,920.7
2,981.1
2,846.2
2,768.6
2,806.2
2,945.5
3,170.2
3,738.8
Net interest income
1,505.2
1,422.9
1,358.6
1,390.2
1,331.4
1,306.9
1,335.2
1,528.0
1,717.8
1,880.7
Net fees and commissions + Trust fees
999.6
1,007.5
1,017.1
1,070.5
1,064.6
1,088.1
1,098.9
1,205.5
1,225.7
1,490,2
Net trading income + Net other operating income
475.7
473.5
545.0
520.3
450.2
373.6
372.1
212.0
226.7
367.9
General and administrative expenses
1,659.3
1,724.8
1,812.4
1,816.2
1,715.1
1,739.6
1,747.1
1,821.1
1,949.2
2,250.6
Overhead ratio
55.7%
59.4%
62.1%
60.9%
60.3%
62.8%
62.3%
61.8%
61.5%
60.2%
Equity in gains (losses) of affiliates
(10.6)
(36.2)
24.6
39.0
61.1
56.1
25.0
28.5
55.5
72.0
Consolidated net business profit
1,310.5
1,142.9
1,132.9
1,203.8
1,192.3
1,085.0
1,084.0
1,152.9
1,276.4
1,560.2
Total credit cost (gains)
7.8
102.8
164.4
94.2
110.3
170.6
360.5
274.4
210.2
274.0
Gains (losses) on stock
66.7
69.0
55.0
118.9
116.3
80.5
92.6
209.1
155.9
249.8
Other income (expenses)
(48.2)
(123.9)
(17.6)
(64.5)
(63.1)
(62.8)
(105.0)
(46.9)
(61.2)
(69.9)
Ordinary profit
1,321.2
985.3
1,005.9
1,164.1
1,135.3
932.1
711.0
1,040.6
1,160.9
1,466.1
Extraordinary gains (losses)
(11.8)
(5.1)
(26.6)
(55.3)
(11.7)
(43.4)
(38.8)
(111.0)
(62.5)
(123.8)
Income taxes
441.4
225.0
171.0
270.5
331.4
167.7
156.3
214.5
282.1
373.7
Profit attributable to non-controlling interests
114.4
108.4
101.8
104.0
65.5
17.1
3.1
8.4
10.5
5.7
Profit attributable to owners of parent
753.6
646.7
706.5
734.4
726.7
703.9
512.8
706.6
805.8
962.9
Consolidated Balance Sheet Summary
Total assets
183,442.6
186,585.8
197,791.6
199,049.1
203,659.1
219,863.5
242,584.3
257,704.6
270,428.6
295,236.7
Loans and bills discounted
73,068.2
75,066.1
80,237.3
72,945.9
77,979.2
82,517.6
85,132.7
90,834.1
98,404.1
107,013.9
Securities
29,633.7
25,264.4
24,631.8
25,712.7
24,338.0
27,128.8
36,549.0
38,538.7
33,213.2
37,142.8
Total liabilities
172,746.3
176,138.2
186,557.3
187,436.2
192,207.5
209,078.6
230,685.3
245,507.3
257,637.5
280,436.7
Deposits
101,047.9
110,668.8
117,830.2
116,477.5
122,325.0
127,042.2
142,026.2
148,585.5
158,770.3
164,839.4
Negotiable certificates of deposit
13,825.9
14,250.4
11,880.9
11,220.3
11,165.5
10,180.4
12,570.6
13,069.8
13,025.6
14,672.3
Total net assets
10,696.3
10,447.7
11,234.3
11,612.9
11,451.6
10,784.9
11,899.0
12,197.3
12,791.1
14,800.0
Shareholders’ equity
7,018.4
7,454.3
8,119.1
8,637.0
9,054.4
9,354.3
9,513.4
9,938.6
10,308.4
10,630.0
Retained earnings
4,098.4
4,534.5
5,036.8
5,552.6
5,992.2
6,336.3
6,492.6
6,916.5
7,423.6
7,843.5
Accumulated other comprehensive income
2,003.9
1,459.5
1,612.5
1,753.4
1,713.9
1,365.7
2,313.1
2,159.6
2,372.1
4,030.1
Non-controlling interests
1,671.7
1,531.0
1,499.3
1,219.6
678.5
62.9
70.8
97.6
109.5
138.9
Financial Indicators
Total capital ratio (BIS guidelines)
16.58%
17.02%
16.93%
19.36%
20.76%
18.75%
18.61%
16.56%
15.98%
15.29%
Tier 1 capital ratio (BIS guidelines)
12.89%
13.68%
14.07%
16.69%
18.19%
16.63%
16.96%
15.46%
14.94%
14.33%
Common equity Tier 1 capital ratio (BIS guidelines)
11.30%
11.81%
12.17%
14.50%
16.37%
15.55%
16.00%
14.45%
14.02%
12.91%
Dividend per share (Yen)
140
150
150
170
180
190
190
210
240
270
Dividend payout ratio
26.2%
32.7%
29.9%
32.7%
34.6%
37.0%
50.8%
40.7%
40.4%
37.1%
ROE (on a stockholders’ equity basis)
11.2%
8.9%
9.1%
8.8%
8.2%
7.6%
5.4%
7.3%
8.0%
9.2%
Market Data (As of the end of the fiscal year)
Nikkei Stock Average (Yen)
19,207
16,759
18,909
21,454
21,206
18,917
29,179
27,821
28,041
40,369
Foreign exchange rate (USD/JPY)
120.15
112.62
112.19
106.25
111.00
108.81
110.71
122.41
133.54
151.33
SMBC GROUP REPORT 2024 143
142
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Securities
Other securities increased by ¥3,667.8 billion year-on-year
to ¥36,132.8 billion mainly due to increase in the balance
of both foreign bonds by depreciation of the yen and stocks
under a strong stock market, while decrease in the balance
of Japanese government bonds required to be held by
SMBC. Net unrealized gains increased by ¥1,477.9 billion
year-on-year to ¥3,393.1 billion, primarily due to higher
unrealized gains of stocks associated with higher stock
prices.
Unrealized Gains (Losses) on Other Securities
(JPY bn)
Balance
Net unrealized gains (losses)
March
2024
YoY
March
2024
YoY
Stocks
4,119.8
+774.4
2,837.0
+892.2
Bonds
10,760.4
(2,417.1)
(100.1)
(35.9)
Others
21,252.7
+5,310.6
656.2
+621.6
Total
36,132.8
+3,667.8
3,393.1
+1,477.9
NPLs Based on the Banking Act and
the Reconstruction Act
The balance of NPLs based on the Banking Act and the
Reconstruction Act increased by ¥95.3 billion year-on-year
to ¥1,023.1 billion primarily due to balance fluctuations of
large obligors. The NPL ratio also increased by 0.01% year-
on-year to 0.81%.
Consolidated gross profit increased by ¥568.6 billion
year-on-year to ¥3,738.8 billion due to increased profit of
all Business Units resulted from an increase in domestic
and overseas loans and ancillary businesses, recovery of
SMBC Nikko Securities, and strong performance in the
payment business, in addition to positive business envi-
ronment including the depreciation of the yen and higher
U.S. interest rates.
General and administrative expenses increased by
¥301.3 billion year-on-year to ¥2,250.6 billion due to
effects of the depreciation of yen and inflation, higher vari-
able marketing cost at Sumitomo Mitsui Card Company,
etc., and upfront investment for future growth.
Total credit cost increased by ¥63.9 billion year-on-
year to ¥274 billion due to business expansion of domestic
and overseas retail subsidiaries, increased provisions for
large obligors in the fourth quarter, and the recording of
forward-looking provisions based on anticipated environ-
mental changes.
Profit attributable to owners of parent increased by
¥157.1 billion year-on-year to ¥962.9 billion due to in-
crease of gains on stocks as a result of accelerating the
sale of equity holdings under a strong stock market.
By making steady progress with our business strategy
in additon to a strong business environment, we achieved
record high consolidated gross profit, consolidated net
business profit, and profit attributable to owners of parent.
Loans and Bills Discounted (SMBC, non-consolidated)
Total balances increased by ¥6.8 trillion year-on-year to
¥101.1 trillion. The increase was primarily due to capturing
demand for funds driven by the revitalization of corporate
activities in Japan and increased overseas balance under
depreciation of the yen.
Domestic offices
Overseas offices and Japan offshore banking accounts
Balance of Loans (JPY tn)
Mar.20
Mar.21
80.2
81.9
54.6
56.9
25.6
25.0
Mar.22
Mar.23
Mar.24
87.7
58.0
29.7
94.3
61.1
33.2
101.1
64.5
36.6
0
60
120
Deposits (SMBC, non-consolidated)
Deposits increased by ¥3.5 trillion year-on-year to ¥153.5
trillion, primarily due to increases in both individuals and
corporate deposits in Japan.
Individuals (domestic)
Corporate (domestic)
Others
Balance of Deposits (JPY tn)
Mar.20
Mar.21
Mar.22
Mar.23
Mar.24
0
80
160
49.1
120.0
53.1
53.4
134.7
59.3
56.1
62.6
59.8
67.9
141.0
153.5
57.9
65.1
149.9
Domestic Loan-to-Deposit Spread
(SMBC, non-consolidated)
The domestic loan-to-deposit spread, calculated by sub-
tracting the value of deposits from the value of loans, rose
by 0.01% year-on-year to 0.84%.
Consolidated Income Analysis Summary
Consolidated Balance Sheet Summary
Financial Review
FY2023
Increase
(Decrease)
Consolidated gross profit
3,738.8
+568.6
General and administrative expenses
2,250.6
+301.3
Equity in gains (losses) of affiliates
72.0
+16.5
Consolidated net business profit
1,560.2
+283.8
Total credit cost
274.0
+63.9
Gains (losses) on stocks
249.8
+94.0
Ordinary profit
1,466.1
+305.2
Profit attributable to owners of parent
962.9
+157.1
(JPY bn)
Performance of Major Group Companies
(Left: FY2023 performance; Right: Year-on-year comparison)
(JPY bn)
SMBC
SMBC Trust
Gross profit
1,885.2
+185.7
72.8
+14.5
Expenses
983.9
+100.3
40.7
+3.8
Net business profit
901.3
+85.4
32.1
+10.7
Net income
762.6
+128.5
25.7
+8.6
SMBC Nikko*1
SMCC*2
Gross profit
473.6
+109.0
547.8
+53.8
Expenses
401.7
+30.3
451.8
+51.5
Net business profit
71.9
+78.7
98.0
+3.8
Net income
55.7
+70.7
25.6
(4.6)
SMBCCF*2
SMDAM
Gross profit
252.5
+18.8
42.4
+6.3
Expenses
103.9
+2.0
33.2
+3.0
Net business profit
91.3
(22.4) *3
9.2
+3.4
Net income
(4.4)
(40.1)
4.2
+2.5
SMFL*4
Gross profit
291.7
+20.7
Expenses
127.5
+5.1
Net business profit
173.0
+14.6
Net income
128.4
+76.6
50%
50%
Ratio of Ownership by SMFG
*1 Figures are on a managerial accounting basis and include profit from SMBC Nikko
Securities America and SMBC Capital Markets
*2 Year-on-year comparisons retroactively reflect impacts of reorganization of SMBC
Mobit
*3 The main cause is -¥46 billion yen in impairment of goodwill for equity method affiliate
FE Credit
*4 Figures are on a managerial accounting basis
Domestic Loan-to-Deposit Spread
(%)
FY2023
FY2022
1Q
2Q
3Q
4Q
Yearly
average
Yearly
average
Interest earned
on loans and
bills discounted
0.82
0.83
0.85
0.86
0.84
0.83
Interest paid on
deposits, etc.
0.00
0.00
0.00
0.00
0.00
0.00
Loan-to-deposit
spread
0.82
0.83
0.85
0.85
0.84
0.83
NPLs Based on the Banking Act and
the Reconstruction Act, and NPL Ratio
Balance:
Consolidated
SMBC non-consolidated
Ratio:
Consolidated
SMBC non-consolidated
0
500
1,000
1,500
0
2
4
6
0.68
0.46
0.98
0.65
1.08
0.77
0.52
0.80
0.52
0.81
Mar.20
Mar.21
650.3
Mar.22
Mar.23
Mar.24
966.5
627.8
586.6
1,157.6
805.3
428.6
927.8
630.0
1,023.1
(JPY bn)
(%)
SMBC GROUP REPORT 2024 145
144
Management Messages
Value Creation Story
Create Social Value / Pursue Economic Value
Rebuild Corporate Infrastructure
Rebuild Corporate Infrastructure
Capital
Common equity Tier 1 capital increased by ¥1,153.6
billion year-on-year to ¥11,992.6 billion, primarily due to
an increase in net unrealized gain on equity holdings as-
sociated with higher stock prices. Tier 1 capital increased
by ¥1,762.7 billion year-on-year to ¥13,311.6 billion and
total capital increased by ¥1,847.1 billion year-on-year
to ¥14,197.9 billion mainly due to issuance of Additional
Tier1 bonds.
Risk-Weighted Assets
Risk-weighted assets increased by ¥15,563.6 billion
year-on-year to ¥92,848.6 billion, mainly due to the start of
phased implementation towards Basel III finalization from
the end of March 2024, in addition to increase in lending in
domestic and overseas.
Capital Ratio
As a result of the above, the Common Equity Tier 1 capital
ratio, which represents the most important form of core
capital, stood at 12.91%, while the total capital ratio was
15.29%. Both ratios remain adequate.
Leverage Ratio
Due to the increase in Tier 1 capital, the leverage ratio
increased by 0.24% year-on-year to 5.27%.
External TLAC Ratio
In addition to increasing our own equity capital, SMBC
Group strives to increase external TLAC capital by procur-
ing external TLAC bonds primarily from overseas corporate
bond markets. The external TLAC ratio was 23.92% on a
risk-weighted asset basis and 10.13% on a total exposure
basis, meeting mandated levels for both.
Financial Review
Capital
Consolidated Capital Ratio (BIS Guidelines)
(JPY bn)
March 2024
March 2023
YoY
Common equity
Tier 1 capital
11,992.6
10,839.0
+1,153.6
Additional Tier 1 capital
1,318.9
710.0
+608.9
Tier 1 capital
13,311.6
11,548.9
+1,762.7
Tier 2 capital
886.3
801.9
+84.4
Total capital
14,197.9
12,350.8
+1,847.1
Risk-weighted assets
92,848.6
77,285.0
+15,563.6
Common equity Tier 1
capital ratio
12.91%
14.02%
(1.11)%
Tier 1 ratio
14.33%
14.94%
(0.61)%
Total capital ratio
15.29%
15.98%
(0.69)%
Leverage Ratio
Leverage Ratio
5.27%
5.03%
+0.24%
External TLAC Ratio
Risk-weighted asset basis
23.92%
25.28%
(1.36)%
Total exposure basis
10.13%
9.72%
+0.41%
Total Exposure
Total exposure*
252,514.1
229,517.0
+22,997.1
* Excludes deposits with the Bank of Japan
146
Rebuild Corporate Infrastructure
CONTENTS
Group Companies .......................................... 148
Risk Management ........................................... 153
Internal Reporting Systems and
Hotline for Inappropriate Accounting
and Auditing Activities .................................... 169
Basic Policy for Customer-Oriented
Business Conduct ........................................... 170
Support for Mid-Sized
Corporations and SMEs,
Vitalization of Local Regions in Japan ............ 172
Employees ....................................................... 174
Main Work-Life Balance Support System ........ 176
Corporate Data ............................................... 177
Sumitomo Mitsui Financial Group, Inc.
Directors and Executive Officers ................ 177
Sumitomo Mitsui Financial Group
Organization ............................................... 178
Sumitomo Mitsui Banking Corporation
Board of Directors, Directors, Members of
the Audit and Supervisory Committee and
Executive Officers ........................................ 179
SMBC Organization ..................................... 182
Principal Subsidiaries and Affiliates ................ 184
Principal Domestic Subsidiaries ................. 184
Principal Overseas Subsidiaries ................. 185
Principal Affiliates ........................................ 186
International Directory .................................... 187
Appendix I
147
SMBC GROUP ANNUAL REPORT 2024
www.smbc.co.jp/global/index.html
Group Companies (as of March 31, 2024)
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.
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: Toru Nakashima
Capital: ¥2,344.0 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.
• 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.
Business Mission
Credit Ratings (as of June 30, 2024)
Long-term
Short-term
Moody’s
A1
P–1
Standard & Poor’s
A–
—
Fitch Ratings
A–
F1
R&I
AA–
—
JCR
AA
—
Financial Information
(Consolidated basis, years ended March 31)
Billions of yen
2024
2023
2022
2021
For the Year:
Ordinary income ¥ 9,3535 ¥ 6,1421 ¥ 4,1111 ¥ 3,9023
Ordinary profit
1,4661
1,1609
1,0406
7110
Profit attributable to
owners of parent
9629
8058
7066
5128
At Year-End:
Net assets ¥ 14,7999 ¥ 12,7911 ¥ 12,1973 ¥ 11,8990
Total assets
295,2367
270,4285
257,7046
242,5843
Note: All amounts shown are rounded down to the nearest 100 million
www.smfg.co.jp/english/
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
Number of Employees: 27,808
Number of branches and other business locations:
In Japan:
1,726*
Branches:
526
(Including 47 specialized deposit account branches)
Sub-branches:
357
Banking agencies:
2
Automated service centers:
841
Overseas:
47
Branches:
19
Sub-branches:
24
Representative offices:
4
* The number of domestic branches excludes ATMs
located at retail convenience stores. The number
of overseas branches excludes branches that are
closing and locally incorporated companies overseas.
Credit Ratings (as of June 30, 2024)
Long-term
Short-term
Moody’s
A1
P–1
Standard & Poor’s
A
A–1
Fitch Ratings
A
F1
R&I
AA
a–1+
JCR
AA
J–1+
Financial Information
(Consolidated basis, years ended March 31)
Billions of yen
2024
2023
2022
2021
For the Year:
Ordinary income ¥ 7,7543 ¥ 4,9919 ¥ 2,9904 ¥ 2,7866
Ordinary profit
1,3565
1,1259
8678
5347
Net income
9019
8070
5682
4060
At Year-End:
Net assets ¥ 11,4942 ¥ 9,7355 ¥ 9,2198 ¥ 9,2563
Total assets
272,2982
252,5675
242,1059
228,0665
Note: All amounts shown are rounded down to the nearest 100 million
148
SMBC GROUP ANNUAL REPORT 2024
www.smfl.co.jp/english/
www.smbctb.co.jp/en
SMBC Trust Bank, formerly Societe General
Private Banking (Japan), launched Citibank’s
retail bank business under the new brand
“PRESTIA.” The bank has advanced numer-
ous initiatives to contribute to customers and
society by providing comprehensive,
advanced solutions that join together the
three functions of foreign currency, real estate,
and trust.
In October 2023, the bank celebrated its
10th anniversary as a member of SMBC
Group. Under a new vision of “Becoming a
‘Trust Bank’ that grows together with our cus-
tomers and society as a solution provider of
foreign currency, real estate and trust ser-
vices”, the bank has put forth the slogan
“Create the ‘Next’” in its current Medium- Term
Management Plan. By continuing to grow as a
trust bank, SMBC Trust Bank will contribute
to customers and society more than ever.
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: Kotaro Hagiwara
(assumed office on June 28, 2024)
Number of Employees: 1,657
Number of branches: In Japan: 26
Financial Information (Years ended March 31)
Billions of yen
2024
2023
2022
2021
For the Year:
Ordinary income
¥ 1227
¥ 861
¥ 565
¥ 479
Ordinary profit (loss)
330
233
46
(75)
Net income (loss)
257
170
(159)
(85)
At Year-End:
Total assets
¥4,4853
¥4,1251
¥3,6917
¥3,4947
Note: All amounts shown are rounded down to the nearest 100 million
Sumitomo Mitsui Finance and Leasing is a
top-class comprehensive leasing company in
Japan. Leveraging over 60 years of expertise
in the leasing business along with the cus-
tomer base and network of SMBC Group
and Sumitomo Corporation, we offer diverse
services that aid in solving customers’ man-
agement issues and social issues.
During Fiscal 2024, the second year of our
Medium-Term Management Plan, we are
aiming to become a carbon neutrality solu-
tions provider and a circular economy
platformer to realize our theme of pursuing
strengths as a company with a wide range of
financial functions and taking on the challenge
of solving social issues. We will also leverage
SMFL’s strength in in-house development DX
to pursue the creation of social value and
expansion of economic value while strength-
ening traceability of goods.
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: 3,941
Credit Ratings (as of June 30, 2024)
Long-term
Short-term
Standard & Poor’s
A–
—
R&I
AA
a-1+
JCR
AA
J–1+
Financial Information
(Consolidated basis, years ended March 31)
Billions of yen
2024
2023
2022
2021
For the Year:
Leasing transaction
volume
¥2,4468
¥3,1431
¥2,9392
¥2,4335
Operating revenue
2,2675
2,1593
1,8185
1,4382
Operating profit
1574
1331
1162
413
Ordinary profit
1497
1365
1194
450
Profit attributable to
owners of parent
1297
504
353
336
At Year-End:
Total assets
¥9,6961
¥9,2456
¥7,7959
¥7,0419
Notes:
1 All amounts shown are rounded down to the nearest 100 million
2 Consolidated subsidiaries include SMBC Aviation Capital Limited
149
SMBC GROUP ANNUAL REPORT 2024
www.smbc-card.com
www.smbcnikko.co.jp/en
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.
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: Shuji Yoshioka
Number of Employees: 8,999
Credit Ratings (as of June 30, 2024)
Long-term
Short-term
Moody’s
A1
P–1
Standard & Poor’s
A
A–1
R&I
AA
a–1+
JCR
AA
—
Financial Information (Years ended March 31)
Billions of yen
2024
2023
2022
2021
For the Year:
Operating revenue ¥ 4033
¥ 2628
¥ 3331
¥ 3547
Operating income
246
(420)
566
795
Ordinary profit
361
(383)
596
819
Net income
268
(323)
442
710
At Year-End:
Total assets ¥19,7395
¥14,9932
¥13,9798
¥13,2131
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, operating revenues adjusted values are
presented for prior periods
(Japanese only)
Since its start in 1967, Sumitomo Mitsui Card
Company has led Japan’s credit card industry
as Japan’s Visa card pioneer and as a com-
prehensive payment operator at the forefront
of cashless payments.
In April 2024, SMBC Finance Service was
merged into Sumitomo Mitsui Card Com-
pany. As a core operator of SMBC Group’s
payment business, Sumitomo Mitsui Card
Company intends to offer even more full-
fledged services.
By offering products and services drawing
on the company’s creditworthiness, know-
how, and business foundation as a top player
in the industry, Sumitomo Mitsui Card Com-
pany will integrate its credit card business,
credit sales business, and transaction busi-
ness to serve as a “digital & innovation”
company that earns customers’ patronage by
supporting payments in every scenario.
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
Osaka Head Office: 4-5-15, Imabashi,
Chuo-ku, Osaka
President and CEO: Yukihiko Onishi
Number of Employees: 5,847
Credit Rating (as of June 30, 2024)
Long-term
Short-term
R&I
AA
a–1+
Financial Information (Years ended March 31)
Billions of yen
2024
2023
2022
2021
For the Year:
Revenue from credit
card operations ¥34,7534
¥30,1834
¥24,7544
¥20,7990
Operating revenue
6329
5235
4705
4475
Operating profit
386
328
310
345
Ordinary profit
408
330
341
353
Net income (loss)
255
218
198
358
At Year-End:
Total assets
Sumitomo Mitsui
Card Company ¥ 4,4013
¥ 3,4001
¥ 2,8522
¥ 2,5245
SMBC Finance
Service ¥ 2,1619
¥ 2,0627
¥ 2,3826
¥ 2,3721
Number of
cardholders (in tens
of thousands)
3,615
3,316
3,143
3,011
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)
3 Revenue from credit card operations includes e-money and QR
code transactions
4 Number of cardholders includes the number of debit cardholders
5 Number of cardholders is only for cards issued by the company
150
SMBC GROUP ANNUAL REPORT 2024
www.smbc-cf.com/english/
Since its establishment in 1962, SMBC Con-
sumer Finance has provided consumer
financial services capable of promptly meeting
customers’ diverse financial needs, by devel-
oping convenient and safe personal loan
products tailored to changes in customers’
lifestyles and by preparing a structure for han-
dling diverse consultation and contract needs.
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: Terumasa Takahashi
Number of Employees: 2,083
Credit Rating (as of June 30, 2024)
Long-term
Short-term
R&I
AA
—
Financial Information (Years ended March 31)
Billions of yen
2024
2023
2022
2021
For the Year:
Operating revenue
¥ 1956
¥ 1804
¥ 1793
¥1871
Operating profit
488
408
412
467
Ordinary profit
955
406
420
480
Net income
845
529
388
388
At Year-End:
Total assets
¥1,3727
¥1,3330
¥1,2793
¥9535
Note: All amounts shown are rounded down to the nearest 100 million
151
SMBC GROUP ANNUAL REPORT 2024
https://www.jri.co.jp/en/
www.smd-am.co.jp/english/
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: 3,258
Financial Information (Years ended March 31)
Billions of yen
2024
2023
2022
2021
For the Year:
Operating revenue
¥2496
¥2197
¥2143
¥1474
Operating profit
27
40
45
19
Ordinary profit
39
50
50
23
Net income
39
35
36
24
At Year-End:
Total assets
¥1313
¥1243
¥1168
¥1056
Note: All amounts shown are rounded down to the nearest 100 million
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.
Company Name: Sumitomo Mitsui DS Asset
Management Company, Limited
Business Profile: Investment management business,
investment advisory and agency
business, type II financial
instruments business
Establishment: July 15, 1985
Head Office: 1-17-1 Toranomon, Minato-ku, Tokyo
President and CEO: Takashi Saruta
Number of Employees: 823
Financial Information (Years ended March 31)
Billions of yen
2024
2023
2022
2021
For the Year:
Operating revenue
¥ 827
¥ 719
¥ 772
¥ 615
Operating profit
63
37
58
01
Ordinary profit
176
33
70
04
Net income (loss)
252
20
41
(289)
At Year-End:
Total assets
¥1400
¥1078
¥1138
¥1063
Note: All amounts shown are rounded down to the nearest 100 million
152
SMBC GROUP ANNUAL REPORT 2024
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.
Risk Category
Department in Charge
Credit risk
Credit risk is the possibility of a loss arising from a credit event, such as deterioration in the financial condition of a
borrower, that causes an asset (including off-balance sheet transactions) to lose value or become worthless.
Credit & Investment Planning Department
Market risk
Market risk is the possibility that fluctuations in interest rates, foreign exchange rates, equity 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
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 163 for information on risk categories and the departments in charge).
Corporate Risk Management Department
Risk Management Information Department
Conduct 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
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 stakeholders (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, as well as of leading to impairment of the Enterprise Value and
decline in trust.
General Affairs Department
Public Relations Department
Environmental and
social risk
Environmental and social risks are the risks that environmental and social factors become risk drivers and transmit
through various pathways to each risk category, ultimately resulting in losses to the SMBC Group
Environmental & Social Risk Management
Department of Credit & Investment Planning
Department
Sustainability Planning 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 the economic slowdown in China
Highly volatiile financial markets/sudden deterioration of the
foreign currency funding conditions
• Market turmoil due to changes in the monetary policies of major countries
Manifestation of a global financial crisis
• Emergence of a global financial crisis due to the failures of banks and rapid outflow of funds from shadow banks
Japanese economic stagnation
• Economic slowdown due to soaring import prices / Negative impact on the economy due to debt adjustments with rising
yen interest rates
Japanese fiscal instability
• Emergence of a Japan sell-off due to increased interest payments on government debt and deteriorating public finances
caused by 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 tensions around Russia-Ukraine conflict
• Radicalization of Russia, including the use of tactical nuclear weapons / Accidental conflict with NATO members
Unstable situations in Asia and the Middle East
• Occurrence of emergency incidents due to heightened tensions on the Korean Peninsula / Sudden surge in resource prices
due to growing tensions in the Middle East
Political turmoil and social instability
• Social turmoil surrounding the next presidential election in the U.S. / Uncertain policy management in China
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, the increased frequency of
extreme weather events and natural disasters, and the impairment of natural capital
Inadequate responses to Cyber-attacks
• Business disruption due to cyber attack damages occurring to our company, third parties, or counterparties
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 and conservation of
natural capital
• Deterioration of reputation and occurrence of stranded assets due to inadequate efforts to reduce GHG emissions and
conserve natural capital
Inadequate responses to human rights and other social issues
• Deterioration of our company’s reputation due to insufficient response to human rights issues, gender issues and work-life
balance reform
Misconduct damaging customer protection and market
integrity
• Administrative actions and deterioration of our company’s reputation due to employees’ inappropriate behavior and serious
disciplinary violations
Inadequate preparedness for AML/CFT
• Administrative actions and deterioration of our company’s reputation due to inadequate preparedness to AML/CFT/CPF
controls
Inadequate responses to system failures
• Significantly negative impact on customers and deterioration of our reputation due to system failures of our company and
third parties
Inadequate preparedness for heightened regulatory and
supervisory scrutiny
• Impact on our business due to the strengthening of financial supervision and regulation
Difficulty in securing human resources
• Restrictions 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.
153
SMBC GROUP ANNUAL REPORT 2024
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
may face risks (e.g. an outlook encompassing the entire world).
We also employ methodology for ensuring scenarios can be
accurately reflected and for incorporating business and portfolio
characteristics.
Commonly used statistical methods are utilized in developing
such methodologies. However, as it is necessary to estimate out-
liers, we may choose the methodology that best recreates outliers
rather than the methodology that offers the highest statistical
accuracy. When projecting scenarios for which there are no prior
examples, human judgment may be given greater weight than the
results of estimates.
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
for practicing proper governance of stress testing will be applied.
(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.
■ Stress Testing Process
154
SMBC GROUP ANNUAL REPORT 2024
Risk-Weighted Assets
Risk-weighted assets subject to the Basel Capital Accord totaled
¥92,848 billion as of March 31, 2024, up ¥15,563 billion from March
31, 2023. Main factors behind fluctuations in risk-weighted assets
include reviews associated with the finalization of Basel III and
impacts of depreciation of the yen.
■ Risk-Weighted Assets as of March 31, 2024
(Trillions of yen)
March 31,
2023
March 31,
2024
Increase
(decrease)
Credit risk
65.0
84.3
+19.3
Market risk
4.4
2.9
(1.5)
Operational risk
4.8
5.5
+0.6
Floor adjustments*
2.9
0.0
(2.9)
Total
77.2
92.8
+15.5
* March 31, 2023: Adjustments for difference between Advanced Internal Ratings-Based
(AIRB) approach and Foundation Internal Ratings-Based (FIRB) approach
March 31, 2024: Adjustments for difference between internal model approaches and
standardised approach
■ Risk Assets of Individual Business Units
(Trillions of yen)
SMBC Group
Credit risk
84.3
Market risk
2.9
Operational risk
5.5
Floor adjustments
0.0
Retail Business Unit
12.4
Wholesale Business Unit
23.3
Global Business Unit
32.6
Global Markets Business Unit 10.6
Credit Risk
1. Basic Approach to Credit Risk Management
(1) Characteristics of Credit Risk
Credit risk is characterized by the possibility of a loss arising from
a credit event, such as deterioration in the financial condition of a
borrower, that causes an asset (including off-balance sheet transac-
tions) to lose value or become worthless.
(2) Fundamental Principles for Credit Risk Management
All Group companies follow the fundamental principles established
by SMBC Group to assess and manage credit risk on a group-wide
basis and further raise the level of accuracy and comprehensive-
ness of group-wide credit risk management. Each Group company
must comprehensively manage credit risk according to the nature of
its business, and assess and manage credit risk of individual loans
and credit portfolios quantitatively and using consistent standards.
Credit risk is the most significant risk to which SMBC Group is
exposed. Without effective credit risk management, the impact of
the corresponding losses on operations can be overwhelming.
The purposes of credit risk management is to keep credit risk
exposure to a permissible level relative to capital, to maintain the
soundness of group-wide assets, and to ensure returns commen-
surate with risk. Doing so leads to a loan portfolio that achieves high
returns on capital and assets.
(3) Credit Policy
SMBC Group’s credit policy comprises clearly stated universal
and basic operating concepts, policies, and standards for credit
operations, in accordance with our business mission and rules of
conduct. SMBC Group is promoting the understanding of and strict
adherence to its Group credit policy among all its managers and
employees. By fostering a culture of appropriate levels of risk-taking
and providing high-value-added financial services, SMBC Group
aims to enhance shareholder value and play a key contributory role
in the community.
2. Credit Risk Management System
At SMBC Group, the Group CRO formulates credit risk manage-
ment policies each year based on the group-wide basic policies
for risk management. Meanwhile, the Credit & Investment Planning
Department is responsible for the comprehensive management of
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
as a body for deliberating on matters related to group-wide credit
portfolios.
At SMBC, the core bank of SMBC Group, the Credit & Investment
Planning Department within the Risk Management Unit furnishes the
credit risk management system and is thus responsible for the 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
155
SMBC GROUP ANNUAL REPORT 2024
sector-specific surveys and studies of individual companies, the
Corporate Research Department works to form an accurate idea of
the circumstances of borrower companies and quickly identify those
with potentially troubled credit positions as well as promising growth
companies.
The Compliance Unit has in place a system of coordinating
to establish systems for providing explanations to customers and
develop information management practices for the purpose of cus-
tomer protection and to prevent transactions with antisocial forces,
among other tasks.
The Internal Audit Unit, operating independently of the business
units, audits asset quality, the accuracy of gradings and self-
assessment, and the state of credit risk management, and reports
the results directly to the Audit and Supervisory Committee and the
Management Committee.
SMBC has established the Credit Risk Committee as a con-
sultative body to round out its oversight system for undertaking
flexible and efficient control of credit risks, and ensuring the overall
soundness of the bank’s loan operations.
3. Credit Risk Management Methods
(1) Credit Risk Assessment and Quantification
At SMBC Group, to effectively manage the risk involved in individual
loans as well as the credit portfolio as a whole, we first acknowl-
edge that every loan entails credit risks, assess the credit risk posed
by each borrower and loan using an internal rating system, and
quantify that risk for control purposes.
(a) Internal Rating System
There is an internal rating system for each asset control category
established according to portfolio characteristics. For example,
credits to corporates are assigned an “obligor grade,” which indi-
cates the borrower’s creditworthiness, and/or “facility grade,” which
indicates the collectibility of assets taking into account transaction
conditions, such as guarantee/collateral, credit period, and tenor. An
obligor grade is determined by first assigning a financial grade using
a financial strength grading model and data obtained from the obli-
gor’s financial statements. The financial grade is then adjusted taking
into account the actual state of the obligor’s balance sheet and
qualitative factors to derive the obligor grade. In the event that the
borrower 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.
1
2
3
4
5
6
7
8
9
10
Obligor Grade
Normal
Assets
Substandard Loans
Doubtful
Assets
Bankrupt and
Quasi-Bankrupt
Assets
Financial Reconstruction Act
Based Disclosure Category
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
(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
Normal
Borrowers
Substandard Borrowers
Potentially
Bankrupt Borrowers
Borrowers
Requiring Caution
Virtually
Bankrupt Borrowers
Bankrupt
Borrowers
Definition
Borrower
Category
■SMBC’s Domestic Obligor Grading System
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SMBC GROUP ANNUAL REPORT 2024
Obligor grades and facility grades are reviewed once a year, and
whenever necessary, such as when there are changes in the credit
situation. There are also grading systems for loans to individuals and
project finance and other structured finance tailored according to
the risk characteristics of these types of assets.
The Credit & Investment Planning Department centrally man-
ages the internal rating systems and properly designs, operates,
supervises, and validates the grading models. It validates the grad-
ing models and systems of main assets following the procedures
manual (including those for statistical validation) once a year to
ensure their effectiveness and suitability and submits reports with
this regard. SMBC, the core bank of SMBC Group, employs a total
of 21 grading models for corporate, specialized lending, and retail
applications. For details on internal rating methods, please refer to
Appendix II.
(b) Quantification of Credit Risk
Credit risk quantification refers to the process of estimating the
degree of credit risk of a portfolio or individual loan taking into
account not just the obligor’s Probability of Default (PD) but also the
concentration of risk in a specific customer or industry and the loss
impact of fluctuations in the value of collateral, such as real estate
and securities.
Specifically, first, the PD by grade, Loss Given Default (LGD),
credit quality correlation among obligors, and other parameter
values are estimated using historical data of obligors and facilities
stored in a database to calculate the credit risk. Then, based on
these parameters, we run a simulation of simultaneous default using
the Monte Carlo method to calculate our maximum loss exposure to
the estimated amount of the maximum losses that may be incurred.
Based on these quantitative results, we allocate risk capital.
Risk quantification is also executed for purposes such as to
determine the portfolio’s risk concentration, or to simulate economic
movements (stress tests), and the results are used for making
optimal decisions across the whole range of business operations,
including formulating business plans and providing a standard
against which individual credit applications are assessed. For details
on internal rating methods, please refer to Appendix II.
(2) Framework for Managing Individual Loans
SMBC Group strives to maintain a sound portfolio through appro-
priate credit assessments and monitoring conducted over credit
periods. The following framework is used for managing individual
loans at SMBC, the core bank of SMBC Group.
(a) Credit Assessment
At SMBC, credit assessment of corporate loans involves a variety
of financial analyses, including cash flow, to predict an enterprise’s
capability of loan repayment and its growth prospects. These quan-
titative measures, when combined with qualitative analyses of indus-
trial trends, the enterprise’s R&D capabilities, the competitiveness
of its products or services, and its management caliber, result in a
comprehensive credit assessment. The loan application is analyzed
in terms of the intended utilization of the funds and the repayment
schedule. Thus, SMBC is able to arrive at an accurate and fair credit
decision based on an objective examination of all relevant factors.
Increasing the understandability to customers of loan conditions
and approval standards for specific borrowing purposes and loan
categories is a part of SMBC’s ongoing review of lending practices,
which includes the revision of loan contract forms with the chief aim
of clarifying lending conditions utilizing financial covenants.
To respond proactively and promptly to customers’ funding
needs—particularly those of SMEs—we employ a standardized
credit risk assessment process for SMEs that uses a credit-scoring
model. With this process, we are building a regime for efficiently
marketing our Business Select Loan and other SME loans.
In the field of housing loans for individuals, we employ a credit
assessment model based on credit data amassed and analyzed
by SMBC over many years. This model enables our loan officers
to efficiently make rational decisions on housing loan applications
and to reply to the customers without delay. It also facilitates the
effective management of credit risk as well as the flexible setting of
interest rates.
We also provide loans to individuals who rent out properties
such as apartments. The loan applications are subjected to a
precise credit risk assessment process utilizing a risk assessment
model that factors in the projected revenue from the rental business.
We also provide advice to such customers on how to revise their
business plans.
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SMBC GROUP ANNUAL REPORT 2024
(b) Credit Monitoring System
At SMBC, in addition to analyzing loans at the application stage, the
Credit Monitoring System is utilized to maintain an understanding
of the circumstances surrounding the obligor in order to reassess
obligor grades and review self-assessment and credit policies so
that problems can be detected at an early stage and quick and
effective action can be taken. The system includes periodic moni-
toring carried out each time an obligor enterprise discloses financial
results as well as continuous monitoring performed each time credit
conditions change, as indicated in the diagram below.
(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 take risks within the acceptable level of capital, we set upper
limits for overall risk capital based on the risk appetite and portfolio
plan of each business unit and monitor credit risk capital as a break-
down of overall risk capital.
(b) Controlling Concentration Risk
As the equity capital of SMBC Group may be materially impaired in
the event that the credit concentration risk becomes apparent, we
implement measures to manage credit toward industrial sectors with
excessive risk concentration and introduce large exposure limit lines
and conduct intensive loan review for obligors with large exposure.
To manage country risk, we also have credit limit guidelines
based on each country’s creditworthiness.
(c) Researching Borrowers More Rigorously and Balancing Risk
and Returns
Against a backdrop of drastic change in the business environment,
we rigorously research borrower companies’ actual conditions. We
run credit operations on the basic principle of earning returns that
are commensurate with the credit risk involved, and make every
effort to reduce credit and capital costs as well as general and
administrative expenses.
(d) Preventing and Reducing Non-Performing Loans
On NPLs and potential NPLs, we carry out regular loan reviews
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 engage in flexible portfolio control aimed at stabilization of our
credit portfolio through credit control methods.
(4) Self-Assessment, Write-Offs and Provisions,
Non-Performing Loans Disclosure
(a) Self-Assessment
Self-assessment is a preparatory task for ensuring SMBC Group’s
asset quality and calculating the appropriate level of write-offs and
provisions. Each asset is assessed individually for its security and
collectibility. Depending on the borrower’s current situation, the
borrower is assigned to one of five categories: Normal Borrowers,
Borrowers Requiring Caution, Potentially Bankrupt Borrowers, Vir-
tually Bankrupt Borrowers, and Bankrupt Borrowers. Based on
the borrower’s category, claims on the borrower are classified into
Classification I, II, III, and IV assets according to their default and
impairment risk levels, taking into account such factors as collateral
and guarantees.
■SMBC’s Credit Monitoring System
Obligor Information
Processing
Flow of Obligor Grading / Grading Outlook / Credit Policies / Action Plans / Facility Grading Assignment
Not Flagged
Self-Assessment
Logic
Normal
Borrowers
Borrowers
Requiring
Caution
Potentially
Bankrupt
Borrowers
Virtually
Bankrupt
Borrowers
Bankrupt
Borrowers
Grading Outlook Assessment
Performance
Trends
Qualitative
Risk
Factors
•Positive
•Flat
•Negative
Action Plan Formulation
Facility Grading Assignment
Determination of
Credit Policies
Policy for Handling
Each Individual
Company
Credit Policy Segment
Flagged
Registration
of Financial
Statements /
Creation and
Revision of
Corporate
Card
Non-
Consolidated
Financial
Grade
Consolidated
Financial
Grade
Effective
Financial
Grade
Flagging
According to
Self-
Assessment
Criteria
Quantitative
Assessment
Financial
Assessment
Credit Status
Qualitative
Assessment
Restructuring
Feasibility
Final
Obligor
Grade
Basic
Approach
Specific
Action Plan
+
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SMBC GROUP ANNUAL REPORT 2024
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-
agement throughout SMBC Group, consolidated subsidiaries carry
out self-assessment in substantially the same manner.
Borrower Categories, Defined
Normal Borrowers
Borrowers with good earnings performances and no
significant financial problems
Borrowers Requiring Caution
Borrowers identified for close monitoring
Potentially Bankrupt Borrowers
Borrowers perceived to have a high risk of falling into
bankruptcy
Virtually Bankrupt Borrowers
Borrowers that may not have legally or formally declared
bankruptcy but are essentially bankrupt
Bankrupt Borrowers
Borrowers that have been legally or formally declared bankrupt
Asset Classifications, Defined
Classification I
Assets not classified under Classifications II, III, or IV
Classification II
Assets perceived to have an above-average risk of
uncollectibility
Classification III
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 mea-
sures to strengthen credit risk management throughout SMBC
Group, all consolidated subsidiaries use substantially the same
standards as SMBC for write-offs and provisions.
SMBC’s Standards for Write-Offs and Provisions
Self-Assessment
Borrower Categories
Standards for Write-Offs and Provisions
Normal Borrowers
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”
Borrowers Requiring Caution
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
Potentially Bankrupt Borrowers
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
Virtually Bankrupt / Bankrupt
Borrowers
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
Notes
General Reserve
Provisions made in accordance with general inherent default risk
of loans, unrelated to specific individual loans or other claims
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.
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SMBC GROUP ANNUAL REPORT 2024
(c) Non-Performing Loans Disclosure
Non-Performing Loans are loans and other claims of which recov-
ery of either principal or interest appears doubtful. In disclosing
Non-Performing Loans, the disclosure category is determined by
the borrower categories assigned during self-assessment, and are
disclosed as Non-Performing Loans based on the Banking Act and
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, equity 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.
2. Market and Liquidity Risk Management System
In accordance with the group-wide basic policies for risk manage-
ment decided upon by the Management Committee, SMBC Group
determines important matters relating to the management of market
and liquidity risks, such as basic policies and risk limits, in order to
manage these risks. The ALM Committee meets four times a year,
in principle, to report on the state of market and liquidity risk 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, business
policies pertaining to market transactions and market liquidity.
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.
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SMBC GROUP ANNUAL REPORT 2024
The risk of interest rate fluctuation differs substantially by how
to recognize the dates for the maturity of demand deposits (current
accounts and ordinary deposit accounts that can be withdrawn
at any time) and how to estimate the time of cancellation prior to
maturity of time deposits and consumer loans. At SMBC, the matu-
rity of demand deposits that are expected to be left with the bank
for a prolonged period is regarded to be up to 5 years (2.5 years on
average). The cancellation prior to the maturity of time deposits and
consumer loans is estimated based on historical data.
(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.
The following table shows the VaR results of the Group’s trading
activities during fiscal 2023.
b. Banking activities
Banking activities are market operations which gain profits by con-
trolling interest rates and term period for assets (loans, bonds, etc.)
and liabilities (deposits, etc.). At SMBC Group, 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 following table shows the VaR results of the Group’s banking
activities during fiscal 2023.
■ VaR for Trading Activities
(Billions of yen)
Fiscal 2023
March 31, 2023
March 31, 2024
September 30, 2023
Maximum
Minimum
Average
Sumitomo Mitsui Financial Group
(consolidated)
40.0
33.8
46.4
27.2
34.4
27.7
Interest rates
19.5
18.2
49.6
15.7
22.5
37.6
Foreign exchange
5.2
4.4
34.9
3.8
9.0
23.9
Equities, commodities, etc.
21.4
16.4
26.9
10.3
16.9
11.2
SMBC (consolidated)
17.5
14.5
21.5
10.9
15.3
11.6
SMBC (non-consolidated)
3.8
5.0
8.9
3.8
5.4
5.4
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
(Billions of yen)
Fiscal 2023
March 31, 2023
March 31, 2024
September 30, 2023
Maximum
Minimum
Average
Sumitomo Mitsui Financial Group
(consolidated)
95.1
94.7
99.5
65.5
85.9
69.4
Interest rates
79.6
84.3
92.8
62.1
77.1
64.7
Equities, etc.
31.8
26.4
33.1
4.0
21.3
11.3
SMBC (consolidated)
93.5
93.3
98.1
64.1
84.6
68.0
SMBC (non-consolidated)
79.2
79.2
84.1
51.2
71.0
55.2
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 strategic shareholdings.
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SMBC GROUP ANNUAL REPORT 2024
(b) Market Risk Measurement Model
a. Overview
SMBC Group uses an internal model to measure VaR. In our internal
VaR model, various market fluctuation scenarios are drawn up on
the basis of past data, and the historical simulation method is used
to run profit-and-loss movement simulations that enable us to fore-
cast probable maximum losses. The appropriateness of the internal
model is verified through back testing. Additionally, this model
undergoes regular audits by an independent auditing firm and has
been evaluated as appropriate.
b. Validity verification process
SMBC Group conducts back-testing on major portfolios as a proce-
dure for verifying of the internal model. Specifically, we compare the
VaR figures calculated by the internal model with the hypothetical
profit-and-loss figures of those portfolios on a daily basis to confirm
the appropriateness of VaR calculation and the adequacy of risk
capital management. We also regularly conduct verification and
analysis related to the autocorrelation of risk factors and the effect
of the observation period to confirm the validity of the model.
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 2022
There have been no changes in the model from fiscal 2022.
(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
SMBC Group establishes risk allowance limits for total risk capital
to control equity price fluctuation risk appropriately. Risk capital
associated with equity holdings is monitored as a component of
total risk capital. More specifically, VaR (1 year holding period) com-
puted from profit-and-loss simulations based on historical market
fluctuation data and aggregated fluctuation in market price from the
beginning of the fiscal year are subject to the risk capital manage-
ment and monitored on a daily basis.
SMBC Group continuously makes efforts to reduce price fluctu-
ation 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 equities drastically fall.
In May 2023, we announced a plan to reduce the balance of
our holdings by ¥200 billion(*) over three years from the end of March
2023, and achieved a reduction of ¥134 billion in the first year of
the plan (FY2023). In FY2024, we will aim to meet the targets of the
plan ahead of schedule.
We have also set interim balance targets.
(*) The book value of Japanese listed equities held by SMBC Group.
■ Composition, by Industry, of Listed Equity Portfolio
(%)
(March 31, 2024)
Fisheries / Farming / Forestry
Mining
Construction
Food Products
Textiles
Pulp / Paper
Pharmaceuticals
Petroleum / Coal
Rubber Products
Glass / Minerals
Steel
Nonferrous Metals
Metal Products
Machinery
Electric Machinery
Transport Machinery
Precision Machinery
Other Products
Electricity / Gas Utilities
Overland Transport
Marine Transport
Air Transport
Warehousing / Distribution
Telecommunications
Wholesale
Retail
Banking
Securities / Commodity / Futures Trading
Insurance
Other Financial
Real Estate
Services
Chemicals
SMBC Group’s Portfolio
TOPIX
Nikkei 225
30
25
0
5
10
15
20
(2) Liquidity Risk Management
At SMBC Group, liquidity risk is regarded as one of the major risks.
The Group’s liquidity risk management is based on a framework
consisting of setting Risk Appetite Measures and establishing con-
tingency plans.
The Risk Appetite Measures are measures for selecting the types
and levels of risk that we are willing to take on or tolerate. As the level
of liquidity risk is evaluated based on cash flow and balance sheet
conditions, Risk Appetite Measures have been set for both of these
areas. These measures include Liquidity Coverage Ratio and Net
Stable Funding Ratio, a liquidity regulation; periods set for which it will
be possible to maintain funding levels even under stress due to deposit
outflow or other factors; and the ratio that stable funding covers loans.
The tolerated levels of risk are set based on account funding
status, cash management planning, economic environments, and
other factors, and measures are monitored on a daily or monthly
basis in order to limit reliance on short-term funding and appropri-
ately manage liquidity.
As a framework to complement the Risk Appetite Measures,
upper limits are set in place on both a Group company basis and an
individual branch basis with regard to funding gaps, which is defined
as a maturity mismatch between the source of funds and use of
funds.
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.
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SMBC GROUP ANNUAL REPORT 2024
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
system risk, covers legal risk, human resources risk, and tangible
asset risk, and third party risk—consists of the following seven
event types that may lead to the risk of loss defined in the Basel
Capital Accord: (1) internal fraud, (2) external fraud, (3) employment
practices and workplace safety, (4) clients, products, and business
practices, (5) damage to physical assets, (6) business disruption
and system failures, and (7) execution, delivery, and process
management.
(2) Fundamental Principles for Operational Risk Management
SMBC Group has set the policeis on Operational Risk Management
that stipulate basic matters in the conduct of operational risk man-
agement. Following these policies, we are enhancing operational
risk management across the Group under basic principles that
include the establishment of an effective framework for identifying,
assessing, controlling, and monitoring material risks and the estab-
lishment of an incident response structure and emergency response
structure in preparation for the materialization of risks. Based on the
framework of Basel Capital Accord, we continuously strive to raise
the level of risk management across the Group.
2. Operational Risk Management System
SMBC Group has developed an operational risk management struc-
ture atop the Risk Management Principle Policy. Our basic policy for
operational risk management is decided by the Group Management
Committee and approved by the Board of Directors.
The Corporate Risk Management Department and the Risk
Management Information Department oversee management of
operational risks overall, working with departments responsible
for subcategories such as processing risk and system risks to
comprehensively manage operational risks. The Internal Audit
Department conducts periodic internal audits to verify that this
operational risk management structure functions properly.
3. Operational Risk Management Methodology
SMBC Group manages internal loss data and key risk indicators
(KRI), and creates risk registers. Internal loss data is defined as
“information on the events in which the Bank incurs losses due to
operational risk.” We examine measures for prevention of recur-
rence by analyzing collected data and perform risk management
based on loss events that have occurred. KRI shall be the monitor-
ing indicator to ascertain the symptoms of the potential operational
risks and to ensure effective control for them. When risks are con-
sidered to have heightened, we analyze the causes and formulate
improvement measures. At the end of March 2024, SMBC Group
adopted the standardised approach for calculating the operational
risk equivalent amount under Basel Capital Accord.
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.
Risk Category
Definition
Department in Charge
Operational risk
The risk of loss arising from inadequate or failed internal processes, people, and systems or from external events.
Corporate Risk Management
Department
Risk Management Information
Department
Processing 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.
Operations Planning Department
System risk
The risk arising from nonconformity to the business strategies, inappropriate technologies applied, changes to the
development plan and delay in development when building an information system, and the risk of loss incurred
due to the breakdown including those caused by cyber attack, malfunction, deficiency, or unauthorized use
(unauthorized alteration, destruction, duplication, and leakage of the information).
System Planning Department
Legal risk
The risk of compensation of damages arising from insufficient legal consideration or breach of contract, or a
surcharge, a forfeit or an administrative fine for infringing the laws and regulations.
Compliance Department
Human resources risk
The risk of loss arising from inappropriate labor practices, poor working environments, discriminatory conduct, an
outflow or loss of human resources, or deterioration in employee morale.
Human Resources Department
Tangible asset risk
The risk of loss arising from damage to tangible assets or deterioration in the operational environment caused by
disasters or inadequate asset maintenance.
Administrative Services
Department
Third party risk
The risk of loss arising from damage due to negative incidents caused by third parties who have business
relationship with SMBC Group.
Corporate Risk Management
Department
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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
strategies, inappropriate technologies applied, changes to the
development 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 recognizes
systems as an integral part of our management strategy. Our basic
principles are to minimize system risks and to minimize losses if
a system risk materializes. To achieve this, we have established
various regulations and specific management standards, including
a security policy, and have developed contingency plans for system
failures and cyberattacks. Thus, we have established a system risk
management framework and are implementing appropriate risk
management measures.
Making reference to The Center for Financial Industry
Information Systems (FISC) safety measures standards and U.S.
safety measures standards (NIST SP800), we continuously improve
our management standards. Across Group companies that require
advanced risk management and our supply chains overall, we are
strengthening our management, addressing areas in order of their
level of risk.
Furthermore, as we actively and openly incorporate techno-
logical evolution and advance digitalization in every field to improve
customer convenience, create new businesses beyond the
boundaries of finance, and improve productivity and efficiency, we
are taking steps to identify newly arising risks and to implement
management systems that match the extent of these risks. SMBC
Group is strengthening IT governance across the Group.
As SMBC Group adopts AI (generative AI), cloud, RPA, low-
code, API, and other technologies, we have established guidelines
that define necessary countermeasure standards and monitoring
procedures specific to the risks associated with these technologies.
We are implementing timely and appropriate risk management that
addresses technological and environmental changes.
The risk from cyber threats is becoming increasingly severe
amid the expansion of areas targeted by cyber attacks due to the
acceleration of digitalization in financial services and heightening
geopolitical tensions. In preparation against this growing threat,
SMBC Group has developed technical measures related to cyber-
security and a structure for intelligence functions and security mon-
itoring, while working to develop related expert human resources.
We regularly participate in training and exercises for the enhance-
ment of effectiveness, and undergo third-party evaluations of our
response structure.
SMBC recognize the significant social impact that system fail-
ures at banks can cause, as well as the diversification and increas-
ing complexity of system risks due to advances in IT technology
and the expansion of business fields. We consider the stable oper-
ation and prompt recovery of information systems to be a critical
responsibility. To this end, we have implemented various measures
to prevent system failures, including the multiplexing of various sys-
tems and infrastructure, and the installation of disaster-prevention
systems at our eastern and western computer centers.
In addition, we are strengthening our preparedness for unfore-
seeable circumstances by creating contingency plans and conduct-
ing drills that simulate system failures.
Additionally, recognizing the importance of information pro-
tection, we take all possible measures to ensure the protection
of customer privacy and prevent information leaks. This includes
encrypting sensitive information and implementing measures to
block and detect unauthorized external access.
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Conduct Risk
1. Basic Approach to Conduct Risk Management
(1) Definition of Conduct Risk
Conduct risk is the risk that our conduct negatively affects cus-
tomers, market integrity, effective competition, public interests,
and the SMBC Group’s stakeholders, through acts that violate
laws and regulations or social norms.
(2) Fundamental Principles of Conduct Risk
Management
SMBC Group’s fundamental stance is that its business is not
to negatively affect customers, market integrity, effective compe-
tition, public interests, and stakeholders. Efforts are being made
to improve group-wide conduct risk management. Focuses of
these efforts include preemptively identifying phenomena with the
potential to cause significant deterioration in the trust of the Group
and preventing the materialization of serious management risks by
being keenly responsive to environmental changes.
2. Conduct Risk Management System
Based on the group-wide basic policies for risk management,
SMBC Group has developed a conduct risk management system.
The Management Committee makes decisions on basic policies
for conduct risk management, and these decisions are autho-
rized by the Board of Directors. In addition, the Corporate Risk
Management Department and the Compliance Department over-
see 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 con-
duct 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
Using frameworks including risk registers, new product and ser-
vice development, compliance-related monitoring, and collection
of customer voice, each business unit in SMBC Group identifies
conduct risks inherent in their operations/initiatives, formulates
control measures corresponding to the degree of materiality, and
undertakes risk reduction and control. Risk management depart-
ments verify the sufficiency of identified risks and corresponding
control measures assessed by business units. We also work to
prevent misconduct through the practice of business units’ risk
ownership and our supports for this practice.
Model Risk
1. Basic Approach to Model Risk Management
(1) Definition of Model Risk
Model risk is the risk of potential adverse consequences or financial
loss resulting from misinformed decision making based on inaccu-
rate model outputs or using the model inappropriately.
(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-
agement based on a risk-based approach, evaluating model risk
and carrying out quantitative 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.
In addition, the Corporate Risk Management Department cen-
trally oversees model risk management and is responsible for drafting
model risk management plans, as well as their operation, promotion
and support. The Internal Audit Department carries out regular audits
of the efficacy of the model risk management system.
3. Model Risk Management Methodology
SMBC Group strives to reduce model risk by implementing appro-
priate 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 peri-
odic validation throughout model lifecycle to prevent their obsoles-
cence or deterioration of their accuracy. In addition, we also strive
to strengthen risk management according to model importance by
assessing the risks present in each model.
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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, customers,
shareholders, market, society, environment, employees, etc.) due
to the business of the SMBC Group and the behavior of employees
and other related parties, as well as of leading to impairment of the
Enterprise Value and decline in trust.
(2) Fundamental Principles of Reputational Risk
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, methodolo-
gies, and rules.
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 the reputational risk management in a centralized
manner and formulate and operate the plan for reputational risk man-
agement, promote and provide support for the related matters as well
as summarize and analyze information related to reputational risk.
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 the losses by adequately gathering informa-
tion 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
proper measures against the reputational risk matters identified.
Environmental and Social Risks
1. Basic Approach to Environmental and Social
Risk Management
(1) Definition of Environmental and Social Risk
Environmental and social risks are the risks that environmental and
social factors become risk drivers and transmit through various
pathways to each risk category, ultimately resulting in losses
to the SMBC Group. Specifically, risks such as climate-related
risks, nature- related risks, and human rights risks are subject to
management.
Risk
Definition
Climate-related risks
(transition risks and
physical risks)
the risks that the SMBC Group incurs losses initiated
by changes related to climate change which transmit to
each risk category through various pathways
Nature-related risks
the risks that the SMBC Group may incur losses due to
potential threats arising from its dependence on and
influence on nature which transmit to each risk
category through various pathways
Human rights risks
the risks that the SMBC Group may incur losses as a
result of violations of the human rights of stakeholders
which transmit to each risk category through various
pathways
(2) Basic Principles of Environmental and Social Risk
Management
SMBC Group has established Group Policies on Environmental and
Social Risk Management that stipulate basic matters for carrying
out environmental and social risk management. We are working to
enhance environmental and social risk management throughout
the Group by clarifying our basic concepts such as understanding
the transmission pathways of environmental and social risks in
management of each risk management, recognizing the location
of environmental and social risks, and implementing appropriate
management according to the risk characteristics.
2. Environmental and Social Risk Management
System
SMBC Group has developed an environmental and social risk man-
agement system based on the group-wide basic policies for risk
management. The Management Committee makes decisions on
basic policies for environmental and social risk management, and
these decisions are authorized by the Board of Directors. The Audit
Department conducts audits of our risk management structure. The
Environmental & Social Risk Management Department of the Credit
& Investment Planning Department oversees environmental and
social risk management overall. Each risk management department
is responsible for managing each risk category to which environmen-
tal and social factors transmit as risk drivers.
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3. Methods of Environmental and Social Risk
Management
SMBC Group has selected inadequate responses to climate
change, conservation and recovery of natural capital, human rights
and other social issues as the top risks with major impacts on our
management. As a specific management method, in response to
environmental and social risks above that transmit to credit risks,
we set policies for specific businesses and sectors, undertake cus-
tomer engagement through environmental and social due diligence
that includes assessment of transition plans and human rights due
diligence, and work to enhance credit assessment. In the area of
climate-related risks, we manage portfolio GHG emissions through
our climate-related RAF, create heat maps that evaluate risks by
sector, and conduct scenario analysis of physical risks and transi-
tion risks.
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SMBC GROUP ANNUAL REPORT 2024
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.
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.
Standardised approach
A method for calculating operational risk equivalent amounts by mul-
tiplying the amount of the Business Indicator Component (BIC) by the
Internal Loss Multiplier (ILM).
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 equity 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.
Glossary
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SMBC GROUP ANNUAL REPORT 2024
Internal Reporting Systems and Hotline for
Inappropriate Accounting and Auditing Activities
We have set up the SMBC Group Alarm Line internal whistleblower
line, available to all Group employees inside and outside their
companies, to enhance self-correction through early detection and
correction of actions that violate laws and regulations. In addition,
SMBC and other Group companies have established internal report-
ing systems for their employees.
Sumitomo Mitsui Financial Group Accounting and Auditing
Hotline is aimed at strengthening the Group’s self-correction function
by encouraging early detection and rectification of improper actions
relating to accounting, accounting internal controls, and auditing
at the Company and its consolidated subsidiaries. The hotline can
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
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.
Designated Dispute Resolution Agencies
For the handling of any complaints received from and conflicts with
our clients, SMBC has executed agreements, respectively, with the
Japanese Bankers Association, a designated dispute resolution
agency under the Banking Act, and the Trust Companies
Association of Japan, a Designated Dispute Resolution
Organization under the Trust Business Act and Act on Provision,
etc. of Trust Business by Financial Institutions and the specified
non-profit organization of “Financial Instruments Mediation
Assistance Center,” one of the “Designated Dispute Resolution
Agencies” under the Financial Instruments and Exchange Act.
Japanese Bankers Association:
Contact information: Consultation office,
Japanese Bankers Association
Telephone numbers: (Japan) 0570-017109 or 03-5252-3772
Business hours:
Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:00 pm
Trust Companies Association of Japan:
Contact information: Consultation office,
Trust Companies Association of Japan
Telephone numbers: (Japan) 0120-817335 or 03-6206-3988
Business hours:
Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:15 pm
Financial Instruments Mediation Assistance Center
Contact information: Financial Instruments Mediation
Assistance Center
Telephone number: (Japan) 0120-64-5005
Fax:
(Japan) 03-3669-9833
Business hours:
Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:00 pm
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SMBC GROUP ANNUAL REPORT 2024
Basic Policy for Customer-Oriented Business Conduct
SMBC Group*1 has formulated the Basic Policy for Customer-
Oriented Business Conduct for its domestic asset management and
asset formulation businesses, based on which they are promoting
customer-oriented business conduct.
This policy informs our basic stance of emphasizing the dispers-
ing of investments over the medium to long term through which
we seek to support customers in stable asset formulation. Also
based on this policy, Sumitomo Mitsui Financial Group and its Group
companies aim to contribute to the development of capital markets
that provide companies with the funds they need to grow and to
economic growth through their asset management and asset formu-
lation businesses.
1. SMBC Group’s Customer-Oriented
Business Conduct
As one part of “Our Mission,” it is stated that “We grow and prosper
together with our customers, by providing services of greater value
to them.” Based on the spirit of this mission, we have defined our
Five Values, a list of five key words that includes “Customer First”
(always think based on a customer-oriented perspective and provide
value based on the individual needs of customers), shared by all the
executives and employees of SMBC Group. SMBC Group continues
to push forward with various initiatives to actualize these values.
Sumitomo Mitsui Financial Group is fully aware of the severity
of the government penalties imposed on SMBC in April 2006 in
relation to its sales practices for interest rate swaps. We are thus
committed to preventing the recurrence of such malpractice.
Accordingly, we have adopted a customer- oriented perspective in
pursuing sustainability throughout our management, internal control,
and compliance systems. Through these and other efforts, we have
endeavored to regain trust from customers and from society as a
whole.
Furthermore, the Customer Experience (CX) Improvement
Subcommittee has been set up to incorporate customer input into
management. The opinions of external experts*2 are utilized in meet-
ings of this committee as discussions on and verification of initiatives
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
customer-oriented business conduct.
We are convinced that the ongoing quest to provide quality
products and services based on customer needs and desires will
contribute to economic growth and subsequently growth for SMBC
Group. Everyone at SMBC Group will carry out their duties in an
earnest and just manner while exercising a high degree of special-
ized knowledge and good business ethics. SMBC Group will never
let up in its efforts to ensure that it always thinks and acts based on
a customer-oriented perspective in the truest sense as it strives to
generate the greatest profits for its customers.
Five Values
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.
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.
Integrity
As a professional,
always act with
sincerity and a high
ethical standard.
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SMBC GROUP ANNUAL REPORT 2024
2. Initiatives for Promoting Customer-Oriented
Business Conduct
Sumitomo Mitsui Financial Group will implement the following ini-
tiatives to entrench the principles of customer-oriented business
conduct into its activities.
(1) Provision of Products and Services Suited to the
Customer
When drawing up and underwriting financial products, we will act
with an accurate understanding of customer needs, determining the
ideal target customer group based on the risks and complexity of
the products, in order to properly develop and select products.
We will also help customers to find the ideal products and ser-
vices. Our first step in this process will be to learn about our custom-
ers, inquiring into their needs and goals. We will next look at their level
of knowledge, investment experience, and asset portfolios so that we
can propose the best possible products and services for them.
If we think that a product may not be ideally suited to a custom-
er’s needs based on its characteristics or risks, we will discuss this
matter with the customer as necessary and refrain from proposing
such products when doing so is inappropriate.
(2) Easy-to-Understand Explanation of Important
Information
The amount of information provided to customers on the charac-
teristics, risks, and fees of the products we handle as well as on
the economic climate and market trends will be enhanced to help
customers make informed decisions. Furthermore, we will strive to
explain this information in an easy-to-understand manner.
(3) Clarification of Fees
Sumitomo Mitsui Financial Group receives fees from customers for
the products and services it provides out of consideration for the
need to develop and improve the quality of products and services
and to supply various types of information as well as for process-
ing- and infrastructure-related expenses. We will seek to provide
thorough explanations of these fees that are as easy to understand
as possible.
(4) Management of Conflicts of Interest
Performing duties in an earnest and just manner based on a cus-
tomer-oriented perspective entails managing any potential conflicts
of interest to ensure that our operations are truly customer oriented.
Based on the Management Policy Concerning Conflicts of
Interest in Sumitomo Mitsui Financial Group, we have defined the
types of conflicts of interest requiring management as well as the
types of transactions that tend to present conflicts of interest and
procedures for identifying these transactions, methods and systems
for managing conflicts of interest, and the scope of Group compa-
nies at which conflicts of interest should be managed. In this manner,
we take steps to ensure that conflicts of interest are properly man-
aged and therefore do not impede the interests of customers.
(5) Frameworks for Properly Motivating Employees
Always thinking and acting based on a customer-oriented perspec-
tive in the truest sense requires our employees to be properly moti-
vated so that they can remain dedicated and effective in their work.
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
Hideki Kanda
Emeritus Professor, University of Tokyo
Kumiko Bando
Former Commissioner of the Consumer
Affairs Agency and Executive Director of
the Japanese Red Cross Society
Taku Umezawa
Partner, Nagashima Ohno & Tsunematsu
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SMBC GROUP ANNUAL REPORT 2024
Services for Corporations
Through the Area Corporate Office, SMBC provides services to
mid-sized corporations and SME clients. The Area Corporate Office
has in place a system for providing specialized services utilizing the
networks of SMBC Group companies to address customers’ funding
needs, wide-ranging financial needs, and management issues. We
also engage in fundraising support aimed at business continuity for
small and medium-sized enterprises customers who face difficult
circumstances due to factors including soaring prices and labor
shortages.
Going forward, we will continue to fulfill our social responsibility as
a financial institution by providing support based on the customer’s
standpoint.
Collaboration with Local Credit Guarantee
Corporations
SMBC offers Business Select Loans, a loan product that offers
unsecured and unguaranteed financing, and collaborates with local
credit guarantee corporations to offer prefectural and other program
financing and partnership guarantees to meet the funding needs of
customers who face ongoing difficult circumstances due to soaring
prices, labor shortages, and other causes.
We will continue offering services to fund and support the manage-
ment of the mid-sized corporations and SMEs that form the backbone
of the Japanese economy.
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
• Loans
• Management
consultation
• Management
support
SMBC
• Departments
of the
head office
• Corporate
Business
Offices
• Area
Corporate
Office
• Area Main
Offices
• Branches,
etc.
Affiliation
Affiliation
SMBC Group Companies
Mid-sized
corporations,
SMEs, and retail
customers
• External
organizations
• External experts /
professionals
Support for Mid-Sized Corporations and SMEs,
Vitalization of Local Regions in Japan
Affiliation
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SMBC GROUP ANNUAL REPORT 2024
Management support tailored to customers’
issues and life stages
Along with efforts to smoothly exert our financial intermediary
functions, SMBC has set a focus on management issues faced by
customers. We strive to further demonstrate our consulting functions
by proposing optimal solutions from customers’ perspectives, tailored
to their issues and life stages.
In addition to support for large and diverse methods of financing
startups including syndicated loans with stock options, social loans,
and Organization for Small & Medium Enterprises and Regional
Innovation-backed loans, we actively offer support for both invest-
ment and financing, including large-scale equity support at the
growth stage through the growth fund we established last year.
The bank also promotes business co-creation, such as the
establishment of joint ventures with startups.
As a part of our support for business establishment and com-
mercialization, we operate the “mirai cross” platform that promotes
business creation with the participation of startups and other com-
panies, venture capitalists, national and local governments, and
other stakeholders.
As an example of business revitalization support, we perform
revitalization financing in line with requests by business revitaliza-
tion attorneys, accountants, and other experts. We provide funds
required for the revitalization of small and medium-sized enterprises,
take part in selection of business sponsors for revitalized companies,
and support business revitalization.
Efforts to revitalize communities
SMBC Group works in partnership with business operators, local
governments, and regional banks to address social issues facing
regions.
As an initiative leading to the realization of a decarbonized society
and revitalization of a regional economy, SMBC and Japan Research
Institute signed a collaboration agreement with Osaka Prefecture on
transformation of citizens’ low-carbon behavior under the “Genkotsu”
CO2 reduction project. Through means including validation of pur-
chases of environmentally considerate products, the partnership
supports low-carbon behavior by companies and consumers.
In December 2023, SMBC, Chugoku Bank Ltd., and Okayama
University held a reverse pitching event on the theme of health care
to address solutions to regional issues through industry-academia
collaboration.
In other regions, too, by supporting utilization of public land and
tourism resources and by offering payment solutions for regional
transportation, we are supporting the revitalization of regional econ-
omies through regional revitalization and enhanced convenience for
residents and tourists.
In response to growing interest among corporate and retail cus-
tomers in contributing to regions, we have begun working to match
this interest with local governments
through Japan’s hometown tax pay-
ment program.
In these ways, SMBC Group will
continue to leverage its all-round
strengths to contribute to the revital-
ization of local economies.
Reverse pitching event in
cooperation with Chugoku Bank
Ltd. and Okayama University
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”
173
SMBC GROUP ANNUAL REPORT 2024
Employees
SMBC
March 31
2022
2023
2024
Number of employees*1
25,658
25,099
24,615
Male
11,535
11,198
10,899
Percentage of total
44.96%
44.62%
44.28%
Female
14,123
13,901
13,716
Percentage of total
55.04%
55.38%
55.72%
Average age
38 yrs 11 mos
39 yrs 7 mos
40 yrs 3 mos
Male
40 yrs 10 mos
41 yrs 3 mos
41 yrs 8 mos
Female
37 yrs 4 mos
38 yrs 3 mos
39 yrs 2 mos
Average years of service
15 yrs 1 mos
15 yrs 8 mos
16 yrs 3 mos
Male
16 yrs 7 mos
16 yrs 11 mos
17 yrs 2 mos
Female
13 yrs 10 mos
14 yrs 8 mos
15 yrs 6 mos
Number of women in
managerial positions*2
819
933
950
Ratio of employees with
disabilities (% of total)
2.83%
2.83%
2.89%
*1 The number of full-time employees, including employees seconded to other companies and
organizations The following list of employees is deducted from the total number of employees:
executive officers, employees on short-term contracts, part-time employees, employees of
temporary employment agencies, and locally hired employees at overseas branches
*2 As of March 1 of respective years
April 1
2022
2023
2024
Number of new hires
472
363
481
Number of newly employed female graduates
187
137
202
Ratio of newly employed females to total new employees 39.6%
37.7%
42.0%
Fiscal
2021
2022
2023
Number of employees taking parental leave
1,585
1,509
1,606
533 <516> <671>
Number of career hires
52
97
207
SMBC Trust Bank
March 31
2022
2023
2024
Number of employees*1
1,807
1,723
1,804
Male
881
877
916
Percentage of total
48.75%
50.90%
50.78%
Female
926
846
888
Percentage of total
51.25%
49.10%
49.22%
Average age
44 yrs 4 mos
44 yrs 11 mos
45 yrs 4 mos
Male
44 yrs 8 mos
46 yrs 0 mos
46 yrs 6 mos
Female
45 yrs 1 mos
43 yrs 11 mos
44 yrs 2 mos
Average years of service
10 yrs 10 mos
10 yrs 10 mos
11 yrs 0 mos
Male
12 yrs 3 mos
9 yrs 4 mos
9 yrs 8 mos
Female
9 yrs 5 mos
12 yrs 5 mos
12 yrs 5 mos
Number of women in
managerial positions*2
65
59
54
Ratio of employees with
disabilities (% of total)*3
2.37%
2.52%
2.40%
*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 Revised retroactively for periods prior to the change in definition
*3 The legally mandated number of employees with disabilities had been hired as of March 31, 2024
April 1
2022
2023
2024
Number of new hires
14
23
37
Number of newly employed female graduates
6
9
17
Ratio of newly employed females to total new employees 42.9%
39.1%
45.9%
Fiscal
2021
2022
2023
Number of employees taking parental leave*
45
60
44
<12>
<15>
<20>
Number of career hires*
14
28
78
Sumitomo Mitsui Finance and Leasing
March 31
2022
2023
2024
Number of employees*1
2,427
2,456
2,533
Male
1,551
1,544
1,566
Percentage of total
63.91%
62.87%
61.82%
Female
876
912
967
Percentage of total
36.09%
37.13%
38.18%
Average age
42 yrs 7 mos
42 yrs 8 mos
42 yrs 7 mos
Male
44 yrs 0 mos
43 yrs 11 mos
43 yrs 10 mos
Female
40 yrs 1 mos
40 yrs 6 mos
40 yrs 8 mos
Average years of service
15 yrs 4 mos
15 yrs 2 mos
14 yrs 10 mos
Male
16 yrs 6 mos
16 yrs 4 mos
16 yrs 1 mos
Female
13 yrs 4 mos
13 yrs 2 mos
12 yrs 10 mos
Number of women in
managerial positions*2
38
70
91
Ratio of employees with
disabilities (% of total)
2.41%
2.42%
2.77%
*1 The number of full-time employees, including employees seconded to other companies and
organizations The following list of employees is deducted from the total number of employees:
employees seconded from other companies and organizations, executive officers, employees on
short-term contracts, part-time employees, employees of temporary employment agencies, and
full-time employees of affiliates (including overseas subsidiaries)
*2 As of March 1 of respective years
April 1
2022
2023
2024
Number of new hires
71
87
73
Number of newly employed female graduates
30
40
39
Ratio of newly employed females to total new employees 42.3%
46.0%
53.4%
Fiscal
2021
2022
2023
Number of employees taking parental leave
111
76
79
<80>
<39>
<45>
Number of career hires
21
52
72
SMBC Nikko Securities
March 31
2022
2023
2024
Number of employees*1
9,623
9,306
9,304
Male
5,926
5,701
5,688
Percentage of total
61.58%
61.26%
61.13%
Female
3,697
3,605
3,616
Percentage of total
38.42%
38.74%
38.87%
Average age
41 yrs 6 mos
42 yrs 2 mos
42 yrs 7 mos
Male
42 yrs 5 mos
43 yrs 0 mos
43 yrs 3 mos
Female
40 yrs 0 mos
40 yrs 11 mos
41 yrs 6 mos
Average years of service*2
14 yrs 2 mos
14 yrs 2 mos
14 yrs 6 mos
Male
14 yrs 1 mos
14 yrs 1 mos
14 yrs 2 mos
Female
14 yrs 2 mos
14 yrs 5 mos
14 yrs 11 mos
Number of women in
managerial positions
207
215
222
Ratio of employees with
disabilities (% of total)*3
2.68%
2.86%
2.82%
*1 Excluding 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
2022
2023
2024
Number of new hires
219
299
273
Number of newly employed female graduates
74
115
115
Ratio of newly employed females to total new employees 33.8%
38.5%
42.1%
Fiscal
2021
2022
2023
Number of employees taking parental leave*4
580
371
410
<445> <220> <269>
Number of career hires
76
72
110
*4 Revision of the short-term childcare leave system and creation of a new special leave for childcare
in FY2021
174
SMBC GROUP ANNUAL REPORT 2024
Sumitomo Mitsui Card
March 31
2022
2023
2024
Number of employees*1
5,976
5,850
5,984
Male
3,034
2,957
3,037
Percentage of total
50.77%
50.55%
50.75%
Female
2,942
2,893
2,947
Percentage of total
49.23%
49.45%
49.25%
Average age
42 yrs 7 mos
42 yrs 9 mos
42 yrs 10 mos
Male
44 yrs 5 mos
44 yrs 4 mos
44 yrs 2 mos
Female
40 yrs 8 mos
41 yrs 2 mos
41 yrs 8 mos
Average years of service
17 yrs 6 mos
17 yrs 8 mos
17 yrs 7 mos
Male
19 yrs 1 mos
19 yrs 2 mos
18 yrs 6 mos
Female
15 yrs 11 mos
16 yrs 2 mos
16 yrs 8 mos
Number of women in
managerial positions
85
86
97
Ratio of employees with
disabilities (% of total)*2
2.50%
2.41%
2.66%
*1 The number of full-time employees This excludes directors, consultants, advisors, employees
seconded from external companies and organizations, temporary employees, part-time 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
2022
2023
2024
Number of new hires
109
103
167
Number of newly employed female graduates
51
39
43
Ratio of newly employed females to total new employees 46.8%
37.9%
25.7%
Note: Includes figures for SMBC Finance Service (a wholly-owned subsidiary of SMBC Card Company)
Fiscal
2021
2022
2023
Number of employees taking parental leave
178
178
171
<69>
<65>
<66>
Number of career hires
46
71
188
Note: Includes figures for SMBC Finance Service (a wholly-owned subsidiary of SMBC Card Company)
SMBC Consumer Finance
March 31
2022
2023
2024
Number of employees*1
2,592
2,594
2,576
Male
1,474
1,460
1,461
Percentage of total
56.87%
56.28%
56.72%
Female
1,118
1,134
1,115
Percentage of total
43.13%
43.72%
43.28%
Average age
42 yrs 4 mos
42 yrs 12 mos
43 yrs 8 mos
Male
43 yrs 9 mos
44 yrs 5 mos
44 yrs 12 mos
Female
40 yrs 6 mos
41 yrs 1 mos
41 yrs 11 mos
Average years of service
16 yrs 7 mos
17 yrs 1 mos
17 yrs 9 mos
Male
18 yrs 7 mos
19 yrs 2 mos
19 yrs 8 mos
Female
13 yrs 11 mos
14 yrs 6 mos
15 yrs 4 mos
Number of women in
managerial positions
147
166
184
Ratio of employees with
disabilities (% of total)*2
2.75%
2.67%
2.59%
*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
2022
2023
2024
Number of new hires
49
35
48
Number of newly employed female graduates
32
12
22
Ratio of newly employed females to total new employees 65.3%
34.3%
45.8%
Fiscal
2021
2022
2023
Number of employees taking parental leave
33
34
37
<9>
<13>
<16>
Number of career hires
2
1
10
Japan Research Institute
March 31
2022
2023
2024
Number of employees*1*2
2,640
2,777
2,958
Male
1,931
2,000
2,125
Percentage of total
73.14%
72.02%
71.84%
Female
709
777
833
Percentage of total
26.86%
27.98%
28.16%
Average age*2
41 yrs 0 mos
40 yrs 8 mos
38 yrs 8 mos
Male
41 yrs 6 mos
41 yrs 3 mos
39 yrs 1 mos
Female
39 yrs 6 mos
39 yrs 2 mos
37 yrs 7 mos
Average years of service
13 yrs 1 mos
12 yrs 8 mos
11 yrs 3 mos
Male
13 yrs 5 mos
13 yrs 1 mos
11 yrs 4 mos
Female
12 yrs 3 mos
11 yrs 11 mos
11 yrs 1mos
Ratio of employees with
disabilities (% of total)*2
2.31%
2.16%
2.22%
*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
2022
2023
2024
Number of new hires
143
168
245
Number of newly employed female graduates
52
52
74
Ratio of newly employed females to total new employees 36.4%
31.0%
30.2%
Fiscal
2021
2022
2023
Number of employees taking parental leave
58
44
109
<33>
<26>
<72>
Number of career hires*3
51
134
225
*3 Excluding former bank employees transferred to the company
Sumitomo Mitsui DS Asset Management
March 31
2022
2023
2024
Number of employees*1
770
747
769
Male
542
509
516
Percentage of total
70.39%
68.14%
67.10%
Female
228
238
253
Percentage of total
29.61%
31.86%
32.90%
Average age
46 yrs 0 mos
46 yrs 4 mos
46 yrs 0 mos
Male
47 yrs 7 mos
47 yrs 11 mos
47 yrs 6 mos
Female
42 yrs 2 mos
43 yrs 0 mos
42 yrs 11 mos
Average years of service
15 yrs 6 mos
12 yrs 11 mos
12 yrs 9 mos
Male
17 yrs 1 mos
13 yrs 4 mos
13 yrs 3 mos
Female
11 yrs 9 mos
11 yrs 10 mos
11 yrs 10 mos
Number of women in
managerial positions
10
11
13
*1 The number of full-time employees This excludes directors, dispatched employees, and locally
hired employees at overseas branches
April 1
2022
2023
2024
Number of new hires
12
20
22
Number of newly employed female graduates
6
8
13
Ratio of newly employed females to total new employees 50.0%
40.0%
59.1%
Fiscal
2021
2022
2023
Number of employees taking parental leave
19
24
21
<12>
<12>
<10>
Number of career hires
16
32
37
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
175
SMBC GROUP ANNUAL REPORT 2024
Main Work-Life Balance Support System
Parental leave
Childcare leave system
Shorter
working hours
Restrictions
on overtime
Exemption from
late-night work
Other principal systems
SMBC
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
Employees can choose
shorter working hours for
each day or fewer days
worked per week, both
applicable until March 31
of the 6th grade
Until March 31 of
the 6th grade
Until March 31 of
the 6th grade
• Short-term childcare leave
(by the hour)
• Work relocations
• Primary Work Location Registration
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)
• Career design leave system
• System for rehiring former
employees
• Special leave for childbirth
• Carryover leave (infertility
treatment)
• Half-day leave
• Teleworking system
• Staggered working hours
• Dual-Career Support system
for side work
SMBC Trust
Bank
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
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
• Flextime system
• Teleworking system
• Paternity leave (3 days)
• Leave for nursing care
• Shorter working hours allowed
for nursing care
• Family care time off (by the hour)
• Family support leave
• Short-term childcare leave
• Annual leave in hour increments
Sumitomo
Mitsui Finance
and Leasing
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 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 65- and
7-hour workdays
Until the entry into
elementary school
Until the entry into
elementary school
• 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
SMBC Nikko
Securities
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
Employees may reduce
daily working hours in
increments of 30 minutes
up to 25 hours until
March 31 of the 6th grade
Until March 31 of
the 6th grade
Until March 31 of
the 6th grade
• Short-term childcare leave
• Discount coupon for nursing care
• Special leave for childbirth
• Nursing care leave
• Special leave for nursing care
(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
• Half-day paid leave
• Hourly paid leave
• Reserved Holiday
• Secondary job
• Long-Term Self Development Leave
Policy as “Challenge Leave”
• Three-day or four-day workweeks
• Corporate-led nursery school
• Baby-sitter discount system
• Special leave for childcare
• Memorial leave system
• Special leave for volunteer activity
• Reverse leave system
• Pro bono work
• Personal care leave
• Leave for balancing work with
medical treatment
Sumitomo
Mitsui Card
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 (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
Until March 31 of
the 3rd grade
• 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
• Teleworking system
• Flextime system
• Health-purpose or anniversary
leave
• Short-term childcare leave
• Career design leave system
• Maternity absence
SMBC
Consumer
Finance
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 the entry into elementary
school (5 days per annum per
child; 10 days for two or more
children)
Employees can choose
to work 5, 55, 6, 65, 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
• 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 the transition
to daycare
• 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
Japan
Research
Institute
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
Until March 31 of the
6th grade (5 days per annum
per child; no upper limit)
Employees can choose to
work 4, 5, 6 or 7 hours per
day until March 31 of the
3rd grade (this system can
be combined with flextime)
Until the entry into
elementary school
For employees who
are pregnant or have
given birth within
previous 12 months
• 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)
• Special leave for childbirth
• Half-day leave
• Leave system for receiving
treatment while working
• Career design leave system
• Carryover leave
• Side work system
• Equity workplace system
• Reduced working hours
Sumitomo
Mitsui DS Asset
Management
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, 65,
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
• Lifestyle enriching leave
• 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
• Job return system
176
SMBC GROUP ANNUAL REPORT 2024
■ Directors and Executive Officers (as of June 30, 2024)
DIRECTORS AND CORPORATE
EXECUTIVE OFFICERS
Chairman of the Board
Takeshi Kunibe
Director President
(Representative Executive Officer)
Toru Nakashima
Group CEO
Director Deputy President and Executive Officer
(Representative Executive Officer)
Teiko Kudo
Group CCO
Compliance Dept., Anti Money Laundering & Financial Crime
Prevention Dept.
Director Senior Managing Executive Officer
Fumihiko Ito
Group CFO and Group CSO
Sustainability Division for Fulfilled Growth, Public Relations
Dept., Corporate Planning Dept., Business Development Dept.
Sustainability Planning Dept.
Sustainability Development Dept., Financial Accounting Dept.
Accounting Service & Planning Dept.
Digital Strategy Dept.
Directors
Toshihiro Isshiki
Yoshiyuki Gono
Shozo Yamazaki(1)
Sonosuke Kadonaga(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)
Muneo Kanamaru
Head of Wholesale Business Unit
Masamichi Koike
Head of Global Markets Business Unit
Senior Managing Executive Officers
Takashi Yamashita
Head of Retail Business Unit
Jun Uchikawa
Group CIO
IT Planning Dept., Cybersecurity Management Dept.,
Data Management Dept., Operations Planning Dept.
Yoshihiro Hyakutome
Co-Head of Global Business Unit (Head office departments
(Global Business Unit), Asia Pacific Division)
Takeshi Mikami
Group CAE
Internal Audit Dept.
Keiichiro Nakamura
Co-Head of Global Business Unit
(Americas Division, Europe, Middle East & Africa Division)
Akio Isowa
Group CDIO
Digital Solution Division, Transaction Business Division,
Digital Strategy Dept.
Deputy Head of Wholesale Business Unit
Takashi Kobayashi
Group CHRO
General Affairs Dept., Human Resources Dept.,
Quality Management Dept., Administrative Services Dept.
Natsuhiro Samejima
Group CRO
Corporate Risk Management Dept., Risk Management Information
Dept., Risk Management Dept., Americas Division, Credit &
Investment Planning Dept.
(1) Mr. Yamazaki, Mr. Kadonaga, Mr. Tsutsui, Mr. Shinbo, Ms. Sakurai, Mr. Lake II
and Ms. Rogers satisfy the requirements for an “outside director” under the
Companies Act.
EXECUTIVE OFFICERS
Senior Managing Executive Officers
Hiroyuki Kamimoto
Deputy Head of Wholesale Business Unit
Hirofumi Otsuka
Head of Americas Division
Yukihiro Mabuchi
Deputy Head of Wholesale Business Unit
Managing Executive Officers
Eiichi Sekiguchi
Wholesale Business Unit
Kenichi Hida
Group Deputy CCO
Hideki Sakamoto
Deputy Head of Wholesale Business Unit
Tatsuya Suzuki
Deputy Head of Wholesale Business Unit,
Deputy Head of Global 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
Masashi Sakamoto
Deputy Head of Retail Business Unit
Shinichiro Watanabe
Global Business Unit
Nobuaki Nakamura
Deputy Head of Global Markets Business Unit
Katsufumi Uchida
Co-Head of Asia Pacific Division
Takashi Kakiuchi
Deputy Head of Asia Pacific Division
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
Wholesale Business Unit
Daiji Nakata
Deputy Head of Retail Business Unit
Head of Wealth Management Division
Akio Uemura
Retail Business Unit
Deputy Head of Asia Business Development Division
Hideo Kawafune
Head of Europe, Middle East & Africa Division
Takahiko Hirashima
Group Deputy CCO
Kazuyuki Anchi
Public Relations Dept., Corporate Planning Dept.,
Business Development Dept., Sustainability Planning Dept.,
Sustainability Development Dept., Financial Accounting Dept.,
Accounting Service & Planning Dept., Digital Strategy Dept.
Kazuya Ikeda
General Manager, Strategic Planning Dept., Global Business Unit
Arihiro Nagata
Deputy Head of Global Markets Business Unit
Haruyuki Yoshikawa
General Affairs Dept., Quality Management Dept., Compliance Dept.,
Anti Money Laundering & Financial Crime Prevention Dept.
Hironari Shoji
Wholesale Business Unit
Hideyuki Omokawa
Group Deputy CSO
Corporate Planning Dept., Retail Business Unit
Hiroshi Tsutsui
Group Deputy CIO and Group Deputy CISO
Bungo Miura
Deputy Head of Global Business Unit
Hideki Takamatsu
Group CDAO
IT Planning Dept., Cybersecurity Management Dept.,
Data Management Dept., Operations Planning Dept.
Tomomi Izawa
Deputy Head of Wealth Management Division
Ichiro Okawara
Credit & Investment Planning Dept.
Takeshi Kimoto
Head of Asia Business Development Division
Ayumu Goto
Group Deputy CFO, Group Deputy CSO,
Group Deputy CDIO and Group Deputy CSuO
Tamaki Shibuya
Retail Business Unit
Executive Officers
Tatsuya Okumura
General Manager, Audit Committee Office
Akihiro Kawara
General Manager, Planning Dept., Global Markets Business Unit
Yukiko Yoritaka
Group Deputy CHRO
Shinsuke Yoshioka
Group Deputy CIO
Naoki Shiraishi
Head of Digital Solution Division
Susumu Masuda
Global Markets Business Unit
Toshihiko Kato
General Manager, Planning Dept., Wealth Management Division
Nobuyuki Takiguchi
Global Business Unit
Hiroshi Maeda
General Manager, Quality Management Dept.
Hiroshi Ibaraki
Deputy Head of Europe, Middle East & Africa Division
Shigeru Kaneko
Group Deputy CCO
Katsuyuki Kubo
Deputy Head of Americas Division
Masayuki Takanashi
Group CSuO
Sustainability Planning Dept., Sustainability Development Dept.
Head of Sustainability Division for Fulfilled Growth
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
Masahiro Yoshimura
General Manager, Corporate Planning Dept.
Takahiko Watanabe
General Manager, Human Resources Dept.
Lisette Lieberman
Regional CCO (Americas)
Functional Head (US CCO) and General Manager, Compliance Dept.,
Americas Division, Compliance Dept.
Scott A. Ashby
Deputy Head of Americas Division and Functional Head (Head of Verticals)
John Nolan
Functional Head (US CAE) and Co-General Manager, Internal Audit Dept.,
Americas Division, Internal Audit Dept.
Glenn Swanton
Co-Regional CRO (Europe, Middle East & Africa)
Takako Hayashi
Group Deputy CHRO
Katsuya Fujita
Global Markets Business Unit
Seiji Ito
General Manager, Internal Audit Dept.
Jun Okahashi
General Manager, Financial Accounting Dept.
Honami Matsugasaki
Group Deputy CAE
Internal Audit Dept.
Masaru Ishibashi
General Manager, Planning Dept., Global Markets Business Unit
Taisuke Naito
General Manager, Operations Planning Dept.
Kenji Irie
General Manager, Sustainability Planning Dept.
Naoki Endo
Head of Transaction Business Division and General Manager,
Transaction Business Planning Dept.
Masanori Fujima
General Manager, Sustainable Solution Dept.
Norimitsu Kobayashi
General Manager, Business Development Dept.
Koichi Nunami
General Manager, Strategic Planning Dept., Europe, Middle East & Africa
Division
Seiya Fujimori
General Manager, Corporate Risk Management Dept.
Osahiro Yamamoto
General Manager, Planning Dept., Global Markets Business Unit
Antony Yates
Deputy Head of Europe, Middle East & Africa Division
Martin Coulson
General Manager, Internal Audit Dept.
Sumitomo Mitsui Financial Group, Inc.
Corporate Data
[REFERENCE]
Group CxO/Head of Business Units
(as of June 30, 2024)
Group CxO
Group CEO
Toru Nakashima
Group CFO and Group CSO
Fumihiko Ito
Group CRO
Natsuhiro Samejima
Group CCO
Teiko Kudo
Group CHRO
Takashi Kobayashi
Group CIO
Jun Uchikawa
Group CISO
Daisuke Shirai
Group CDAO
Hideki Takamatsu
Group CDIO
Akio Isowa
Group CSuO
Masayuki Takanashi
Group CAE
Takeshi Mikami
Head of Business Units
Head of Retail Business Unit
Takashi Yamashita
Head of Wholesale Business Unit
Muneo Kanamaru
Co-Head of Global Business Unit
Yoshihiro Hyakutome
Co-Head of Global Business Unit
Keiichiro Nakamura
Head of Global Markets
Business Unit
Masamichi Koike
177
SMBC GROUP ANNUAL REPORT 2024
Global Markets Business Unit
Planning Dept., Global Markets Business Unit
Board of
Directors
Compensation
Committee
Nomination
Committee
Audit
Committee
Risk
Committee
Sustainability
Committee
Audit
Committee
Office
Group
Management
Committee
Shareholders’
Meeting
Public Relations Dept.
Business Development Dept.
Sustainability Division for Fulfilled Growth *1
Sustainability Planning Dept.
*1
Sustainability Development Dept.
*1
Corporate Planning Dept.
Investor Relations Dept
Productivity Management Dept
Asset & Wealth Management Strategy Dept
Financial Accounting Dept.
Equity Portfolio Management Dept
Tax Planning Dept
IT Planning Dept.
Accounting Service & Planning Dept.
Cybersecurity Management Dept.
Group Business Management Dept
Legal Dept
General Affairs Dept.
Human Resources Dept.
Learning and Development Institute
Diversity, Equity & Inclusion Dept
Global Human Resources Dept
Quality Management Dept.
Digital Strategy Dept.
Silicon Valley Digital Innovation Lab
*2
Data Management Dept.
Risk Management Dept.,
Americas Division
Anti Money Laundering &
Financial Crime Prevention Dept.
Corporate Risk Management Dept.
Risk Management Information Dept.
Credit & Investment Planning Dept.
Environmental and Social Risk
Management Dept
Compliance Dept.
Compliance Dept,
Americas Division
Internal Audit Dept.
Internal Audit Dept,
Americas Division
Operations Planning Dept.
Administrative Services Dept.
Secretariat
Corporate Real Estate
Management Dept
*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
Global Business Unit
Wholesale Business Unit
Retail Business Unit
Sustainable Solution Dept.
*1
Transaction Business Division
*6
Kansai Growth Strategy Dept
Planning Dept., Wholesale Business Unit
Specialized Finance Dept.
Corporate Digital Solution Dept.
*2
Strategic Planning Dept., Global Business Unit
Securities Business Planning Dept., Global Business Unit
Governance Planning Dept., Global Business Unit
Europe, Middle East
and Africa Division
Asia Pacific Division
Asia Business
Development Division
Americas Division
Office of the CEO, Americas Division
Finance & Strategic Planning
Dept., Americas Division
Corporate Treasury Dept.,
Americas Division
Data Management Dept.,
Americas Division
Information Technology Dept.,
Americas Division
Information Security Dept.,
Americas Division
Legal Dept., Americas Division
Human Resources Dept.,
Americas Division
Operations Planning Dept.,
Americas Division
Strategic Planning Dept.,
Europe, Middle East
and Africa Division
Operations Planning Dept.,
Europe, Middle East
and Africa Division
Asia Growing Markets Dept.
*2
Digital Solution Division
*3
Planning Dept., Wealth Management Division
*3
Wealth Management Products Planning Dept.
*3
Channel Strategy Dept.
*3
PRESTIA Business Planning Dept.
*4
Planning Dept., Payments & Consumer Finance Division
*4
Card Loan Dept.
Planning Dept., Retail Business Unit
Retail Risk Management Dept.
*5
Retail Marketing Dept.
*3
Wealth Management Division
*4
Payments & Consumer Finance Division
*5
Retail IT Strategy Dept.
Strategic Planning Dept.,
Asia Pacific Division
Governance Planning Dept.,
Asia Pacific Division
Planning Dept., East Asia
*6 Transaction Business Division
Transaction Business Planning Dept.
Transaction Product Development Dept.
Sumitomo Mitsui Financial Group Organization (as of June 30, 2024)
178
SMBC GROUP ANNUAL REPORT 2024
■ Board of Directors, Directors, Members of the Audit and Supervisory Committee and Executive Officers
(as of June 30, 2024)
BOARD OF DIRECTORS
Chairman of the Board
Makoto Takashima
President and Chief Executive Officer (Representative Director)
Akihiro Fukutome*
Directors and Deputy Presidents (Representative Directors)
Muneo Kanamaru*
Head of Wholesale Banking Unit
Teiko Kudo*
Compliance Dept., Anti Money Laundering & Financial Crime Prevention Dept.
Directors and Senior Managing Executive Officers
Jun Uchikawa*
IT Planning Dept., Cybersecurity Management Dept.,
Data Management Dept.,
Operations Planning Dept., Inter-Market Settlement Dept.
Fumihiko Ito*
Sustainability Division for Fulfilled Growth, Public Relations Dept., Corporate
Planning Dept., Business Development Dept., Sustainability Planning Dept.,
Sustainability Development Dept., Financial Accounting Dept.,
Accounting Service & Planning Dept.
Digital Strategy Dept.
Takashi Kobayashi*
General Affairs Dept., Human Resources Dept.,
Human Resources Development Dept.,
Quality Management Dept., Administrative Services Dept.
Toshihiro Michioka*
Deputy Head of Wholesale Banking Unit (in charge of West Japan)
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, Credit & Investment Planning
Dept., Credit Depts., Americas Division, Europe, Middle East and Africa
Division and Asia Pacific Division, Global Credit 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.
DIRECTORS, MEMBERS OF THE AUDIT AND
SUPERVISORY COMMITTEE
Shuji Yabe
Takayuki Inoue
Michiko Kuboyama (2)
Yoriko Goto (2)
Chikatomo Hodo (2)
Daiken Tsunoda (2)
Toshihiro Isshiki
(2) Ms. Kuboyama, Ms. Goto, Mr. Hodo and Mr. Tsunoda satisfy the requirements for an “outside
director” under the Companies Act.
Sumitomo Mitsui Banking Corporation
179
SMBC GROUP ANNUAL REPORT 2024
EXECUTIVE OFFICERS
Deputy President Executive Officer
Masamichi Koike
Head of Global Markets & Treasury Unit
Senior Managing Executive Officers
Takashi Yamashita
Head of Retail Banking Unit
Yoshihiro Hyakutome
Co-Head of Global Banking Unit
(Head office departments (Global Banking Unit), The Asia Pacific Division)
Hiroyuki Kamimoto
Deputy Head of Wholesale Banking Unit
Head of Global Corporate Banking Division
Keiichiro Nakamura
Co-Head of Global Banking Unit
(The Americas Division, Europe, Middle East and Africa Division)
Akio Isowa
Digital Solution Division, Transaction Business Division
Digital Strategy Dept.
Deputy Head of Wholesale Banking Unit
Hirofumi Otsuka
Head of The Americas Division and President of SMBC Americas Holdings, Inc.
Yukihiro Mabuchi
Deputy Head of Wholesale Banking Unit
Head of Corporate Banking Division
Managing Executive Officers
Katsufumi Uchida
Co-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
Takashi Kakiuchi
Deputy Head of The Asia Pacific Division and Chairman of Sumitomo Mitsui
Banking Corporation (China) Limited
Yasuhiro Shirai
Deputy Head of Global Corporate Banking Division
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. II, VIII and IX)
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 and Functional Head (Head of Verticals)
Hideomi Shigematsu
Deputy Head of Global Corporate Banking Division
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. III and X)
Takeya Sasaki
Deputy Head of Retail Banking Unit
Eiichi Takasaki
Deputy Head of Wholesale Banking Unit
Daiji Nakata
Deputy Head of Retail 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 Retail Banking Unit
Deputy Head of Asia Business Development Division
Ichiro Okawara
Credit & Investment Planning Dept.
Deputy Head of Wholesale Banking Unit
(Corporate Credit Dept., Credit Administration Dept., Trust Services Dept.)
Corporate Research 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
Public Relations Dept., Corporate Planning Dept., Business Development Dept.,
Sustainability Planning Dept., Sustainability Development Dept.,
Financial Accounting Dept., Accounting Service & Planning Dept.,
Digital Strategy Dept.
Kazuya Ikeda
General Manager, Strategic Planning Dept., Global Banking Unit
Arihiro Nagata
Deputy Head of Global Markets & Treasury Unit
Haruyuki Yoshikawa
General Affairs Dept., Quality Management Dept., Compliance Dept.,
Anti Money Laundering & Financial Crime Prevention Dept.
Hideyuki Omokawa
Corporate Planning Dept.
Deputy Head of Retail Banking Unit,
Deputy Head of Wholesale Banking Unit (in charge of investment business),
Deputy Head of Global Banking Unit (in charge of investment business)
Hideki Takamatsu
IT Planning Dept., Cybersecurity Management Dept., Data Management Dept.,
Operations Planning Dept., Inter-Market Settlement Dept.
Tomomi Izawa
Private Advisory Division, Private Banking Division
Deputy Head of Wholesale Banking Unit
Head of Private Banking Division and General Manager, Private Banking Dept.
Kenji Kawabata
Deputy Head of Corporate Advisory Division
Takeshi Kimoto
Head of Asia Business Development Division and Deputy Head of The Asia
Pacific Division
Hitoshi Ryoji
Deputy Head of Global Corporate Banking Division
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. I, V and VII)
Hiroshi Kawamura
Deputy Head of Global Corporate Banking Division
Nagoya Corporate Banking Division (Nagoya Corporate Banking Dept.)
Head of Nagoya Middle Market Banking Division
Tamaki Shibuya
Deputy Head of Retail Banking Unit
Executive Officers
Antony Yates
Deputy Head of Europe, Middle East and Africa Division and President of
SMBC Nikko Capital Markets Limited
Tatsuya Okumura
General Manager, Audit & Supervisory Committee Office
Akihiro Kawara
Chairman and President of SMBC Capital Markets, Inc.
Toshihiko Kato
General Manager, Planning Dept., Retail Banking Unit
Katsuyuki Kubo
Deputy Head of The Americas Division
180
SMBC GROUP ANNUAL REPORT 2024
Naoki Shiraishi
Head of Digital Solution Division
Paul Derek Gibbon
General Manager, Loan Capital Markets Dept., Europe, Middle East and
Africa Division
Naoki Kanbayashi
Internal Audit Dept., Domestic Branches Audit Dept.
Akira Masuda
Deputy Head of Financial Solutions Division
Hideo Uchida
General Manager, Corporate Banking Dept., Asia Pacific Division
Makiko Kaji
General Manager, Tokyo Corporate Banking Dept. VI
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.)
Hirokazu Sakamoto
Head of Higashinihon Daini Middle Market Banking Division
Yoshihiro Takami
General Manager, Structured Finance Dept.
Nobuyuki Takiguchi
Deputy Head of Global Banking Unit
Hiroshi Maeda
General Manager, Quality Management Dept.
Hidetaka Matsuda
Head of Higashinihon Daiyon Middle Market Banking Division
Hajime Yokohata
Country Head of China and President of Sumitomo Mitsui Banking
Corporation (China) Limited
Masaru Ishibashi
General Manager, Planning Dept., Global Markets & Treasury Unit
Hiroshi Ibaraki
Deputy Head of Europe, Middle East and Africa Division
Yunson Du
SMBC Capital Markets, Inc.
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 Planning Dept., Sustainability Development Dept.
Head of Sustainability Division for Fulfilled Growth
Takanori Ueda
General Manager, Shinjuku Nishiguchi Corporate Business Office-I
Shinji Kodera
Head of Higashinihon Daigo Middle Market Banking Division
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
Masahiro Yoshimura
General Manager, Corporate Planning Dept.
Takahiko Watanabe
General Manager, Human Resources Dept.
Lisette Lieberman
Functional Head (US CCO) and General Manager, Compliance Dept.,
Americas Division, Compliance Dept.
Anjali Mohan
Co-General Manager, Legal & Compliance Dept., Asia Pacific Division,
Compliance Dept.
John Nolan
Functional Head (US CAE) and Co-General Manager, Internal Audit Dept.,
Americas Division, Internal Audit Dept.
Elena Paitra
Functional Head (Head of Verticals) and 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
Hiroshi Asami
Head of Higashinihon Daisan Middle Market Banking Division
Jun Okahashi
General Manager, Financial Accounting Dept.
Shinichiro Nishino
Credit Depts., Americas Division, Europe, Middle East and Africa Division and
Asia Pacific Division, Global Credit Dept.
Taisuke Naito
General Manager, Operations Planning Dept.
Kenji Irie
General Manager, Sustainability Planning Dept.
Kosuke Uchida
General Manager, Strategic Corporate Banking Dept.
Naoki Endo
Head of Transaction Business Division and General Manager,
Transaction Business Planning Dept.
Masanori Fujima
General Manager, Sustainable Solution Dept.
Hisa Matsuda
General Manager, Hibiya Corporate Business Office-II
Koichiro Yui
Country Head of Thailand and General Manager, Bangkok Branch
Norimitsu Kobayashi
General Manager, Business Development Dept.
Yoshimi Nishikubo
General Manager, Yokohama Area Main Office
Koichi Nunami
General Manager, Strategic Planning Dept., Europe, Middle East and Africa
Division
Seiya Fujimori
General Manager, Corporate Risk Management Dept.
Yoshihiro Miyake
General Manager, Osaka Corporate Banking Dept. I
Osahiro Yamamoto
General Manager, Planning Dept., Global Markets & Treasury Unit
Carsten Stoehr
Deputy Head of The Asia Pacific Division
Salim Zaman
Co-General Manager, Global Markets & Treasury Dept., Asia Pacific Division
Owen Verrier-Jones
Functional Head (Head of Verticals) and General Manager,
Specialised Products Dept., Europe, Middle East and Africa Division
Martin Coulson
Co-General Manager, Internal Audit Dept., Europe, Middle East and Africa
Division, Internal Audit Dept.
181
SMBC GROUP ANNUAL REPORT 2024
Public Relations Dept.
Corporate Planning Dept.
Financial Accounting Dept.
Productivity Management Dept.
Asset & Wealth Management Strategy Dept.
Equity Portfolio Management Dept.
Tax Planning Dept.
IT Planning Dept.
Accounting Service and Planning Dept.
Quality Management Dept.
Customer Relations Dept.
Human Resources Dept.
Human Resources Development Dept.
Digital Solution Division
Data Management Dept.
Digital Strategy Dept.
*2
*1
*1
*1
*2
Learning and Development Institute
Counseling Dept.
Cybersecurity Management Dept.
Group Business Management Dept.
Legal Dept.
Diversity, Equity & Inclusion Dept.
Global Human Resources Dept.
Compliance Dept.
Internal Audit Dept.
Domestic Branches Audit Dept.
Business Development Dept.
Sustainability Division for Fulfilled Growth
Sustainability Planning Dept.
Sustainability Development Dept.
Corporate Staff Unit
Compliance Unit
Corporate Risk Management Dept.
Risk Management Dept., Americas Division
Risk Management Information Dept.
Risk Management Dept.,
Europe, Middle East and Africa Division
Risk Management Dept., Asia Pacific Division
Risk Management Dept., East Asia Division
Credit & Investment Planning Dept.
Environmental and Social Risk Management Dept.
Credit Dept., Americas Division
Credit Dept., Asia Pacific Division
Global Credit Dept.
Anti Money Laundering &
Financial Crime Prevention Dept.
Credit Dept., Europe, Middle East and Africa Division
LBO Credit Dept.,
Europe, Middle East and Africa Division
Risk Management Unit
Administrative Services Dept.
Secretariat
Corporate Real Estate Management Dept.
Operations Planning Dept.
Inter-Market Settlement Dept.
Corporate Services Unit
Internal Audit Unit
Retail
Banking Unit
Audit and Supervisory
Committee Office
Audit and Supervisory
Committee
*1 Belongs to Sustainability Division.
*2 Belongs to Digital Solutions Division.
*3 Belongs to Corporate Advisory Division.
*4 Belongs to Financial Solutions Division.
*5 Belongs to Private Banking Division.
*6 Belongs to Global Banking Unit and Wholesale Banking Unit
*7 Belongs to Asia Business Development Division.
*8
*9
*10 Belongs to Retail Banking Unit, Wholesale Banking Unit
and Global Banking Unit.
General Affairs Dept.
Shareholders’
Meeting
Board of
Directors
Management
Committee
Wholesale
Banking Unit
Global
Banking Unit
Global Markets and
Treasury Unit
Succession Advisory Business Dept.
Human Resource Advisory Business Dept.
Defined Contribution Dept.
Global Transaction Banking Products
Development Dept.
Private Advisory Division
Transaction Business Planning Dept.
Transaction Business Division
Transaction Banking Dept.
Transaction Products Development Dept.
Global Business Promotion Dept.
Global Transaction Banking Dept.
Global Advisory Dept.
Internal Audit Dept., Americas Division
Credit Review Dept., Americas Division
Internal Audit Dept., Europe, Middle East
and Africa Division
Internal Audit Dept., Asia Pacific Division
Compliance Dept., Americas Division
Compliance Dept., Europe, Middle East
and Africa Division
Legal and Compliance Dept.,
Asia Pacific Division
SMBC Organization
(as of June 30, 2024)
182
SMBC GROUP ANNUAL REPORT 2024
Planning Dept., Retail Banking Unit
Next W-ing Project Dept.
Area Support Dept.
Financial Consulting Dept., Retail Banking Unit
Area Support Dept.
Retail Marketing Dept., Retail Banking Unit
Kansai Growth Strategy Dept.
Group Solution Promotion Dept.
Global Corporate Banking Dept.
Wholesale Business Control Dept.
Small and Medium Enterprises Planning Dept.
Middle Market Facilitating Financing Dept.
Card Loan Dept.
Retail Credit Dept.
Retail IT Strategy Dept.
Loan Business Dept.
Channel Strategy Dept.
Business Promotion Dept., Retail Banking Unit
PRESTIA Business Planning Dept.
Retail Compliance Dept.
Life Shift Solution Dept.
Area Main Office
Store Sales Dept.
Branch
Private Wealth Dept.
Store
Securities Sales Dept.
PRESTIA Sales Dept.
Corporate Banking Dept.
E-Transaction Business Dept.
Departments of Europe, Middle East
and Africa Division
Global Trade Finance Dept.
Departments of Americas Division
Global FIG Dept.
Global Client Business Dept.
Transportation Dept.
Global Transaction Office
E-Transaction Business Dept.
Branches / Representative Offices in
Asia Pacific Division
Remote Marketing Dept.
Consumer Loan Promotion Office
Corporate Business Office
Public Institutions Business Office
Real Estate Corporate Business Office
Real Estate Finance Corporate Business Office
Credit Business Office
Private Banking Dept.
Global Transaction Office
*10
*7
*7
*2
*3
*3
*3
*3
*3
*3
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*4
*5
*5
*4, 6
*1, 6
*10
*10
*10
Strategic Finance Promotion Office
Remote Transaction Marketing Dept.
Call Center
Consumer Finance Promotion Office
Retail Credit Business Office
Global Transaction Office
E-Transaction Business Dept.
Inheritance Advisory Business Dept.
*10
*10
Americas Division
Asia Pacific Division
Europe, Middle East
and Africa Division
Planning Dept., Wholesale Banking Unit
Strategic Corporate Business Dept.
Strategic Planning Dept., Global Banking Unit
Aviation & Maritime Strategy Dept., Global Banking Unit
Corporate Treasury Dept., Americas Division
Data Management Dept., Americas Division
IT Planning Dept., Asia Pacific Division
Governance Planning Dept., Asia Pacific Division
Strategic Planning Dept., Europe, Middle East and Africa Division
Securities Business Planning Dept., Global Banking Unit
Governance Planning Dept., Global Banking Unit
Office of the CEO, Americas Division
Finance & Strategic Planning Dept., Americas Division
Information Technology Dept., Americas Division
Information Security Dept., Americas Division
Legal Dept., Americas Division
Human Resources Dept., Americas Division
Operations Planning Dept., Americas Division
Planning Dept., East Asia
Asia Business Development Division
Asia Growing Markets Dept.
Planning Dept., Global Markets & Treasury Unit
Treasury Dept.
Global Investment Dept.
Portfolio Investment Dept.
Global Markets Trading Dept.
Global Markets Marketing Dept.
Global Markets Solution Dept.
Global Markets & Treasury Dept., Asia Pacific Division
Global Markets & Treasury Dept., Europe, Middle East and Africa Division
Global Markets & Treasury Dept., East Asia
*8
*9
Operations Service Branch
Public Institutions Operations Office
Operations Service Office
Souzoku-office Sub-Branch
Zaikei-Office
Middle Market Banking
Division
Small and Medium
Enterprises Banking Division
Corporate Banking
Division
Tokyo Corporate Banking Division
Osaka Corporate Banking Division
Nagoya Corporate Banking Division
Private Advisory Division
Transaction Business Division
Global Corporate
Banking Division
Area Corporate Office
Area Corporate Credit Business Office
Retail Facilitating Financing Dept.
Retail Risk Management Dept.
Retail Anti Money Laundering Dept.
Strategic Planning Dept., Asia Pacific
Human Capital Management Dept., Asia Pacific Division
Asia Innovation Centre
Global Supply Chain Finance Dept.
Operations Planning Dept., Europe, Middle East and Africa Division
IT & Security Planning Dept, Europe, Middle East and Africa Division
Structured Finance Credit Dept.
Public & Financial Institutions Banking Dept.
Corporate Credit Dept.
Credit Dept., Wholesale Banking Unit
Credit Administration Dept.
Growth Business Development Dept.
M & A Advisory Services Dept.
Corporate Digital Solution Dept.
Advisory Dept. I
Corporate Advisory Division
Advisory Dept. II
Advisory Dept. III
Capital Market Dept.
Corporate Research Dept.
Financial Solutions Division
Structured Finance Dept.
Strategic Corporate Banking Dept.
Distribution Dept.
Real Estate Finance Dept.
Specialized Finance Dept.
Private Banking Division
Private Banking Planning Dept.
Sustainable Solution Dept.
Merchant Banking Dept.
Asset Finance Dept.
Investment Banking Services Dept.
LBO Finance Dept.
Debt Finance Dept.
Trust Business Operations Dept.
Trust Services Dept.
eFX Business Promotion Dept.
183
SMBC GROUP ANNUAL REPORT 2024
■ Principal Domestic Subsidiaries
Note: Figures in parentheses ( ) in the voting rights columns indicate voting rights held indirectly via subsidiaries and affiliates.
Company Name
Issued Capital
(Millions of Yen)
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
Sumitomo Mitsui Banking Corporation
1,770,996
100
—
Jun. 6, 1996
Commercial banking
SMBC Trust Bank Ltd.
87,550
0
(100)
100
Feb. 25, 1986
Trust service and commercial banking
SMBC Nikko Securities Inc.
135,000
100
—
Jun. 15, 2009
Securities
Sumitomo Mitsui Card Company, Limited
34,000
100
—
Dec. 26, 1967
Credit card services
SMBC Finance Service Co., Ltd.
82,843
0
(100)
—
Sep. 11, 1950
Credit card, installment businesses, and
transaction businesses
SMBC Consumer Finance Co., Ltd.
140,737
100
—
Mar. 20, 1962
Consumer loans
The Japan Research Institute, Limited
10,000
100
—
Nov. 1, 2002
System engineering, data processing,
management consulting, and economic research
Sumitomo Mitsui DS Asset Management
Company, Limited
2,000
50.12
—
Dec. 1, 2002
Investment management
Nikko Global Wrap Ltd.
1,499
100
—
Dec. 20, 2002
Investment management services,
investment advisory services
SMBC Guarantee Co., Ltd.
187,720
0
(100)
—
Jul. 14, 1976
Credit guarantee
JAIS, Limited
450
0
(100)
—
Oct. 16, 1990
System engineering and data processing
Alternative Investment Capital Limited
400
0
(60)
60
Jul. 15, 2002
Investment management and advisory services
BPORTUS Co., Ltd.
100
64.40
—
Jul. 15, 2023
Data processing service and e-trading consulting
plus medi corp.
100
96.01
—
Dec. 15, 2016
Information services
SMBC VALUE CREATION CO., LTD.
495
0
(100)
100
Feb. 20, 2019
Data processing service and e-trading consulting
SMBC GMO PAYMENT, Inc.
490
0
(60)
10
Nov. 2, 2015
Settlement agent
SMBC Venture Capital Management Co.,Ltd.
643
0
(40)
40
Jul. 1, 2010
Management consulting services, investment
management services
SMBC Venture Capital Co., Ltd.
500
0
(100)
0
(100)
Sep. 22, 2005
Venture capital
SMBC Consulting Co., Ltd.
1,100
0
(100)
50
(1.63)
May 1, 1981
Management consulting and seminar
organizer
Japan Pension Navigator Co., Ltd.
1,600
0
(69.71)
69.71
Sep. 21, 2000
Defined contribution plan administrator
SMBC ReSolutions Inc.
10
100
—
Apr. 1, 2020
Real estate management
Plari Town, Inc.
100
100
—
May 26, 2020
Platform management and operation
SMBC Servicer Co., Ltd.
1,000
0
(100)
100
Mar. 11, 1999
Servicer
SMBC Electronic Monetary Claims
Recording Co., Ltd.
500
0
(100)
100
Apr. 16, 2009
Electronic monetary claims recording
SMBC Staff Service Co., Ltd.
90
0
(100)
100
Jul. 15, 1982
Temp worker dispatch services, fee-based
headhunting services and contracting of human
resources-related procedures
SMBC Learning Support Co., Ltd.
10
0
(100)
100
May 27, 1998
Training services
SMBC PERSONNEL SUPPORT CO., LTD.
10
0
(100)
100
Apr. 15, 2002
HR related clerical services
SMBC OPERATION SERVICE CO., LTD.
30
0
(100)
100
Jan. 31, 1996
Banking clerical work
SMBC Green Service Co., Ltd.
30
0
(100)
100
Mar. 15, 1990
Contract preparation of deposit survey responses
SMBC Real Estate Appraisal Service Co., Ltd.
30
0
(100)
100
Feb. 1, 1984
Collateral real estate survey and appraisal
SMBC REIT Management Co., Ltd.
250
0
(80)
80
Mar. 10, 2020
Asset management
SMBC Capital Partners Co., Ltd.
100
0
(100)
100
Feb. 10, 2020
Investments
Polarify, Inc.
100
76.47
—
May 1, 2017
Biometric authentication services
(Polarify biometric authentication services) and
e-KYC service (Polarify e-KYC)
SMBC CLOUDSIGN, Inc.
50
51
—
Oct. 1, 2019
Cloud-based electronic contract services
SMBC Wevox, Inc.
50
55
—
Oct. 2, 2023
Support services for improving companies’
organizational capabilities and corporate value, etc.
SMBC Digital Marketing, Ltd.
100
66
—
Jul. 8, 2021
Advertising and marketing
SMBC HUMAN CAREER Co., Ltd.
150
0
(100)
100
Mar. 1, 1987
Job introduction and staffing
Principal Subsidiaries and Affiliates (as of March 31, 2024)
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.
184
SMBC GROUP ANNUAL REPORT 2024
■ Principal Overseas Subsidiaries
Company Name
Country
Issued Capital
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
SMBC Bank International plc
U.K.
US$3,200 million
0
(100)
100
Mar. 3, 2003
Commercial banking
Sumitomo Mitsui Banking Corporation
(China) Limited
China
CNY10.0 billion
0
(100)
100
Apr. 27, 2009
Commercial banking
PT Bank BTPN Tbk
Indonesia
Rp212,918 million
0
(91.04)
91.04
Feb. 5, 1958
Commercial banking
SMBC Americas Holdings, Inc.
U.S.A.
US$2,775
0
(100)
100
Aug. 8, 1990
Management of the US BHC
and US BHC subsidiaries
SMBC MANUBANK
U.S.A.
US$630.786 million
0
(100)
0
(100)
Jun. 26, 1962
Commercial banking
Banco Sumitomo Mitsui
Brasileiro S.A.
Brazil
R$1,675.699 million
0
(100)
100
Oct. 6, 1958
Commercial banking
JSC Sumitomo Mitsui Rus Bank
Russia
RUB6.4 billion
0
(100)
99
(1)
May 8, 2009
Commercial banking
SMBC Bank EU AG
Germany
€5,100 million
0
(100)
100
Nov. 23, 2017
Commercial banking,
securities business,
derivatives and investments,
financial intermediation
services, ancillary services
Sumitomo Mitsui Banking Corporation
Malaysia Berhad
Malaysia
MYR2,452 million
0
(100)
100
Dec. 22, 2010
Commercial banking
SMBC Leasing and Finance, Inc.
U.S.A.
US$4,350
0
(100)
0
(100)
Nov. 9, 1990
Leasing, investments,
deferred payment services
SMBC Nikko Securities America, Inc.
U.S.A.
US$655
0
(100)
0
(80)
Aug. 8, 1990
Securities, investments
SMBC Nikko Capital Markets Limited
U.K.
US$1,138 million
0
(100)
84.84
Mar. 13, 1990
Swap-related services,
investments and loans,
financial intermediary,
incidental, securities-related,
and M&A advisory services
SMBC Capital Markets, Inc.
U.S.A.
US$100
0
(100)
0
(100)
Dec. 4, 1986
Derivatives and investments,
leasing, securities business
TT International Asset Management Ltd
U.K.
£92 million
0
(100)
—
Feb. 28, 2020
Investment management
SMBC Asset Management Services
(UK) Limited
U.K.
£240 million
100
—
Oct. 16, 2019
Stock holding
SMBC DIP Limited
Cayman Islands
US$1 million
0
(100)
100
Mar. 16, 2005
Loans, buying /
selling of monetary claims
SFVI Limited
British Virgin Islands
US$9,600
0
(100)
100
Jul. 30, 1997
Investments
SMBC, S.A.P.I. DE C.V.,
SOFOM, E.N.R.
Mexico
MXN2,660 million
0
(100)
100
Sep. 18, 2014
Money lending business,
derivatives business and
services related to leasing
SMBC International Finance N.V.
Curaçao
US$200,000
0
(100)
100
Jun. 25, 1990
Finance
Sumitomo Mitsui Finance Dublin Limited
Ireland
US$12 million
0
(100)
100
Sep. 19, 1989
Finance
Sakura Finance Asia Limited
Hong Kong
US$65.5 million
0
(100)
100
Oct. 17, 1977
Investments
SMBC Derivative Products Limited
U.K.
US$200 million
0
(100)
0
(100)
Apr. 18, 1995
Derivatives and investments
SMBC Advisory Services Saudi Arabia LLC
Saudi Arabia
SAR18,000,000
0
(100)
100
Dec. 29, 2017
Consulting, research and
study services
SMFG India Credit Company Limited
India
22,467 million rupees
100
—
Aug. 30, 1994
Lending business
PT Oto Multiartha
Indonesia
Rp928,707 million
0
(51)
0
(51)
Mar. 28, 1994
Automotive financing
PT Summit Oto Finance
Indonesia
Rp2,442,060 million
0
(51)
0
(51)
Sep. 20, 1990
Motorcycle financing
(Note 2) Fullerton India Credit Company Limited changed its company name to SMFG India Credit Company Limited on May 11, 2023.
185
SMBC GROUP ANNUAL REPORT 2024
■ Principal Affiliates
Company Name
Issued Capital
(Millions of Yen)
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
PayPay Bank Corporation
72,216
0
(46.57)
46.57
Sep. 19, 2000
Commercial banking
ACLEDA Bank Plc.
US$433 million
0
(18.06)
18.06
Dec. 1, 2003
Commercial banking
The Bank of East Asia, Limited
HKD41,915 million
0
(21.72)
21.72
Nov. 14, 1918
Commercial banking
Sumitomo Mitsui Finance and Leasing
Company, Limited
15,000
50
—
Feb. 4, 1963
Leasing
Sumitomo Mitsui Auto Service Company, Limited
13,636
26.16 (59.56)
—
Feb. 21, 1981
Leasing
SMBC Aviation Capital Limited
US$2,249 million
0
(32)
32
Aug. 14, 1997
Leasing
Osaka Digital Exchange Co.,Ltd.
300
20
—
Apr. 1, 2021
Proprietary Trading System (PTS)
Management
Vietnam Prosperity Joint-Stock Commercial Bank
VND103,331,782 million
0
(15)
15
Oct. 20, 2023
Commercial Banking
VPBank SMBC Finance Company Limited
VND10,928,000 million
0
(49)
—
Oct. 28, 2021
Consumer finance business
POCKET CARD CO., LTD.
14,374
0
(20)
20
May 25, 1982
Credit card services
JSOL CORPORATION
5,000
0
(50)
—
Jul. 3, 2006
System engineering and data
processing
Sakura Information Systems Co., Ltd.
600
0
(49)
49
Nov. 29, 1972
System engineering and data
processing
SAKURA KCS Corporation
2,054
0
(29.77)
28.52
(1.25)
Mar. 29, 1969
System engineering and data
processing
China Post & Capital Fund Management Co., Ltd.
CNY304 million
0
(23.67)
23.67
Apr. 24, 2012
Investment management
Spring Infrastructure Capital Co., Ltd.
250
0
(24.50)
24.50
Jul. 31, 2018
Investments
BrainCell, Inc.
300
49
—
Jun. 1, 2018
Marketing
Cotra Ltd.
1,700
0
(25)
25
Jul. 1, 2021
Planning and operation of fund
settlement infrastructure
Rizal Commercial Banking Corporation
PHP24,198 million
0
(20)
20
Sep. 23, 1960
Commercial Banking
CCC MK HOLDINGS Co.,Ltd.
100
40
(20)
—
Oct. 1, 2012
V POINT business and advertising
and marketing services
186
SMBC GROUP ANNUAL REPORT 2024
Asia and Oceania
SMBC Branches and
Representative Offices
Hong Kong Branch
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
Hong Kong Branch Quarry Bay Office
9F, Two Taikoo Place, 979 King’s Road,
Quarry Bay, 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
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
New Delhi Branch
2nd Floor, Worldmark3, Hospitality
District, Aerocity, New Delhi 110037
Tel: 91 (11) 4768-9111
SMBC Principal Subsidiaries/
Affiliates
SMFG Network
Sumitomo Mitsui Banking Corporation
(China) Limited Head Office (Shanghai)
12F, RoomT10, T50, T70,13F,
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
International Directory (as of June 30, 2024)
187
SMBC GROUP ANNUAL REPORT 2024
Sumitomo Mitsui Banking Corporation
(China) Limited Shenzhen Branch
23/F, Tower Two, Kerry Plaza,
1 Zhongxinsi Road, Futian District,
Shenzhen 518048,
The People’s Republic of China
Tel: 86 (755) 2383-0980
Sumitomo Mitsui Banking Corporation
(China) Limited Shenyang Branch
1606, 1 Building, Forum 66, No.1
Qingnian Street, Shenhe District,
Shenyang, Liaoning Province,
The People’s Republic of China
Tel: 86 (24) 3128-7000
Sumitomo Mitsui Banking Corporation
(China) Limited Suzhou Branch
12F, SND International Commerce Tower,
No.28 Shishan Road, Suzhou New
District, Suzhou, Jiangsu 215011,
The People’s Republic of China
Tel: 86 (512) 6606-6500
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 T30, 13F, 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
Room7F01, 5 Building, Kingboard
Square, No.269 Tongxie Road,
Changning District, Shanghai 200335,
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
8th 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 (IFC Office)
Suites 807-811, 8/F, One International
Finance Centre, 1 Harbour View Street,
Central, Hong Kong
Tel: 852-2842-1111
SMBC Nikko Securities (Hong Kong)
Limited (TTP Office)
Suites 904-905, 9/F, Two Taikoo Place,
979 King’s Road, Quarry Bay, Hong Kong
Tel: 852-2842-1111
SMBC Nikko Securities (Hong Kong)
Limited (Sydney Office)
Level 35, The Chifley Tower,
2 Chifley Square, Sydney, NSW 2000,
Australia
Tel: 612-9376-1895
SMBC Nikko Securities (Singapore)
Pte. Ltd.
88 Market Street #34-02 CapitaSpring
Singapore 048948
Tel: 65-6690-4411
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
188
SMBC GROUP ANNUAL REPORT 2024
ACLEDA Bank Plc.
#61, Preah Monivong Blvd.,
Sangkat Srah Chork, Khan Daun Penh,
Phnom Penh, Kingdom of Cambodia
Tel: 855 (23) 998-777
Rizal Commercial Banking
Corporation Yuchengco Tower 1, RCBC
Plaza,6819 Ayala Avenue, Makati City
Vietnam Prosperity Joint-Stock
Commercial Bank
VPBank Tower, 89 Lang Ha street,
Lang Ha ward, Dong Da district, Hanoi,
Vietnam
VPBank SMBC Finance Company
Limited
2nd Floor, REE Tower, 9 Doan Van Bo,
Ward 13, Dist.4, HCMC, Vietnam
SMFG India Credit Company Limited
Megh Towers, Third Floor, Old No-307,
New No-165, Poonamallee High Road,
Maduravoyal, Chennai Tamil Nadu
600095, India
The Japan Research Institute
(Shanghai) Solution Co., Ltd.
7th Floor, Building 6, Jiantao Plaza,
No. 269 Tongxie Road, Changning District,
Shanghai 200335
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
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
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.
12/F Central Plaza,18 Harbour Road,
Wanchai, Hong Kong
Tel: 852 (3199) 1000
Liang Jing Co., Ltd.
9th Floor No.6, Sec 3, Min Chuan E.Rd.,
Taipei, Taiwan 104, 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, 28/F, Tower A, Kingkey 100
Building, No.5016 Shennan East Road,
Luohu District, Shenzhen 518001,
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, No.3012 Renmin South Road,
Luoho District, Shenzhen 518005,
The People’s Republic of China
Tel: 86 (755) 3698-5100
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 ASSET MANAGEMENT
(TAIWAN) CO., LTD.
9th Floor No.6, Sec 3, Min Chuan E.Rd.,
Taipei, Taiwan 104, 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
Suites 901 & 902, 9th Floor, Two Taikoo
Place, Taikoo Place,979 King’s Road,
Quarry Bay, 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
189
SMBC GROUP ANNUAL REPORT 2024
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
Washington D.C. Representative Office
601 13th Street, N.W.,
Washington D.C., U.S.A.
Tel: 1 (212) 224-4000
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
SMBC MANUBANK
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.
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
190
SMBC GROUP ANNUAL REPORT 2024
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 No1.
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, International Financial
Services Centre, Custom House Docks,
Dublin 1, Ireland
Tel: 353 (1) 670-0066
JRI Europe, Limited
100 Liverpool Street, London, EC2M 2AT
8 Harbour Exchange Square,
London E14 9GE
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
Fitzwilliam 28, Fitzwilliam Street Lower,
Dublin 2, D02 KF20, 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) 4507-1000
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
Fitzwilliam 28, Fitzwilliam Street Lower,
Dublin 2, D02 KF20, Ireland
SMBC Aero Engine Lease B.V.
World Trade Center Tower Eight,
16th floor, Strawinskylaan 1639, 1077 XX
Amsterdam, the Netherlands
Tel: 31-20-705-4980
SMFL LCI Helicopters Limited
8th Floor, North Dock Two,
93/94 North Wall Quay, Dublin,
D01 V8Y6, Ireland
DMG MORI Finance GmbH
Rita-Maiburg-Strasse 40, 70794
Filderstadt, Germany
Tel: 49 711 34 24 4 0-0
191
SMBC GROUP ANNUAL REPORT 2024
JSC Sumitomo Mitsui Rus Bank
GLOBAL NETWORK
SMBC Bank
International plc
SMBC Bank
International plc
Paris Branch
SMBC Bank EU AG
Paris Branch
SMBC Bank EU AG Milan Branch
Istanbul Representative Office
Brussels Branch
SMBC Bank EU AG
SMBC Bank EU AG
Amsterdam Branch
Düsseldorf Branch
SMBC Bank EU AG Düsseldorf Branch
SMBC Bank EU AG
Madrid Branch
SMBC Bank EU AG Prague Branch
Tehran Representative Office
New Delhi Branch
DIFC Branch-Dubai
Doha QFC Office
SMBC Advisory Services Saudi Arabia LLC
Mumbai Branch
SMFG India Credit
Company Limited
Chennai Branch
Abu Dhabi Representative Office
Cairo Representative Office
Johannesburg Representative Office
Sumitomo Mitsui Finance
Dublin Limited
SMBC Aviation
Capital Limited
Sydney Branch
Perth Branch
SMBC Nikko Capital
Markets Limited
London Branch
SMBC Leasing (UK) Limited
Asia and Oceania
■ Sumitomo Mitsui Banking Corporation (China) Limited
Head Office (Shanghai)
■ Sumitomo Mitsui Banking Corporation (China) Limited
Guangzhou Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Hangzhou Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Chongqing Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shenzhen Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shenyang Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Suzhou Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Dalian Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Tianjin Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Beijing Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Kunshan Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shanghai Pilot Free Trade Zone Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shanghai Puxi Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Changshu Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Suzhou Industrial Park Sub-Branch
■ PT Bank BTPN Tbk
■ Sumitomo Mitsui Banking Corporation Malaysia Berhad
■ Hong Kong Branch
■ Hong Kong Branch Kowloon Office
■ Hong Kong Branch Quarry Bay Office
■ Taipei Branch
■ Seoul Branch
■ Singapore Branch
■ Sydney Branch
■ Perth Branch
■ Mumbai Branch
■ New Delhi Branch
■ Chennai Branch
■ Bangkok Branch
■ Chonburi Branch
■ Ho Chi Minh City Branch
■ Hanoi Branch
■ Manila Branch
■ Yangon Branch
■ Yangon Branch Thilawa Front Office
■ Labuan Branch
■ Labuan Branch Kuala Lumpur Office
■ Phnom Penh Representative Office
■ SMBC Capital Markets (Asia) Limited
■ The Bank of East Asia, Limited
■ PT Oto Multiartha
■ PT Summit Oto Finance
■ ACLEDA Bank Plc
■ SMFG India Credit Company Limited
■ Vietnam Prosperity Joint-Stock Commercial Bank
■ Rizal Commercial Banking Corporation
■ VPBank SMBC Finance Company Limited
192
SMBC GROUP ANNUAL REPORT 2024
Houston Representative Ofce
Dallas Representative Ofce
SMBC Leasing and Finance, Inc.
SMBC Nikko Securities America, Inc.
Europe, Middle East and Africa
The Americas
Overseas service network (as of June 30, 2024)
Total: 90
(including banking subsidiaries and their branches/
sub-branches/rep. offices)
Consolidated subsidiary PT Bank BTPN Tbk has 274 offices (as of June 30, 2024)
SMFG India Credit Co, Ltd has 981 offices (as of March 31, 2024)
Seoul
Branch
Hong Kong Branch
Kowloon Office
Guangzhou
Branch
Taipei Branch
Rizal Commercial
Banking Corporation
Head Office (Shanghai)
Shanghai Puxi Sub-Branch
Shanghai Pilot Free
Trade Zone Sub-Branch
Hangzhou
Branch
Suzhou Branch
Kunshan Sub-Branch
Quarry Bay Office
SMBC Capital Markets (Asia) Limited
Tianjin Branch
Beijing Branch
Shenyang Branch
Singapore Branch
Sumitomo Mitsui Banking
Corporation Malaysia Berhad
Labuan Branch
Bangkok Branch
Ho Chi Minh City Branch
VPBank SMBC Finance Company Limited
Phnom Penh Representative Office
ACLEDA Bank Plc.
Thilawa Front Office
Yangon Branch
Mexico City Representative Office
SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
Leon Representative Office
Chonburi Branch
Chongqing Branch
Dalian
Branch
Hanoi Branch
Vietnam Prosperity Joint-Stock
Commercial Bank
Shenzhen Branch
Manila Branch
Suzhou Industrial Park Sub-Branch
Changshu Sub-Branch
New York Branch
Los Angeles Branch
San Francisco Branch
Silicon Valley Representative Ofce
SMBC MANUBANK
Canada Branch
Washington D.C. Representative Ofce
Bogota Representative Ofce
Lima Representative Ofce
Banco Sumitomo Mitsui Brasileiro S.A.
Santiago Representative Office
Chicago Representative
Office
SMBC Capital Markets, Inc.
SMBC Americas Holdings, Inc.
SMBC Nikko Securities Canada, Inc.
White Plains Representative Ofce
Kuala Lumpur Office
PT Bank BTPN Tbk
PT Oto Multiartha
PT Summit Oto Finance
Cayman Branch
Indicates branch or sub-branch of
Sumitomo Mitsui Banking Corporation (China) Limited
■ New York Branch
■ San Francisco Branch
■ Los Angeles Branch
■ Canada Branch
■ Cayman Branch
■ Chicago Representative Office
■ Dallas Representative Office
■ Houston Representative Office
■ Silicon Valley Representative Office
■ White Plains Representative Office
■ Washington DC Representative Office
■ Mexico City Representative Office
■ Leon Representative Office
■ Santiago Representative Office
■ Bogota Representative Office
■ Lima Representative Office
■ SMBC MANUBANK
■ Banco Sumitomo Mitsui Brasileiro SA
■ SMBC Capital Markets, Inc
■ SMBC Nikko Securities America, Inc
■ SMBC Nikko Securities Canada, Inc
■ SMBC Leasing and Finance, Inc
■ SMBC, SAPI DE CV, SOFOM, ENR
■ SMBC Americas Holdings, Inc
■ SMBC Bank International plc
■ SMBC Bank International plc Paris Branch
■ SMBC Bank EU AG
■ SMBC Bank EU AG Amsterdam Branch
■ SMBC Bank EU AG Dublin Branch
■ SMBC Bank EU AG Düsseldorf Branch
■ SMBC Bank EU AG Paris Branch
■ SMBC Bank EU AG Prague Branch
■ SMBC Bank EU AG Madrid Branch
■ SMBC Bank EU AG Milan Branch
■ London Branch
■ Düsseldorf Branch
■ Brussels Branch
■ DIFC Branch-Dubai
■ Abu Dhabi Representative Office
■ Istanbul Representative Office
■ Doha QFC Office
■ Johannesburg Representative Office
■ Cairo Representative Office
■ Tehran Representative Office
■ JSC Sumitomo Mitsui Rus Bank
■ SMBC Nikko Capital Markets Limited
■ Sumitomo Mitsui Finance Dublin Limited
■ SMBC Aviation Capital Limited
■ SMBC Advisory Services Saudi Arabia LLC
■ SMBC Leasing (UK) Limited
The Bank of East Asia, Limited
193
SMBC GROUP ANNUAL REPORT 2024
194
SMBC GROUP ANNUAL REPORT 2024
195
SMBC GROUP ANNUAL REPORT 2024
Appendix II
Financial Data
Sumitomo Mitsui Financial Group
Financial Highlights
196
Compensation
Sumitomo Mitsui Financial Group
Compensation (Consolidated)
318
SMBC
Compensation
322
SMBC
Financial Highlights
286
CONTENTS
Basel III Information
Sumitomo Mitsui Financial Group
Capital Ratio and Leverage Ratio
Information (Consolidated)
197
Countercyclical buffer requirement by
country or region
273
Indicators for assessing Global Systemically
Important Banks (G-SIBs)
274
TLAC information
278
Liquidity Coverage Ratio Information
(Consolidated)
282
Net Stable Funding Ratio Information
(Consolidated)
284
Basel III Information
SMBC
Capital Ratio and Leverage Ratio
Information (Consolidated)
287
Liquidity Coverage Ratio Information
(Consolidated)
298
Net Stable Funding Ratio Information
(Consolidated)
300
Capital Ratio and Leverage Ratio Information
(Non-consolidated)
302
Liquidity Coverage Ratio Information (Non-
consolidated)
312
Net Stable Funding Ratio Information (Non-
consolidated)
314
197
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
Basel III Information
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: 175
Please refer to “Principal Subsidiaries and Affiliates” on page 184 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 standardised approach for calculating the operational risk equivalent amount.
Capital Ratio and Leverage Ratio Information (Consolidated)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
196
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
Sumitomo Mitsui Financial Group (Consolidated)
Millions of yen
Year ended March 31
2024
2023
2022
2021
2020
For the Year:
Ordinary income �����������������������������������������������������������
¥ 9,353,590
¥ 6,142,155
¥ 4,111,127
¥ 3,902,307
¥ 4,591,873
Ordinary profit ��������������������������������������������������������������
1,466,128
1,160,930
1,040,621
711,018
932,064
Profit attributable to owners of parent �������������������������
962,946
805,842
706,631
512,812
703,883
Comprehensive income �����������������������������������������������
2,629,723
1,031,712
561,887
1,465,014
372,971
At Year-End:
Total net assets ������������������������������������������������������������
¥ 14,799,967
¥ 12,791,106
¥ 12,197,331
¥ 11,899,046
¥ 10,784,903
Total assets ������������������������������������������������������������������
295,236,701
270,428,564
257,704,625
242,584,308
219,863,518
Total capital ratio (BIS guidelines) ��������������������������������
15.29%
15�98%
16�56%
18�61%
18�75%
Tier 1 capital ratio (BIS guidelines) �������������������������������
14.33%
14�94%
15�46%
16�96%
16�63%
Common equity Tier 1 capital ratio
(BIS guidelines) ����������������������������������������������������������
12.91%
14�02%
14�45%
16�00%
15�55%
Number of employees ��������������������������������������������������
120,373
105,955
101,023
86,781
86,443
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 the
fiscal year ended March 31, 2021 and the change in accounting policies is applied retroactively for the fiscal year ended March 31, 2020. As a result,
comparing before and after the retroactive application, ordinary income decreased by 722,440 million yen.
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/cy2024annu_eng_smfg�html
199
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, except percentages)
Basel III
Template No. Items
a
b
c
As of March
31, 2024
As of March
31, 2023
Reference
to Template
CC2
Additional Tier 1 capital: instruments (3)
30
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 subscription rights and stock acquisition rights to Additional Tier 1 instruments
—
—
32 Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which:
classified as liabilities under applicable accounting standards
1,463,945
766,214
Qualifying Additional Tier 1 instruments plus related capital surplus issued by special purpose
vehicles and other equivalent entities
—
—
34
Additional Tier 1 instruments issued by subsidiaries and held by third parties (amount allowed in
group AT1)
12,239
29,268
36
Additional Tier 1 capital: instruments
(D)
1,476,185
795,482
Additional Tier 1 capital: regulatory adjustments
37
Investments in own Additional Tier 1 instruments
—
—
38
Reciprocal cross-holdings in Additional Tier 1 instruments
—
—
39
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)
74,283
2,547
40
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)
82,978
82,978
42
Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover
deductions
—
—
43
Additional Tier 1 capital: regulatory adjustments
(E)
157,262
85,526
Additional Tier 1 capital (AT1)
44
Additional Tier 1 capital ((D)-(E))
(F)
1,318,922
709,956
Tier 1 capital (T1 = CET1 + AT1)
45
Tier 1 capital (T1 = CET1 + AT1) ((C)+(F))
(G)
13,311,550
11,548,912
Tier 2 capital: instruments and provisions (4)
46
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
equity under applicable accounting standards and the breakdown
—
—
Stock subscription rights and 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
946,577
766,438
Qualifying Tier 2 instruments plus related capital surplus issued by special purpose vehicles
and other equivalent entities
—
—
48
Tier 2 instruments issued by subsidiaries and held by third parties (amount allowed in group T2)
3,071
5,825
50
Total of general reserve for possible loan losses and eligible provisions included in Tier 2
129,692
105,858
50a
of which: general reserve for possible loan losses
105,555
79,073
50b
of which: eligible provisions
24,136
26,784
51
Tier 2 capital: instruments and provisions
(H)
1,079,340
878,121
Basel III Information
198
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ CC1: Composition of regulatory capital
(Millions of yen, except percentages)
Basel III
Template No. Items
a
b
c
As of March
31, 2024
As of March
31, 2023
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
10,452,598
10,140,313
1a
of which: capital and capital surplus
2,954,181
3,036,589
2
of which: retained earnings
7,843,470
7,423,600
1c
of which: treasury stock (–)
167,671
151,798
26
of which: national specific regulatory adjustments (earnings to be distributed) (–)
177,382
168,077
of which: other than the above
—
—
1b
Stock subscription rights and stock acquisition rights to common shares
931
1,145
3
Accumulated other comprehensive income and other disclosed reserves
4,030,129
2,372,074
(a)
5
Common share capital issued by subsidiaries and held by third parties (amount allowed in group
CET1)
2,243
1,404
6
Common Equity Tier 1 capital: instruments and reserves
(A)
14,485,903
12,514,937
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)
957,397
841,089
8
of which: goodwill (including those equivalent)
461,174
405,810
9
of which: other intangibles other than goodwill and mortgage servicing rights
496,223
435,279
10
Deferred tax assets that rely on future profitability excluding those arising from temporary
differences (net of related tax liability)
4,693
6,899
11
Net deferred gains or losses on hedges
(144,850)
(74,959)
12
Shortfall of eligible provisions to expected losses
—
—
13
Securitisation gain on sale
47,724
52,939
14
Gains and losses due to changes in own credit risk on fair valued liabilities
24,314
47,781
15
Net defined benefit asset
634,121
489,035
16
Investments in own shares (excluding those reported in the Net assets section)
6,812
7,205
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)
719,737
187,705
19+20+21
Amount exceeding the 10% threshold on specified items
243,324
118,285
19
of which: significant investments in the common stock of financials
243,324
118,285
20
of which: mortgage servicing rights
—
—
21
of which: deferred tax assets arising from temporary differences (net of related tax liability)
—
—
22
Amount exceeding the 15% threshold on specified items
—
—
23
of which: significant investments in the common stock of financials
—
—
24
of which: mortgage servicing rights
—
—
25
of which: deferred tax assets arising from temporary differences (net of related tax liability)
—
—
27
Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1
and Tier 2 to cover deductions
—
—
28
Common Equity Tier 1 capital: regulatory adjustments
(B)
2,493,275
1,675,982
Common Equity Tier 1 capital (CET1)
29
Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
11,992,628
10,838,955
Basel III Information
201
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ Overview of RWA (OV1)
(Millions of yen)
OV1: Overview of RWA
Basel III
Template
No.
a
b
c
d
RWA
Minimum capital
requirements
As of
March
31, 2024
As of
March
31, 2023
As of
March
31, 2024
As of
March
31, 2023
1 Credit risk (excluding counterparty credit risk)
66,152,556
5,292,204
2
Of which: standardised approach (SA)
4,534,078
362,726
3
Of which: foundation internal ratings-based (F-IRB) approach
42,010,716
3,360,857
4
Of which: supervisory slotting criteria approach
644,912
51,593
5
Of which: advanced internal ratings-based (A-IRB) approach
14,658,740
1,172,699
Of which: significant investments in commercial entities
—
—
Of which: lease residual value
32,604
2,608
Other assets
4,271,504
341,720
6 Counterparty credit risk (CCR)
2,767,485
221,398
7
Of which: standardised approach for counterparty credit risk (SA-CCR)
1,828,241
146,259
8
Of which: internal model method (IMM)
—
—
Of which: Central Counterparty (CCP)
59,849
4,787
9
Others
879,393
70,351
10 Credit valuation adjustment (CVA)
2,412,722
193,017
of which: the standardisd approach (SA-CVA)
—
—
of which: the full basic approach (full BA-CVA)
1,808,479
144,678
of which: the reduced basic approach (reduced BA-CVA)
604,242
48,339
11 Equity positions in banking book under market-based approach during the five-year linear phase-
in period
2,329,143
186,331
12 Equity investments in funds - look-through approach
4,691,335
375,306
13 Equity investments in funds - mandate-based approach
—
—
Equity investments in funds - simple approach (subject to 250% risk weight)
252,616
20,209
Equity investments in funds - simple approach (subject to 400% risk weight)
540,466
43,237
14 Equity investments in funds - fall-back approach
570,086
45,606
15 Settlement risk
0
0
16 Securitisation exposures in banking book
1,488,838
119,107
17
Of which: securitisation IRB approach (SEC-IRBA)
1,317,929
105,434
18
Of which: securitisation external ratings-based approach (SEC-ERBA), including internal
assessment approach (IAA)
168,648
13,491
19
Of which: securitisation standardised approach (SEC-SA)
2,260
180
Of which: RW 1250% is applied
—
—
20 Market risk
2,926,210
234,096
21
Of which: standardised approach (SA)
2,812,666
225,013
22
Of which: internal model approaches (IMA)
—
—
Of which: simplified standardised approach (SSA)
113,543
9,083
23 Capital charge for switch between trading book and banking book
—
—
24 Operational risk
5,545,060
443,604
25 Amounts below the thresholds for deduction (subject to 250% risk weight)
3,172,056
253,764
26 Floor adjustment
—
—
27 Total
92,848,578
7,427,886
Basel III Information
200
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, except percentages)
Basel III
Template No. Items
a
b
c
As of March
31, 2024
As of March
31, 2023
Reference
to Template
CC2
Tier 2 capital: regulatory adjustments (5)
52
Investments in own Tier 2 instruments
99
0
53
Reciprocal cross-holdings in Tier 2 instruments and other TLAC liabilities
—
—
54
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)
147,523
36,190
54a
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
—
—
55
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)
45,399
40,062
57
Tier 2 capital: regulatory adjustments
(I)
193,022
76,252
Tier 2 capital (T2)
58
Tier 2 capital (T2) ((H)-(I))
(J)
886,318
801,869
Total capital (TC = T1 + T2)
59
Total capital (TC = T1 + T2) ((G)+(J))
(K)
14,197,869
12,350,781
Risk weighted assets (6)
60
Total risk-weighted assets (RWA)
(L)
92,848,578
77,285,048
Capital ratios (consolidated) and buffers (7)
61
Common Equity Tier 1 risk-weighted capital ratio (consolidated) ((C)/(L))
12.91%
14.02%
62
Tier 1 risk-weighted capital ratio (consolidated) ((G)/(L))
14.33%
14.94%
63
Total risk-weighted capital ratio (consolidated) ((K)/(L))
15.29%
15.98%
64
CET1 specific buffer requirement
3.65%
3.60%
65
of which: capital conservation buffer requirement
2.50%
2.50%
66
of which: countercyclical buffer requirement
0.15%
0.10%
67
of which: G-SIB/D-SIB additional requirement
1.00%
1.00%
68
CET1 available after meeting the minimum capital requirements
7.29%
7.98%
Regulatory adjustments (8)
72
Non-significant investments in the capital and other TLAC liabilities of other financials that are
below the thresholds for deduction (before risk weighting)
1,295,569
1,114,494
73
Significant investments in the common stock of other financials that are below the thresholds
for deduction (before risk weighting)
1,223,595
1,095,724
74
Mortgage servicing rights that are below the thresholds for deduction (before risk weighting)
—
—
75
Deferred tax assets arising from temporary differences that are below the thresholds for
deduction (before risk weighting)
45,227
199,927
Provisions included in Tier 2 capital: instruments and provisions (9)
76
Provisions (general reserve for possible loan losses)
105,555
85,077
77
Cap on inclusion of provisions (general reserve for possible loan losses)
108,011
79,073
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”)
24,136
26,784
79
Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
439,582
326,973
(Millions of yen)
Items
As of March
31, 2024
As of March
31, 2023
Required capital ((L) ✕ 8%)
7,427,886
6,182,803
Basel III Information
203
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ 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 156 to 160 (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 207 to 208 “3. Overview of Internal Rating System (2)
Parameter Estimation and Its Validation System.”
2. Credit Quality of Assets (CR1)
(Millions of yen)
CR1: Credit quality of assets
As of March 31, 2024
As of March 31, 2023
Item
No.
a
b
c
d
a
b
c
d
Gross carrying
values of:
Allowances Net values
(a+b–c)
Gross carrying
values of:
Allowances Net values
(a+b–c)
Defaulted
exposures
Non-
defaulted
exposures
Defaulted
exposures
Non-
defaulted
exposures
On-balance sheet assets
1
Loans
1,111,185 104,655,700
857,810 104,909,075
916,540
96,078,487
732,290
96,262,737
2
Securities (of which: debt securities)
2,807
26,618,145
—
26,620,953
4,100
25,370,319
—
25,374,419
3
Other on-balance sheet assets
(of which: debt-based assets)
131,143
88,291,562
39,519
88,383,186
144,231
85,292,570
46,659
85,390,142
4
Subtotal (1+2+3)
1,245,136 219,565,409
897,330 219,913,215
1,064,872 206,741,377
778,949 207,027,300
Off-balance sheet assets
5
Acceptances and guarantees, etc.
13,146
15,176,915
67,277
15,122,784
7,625
14,455,696
60,430
14,402,891
6
Commitments, etc.
39,476
70,393,763
82,202
70,351,036
40,257
31,232,414
70,620
31,202,052
7
Subtotal (5+6)
52,622
85,570,678
149,479
85,473,821
47,883
45,688,111
131,051
45,604,943
Total
8
Total (4+7)
1,297,759 305,136,087
1,046,810 305,387,037
1,112,756 252,429,488
910,000 252,632,244
Basel III Information
202
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
OV1: Overview of RWA
Basel III
Template
No.
a
b
c
d
RWA
Minimum capital
requirements
As of
March
31, 2024
As of
March
31, 2023
As of
March
31, 2024
As of
March
31, 2023
1 Credit risk (excluding counterparty credit risk)
48,133,282
4,043,801
2
Of which: standardised approach (SA)
3,650,094
292,007
3
Of which: internal ratings-based (IRB) approach
40,237,209
3,412,115
Of which: significant investments in commercial entities
—
—
Of which: lease residual value
36,042
2,883
Other assets
4,209,936
336,794
4 Counterparty credit risk (CCR)
5,247,547
427,703
5
Of which: standardised approach for counterparty credit risk (SA-CCR)
—
—
Of which: current exposure method (CEM)
1,503,981
126,501
6
Of which: Expected Positive Exposure (EPE)
—
—
Of which: Credit Valuation Adjustment (CVA)
2,594,370
207,549
Of which: Central Counterparty (CCP)
284,745
22,779
Others
864,450
70,872
7 Equity positions in banking book under market-based approach
847,614
71,877
8 Equity investments in funds – look-through approach
2,550,305
204,024
9 Equity investments in funds – mandate-based approach
—
—
Equity investments in funds – simple approach (subject to 250% risk weight)
85,894
7,083
Equity investments in funds – simple approach (subject to 400% risk weight)
550,764
45,946
10 Equity investments in funds – fall-back approach
271,158
21,692
11 Settlement risk
255
21
12 Securitisation exposures in banking book
1,311,406
104,912
13
Of which: securitisation IRB approach (SEC-IRBA) or internal assessment approach
(IAA)
1,074,905
85,992
14
Of which: securitisation external ratings-based approach (SEC-ERBA)
218,204
17,456
15
Of which: securitisation standardised approach (SEC-SA)
4,111
328
Of which: RW 1250% is applied
14,184
1,134
16 Market risk
4,474,842
357,987
17
Of which: standardised approach (SA)
1,607,836
128,626
18
Of which: internal model approaches (IMA)
2,867,006
229,360
19 Operational risk
4,870,622
389,649
20
Of which: Basic Indicator Approach
1,112,261
88,980
21
Of which: Standardised Approach
—
—
22
Of which: Advanced Measurement Approach
3,758,360
300,668
23 Amounts below the thresholds for deduction (subject to 250% risk weight)
3,239,127
273,891
Risk weighted assets subject to transitional arrangements
—
—
24 Floor adjustment
2,927,635
234,210
25 Total (after applying the scaling factor)
77,285,048
6,182,803
Basel III Information
205
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(2) Exposure Balance by Type of Assets and Residual Term
(Millions of yen)
Category
As of March 31, 2024
As of March 31, 2023
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
To 1 year
52,050,172
10,226,693
—
62,276,865
59,067,939
9,188,027
26,399
68,282,365
More than 1 year to 3 years
31,328,032
3,173,218
—
34,501,250
25,907,221
3,566,043
—
29,473,265
More than 3 years to 5 years
23,025,485
3,624,008
—
26,649,494
22,835,840
3,933,771
—
26,769,612
More than 5 years to 7 years
8,698,233
1,547,057
—
10,245,291
9,114,056
1,647,817
—
10,761,873
More than 7 years
23,548,332
5,549,658
—
29,097,990
23,001,636
7,053,894
—
30,055,531
No fixed maturity
88,557,851
2,513,105
12,230,239
103,301,196
72,467,295
—
11,651,449
84,118,745
Total
227,208,107
26,633,741
12,230,239
266,072,089
212,393,990
25,389,554
11,677,848
249,461,394
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
(Billions of yen)
Fiscal 2023
Fiscal 2022
Term-end
balance
Term-end
Reserves
Write-offs for
the year
Term-end
balance
Term-end
Reserves
Write-offs for
the year
Domestic operations (excluding offshore
banking accounts)
806.4
203.4
77.9
781.7
203.4
78.3
Overseas operations and offshore banking
accounts
612.8
297.1
52.9
522.5
234.2
28.2
Asia
343.5
184.2
43.6
290.2
156.8
25.3
North America
60.4
21.2
1.0
92.6
26.5
1.8
Other regions
208.8
91.6
8.2
139.7
50.9
1.2
Total
1,419.2
500.5
130.8
1,304.2
437.6
106.5
(2) By Industry
(Billions of yen)
Fiscal 2023
Fiscal 2022
Term-end
balance
Term-end
Reserves
Write-offs for
the year
Term-end
balance
Term-end
Reserves
Write-offs for
the year
Domestic operations (excluding offshore
banking accounts)
806.4
203.4
77.9
781.7
203.4
78.3
Manufacturing
110.6
41.6
11.8
136.4
43.6
11.6
Agriculture, forestry, fishery and mining
2.2
1.4
0.1
2.7
1.6
0.7
Construction
8.3
1.8
0.3
8.4
2.0
0.2
Transport, information, communications
and utilities
28.1
10.9
(0.2)
45.1
17.7
0.0
Wholesale and retail
83.2
32.6
0.4
69.8
22.1
0.4
Financial and insurance
5.5
0.1
0.0
6.5
0.2
0.0
Real estate, goods rental and leasing
36.4
3.5
(0.8)
42.2
5.8
(0.2)
Services
172.8
31.8
(1.1)
114.4
34.3
(1.4)
Other industries
359.0
79.3
67.2
356.0
76.2
67.1
Overseas operations and offshore banking
accounts
612.8
297.1
52.9
522.5
234.2
28.2
Financial institutions
20.4
18.8
(0.5)
17.8
16.7
0.0
C&I companies
540.8
254.1
11.1
415.7
193.8
6.4
Others
51.5
24.1
42.3
89.0
23.7
21.9
Total
1,419.2
500.5
130.8
1,304.2
437.6
106.5
Notes: 1. Term-end Reserves include partial direct write-offs (direct reduction).
2. “Domestic operations” comprises the operations of SMBC Group (excluding overseas branches) and domestic consolidated subsidiaries. “Overseas operations” comprises the
operations of SMBC Group’s overseas branches and overseas consolidated subsidiaries, and the term-end balances are calculated based on the obligor’s domicile country.
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3. Changes in stock of defaulted loans and securities (of which: debt securities) (CR2)
(Millions of yen)
CR2: Changes in stock of defaulted loans and securities (of which: debt securities)
Item
No.
Amount
1
Stock of loans and securities (of which: debt securities) that were placed in defaulted
status as of March 31, 2023
1,064,872
2
Changes in loans and securities (of
which: debt securities) by factors
during the current interim period
Amounts defaulted
345,137
3
Amounts returned to non-defaulted status
102,843
4
Amounts written off
221,720
5
Other changes
159,690
6
Stock of loans and securities (of which: debt securities) that were placed in defaulted
status as of March 31, 2024 (1+2-3-4+5)
1,245,136
Note: The major factor for other changes is that, despite decreases in stock by collection and sale of receivables that were placed in defaulted status at the end of the previous fiscal year,
the stock of receivables increased owing to the foreign exchange impact, resulting in an increase.
(Millions of yen)
CR2: Changes in stock of defaulted loans and securities (of which: debt securities)
Item
No.
Amount
1
Stock of loans and securities (of which: debt securities) that were placed in defaulted
status as of March 31, 2022
1,153,280
2
Changes in loans and securities (of
which: debt securities) by factors
during the current interim period
Amounts defaulted
230,238
3
Amounts returned to non-defaulted status
68,744
4
Amounts written off
202,950
5
Other changes
(46,951)
6
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
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)
Category
As of March 31, 2024
As of March 31, 2023
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
Domestic operations (excluding
offshore banking accounts)
143,366,874
17,743,697
10,119,428
171,230,000
135,864,846
18,647,976
9,389,132
163,901,956
Manufacturing
13,914,859
137,843
2,422,404
16,475,107
12,086,282
122,856
1,996,652
14,205,791
Agriculture, forestry, fishery and
mining
297,304
6,601
3,100
307,005
262,150
6,430
3,004
271,585
Construction
1,502,663
44,919
167,997
1,715,579
1,228,917
34,605
134,809
1,398,333
Transport, information,
communications and utilities
7,420,992
222,759
525,692
8,169,445
7,418,455
230,885
499,411
8,148,753
Wholesale and retail
7,177,814
99,216
491,170
7,768,201
6,623,832
135,308
410,348
7,169,489
Financial and insurance
65,187,622
2,161,489
244,459
67,593,571
67,197,664
2,194,188
330,061
69,721,915
Real estate, goods rental and
leasing
16,463,335
1,080,765
175,653
17,719,754
15,043,141
1,238,633
83,117
16,364,892
Services
5,653,386
188,336
70,833
5,912,556
4,863,194
266,010
96,019
5,225,224
Local municipal corporations
2,504,475
202,550
1,866
2,708,892
1,830,028
171,204
1,644
2,002,877
Other industries
23,244,420
13,599,214
6,016,250
42,859,885
19,311,178
14,247,852
5,834,061
39,393,093
Overseas operations and offshore
banking accounts
83,841,232
8,890,044
2,110,811
94,842,088
76,529,143
6,741,578
2,288,716
85,559,437
Sovereigns
19,747,186
5,990,310
21,730
25,759,228
17,505,424
4,490,993
8,363
22,004,781
Financial institutions
8,557,208
1,770,182
647,401
10,974,792
7,966,317
1,225,126
456,111
9,647,555
C&I companies
46,146,623
793,464
—
46,940,088
42,702,686
611,797
—
43,314,484
Others
9,390,214
336,086
1,441,679
11,167,979
8,354,714
413,660
1,824,240
10,592,615
Total
227,208,107
26,633,741
12,230,239
266,072,089
212,393,990
25,389,554
11,677,848
249,461,394
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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SMBC GROUP ANNUAL REPORT 2024
■ 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, PT BANK BTPN SYARIAH 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.
(*) Only when risk-weighted assets are calculated using the PD/LGD approach and the market-based approach in accordance with the transitional arrangements for equity
exposures
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 156 to 157). 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) 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. Exposure at default (EAD) used is the value
designated by the authorities based on the Foundation Internal Ratings-Based (FIRB) approach.
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6. Term-End Balance of Exposures by Past Due Periods
(Billions of yen)
Fiscal 2023
Less than 1 month
1 month or more to less
than 2 months
2 months or more to less
than 3 months
3 months or more
Total
222.2
74.1
45.5
114.9
456.9
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.
2. Items that are not accompanied by deterioration of business conditions/cash flows are excluded.
(Billions of yen)
Fiscal 2022
Less than 1 month
1 month or more to less
than 2 months
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.
2. Items that are not accompanied by deterioration of business conditions/cash flows are excluded.
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
(Billions of yen)
Fiscal 2023
Fiscal 2022
Term-end balance
Term-end balance
Of which: amounts of increased
Reserves for such exposures
due to the restructuring of the
loan conditions
Of which: other
amounts
Of which: amounts of increased
Reserves for such exposures
due to the restructuring of the
loan conditions
Of which: other
amounts
257.4
257.4
0.0
393.0
393.0
0.0
Note: Bankrupt and Quasi-Bankrupt Assets prescribed in Article 4, Paragraph 2 of the Ordinance for Enforcement of the Act on Emergency Measures for the Revitalization of Financial
Functions, doubtful assets prescribed in Paragraph 3 of the said Article, and loans past due three months or more prescribed in Paragraph 4 of the said Article are excluded.
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SMBC GROUP ANNUAL REPORT 2024
(B) Retail Exposures
• “Residential mortgage exposures” includes mortgage loans to individuals and some real estate loans in which the property consists
of both residential and commercial facilities such as a store or rental apartment units, but excludes apartment construction loans.
• Mortgage loans are rated as follows.
Mortgage loans are allocated to a portfolio segment with similar risk characteristics in terms of default risk determined using loan
contract information, a borrower category under self-assessment in accordance with an exclusive grading model, and recovery risk
at the time of default determined using Loan To Value (LTV) calculated based on the assessment value of collateral real estate. PDs
and LGDs are estimated based on the default experience for each segment and taking into account the possibility of estimation
errors.
Further, the portfolio is subdivided based on the lapse of years from the contract date, and the effectiveness of segmentation in
terms of default risk and recovery risk is validated periodically.
Internal data are used to estimate and validate PDs and LGDs. The definition of default is the definition stipulated in the
Notification.
• “Qualifying revolving retail exposures” includes card loans and credit card balances.
• Card loans and credit card balances are rated as follows.
Card loans and credit card balances are allocated to a portfolio segment with similar risk characteristics determined based, for card
loans, on the credit quality of the loan guarantee company, credit limit, settlement account balance and payment history, and, for
credit card balances, on repayment history and frequency of use.
PDs and LGDs used to calculate credit risk-weighted asset amounts are estimated based on the default experience for each
segment and taking into account the possibility of estimation errors.
Further, the effectiveness of segmentation in terms of default risk and recovery risk is validated periodically.
Internal data are used to estimate and validate PDs and LGDs. The definition of default is the definition stipulated in the
Notification.
• “Other retail exposures” includes business loans such as apartment construction loans and consumer loans such as My Car Loan.
• Business loans and consumer loans are rated as follows.
a. Business loans are allocated to a portfolio segment with similar risk characteristics in terms of default risk determined using
loan contract information, a borrower category under self-assessment in accordance with an exclusive grading model, and
recovery risk determined based on LTV for business loans.
PDs and LGDs are estimated based on the default experience for each segment and taking into account the possibility of
estimation errors.
b. Rating procedures for consumer loans depends on whether the loan is collateralized. Collateralized consumer loans are allocated
to a portfolio segment using the same standards as for mortgage loans of “Residential Mortgage Exposures.” Uncollateralized
consumer loans are allocated to a portfolio segment based on account history. PDs and LGDs are estimated based on the default
experience for each segment and taking into account the possibility of estimation errors.
Further, the effectiveness of segmentation in terms of default risk and recovery risk is validated periodically.
Internal data are used to estimate and validate PDs and LGDs. The definition of default is the definition stipulated in the
Notification.
(C) Equity Exposures
When acquiring equities subject to the PD/LGD approach, issuers are assigned obligor grades using the same rules as those of
general credits to C&I companies, sovereigns and financial institutions. The obligors are monitored (for details, please refer to page
158) 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.
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Obligor Grade
Domestic
Corporate
Definition
Borrower Category
J1
Very high certainty of debt repayment
Normal Borrowers
J2
High certainty of debt repayment
J3
Satisfactory certainty of debt repayment
J4
Debt repayment is likely but this could change in cases of significant
changes in economic trends or business environment depending on
the situation
J5
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
J6
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
J7
Close monitoring is required due to problems in meeting loan
terms and conditions, sluggish/unstable business, or financial
problems
Borrowers Requiring Caution
J7R
Borrowers Requiring Caution identified as Substandard Borrowers
Substandard Borrowers
J8
Currently not bankrupt, but experiencing business difficulties,
making insufficient progress in restructuring, and highly likely to
go bankrupt
Potentially Bankrupt Borrowers
J9
Though not yet legally or formally bankrupt, has serious business
difficulties and rehabilitation is unlikely; thus, effectively bankrupt
Virtually Bankrupt Borrowers
J10
Legally or formally bankrupt
Bankrupt Borrowers
Obligor Grade
Overseas
Corporate
Definition
Borrower Category
G1
Very high certainty or high certainty of debt repayment
Normal Borrowers
G2
Satisfactory certainty of debt repayment
G3
Debt repayment is likely but this could change in cases of significant
changes in economic trends or business environment depending on
the situation
G4
Debt repayment is likely but this could change in cases of
significant changes in economic trends or business environment
G5
No problem with debt repayment over the short term, but not
satisfactory over the mid to long term and the situation could change
in cases of any changes in economic trends or business environment
G6
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
G7
Close monitoring is required due to problems in meeting loan
terms and conditions, sluggish/unstable business, or financial
problems
Borrowers Requiring Caution
G7R
Borrowers Requiring Caution identified as Substandard Borrowers
Substandard Borrowers
G8
Currently not bankrupt, but experiencing business difficulties,
making insufficient progress in restructuring, and highly likely to
go bankrupt
Potentially Bankrupt Borrowers
G9
Though not yet legally or formally bankrupt, has serious business
difficulties and rehabilitation is unlikely; thus, effectively bankrupt
Virtually Bankrupt Borrowers
G10
Legally or formally bankrupt
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, 2024.
• 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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5. CR Exposures by Portfolio and PD (CR6)
(Millions of yen, %, the number of data in thousands, years)
CR6: IRB - CR
exposures by
portfolio and PD
range
As of March 31, 2024
a
b
c
d
e
f
g
h
i
j
k
l
Item
No. PD scale
On-balance
sheet gross
exposures
Off-balance
sheet
exposures pre
CCF (Credit
Conversion
Factor) and
pre CRM
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
94,134,565
513,038
85.20
96,973,305
0.00
0.5
33.87
3.6
228,795
0.23
354
2
0.15 to <0.25
408,011
136,436
40.66
574,046
0.16
0.0
31.02
2.6
178,849
31.15
289
3
0.25 to <0.50
55,516
20,408
43.35
43,144
0.41
0.0
28.87
2.1
16,913
39.20
51
4
0.50 to <0.75
560
4,426
63.11
3,354
0.71
0.0
35.00
4.8
3,073
91.62
8
5
0.75 to <2.50
154,183
169,308
93.26
214,558
1.57
0.0
30.60
2.9
162,078
75.54
962
6
2.50 to <10.00
42,178
12,123
40.00
11,784
4.16
0.0
28.03
1.5
9,754
82.76
137
7
10.00 to <100.00
10,560
2,043
100.00
11,775
15.24
0.0
30.00
1.0
16,322
138.62
538
8
100.00 (Default)
114,567
—
—
114,567
100.00
0.0
49.92
1.0
49,264
43.00
57,202
9
Subtotal
94,920,143
857,785
77.99
97,946,536
0.12
0.6
33.86
3.6
665,051
0.67
59,543
3,589
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)
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 (FIRB approach)
1
0.00 to <0.15
5,651,723
1,585,946
71.13
9,523,162
0.05
1.3
44.98
2.2
2,368,812
24.87
2,347
2
0.15 to <0.25
746,840
299,840
67.31
895,337
0.16
0.1
44.84
1.4
326,765
36.49
647
3
0.25 to <0.50
175,072
119,178
42.29
210,086
0.35
0.0
44.44
1.6
120,792
57.49
328
4
0.50 to <0.75
1
—
—
1
0.71
0.0
45.00
5.0
2
144.46
0
5
0.75 to <2.50
533,619
252,960
93.60
750,721
1.39
0.2
44.95
1.1
707,066
94.18
3,171
6
2.50 to <10.00
259,497
65,172
46.54
244,286
4.16
0.0
42.19
1.3
311,088
127.34
4,293
7
10.00 to <100.00
1,404
—
—
375
13.30
0.0
45.00
1.0
853
227.17
22
8
100.00 (Default)
441
—
—
441
100.00
0.0
79.00
1.0
56
12.75
348
9
Subtotal
7,368,603
2,323,097
70.91
11,624,414
0.24
1.8
44.90
2.0
3,835,438
32.99
11,160
16,619
Corporate exposures (AIRB approach)
1
0.00 to <0.15
2,353,233
353,241
66.74
2,686,016
0.07
2.0
31.26
2.8
538,193
20.03
592
2
0.15 to <0.25
2,557,481
297,729
47.37
2,639,038
0.18
3.4
26.33
2.6
655,129
24.82
1,310
3
0.25 to <0.50
619,632
97,928
48.43
638,962
0.44
0.8
27.19
2.2
240,269
37.60
770
4
0.50 to <0.75
229,840
17,039
49.91
228,803
0.71
0.4
28.02
2.3
110,169
48.15
455
5
0.75 to <2.50
521,603
162,883
54.04
525,316
1.48
0.8
29.27
2.5
354,123
67.41
2,292
6
2.50 to <10.00
245,697
48,126
50.92
258,850
6.77
0.2
29.14
2.1
273,901
105.81
5,325
7
10.00 to <100.00
66,521
4,439
55.56
67,246
18.96
0.1
25.73
2.0
86,711
128.94
3,307
8
100.00 (Default)
108,954
10,953
100.00
115,460
100.00
0.1
42.80
1.6
23,186
20.08
49,425
9
Subtotal
6,702,963
992,340
56.30
7,159,695
2.30
8.3
28.89
2.6
2,281,684
31.86
63,479
282,272
Basel III Information
210
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
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
estimation method or rating system.
(b) Pretesting
This is to compare and validate the estimated value to be applied and the historical value. In the case of hitting the predetermined
excess criteria, the estimated value shall be conservatively corrected.
The purpose is to prevent underestimation by making adjustments, if necessary.
B. LGD
This is defined as the ratio of loss amounts after default to the amount of receivable at the time of default. LGD is estimated as a long-
term average value calculated based on historical data over seven consecutive fiscal years (for retail, five fiscal years) or more. However,
in the case where a high positive correlation with the default rate is observed, taking into account the possibility that the loss rate of
the recession period will exceed the long-term average value, LGD is estimated mainly by one of the following methods.
• By taking into account the influence of the recession period on 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. For each exposure, estimation by the Bank or the value designated by
the authorities based on the Foundation Internal Ratings-Based (FIRB) approach is used.
Regarding estimation by the Bank, the increase is estimated by comparing the balance at default with the balance one year prior to
the default, and by taking an average value for each segment, etc.
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, 2024
As of March 31, 2023
IRB approach
94.31 %
94.78 %
Corporate exposures (Advanced Internal Ratings-Based (AIRB) approach)
45.94 %
83.42 %
Corporate exposures (Foundation Internal Ratings-Based (FIRB) approach)
36.97 %
0.27 %
Retail exposures
6.25 %
5.93 %
Equity exposures
2.07 %
1.87 %
Purchased receivables (AIRB approach)
0.08 %
1.12 %
Purchased receivables (FIRB approach)
1.09 %
0.00 %
Other assets, etc.
1.88 %
2.15 %
SA
5.68 %
5.21 %
Total
100.00 %
100.00 %
Basel III Information
213
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CR6: IRB - CR
exposures by
portfolio and PD
range
As of March 31, 2024
a
b
c
d
e
f
g
h
i
j
k
l
Item
No. PD scale
On-balance
sheet gross
exposures
Off-balance
sheet
exposures pre
CCF and pre
CRM
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
Purchased receivables (corporates) (the amount equivalent to default risks) (AIRB approach)
1
0.00 to <0.15
98,770
9,091
100.00
106,687
0.05
0.9
37.59
1.4
13,917
13.04
23
2
0.15 to <0.25
15,530
22,135
100.00
37,443
0.18
1.7
52.82
1.0
12,225
32.64
36
3
0.25 to <0.50
5,874
8,679
100.00
14,471
0.46
0.8
50.70
1.0
7,883
54.47
34
4
0.50 to <0.75
767
7,572
100.00
8,328
0.70
0.5
62.35
1.0
6,814
81.81
36
5
0.75 to <2.50
7,638
31,369
100.00
38,930
1.75
3.8
57.58
1.0
39,082
100.39
414
6
2.50 to <10.00
58
1,339
100.00
1,396
8.52
0.1
63.76
1.0
3,100
221.97
76
7
10.00 to <100.00
7
659
100.00
667
25.39
0.1
64.65
1.0
2,027
303.68
108
8
100.00 (Default)
712
42
100.00
746
100.00
0.1
42.81
1.0
95
12.75
319
9
Subtotal
129,359
80,890
100.00
208,672
0.94
8.3
46.23
1.2
85,146
40.80
1,050
1,120
Purchased receivables (corporates) (the amount equivalent to dilution risks) (AIRB approach)
1
0.00 to <0.15
11,666
—
—
11,666
0.02
0.0
28.51
1.3
506
4.34
1
2
0.15 to <0.25
16,287
—
—
16,287
0.19
0.0
35.00
1.0
3,755
23.05
11
3
0.25 to <0.50
6,484
—
—
6,484
0.47
0.0
35.00
2.4
3,370
51.97
10
4
0.50 to <0.75
—
—
—
—
—
—
—
—
—
—
—
5
0.75 to <2.50
696
—
—
696
0.82
0.0
25.00
1.0
259
37.22
1
6
2.50 to <10.00
—
—
—
—
—
—
—
—
—
—
—
7
10.00 to <100.00
—
—
—
—
—
—
—
—
—
—
—
8
100.00 (Default)
—
—
—
—
—
—
—
—
—
—
—
9
Subtotal
35,133
—
—
35,133
0.20
0.0
32.64
1.3
7,891
22.46
24
37
Purchased receivables (corporates) (the amount equivalent to default risks) (FIRB approach)
1
0.00 to <0.15
2,058,360
148,021
100.00
2,174,183
0.07
5.2
43.08
1.0
388,471
17.86
682
2
0.15 to <0.25
331,350
43,618
100.00
371,056
0.17
4.0
41.70
1.0
95,497
25.73
269
3
0.25 to <0.50
122,158
70,233
100.00
190,290
0.35
7.5
42.17
1.0
76,645
40.27
285
4
0.50 to <0.75
917
29,208
100.00
30,113
0.60
3.9
44.83
1.0
17,351
57.62
81
5
0.75 to <2.50
56,781
74,533
100.00
129,589
1.42
14.2
43.69
1.2
179,595
138.58
801
6
2.50 to <10.00
29
4,275
100.00
4,304
3.51
0.6
44.91
1.0
4,951
115.02
67
7
10.00 to <100.00
4
1,505
100.00
1,509
96.74
0.1
45.00
1.0
152
10.10
657
8
100.00 (Default)
569
145
100.00
701
100.00
0.0
45.00
1.0
—
0.00
315
9
Subtotal
2,570,172
371,540
100.00
2,901,749
0.24
35.7
42.89
1.0
762,664
26.28
3,161
4,362
Purchased receivables (corporates) (the amount equivalent to dilution risks) (FIRB approach)
1
0.00 to <0.15
1,162,276
—
—
1,162,276
0.06
0.1
44.16
1.1
170,138
14.63
313
2
0.15 to <0.25
510,312
—
—
510,312
0.18
0.0
42.05
1.0
141,439
27.71
404
3
0.25 to <0.50
35,168
—
—
35,168
0.29
0.0
42.13
1.0
12,694
36.09
44
4
0.50 to <0.75
2
—
—
2
0.60
0.0
45.00
1.0
1
57.45
0
5
0.75 to <2.50
11,804
—
—
11,804
1.04
0.0
45.00
3.1
14,277
120.94
55
6
2.50 to <10.00
16,712
—
—
16,712
8.67
0.0
44.93
1.0
27,629
165.31
652
7
10.00 to <100.00
—
—
—
—
—
—
—
—
—
—
—
8
100.00 (Default)
—
—
—
—
—
—
—
—
—
—
—
9
Subtotal
1,736,277
—
—
1,736,277
0.19
0.1
43.51
1.1
366,180
21.08
1,470
2,253
Purchased receivables (retail) (the amount equivalent to default risks)
1
0.00 to <0.15
5,340
—
—
5,340
0.07
0.3
65.00
—
720
13.50
2
2
0.15 to <0.25
1,376
—
—
1,376
0.19
0.1
65.00
—
349
25.42
1
3
0.25 to <0.50
1,636
—
—
1,636
0.34
0.2
53.95
—
513
31.38
3
4
0.50 to <0.75
240
—
—
240
0.59
0.0
64.22
—
122
51.07
0
5
0.75 to <2.50
43
20
100.00
63
1.02
0.0
65.00
—
42
65.98
0
6
2.50 to <10.00
—
—
—
—
—
—
—
—
—
—
—
7
10.00 to <100.00
—
—
—
—
—
—
—
—
—
—
—
8
100.00 (Default)
—
—
—
—
—
—
—
—
—
—
—
9
Subtotal
8,637
20
100.00
8,657
0.16
0.7
62.89
—
1,749
20.20
8
13
Basel III Information
212
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CR6: IRB - CR
exposures by
portfolio and PD
range
As of March 31, 2024
a
b
c
d
e
f
g
h
i
j
k
l
Item
No. PD scale
On-balance
sheet gross
exposures
Off-balance
sheet
exposures pre
CCF and pre
CRM
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
Corporate exposures (FIRB approach)
1
0.00 to <0.15
38,966,510
23,912,900
53.49
55,084,256
0.06
6.3
41.79
2.5
12,275,810
22.28
14,816
2
0.15 to <0.25
14,603,617
11,388,176
48.53
17,462,122
0.16
4.6
41.11
2.3
6,634,197
37.99
12,063
3
0.25 to <0.50
5,214,456
4,234,662
48.25
5,272,420
0.37
1.3
40.94
2.4
3,080,396
58.42
8,142
4
0.50 to <0.75
309,288
124,121
52.15
367,014
0.70
0.1
40.17
3.6
342,796
93.40
1,046
5
0.75 to <2.50
4,842,183
3,788,754
57.68
6,203,306
1.40
5.0
40.67
2.9
6,426,110
103.59
32,303
6
2.50 to <10.00
1,220,172
689,475
49.12
1,022,315
5.51
0.4
39.42
2.6
1,431,935
140.06
22,254
7
10.00 to <100.00
522,017
218,950
45.77
569,821
18.28
0.1
40.15
2.4
1,169,023
205.15
41,746
8
100.00 (Default)
460,660
9,052
100.00
442,675
100.00
0.1
40.05
2.1
110
0.02
177,319
9
Subtotal
66,138,906
44,366,092
51.98
86,423,933
0.89
18.4
41.46
2.5
31,360,382
36.28
309,694
202,945
Mid-sized corporations and small-medium enterprises (SMEs) exposures (AIRB approach)
1
0.00 to <0.15
617,040
18,753
56.83
634,998
0.07
1.3
22.65
2.9
75,978
11.96
112
2
0.15 to <0.25
1,592,451
115,362
87.35
1,629,012
0.18
7.4
25.55
3.5
381,743
23.43
748
3
0.25 to <0.50
747,966
11,985
52.70
715,145
0.39
4.5
29.62
4.0
295,109
41.26
797
4
0.50 to <0.75
379,935
14,523
88.27
350,089
0.69
3.0
26.57
3.6
158,360
45.23
647
5
0.75 to <2.50
1,353,304
35,733
68.59
1,104,134
1.69
17.8
25.20
3.6
598,247
54.18
4,691
6
2.50 to <10.00
162,304
9,567
49.44
143,111
8.16
1.0
21.76
2.5
100,776
70.41
2,491
7
10.00 to <100.00
113,010
182
51.60
62,597
24.79
2.1
37.38
2.1
105,472
168.49
5,809
8
100.00 (Default)
185,893
1,528
100.00
136,079
100.00
2.8
45.59
1.7
19,762
14.52
62,042
9
Subtotal
5,151,907
207,637
77.74
4,775,168
3.99
40.3
26.38
3.4
1,735,450
36.34
77,341
71,068
Mid-sized corporations and SMEs exposures (FIRB approach)
1
0.00 to <0.15
120,116
56,825
51.93
138,412
0.08
0.0
43.21
2.6
42,958
31.03
52
2
0.15 to <0.25
240,557
246,271
47.63
154,312
0.17
0.0
39.86
2.7
65,662
42.55
111
3
0.25 to <0.50
126,941
109,524
54.08
40,257
0.38
0.0
41.86
1.4
18,937
47.04
63
4
0.50 to <0.75
8,245
4,646
100.00
12,502
0.70
0.0
37.59
3.9
11,255
90.02
33
5
0.75 to <2.50
60,536
25,511
48.97
43,238
1.51
0.1
43.43
1.8
42,293
97.81
280
6
2.50 to <10.00
14,879
12,776
96.15
21,432
4.68
0.0
43.12
1.4
26,660
124.39
416
7
10.00 to <100.00
6,935
23
95.56
6,685
24.90
0.0
44.44
2.1
16,008
239.43
739
8
100.00 (Default)
764
2,547
100.00
2,243
100.00
0.0
21.79
1.0
—
0.00
488
9
Subtotal
578,976
458,127
51.96
419,085
1.48
0.4
41.60
2.4
223,775
53.39
2,186
2,601
Specialized lending (SL)
1
0.00 to <0.15
4,540,301
216,514
43.60
4,579,933
0.07
—
27.29
3.2
798,002
17.42
923
2
0.15 to <0.25
2,369,264
738,646
47.07
2,615,908
0.16
—
27.55
3.4
753,974
28.82
1,213
3
0.25 to <0.50
3,393,089
1,518,728
47.94
3,597,900
0.36
—
30.98
3.5
1,715,695
47.68
4,085
4
0.50 to <0.75
8,521
—
—
8,521
0.71
—
29.69
2.5
4,610
54.09
17
5
0.75 to <2.50
1,741,463
614,853
56.35
1,783,835
1.14
—
30.67
3.4
1,278,157
71.65
6,333
6
2.50 to <10.00
347,798
23,912
40.00
299,757
4.16
—
36.76
3.0
371,950
124.08
4,584
7
10.00 to <100.00
314,169
86,382
55.36
288,279
15.42
—
48.71
3.2
720,147
249.80
21,685
8
100.00 (Default)
154,244
39,882
100.00
114,160
100.00
—
49.50
3.6
49,089
43.00
56,512
9
Subtotal
12,868,852
3,238,919
49.83
13,288,297
1.60
—
29.66
3.3
5,691,628
42.83
95,355
115,217
Equity exposures
1
0.00 to <0.15
4,526,638
—
—
4,526,638
0.05
1.1
90.00
5.0
4,866,163
107.50
—
2
0.15 to <0.25
276,591
—
—
276,591
0.16
0.5
90.00
5.0
418,368
151.25
—
3
0.25 to <0.50
7,934
—
—
7,934
0.45
0.0
90.00
5.0
17,980
226.59
—
4
0.50 to <0.75
4,403
—
—
4,403
0.71
0.0
90.00
5.0
10,941
248.45
—
5
0.75 to <2.50
16,889
—
—
16,889
1.92
0.1
90.00
5.0
56,843
336.56
—
6
2.50 to <10.00
7,611
—
—
7,611
8.74
0.0
90.00
5.0
39,761
522.39
—
7
10.00 to <100.00
1,011
—
—
1,011
24.81
0.0
90.00
5.0
7,815
772.62
—
8
100.00 (Default)
202
—
—
202
100.00
0.0
90.00
5.0
2,279
1,125.00
—
9
Subtotal
4,841,283
—
—
4,841,283
0.09
2.0
90.00
5.0
5,420,152
111.95
—
—
Basel III Information
215
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CR6: IRB - CR
exposures by
portfolio and PD
range
As of March 31, 2023
a
b
c
d
e
f
g
h
i
j
k
l
Item
No. PD scale
On-balance
sheet gross
exposures
Off-balance
sheet
exposures pre
CCF (Credit
Conversion
Factor) and
pre CRM
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
93,633,322
152,011
62.93
96,065,791
0.00
0.4
33.40
3.7
146,695
0.15
226
2
0.15 to <0.25
641,893
171,767
46.32
717,071
0.15
0.2
31.41
1.9
169,520
23.64
353
3
0.25 to <0.50
47,656
9,765
50.27
25,766
0.38
0.0
28.16
1.2
7,646
29.67
28
4
0.50 to <0.75
12
—
—
12
0.74
0.0
35.00
1.0
5
49.63
0
5
0.75 to <2.50
91,561
69,840
92.37
69,790
1.42
0.0
30.65
3.2
50,525
72.39
292
6
2.50 to <10.00
60,383
17,214
45.97
14,565
4.15
0.0
28.93
1.5
12,816
87.98
173
7
10.00 to <100.00
11,100
—
—
9,865
13.24
0.0
29.84
1.0
12,890
130.66
389
8
100.00 (Default)
126,344
—
—
126,344
100.00
0.0
54.76
1.0
58,914
46.63
69,196
9
Subtotal
94,612,274
420,599
60.05
97,029,207
0.13
0.7
33.41
3.7
459,014
0.47
70,661
2,942
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)
1
0.00 to <0.15
5,007,954
1,469,203
86.70
6,797,378
0.03
0.6
29.82
2.3
986,019
14.50
778
2
0.15 to <0.25
719,404
180,362
57.32
811,622
0.15
0.2
28.25
1.2
168,624
20.77
365
3
0.25 to <0.50
150,391
39,981
43.34
147,431
0.40
0.0
28.19
0.9
46,905
31.81
171
4
0.50 to <0.75
10,000
2,526
45.97
11,161
0.74
0.0
35.00
1.0
7,155
64.10
28
5
0.75 to <2.50
547,721
155,635
47.90
552,579
1.17
0.2
31.63
1.2
366,716
66.36
2,103
6
2.50 to <10.00
192,480
23,557
79.32
162,701
4.11
0.0
26.56
1.0
130,810
80.39
1,776
7
10.00 to <100.00
5,600
—
—
4,541
17.14
0.0
30.00
0.4
6,413
141.23
233
8
100.00 (Default)
593
—
—
593
100.00
0.0
79.25
1.0
80
13.63
470
9
Subtotal
6,634,145
1,871,267
79.56
8,488,008
0.22
1.2
29.71
2.0
1,712,726
20.17
5,928
10,967
Bank exposures (FIRB approach)
1
0.00 to <0.15
48,945
—
—
48,945
0.03
0.0
45.00
5.0
17,362
35.47
6
2
0.15 to <0.25
102
—
—
102
0.16
0.0
45.00
5.0
82
81.01
0
3
0.25 to <0.50
—
—
—
—
—
—
—
—
—
—
—
4
0.50 to <0.75
1,210
—
—
1,210
0.74
0.0
45.00
5.0
1,769
146.22
4
5
0.75 to <2.50
2,280
—
—
2,280
2.21
0.1
45.00
5.0
4,027
176.65
22
6
2.50 to <10.00
—
—
—
—
—
—
—
—
—
—
—
7
10.00 to <100.00
—
—
—
—
—
—
—
—
—
—
—
8
100.00 (Default)
—
—
—
—
—
—
—
—
—
—
—
9
Subtotal
52,537
—
—
52,537
0.14
0.1
45.00
5.0
23,242
44.23
33
78
Corporate exposures (AIRB approach)
1
0.00 to <0.15
32,446,992
16,125,650
54.49
46,608,362
0.05
7.2
33.65
2.4
7,381,597
15.83
8,043
2
0.15 to <0.25
17,474,685
14,497,451
54.79
22,772,210
0.16
6.2
28.58
2.2
5,775,865
25.36
10,450
3
0.25 to <0.50
7,496,947
3,705,167
53.71
7,856,228
0.34
4.1
28.99
2.3
3,012,585
38.34
7,911
4
0.50 to <0.75
542,767
103,539
51.66
585,699
0.73
0.7
34.40
2.5
394,277
67.31
1,491
5
0.75 to <2.50
5,163,341
2,196,914
52.55
5,530,634
1.40
2.5
26.19
3.2
3,772,093
68.20
20,927
6
2.50 to <10.00
1,150,151
553,464
53.14
1,267,564
5.99
0.7
26.40
2.6
1,218,636
96.13
20,893
7
10.00 to <100.00
726,466
270,960
56.03
759,742
16.09
0.3
24.33
2.7
911,538
119.97
29,705
8
100.00 (Default)
500,246
49,206
100.00
469,093
100.00
0.3
46.29
2.1
155,954
33.24
217,189
9
Subtotal
65,501,599
37,502,355
54.46
85,849,536
0.97
22.2
31.29
2.4
22,622,549
26.35
316,611
383,182
Basel III Information
214
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CR6: IRB - CR
exposures by
portfolio and PD
range
As of March 31, 2024
a
b
c
d
e
f
g
h
i
j
k
l
Item
No. PD scale
On-balance
sheet gross
exposures
Off-balance
sheet
exposures pre
CCF and pre
CRM
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
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
92,600
985,449
17.65
1,078,049
0.10
14,077.8
66.24
42,981
3.98
714
2
0.15 to <0.25
471,599
502,807
14.63
974,406
0.22
3,307.9
68.78
77,290
7.93
1,474
3
0.25 to <0.50
278,438
—
—
278,438
0.29
2,158.3
61.77
24,823
8.91
498
4
0.50 to <0.75
727,084
256,131
18.01
983,215
0.59
1,024.5
68.87
172,106
17.50
4,005
5
0.75 to <2.50
467,816
174,899
9.87
642,716
1.61
2,267.2
75.35
263,429
40.98
7,824
6
2.50 to <10.00
969,918
395,683
12.21
1,365,602
4.56
3,617.7
71.39
1,080,624
79.13
44,321
7
10.00 to <100.00
44,481
13,462
19.47
57,943
51.27
105.5
70.11
92,222
159.15
20,799
8
100.00 (Default)
101,483
16,814
100.00
118,297
100.00
314.4
73.03
136,165
115.10
86,403
9
Subtotal
3,153,422
2,345,248
42.65
5,498,671
4.19
26,873.6
69.46
1,889,644
34.36
166,042
144,761
Residential mortgage exposures
1
0.00 to <0.15
—
—
—
26,792
0.05
3.3
40.91
7,479
27.91
5
2
0.15 to <0.25
—
—
—
2,099
0.16
0.1
54.13
844
40.21
1
3
0.25 to <0.50
7,790,723
3,653
100.00
7,794,377
0.30
435.7
23.23
982,640
12.60
5,458
4
0.50 to <0.75
1,148,162
1,315
100.00
1,149,501
0.62
72.7
24.59
255,938
22.26
1,756
5
0.75 to <2.50
326,875
585
100.00
300,719
1.08
29.5
36.54
146,468
48.70
1,207
6
2.50 to <10.00
—
—
—
—
—
—
—
—
—
—
7
10.00 to <100.00
19,409
468
100.00
17,704
20.76
1.8
25.32
23,576
133.16
909
8
100.00 (Default)
56,103
61
100.00
56,164
100.00
4.7
20.28
10,960
19.51
11,394
9
Subtotal
9,341,275
6,084
100.00
9,347,359
1.00
548.1
23.87
1,427,906
15.27
20,734
18,771
Other retail exposures
1
0.00 to <0.15
1
4
100.00
6
0.10
0.0
66.24
1
16.43
0
2
0.15 to <0.25
103,982
16
100.00
103,998
0.15
2.4
34.12
11,783
11.33
53
3
0.25 to <0.50
253,629
63
100.00
253,692
0.34
7.5
34.92
50,976
20.09
307
4
0.50 to <0.75
194,552
377,482
100.00
572,035
0.53
296.9
51.89
220,597
38.56
1,583
5
0.75 to <2.50
596,464
310,363
89.28
906,827
1.29
1,020.1
50.49
502,443
55.40
5,864
6
2.50 to <10.00
12,679
244
100.00
12,923
4.73
1.0
39.37
7,562
58.51
260
7
10.00 to <100.00
12,304
6,068
100.00
18,372
22.54
21.5
54.45
22,079
120.17
2,264
8
100.00 (Default)
40,852
679
88.52
41,531
100.00
100.4
54.78
99,264
239.01
22,751
9
Subtotal
1,214,467
694,921
100.00
1,909,389
3.25
1,450.3
48.00
914,709
47.90
33,084
21,374
Total (all portfolios)
216,760,383
55,942,707
56.06 248,124,325
0.76
28,989.3
38.33
—
56,669,456
22.83
844,338
887,009
Basel III Information
217
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CR6: IRB - CR
exposures by
portfolio and PD
range
As of March 31, 2023
a
b
c
d
e
f
g
h
i
j
k
l
Item
No. PD scale
On-balance
sheet gross
exposures
Off-balance
sheet
exposures pre
CCF and pre
CRM
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
Purchased receivables (corporates) (the amount equivalent to default risks) (AIRB approach)
1
0.00 to <0.15
1,453,903
266,886
99.81
1,707,106
0.05
7.3
35.30
1.1
234,702
13.74
763
2
0.15 to <0.25
432,523
127,816
99.55
555,738
0.16
5.9
32.86
1.0
115,625
20.80
309
3
0.25 to <0.50
166,977
145,865
100.00
310,355
0.36
10.0
43.09
1.1
138,458
44.61
497
4
0.50 to <0.75
4,981
34,666
100.00
39,594
0.64
4.5
61.70
1.0
31,915
80.60
156
5
0.75 to <2.50
43,848
101,131
100.00
144,504
1.45
17.8
55.34
1.1
145,764
100.87
1,131
6
2.50 to <10.00
3,649
5,022
100.00
8,639
5.73
0.8
51.70
1.0
13,151
152.22
246
7
10.00 to <100.00
106
1,768
100.00
1,874
60.52
0.2
63.38
1.0
3,065
163.50
713
8
100.00 (Default)
4,249
106
100.00
4,308
100.00
0.1
72.93
1.0
587
13.63
3,142
9
Subtotal
2,110,239
683,263
99.84
2,772,122
0.40
46.9
37.23
1.1
683,271
24.64
6,960
7,672
Purchased receivables (corporates) (the amount equivalent to dilution risks) (AIRB approach)
1
0.00 to <0.15
996,337
858
45.48
996,728
0.05
0.1
33.03
1.2
109,091
10.94
192
2
0.15 to <0.25
428,001
—
—
428,001
0.16
0.0
32.63
1.1
85,867
20.06
222
3
0.25 to <0.50
164,610
—
—
164,610
0.27
0.0
33.43
1.0
45,642
27.72
152
4
0.50 to <0.75
—
—
—
—
—
—
—
—
—
—
—
5
0.75 to <2.50
18,339
—
—
18,339
1.72
0.0
28.32
1.0
9,914
54.06
84
6
2.50 to <10.00
1,975
—
—
1,975
5.76
0.0
28.40
1.0
1,766
89.41
34
7
10.00 to <100.00
—
—
—
—
—
—
—
—
—
—
—
8
100.00 (Default)
549
—
—
549
100.00
0.0
45.23
1.0
74
13.63
248
9
Subtotal
1,609,814
858
45.48
1,610,205
0.16
0.2
32.91
1.1
252,356
15.67
934
1,378
Purchased receivables (corporates) (the amount equivalent to default risks) (FIRB approach)
1
0.00 to <0.15
—
90
100.00
90
0.11
0.0
45.00
1.0
18
19.97
0
2
0.15 to <0.25
—
169
100.00
169
0.20
0.0
45.00
1.0
51
30.23
0
3
0.25 to <0.50
—
1,659
100.00
1,659
0.42
0.0
45.00
1.0
668
40.26
3
4
0.50 to <0.75
—
787
100.00
787
0.61
0.0
45.00
1.0
373
47.45
2
5
0.75 to <2.50
—
1,191
100.00
1,191
1.00
0.0
45.00
1.0
687
57.64
5
6
2.50 to <10.00
—
—
—
—
—
—
—
—
—
—
—
7
10.00 to <100.00
—
—
—
—
—
—
—
—
—
—
—
8
100.00 (Default)
89
—
—
88
100.00
0.0
45.00
1.0
—
0.00
39
9
Subtotal
89
3,898
100.00
3,986
2.81
0.1
45.00
1.0
1,797
45.10
50
21
Purchased receivables (corporates) (the amount equivalent to dilution risks) (FIRB approach)
1
0.00 to <0.15
86
—
—
86
0.11
0.0
45.00
1.0
17
19.97
0
2
0.15 to <0.25
0
—
—
0
0.20
0.0
45.00
1.0
0
30.02
0
3
0.25 to <0.50
1
—
—
1
0.49
0.0
45.00
1.0
0
51.59
0
4
0.50 to <0.75
0
—
—
0
0.61
0.0
45.00
1.0
0
57.94
0
5
0.75 to <2.50
0
—
—
0
1.09
0.0
45.00
1.0
0
76.03
0
6
2.50 to <10.00
0
—
—
0
2.70
0.0
45.00
1.0
0
106.02
0
7
10.00 to <100.00
—
—
—
—
—
—
—
—
—
—
—
8
100.00 (Default)
—
—
—
—
—
—
—
—
—
—
—
9
Subtotal
88
—
—
88
0.11
0.0
45.00
1.0
18
20.61
0
0
Purchased receivables (retail) (the amount equivalent to default risks)
1
0.00 to <0.15
4,543
—
—
4,543
0.08
0.3
65.00
—
642
14.13
2
2
0.15 to <0.25
2,370
—
—
2,370
0.20
0.1
65.00
—
624
26.32
3
3
0.25 to <0.50
1,753
—
—
1,753
0.34
0.2
50.88
—
520
29.68
3
4
0.50 to <0.75
244
—
—
244
0.60
0.0
64.25
—
125
51.55
0
5
0.75 to <2.50
78
20
100.00
98
0.95
0.0
63.71
—
61
62.92
0
6
2.50 to <10.00
—
—
—
—
—
—
—
—
—
—
—
7
10.00 to <100.00
—
—
—
—
—
—
—
—
—
—
—
8
100.00 (Default)
—
—
—
—
—
—
—
—
—
—
—
9
Subtotal
8,990
20
100.00
9,010
0.19
0.8
62.21
—
1,974
21.91
10
20
Basel III Information
216
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CR6: IRB - CR
exposures by
portfolio and PD
range
As of March 31, 2023
a
b
c
d
e
f
g
h
i
j
k
l
Item
No. PD scale
On-balance
sheet gross
exposures
Off-balance
sheet
exposures pre
CCF and pre
CRM
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
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
—
—
—
—
—
—
—
—
—
—
—
0
Mid-sized corporations and small-medium enterprises (SMEs) exposures (AIRB approach)
1
0.00 to <0.15
776,693
64,803
47.23
818,090
0.07
1.3
24.93
2.6
105,407
12.88
146
2
0.15 to <0.25
1,419,695
298,513
54.52
1,271,292
0.15
4.8
27.11
3.2
287,753
22.63
541
3
0.25 to <0.50
1,546,558
159,696
56.51
1,356,274
0.34
8.1
26.12
3.7
461,011
33.99
1,222
4
0.50 to <0.75
444,790
23,191
86.87
412,121
0.72
3.5
26.65
3.6
195,144
47.35
796
5
0.75 to <2.50
1,523,124
63,969
51.38
1,161,869
1.75
21.3
25.98
3.5
649,625
55.91
5,293
6
2.50 to <10.00
205,223
10,103
47.59
159,210
8.24
1.2
20.60
2.6
107,495
67.51
2,619
7
10.00 to <100.00
136,914
2,627
52.83
78,198
24.42
2.3
35.92
2.2
126,219
161.40
6,899
8
100.00 (Default)
213,184
5,795
100.00
156,446
100.00
3.0
45.54
1.8
23,438
14.98
71,258
9
Subtotal
6,266,185
628,701
55.45
5,413,504
4.05
45.7
26.72
3.3
1,956,096
36.13
88,778
93,366
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
—
—
—
—
—
—
—
—
—
—
—
—
Specialized lending (SL)
1
0.00 to <0.15
3,348,460
80,085
46.35
3,361,496
0.04
—
21.88
3.4
366,921
10.91
324
2
0.15 to <0.25
2,592,890
810,476
51.95
2,862,094
0.16
—
19.67
3.6
587,658
20.53
905
3
0.25 to <0.50
2,498,862
1,272,789
52.05
2,755,888
0.35
—
22.21
3.7
969,636
35.18
2,229
4
0.50 to <0.75
54,253
—
—
54,253
0.74
—
22.53
2.0
20,914
38.54
90
5
0.75 to <2.50
1,792,728
588,769
61.07
1,761,163
1.18
—
21.96
3.4
907,825
51.54
4,621
6
2.50 to <10.00
266,936
23,310
54.99
214,130
4.11
—
31.80
3.2
233,964
109.26
2,799
7
10.00 to <100.00
288,326
87,257
55.39
227,656
15.58
—
35.27
3.4
420,003
184.49
12,788
8
100.00 (Default)
93,302
20,664
100.00
56,209
100.00
—
52.07
2.9
26,210
46.63
29,273
9
Subtotal
10,935,760
2,883,352
54.17
11,292,893
1.22
—
22.03
3.5
3,533,135
31.28
53,032
83,429
Equity exposures
1
0.00 to <0.15
3,675,024
—
—
3,675,024
0.04
1.1
90.00
5.0
3,771,067
102.61
—
2
0.15 to <0.25
488,369
—
—
488,369
0.15
0.4
90.00
5.0
603,393
123.55
—
3
0.25 to <0.50
79,138
—
—
79,138
0.41
0.2
90.00
5.0
151,111
190.94
—
4
0.50 to <0.75
1,563
—
—
1,563
0.74
0.0
90.00
5.0
3,579
228.96
—
5
0.75 to <2.50
20,093
—
—
20,093
1.55
0.0
90.00
5.0
60,161
299.40
—
6
2.50 to <10.00
6,319
—
—
6,319
8.89
0.0
90.00
5.0
33,052
523.01
—
7
10.00 to <100.00
269
—
—
269
24.92
0.0
90.00
5.0
2,148
796.56
—
8
100.00 (Default)
821
—
—
821
100.00
0.0
90.00
5.0
9,242
1,125.00
—
9
Subtotal
4,271,600
—
—
4,271,600
0.10
1.9
90.00
5.0
4,633,756
108.47
—
—
Basel III Information
219
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
6. Effect on Credit RWA of Credit Derivatives Used as CRM Techniques (CR7)
(Millions of yen)
CR7: IRB – Effect on credit RWA of credit derivatives used as CRM
techniques
As of March 31, 2024
Item
No.
Portfolio
a
b
Pre-credit
derivatives
credit RWA
Actual credit
RWA
1
Sovereign exposures - FIRB
25,660
25,660
2
Sovereign exposures - AIRB
501,010
501,010
3
Bank exposures - FIRB
3,272,624
3,272,624
4
Bank exposures - AIRB
145,387
145,387
5
Corporate exposures (excluding SL) - FIRB
31,790,773
31,790,773
6
Corporate exposures (excluding SL) - AIRB
4,150,739
4,150,739
7
SL - FIRB
830,061
830,061
8
SL- AIRB
5,722,064
5,722,064
9
Retail - QRRE
1,889,644
1,889,644
10
Retail - Residential mortgage exposures
1,427,906
1,427,906
11
Retail - Other retail exposures
914,709
914,709
12
Purchased receivables - FIRB
1,128,845
1,128,845
13
Purchased receivables - AIRB
94,787
94,787
14
Total
51,894,216
51,894,216
(Millions of yen)
CR7: IRB – Effect on credit RWA of credit derivatives used as CRM
techniques
As of March 31, 2023
Item
No.
Portfolio
a
b
Pre-credit
derivatives
credit RWA
Actual credit
RWA
1
Sovereign exposures - FIRB
—
—
2
Sovereign exposures - AIRB
385,671
385,671
3
Bank exposures - FIRB
23,242
23,242
4
Bank exposures - AIRB
1,631,397
1,631,397
5
Corporate exposures (excluding SL) - FIRB
—
—
6
Corporate exposures (excluding SL) - AIRB
24,615,146
24,614,964
7
SL - FIRB
622,798
622,798
8
SL- AIRB
3,647,258
3,647,258
9
Retail - QRRE
1,286,558
1,286,558
10
Retail - Residential mortgage exposures
1,487,791
1,487,791
11
Retail - Other retail exposures
964,351
964,351
12
Equity - FIRB
—
—
13
Equity - AIRB
5,481,371
5,481,371
14
Purchased receivables - FIRB
1,816
1,816
15
Purchased receivables - AIRB
937,602
937,602
16
Total
41,085,004
41,084,823
7. RWA flow statements of credit risk exposures under IRB approach (CR8)
(One hundred billions of yen)
CR8: RWA flow statements of credit risk exposures under IRB approach
Item
No.
RWA amounts
1
RWA as of March 31, 2023
410
2
Breakdown of
variations in the
credit risk-
weighted assets
Asset size
32
3
Asset quality
(2)
4
Model updates
—
5
Methodology and policy
132
6
Acquisitions and disposals
—
7
Foreign exchange movements
22
8
Other
—
9
RWA as of March 31, 2024
596
Basel III Information
218
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CR6: IRB - CR
exposures by
portfolio and PD
range
As of March 31, 2023
a
b
c
d
e
f
g
h
i
j
k
l
Item
No. PD scale
On-balance
sheet gross
exposures
Off-balance
sheet
exposures pre
CCF and pre
CRM
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
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
81,876
279,145
6.41
361,021
0.08
4,883.2
67.52
12,722
3.52
205
2
0.15 to <0.25
386,287
496,656
15.75
882,944
0.18
5,491.6
69.74
61,291
6.94
1,131
3
0.25 to <0.50
698,222
317,206
9.12
1,015,428
0.38
3,994.0
68.73
125,864
12.39
2,678
4
0.50 to <0.75
2,907
7,065
6.32
9,972
0.62
141.3
66.64
1,756
17.61
41
5
0.75 to <2.50
565,432
55,876
14.23
621,308
1.67
655.8
75.79
262,840
42.30
7,864
6
2.50 to <10.00
711,871
139,334
5.49
851,206
4.14
1,518.2
73.04
656,599
77.13
25,754
7
10.00 to <100.00
37,445
5,246
8.92
42,692
50.95
86.5
70.87
73,235
171.54
15,424
8
100.00 (Default)
76,728
6,776
100.00
83,504
100.00
240.4
74.39
92,246
110.46
62,124
9
Subtotal
2,560,771
1,307,308
33.79
3,868,080
4.05
17,011.3
71.07
1,286,558
33.26
115,224
121,424
Residential mortgage exposures
1
0.00 to <0.15
—
—
—
31,928
0.05
3.8
38.92
8,074
25.28
6
2
0.15 to <0.25
—
—
—
1,831
0.16
0.1
77.51
691
37.74
2
3
0.25 to <0.50
7,434,456
4,487
100.00
7,439,509
0.31
434.7
24.04
992,857
13.34
5,560
4
0.50 to <0.75
813,742
858
100.00
814,627
0.58
48.6
25.45
179,374
22.01
1,202
5
0.75 to <2.50
735,074
1,490
100.00
704,721
0.92
58.2
31.33
269,095
38.18
2,135
6
2.50 to <10.00
—
—
—
—
—
—
—
—
—
—
7
10.00 to <100.00
20,041
594
100.00
18,128
20.93
1.8
26.56
25,983
143.32
994
8
100.00 (Default)
65,530
59
100.00
65,589
100.00
5.2
19.96
11,713
17.85
13,096
9
Subtotal
9,068,846
7,490
100.00
9,076,336
1.14
552.8
24.77
1,487,791
16.39
23,000
24,711
Other retail exposures
1
0.00 to <0.15
1
2
100.00
4
0.08
0.0
66.64
0
14.01
0
2
0.15 to <0.25
104,804
13
100.00
104,817
0.15
2.5
34.35
11,957
11.40
54
3
0.25 to <0.50
270,659
113
100.00
270,772
0.34
8.2
35.22
54,891
20.27
331
4
0.50 to <0.75
156,479
351,047
100.00
507,526
0.64
335.4
50.97
213,666
42.09
1,670
5
0.75 to <2.50
617,465
151,086
90.32
768,551
1.33
1,439.4
53.66
467,719
60.85
5,557
6
2.50 to <10.00
15,641
139,233
100.00
154,875
2.78
124.0
46.21
98,185
63.39
1,978
7
10.00 to <100.00
13,686
6,121
97.02
19,807
23.78
38.2
53.88
23,667
119.48
2,526
8
100.00 (Default)
41,472
640
61.95
42,112
100.00
99.7
57.95
94,264
223.83
24,405
9
Subtotal
1,220,209
648,258
100.00
1,868,467
3.52
2,047.7
48.66
964,351
51.61
36,523
29,983
Total (all portfolios)
204,853,153
45,957,374
58.21 231,605,586
0.72
19,732.3
33.28
—
39,618,642
17.10
717,750
759,180
Basel III Information
221
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
9. SL (Slotting Criteria Approach) and Equity Exposures (Market-Based Approach, etc.) (CR10)
(Millions of yen, except percentages)
CR10: IRB - SL (slotting
criteria approach)
As of March 31, 2024
a
b
c
d
e
f
g
h
i
j
k
l
SL (slotting criteria approach)
Other than high-volatility commercial real estate (HVCRE)
Regulatory
categories
Remaining
maturity
On-balance
sheet amount
Off-balance
sheet amount
RW
Exposure amount (EAD)
Credit RWA
amount
Expected
losses
PF
OF
CF
IPRE
Total
Strong
Less than
2.5 years
3,789
58,759
50%
62,549
—
—
—
62,549
31,274
—
Equal to or
more than
2.5 years
25,850
—
70%
9,103
16,747
—
—
25,850
18,095
103
Good
Less than
2.5 years
22,071
—
70%
22,071
—
—
—
22,071
15,449
88
Equal to or
more than
2.5 years
186,928
4,334
90%
188,805
—
—
—
188,805
169,925
1,510
Satisfactory
9,206
12,684
115%
14,280
—
—
—
14,280
16,422
366
Weak
—
—
250%
—
—
—
—
—
—
—
Default
4,335
—
—
4,335
—
—
—
4,335
—
2,167
Total
252,181
75,779
—
301,145
16,747
—
—
317,892
251,167
4,235
HVCRE
Regulatory
categories
Remaining
maturity
On-balance
sheet amount
Off-balance
sheet amount
RW
Exposure
amount
(EAD)
Credit
RWA
amount
Expected
losses
Strong
Less than
2.5 years
17,136
11,243
70%
21,633
15,143
86
Equal to or
more than
2.5 years
7,062
29,840
95%
18,998
18,048
75
Good
Less than
2.5 years
76,246
11,024
95%
83,658
79,475
334
Equal to or
more than
2.5 years
86,665
36,825
120%
103,175
123,810
412
Satisfactory
111,403
2,326
140%
112,333
157,266
3,145
Weak
—
—
250%
—
—
—
Default
—
—
—
—
—
—
Total
298,514
91,259
—
339,799
393,745
4,055
Basel III Information
220
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(One hundred billions of yen)
CR8: RWA flow statements of credit risk exposures under IRB approach
Item
No.
RWA amounts
1
RWA as of March 31, 2022
412
2
Breakdown of
variations in the
credit risk-
weighted assets
Asset size
16
3
Asset quality
(31)
4
Model updates
—
5
Methodology and policy
—
6
Acquisitions and disposals
—
7
Foreign exchange movements
12
8
Other
—
9
RWA as of March 31, 2023
410
8. Backtesting of Probability of Default (PD) per Portfolio (CR9)
(%, the number of data)
CR9: IRB - Backtesting of PD per portfolio
a
b
c
d
e
f
g
h
i
Portfolio
PD Range
External rating equivalent
Weighted
average PD
(EAD
weighted)
Arithmetic
average PD
(by
obligors)
Number of obligors
Number
of
defaulted
obligors
in the
year
Of which:
number
of new
defaulted
obligors
in the
year
Average
historical
annual
default
rate (5
years)
S&P
Moody’s
Fitch
R&I
JCR
As of
March
31, 2023
As of
March
31, 2022
Corporates
0.00 to < 0.05
AAA~A+ Aaa~A1 AAA~A+ AAA~AA- AAA~AA-
0.00%
0.02%
456
456
0
0
0.02%
0.05 to < 0.10
A~A-
A2~A3
A~A-
A+~BBB- A+~BBB-
0.06%
0.07%
6,006
6,006
0
0
0.02%
0.10 to < 0.50
BBB+~BB
Baa1~Ba2 BBB+~BB BB+~BB- BB+~BB-
0.20%
0.21%
12,329
12,329
6
0
0.12%
0.50 to < 2.50
BB-~B
Ba3~B2
BB-~B
BB+~B-
BB+~B-
1.23%
1.58%
24,570
24,569
106
1
0.39%
2.50 to < 100.00
B-~
B3~
B-~
CCC+~
CCC+~
9.85%
17.13%
3,602
3,602
537
0
13.40%
Qualifying
revolving
retail
0.00 to < 0.05
—
—
—
—
—
—
—
0.05 to < 0.10
0.08%
0.08%
6,245,032
6,242,941
5,627
2,094
0.08%
0.10 to < 0.50
0.28%
0.24%
9,797,575
9,795,143
16,716
2,432
0.16%
0.50 to < 2.50
1.65%
1.39%
855,151
855,505
14,157
2,365
0.91%
2.50 to < 100.00
6.28%
6.70%
1,531,306
1,509,374
90,835
5,083
4.94%
Residential
mortgage
0.00 to < 0.05
—
—
—
—
—
—
—
0.05 to < 0.10
—
—
—
—
—
—
—
0.10 to < 0.50
0.31%
0.31%
624,435
628,545
443
0
0.10%
0.50 to < 2.50
0.74%
0.78%
138,194
144,161
325
1
0.35%
2.50 to < 100.00
21.48%
22.70%
1,908
2,007
156
0
9.53%
Other retail
0.00 to < 0.05
—
—
—
—
—
—
—
0.05 to < 0.10
—
—
—
—
—
—
—
0.10 to < 0.50
0.30%
0.32%
12,554
13,871
15
0
0.08%
0.50 to < 2.50
1.10%
1.07%
2,011,364
2,012,969
8,773
60
0.45%
2.50 to < 100.00
5.19%
8.27%
175,942
175,881
9,003
244
4.87%
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 89.17 percent, “Qualifying revolving retail” accounts for 3.20
percent, “Residential mortgage” accounts for 3.67 percent, and “Other retail” accounts for 2.40 percent.
Basel III Information
223
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
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.
(Millions of yen)
Calculation method
As of March 31, 2024
As of March 31, 2023
Look-through approach
1,384,604
1,056,257
Mandate-based approach
—
—
Simple approach (subject to 250% risk weight)
101,046
34,357
Simple approach (subject to 400% risk weight)
135,116
137,691
Fall-back approach
45,606
21,408
Basel III Information
222
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, except percentages)
CR10: IRB - SL (slotting
criteria approach)
and equity
exposures (market-
based approach,
etc.)
As of March 31, 2023
a
b
c
d
e
f
g
h
i
j
k
l
SL (slotting criteria approach)
Other than high-volatility commercial real estate (HVCRE)
Regulatory
categories
Remaining
maturity
On-balance
sheet amount
Off-balance
sheet amount
RW
Exposure amount (EAD)
Credit RWA
amount
Expected
losses
PF
OF
CF
IPRE
Total
Strong
Less than
2.5 years
—
52,428
50%
52,428
—
—
—
52,428
26,214
—
Equal to or
more than
2.5 years
24,249
—
70%
15,950
8,299
—
—
24,249
16,974
96
Good
Less than
2.5 years
22,694
1,111
70%
23,205
—
—
—
23,205
16,243
92
Equal to or
more than
2.5 years
126,803
7,836
90%
130,618
—
—
—
130,618
117,557
1,044
Satisfactory
9,534
2,716
115%
10,783
—
—
—
10,783
12,400
301
Weak
—
—
250%
—
—
—
—
—
—
—
Default
3,847
—
—
3,847
—
—
—
3,847
—
1,923
Total
187,129
64,093
—
236,833
8,299
—
—
245,132
189,390
3,460
HVCRE
Regulatory
categories
Remaining
maturity
On-balance
sheet amount
Off-balance
sheet amount
RW
Exposure
amount
(EAD)
Credit
RWA
amount
Expected
losses
Strong
Less than
2.5 years
19,866
8,181
70%
23,627
16,539
94
Equal to or
more than
2.5 years
6,321
6,537
95%
9,326
8,860
37
Good
Less than
2.5 years
106,166
23,675
95%
117,099
111,244
468
Equal to or
more than
2.5 years
135,532
10,158
120%
142,639
171,167
570
Satisfactory
68,118
20,061
140%
86,689
121,364
2,427
Weak
—
—
250%
—
—
—
Default
—
—
—
—
—
—
Total
336,004
68,613
—
379,382
429,176
3,598
Equity exposures (market-based approach, etc.)
Equity exposures subject to market-based approach
Categories
On-balance
sheet amount
Off-balance
sheet amount
RW
Exposure
amount
(EAD)
Credit
RWA
amount
Simple risk weight
method –listed shares
30,856
—
300%
30,856
92,570
Simple risk weight
method –unlisted shares
75,418
43,997
400%
95,859
383,438
Internal models approach
287,621
—
129%
287,621
371,605
Total
393,896
43,997
—
414,337
847,614
Equity exposures subject to 100% risk weight
Equity exposures subject
to 100% risk weight
pursuant to the provisions
of Article 166, Paragraph 1
of the Notification No. 19
issued by the Japan
Financial Service Agency
in 2006
—
—
100%
—
—
Basel III Information
225
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, except percentages)
CR4: SA – CR exposure and CRM effects
As of March 31, 2023
Item
No.
a
b
c
d
e
f
Exposures pre-CCF and pre-CRM
Exposures post-CCF and post-CRM
Credit RWA
amount
RWA density
Asset classes
On-balance
sheet amount
Off-balance
sheet amount
On-balance
sheet amount
Off-balance
sheet amount
1
Cash
30,923
—
30,923
—
0
0.00%
2
Government of Japan and Bank of
Japan (BOJ)
3,832,051
—
3,832,051
—
0
0.00%
3
Foreign central governments and
foreign central banks
2,212,839
—
2,212,839
—
42,135
1.90%
4
Bank for International Settlements,
etc.
10
—
10
—
0
0.00%
5
Local governments of Japan
126,273
—
126,273
—
0
0.00%
6
Foreign non-central government
public sector entities (PSEs)
3,965
—
3,965
—
793
20.00%
7
Multilateral development banks
(MDBs)
1,392
—
1,392
—
0
0.00%
8
Japan Finance Organization for
Municipalities (JFM)
—
—
—
—
—
—
9
Government- affiliated agencies of
Japan
96,971
—
96,971
—
9,697
10.00%
10
The three local public corporations
—
—
—
—
—
—
11
Banks entities and financial
instruments business operators
engaged in Type I Financial
Instruments Business
1,216,433
—
1,216,433
—
295,453
24.28%
12
Corporates
906,830
348,485
893,080
116,774
1,050,444
104.01%
13
SMEs and retail
1,980,133
945,356
1,980,133
629,180
1,956,985
75.00%
14
Residential mortgage loans
209,296
—
209,296
—
73,253
35.00%
15
Real estate acquisition activities
—
—
—
—
—
—
16
Past due loans (three months or
more),etc. (excluding residential
mortgage loans)
155,899
170
155,715
170
221,261
141.93%
17
Past due loans (three months or
more) (residential mortgage loans)
69
—
69
—
69
100.00%
18
Bills in the course of collection
—
—
—
—
—
—
19
Guaranteed by credit guarantee
associations, etc.
—
—
—
—
—
—
20
Guaranteed by Regional Economy
Vitalization Corporation of Japan
(REVIC), etc.
—
—
—
—
—
—
21
Investments, etc. (excluding
significant investments)
—
—
—
—
—
—
22
Total
10,773,090
1,294,012
10,759,156
746,125
3,650,094
31.72%
Basel III Information
224
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ Standardised Approach
1. Scope
The following consolidated subsidiaries have adopted the standardised approach for exposures as of March 31, 2024 (i.e. consolidated
subsidiaries not listed in the “Internal Ratings-Based (IRB) Approach: 1. Scope” on page 205).
(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
Consolidated subsidiaries that have adopted the standardized approach use the following qualifying rating agencies for determination of risk
weights: Rating and Investment Information, Inc., Japan Credit Rating Agency, Ltd., Moody’s Investors Service, Inc., S&P Global Ratings,
and Fitch Ratings Ltd. Certain consolidated subsidiaries use country risk scores published by the Organization for Economic Co-operation
and Development (OECD) for determination of risk weights of sovereign exposure.
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, 2024
Item
No.
a
b
c
d
e
f
Exposures pre-CCF and pre-CRM
Exposures post-CCF and post-CRM
Credit RWA
amount
RWA density
Asset classes
On-balance
sheet amount
Off-balance
sheet amount
On-balance
sheet amount
Off-balance
sheet amount
1a
Government of Japan and Bank of
Japan (BOJ)
4,424,030
—
4,424,030
—
0
0.00%
1b
Foreign central governments and
foreign central banks
2,724,420
—
2,724,420
—
45,207
1.65%
1c
Bank for International Settlements, etc.
3,700
—
3,700
—
0
0.00%
2a
Local governments of Japan
163,273
—
163,273
—
0
0.00%
2b
Foreign non-central government
public sector entities (PSEs)
28,146
—
28,146
—
5,629
20.00%
2c
Japan Finance Organization for
Municipalities (JFM)
37,637
—
37,637
—
3,763
10.00%
2d
Government- affiliated agencies of
Japan
78,814
—
78,814
—
7,881
10.00%
2e
The three local public corporations
—
—
—
—
—
—
3
Multilateral development banks (MDBs)
7,112
—
7,112
—
0
0.00%
4
Banks, securities firms and
insuranse companies
1,305,857
—
1,305,857
—
348,042
26.65%
Of which: securities firms and
insurance companies
35,386
—
35,386
—
16,008
45.23%
5
Covered bonds
—
—
—
—
—
—
6
Corporates including specialized lending
1,148,649
356,941
1,136,062
133,850
1,244,632
98.00%
Of which: specialized lending
—
—
—
—
—
—
7a
Subordinated debt and other capital
—
—
—
—
—
—
7b
Equity
—
—
—
—
—
—
8
SMEs and individuals
2,574,274
1,428,801
2,574,274
783,497
2,533,535
75.45%
Of which transactors
—
—
—
—
—
—
9
Real estate
242,058
—
242,058
—
83,112
34.33%
Of which: general RRE
225,904
—
225,904
—
76,344
33.79%
Of which: IPRRE
16,154
—
16,154
—
6,768
41.89%
Of which: general CRE
—
—
—
—
—
—
Of which: Other real estate related
—
—
—
—
—
—
Of which: ADC
—
—
—
—
—
—
10a
Delinquency excluding general RRE
186,533
119
186,405
119
262,258
140.60%
10b
Delinquency for general RRE
14
—
14
—
14
100.00%
11a
Cash
23,511
—
23,511
—
0
0.00%
11b
Bills in the course of collection
—
—
—
—
—
—
Guaranteed by credit guarantee
associations, etc.
—
—
—
—
—
—
Guaranteed by Regional Economy
Vitalization Corporation of Japan
(REVIC), etc.
—
—
—
—
—
—
12
Total
12,948,036
1,785,862
12,935,320
917,466
4,534,078
32.73%
Basel III Information
227
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
CR5a: SA – CR exposures by asset
classes and risk weights
As of March 31, 2024
Item
No.
Total credit exposures amount (post CCF and post-CRM)
Risk weight
Asset classes
70%
90%
110%
150%
Others
Total
9c Real estate Of which: general CRE
—
—
—
—
—
—
70%
112.5%
Others
Total
Of which: mortgage is second
priority and meets eligibility
criteria
—
—
—
—
—
—
60%
Others
Total
9d Real estate Of which: Other real
estate related
—
—
—
60%
Others
Total
Of which: mortgage is second
priority and meets eligibility
criteria
—
—
—
100%
150%
Others
Total
9e Real estate Of which: ADC
—
—
—
—
50%
100%
150%
Others
Total
10a Delinquency excluding general
RRE
11,510
12,034
162,979
—
186,524
10b Delinquency for general RRE
—
14
—
—
14
0%
10%
20%
Others
Total
11a Cash
23,511
—
—
—
23,511
11b Bills in the course of collection
—
—
—
—
—
Guaranteed by credit guarantee
associations, etc.
—
—
—
—
—
Guaranteed by REVIC of Japan,
etc.
—
—
—
—
—
Basel III Information
226
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
4. CR Exposures by Asset Classes and Risk Weights (CR5)
(Millions of yen)
CR5a: SA – CR exposures by asset
classes and risk weights
As of March 31, 2024
Item
No.
Total credit exposures amount (post CCF and post-CRM)
Risk weight
Asset classes
0%
20%
50%
100%
150%
Others
Total
1a Government of Japan and BOJ
4,424,030
—
—
—
—
—
4,424,030
1b Foreign central governments and
foreign central banks
2,634,005
—
90,414
—
—
—
2,724,420
1c Bank for International Settlements,
etc.
3,700
—
—
—
—
—
3,700
0%
10%
20%
50%
100%
150%
Others
Total
2a Local governments of Japan
163,273
—
—
—
—
—
—
163,273
2b Foreign non-central government
PSEs
—
—
28,146
—
—
—
—
28,146
2c JFM
—
37,637
—
—
—
—
—
37,637
2d Government- affiliated agencies of
Japan
—
78,814
—
—
—
—
—
78,814
2e The three local public corporations
—
—
—
—
—
—
—
—
0%
20%
30%
50%
100%
150%
Others
Total
3
MDBs
7,112
—
—
—
—
—
—
7,112
20%
30%
40%
50%
75%
100%
150%
Others
Total
4
Banks, securities firms and
insuranse companies
913,459
333,823
7,226
14,709
0
—
36,638
—
1,305,857
Of which: securities firms and
insurance companies
13,733
16,015
—
0
—
—
5,638
—
35,386
10%
15%
20%
25%
35%
50%
100%
Others
Total
5
Covered bonds
—
—
—
—
—
—
—
—
—
20%
50%
75%
80%
85%
100%
130%
150%
Others
Total
6
Corporates including specialized
lending
17,888
13,548
43
—
140,993
1,097,436
—
1
—
1,269,912
Of which: specialized lending
—
—
—
—
—
—
—
—
—
—
100%
150%
100%
100%
Others
Total
7a Subordinated debt and other capital
—
—
—
—
—
—
7b Equity
—
—
—
—
—
—
45%
75%
100%
Others
Total
8
SMEs and individuals
882
3,296,811
59,175
903
3,357,772
20%
25%
30%
40%
50%
70%
75%
Others
Total
9a Real estate Of which: general RRE
33,127
20,798
86,284
47,890
35,145
1,768
889
—
225,904
20%
31.25%
37.5%
50%
62.5%
Others
Total
Of which: mortgage is second
priority and meets eligibility
criteria
—
—
—
—
—
—
—
—
—
30%
35%
45%
60%
75%
105%
150%
Others
Total
9b Real estate Of which: IPRRE
4,863
2,339
7,311
793
546
298
—
—
16,154
30%
43.75%
56.25%
75%
93.75%
Others
Total
Of which: mortgage is second
priority and meets eligibility
criteria
—
—
—
—
—
—
—
—
—
Basel III Information
229
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
5. exposures and CCF by risk weight (CR5b)
(Millions of yen, except percentages)
CR5b: Standardized approach –
exposures and CCF by risk
weight
As of March 31, 2024
Item
No.
Risk weight
a
b
c
d
On-balance sheet
exposure
Off-balance sheet
exposures
Weighted average CCF
Exposure (post-CCF
and post-CRM)
1
Less than 40%
8,812,817
—
—
8,812,817
2
40%-70%
231,196
6
100.00%
231,202
3
75%
2,518,604
1,390,692
56.06%
3,298,291
80%
—
—
—
—
4
85%
136,601
43,923
10.00%
140,993
5
90%-100%
1,047,976
351,129
37.95%
1,168,660
6
105%-130%
298
—
—
298
7
150%
200,540
110
100.00%
200,522
8
100%
—
—
—
—
9
100%
—
—
—
—
10
1,250%
—
—
—
—
11
Total exposures
12,948,036
1,785,862
51.37%
13,852,787
6. Comparison of modelled and standardized RWA at risk level (CMS1)
(Millions of yen)
CMS1: Comparison of modelled and
standardized RWA at risk level
As of March 31, 2024
Item
No.
a
b
c
d
RWA
RWA for modelled
approaches that banks
have supervisory
approval to use
RWA for portfolios
where standardized
approaches are used
Total Actual RWA
RWA calculated using
full standardised
approach and prior to
the application of the
output floor
(ie RWA used in capital
floor computation)
1
Credit risk (excluding
counterparty credit risk)
56,669,456
5,178,991
61,848,447
116,056,356
2
Counterparty credit risk (CCR)
1,780,375
987,110
2,767,485
5,522,521
3
Credit valuation adjustment
(CVA)
2,412,722
2,412,722
2,412,722
4
Securitisation exposures in the
banking book
1,317,929
170,908
1,488,838
2,314,186
5
Market risk
—
2,926,210
2,926,210
2,926,210
6
Operational risk
5,545,060
5,545,060
5,545,060
7
Residual RWA
15,859,814
15,859,814
11,531,998
8
Total
59,767,761
33,080,817
92,848,578
146,309,056
Basel III Information
228
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
CR5: SA – CR exposures by asset
classes and risk weights
As of March 31, 2023
Item
No.
a
b
c
d
e
f
g
h
i
j
k
CR exposure amounts (post-CCF and CRM)
Risk weight
Asset classes
0%
10%
20%
35%
50%
75%
100%
150%
250%
1250%
Total
1
Cash
30,923
—
—
—
—
—
—
—
—
—
30,923
2
Government of Japan and BOJ
3,832,051
—
—
—
—
—
—
—
—
—
3,832,051
3
Foreign central governments and
foreign central banks
2,128,569
—
—
—
84,270
—
—
—
—
—
2,212,839
4
Bank for International
Settlements, etc.
10
—
—
—
—
—
—
—
—
—
10
5
Local governments of Japan
126,273
—
—
—
—
—
—
—
—
—
126,273
6
Foreign non-central government
PSEs
—
—
3,965
—
—
—
—
—
—
—
3,965
7
MDBs
1,392
—
—
—
—
—
—
—
—
—
1,392
8
JFM
—
—
—
—
—
—
—
—
—
—
—
9
Government- affiliated agencies
of Japan
—
96,971
—
—
—
—
—
—
—
—
96,971
10 The three local public
corporations
—
—
—
—
—
—
—
—
—
—
—
11
Banks and financial instruments
business operators engaged in
Type I Financial Instruments
Business
—
—
1,125,692
—
40,851
—
49,889
—
—
—
1,216,433
12 Corporates
3,669
—
1,161
—
—
—
1,005,024
—
—
—
1,009,855
13 SMEs and retail
—
—
—
—
—
2,609,313
—
—
—
—
2,609,313
14 Residential mortgage loans
—
—
—
209,296
—
—
—
—
—
—
209,296
15 Real estate acquisition activities
—
—
—
—
—
—
—
—
—
—
—
16
Past due loans (three months or
more), etc. (excluding residential
mortgage loans)
—
—
—
—
7,303
—
10,526
138,055
—
—
155,885
17
Past due loans (three months or
more) (residential mortgage
loans)
—
—
—
—
—
—
69
—
—
—
69
18 Bills in the course of collection
—
—
—
—
—
—
—
—
—
—
—
19 Guaranteed by credit guarantee
associations, etc.
—
—
—
—
—
—
—
—
—
—
—
20 Guaranteed by REVIC of Japan,
etc.
—
—
—
—
—
—
—
—
—
—
—
21 Investments, etc. (excluding
significant investments)
—
—
—
—
—
—
—
—
—
—
—
22 Total
6,122,890
96,971
1,130,818
209,296
132,425
2,609,313
1,065,510
138,055
—
—
11,505,282
Basel III Information
231
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ Credit Risk Mitigation (CRM) Techniques
1. Overview of Risk Characteristics, Risk Management Policy, Risk Management Procedures and Risk Management System
In calculating credit risk-weighted asset amounts, we take into account credit risk mitigation (CRM) techniques. Specifically, amounts are
adjusted for eligible financial or real estate collateral, guarantees, and credit derivatives. The methods and scope of these adjustments and
methods of management are as follows.
(1) Scope and Management
A. Collateral (Eligible Financial or Real Estate Collateral)
SMBC designates deposits and securities as eligible financial collateral, and land and buildings as eligible real estate collateral.
Real estate collateral is evaluated by taking into account its fair value, appraisal value, and current condition, as well as our lien
position. Real estate collateral must maintain sufficient collateral value in the event security rights must be exercised due to delinquency.
However, during the period from acquiring the rights to exercising the rights, the property may deteriorate or suffer damage from
earthquakes or other natural disasters, or there may be changes in the lien position due to, for example, attachment or establishment of
liens by a third party. Therefore, the regular monitoring of collateral is implemented according to the type of property and the type of
security interest.
B. Guarantees and Credit Derivatives
Guarantors are sovereigns, municipal corporations, credit guarantee corporations and other public entities, financial institutions, and
C&I companies. Counterparties to credit derivative transactions are mostly domestic and overseas banks and securities companies.
Credit risk-weighted asset amounts are calculated taking into account credit risk mitigation of guarantees and credit derivatives
acquired from entities with sufficient ability to provide protection such as sovereigns, municipal corporations and other public sector
entities of comparable credit quality, and financial institutions and C&I companies with sufficient credit ratings.
(2) Concentration of Credit Risk and Market Risk under Credit Risk Mitigation Techniques
There is a framework in place for controlling concentration of risk in obligors with large exposures which includes large exposure limit
lines, risk concentration monitoring, and reporting to the Credit Risk Committee (please refer to pages 155 to 160). 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)
(Millions of yen)
CR3: CRM techniques
As of March 31, 2024
Item
No.
a
b
c
d
e
Exposures
unsecured
Exposures
secured
Exposures
secured by
collateral
Exposures
secured by
financial
guarantees
Exposures
secured by credit
derivatives
1
Loans
75,640,079
29,268,996
12,329,056
12,621,786
—
2
Securities
(of which: Debt securities)
26,350,070
270,883
101,003
20,046
—
3
Other on-balance sheet assets
(of which: debt-based assets)
87,958,680
424,506
3,118
413,427
—
4
Total (1+2+3)
189,948,829
29,964,386
12,433,177
13,055,260
—
5
Of which: defaulted
1,066,812
178,324
65,959
36,848
—
Basel III Information
230
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
7. Comparison of modelled and standardized RWA for credit risk at asset class level (CMS2)
(Millions of yen)
CMS2: Comparison of modelled and
standardized RWA for credit
risk at asset class level
As of March 31, 2024
Item
No.
a
b
c
d
RWA
RWA for modelled
approaches that banks
have supervisory
approval to use
RWA for column (a) if
re-computed using the
standardized approach
Total Actual RWA
RWA calculated using
full standardised
approach and prior to
the application of the
output floor
(ie RWA used in capital
floor computation)
1
Sovereign
676,660
62,482
739,142
1,497,926
Of which: Local governments
of Japan
45,360
—
45,360
55,348
Of which: Foreign non-
central government public
sector entities (PSEs)
198,115
5,629
203,744
411,494
Of which: Multilateral
development banks (MDBs)
—
—
—
—
Of which: Japan Finance
Organization for
Municipalities (JFM)
—
3,763
3,763
3,763
Of which: Government-
affiliated agencies of Japan
1,344
7,881
9,226
98,482
Of which: The three local
public corporations
2,481
—
2,481
3,981
2
Banks
3,980,826
348,042
4,328,868
5,392,201
3
Equity
5,420,152
—
5,420,152
4,841,283
4
Purchased receivables
1,223,633
—
1,223,633
3,205,250
5
Corporate excluding
specialized lending and mid-
sized corporations and SMEs
33,485,069
1,171,269
34,656,339
71,786,223
Of which: FIRB is applied
31,257,339
31,257,339
Of which: AIRB is applied
2,227,730
2,227,730
6
Mid-sized corporations and
SMEs
1,959,225
119,844
2,079,070
4,193,968
Of which: FIRB is applied
224,121
224,121
Of which: AIRB is applied
1,735,103
1,735,103
7
Residential mortgage
1,427,906
76,359
1,504,265
3,790,641
8
Qualifying revolving retail
1,889,644
—
1,889,644
2,674,590
9
Other retail
914,709
2,756,080
3,670,789
4,106,999
10
Specialized lending
5,691,628
644,912
6,336,541
14,567,270
Of which: Commercial real
estate and high-volatility
commercial real estate
1,417,636
393,745
1,811,381
5,510,007
11
Total
56,669,456
5,178,991
61,848,447
116,056,356
Note: The criteria for classifying the exposures to which the standardized approach is applied to the IRBA portfolio is as described below:
• Exposures to individuals other than those that come under Item 7 “Residential mortgage exposures” are classified under Item 9 “Other retail
exposures.”
• Exposures other than the above are classified in accordance with the definition of the IRBA portfolio.
Basel III Information
233
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ 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)
(Millions of yen)
CCR1: Amount of CCR exposure by
approach
As of March 31, 2024
Item
No.
a
b
c
d
e
f
Replacement
cost
PFE
Effective EPE
(EEPE)
Alpha used for
computing
regulatory EAD
EAD post-
CRM
RWA
1
SA-CCR
1,687,432
2,728,055
1.4
6,181,683
1,828,241
CEM
—
—
—
—
2
Expected exposure method (IMM)
—
—
—
—
3
Simple approach for CRM
—
—
4
Comprehensive approach for CRM
2,170,189
879,393
5
Exposure fluctuation estimation
model
—
—
6
Total
2,707,635
(Millions of yen)
CCR1: Amount of CCR exposure by
approach
As of March 31, 2023
Item
No.
a
b
c
d
e
f
Replacement
cost
PFE
Effective EPE
(EEPE)
Alpha used for
computing
regulatory EAD
EAD post-
CRM
RWA
1
SA-CCR
—
—
1.4
—
—
CEM
2,402,391
3,857,731
6,260,123
1,503,981
2
Expected exposure method (IMM)
—
—
—
—
3
Simple approach for CRM
—
—
4
Comprehensive approach for CRM
8,324,288
864,450
5
Exposure fluctuation estimation
model
—
—
6
Total
2,368,432
Basel III Information
232
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
CR3: CRM techniques
As of March 31, 2023
Item
No.
a
b
c
d
e
Exposures
unsecured
Exposures
secured
Exposures
secured by
collateral
Exposures
secured by
financial
guarantees
Exposures
secured by credit
derivatives
1
Loans
66,405,972
29,856,764
13,274,199
10,516,994
32,138
2
Securities
(of which: Debt securities)
24,985,159
389,260
134,580
10,685
—
3
Other on-balance sheet assets
(of which: debt-based assets)
85,006,276
383,866
11,101
259,468
—
4
Total (1+2+3)
176,397,408
30,629,891
13,419,881
10,787,148
32,138
5
Of which: defaulted
814,442
250,429
83,170
46,275
—
Basel III Information
235
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
CCR3: CCR exposures by regulatory portfolio
and risk weights
As of March 31, 2023
Item
No.
a
b
c
d
e
f
g
h
i
Credit equivalent amounts (post-CRM)
Risk weight
Regulatory porfolio
0%
10%
20%
50%
75%
100%
150%
Others
Total
1
Government of Japan and BOJ
191,331
—
—
—
—
—
—
—
191,331
2
Foreign central governments and
foreign central banks
—
—
—
—
—
—
—
—
—
3
Bank for International Settlements,
etc.
—
—
—
—
—
—
—
—
—
4
Local governments of Japan
1,057
—
—
—
—
—
—
—
1,057
5
Foreign non-central government
PSEs
—
—
—
—
—
—
—
—
—
6
MDBs
—
—
—
—
—
—
—
—
—
7
JFM
—
—
—
—
—
—
—
—
—
8
Government- affiliated agencies of
Japan
—
—
—
—
—
—
—
—
—
9
The three local public corporations
—
—
—
—
—
—
—
—
—
10
Banks and financial instruments
business operators engaged in Type
I Financial Instruments Business
—
—
419,720
227
—
—
—
—
419,947
11
Corporates
—
—
—
—
—
511,671
—
—
511,671
12
SMEs and retail
—
—
—
—
72,229
—
—
—
72,229
13
Other than the above
—
—
—
—
—
72,721
—
—
72,721
14
Total
192,389
—
419,720
227
72,229
584,393
—
— 1,268,959
Basel III Information
234
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
4. CVA Capital Charge (CCR2)
(Millions of yen)
CCR2: CVA risk capital charge
As of March 31, 2023
Item
No.
a
b
EAD post-
CRM
RWA
(Amount
calculated by
dividing CVA
capital charge
by 8%)
1
Total portfolios subject to the advanced CVA capital charge
—
—
2
(i) VaR component (including the 3×multiplier)
—
3
(ii) Stressed VaR component (including the 3×multiplier)
—
4
Total portfolios subject to the standardised CVA capital charge
5,735,518
2,594,370
5
Total subject to the CVA capital charge
5,735,518
2,594,370
5. CCR Exposures by Regulatory Portfolio and Risk Weights (CCR3)
(Millions of yen)
CCR3: CCR exposures by regulatory
portfolio and risk weights
As of March 31, 2024
Item
No.
a
b
c
d
e
f
g
h
i
j
k
l
m
n
Credit equivalent amounts (post-CRM)
Risk weight
Regulatory porfolio
0%
10%
20%
30%
40%
50%
75%
80%
85%
100%
130%
150%
Others
Total
1
Government of Japan and
BOJ
207,124
—
—
—
—
—
—
—
—
—
—
—
—
207,124
2
Foreign central governments
and foreign central banks
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3
Bank for International
Settlements, etc.
—
—
—
—
—
—
—
—
—
—
—
—
—
—
4
Local governments of Japan
16
—
—
—
—
—
—
—
—
—
—
—
—
16
5
Foreign non-central
government PSEs
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6
MDBs
—
—
—
—
—
—
—
—
—
—
—
—
—
—
7
JFM
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8
Government- affiliated
agencies of Japan
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9
The three local public
corporations
—
—
—
—
—
—
—
—
—
—
—
—
—
—
10
Banks, securities firms and
insuranse companies
—
—
218,652
138,678
758
2,722
—
—
—
—
—
28,893
—
389,705
11
Corporates
—
—
7,099
—
—
92,996
243
—
—
589,735
—
—
—
690,075
12
SMEs and retail
—
—
—
—
—
—
80,201
—
—
—
—
—
—
80,201
13
Other than the above
—
—
—
—
—
—
—
—
—
98,933
—
—
—
98,933
14
Total
207,141
—
225,751
138,678
758
95,719
80,445
—
—
688,669
—
28,893
— 1,466,057
Basel III Information
237
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2024
a
b
c
d
e
f
g
Item
No.
PD scale
EAD post-
CRM
Average PD
(%)
Number of
obligors
Average
LGD
(%)
Average
maturity
Credit RWA RWA density
(%)
Corporate exposures (AIRB approach)
1
0.00 to <0.15
36,859
0.07
2.7
35.01
0.9
4,350
11.80
2
0.15 to <0.25
47,681
0.18
4.3
34.97
1.0
10,459
21.93
3
0.25 to <0.50
85,606
0.29
1.0
4.96
0.1
4,380
5.11
4
0.50 to <0.75
1,669
0.71
0.2
35.00
1.0
812
48.64
5
0.75 to <2.50
6,451
1.63
0.9
35.00
1.0
4,395
68.13
6
2.50 to <10.00
938
8.47
0.1
35.00
1.0
1,194
127.25
7
10.00 to <100.00
1,897
24.90
0.0
35.00
1.0
3,430
180.82
8
100.00 (Default)
876
100.00
0.0
44.84
1.0
111
12.75
9
Subtotal
181,981
1.05
9.7
20.91
0.5
29,136
16.01
Corporate exposures (FIRB approach)
1
0.00 to <0.15
3,026,845
0.06
38.0
40.78
0.9
426,339
14.08
2
0.15 to <0.25
738,108
0.16
13.2
40.72
0.9
189,998
25.74
3
0.25 to <0.50
185,206
0.37
1.5
41.76
1.0
82,948
44.78
4
0.50 to <0.75
408
0.71
0.1
41.78
1.0
264
64.63
5
0.75 to <2.50
669,283
1.87
14.2
40.85
1.1
625,218
93.41
6
2.50 to <10.00
14,211
7.61
0.3
40.12
1.0
19,792
139.27
7
10.00 to <100.00
2,825
22.27
0.0
40.69
1.0
5,842
206.75
8
100.00 (Default)
0
100.00
0.0
40.00
1.0
—
0.00
9
Subtotal
4,636,889
0.39
67.5
40.81
1.0
1,350,405
29.12
Mid-sized corporations and SMEs exposures (AIRB approach)
1
0.00 to <0.15
11,953
0.07
0.4
35.00
1.0
1,354
11.32
2
0.15 to <0.25
21,098
0.19
3.3
35.00
1.0
4,458
21.13
3
0.25 to <0.50
6,694
0.46
0.9
35.00
1.0
2,401
35.87
4
0.50 to <0.75
2,899
0.71
0.5
35.00
1.0
1,237
42.67
5
0.75 to <2.50
3,041
1.79
1.6
35.00
1.0
1,809
59.51
6
2.50 to <10.00
1,663
4.92
0.1
35.00
1.0
1,377
82.77
7
10.00 to <100.00
192
23.67
0.0
35.00
1.4
294
153.32
8
100.00 (Default)
1
100.00
0.0
44.85
1.0
0
12.75
9
Subtotal
47,543
0.60
7.2
35.00
1.0
12,932
27.20
Mid-sized corporations and SMEs exposures (FIRB approach)
1
0.00 to <0.15
25
0.08
0.0
45.00
1.0
5
20.66
2
0.15 to <0.25
100
0.20
0.0
45.00
1.0
27
27.24
3
0.25 to <0.50
122
0.47
0.0
45.00
1.0
70
57.92
4
0.50 to <0.75
—
—
—
—
—
—
—
5
0.75 to <2.50
132
1.33
0.0
45.00
1.0
109
82.99
6
2.50 to <10.00
26
8.74
0.0
45.00
1.0
33
126.43
7
10.00 to <100.00
—
—
—
—
—
—
—
8
100.00 (Default)
—
—
—
—
—
—
—
9
Subtotal
406
1.20
0.0
45.00
1.0
246
60.64
Basel III Information
236
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
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, 2024
a
b
c
d
e
f
g
Item
No.
PD scale
EAD post-
CRM
Average PD
(%)
Number of
obligors
Average
LGD
(%)
Average
maturity
Credit RWA RWA density
(%)
Sovereign exposures (AIRB approach)
1
0.00 to <0.15
113,083
0.02
0.1
35.00
0.6
727
0.64
2
0.15 to <0.25
3,220
0.17
0.0
35.00
1.0
841
26.12
3
0.25 to <0.50
410
0.47
0.0
35.00
1.0
160
39.22
4
0.50 to <0.75
—
—
—
—
—
—
—
5
0.75 to <2.50
4,140
1.00
0.0
35.00
1.0
2,361
57.04
6
2.50 to <10.00
26
4.16
0.0
35.00
1.0
30
115.58
7
10.00 to <100.00
—
—
—
—
—
—
—
8
100.00 (Default)
—
—
—
—
—
—
—
9
Subtotal
120,881
0.06
0.1
35.00
0.6
4,122
3.40
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)
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 (FIRB approach)
1
0.00 to <0.15
1,468,018
0.05
7.2
45.00
0.9
233,067
15.87
2
0.15 to <0.25
68,369
0.16
0.2
45.00
1.0
23,217
33.95
3
0.25 to <0.50
1,247
0.41
0.0
45.00
1.0
632
50.66
4
0.50 to <0.75
—
—
—
—
—
—
—
5
0.75 to <2.50
30,053
1.67
0.1
45.00
2.4
32,485
108.09
6
2.50 to <10.00
2,093
8.36
0.0
45.00
1.0
4,004
191.26
7
10.00 to <100.00
47
13.30
0.0
45.00
5.0
131
278.90
8
100.00 (Default)
—
—
—
—
—
—
—
9
Subtotal
1,569,830
0.10
7.6
45.00
1.0
293,538
18.69
Basel III Information
239
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2023
a
b
c
d
e
f
g
Item
No.
PD scale
EAD post-
CRM
Average PD
(%)
Number of
obligors
Average
LGD
(%)
Average
maturity
Credit RWA RWA density
(%)
Sovereign exposures (AIRB approach)
1
0.00 to <0.15
773,434
0.00
0.3
9.66
1.5
549
0.07
2
0.15 to <0.25
148,880
0.15
0.0
10.84
0.5
7,079
4.75
3
0.25 to <0.50
3
0.48
0.0
35.00
1.0
1
39.67
4
0.50 to <0.75
2,858
0.74
0.0
1.00
3.2
75
2.64
5
0.75 to <2.50
—
—
0.0
—
—
—
—
6
2.50 to <10.00
—
—
—
—
—
—
—
7
10.00 to <100.00
—
—
—
—
—
—
—
8
100.00 (Default)
—
—
—
—
—
—
—
9
Subtotal
925,176
0.02
0.4
9.83
1.4
7,706
0.83
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)
1
0.00 to <0.15
6,386,190
0.03
28.5
20.72
1.8
617,464
9.66
2
0.15 to <0.25
847,877
0.15
2.2
11.53
1.3
136,054
16.04
3
0.25 to <0.50
1,783
0.37
0.0
32.98
2.3
848
47.58
4
0.50 to <0.75
—
—
0.0
—
—
—
—
5
0.75 to <2.50
90,487
1.38
0.3
5.46
0.2
11,447
12.65
6
2.50 to <10.00
—
—
0.0
—
—
—
—
7
10.00 to <100.00
—
—
—
—
—
—
—
8
100.00 (Default)
—
—
—
—
—
—
—
9
Subtotal
7,326,339
0.06
31.2
19.47
1.7
765,815
10.45
Bank 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
—
—
—
—
—
—
—
Basel III Information
238
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2024
a
b
c
d
e
f
g
Item
No.
PD scale
EAD post-
CRM
Average PD
(%)
Number of
counterparties
Average
LGD
(%)
Average
maturity
Credit RWA RWA density
(%)
SL
1
0.00 to <0.15
128,765
0.09
0.3
29.69
1.0
19,210
14.91
2
0.15 to <0.25
82,374
0.16
0.2
35.00
1.0
16,978
20.61
3
0.25 to <0.50
76,537
0.36
0.3
35.00
1.0
25,718
33.60
4
0.50 to <0.75
—
—
—
—
—
—
—
5
0.75 to <2.50
32,266
1.10
0.1
35.00
1.0
18,652
57.80
6
2.50 to <10.00
4,958
4.16
0.0
35.00
1.0
4,747
95.75
7
10.00 to <100.00
2,916
13.64
0.0
35.00
1.0
4,484
153.76
8
100.00 (Default)
464
100.00
0.0
49.93
1.0
199
43.00
9
Subtotal
328,283
0.59
1.2
32.93
1.0
89,992
27.41
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
—
—
—
—
—
—
—
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 (sum of portfolios)
6,885,815
0.34
93.5
40.72
0.9
1,780,375
25.85
Basel III Information
241
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2023
a
b
c
d
e
f
g
Item
No.
PD scale
EAD post-
CRM
Average PD
(%)
Number of
counterparties
Average
LGD
(%)
Average
maturity
Credit RWA RWA density
(%)
SL
1
0.00 to <0.15
33,872
0.04
0.1
7.95
4.7
2,760
8.14
2
0.15 to <0.25
145,048
0.15
0.5
16.75
4.7
31,162
21.48
3
0.25 to <0.50
104,682
0.35
2.0
17.73
4.7
33,735
32.22
4
0.50 to <0.75
—
—
—
—
—
—
—
5
0.75 to <2.50
40,458
1.09
0.2
16.00
4.4
16,929
41.84
6
2.50 to <10.00
4,389
4.11
0.0
51.49
4.9
8,576
195.38
7
10.00 to <100.00
2,130
15.79
0.0
48.37
4.8
5,644
264.99
8
100.00 (Default)
617
100.00
0.0
54.77
4.9
287
46.63
9
Subtotal
331,198
0.66
3.1
16.80
4.7
99,096
29.92
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
—
—
—
—
—
—
—
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 (sum of portfolios)
13,315,452
0.11
145.1
19.06
1.8
1,645,809
12.36
Basel III Information
240
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, %, the number of data in thousands, years)
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2023
a
b
c
d
e
f
g
Item
No.
PD scale
EAD post-
CRM
Average PD
(%)
Number of
obligors
Average
LGD
(%)
Average
maturity
Credit RWA RWA density
(%)
Corporate exposures (AIRB approach)
1
0.00 to <0.15
3,117,081
0.04
51.0
17.48
1.5
232,383
7.45
2
0.15 to <0.25
1,192,759
0.15
24.8
23.69
2.2
292,501
24.52
3
0.25 to <0.50
208,887
0.36
14.2
32.72
2.7
101,593
48.63
4
0.50 to <0.75
6,711
0.74
1.1
35.00
2.6
4,469
66.58
5
0.75 to <2.50
125,219
1.21
2.9
31.14
1.9
83,831
66.94
6
2.50 to <10.00
21,694
8.35
0.9
34.26
2.2
29,565
136.28
7
10.00 to <100.00
2,453
23.15
0.0
33.86
1.3
4,281
174.46
8
100.00 (Default)
107
100.00
0.0
51.66
1.7
40
37.57
9
Subtotal
4,674,915
0.17
95.3
20.22
1.7
748,666
16.01
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 SMEs exposures (AIRB approach)
1
0.00 to <0.15
11,391
0.07
1.8
33.90
3.5
2,679
23.52
2
0.15 to <0.25
18,354
0.16
4.1
32.84
3.6
5,988
32.62
3
0.25 to <0.50
19,723
0.35
4.1
34.72
3.7
9,835
49.86
4
0.50 to <0.75
4,114
0.74
0.9
35.00
2.8
2,478
60.24
5
0.75 to <2.50
3,499
1.92
3.4
34.83
2.6
2,554
73.01
6
2.50 to <10.00
639
8.95
0.1
35.02
4.0
908
141.98
7
10.00 to <100.00
42
23.81
0.0
35.00
3.4
72
170.95
8
100.00 (Default)
58
100.00
0.0
46.13
3.5
7
13.63
9
Subtotal
57,822
0.57
14.9
34.00
3.5
24,525
42.41
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
—
—
—
—
—
—
—
Basel III Information
243
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
9. Credit Derivative Transaction Exposures (CCR6)
(Millions of yen)
CCR6: Credit derivative transaction exposures
As of March 31, 2024
As of March 31, 2023
Item
No.
a
b
a
b
Protection
bought
Protection sold
Protection
bought
Protection sold
Notionals
1
Single-name credit default swaps
431,282
690,955
400,301
608,659
2
Index credit default swaps
1,269,501
754,387
845,493
748,559
3
Total return swaps
—
—
—
—
4
Credit options
60,532
—
120,186
—
5
Other credit derivatives
—
—
—
—
6
Total notionals
1,761,316
1,445,342
1,365,980
1,357,219
Fair values
7
Positive fair value (asset)
3,735
19,087
4,724
12,718
8
Negative fair value (liability)
29,428
4,025
12,923
10,094
10. RWA flow statements of CCR exposures under the Expected exposure method (IMM) (CCR7)
Not applicable.
11. Exposures to Central Counterparties (CCR8)
(Millions of yen)
CCR8: Exposures to central counterparties (CCP)
As of March 31, 2024
As of March 31, 2023
Item
No.
a
b
a
b
EAD to CCP
(post-CRM)
RWA
EAD to CCP
(post-CRM)
RWA
1
Exposures to qualifying central counterparties (QCCPs) (total)
59,849
158,031
2
Exposures for trades at QCCPs (excluding initial margin and
default fund contributions); of which
2,046,957
41,089
3,784,452
75,696
3
(i) OTC derivatives
1,710,027
34,200
3,075,359
61,507
4
(ii) Exchange-traded derivatives
181,358
3,777
666,754
13,341
5
(iii) SFTs
155,571
3,111
42,338
846
6
(iv) Netting sets where cross-product netting has been
approved
—
—
—
—
7
Segregated initial margin
0
—
8
Non-segregated initial margin
7,775
155
381,938
7,638
9
Pre-funded default fund contributions
51,312
17,508
202,805
74,696
10
Unfunded default fund contributions
1,357
1,096
—
—
11
Exposures to non-QCCPs (total)
—
126,714
12
Exposures for trades at non-QCCPs (excluding initial margin and
default fund contributions); of which
—
—
517,076
126,710
13
(i) OTC derivatives
—
—
394,002
88,186
14
(ii) Exchange-traded derivatives
—
—
106,782
22,233
15
(iii) SFTs
—
—
16,290
16,290
16
(iv) Netting sets where cross-product netting has been
approved
—
—
—
—
17
Segregated initial margin
—
—
18
Non-segregated initial margin
—
—
3
3
19
Pre-funded default fund contributions
—
—
—
—
20
Unfunded default fund contributions
—
—
—
—
Basel III Information
242
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
7. Asset encumbrance (ENC1)
(Millions of yen)
ENC1: Assets encumbrance
As of March 31, 2024
Item
No.
a
b
c
d
Encumbered assets
Unencumbered assets
Total
Of which:
Securitization
exposures
1
Cash and due from banks
20,979
78,122,121
78,143,100
—
2
Trading assets
2,890,448
8,649,614
11,540,063
—
3
Securities
18,870,572
18,272,236
37,142,808
1,205,122
4
Loans and bills discounted
12,398,553
94,615,353
107,013,907
2,639,595
5
Other assets
3,225,117
12,088,428
15,313,546
1,903,345
Total
37,405,670
211,747,754
249,153,425
5,748,063
8. Composition of Collateral for CCR Exposure (CCR5)
(Millions of yen)
CCR5: Composition of collateral for CCR
exposure
As of March 31, 2024
Item
No.
a
b
c
d
e
f
Collateral used in derivative transactions
Collateral used in securities
financing transactions (SFTs)
Fair value of collateral received Fair value of posted collateral
Fair value of
collateral
received
Fair value of
posted
collateral
Segregated
Unsegregated
Segregated
Unsegregated
1
Cash (domestic currency)
—
346,882
—
467,434
6,776,928
10,599,672
2
Cash (other currencies)
—
977,872
—
527,307
5,806,583
4,471,986
3
Domestic sovereign debt
—
145,066
—
160,324
6,994,393
6,580,549
4
Other sovereign debt
—
170,914
—
86,104
5,526,379
5,384,128
5
Government agency debt
—
375
—
—
602,978
2,168
6
Corporate bonds
—
92
—
—
506,238
696,430
7
Equity securities
—
—
—
—
3,205,290
1,612,330
8
Other collateral
—
—
—
—
—
—
9
Total
—
1,641,204
—
1,241,171
29,418,793
29,347,266
(Millions of yen)
CCR5: Composition of collateral for CCR
exposure
As of March 31, 2023
Item
No.
a
b
c
d
e
f
Collateral used in derivative transactions
Collateral used in securities
financing transactions (SFTs)
Fair value of collateral received Fair value of posted collateral
Fair value of
collateral
received
Fair value of
posted
collateral
Segregated
Unsegregated
Segregated
Unsegregated
1
Cash (domestic currency)
12,837
230,100
—
171,595
6,123,681
8,235,330
2
Cash (other currencies)
103
632,101
—
474,897
5,054,287
6,599,823
3
Domestic sovereign debt
292
52,392
—
125,658
4,169,561
6,472,875
4
Other sovereign debt
992
183,265
—
72,289
2,789,246
3,974,426
5
Government agency debt
6
—
—
—
521,855
19,854
6
Corporate bonds
5,576
—
—
—
5,929,154
474,996
7
Equity securities
5,939
—
—
—
2,150,791
804,390
8
Other collateral
—
—
—
—
—
—
9
Total
25,748
1,097,859
—
844,441
26,738,578
26,581,697
Basel III Information
245
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
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)
(Millions of yen)
SEC1: Securitisation exposures in the
banking book
As of March 31, 2024
Item
No.
Type of underlying asset
a
b
c
d
e
f
g
h
i
Bank acts as originator
Bank acts as sponsor
Bank acts as investor
Traditional Synthetic
Subtotal
Traditional Synthetic
Subtotal
Traditional Synthetic
Subtotal
1
Retail (total)
- of which
419,099
—
419,099
961,717
—
961,717 1,735,534
— 1,735,534
2
Residential mortgage
419,099
—
419,099
8,206
—
8,206
373,269
—
373,269
3
Credit card
—
—
—
30,000
—
30,000
263,381
—
263,381
4
Other retail exposures
—
—
—
923,511
—
923,511 1,098,882
— 1,098,882
5
Re-securitisation
—
—
—
—
—
—
—
—
—
6
Wholesale (total)
- of which
355,584
4
355,588 1,087,968
— 1,087,968 2,264,175
— 2,264,175
7
Loans to corporates
355,584
4
355,588
78,704
—
78,704 1,895,168
— 1,895,168
8
Commercial mortgage
—
—
—
—
—
—
—
—
—
9
Lease and receivables
—
—
—
938,386
—
938,386
273,655
—
273,655
10
Other wholesale
—
—
—
70,877
—
70,877
95,352
—
95,352
11
Re-securitisation
—
—
—
—
—
—
—
—
—
Basel III Information
244
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ 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)
Basel III Information
247
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
9. Securitisation Exposures in the Banking Book and Associated Regulatory Capital Requirements
(Bank Acting as Originator or as Sponsor) (SEC3)
(Millions of yen)
SEC3: Securitisation exposures in the
banking book and associated
capital regulatory requirements
(bank acting as originator or
sponsor) (1/2)
As of March 31, 2024
Item
No.
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Re-
securitisation
Retail
underlying Wholesale
Senior
Non-senior
Exposure values (by RW bands)
1
≤20% RW
2,099,025
2,099,025
2,099,025
938,713
1,160,312
—
—
—
2
>20% to 50% RW
261,255
261,255
261,255
108,281
152,973
—
—
—
3
>50% to 100% RW
392,328
392,328
392,328
324,868
67,460
—
—
—
4
>100% to <1250% RW
71,244
71,244
71,244
8,954
62,289
—
—
—
5
1250% RW
520
516
516
—
516
—
—
—
Exposure values (by regulatory approach)
6
SEC-IRBA
2,713,601
2,713,597
2,713,597
1,346,023
1,367,573
—
—
—
7
SEC-ERBA or IAA
102,566
102,566
102,566
26,587
75,979
—
—
—
8
SEC-SA
8,206
8,206
8,206
8,206
—
—
—
—
9
1250% RW
—
—
—
—
—
—
—
—
Credit RWA amounts (by regulatory approach)
10
SEC-IRBA
787,970
787,919
787,919
424,364
363,555
—
—
—
11
SEC-ERBA or IAA
25,142
25,142
25,142
6,261
18,881
—
—
—
12
SEC-SA
2,260
2,260
2,260
2,260
—
—
—
—
13
1250% RW
—
—
—
—
—
—
—
—
Capital charge after cap (by regulatory approach)
14
SEC-IRBA
63,037
63,033
63,033
33,949
29,084
—
—
—
15
SEC-ERBA or IAA
2,011
2,011
2,011
500
1,510
—
—
—
16
SEC-SA
180
180
180
180
—
—
—
—
17
1250% RW
—
—
—
—
—
—
—
—
Basel III Information
246
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
SEC1: Securitisation exposures in the
banking book
As of March 31, 2023
Item
No.
Type of underlying asset
a
b
c
d
e
f
g
h
i
Bank acts as originator
Bank acts as sponsor
Bank acts as investor
Traditional Synthetic
Subtotal
Traditional Synthetic
Subtotal
Traditional Synthetic
Subtotal
1
Retail (total)
- of which
423,084
—
423,084
872,771
—
872,771 1,408,177
— 1,408,177
2
Residential mortgage
423,084
—
423,084
—
—
—
358,947
—
358,947
3
Credit card
—
—
—
60,000
—
60,000
272,935
—
272,935
4
Other retail exposures
—
—
—
812,771
—
812,771
776,295
—
776,295
5
Re-securitisation
—
—
—
—
—
—
—
—
—
6
Wholesale (total)
- of which
228,117
5
228,122
688,106
—
688,106 2,197,777
— 2,197,777
7
Loans to corporates
228,117
5
228,122
—
—
— 1,931,250
— 1,931,250
8
Commercial mortgage
—
—
—
—
—
—
1,134
—
1,134
9
Lease and receivables
—
—
—
605,079
—
605,079
179,099
—
179,099
10
Other wholesale
—
—
—
83,026
—
83,026
86,293
—
86,293
11
Re-securitisation
—
—
—
—
—
—
—
—
—
8. Securitisation Exposures in the Trading Book (SEC2)
(Millions of yen)
SEC2: Securitisation exposures in the trading
book
As of March 31, 2024
Item
No.
Type of underlying asset
a
b
c
d
e
f
g
h
i
Bank acts as originator
Bank acts as sponsor
Bank acts as investor
Traditional Synthetic
Subtotal
Traditional Synthetic
Subtotal
Traditional Synthetic
Subtotal
1
Retail (total)
- of which
—
—
—
—
—
—
16,372
—
16,372
2
Residential mortgage
—
—
—
—
—
—
9,334
—
9,334
3
Credit card
—
—
—
—
—
—
4,101
—
4,101
4
Other retail exposures
—
—
—
—
—
—
2,936
—
2,936
5
Re-securitisation
—
—
—
—
—
—
—
—
—
6
Wholesale (total)
- of which
—
—
—
—
—
—
27,423
—
27,423
7
Loans to corporates
—
—
—
—
—
—
27,423
—
27,423
8
Commercial mortgage
—
—
—
—
—
—
—
—
—
9
Lease and receivables
—
—
—
—
—
—
—
—
—
10
Other wholesale
—
—
—
—
—
—
—
—
—
11
Re-securitisation
—
—
—
—
—
—
—
—
—
(Millions of yen)
SEC2: Securitisation exposures in the trading
book
As of March 31, 2023
Item
No.
Type of underlying asset
a
b
c
d
e
f
g
h
i
Bank acts as originator
Bank acts as sponsor
Bank acts as investor
Traditional Synthetic
Subtotal
Traditional Synthetic
Subtotal
Traditional Synthetic
Subtotal
1
Retail (total)
- of which
—
—
—
—
—
—
27,671
—
27,671
2
Residential mortgage
—
—
—
—
—
—
26,372
—
26,372
3
Credit card
—
—
—
—
—
—
—
—
—
4
Other retail exposures
—
—
—
—
—
—
1,299
—
1,299
5
Re-securitisation
—
—
—
—
—
—
—
—
—
6
Wholesale (total)
- of which
—
—
—
—
—
—
5,322
—
5,322
7
Loans to corporates
—
—
—
—
—
—
5,322
—
5,322
8
Commercial mortgage
—
—
—
—
—
—
—
—
—
9
Lease and receivables
—
—
—
—
—
—
—
—
—
10
Other wholesale
—
—
—
—
—
—
—
—
—
11
Re-securitisation
—
—
—
—
—
—
—
—
—
Basel III Information
249
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
SEC3: Securitisation exposures in the
banking book and associated
capital regulatory requirements
(bank acting as originator or
sponsor) (1/2)
As of March 31, 2023
Item
No.
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Re-
securitisation
Retail
underlying Wholesale
Senior
Non-senior
Exposure values (by RW bands)
1
≤20% RW
1,533,766
1,533,766
1,533,766
671,075
862,690
—
—
—
2
>20% to 50% RW
276,143
276,143
276,143
249,733
26,410
—
—
—
3
>50% to 100% RW
256,214
256,214
256,214
234,420
21,793
—
—
—
4
>100% to <1250% RW
145,497
145,497
145,497
140,626
4,871
—
—
—
5
1250% RW
462
457
457
—
457
—
—
—
Exposure values (by regulatory approach)
6
SEC-IRBA or IAA
2,095,625
2,095,620
2,095,620
1,250,887
844,732
—
—
—
7
SEC-ERBA
106,210
106,210
106,210
34,719
71,491
—
—
—
8
SEC-SA
10,248
10,248
10,248
10,248
—
—
—
—
9
1250% RW
—
—
—
—
—
—
—
—
Credit RWA amounts (by regulatory approach)
10
SEC-IRBA or IAA
650,715
650,652
650,652
497,349
153,302
—
—
—
11
SEC-ERBA
28,742
28,742
28,742
8,055
20,686
—
—
—
12
SEC-SA
4,111
4,111
4,111
4,111
—
—
—
—
13
1250% RW
—
—
—
—
—
—
—
—
Capital charge after cap (by regulatory approach)
14
SEC-IRBA or IAA
52,057
52,052
52,052
39,787
12,264
—
—
—
15
SEC-ERBA
2,299
2,299
2,299
644
1,654
—
—
—
16
SEC-SA
328
328
328
328
—
—
—
—
17
1250% RW
—
—
—
—
—
—
—
—
Basel III Information
248
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
SEC3: Securitisation exposures in the
banking book and associated
regulatory capital requirements
(bank acting as originator or
sponsor) (2/2)
As of March 31, 2024
Item
No.
i
j
k
l
m
n
o
Synthetic
securitisation
(subtotal)
Securitisation
Re-
securitisation
Retail
underlying
Wholesale
Senior
Non-senior
Exposure values (by RW bands)
1
≤20% RW
—
—
—
—
—
—
—
2
>20% to 50% RW
—
—
—
—
—
—
—
3
>50% to 100% RW
—
—
—
—
—
—
—
4
>100% to <1250% RW
—
—
—
—
—
—
—
5
1250% RW
4
4
—
4
—
—
—
Exposure values (by regulatory approach)
6
SEC-IRBA
4
4
—
4
—
—
—
7
SEC-ERBA or IAA
—
—
—
—
—
—
—
8
SEC-SA
—
—
—
—
—
—
—
9
1250% RW
—
—
—
—
—
—
—
Credit RWA amounts (by regulatory approach)
10
SEC-IRBA
50
50
—
50
—
—
—
11
SEC-ERBA or IAA
—
—
—
—
—
—
—
12
SEC-SA
—
—
—
—
—
—
—
13
1250% RW
—
—
—
—
—
—
—
Capital requirement values (by regulatory approach)
14
SEC-IRBA
4
4
—
4
—
—
—
15
SEC-ERBA or IAA
—
—
—
—
—
—
—
16
SEC-SA
—
—
—
—
—
—
—
17
1250% RW
—
—
—
—
—
—
—
Basel III Information
251
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
10. Securitisation Exposures in the Banking Book Associated Capital Requirements
(Bank Acting as Investor) (SEC4)
(Millions of yen)
SEC4: Securitisation exposures in the
banking book and associated
capital requirements (bank acting
as investor) (1/2)
As of March 31, 2024
Item
No.
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Re-
securitisation
Retail
underlying Wholesale
Senior
Non-senior
Exposure values (by RW bands)
1
≤20% RW
3,811,314
3,811,314
3,811,314
1,586,673
2,224,641
—
—
—
2
>20% to 50% RW
152,255
152,255
152,255
135,947
16,308
—
—
—
3
>50% to 100% RW
15,477
15,477
15,477
12,682
2,794
—
—
—
4
>100% to <1250% RW
20,662
20,662
20,662
231
20,430
—
—
—
5
1250% RW
—
—
—
—
—
—
—
—
Exposure values (by regulatory approach)
6
SEC-IRBA
3,402,802
3,402,802
3,402,802
1,294,723
2,108,078
—
—
—
7
SEC-ERBA or IAA
596,908
596,908
596,908
440,810
156,097
—
—
—
8
SEC-SA
—
—
—
—
—
—
—
—
9
1250% RW
—
—
—
—
—
—
—
—
Credit RWA amounts (by regulatory approach)
10
SEC-IRBA
529,959
529,959
529,959
211,047
318,912
—
—
—
11
SEC-ERBA or IAA
143,505
143,505
143,505
88,260
55,244
—
—
—
12
SEC-SA
—
—
—
—
—
—
—
—
13
1250% RW
—
—
—
—
—
—
—
—
Capital charge after cap (by regulatory approach)
14
SEC-IRBA
42,396
42,396
42,396
16,883
25,512
—
—
—
15
SEC-ERBA or IAA
11,480
11,480
11,480
7,060
4,419
—
—
—
16
SEC-SA
—
—
—
—
—
—
—
—
17
1250% RW
—
—
—
—
—
—
—
—
Basel III Information
250
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
SEC3: Securitisation exposures in the
banking book and associated
regulatory capital requirements
(bank acting as originator or
sponsor) (2/2)
As of March 31, 2023
Item
No.
i
j
k
l
m
n
o
Synthetic
securitisation
(subtotal)
Securitisation
Re-
securitisation
Retail
underlying
Wholesale
Senior
Non-senior
Exposure values (by RW bands)
1
≤20% RW
—
—
—
—
—
—
—
2
>20% to 50% RW
—
—
—
—
—
—
—
3
>50% to 100% RW
—
—
—
—
—
—
—
4
>100% to <1250% RW
—
—
—
—
—
—
—
5
1250% RW
5
5
—
5
—
—
—
Exposure values (by regulatory approach)
6
SEC-IRBA or IAA
5
5
—
5
—
—
—
7
SEC-ERBA
—
—
—
—
—
—
—
8
SEC-SA
—
—
—
—
—
—
—
9
1250% RW
—
—
—
—
—
—
—
Credit RWA amounts (by regulatory approach)
10
SEC-IRBA or IAA
63
63
—
63
—
—
—
11
SEC-ERBA
—
—
—
—
—
—
—
12
SEC-SA
—
—
—
—
—
—
—
13
1250% RW
—
—
—
—
—
—
—
Capital requirement values (by regulatory approach)
14
SEC-IRBA or IAA
5
5
—
5
—
—
—
15
SEC-ERBA
—
—
—
—
—
—
—
16
SEC-SA
—
—
—
—
—
—
—
17
1250% RW
—
—
—
—
—
—
—
Basel III Information
253
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
SEC4: Securitisation exposures in the
banking book and associated
capital requirements (bank acting
as investor) (1/2)
As of March 31, 2023
Item
No.
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Re-
securitisation
Retail
underlying Wholesale
Senior
Non-senior
Exposure values (by RW bands)
1
≤20% RW
3,421,361
3,421,361
3,421,361
1,382,524
2,038,837
—
—
—
2
>20% to 50% RW
70,476
70,476
70,476
3,706
66,770
—
—
—
3
>50% to 100% RW
95,271
95,271
95,271
20,551
74,720
—
—
—
4
>100% to <1250% RW
17,710
17,710
17,710
1,395
16,315
—
—
—
5
1250% RW
1,134
1,134
1,134
—
1,134
—
—
—
Exposure values (by regulatory approach)
6
SEC-IRBA or IAA
2,963,084
2,963,084
2,963,084
1,035,412
1,927,672
—
—
—
7
SEC-ERBA
641,736
641,736
641,736
372,765
268,970
—
—
—
8
SEC-SA
—
—
—
—
—
—
—
—
9
1250% RW
1,134
1,134
1,134
—
1,134
—
—
—
Credit RWA amounts (by regulatory approach)
10
SEC-IRBA or IAA
424,189
424,189
424,189
134,050
290,139
—
—
—
11
SEC-ERBA
189,462
189,462
189,462
72,860
116,602
—
—
—
12
SEC-SA
—
—
—
—
—
—
—
—
13
1250% RW
14,184
14,184
14,184
—
14,184
—
—
—
Capital charge after cap (by regulatory approach)
14
SEC-IRBA or IAA
33,935
33,935
33,935
10,724
23,211
—
—
—
15
SEC-ERBA
15,157
15,157
15,157
5,828
9,328
—
—
—
16
SEC-SA
—
—
—
—
—
—
—
—
17
1250% RW
1,134
1,134
1,134
—
1,134
—
—
—
Basel III Information
252
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
SEC4: Securitisation exposures in the
banking book and associated
capital requirements (bank acting
as investor) (2/2)
As of March 31, 2024
Item
No.
i
j
k
l
m
n
o
Synthetic
securitisation
(subtotal)
Securitisation
Re-
securitisation
Retail
underlying
Wholesale
Senior
Non-senior
Exposure values (by RW bands)
1
≤20% RW
—
—
—
—
—
—
—
2
>20% to 50% RW
—
—
—
—
—
—
—
3
>50% to 100% RW
—
—
—
—
—
—
—
4
>100% to <1250% RW
—
—
—
—
—
—
—
5
1250% RW
—
—
—
—
—
—
—
Exposure values (by regulatory approach)
6
SEC-IRBA
—
—
—
—
—
—
—
7
SEC-ERBA or IAA
—
—
—
—
—
—
—
8
SEC-SA
—
—
—
—
—
—
—
9
1250% RW
—
—
—
—
—
—
—
Credit RWA amounts (by regulatory approach)
10
SEC-IRBA
—
—
—
—
—
—
—
11
SEC-ERBA or IAA
—
—
—
—
—
—
—
12
SEC-SA
—
—
—
—
—
—
—
13
1250% RW
—
—
—
—
—
—
—
Capital charge after cap (by regulatory approach)
14
SEC-IRBA
—
—
—
—
—
—
—
15
SEC-ERBA or IAA
—
—
—
—
—
—
—
16
SEC-SA
—
—
—
—
—
—
—
17
1250% RW
—
—
—
—
—
—
—
Basel III Information
255
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ CVA Risk
1. Overview of CVA Risk Characteristics and Risk Management System
(1) Overview of risk characteristics
CVA risk is defined as “the risk of losses arising from changing CVA values” and involves credit risk in response to changes in
counterparty credit spreads and risk of market-price fluctuation associated with fluctuation of market indices.
(2) Overview of the risk management system
CVA risk can be categorized into market risk factors, such as interest rates and foreign exchange rates, and credit risk factors. After
confirming the effectiveness of hedging and consistency with the hedging plan, CVA risk is managed by using loss amount and the BPV
and other indicators suitable for managing risk factors in combination with the use of stress tests.
2. CVA Risk Equivalent Amount Calculation Methodology and Overview of the Transactions Subject to Each Approach
We calculate CVA risk equivalent amount using the reduced BA-CVA and full BA-CVA approaches. The following consolidated subsidiaries use the full BA-
CVA approach and other consolidated subsidiaries use the reduced BA-CVA approach.
Sumitomo Mitsui Banking Corporation (Note), SMBC Capital Markets, Inc., and SMBC Nikko Capital Markets Limited
Note: The reduced BA-CVA approach is used for certain transactions.
3. The reduced basic approach for CVA (CVA1)
(Millions of yen)
CVA1: The reduced basic approach for CVA
As of March 31, 2024
Item
No.
a
b
Components
BA-CVA RWA
(CVA risk divided 8%)
1
Aggregation of systematic components of CVA risk
135,732
2
Aggregation of idiosyncratic components of CVA risk
26,122
3
Total
48,339
4. The full basic approach for CVA (CVA2)
(Millions of yen)
CVA2: The full basic approach for CVA
As of March 31, 2024
Item
No.
a
CVA risk equivalent
1
K Reduced
161,195
2
K Hedged
139,172
3
Total
144,678
Basel III Information
254
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
SEC4: Securitisation exposures in the
banking book and associated
capital requirements (bank acting
as investor) (2/2)
As of March 31, 2023
Item
No.
i
j
k
l
m
n
o
Synthetic
securitisation
(subtotal)
Securitisation
Re-
securitisation
Retail
underlying
Wholesale
Senior
Non-senior
Exposure values (by RW bands)
1
≤20% RW
—
—
—
—
—
—
—
2
>20% to 50% RW
—
—
—
—
—
—
—
3
>50% to 100% RW
—
—
—
—
—
—
—
4
>100% to <1250% RW
—
—
—
—
—
—
—
5
1250% RW
—
—
—
—
—
—
—
Exposure values (by regulatory approach)
6
SEC-IRBA or IAA
—
—
—
—
—
—
—
7
SEC-ERBA
—
—
—
—
—
—
—
8
SEC-SA
—
—
—
—
—
—
—
9
1250% RW
—
—
—
—
—
—
—
Credit RWA amounts (by regulatory approach)
10
SEC-IRBA or IAA
—
—
—
—
—
—
—
11
SEC-ERBA
—
—
—
—
—
—
—
12
SEC-SA
—
—
—
—
—
—
—
13
1250% RW
—
—
—
—
—
—
—
Capital charge after cap (by regulatory approach)
14
SEC-IRBA or IAA
—
—
—
—
—
—
—
15
SEC-ERBA
—
—
—
—
—
—
—
16
SEC-SA
—
—
—
—
—
—
—
17
1250% RW
—
—
—
—
—
—
—
Basel III Information
257
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ Market Risk
1. Classification of various instruments into regulatory capital accounts
In accordance with the Notification, instruments that are held with the intention of short-term resale and/or with the expectation of
profiting from short-term price movements in markets and other indices, and instruments that are stipulated to be classified as trading book
(however, certain instruments are classified as banking book after notifying the Commissioner of the Financial Services Agency) are classified
as trading book.
2. Market Risk under standardised approach (MR1)
(Millions of yen)
MR1: Market risk under standardised approach
As of March 31, 2024
Item
No.
Capital requirement in
standardized approach
1
General interest rate risk
70,229
2
Equity risk
16,557
3
Commodity risk
1,043
4
Foreign exchange risk
28,481
5
Credit spread risk – non-securitizations
55,966
6
Credit spread risk – securitizations (non-correlation trading
portfolio)
1,293
7
Credit spread risk – securitization (correlation trading portfo-
lio)
0
8
Default risk – non-securitizations
31,379
9
Default risk – securitizations (non-correlation trading portfolio)
3,942
10
Default risk – securitizations (correlation trading portfolio)
0
11
Residual risk add-on
16,122
Other
0
12
Total
225,013
(Millions of yen)
MR1: Market risk under standardised approach
As of March 31, 2023
Item
No.
RWA
(Amounts calculated by dividing
risk equivalent amounts by 8%)
1
Interest rate risk (general and specific)
711,369
2
Equity risk (general and specific)
600,099
3
Foreign exchange risk
44,410
4
Commodity risk
0
Options
5
Simplified approach
—
6
Delta-plus method
78,546
7
Scenario approach
—
8
Specific risk related to securitisation exposures
173,410
9
Total
1,607,836
Basel III Information
256
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ 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.”
Basel III Information
259
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
5. IMA values for trading portfolios (MR3)
(Millions of yen)
MR3: IMA values for trading portfolios
Fiscal 2022
Item
No.
VaR (holding period of 10 business days, one-sided confidence level of 99%)
1
Maximum value
31,912
2
Average value
23,331
3
Minimum value
14,784
4
Period end
22,944
Stressed VaR (holding period of 10 business days, one-sided confidence level of 99%)
5
Maximum value
85,369
6
Average value
50,753
7
Minimum value
35,967
8
Period end
54,793
Incremental risk value (one-sided confidence level of 99.9%)
9
Maximum value
—
10
Average value
—
11
Minimum value
—
12
Period end
—
Comprehensive risk value (one-sided confidence level of 99.9%)
13
Maximum value
—
14
Average value
—
15
Minimum value
—
16
Period end
—
17
Floor (modified standardized measurement method)
—
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.
6. Market Risk under simplified approach (MR3)
(Millions of yen)
MR3: Market Risk under simplified Approach
As of March 31, 2024
Item
No.
a
b
c
d
Other than
options
Options
Simplified
approach
Delta-plus
method
Scenario
approach
1
Interest rate risk (general and specific)
4,946
0
0
0
2
Equity risk (general and specific)
0
0
0
0
3
Commodity risk
0
0
0
0
4
Foreign exchange risk
4,138
0
0
0
5
Specific risk related to securitization exposures
0
—
—
—
6
Total
9,084
0
0
0
Basel III Information
258
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
3. RWA flow statements of market risk exposures under an IMA (MR2)
(Billions of yen)
MR2: RWA flow statements of market risk
exposures under an IMA
As of March 31, 2023
Item
No.
a
b
c
d
e
f
VaR
Stressed VaR
IRC
CRM
Other
Total RWA
1a
RWA as of March 31, 2022
542
1,429
—
—
1,971
1b
Ratio of 1a / 1c
2.5
2.3
—
—
2.4
1c
RWA at end of March 31, 2022
210
602
—
—
813
2
Breakdown
of variations
in the
market risk-
weighted
assets
Movement in risk
levels
54
86
—
—
141
3
Model updates/
changes
—
—
—
—
—
4
Methodology and
policy
—
—
—
—
—
5
Acquisitions and
disposals
—
—
—
—
—
6
Foreign exchange
movements
3
(4)
—
—
(1)
7
Other
18
—
—
—
18
8a
RWA at end of March 31, 2023
286
684
—
—
971
8b
Ratio of 8c / 8a
3.4
2.7
—
—
2.9
8c
RWA as of March 31, 2023
1,001
1,865
—
—
2,867
4. Breakdown of Market Risk under IMA (MR2)
Not applicable
Basel III Information
261
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ 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 160 to 161).
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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SMBC GROUP ANNUAL REPORT 2024
7. Backtesting results by the internal models approach (MR4)
The status of backtesting of trading for Fiscal 2022 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.
March 2023
Daily gain/loss
March 2022
(Millions of Yen)
Daily VaR
-20,000
10,000
5,000
0
-5,000
-10,000
-15,000
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SMBC GROUP ANNUAL REPORT 2024
■ Operational Risk
1. Overview of Risk Management Policy and Procedures
For the overview of risk management policy and procedures, please refer to pages 163 to 164.
2. BI Calculation Method
The business indicator (BI) is calculated as the sum of the interest, leases and dividend component (ILDC), the services component (SC), and
the financial component (FC).
3. ILM Calculation Method
The Internal Loss Multiplier (ILM) is calculated by 15 times average annual operational risk losses using all net losses in excess of 2 million
yen over the previous 10 years, excluding certain losses which are no longer relevant to our risk profile. However, certain consolidated
subsidiaries that do not meet the criteria set forth in the Financial Services Agency Notification use conservative estimates for ILM.
4. Business Units Excluded from Calculation of the BI for the Operational Risk Equivalent Amount
Not applicable
5. Losses Excluded from Calculation of the ILM for the Operational Risk Equivalent Amount
Losses that meet the criteria set forth in the Financial Services Agency Notification are excluded from the calculation of ILM.
6. Historical losses (OR1)
(Millions of yen, the number of items)
OR1: Historical losses
Item
No.
a
b
c
d
e
f
g
h
i
j
k
T
T-1
T-2
T-3
T-4
T-5
T-6
T-7
T-8
T-9
Ten-year
average
Using ¥2,000,000 threshold
1
Total amount of operational
losses net of recoveries (no
exclusions)
23,057
38,202
23,138
26,627
28,957
25,949
38,167
44,211
41,045
45,607
33,496
2
Total number of operational
risk losses
5,222
5,824
6,151
6,602
7,054
6,930
9,806
12,234
11,985
12,681
8,448
3
Total amount of excluded
operational risk losses
18,209
21,072
22,350
23,315
24,911
24,630
34,417
42,416
39,705
42,004
29,303
4
Total number of exclusions
4,921
5,651
6,083
6,484
6,828
6,870
9,738
12,166
11,831
12,582
8,315
5
Total amount of operational
losses net of recoveries and
net of excluded losses
4,848
17,130
788
3,311
4,045
1,319
3,750
1,794
1,339
3,602
4,193
Using ¥10,000,000 threshold
6
Total amount of operational
losses net of recoveries (no
exclusions)
4,163
16,909
1,188
3,287
3,891
1,901
4,283
2,219
1,364
3,716
4,292
7
Total number of operational
risk losses
82
68
67
51
80
80
86
72
73
68
72
8
Total amount of excluded
operational risk losses
510
414
604
353
653
734
742
669
528
390
560
9
Total number of exclusions
41
35
48
30
54
61
63
56
43
34
46
10
Total amount of operational
losses net of recoveries and
net of excluded losses
3,653
16,494
584
2,933
3,237
1,166
3,541
1,550
835
3,326
3,732
Details of operational risk capital calculation
11 Are losses used to calculate
the ILM (yes/no)?
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
12
If “no” in row 11, is the
exclusion of internal loss
data due to non-compliance
with the minimum loss data
standards (yes/no)?
—
—
—
—
—
—
—
—
—
—
—
Note: Conservative estimates are used for ILM as regards certain consolidated subsidiaries which do not meet the criteria set forth in the
Financial Services Agency Notification.
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SMBC GROUP ANNUAL REPORT 2024
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 2.2%
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 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.
a
b
c
d
⊿EVE
⊿NII
As of March
31, 2024
As of March 31,
2023
As of March
31, 2024
As of March 31,
2023
1
Parallel up
295,781
287,092
(506,058)
(462,516)
2
Parallel down
172,664
85,466
692,663
664,372
3
Steepener
40,471
165,125
4
Flattener
224,554
36,163
5
Short rate up
173,899
64,628
6
Short rate down
39,796
67,412
7
Maximum
295,781
287,092
692,663
664,372
e
f
As of March 31, 2024
As of March 31, 2023
8
Tier 1 capital
13,311,550
11,548,912
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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SMBC GROUP ANNUAL REPORT 2024
■ CC2: Reconciliation of regulatory capital to balance sheet
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
(Millions of yen)
Items
a
b
c
Consolidated balance sheet as
in published financial
statements
Reference to
Template CC1
Reference to
appended table
As of March 31,
2024
As of March 31,
2023
(Assets)
Cash and due from banks
78,143,100
75,913,960
Call loans and bills bought
5,333,883
5,684,812
Receivables under resale agreements
8,525,688
5,785,945
Receivables under securities borrowing transactions
6,799,541
5,576,612
Monetary claims bought
6,103,091
5,558,287
Trading assets
11,540,063
8,751,204
7-a
Money held in trust
23,751
12,957
Securities
37,142,808
33,213,165
3-b,7-b
Loans and bills discounted
107,013,907
98,404,137
7-c
Foreign exchanges
2,068,885
1,942,764
Lease receivables and investment assets
207,645
226,302
Other assets
15,313,546
13,243,899
7-d
Tangible fixed assets
1,006,883
1,494,527
Intangible fixed assets
976,706
897,848
3-a
Net defined benefit asset
913,791
704,654
4
Deferred tax assets
71,427
74,084
5-a
Customers’ liabilities for acceptances and guarantees
14,869,558
13,693,771
Reserve for possible loan losses
(817,578)
(750,369)
Total assets
295,236,701
270,428,564
(Liabilities)
Deposits
164,839,357
158,770,253
Negotiable certificates of deposit
14,672,275
13,025,555
Call money and bills sold
3,138,049
2,569,055
Payables under repurchase agreements
19,625,877
16,772,716
Payables under securities lending transactions
1,736,935
1,521,271
Commercial paper
2,429,179
2,349,956
Trading liabilities
9,689,434
8,066,745
7-e
Borrowed money
14,705,266
13,674,830
9-a
Foreign exchanges
2,872,560
1,465,847
Short-term bonds
863,000
424,000
Bonds
13,120,274
10,365,003
9-b
Due to trust account
1,246,198
2,413,464
Other liabilities
15,573,044
11,923,748
7-f
Reserve for employee bonuses
115,488
96,254
Reserve for executive bonuses
4,411
3,307
Net defined benefit liability
37,263
35,449
Reserve for executive retirement benefits
1,179
1,133
Reserve for point service program
35,622
28,659
Reserve for reimbursement of deposits
9,228
10,845
Reserve for losses on interest repayment
121,947
128,378
Reserves under the special laws
4,631
3,902
Deferred tax liabilities
698,632
265,354
5-b
Deferred tax liabilities for land revaluation
27,316
27,952
5-c
Acceptances and guarantees
14,869,558
13,693,771
Total liabilities
280,436,734
257,637,458
(Net assets)
Capital stock
2,344,038
2,342,537
1-a
Capital surplus
610,143
694,052
1-b
Retained earnings
7,843,470
7,423,600
1-c
Treasury stock
(167,671)
(151,798)
1-d
Total stockholders’ equity
10,629,980
10,308,391
Net unrealized gains or losses on other securities
2,406,883
1,373,521
Net deferred gains or losses on hedges
(65,073)
(13,293)
6
Land revaluation excess
34,936
35,005
Foreign currency translation adjustments
1,362,647
843,614
Accumulated remeasurements of defined benefit plans
290,735
133,226
Total accumulated other comprehensive income
4,030,129
2,372,074
(a)
Stock acquisition rights
931
1,145
2,8-a
Non-controlling interests
138,925
109,495
8-b
Total net assets
14,799,967
12,791,106
Total liabilities and net assets
295,236,701
270,428,564
Note: The regulatory scope of consolidation is the same as the accounting scope of consolidation.
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SMBC GROUP ANNUAL REPORT 2024
7. Business Indicator component and its subcomponents (OR2)
(Millions of yen, the number)
OR2: Business Indicator component and its subcomponents
Item
No.
a
b
c
T
T-1
T-2
1
ILDC: Interest, lease and dividend component
1,744,692
2
Interest and lease income
5,585,124
3,399,531
1,600,090
3
Interest and lease expense
4,372,397
2,079,699
387,819
4
Interest earning assets
179,493,749
163,158,672
156,419,297
5
Dividend income
704,133
437,252
347,862
6
SC: Services component
1,732,119
7
Fee and commission income
1,724,530
1,448,583
1,421,371
8
Fee and commission expense
234,305
222,957
216,069
9
Other operating income
65,845
60,484
60,901
10
Other operating expense
205,835
219,793
176,245
11 FC: Financial component
503,400
12
Net P&L on the trading book
572,409
447,726
328,826
13
Net P&L on the banking book
27,405
(47,397)
86,436
14 BI: Business indicator
3,980,213
15 BIC: Business indicator component
623,438
16
BI gross of excluded divested activities
3,980,213
17
Reduction in BI due to excluded divested activities
—
8. Minimum required operational risk capital (OR3)
(Millions of yen)
OR3: Minimum required operational risk capital
As of march 31, 2024
Item
No.
1
BIC: Business indicator component
593,393
2
ILM: Internal loss multiplier
0.74
3
Minimum required operational risk capital
443,604
4
Operational risk RWA
5,545,060
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SMBC GROUP ANNUAL REPORT 2024
4. Net defined benefit asset
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Net defined benefit asset
913,791
704,654
4
Income taxes related to above
279,669
215,618
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Net defined benefit asset
634,121
489,035
15
5. Deferred tax assets
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Deferred tax assets
71,427
74,084
5-a
Deferred tax liabilities
698,632
265,354
5-b
Deferred tax liabilities for land revaluation
27,316
27,952
5-c
Tax effects on intangible fixed assets
211,648
185,267
Tax effects on net defined benefit asset
279,669
215,618
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability
excluding those arising from temporary differences
(net of related tax liability)
4,693
6,899
This item does not agree with the
amount reported on the consolidated
balance sheet due to offsetting of
assets and liabilities.
10
Deferred tax assets arising from temporary
differences (net of related tax liability)
45,227
199,927
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
—
—
21
Amount exceeding the 15% threshold on
specified items
—
—
25
Deferred tax assets arising from temporary
differences that are below the thresholds for
deduction (before risk weighting)
45,227
199,927
75
6. Deferred gains or losses on derivatives under hedge accounting
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Net deferred gains or losses on hedges
(65,073)
(13,293)
6
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Net deferred gains or losses on hedges
(144,850)
(74,959)
Excluding those items whose valuation
differences arising from hedged items
are recognized as “Accumulated other
comprehensive income”
11
7. Items associated with investments in the capital of financial institutions
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Trading assets
11,540,063
8,751,204
Including trading account securities
and derivatives for trading assets
7-a
Securities
37,142,808 33,213,165
7-b
Loans and bills discounted
107,013,907 98,404,137
Including subordinated loans
7-c
Other assets
15,313,546 13,243,899
Including derivatives
7-d
Trading liabilities
9,689,434
8,066,745
Including trading account securities
sold and derivatives for trading
liabilities
7-e
Other liabilities
15,573,044 11,923,748
Including derivatives
7-f
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SMBC GROUP ANNUAL REPORT 2024
(Appended Table)
1. Stockholders’ equity
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Capital stock
2,344,038
2,342,537
1-a
Capital surplus
610,143
694,052
1-b
Retained earnings
7,843,470
7,423,600
1-c
Treasury stock
(167,671)
(151,798)
1-d
Total stockholders’ equity
10,629,980 10,308,391
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Directly issued qualifying common share capital plus
related capital surplus and retained earnings
10,629,980 10,308,391
Stockholders’ equity attributable to
common shares (before adjusting
national specific regulatory adjustments
(earnings to be distributed))
of which: capital and capital surplus
2,954,181
3,036,589
1a
of which: retained earnings
7,843,470
7,423,600
2
of which: treasury stock (–)
167,671
151,798
1c
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
—
—
Stockholders’ equity attributable to
preferred shares with a loss
absorbency clause upon entering into
effectively bankruptcy
31a
2. Stock acquisition rights
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Stock acquisition rights
931
1,145
2
of which: Stock acquisition rights issued by
bank holding company
931
1,145
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Stock subscription rights and stock acquisition rights
to common shares
931
1,145
1b
Stock subscription rights and stock acquisition rights
to Additional Tier 1 instruments
—
—
31b
Stock subscription rights and stock acquisition rights
to Tier 2 instruments
—
—
46
3. Intangible fixed assets
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Intangible fixed assets
976,706
897,848
3-a
Securities
37,142,808 33,213,165
3-b
of which: goodwill attributable to equity-
method investees
192,340
128,509
Income taxes related to above
211,648
185,267
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Goodwill (including those equivalent)
461,174
405,810
8
Other intangibles other than goodwill and mortgage
servicing rights
496,223
435,279
Software and other
9
Mortgage servicing rights
—
—
Amount exceeding the 10% threshold on
specified items
—
—
20
Amount exceeding the 15% threshold on
specified items
—
—
24
Mortgage servicing rights that are below the
thresholds for deduction (before risk weighting)
—
—
74
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SMBC GROUP ANNUAL REPORT 2024
9. Other capital instruments
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Borrowed money
14,705,266 13,674,830
9-a
Bonds
13,120,274 10,365,003
9-b
Total
27,825,541 24,039,833
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
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
1,463,945
766,214
32
Directly issued qualifying Tier 2 instruments plus
related capital surplus of which: classified as
liabilities under applicable accounting standards
946,577
766,438
46
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SMBC GROUP ANNUAL REPORT 2024
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Investments in own capital instruments
6,912
7,205
Common Equity Tier 1 capital
6,812
7,205
16
Additional Tier 1 capital
—
—
37
Tier 2 capital
99
0
52
Reciprocal cross-holdings in the capital of banking,
financial and insurance entities
—
—
Common Equity Tier 1 capital
—
—
17
Additional Tier 1 capital
—
—
38
Tier 2 capital and other TLAC liabilities
—
—
53
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)
2,237,113
1,340,937
Common Equity Tier 1 capital
719,737
187,705
18
Additional Tier 1 capital
74,283
2,547
39
Tier 2 capital and other TLAC liabilities
147,523
36,190
54
Non-significant investments in the capital
and other TLAC liabilities of other financials
that are below the thresholds for deductions
(before risk weighting)
1,295,569
1,114,494
72
Significant investments in the capital of banking,
financial and insurance entities that are outside the
scope of regulatory consolidation (net of eligible
short positions)
1,595,297
1,337,050
Amount exceeding the 10% threshold on
specified items
243,324
118,285
19
Amount exceeding the 15% threshold on
specified items
—
—
23
Additional Tier 1 capital
82,978
82,978
40
Tier 2 capital and other TLAC liabilities
45,399
40,062
55
Significant investments in the common stock
of other financials that are below the
thresholds for deductions (before risk
weighting)
1,223,595
1,095,724
73
8. Non-controlling interests
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Stock acquisition rights
931
1,145
8-a
Non-controlling interests
138,925
109,495
8-b
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Amount allowed in group CET1
2,243
1,404
After reflecting amounts eligible for
inclusion (Non-Controlling Interest
after adjustments)
5
Qualifying Additional Tier 1 instruments plus related
capital surplus issued by special purpose vehicles
and other equivalent entities
—
—
After reflecting amounts eligible for
inclusion (Non-Controlling Interest
after adjustments)
30-31ab-32
Amount allowed in group AT1
12,239
29,268
After reflecting amounts eligible for
inclusion (Non-Controlling Interest
after adjustments)
34
Qualifying Tier 2 instruments plus related capital
surplus issued by special purpose vehicles and other
equivalent entities
—
—
After reflecting amounts eligible for
inclusion (Non-Controlling Interest
after adjustments)
46
Amount allowed in group T2
3,071
5,825
After reflecting amounts eligible for
inclusion (Non-Controlling Interest
after adjustments)
48
Basel III Information
271
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen)
LI1: Differences between accounting and
regulatory scopes of consolidation and
mapping of consolidated financial statement
categories with regulatory risk categories
As of March 31, 2023
a
b
c
d
e
f
g
Carrying
values as
reported in
published
Consolidated
financial
statement
Carrying
values
under scope
of regulatory
consolidation
Carrying values of items:
CR
(excluding
amounts
relevant to
d and e)
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
Assets
Cash and due from banks
75,913,960
75,913,960
75,913,960
—
—
—
—
Call loans and bills bought
5,684,812
5,684,812
5,684,812
—
—
—
—
Receivables under resale agreements
5,785,945
5,785,945
—
5,785,945
—
—
—
Receivables under securities borrowing transactions
5,576,612
5,576,612
—
5,576,612
—
—
—
Monetary claims bought
5,558,287
5,558,287
3,392,899
—
2,165,387
—
—
Trading assets (Note 1)
8,751,204
8,751,204
—
4,255,026
—
8,751,204
104,098
Money held in trust
12,957
12,957
12,957
—
—
—
—
Securities
33,213,165
33,213,165
31,822,569
—
1,060,822
—
329,773
Loans and bills discounted
98,404,137
98,404,137
96,694,351
—
1,669,723
—
40,062
Foreign exchanges
1,942,764
1,942,764
1,942,764
—
—
—
—
Lease receivables and investment assets
226,302
226,302
226,302
—
—
—
—
Other assets
13,243,899
13,243,899
5,352,635
6,795,876
5,384
—
1,090,002
Tangible fixed assets
1,494,527
1,494,527
1,494,527
—
—
—
—
Intangible fixed assets
897,848
897,848
185,267
—
—
—
712,580
Net defined benefit asset
704,654
704,654
215,618
—
—
—
489,035
Deferred tax assets
74,084
74,084
34,067
—
—
—
40,016
Customers’ liabilities for acceptances and guarantees
13,693,771
13,693,771
13,693,310
—
461
—
—
Reserve for possible loan losses
(750,369)
(750,369)
(750,369)
—
—
—
—
Total assets
270,428,564 270,428,564 235,915,675
22,413,460
4,901,780
8,751,204
2,805,569
Liabilities
Deposits
158,770,253 158,770,253
2,928
—
—
— 158,767,325
Negotiable certificates of deposit
13,025,555
13,025,555
—
—
—
—
13,025,555
Call money and bills sold
2,569,055
2,569,055
—
—
—
—
2,569,055
Payables under repurchase agreements
16,772,716
16,772,716
—
8,373,336
—
—
8,399,380
Payables under securities lending transactions
1,521,271
1,521,271
—
1,327,441
—
—
193,830
Commercial paper
2,349,956
2,349,956
—
—
—
—
2,349,956
Trading liabilities
8,066,745
8,066,745
—
4,779,599
—
8,066,745
395,649
Borrowed money
13,674,830
13,674,830
—
—
—
—
13,674,830
Foreign exchanges
1,465,847
1,465,847
—
—
—
—
1,465,847
Short-term bonds
424,000
424,000
—
—
—
—
424,000
Bonds
10,365,003
10,365,003
—
—
—
—
10,365,003
Due to trust account
2,413,464
2,413,464
—
—
—
—
2,413,464
Other liabilities
11,923,748
11,923,748
—
3,456,398
—
—
8,467,349
Reserve for employee bonuses
96,254
96,254
—
—
—
—
96,254
Reserve for executive bonuses
3,307
3,307
—
—
—
—
3,307
Net defined benefit liability
35,449
35,449
—
—
—
—
35,449
Reserve for executive retirement benefits
1,133
1,133
—
—
—
—
1,133
Reserve for point service program
28,659
28,659
—
—
—
—
28,659
Reserve for reimbursement of deposits
10,845
10,845
—
—
—
—
10,845
Reserve for losses on interest repayment
128,378
128,378
—
—
—
—
128,378
Reserve under the special laws
3,902
3,902
—
—
—
—
3,902
Deferred tax liabilities
265,354
265,354
—
—
—
—
265,354
Deferred tax liabilities for land revaluation
27,952
27,952
—
—
—
—
27,952
Acceptances and guarantees
13,693,771
13,693,771
—
—
—
—
13,693,771
Total liabilities
257,637,458 257,637,458
2,928
17,936,775
—
8,066,745 236,806,256
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.
Basel III Information
270
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ 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)
(Millions of yen)
LI1: Differences between accounting and
regulatory scopes of consolidation and
mapping of consolidated financial statement
categories with regulatory risk categories
As of March 31, 2024
a
b
c
d
e
f
g
Carrying
values as
reported in
published
Consolidated
financial
statement
Carrying
values
under scope
of regulatory
consolidation
Carrying values of items:
CR
(excluding
amounts
relevant to
d and e)
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
Assets
Cash and due from banks
78,143,100
78,143,100
78,143,100
—
—
—
—
Call loans and bills bought
5,333,883
5,333,883
5,333,883
—
—
—
—
Receivables under resale agreements
8,525,688
8,525,688
51,221
8,474,466
—
—
—
Receivables under securities borrowing transactions
6,799,541
6,799,541
—
6,799,541
—
—
—
Monetary claims bought
6,103,091
6,103,091
4,199,745
—
1,903,345
—
—
Trading assets (Note 1)
11,540,063
11,540,063
19,483
5,053,764
—
11,540,063
41,500
Money held in trust
23,751
23,751
23,751
—
—
—
—
Securities
37,142,808
37,142,808
34,742,952
—
1,205,122
—
1,194,733
Loans and bills discounted
107,013,907 107,013,907 104,326,387
—
2,639,595
—
47,924
Foreign exchanges
2,068,885
2,068,885
2,068,885
—
—
—
—
Lease receivables and investment assets
207,645
207,645
207,645
—
—
—
—
Other assets
15,313,546
15,313,546
6,431,810
7,620,653
—
—
1,261,082
Tangible fixed assets
1,006,883
1,006,883
1,006,883
—
—
—
—
Intangible fixed assets
976,706
976,706
211,648
—
—
—
765,057
Net defined benefit asset
913,791
913,791
279,669
—
—
—
634,121
Deferred tax assets
71,427
71,427
32,607
—
—
—
38,820
Customers’ liabilities for acceptances and guarantees
14,869,558
14,869,558
14,869,558
—
—
—
—
Reserve for possible loan losses
(817,578)
(817,578)
(817,578)
—
—
—
—
Total assets
295,236,701 295,236,701 251,131,657
27,948,425
5,748,063
11,540,063
3,983,240
Liabilities
Deposits
164,839,357 164,839,357
62,463
—
—
— 164,776,894
Negotiable certificates of deposit
14,672,275
14,672,275
—
—
—
—
14,672,275
Call money and bills sold
3,138,049
3,138,049
—
—
—
—
3,138,049
Payables under repurchase agreements
19,625,877
19,625,877
—
7,536,131
—
—
12,089,745
Payables under securities lending transactions
1,736,935
1,736,935
—
5,792,487
—
—
(4,055,551)
Commercial paper
2,429,179
2,429,179
—
—
—
—
2,429,179
Trading liabilities
9,689,434
9,689,434
—
4,768,119
—
9,689,434
1,330
Borrowed money
14,705,266
14,705,266
—
—
—
—
14,705,266
Foreign exchanges
2,872,560
2,872,560
—
—
—
—
2,872,560
Short-term bonds
863,000
863,000
—
—
—
—
863,000
Bonds
13,120,274
13,120,274
—
—
—
—
13,120,274
Due to trust account
1,246,198
1,246,198
—
—
—
—
1,246,198
Other liabilities
15,573,044
15,573,044
—
5,869,898
—
—
9,703,145
Reserve for employee bonuses
115,488
115,488
—
—
—
—
115,488
Reserve for executive bonuses
4,411
4,411
—
—
—
—
4,411
Net defined benefit liability
37,263
37,263
—
—
—
—
37,263
Reserve for executive retirement benefits
1,179
1,179
—
—
—
—
1,179
Reserve for point service program
35,622
35,622
—
—
—
—
35,622
Reserve for reimbursement of deposits
9,228
9,228
—
—
—
—
9,228
Reserve for losses on interest repayment
121,947
121,947
—
—
—
—
121,947
Reserve under the special laws
4,631
4,631
—
—
—
—
4,631
Deferred tax liabilities
698,632
698,632
—
—
—
—
698,632
Deferred tax liabilities for land revaluation
27,316
27,316
—
—
—
—
27,316
Acceptances and guarantees
14,869,558
14,869,558
—
—
—
—
14,869,558
Total liabilities
280,436,734 280,436,734
62,463
23,966,637
—
9,689,434 251,487,647
Basel III Information
273
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ Countercyclical buffer requirement by country or region
(Millions of yen, except percentages)
CCyB1: Countercyclical buffer (CCyB) requirement by country or region
As of March 31, 2024
a
b
c
d
Geographical
breakdown
Applicable CCyB ratio in
effect
RWAs used in the
computation of CCyB ratio
Bank-specific CCyB ratio
CCyB amount
Australia
1.00%
1,308,386
France
1.00%
667,330
Germany
0.75%
845,462
Hong Kong
1.00%
1,438,445
Luxembourg
0.50%
573,818
Netherlands
1.00%
631,247
Sweden
2.00%
63,850
U.K.
2.00%
2,817,146
Subtotal
8,345,684
Total
71,281,543
0.15%
107,284
(Millions of yen, except percentages)
CCyB1: Countercyclical buffer (CCyB) requirement by country or region
As of March 31, 2023
a
b
c
d
Geographical
breakdown
Applicable CCyB ratio in
effect
RWAs used in the
computation of CCyB ratio
Bank-specific CCyB ratio
CCyB amount
Australia
1.00%
951,173
Germany
0.75%
616,014
Hong Kong
1.00%
1,529,589
Luxembourg
0.50%
487,357
Sweden
1.00%
40,071
U.K.
1.00%
2,933,276
Subtotal
6,557,480
Total
57,404,494
0.10%
61,597
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.
Countercyclical buffer requirement by country or region
Basel III Information
272
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
2. Main Sources of Differences between Regulatory Exposure Amounts and Carrying Values in Consolidated Financial Statements
(LI2)
(Millions of yen)
LI2: Main sources of differences between
regulatory exposure amounts and
carrying values in consolidated
financial statements amounts
As of March 31, 2024
Item
No.
a
b
c
d
e
Total
Items subject to:
CR (excluding
amounts relevant
to c and d)
CCR
Securitisation
(excluding
amounts relevant
to e)
Market risk
1
Asset carrying value amount under
scope of regulatory consolidation
291,253,461
251,131,657
27,948,425
5,748,063
11,540,063
2
Liabilities carrying value amount
under scope of regulatory
consolidation
28,949,086
62,463
23,966,637
—
9,689,434
3
Total net amount under regulatory
scope of consolidation
262,304,375
251,069,194
3,981,787
5,748,063
1,850,628
4
Off-balance sheet amounts
29,466,147
17,508,486 (Note 1)
10,890,655
1,067,004
—
5
Differences due to consideration of
provisions and write-offs
1,009,112
1,009,112 (Note 2)
—
—
—
6
Differences due to derivative
transactions
5,679,211
—
5,333,912 (Note 3)
—
—
7
Differences due to SFTs
(9,869,058)
—
(9,869,058)
—
—
8
Other differences
293,604
162,608
121,978
—
—
9
Regulatory exposure amounts
288,883,392
269,749,402
10,459,276
6,824,084
1,850,628
(Millions of yen)
LI2: Main sources of differences between
regulatory exposure amounts and
carrying values in consolidated
financial statements amounts
As of March 31, 2023
Item
No.
a
b
c
d
e
Total
Items subject to:
CR (excluding
amounts relevant
to c and d)
CCR
Securitisation
(excluding
amounts relevant
to e)
Market risk
1
Asset carrying value amount under
scope of regulatory consolidation
267,622,995
235,915,675
22,413,460
4,901,780
8,751,204
2
Liabilities carrying value amount
under scope of regulatory
consolidation
20,831,201
2,928
17,936,775
—
8,066,745
3
Total net amount under regulatory
scope of consolidation
246,791,794
235,912,746
4,476,685
4,901,780
684,458
4
Off-balance sheet amounts
21,588,505
13,660,974 (Note 1)
7,022,364
905,166
—
5
Differences due to consideration of
provisions and write-offs
859,820
859,820 (Note 2)
—
—
—
6
Differences due to derivative
transactions
7,865,093
—
8,670,123 (Note 3)
11,093
—
7
Differences due to SFTs
(688,168)
—
(688,168)
—
—
8
Other differences
231,294
241,610
(10,316)
—
—
9
Regulatory exposure amounts
276,648,339
250,675,152
19,470,688
5,818,040
684,458
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.
Basel III Information
275
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ Composition of Leverage Ratio
(In million yen)
Basel Ⅲ Template
No.
Items
As of March 31,
2024
As of March 31,
2023
1
Total assets reported in the consolidated balance sheet
295,236,701
2
The amount of assets of subsidiaries that are not included in the scope of the leverage ratio
on a consolidated basis (–)
—
3
Adjustment for securitised exposures that meet the operational requirements for the
recognition of risk transference
—
4
Adjustments for exemption of central bank reserves (–)
61,284,825
5
Adjustment for fiduciary assets recognised on the balance sheet pursuant to the operative
accounting framework but excluded from the leverage ratio exposure measure (–)
6
Adjustments for regular-way purchases and sales of financial assets subject to trade date
accounting
1,076,148
7
Adjustments for eligible cash pooling transactions
—
8
Adjustments for total exposures related to derivatives transactions, etc.
749,438
8a
Total exposures related to derivatives transactions, etc.
11,991,542
8b
The amount of deductions from the exposures above (line 8a) (–)
11,242,104
9
Adjustment for total exposures related to repo transactions, etc.
637,513
9a
Total exposures related to repo transactions, etc.
15,962,743
9b
The amount of deductions from the exposures above (line 9a) (–)
15,325,230
10
Adjustments for total off-balance sheet exposures
34,416,562
11
The amount of adjustments associated with Tier 1 capital (specific and general provisions) (–)
—
12
Other adjustments
(18,317,462)
12a
The amount of adjustments associated with Tier 1 capital (excluding specific and general
provisions) (–)
2,723,350
12b
The amount of customers’ liabilities for acceptances and guarantees (–)
14,869,558
12c
The amount of receivables arising from providing collateral, provided where deducted from
the consolidated balance sheet pursuant to the operative accounting framework
—
12d
The amount of receivables arising from providing cash variation margin (–)
724,554
12e
The amount of assets of subsidiaries that are included in the scope of the leverage ratio on a
consolidated basis (excluding those included in the total assets reported in the consolidated
balance sheet)
—
13
Total exposures
252,514,076
Basel III Information
274
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ Indicators for assessing Global Systemically Important Banks (G-SIBs)
(Millions of yen)
GSIB1: G-SIB indicators
Basel III
Template
No.
As of March 31,
2024
1
Cross-jurisdictional
activity
Cross-jurisdictional claims
100,058,511
2
Cross-jurisdictional liabilities
74,639,376
3
Size
Total exposures
316,522,252
4
Mutual relevance
Intra-financial system assets
55,073,343
5
Intra-financial system liabilities
24,377,143
6
Securities outstanding
43,000,776
7
Substitutability/
financial institution
infrastructure
Assets under custody
19,668,879
8
Annual total amount of payments settled through settlement
systems
5,433,594,969
9
Annual total amount of underwritten transactions in debt and
equity markets
10,018,848
10a
Trading volume fixed income
89,370,953
10b
Trading volume equities and other securities
83,080,646
11
Complexity
Total amount of notional amount of OTC derivatives and long
settlement transactions with other financial institutions
1,661,132,343
12
Level 3 assets
452,714
13
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
16,384,385
(Millions of yen)
GSIB1: G-SIB indicators
Basel III
Template
No.
As of March 31,
2023
1
Cross-jurisdictional
activity
Cross-jurisdictional claims
86,194,529
2
Cross-jurisdictional liabilities
73,695,197
3
Size
Total exposures
291,673,049
4
Mutual relevance
Intra-financial system assets
51,152,083
5
Intra-financial system liabilities
25,471,036
6
Securities outstanding
33,447,629
7
Substitutability/
financial institution
infrastructure
Assets under custody
16,110,817
8
Annual total amount of payments settled through settlement
systems
5,454,562,907
9
Annual total amount of underwritten transactions in debt and
equity markets
5,084,242
10
Total amount of trading volume
102,325,402
11
Complexity
Total amount of notional amount of OTC derivatives and long
settlement transactions with other financial institutions
1,603,772,144
12
Level 3 assets
506,004
13
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
12,007,752
Indicators for assessing Global Systemically Important Banks (G-SIBs)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Basel III Information
277
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(In million yen, %)
Corresponding line #
on Basel III disclosure
template (Table2)
Corresponding line #
on Basel III disclosure
template (Table1)
Items
As of March 31,
2024
As of March 31,
2023
On-balance sheet exposures (1)
1
On-balance sheet exposures before deducting adjustment items
175,221,153
1a
1
Total assets reported in the consolidated balance sheet
210,008,235
1b
2
The amount of assets of subsidiaries that are not included in the scope
of the leverage ratio on a consolidated basis (-)
—
1c
7
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)
—
1d
3
The amount of assets that are deducted from the total assets reported
in the consolidated balance sheet (except adjustment items) (-)
34,787,082
2
7
The amount of adjustment items pertaining to Tier 1 capital (-)
1,735,746
3
Total on-balance sheet exposures
(a)
173,485,406
Exposures related to derivative transactions (2)
4
Replacement cost associated with derivatives transactions, etc. (with
the 1.4 alpha factor applied)
Replacement cost associated with derivatives transactions, etc.
4,790,390
5
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.
5,435,663
The amount of receivables arising from providing cash margin in
relation to derivatives transactions, etc.
981,452
6
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
—
7
The amount of deductions of receivables (out of those arising from
providing cash variation margin) (-)
145,156
8
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 (-)
9
Adjusted effective notional amount of written credit derivatives
1,330,211
10
The amount of deductions from effective notional amount of written
credit derivatives (-)
1,168,020
11
4
Total exposures related to derivative transactions
(b)
11,224,540
Exposures related to repo transactions (3)
12
The amount of assets related to repo transactions, etc.
11,362,558
13
The amount of deductions from the assets above (line 12) (-)
—
14
The exposures for counterparty credit risk for repo transactions, etc.
453,886
15
The exposures for agent repo transaction
16
5
Total exposures related to repo transactions, etc.
(c)
11,816,444
Exposures related to off-balance sheet transactions (4)
17
Notional amount of off-balance sheet transactions
81,463,037
18
The amount of adjustments for conversion in relation to off-balance
sheet transactions (-)
48,472,455
19
6
Total exposures related to off-balance sheet transactions
(d)
32,990,581
Leverage ratio on a consolidated basis (5)
20
The amount of capital (Tier 1 capital)
(e)
11,548,912
21
8
Total exposures ((a)+(b)+(c)+(d))
(f)
229,516,974
22
Leverage ratio on a consolidated basis ((e)/(f))
5.03%
Minimum leverage ratio requirement
3.00%
Applicable leverage buffer requirement
0.50%
Leverage ratio on a consolidated basis (including deposits with the Bank of Japan) (6)
Total exposures
(f)
229,516,974
The amount of deposits with the Bank of Japan
60,420,329
Total exposures (including deposits with the Bank of Japan)
(f’)
289,937,303
Leverage ratio on a consolidated basis (including deposits with the
Bank of Japan) ((e)/(f’))
3.98%
Basel III Information
276
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
(In million yen, %)
Basel Ⅲ Template
No.
Items
As of March 31,
2024
As of March 31,
2023
On-balance sheet exposures (1)
1
On-balance sheet exposures before deducting adjustments
193,591,132
2
The amount of receivables arising from providing collateral, provided where deducted from
the consolidated balance sheet pursuant to the operative accounting framework
—
3
The amount of receivables arising from providing cash variation margin (–)
724,554
4
Adjustment for securities received under repo transactions that are recognised as assets (–)
—
5
The amount of adjustments associated with Tier 1 capital (specific and general provisions) (–)
—
6
The amount of adjustments associated with Tier 1 capital (excluding specific and general
provisions) (–)
2,723,350
7
Total on-balance sheet exposures
(a)
190,143,228
Exposures related to derivatives transactions, etc. (2)
8
Replacement cost associated with derivatives transactions, etc. (with the 1.4 alpha factor
applied)
5,306,692
9
Add-on amounts for potential future exposure associated with derivatives transactions, etc.
(with the 1.4 alpha factor applied)
6,417,609
10
Exempted central counterparty (CCP) leg of client-cleared trade exposures (–)
—
11
Adjusted effective notional amount of written credit derivatives
1,445,342
12
The amount of deductions from effective notional amount of written credit derivatives (–)
1,178,102
13
Total exposures related to derivatives transactions, etc.
(b)
11,991,542
Exposures related to repo transactions, etc. (3)
14
The amount of assets related to repo transactions, etc.
15,325,230
15
The amount of deductions from the assets above (line 14) (–)
—
16
The exposures for counterparty credit risk for repo transactions, etc.
637,513
17
The exposures for agent repo transaction
18
Total exposures related to repo transactions, etc.
(c)
15,962,743
Exposures related to off-balance sheet transactions (4)
19
Notional amount of off-balance sheet items
92,108,666
20
The amount of adjustments for conversion to off-balance sheet exposures (–)
57,692,103
22
Total off-balance sheet exposures
(d)
34,416,562
Leverage ratio on a consolidated basis (5)
23
The amount of capital (Tier 1 capital)
(e)
13,311,550
24
Total exposures ((a)+(b)+(c)+(d))
(f)
252,514,076
25
Leverage ratio on a consolidated basis ((e)/(f))
5.27%
26
Minimum leverage ratio requirement
3.00%
27
Applicable leverage buffer requirement
0.50%
Leverage ratio on a consolidated basis (including due from Bank of Japan) (6)
Total exposures
(f)
252,514,076
The amount of due from Bank of Japan
61,284,825
Total exposures (including due from Bank of Japan)
(f’)
313,798,901
Leverage ratio on a consolidated basis (including due from Bank of Japan) ((e)/(f’))
4.24%
Disclosure of mean values (7)
28
Mean value of assets related to repo transactions, etc. (after the deductions) ((g)+(h))
12,891,568
Mean value of assets related to repo transactions, etc.
(g)
12,891,568
Mean value of deductions from the assets above (–)
(h)
—
29
Quarter-end value of assets related to repo transactions, etc. (after the deductions) ((i)+(j))
15,325,230
14
Quarter-end value of assets related to repo transactions, etc.
(i)
15,325,230
15
Quarter-end value of deductions from the assets above (line 14) (–)
(j)
—
30
Total exposures
(including mean value above (line 28), but excluding due from Bank of Japan)
(k)
250,080,415
30a
Total exposures
(including mean value above (line 28) and due from Bank of Japan)
(l)
311,365,240
31
Leverage ratio on a consolidated basis
(including mean value above (line 28), but excluding due from Bank of Japan) ((e)/(k))
5.32%
31a
Leverage ratio on a consolidated basis
(including mean value above (line 28) and due from Bank of Japan) ((e)/(l))
4.27%
Basel III Information
279
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ TLAC2: - Material subgroup entity - creditor ranking at legal entity level
Sumitomo Mitsui Banking Corporation
(Millions of yen)
As of March 31, 2024
Creditor ranking
Sum of
1 to 4
Basel III
Template
No.
Items
1
2
3
4
(most junior)
(most senior)
1
Is the resolution entity the creditor/investor?
Yes
No
Yes
No
Yes
No
Yes
No
2
Description of creditor ranking
Common
share capital
Additional Tier 1
instruments
Tier 2 instruments
Other internal
TLAC liabilities
3
Total capital and liabilities net of credit risk
mitigation
(A)
3,545,551
—
1,967,330
—
1,492,083
—
8,640,648
—
15,645,613
4
Subset of row 3 that are excluded liabilities (B)
—
—
—
—
—
—
—
—
—
5
Total capital and liabilities less excluded liabilities
((A)-(B))
3,545,551
—
1,967,330
—
1,492,083
—
8,640,648
—
15,645,613
6
Subset of row 5 that are eligible as TLAC
3,545,551
—
1,967,330
—
1,114,256
—
7,749,956
—
14,377,093
7
1 year ≤ residual maturity < 2 years
—
—
—
—
131,000
—
1,058,553
—
1,189,553
8
2 years ≤ residual maturity < 5 years
—
—
—
—
365,000
—
3,705,363
—
4,070,363
9
5 years ≤ residual maturity < 10 years
—
—
—
—
338,295
—
2,335,242
—
2,673,537
10
10 years ≤ residual maturity
(excluding perpetual securities)
—
—
—
—
279,960
—
650,797
—
930,758
11
Perpetual securities
3,545,551
—
1,967,330
—
—
—
—
—
5,512,881
SMBC Nikko Securities Inc.
(Millions of yen)
As of March 31, 2024
Creditor ranking
Sum of
1 to 3
Basel III
Template
No.
Items
1
2
3
(most junior)
(most senior)
1
Is the resolution entity the creditor/investor?
Yes
No
Yes
No
Yes
No
2
Description of creditor ranking
Common
share capital
Subordinated debts
Other internal
TLAC liabilities
3
Total capital and liabilities net of credit risk mitigation
(A)
717,714
—
—
—
—
—
717,714
4
Subset of row 3 that are excluded liabilities
(B)
—
—
—
—
—
—
—
5
Total capital and liabilities less excluded liabilities ((A)-(B))
717,714
—
—
—
—
—
717,714
6
Subset of row 5 that are eligible as TLAC
717,714
—
—
—
—
—
717,714
7
1 year ≤ residual maturity < 2 years
—
—
—
—
—
—
—
8
2 years ≤ residual maturity < 5 years
—
—
—
—
—
—
—
9
5 years ≤ residual maturity < 10 years
—
—
—
—
—
—
—
10
10 years ≤ residual maturity (excluding perpetual securities)
—
—
—
—
—
—
—
11
Perpetual securities
717,714
—
—
—
—
—
717,714
Basel III Information
278
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ TLAC1: TLAC composition for G-SIBs (at resolution group level)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
(Millions of yen, except percentages)
Basel III
Template
No.
Items
As of
March 31,
2024
As of
March 31,
2023
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
Common Equity Tier 1 capital (CET1)
(A)
11,992,628
10,838,955
2
Additional Tier 1capital (AT1) before TLAC adjustments
(B)
1,318,922
709,956
3
AT1 ineligible as TLAC as issued out of subsidiaries to third parties
(C)
—
—
4
Other adjustments
(D)
12,239
29,268
5
AT1 instruments eligible under the TLAC framework ((B) - (C) - (D))
(E)
1,306,683
680,688
6
Tier 2 capital (T2) before TLAC adjustments
(F)
886,318
801,869
7
Amortised portion of T2 instruments where remaining maturity > 1 year
(G)
(176,513)
(373,829)
8
T2 capital ineligible as TLAC as issued out of subsidiaries to third parties
(H)
—
—
9
Other adjustments
(I)
3,071
5,825
10
T2 instruments eligible under the TLAC framework ((F) - (G) - (H) - (I))
(J)
1,059,760
1,169,873
11
TLAC arising from regulatory capital ((A) + (E) + (J))
(K)
14,359,071
12,689,517
Non-regulatory capital elements of TLAC (3)
12
External TLAC instruments issued directly by the bank and subordinated to excluded liabilities
(L)
7,994,297
6,930,885
13
External TLAC instruments issued directly by the bank which are not subordinated to excluded
liabilities but meet all other TLAC term sheet requirements
14
Of which: amount eligible as TLAC after application of the caps
15
External TLAC instruments issued by funding vehicles prior to 1 January 2022
16
Eligible ex ante commitments to recapitalise a G-SIB in resolution
(M)
3,249,700
2,704,976
17
TLAC arising from non-regulatory capital instruments before adjustments ((L) + (M))
(N)
11,243,997
9,635,862
Non-regulatory capital elements of TLAC: adjustments (4)
18
TLAC before deductions ((K) + (N))
(O)
25,603,069
22,325,379
19
Deductions of exposures between MPE resolution groups that correspond to items eligible
for TLAC (not applicable to SPE G-SIBs)
(P)
—
—
20
Deduction of investments in own other TLAC liabilities
(Q)
—
315
21
Other adjustment to TLAC
(R)
—
—
22
TLAC after deductions ((O) - (P) - (Q) - (R))
(S)
25,603,069
22,325,063
Risk-weighted assets and leverage exposure measure for TLAC purposes (5)
23
Total risk-weighted assets (RWA)
(T)
92,848,578
77,285,048
24
Total exposures
(U)
252,514,076
229,516,974
TLAC ratios and buffers (6)
25
TLAC before deduction of CET1 specific buffer requirement (as a percentage of RWA) ((S) / (T))
27.57%
28.88%
25a
TLAC (as a percentage of RWA)
23.92%
25.28%
26
TLAC (as a percentage of total exposures) ((S) / (U))
10.13%
9.72%
27
CET1 available after meeting the minimum capital requirements
7.29%
7.98%
28
CET1 specific buffer requirement
3.65%
3.60%
29
of which: capital conservation buffer requirement
2.50%
2.50%
30
of which: countercyclical buffer requirement
0.15%
0.10%
31
of which: G-SIB/D-SIB additional requirement
1.00%
1.00%
TLAC (as a percentage of total exposures) (including deposits with the Bank of Japan) (7)
Total exposures
(U)
252,514,076
229,516,974
The amount of deposits with the Bank of Japan
61,284,825
60,420,329
Total exposures (including deposits with the Bank of Japan)
(U’)
313,798,901
289,937,303
TLAC (as a percentage of total exposures) (including deposits with the Bank of Japan) ((S)/(U’))
8.15%
7.69%
TLAC information
Basel III Information
281
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ TLAC3: Creditor ranking of external TLAC, etc.
Sumitomo Mitsui Financial Group, Inc.
(Millions of yen)
As of March 31, 2024
Creditor ranking
Sum of
1 to 4
Basel III
Template
No.
Items
1
2
3
4
(most junior)
(most senior)
1
Description of creditor ranking
Common
share
capital
Additional
Tier 1
instruments
Tier 2
instruments
Unsecured
senior
bonds *
1
2
Total capital and liabilities net of credit risk mitigation
(A)
3,909,552
1,467,330
1,492,083
8,997,988
15,866,954
3
Subset of row 2 that are excluded liabilities *
2
(B)
—
—
—
92,146
92,146
4
Total capital and liabilities less excluded liabilities ((A)-(B))
3,909,552
1,467,330
1,492,083
8,905,842
15,774,808
5
Subset of row 4 that are eligible as TLAC
3,909,552
1,467,330
1,114,256
8,015,150
14,506,289
6
1 year ≤ residual maturity < 2 years
—
—
131,000
1,128,720
1,259,720
7
2 years ≤ residual maturity < 5 years
—
—
365,000
3,831,068
4,196,068
8
5 years ≤ residual maturity < 10 years
—
—
338,295
2,400,568
2,738,864
9
10 years ≤ residual maturity (excluding perpetual securities)
—
—
279,960
654,792
934,753
10
Perpetual securities
3,909,552
1,467,330
—
—
5,376,882
*1 Excluding those owed to group companies
*2 Conservatively estimated in light of quantitative materiality
Sumitomo Mitsui Financial Group, Inc.
(Millions of yen)
As of March 31, 2023
Creditor ranking
Sum of
1 to 4
Basel III
Template
No.
Items
1
2
3
4
(most junior)
(most senior)
1
Description of creditor ranking
Common
share
capital
Additional
Tier 1
instruments
Tier 2
instruments
Unsecured
senior
bonds *
1
2
Total capital and liabilities net of credit risk mitigation
(A)
3,906,550
767,000
1,140,483
7,585,036
13,399,070
3
Subset of row 2 that are excluded liabilities *
2
(B)
—
—
—
64,304
64,304
4
Total capital and liabilities less excluded liabilities ((A)-(B))
3,906,550
767,000
1,140,483
7,520,731
13,334,765
5
Subset of row 4 that are eligible as TLAC
3,906,550
767,000
1,140,483
6,943,743
12,757,777
6
1 year ≤ residual maturity < 2 years
—
—
346,695
858,888
1,205,583
7
2 years ≤ residual maturity < 5 years
—
—
347,000
3,466,408
3,813,408
8
5 years ≤ residual maturity < 10 years
—
—
333,279
2,048,388
2,381,667
9
10 years ≤ residual maturity (excluding perpetual securities)
—
—
113,509
570,058
683,567
10
Perpetual securities
3,906,550
767,000
—
—
4,673,550
*1 Excluding those owed to group companies
*2 Conservatively estimated in light of quantitative materiality
Basel III Information
280
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
Sumitomo Mitsui Banking Corporation
(Millions of yen)
As of March 31, 2023
Creditor ranking
Sum of
1 to 4
Basel III
Template
No.
Items
1
2
3
4
(most junior)
(most senior)
1
Is the resolution entity the creditor/investor?
Yes
No
Yes
No
Yes
No
Yes
No
2
Description of creditor ranking
Common
share capital
Additional Tier 1
instruments
Tier 2 instruments
Other internal
TLAC liabilities
3
Total capital and liabilities net of credit risk
mitigation
(A)
3,545,551
—
1,267,000
—
1,140,483
—
7,385,780
—
13,338,814
4
Subset of row 3 that are excluded liabilities (B)
—
—
—
—
—
—
—
—
—
5
Total capital and liabilities less excluded liabilities
((A)-(B))
3,545,551
—
1,267,000
—
1,140,483
—
7,385,780
—
13,338,814
6
Subset of row 5 that are eligible as TLAC
3,545,551
—
1,267,000
—
1,140,483
—
6,808,792
—
12,761,826
7
1 year ≤ residual maturity < 2 years
—
—
—
—
346,695
—
789,388
—
1,136,083
8
2 years ≤ residual maturity < 5 years
—
—
—
—
347,000
—
3,429,669
—
3,776,669
9
5 years ≤ residual maturity < 10 years
—
—
—
—
333,279
—
2,023,061
—
2,356,340
10
10 years ≤ residual maturity
(excluding perpetual securities)
—
—
—
—
113,509
—
566,673
—
680,182
11
Perpetual securities
3,545,551
—
1,267,000
—
—
—
—
—
4,812,551
SMBC Nikko Securities Inc.
(Millions of yen)
As of March 31, 2023
Creditor ranking
Sum of
1 to 3
Basel III
Template
No.
Items
1
2
3
(most junior)
(most senior)
1
Is the resolution entity the creditor/investor?
Yes
No
Yes
No
Yes
No
2
Description of creditor ranking
Common
share capital
Subordinated debts
Other internal
TLAC liabilities
3
Total capital and liabilities net of credit risk mitigation
(A)
467,714
—
—
—
—
—
467,714
4
Subset of row 3 that are excluded liabilities
(B)
—
—
—
—
—
—
—
5
Total capital and liabilities less excluded liabilities ((A)-(B))
467,714
—
—
—
—
—
467,714
6
Subset of row 5 that are eligible as TLAC
467,714
—
—
—
—
—
467,714
7
1 year ≤ residual maturity < 2 years
—
—
—
—
—
—
—
8
2 years ≤ residual maturity < 5 years
—
—
—
—
—
—
—
9
5 years ≤ residual maturity < 10 years
—
—
—
—
—
—
—
10
10 years ≤ residual maturity (excluding perpetual securities)
—
—
—
—
—
—
—
11
Perpetual securities
467,714
—
—
—
—
—
467,714
Basel III Information
283
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ Disclosure of Quantitative Information about Liquidity Coverage Ratio (Consolidated)
(In million yen, %, the number of data)
Item
Current Quarter
(From 2024/1/1
To 2024/3/31)
Prior Quarter
(From 2023/10/1
To 2023/12/31)
High-Quality Liquid Assets (1)
1
Total high-quality liquid assets (HQLA)
86,516,063
87,422,115
Cash Outflows (2)
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
2
Cash outflows related to unsecured retail funding
63,443,579
4,923,897
62,845,227
4,892,409
3
of which, Stable deposits
20,341,415
613,074
19,934,640
600,736
4
of which, Less stable deposits
43,102,163
4,310,822
42,910,586
4,291,672
5
Cash outflows related to unsecured wholesale funding
95,792,027
48,320,101
94,161,546
46,887,991
6
of which, Qualifying operational deposits
—
—
—
—
7
of which, Cash outflows related to unsecured wholesale funding
other than qualifying operational deposits and debt securities
88,876,677
41,404,751
88,225,105
40,951,550
8
of which, Debt securities
6,915,349
6,915,349
5,936,441
5,936,441
9
Cash outflows related to secured funding, etc.
595,577
397,113
10
Cash outflows related to derivative transactions, etc. funding
programs, credit and liquidity facilities
39,596,495
14,389,119
39,048,777
14,238,756
11
of which, Cash outflows related to derivative transactions, etc.
2,214,702
2,214,702
2,226,124
2,226,124
12
of which, Cash outflows related to funding programs
390,248
390,248
478,837
478,837
13
of which, Cash outflows related to credit and liquidity facilities
36,991,543
11,784,168
36,343,816
11,533,794
14
Cash outflows related to contractual funding obligations, etc.
12,655,757
9,018,167
11,756,040
8,368,628
15
Cash outflows related to contingencies
87,751,299
2,248,973
87,462,675
2,236,905
16
Total cash outflows
79,495,836
77,021,804
Cash Inflows (3)
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
17
Cash inflows related to secured lending, etc.
10,691,925
1,017,005
9,705,981
935,744
18
Cash inflows related to collection of loans, etc.
15,057,425
9,522,642
12,916,581
8,238,313
19
Other cash inflows
5,478,710
3,035,047
5,961,186
2,842,503
20
Total cash inflows
31,228,061
13,574,694
28,583,748
12,016,561
Consolidated Liquidity Coverage Ratio (4)
21
Total HQLA allowed to be included in the calculation
86,516,063
87,422,115
22
Net cash outflows
65,921,141
65,005,243
23
Consolidated liquidity coverage ratio (LCR)
131.2%
134.4%
24
The number of data used to calculate the average value
58
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
(In million yen)
Item
Current Quarter
(From 2024/1/1
To 2024/3/31)
Prior Quarter
(From 2023/10/1
To 2023/12/31)
1
Cash and due from banks
78,609,176
78,824,560
2
Securities
7,906,886
8,597,555
3
of which, government bonds, etc.
4,305,298
4,955,008
4
of which, municipal bonds, etc.
160,962
241,978
5
of which, other bonds
1,227,902
1,311,750
6
of which, stocks
2,212,721
2,088,817
7
Total high-quality liquid assets (HQLA)
86,516,063
87,422,115
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.
Basel III Information
282
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
Liquidity Coverage Ratio Information (Consolidated)
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 “cash outflows related to small-sized consolidated subsidiaries,” etc. under “cash outflows based on other contracts” prescribed
in Article 59 of the Liquidity Ratio Notification.
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Basel III Information
285
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ Disclosure of Quantitative Information about Net Stable Funding Ratio (Consolidated)
(In million yen, %)
Item
Current Quarter (From 2024/1/1 To 2024/3/31)
Prior Quarter (From 2023/10/1 To 2023/12/31)
Unweighted value by residual maturity
Weighted
value
Unweighted value by residual maturity
Weighted
value
No maturity < 6 months 6 months to
< 1 year
≥ 1 year
No maturity < 6 months 6 months to
< 1 year
≥ 1 year
Available stable funding (ASF) items (1)
1
Capital; of which:
14,678,597
354,048
10,507
2,527,677
17,211,528
13,822,875
227,301
84,435
2,307,292
16,172,385
2
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
14,678,597
0
0
2,351,163
17,029,760
13,822,875
0
0
2,136,854
15,959,730
3
Other capital instruments that are
not included in the above category
0
354,048
10,507
176,513
181,767
0
227,301
84,435
170,437
212,655
4
Funding from retail and small
business customers; of which:
63,920,184
0
0
110,462
58,674,024
63,862,701
0
0
104,035
58,633,415
5
Stable deposits
20,707,911
0
0
0
19,672,516
21,058,984
0
0
0
20,006,035
6
Less stable deposits
43,212,272
0
0
110,462
39,001,507
42,803,716
0
0
104,035
38,627,380
7
Wholesale funding; of which:
73,062,264
67,906,458
8,123,614
19,207,407
62,924,473
69,264,294
66,651,887
4,790,911
20,837,517
60,923,152
8
Operational deposits
—
—
—
—
—
—
—
—
—
—
9
Other wholesale funding
73,062,264
67,906,458
8,123,614
19,207,407
62,924,473
69,264,294
66,651,887
4,790,911
20,837,517
60,923,152
10 Liabilities with matching
interdependent assets
—
—
—
—
—
—
—
—
—
—
11 Other liabilities; of which:
1,628,865
15,390,181
0
940,872
121,370
1,320,308
16,423,735
0
465,085
82,293
12
Derivative liabilities
714,683
208,433
13
All other liabilities and equity not
included in the above categories
1,628,865
15,390,181
0
226,188
121,370
1,320,308
16,423,735
0
256,651
82,293
14 Total available stable funding
138,931,396
135,811,246
Required stable funding (RSF) items (2)
15 HQLA
4,031,515
3,570,396
16 Deposits held at financial
institutions for operational purposes
489,669
26,418
0
0
258,044
368,701
26,770
0
0
197,735
17
Loans, repo transactions-related
assets, securities and other similar
assets; of which:
1,774,362
42,879,327
12,727,224
78,157,384
87,222,465
1,628,107
44,562,102
10,116,348
74,169,086
82,974,029
18
Loans to- and repo transactions
with- financial institutions
(secured by level 1 HQLA)
0
9,987,432
0
23,886
477,337
0
9,196,158
29,672
9,808
86,158
19
Loans to- and repo transactions
with- financial institutions (not
included in item 18)
316,004
7,043,655
2,901,278
13,311,684
16,046,202
254,113
6,971,101
2,573,220
11,951,296
14,370,245
20
Loans and repo transactions-
related assets (not included in
item 18, 19 and 22); of which:
987,153
23,840,359
8,776,190
50,340,832
57,603,768
906,644
26,608,617
6,512,993
47,984,834
55,936,147
21
With a risk weight of less than
or equal to 35% under the
Standardised Approach for
credit risk
27,372
5,407,372
1,349,423
4,445,989
4,932,951
126
5,511,445
345,039
1,086,527
1,735,373
22
Residential mortgages; of which:
0
293,556
291,659
10,848,709
8,326,334
0
291,632
291,587
10,735,116
8,084,114
23
With a risk weight of less than or
equal to 35% under the Standardised
Approach for credit risk
0
166,109
165,559
5,938,383
4,025,783
0
160,668
160,462
6,661,722
4,490,684
24
Securities that are not in default
and do not qualify as HQLA and
other similar assets
471,204
1,714,323
758,096
3,632,271
4,768,822
467,349
1,494,592
708,873
3,488,029
4,497,363
25 Assets with matching
interdependent liabilities
—
—
—
—
—
—
—
—
—
—
26 Other assets; of which:
5,111,610
1,581,248
122,667
18,039,467
23,662,649
4,995,016
1,463,837
94,600
17,897,035
23,191,455
27
Physical traded commodities,
including gold
0
0
0
0
28
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)
726,037
617,132
770,346
654,794
29
Derivative assets
0
0
0
0
30
Derivative liabilities (before deduction
of variation margin posted)
264,358
264,358
225,905
225,905
31
All other assets not included in
the above categories
5,111,610
1,581,248
122,667
17,049,070
22,781,158
4,995,016
1,463,837
94,600
16,900,783
22,310,754
32 Off-balance sheet items
128,609,387
2,688,838
123,934,595
2,634,347
33 Total required stable funding
117,863,513
112,567,965
34 Consolidated net stable funding ratio (NSFR)
117.8%
120.6%
Basel III Information
284
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
Net Stable Funding Ratio Information (Consolidated)
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.
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Basel III Information
287
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ CC1: Composition of regulatory capital
(Millions of yen, except percentages)
Basel III
Template No. Items
a
b
c
As of March
31,2024
As of March
31,2023
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
7,815,032
7,694,942
1a
of which: capital and capital surplus
3,538,331
3,526,676
2
of which: retained earnings
4,598,846
4,239,771
1c
of which: treasury stock (–)
—
—
26
of which: national specific regulatory adjustments (earnings to be distributed) (–)
322,145
71,505
of which: other than the above
—
—
1b
Stock subscription rights and stock acquisition rights to common shares
—
—
3
Accumulated other comprehensive income and other disclosed reserves
3,154,871
1,821,091
(a)
5
Common share capital issued by subsidiaries and held by third parties (amount allowed in group
CET1)
2,135
1,404
6
Common Equity Tier 1 capital: instruments and reserves
(A)
10,972,039
9,517,439
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)
395,920
254,563
8
of which: goodwill (including those equivalent)
99,142
3,801
9
of which: other intangibles other than goodwill and mortgage servicing rights
296,777
250,761
10
Deferred tax assets that rely on future profitability excluding those arising from temporary
differences (net of related tax liability)
3,949
1,292
11
Net deferred gains or losses on hedges
(146,062)
(77,631)
12
Shortfall of eligible provisions to expected losses
—
—
13
Securitisation gain on sale
47,724
52,939
14
Gains and losses due to changes in own credit risk on fair valued liabilities
23,464
45,592
15
Net defined benefit asset
625,498
485,094
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
—
—
19
of which: significant investments in the common stock of financials
—
—
20
of which: mortgage servicing rights
—
—
21
of which: deferred tax assets arising from temporary differences (net of related tax liability)
—
—
22
Amount exceeding the 15% threshold on specified items
—
—
23
of which: significant investments in the common stock of financials
—
—
24
of which: mortgage servicing rights
—
—
25
of which: deferred tax assets arising from temporary differences (net of related tax liability)
—
—
27
Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1
and Tier 2 to cover deductions
—
—
28
Common Equity Tier 1 capital: regulatory adjustments
(B)
950,493
761,851
Common Equity Tier 1 capital (CET1)
29
Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
10,021,546
8,755,588
Capital Ratio and Leverage Ratio Information (Consolidated)
Sumitomo Mitsui Banking Corporation and Subsidiaries
Basel III Information
286
SMBC
SMBC GROUP ANNUAL REPORT 2024
Financial Highlights
Sumitomo Mitsui Banking Corporation
Consolidated
Millions of yen
Year ended March 31
2024
2023
2022
2021
2020
For the Year:
Ordinary income �����������������������������������������������������������
¥ 7,754,385
¥ 4,991,948
¥ 2,990,450
¥ 2,786,647
¥ 3,469,068
Ordinary profit ��������������������������������������������������������������
1,356,572
1,125,928
867,849
534,722
770,491
Profit attributable to owners of parent �������������������������
901,935
807,042
568,244
406,093
517,750
Comprehensive income �����������������������������������������������
2,251,293
952,014
327,943
1,238,547
222,122
At Year-End:
Total net assets ������������������������������������������������������������
¥ 11,494,278
¥ 9,735,509
¥ 9,219,858
¥ 9,256,369
¥ 8,368,349
Total assets ������������������������������������������������������������������
272,298,248
252,567,523
242,105,934
228,066,567
206,089,633
Total capital ratio (BIS guidelines) ��������������������������������
16.11%
15�34%
15�78%
17�72%
18�06%
Tier 1 capital ratio (BIS guidelines) �������������������������������
14.80%
14�15%
14�53%
15�89%
15�80%
Common equity Tier 1 capital ratio
(BIS guidelines) ����������������������������������������������������������
12.42%
12�43%
12�67%
13�98%
13�70%
Number of employees ��������������������������������������������������
68,750
59,399
58,041
58,127
57,961
Note: “Number of employees” has been reported on the basis of full-time workers. “Number of employees” includes locally hired overseas staff members but
excludes contract employees and temporary staff.
Non-consolidated
Millions of yen
Year ended March 31
2024
2023
2022
2021
2020
For the Year:
Ordinary income �����������������������������������������������������������
¥ 6,349,899
¥ 4,133,627
¥ 2,477,287
¥ 2,283,356
¥ 2,851,162
Trust fees �����������������������������������������������������������������
3,114
2,451
2,254
2,076
2,110
Gross banking profit (A) �����������������������������������������������
1,885,198
1,699,474
1,579,178
1,481,662
1,412,007
Expenses (excluding nonrecurring losses) (B) �������������
983,886
883,603
857,233
816,488
808,052
Overhead ratio (B) / (A) �������������������������������������������������
52.2%
52�0%
54�3%
55�1%
57�2%
Banking profit
(before provision for general reserve for possible
loan losses) ��������������������������������������������������������������
901,311
815,871
721,944
665,173
603,955
Core banking profit ������������������������������������������������������
946,809
902,618
764,309
585,189
529,752
Core banking profit (excluding gains or losses on
cancellation of investment trusts) ����������������������������
926,024
863,278
722,805
551,401
505,785
Banking profit ���������������������������������������������������������������
880,652
797,003
715,731
502,679
586,741
Ordinary profit ��������������������������������������������������������������
1,040,471
865,797
745,950
436,062
483,944
Net income �������������������������������������������������������������������
762,646
634,154
546,294
338,036
317,381
At Year-End:
Total net assets ������������������������������������������������������������
¥ 8,041,611
¥ 7,394,955
¥ 7,546,483
¥ 8,065,866
¥ 7,496,219
Total assets ������������������������������������������������������������������
249,722,179
235,337,464
227,964,729
215,846,732
193,963,791
Deposits �����������������������������������������������������������������������
153,494,437
149,948,880
141,015,245
134,685,582
119,973,324
Loans and bills discounted ������������������������������������������
101,124,712
94,307,397
87,671,294
81,937,725
80,187,382
Securities ���������������������������������������������������������������������
34,666,605
32,210,394
38,238,579
36,487,225
27,058,633
Trust assets and liabilities ��������������������������������������������
6,377,557
5,108,905
4,622,304
4,484,901
4,261,245
Loans and bills discounted in trust account ������������
1,738,854
1,070,590
751,760
671,654
662,844
Securities in trust account (excluding
electronically recorded transferable rights on
securities in trust account) ���������������������������������
916,967
900,799
889,179
922,114
1,164,251
Electronic payment instruments in trust account
and performance-guarantee electronic
payment instruments ������������������������������������������
—
—
—
—
—
Crypto-assets in trust account and
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 ����������������������������������������������������
106,248
106,248
106,248
106,248
106,248
Preferred stock ����������������������������������������������������
70
70
70
70
70
Dividend payout ratio ���������������������������������������������������
104.05%
73�46%
70�61%
77�79%
167�61%
Total capital ratio (BIS guidelines) ��������������������������������
14.27%
13�97%
14�77%
16�96%
17�61%
Tier 1 capital ratio (BIS guidelines) �������������������������������
12.86%
12�63%
13�49%
15�08%
15�23%
Common equity Tier 1 capital ratio
(BIS guidelines) ��������������������������������������������������������
10.35%
10�81%
11�53%
13�09%
13�01%
Number of employees ��������������������������������������������������
27,808
27,839
27,851
28,104
27,957
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.
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/cy2024annu_eng_smfg�html
289
SMBC
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, except percentages)
Basel III
Template No. Items
a
b
c
As of March
31,2024
As of March
31,2023
Reference
to Template
CC2
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
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)
—
—
55
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)
45,399
40,062
57
Tier 2 capital: regulatory adjustments
(I)
45,399
40,062
Tier 2 capital (T2)
58
Tier 2 capital (T2) ((H)-(I))
(J)
1,060,831
839,109
Total capital (TC = T1 + T2)
59
Total capital (TC = T1 + T2) ((G)+(J))
(K)
12,998,713
10,802,315
Risk weighted assets (6)
60
Total risk-weighted assets (RWA)
(L)
80,641,252
70,401,996
Capital ratios (consolidated) (7)
61
Common Equity Tier 1 risk-weighted capital ratio (consolidated) ((C)/(L))
12.42%
12.43%
62
Tier 1 risk-weighted capital ratio (consolidated) ((G)/(L))
14.80%
14.15%
63
Total risk-weighted capital ratio (consolidated) ((K)/(L))
16.11%
15.34%
Regulatory adjustments (8)
72
Non-significant investments in the capital and other TLAC liabilities of other financials that are
below the thresholds for deduction (before risk weighting)
907,607
532,660
73
Significant investments in the common stock of other financials that are below the thresholds
for deduction (before risk weighting)
841,929
597,865
74
Mortgage servicing rights that are below the thresholds for deduction (before risk weighting)
—
—
75
Deferred tax assets arising from temporary differences that are below the thresholds for
deduction (before risk weighting)
32,421
48,842
Provisions included in Tier 2 capital: instruments and provisions (9)
76
Provisions (general reserve for possible loan losses)
30,761
17,293
77
Cap on inclusion of provisions (general reserve for possible loan losses)
50,704
30,464
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”)
119,655
90,771
79
Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
412,505
296,379
(Millions of yen)
Items
As of March
31,2024
As of March
31,2023
Required capital ((L) ✕ 8%)
6,451,300
5,632,159
Basel III Information
288
SMBC
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, except percentages)
Basel III
Template No. Items
a
b
c
As of March
31,2024
As of March
31,2023
Reference
to Template
CC2
Additional Tier 1 capital: instruments (3)
30
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 subscription rights and stock acquisition rights to Additional Tier 1 instruments
—
—
32 Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which:
classified as liabilities under applicable accounting standards
1,967,330
1,267,000
Qualifying Additional Tier 1 instruments plus related capital surplus issued by special purpose
vehicles and other equivalent entities
—
—
34
Additional Tier 1 instruments issued by subsidiaries and held by third parties (amount allowed in
group AT1)
31,984
23,597
36
Additional Tier 1 capital: instruments
(D)
1,999,314
1,290,597
Additional Tier 1 capital: regulatory adjustments
37
Investments in own Additional Tier 1 instruments
—
—
38
Reciprocal cross-holdings in Additional Tier 1 instruments
—
—
39
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)
—
—
40
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)
82,978
82,978
42
Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover
deductions
—
—
43
Additional Tier 1 capital: regulatory adjustments
(E)
82,978
82,978
Additional Tier 1 capital (AT1)
44
Additional Tier 1 capital ((D)-(E))
(F)
1,916,335
1,207,618
Tier 1 capital (T1 = CET1 + AT1)
45
Tier 1 capital (T1 = CET1 + AT1) ((C)+(F))
(G)
11,937,881
9,963,206
Tier 2 capital: instruments and provisions (4)
46
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
equity under applicable accounting standards and the breakdown
—
—
Stock subscription rights and 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
948,121
766,614
Qualifying Tier 2 instruments plus related capital surplus issued by special purpose vehicles
and other equivalent entities
—
—
48
Tier 2 instruments issued by subsidiaries and held by third parties (amount allowed in group T2)
7,692
4,491
50
Total of general reserve for possible loan losses and eligible provisions included in Tier 2
150,417
108,065
50a
of which: general reserve for possible loan losses
30,761
17,293
50b
of which: eligible provisions
119,655
90,771
51
Tier 2 capital: instruments and provisions
(H)
1,106,230
879,171
Basel III Information
291
SMBC
SMBC GROUP ANNUAL REPORT 2024
(Appended Table)
1. Stockholders’ equity
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Capital stock
1,770,996
1,770,996
Including eligible Tier 1 capital
instruments subject to transitional
arrangement
1-a
Capital surplus
1,977,337
1,965,682
Including eligible Tier 1 capital
instruments subject to transitional
arrangement
1-b
Retained earnings
4,598,846
4,239,771
1-c
Treasury stock
(210,003)
(210,003) Eligible Tier 1 capital instruments
subject to transitional arrangement
1-d
Total stockholders’ equity
8,137,177
7,766,447
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Directly issued qualifying common share capital plus
related capital surplus and retained earnings
8,137,177
7,766,447
Stockholders’ equity attributable to
common shares (before adjusting
national specific regulatory adjustments
(earnings to be distributed))
of which: capital and capital surplus
3,538,331
3,526,676
1a
of which: retained earnings
4,598,846
4,239,771
2
of which: treasury stock (–)
—
—
1c
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
—
—
Stockholders’ equity attributable to
preferred shares with a loss
absorbency clause upon entering into
effectively bankruptcy
31a
2. Intangible fixed assets
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Intangible fixed assets
420,745
354,939
2-a
Securities
35,622,891 32,074,167
2-b
of which: goodwill attributable to equity-
method investees
99,142
3,801
Income taxes related to above
123,968
104,177
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Goodwill (including those equivalent)
99,142
3,801
8
Other intangibles other than goodwill and mortgage
servicing rights
296,777
250,761
Software and other
9
Mortgage servicing rights
—
—
Amount exceeding the 10% threshold on
specified items
—
—
20
Amount exceeding the 15% threshold on
specified items
—
—
24
Mortgage servicing rights that are below the
thresholds for deduction (before risk weighting)
—
—
74
3. Net defined benefit asset
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Net defined benefit asset
901,362
698,974
3
Income taxes related to above
275,863
213,879
Basel III Information
290
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ CC2: Reconciliation of regulatory capital to balance sheet
Sumitomo Mitsui Banking Corporation and Subsidiaries
(Millions of yen)
a
b
c
Items
Consolidated balance sheet as
in published financial
statements
Reference to
Template CC1
Reference to
appended table
As of March 31,
2024
As of March 31,
2023
(Assets)
Cash and due from banks
75,046,469
73,403,912
Call loans and bills bought
5,933,883
6,374,812
Receivables under resale agreements
6,163,573
4,603,145
Receivables under securities borrowing transactions
2,607,042
1,612,415
Monetary claims bought
6,094,883
5,549,887
Trading assets
5,656,912
4,084,755
6-a
Money held in trust
0
0
Securities
35,622,891
32,074,167
2-b,6-b
Loans and bills discounted
107,763,214
99,823,911
6-c
Foreign exchanges
2,068,885
1,940,736
Lease receivables and investment assets
207,645
226,302
Other assets
10,142,406
8,753,186
6-d
Tangible fixed assets
841,538
1,337,805
Intangible fixed assets
420,745
354,939
2-a
Net defined benefit asset
901,362
698,974
3
Deferred tax assets
53,836
57,428
4-a
Customers’ liabilities for acceptances and guarantees
13,426,544
12,278,891
Reserve for possible loan losses
(653,587)
(607,747)
Total assets
272,298,248
252,567,523
(Liabilities)
Deposits
165,146,962
159,251,139
Negotiable certificates of deposit
15,149,775
13,252,060
Call money and bills sold
1,018,349
786,055
Payables under repurchase agreements
15,830,507
14,194,027
Payables under securities lending transactions
791,908
438,094
Commercial paper
2,429,179
2,320,969
Trading liabilities
4,312,954
4,234,268
6-e
Borrowed money
24,998,606
22,246,521
8-a
Foreign exchanges
2,873,784
1,496,765
Bonds
1,144,288
681,821
8-b
Due to trust account
1,246,198
2,413,464
Other liabilities
11,668,391
8,811,706
6-f
Reserve for employee bonuses
62,064
52,102
Reserve for executive bonuses
1,861
1,623
Net defined benefit liability
9,846
6,367
Reserve for executive retirement benefits
642
596
Reserve for point service program
1,581
1,140
Reserve for reimbursement of deposits
9,228
10,845
Deferred tax liabilities
653,976
325,598
4-b
Deferred tax liabilities for land revaluation
27,316
27,952
4-c
Acceptances and guarantees
13,426,544
12,278,891
Total liabilities
260,803,969
242,832,013
(Net assets)
Capital stock
1,770,996
1,770,996
1-a
Capital surplus
1,977,337
1,965,682
1-b
Retained earnings
4,598,846
4,239,771
1-c
Treasury stock
(210,003)
(210,003)
1-d
Total stockholders’ equity
8,137,177
7,766,447
Net unrealized gains or losses on other securities
1,779,511
972,941
Net deferred gains or losses on hedges
(66,285)
(15,964)
5
Land revaluation excess
34,936
35,005
Foreign currency translation adjustments
1,124,445
697,887
Accumulated remeasurements of defined benefit plans
282,263
131,222
Total accumulated other comprehensive income
3,154,871
1,821,091
(a)
Non-controlling interests
202,229
147,969
7-b
Total net assets
11,494,278
9,735,509
Total liabilities and net assets
272,298,248
252,567,523
Note: The regulatory scope of consolidation is the same as the accounting scope of consolidation.
Basel III Information
293
SMBC
SMBC GROUP ANNUAL REPORT 2024
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Investments in own capital instruments
—
—
Common Equity Tier 1 capital
—
—
16
Additional Tier 1 capital
—
—
37
Tier 2 capital
—
—
52
Reciprocal cross-holdings in the capital of banking,
financial and insurance entities
—
—
Common Equity Tier 1 capital
—
—
17
Additional Tier 1 capital
—
—
38
Tier 2 capital and other TLAC liabilities
—
—
53
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)
907,607
532,660
Common Equity Tier 1 capital
—
—
18
Additional Tier 1 capital
—
—
39
Tier 2 capital and other TLAC liabilities
—
—
54
Non-significant investments in the capital
and other TLAC liabilities of other financials
that are below the thresholds for deductions
(before risk weighting)
907,607
532,660
72
Significant investments in the capital of banking,
financial and insurance entities that are outside the
scope of regulatory consolidation (net of eligible
short positions)
970,307
720,906
Amount exceeding the 10% threshold on
specified items
—
—
19
Amount exceeding the 15% threshold on
specified items
—
—
23
Additional Tier 1 capital
82,978
82,978
40
Tier 2 capital and other TLAC liabilities
45,399
40,062
55
Significant investments in the common stock
of other financials that are below the
thresholds for deductions (before risk
weighting)
841,929
597,865
73
7. Non-controlling interests
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Non-controlling interests
202,229
147,969
7-b
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Amount allowed in group CET1
2,135
1,404
After reflecting amounts eligible for
inclusion (Non-Controlling Interest
after adjustments)
5
Qualifying Additional Tier 1 instruments plus related
capital surplus issued by special purpose vehicles
and other equivalent entities
—
—
After reflecting amounts eligible for
inclusion (Non-Controlling Interest
after adjustments)
30-31ab-32
Amount allowed in group AT1
31,984
23,597
After reflecting amounts eligible for
inclusion (Non-Controlling Interest
after adjustments)
34
Qualifying Tier 2 instruments plus related capital
surplus issued by special purpose vehicles and other
equivalent entities
—
—
After reflecting amounts eligible for
inclusion (Non-Controlling Interest
after adjustments)
46
Amount allowed in group T2
7,692
4,491
After reflecting amounts eligible for
inclusion (Non-Controlling Interest
after adjustments)
48
Basel III Information
292
SMBC
SMBC GROUP ANNUAL REPORT 2024
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Net defined benefit asset
625,498
485,094
15
4. Deferred tax assets
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Deferred tax assets
53,836
57,428
4-a
Deferred tax liabilities
653,976
325,598
4-b
Deferred tax liabilities for land revaluation
27,316
27,952
4-c
Tax effects on intangible fixed assets
123,968
104,177
Tax effects on net defined benefit asset
275,863
213,879
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability
excluding those arising from temporary differences
(net of related tax liability)
3,949
1,292
This item does not agree with the
amount reported on the consolidated
balance sheet due to offsetting of
assets and liabilities.
10
Deferred tax assets arising from temporary
differences (net of related tax liability)
32,421
48,842
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
—
—
21
Amount exceeding the 15% threshold on
specified items
—
—
25
Deferred tax assets arising from temporary
differences that are below the thresholds for
deduction (before risk weighting)
32,421
48,842
75
5. Deferred gains or losses on derivatives under hedge accounting
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Net deferred gains or losses on hedges
(66,285)
(15,964)
5
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Net deferred gains or losses on hedges
(146,062)
(77,631)
Excluding those items whose valuation
differences arising from hedged items
are recognized as “Accumulated other
comprehensive income”
11
6. Items associated with investments in the capital of financial institutions
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Trading assets
5,656,912
4,084,755
Including trading account securities
and derivatives for trading assets
6-a
Securities
35,622,891
32,074,167
6-b
Loans and bills discounted
107,763,214
99,823,911
Including subordinated loans
6-c
Other assets
10,142,406
8,753,186
Including derivatives
6-d
Trading liabilities
4,312,954
4,234,268
Including trading account securities
sold and derivatives for trading
liabilities
6-e
Other liabilities
11,668,391
8,811,706
Including derivatives
6-f
Basel III Information
295
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ Composition of Leverage Ratio
(In million yen)
Basel Ⅲ Template
No.
Items
As of March 31,
2024
As of March 31,
2023
1
Total assets reported in the consolidated balance sheet
272,298,248
2
The amount of assets of subsidiaries that are not included in the scope of the leverage ratio
on a consolidated basis (–)
—
3
Adjustment for securitised exposures that meet the operational requirements for the
recognition of risk transference
—
4
Adjustments for exemption of central bank reserves (–)
59,381,657
5
Adjustment for fiduciary assets recognised on the balance sheet pursuant to the operative
accounting framework but excluded from the leverage ratio exposure measure (–)
6
Adjustments for regular-way purchases and sales of financial assets subject to trade date
accounting
306,966
7
Adjustments for eligible cash pooling transactions
—
8
Adjustments for total exposures related to derivatives transactions, etc.
1,372,731
8a
Total exposures related to derivatives transactions, etc.
11,160,008
8b
The amount of deductions from the exposures above (line 8a) (–)
9,787,276
9
Adjustment for total exposures related to repo transactions, etc.
447,928
9a
Total exposures related to repo transactions, etc.
9,218,544
9b
The amount of deductions from the exposures above (line 9a) (–)
8,770,615
10
Adjustments for total off-balance sheet exposures
30,202,520
11
The amount of adjustments associated with Tier 1 capital (specific and general provisions) (–)
—
12
Other adjustments
(15,252,560)
12a
The amount of adjustments associated with Tier 1 capital (excluding specific and general
provisions) (–)
1,108,346
12b
The amount of customers’ liabilities for acceptances and guarantees (–)
13,426,544
12c
The amount of receivables arising from providing collateral, provided where deducted from
the consolidated balance sheet pursuant to the operative accounting framework
—
12d
The amount of receivables arising from providing cash variation margin (–)
717,669
12e
The amount of assets of subsidiaries that are included in the scope of the leverage ratio on a
consolidated basis (excluding those included in the total assets reported in the consolidated
balance sheet)
—
13
Total exposures
229,994,176
Basel III Information
294
SMBC
SMBC GROUP ANNUAL REPORT 2024
8. Other capital instruments
(1) Consolidated balance sheet
(Millions of yen)
Consolidated balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Borrowed money
24,998,606 22,246,521
8-a
Bonds
1,144,288
681,821
8-b
Total
26,142,894 22,928,343
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
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
1,967,330
1,267,000
32
Directly issued qualifying Tier 2 instruments plus
related capital surplus of which: classified as
liabilities under applicable accounting standards
948,121
766,614
46
Basel III Information
297
SMBC
SMBC GROUP ANNUAL REPORT 2024
(In million yen, %)
Corresponding line #
on Basel III disclosure
template (Table2)
Corresponding line #
on Basel III disclosure
template (Table1)
Items
As of March 31,
2024
As of March 31,
2023
On-balance sheet exposures (1)
1
On-balance sheet exposures before deducting adjustment items
166,362,969
1a
1
Total assets reported in the consolidated balance sheet
193,518,055
1b
2
The amount of assets of subsidiaries that are not included in the scope
of the leverage ratio on a consolidated basis (–)
—
1c
7
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)
—
1d
3
The amount of assets that are deducted from the total assets reported
in the consolidated balance sheet (except adjustment items) (–)
27,155,086
2
7
The amount of adjustment items pertaining to Tier 1 capital (–)
823,929
3
Total on-balance sheet exposures
(a)
165,539,040
Exposures related to derivative transactions (2)
4
Replacement cost associated with derivatives transactions, etc. (with
the 1.4 alpha factor applied)
Replacement cost associated with derivatives transactions, etc.
4,065,961
5
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.
4,495,701
The amount of receivables arising from providing cash margin in
relation to derivatives transactions, etc.
864,127
6
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
—
7
The amount of deductions of receivables (out of those arising from
providing cash variation margin) (–)
145,156
8
The amount of client-cleared trade exposures for which a bank acting
as clearing member is not obliged to make any indemnification (–)
9
Adjusted effective notional amount of written credit derivatives
73,650
10
The amount of deductions from effective notional amount of written
credit derivatives (–)
—
11
4
Total exposures related to derivative transactions
(b)
9,354,284
Exposures related to repo transactions (3)
12
The amount of assets related to repo transactions, etc.
6,215,561
13
The amount of deductions from the assets above (line 12) (–)
—
14
The exposures for counterparty credit risk for repo transactions, etc.
299,578
15
The exposures for agent repo transaction
16
5
Total exposures related to repo transactions, etc.
(c)
6,515,139
Exposures related to off-balance sheet transactions (4)
17
Notional amount of off-balance sheet transactions
75,774,180
18
The amount of adjustments for conversion in relation to off-balance
sheet transactions (-)
45,111,909
19
6
Total exposures related to off-balance sheet transactions
(d)
30,662,270
Leverage ratio on a consolidated basis (5)
20
The amount of capital (Tier 1 capital)
(e)
9,963,206
21
8
Total exposures ((a)+(b)+(c)+(d))
(f)
212,070,734
22
Leverage ratio on a consolidated basis ((e)/(f))
4.69%
Minimum leverage ratio requirement
3.00%
Leverage ratio on a consolidated basis (including deposits with the Bank of Japan) (6)
Total exposures
(f)
212,070,734
The amount of deposits with the Bank of Japan
59,049,467
Total exposures (including deposits with the Bank of Japan)
(f’)
271,120,202
Leverage ratio on a consolidated basis (including deposits with the
Bank of Japan) ((e)/(f’))
3.67%
Basel III Information
296
SMBC
SMBC GROUP ANNUAL REPORT 2024
(In million yen, %)
Basel Ⅲ Template
No.
Items
As of March 31,
2024
As of March 31,
2023
On-balance sheet exposures (1)
1
On-balance sheet exposures before deducting adjustments
181,239,119
2
The amount of receivables arising from providing collateral, provided where deducted from
the consolidated balance sheet pursuant to the operative accounting framework
—
3
The amount of receivables arising from providing cash variation margin (–)
717,669
4
Adjustment for securities received under repo transactions that are recognised as assets (–)
—
5
The amount of adjustments associated with Tier 1 capital (specific and general provisions) (–)
—
6
The amount of adjustments associated with Tier 1 capital (excluding specific and general
provisions) (–)
1,108,346
7
Total on-balance sheet exposures
(a)
179,413,103
Exposures related to derivatives transactions, etc. (2)
8
Replacement cost associated with derivatives transactions, etc. (with the 1.4 alpha factor
applied)
4,805,289
9
Add-on amounts for potential future exposure associated with derivatives transactions, etc.
(with the 1.4 alpha factor applied)
6,194,333
10
Exempted central counterparty (CCP) leg of client-cleared trade exposures (–)
—
11
Adjusted effective notional amount of written credit derivatives
160,384
12
The amount of deductions from effective notional amount of written credit derivatives (–)
—
13
Total exposures related to derivatives transactions, etc.
(b)
11,160,008
Exposures related to repo transactions, etc. (3)
14
The amount of assets related to repo transactions, etc.
8,770,615
15
The amount of deductions from the assets above (line 14) (–)
—
16
The exposures for counterparty credit risk for repo transactions, etc.
447,928
17
The exposures for agent repo transaction
18
Total exposures related to repo transactions, etc.
(c)
9,218,543
Exposures related to off-balance sheet transactions (4)
19
Notional amount of off-balance sheet items
84,868,227
20
The amount of adjustments for conversion to off-balance sheet exposures (–)
54,665,706
22
Total off-balance sheet exposures
(d)
30,202,520
Leverage ratio on a consolidated basis (5)
23
The amount of capital (Tier 1 capital)
(e)
11,937,881
24
Total exposures ((a)+(b)+(c)+(d))
(f)
229,994,176
25
Leverage ratio on a consolidated basis ((e)/(f))
5.19%
26
Minimum leverage ratio requirement
3.00%
27
Applicable leverage buffer requirement
—
Leverage ratio on a consolidated basis (including due from Bank of Japan) (6)
Total exposures
(f)
229,994,176
The amount of due from Bank of Japan
59,381,657
Total exposures (including due from Bank of Japan)
(f’)
289,375,834
Leverage ratio on a consolidated basis (including due from Bank of Japan) ((e)/(f’))
4.12%
Disclosure of mean values (7)
28
Mean value of assets related to repo transactions, etc. (after the deductions) ((g)+(h))
7,689,801
Mean value of assets related to repo transactions, etc.
(g)
7,689,801
Mean value of deductions from the assets above (–)
(h)
—
29
Quarter-end value of assets related to repo transactions, etc. (after the deductions) ((i)+(j))
8,770,615
14
Quarter-end value of assets related to repo transactions, etc.
(i)
8,770,615
15
Quarter-end value of deductions from the assets above (line 14) (–)
(j)
—
30
Total exposures
(including mean value above (line 28), but excluding due from Bank of Japan)
(k)
228,913,361
30a
Total exposures
(including mean value above (line 28) and due from Bank of Japan)
(l)
288,295,019
31
Leverage ratio on a consolidated basis
(including mean value above (line 28), but excluding due from Bank of Japan) ((e)/(k))
5.21%
31a
Leverage ratio on a consolidated basis
(including mean value above (line 28) and due from Bank of Japan) ((e)/(l))
4.14%
Basel III Information
299
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ Disclosure of Quantitative Information about Liquidity Coverage Ratio (Consolidated)
(In million yen, %, the number of data)
Item
Current Quarter
(From 2024/1/1
To 2024/3/31)
Prior Quarter
(From 2023/10/1
To 2023/12/31)
High-Quality Liquid Assets (1)
1
Total high-quality liquid assets (HQLA)
84,610,901
85,534,065
Cash Outflows (2)
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
2
Cash outflows related to unsecured retail funding
63,443,664
4,923,899
62,845,295
4,892,411
3
of which, Stable deposits
20,341,500
613,076
19,934,708
600,738
4
of which, Less stable deposits
43,102,163
4,310,822
42,910,586
4,291,672
5
Cash outflows related to unsecured wholesale funding
94,974,328
47,500,956
93,675,501
46,400,558
6
of which, Qualifying operational deposits
—
—
—
—
7
of which, Cash outflows related to unsecured wholesale funding
other than qualifying operational deposits and debt securities
88,372,497
40,899,124
87,899,943
40,625,000
8
of which, Debt securities
6,601,831
6,601,831
5,775,557
5,775,557
9
Cash outflows related to secured funding, etc.
391,876
241,842
10
Cash outflows related to derivative transactions, etc. funding
programs, credit and liquidity facilities
39,396,890
14,128,444
38,861,388
13,991,223
11
of which, Cash outflows related to derivative transactions, etc.
1,933,400
1,933,400
1,949,516
1,949,516
12
of which, Cash outflows related to funding programs
390,248
390,248
478,837
478,837
13
of which, Cash outflows related to credit and liquidity facilities
37,073,242
11,804,795
36,433,033
11,562,869
14
Cash outflows related to contractual funding obligations, etc.
8,845,198
5,779,752
8,200,276
5,427,620
15
Cash outflows related to contingencies
83,690,568
2,126,845
83,347,462
2,103,594
16
Total cash outflows
74,851,774
73,057,250
Cash Inflows (3)
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
17
Cash inflows related to secured lending, etc.
4,690,348
295,465
4,267,029
152,755
18
Cash inflows related to collection of loans, etc.
15,512,179
10,465,417
12,939,696
8,705,214
19
Other cash inflows
3,905,179
1,882,975
4,583,152
1,854,006
20
Total cash inflows
24,107,707
12,643,858
21,789,877
10,711,976
Consolidated Liquidity Coverage Ratio (4)
21
Total HQLA allowed to be included in the calculation
84,610,901
85,534,065
22
Net cash outflows
62,207,916
62,345,274
23
Consolidated liquidity coverage ratio (LCR)
136.0%
137.1%
24
The number of data used to calculate the average value
58
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
(In million yen)
Item
Current Quarter
(From 2024/1/1
To 2024/3/31)
Prior Quarter
(From 2023/10/1
To 2023/12/31)
1
Cash and due from banks
77,487,307
77,739,197
2
Securities
7,123,594
7,794,868
3
of which, government bonds, etc.
4,237,380
4,909,844
4
of which, municipal bonds, etc.
70,040
77,529
5
of which, other bonds
1,212,033
1,284,344
6
of which, stocks
1,604,139
1,523,149
7
Total high-quality liquid assets (HQLA)
84,610,901
85,534,065
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.
Basel III Information
298
SMBC
SMBC GROUP ANNUAL REPORT 2024
Liquidity Coverage Ratio Information (Consolidated)
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 “cash outflows related to small-
sized consolidated subsidiaries,” etc. under “cash outflows based on other contracts” prescribed in Article 60 of the Liquidity Ratio
Notification.
Sumitomo Mitsui Banking Corporation and Subsidiaries
Basel III Information
301
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ Disclosure of Quantitative Information about Net Stable Funding Ratio (Consolidated)
(In million yen, %)
Item
Current Quarter (From 2024/1/1 To 2024/3/31)
Prior Quarter (From 2023/10/1 To 2023/12/31)
Unweighted value by residual maturity
Weighted
value
Unweighted value by residual maturity
Weighted
value
No maturity < 6 months 6 months to
< 1 year
≥ 1 year
No maturity < 6 months 6 months to
< 1 year
≥ 1 year
Available stable funding (ASF) items (1)
1
Capital; of which:
11,333,861
355,506
10,507
2,909,858
14,248,973
10,406,050
235,568
85,987
2,806,905
13,255,949
2
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
11,333,861
0
0
2,731,909
14,065,770
10,406,050
0
0
2,636,387
13,042,437
3
Other capital instruments that are
not included in the above category
0
355,506
10,507
177,948
183,202
0
235,568
85,987
170,517
213,511
4
Funding from retail and small
business customers; of which:
63,900,604
0
0
110,462
58,655,423
63,837,211
0
0
104,035
58,609,199
5
Stable deposits
20,688,331
0
0
0
19,653,915
21,033,494
0
0
0
19,981,819
6
Less stable deposits
43,212,272
0
0
110,462
39,001,507
42,803,716
0
0
104,035
38,627,380
7
Wholesale funding; of which:
73,318,166
60,541,240
7,662,170
18,837,396
62,295,342
69,537,870
59,646,828
4,632,141
20,483,647
60,481,209
8
Operational deposits
—
—
—
—
—
—
—
—
—
—
9
Other wholesale funding
73,318,166
60,541,240
7,662,170
18,837,396
62,295,342
69,537,870
59,646,828
4,632,141
20,483,647
60,481,209
10 Liabilities with matching
interdependent assets
—
—
—
—
—
—
—
—
—
—
11 Other liabilities; of which:
1,749,107
6,080,240
0
1,071,583
160,417
1,482,135
6,987,817
0
590,519
126,554
12
Derivative liabilities
971,681
443,040
13
All other liabilities and equity not
included in the above categories
1,749,107
6,080,240
0
99,901
160,417
1,482,135
6,987,817
0
147,479
126,554
14 Total available stable funding
135,360,155
132,472,913
Required stable funding (RSF) items (2)
15 HQLA
3,280,509
3,134,743
16 Deposits held at financial institutions
for operational purposes
489,669
26,418
0
0
258,044
368,701
26,770
0
0
197,735
17
Loans, repo transactions-related
assets, securities and other similar
assets; of which:
1,774,528
39,306,634
14,769,666
75,266,456
85,810,222
1,628,434
40,958,016
10,116,288
71,817,048
81,381,329
18
Loans to- and repo transactions
with- financial institutions
(secured by level 1 HQLA)
0
6,213,937
0
23,886
379,736
0
5,405,486
29,672
9,808
133,363
19
Loans to- and repo transactions
with- financial institutions (not
included in item 18)
316,170
8,273,957
4,976,351
12,220,079
16,176,845
254,441
9,614,922
2,598,849
11,187,305
14,015,969
20
Loans and repo transactions-
related assets (not included in
item 18, 19 and 22); of which:
987,153
22,544,515
8,764,512
49,094,379
56,519,532
906,644
23,853,285
6,501,818
46,763,377
54,824,523
21
With a risk weight of less than or
equal to 35% under the Standardised
Approach for credit risk
27,372
4,121,433
1,349,423
4,445,989
4,918,991
126
2,765,653
345,039
1,086,527
1,672,346
22
Residential mortgages; of which:
0
293,556
291,659
10,848,709
8,326,334
0
291,632
291,587
10,735,116
8,084,114
23
With a risk weight of less than or
equal to 35% under the Standardised
Approach for credit risk
0
166,109
165,559
5,938,383
4,025,783
0
160,668
160,462
6,661,722
4,490,684
24
Securities that are not in default
and do not qualify as HQLA and
other similar assets
471,204
1,980,666
737,143
3,079,401
4,407,773
467,349
1,792,690
694,360
3,121,440
4,323,359
25 Assets with matching
interdependent liabilities
—
—
—
—
—
—
—
—
—
—
26 Other assets; of which:
5,110,007
1,046,403
122,667
8,765,324
14,402,406
4,987,465
811,183
94,600
8,607,432
13,913,464
27
Physical traded commodities,
including gold
0
0
0
0
28
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)
613,584
521,546
635,701
540,346
29
Derivative assets
0
0
0
0
30
Derivative liabilities (before deduction
of variation margin posted)
252,192
252,192
217,339
217,339
31
All other assets not included in
the above categories
5,110,007
1,046,403
122,667
7,899,547
13,628,667
4,987,465
811,183
94,600
7,754,391
13,155,778
32 Off-balance sheet items
122,989,934
2,542,881
130,348,822
2,729,245
33 Total required stable funding
106,294,063
101,356,518
34 Consolidated net stable funding ratio (NSFR)
127.3%
130.6%
Basel III Information
300
SMBC
SMBC GROUP ANNUAL REPORT 2024
Net Stable Funding Ratio Information (Consolidated)
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.
Sumitomo Mitsui Banking Corporation and Subsidiaries
Basel III Information
303
SMBC
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, except percentages)
Basel III
Template No. Items
a
b
c
As of March
31,2024
As of March
31,2023
Reference
to Template
CC2
Additional Tier 1 capital: instruments (3)
30
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 subscription rights and stock acquisition rights to Additional Tier 1 instruments
—
—
32 Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which:
classified as liabilities under applicable accounting standards
1,967,330
1,267,000
Qualifying Additional Tier 1 instruments plus related capital surplus issued by special purpose
vehicles and other equivalent entities
—
—
36
Additional Tier 1 capital: instruments
(D)
1,967,330
1,267,000
Additional Tier 1 capital: regulatory adjustments
37
Investments in own Additional Tier 1 instruments
—
—
38
Reciprocal cross-holdings in Additional Tier 1 instruments
—
—
39
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)
14,973
—
40
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)
82,978
82,978
42
Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover
deductions
—
—
43
Additional Tier 1 capital: regulatory adjustments
(E)
97,952
82,978
Additional Tier 1 capital (AT1)
44
Additional Tier 1 capital ((D)-(E))
(F)
1,869,377
1,184,021
Tier 1 capital (T1 = CET1 + AT1)
45
Tier 1 capital (T1 = CET1 + AT1) ((C)+(F))
(G)
9,583,198
8,223,587
Tier 2 capital: instruments and provisions (4)
46
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
equity under applicable accounting standards and the breakdown
—
—
Stock subscription rights and 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
948,121
766,614
Qualifying Tier 2 instruments plus related capital surplus issued by special purpose vehicles
and other equivalent entities
—
—
50
Total of general reserve for possible loan losses and eligible provisions included in Tier 2
157,055
148,246
50a
of which: general reserve for possible loan losses
—
—
50b
of which: eligible provisions
157,055
148,246
51
Tier 2 capital: instruments and provisions
(H)
1,105,176
914,860
Basel III Information
302
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ CC1: Composition of regulatory capital
(Millions of yen, except percentages)
Basel III
Template No. Items
a
b
c
As of March
31,2024
As of March
31,2023
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
6,510,103
6,540,958
1a
of which: capital and capital surplus
3,335,548
3,335,548
2
of which: retained earnings
3,496,700
3,276,915
1c
of which: treasury stock (–)
—
—
26
of which: national specific regulatory adjustments (earnings to be distributed) (–)
322,145
71,505
of which: other than the above
—
—
1b
Stock subscription rights and stock acquisition rights to common shares
—
—
3
Valuation and translation adjustment and other disclosed reserves
1,209,362
782,492
(a)
6
Common Equity Tier 1 capital: instruments and reserves
(A)
7,719,466
7,323,450
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)
237,262
198,417
8
of which: goodwill
—
—
9
of which: other intangibles other than goodwill and mortgage servicing rights
237,262
198,417
10
Deferred tax assets that rely on future profitability excluding those arising from temporary
differences (net of related tax liability)
—
0
11
Net deferred gains or losses on hedges
(698,455)
(344,457)
12
Shortfall of eligible provisions to expected losses
—
—
13
Securitisation gain on sale
47,724
52,939
14
Gains and losses due to changes in own credit risk on fair valued liabilities
17,277
32,631
15
Prepaid pension cost
332,807
344,352
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)
69,027
—
19+20+21
Amount exceeding the 10% threshold on specified items
—
—
19
of which: significant investments in the common stock of financials
—
—
20
of which: mortgage servicing rights
—
—
21
of which: deferred tax assets arising from temporary differences (net of related tax liability)
—
—
22
Amount exceeding the 15% threshold on specified items
—
—
23
of which: significant investments in the common stock of financials
—
—
24
of which: mortgage servicing rights
—
—
25
of which: deferred tax assets arising from temporary differences (net of related tax liability)
—
—
27
Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1
and Tier 2 to cover deductions
—
—
28
Common Equity Tier 1 capital: regulatory adjustments
(B)
5,644
283,884
Common Equity Tier 1 capital (CET1)
29
Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
7,713,821
7,039,566
Capital Ratio and Leverage Ratio Information (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Basel III Information
305
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ CC2: Reconciliation of regulatory capital to balance sheet
Sumitomo Mitsui Banking Corporation
(Millions of yen)
a
b
c
Items
Balance sheet as
in published financial
statements
Reference to
Template CC1
Reference to
appended table
As of March 31,
2024
As of March 31,
2023
(Assets)
Cash and due from banks
72,661,204
70,818,701
Call loans
4,305,503
5,285,838
Receivables under resale agreements
1,781,354
1,437,595
Receivables under securities borrowing transactions
2,538,794
1,598,124
Monetary claims bought
2,370,100
1,944,291
Trading assets
2,702,185
2,379,930
6-a
Securities
34,666,605
32,210,394
6-b
Loans and bills discounted
101,124,712
94,307,397
6-c
Foreign exchanges
1,941,854
1,824,364
Other assets
8,879,250
7,129,287
6-d
Tangible fixed assets
746,606
737,253
Intangible fixed assets
341,974
285,986
2
Prepaid pension cost
479,688
496,328
3
Customers’ liabilities for acceptances and guarantees
15,712,360
15,405,856
Reserve for possible loan losses
(523,385)
(523,888)
Reserve for possible loan losses on investments
(6,630)
—
Total assets
249,722,179
235,337,464
(Liabilities)
Deposits
153,494,437
149,948,880
Negotiable certificates of deposit
14,826,777
12,929,824
Call money
1,028,135
774,968
Payables under repurchase agreements
12,357,578
12,041,367
Payables under securities lending transactions
669,425
370,514
Commercial paper
1,549,515
1,292,198
Trading liabilities
1,823,239
1,643,213
6-e
Borrowed money
25,119,261
21,905,262
7-a
Foreign exchanges
2,907,692
1,516,160
Bonds
472,161
641,410
7-b
Due to trust account
1,810,236
2,277,046
Other liabilities
9,427,116
6,991,747
6-f
Reserve for employee bonuses
14,343
13,542
Reserve for executive bonuses
1,344
1,202
Reserve for point service program
1,581
1,140
Reserve for reimbursement of deposits
8,283
9,998
Deferred tax liabilities
429,760
150,223
4-a
Deferred tax liabilities for land revaluation
27,316
27,952
4-b
Acceptances and guarantees
15,712,360
15,405,856
Total liabilities
241,680,568
227,942,508
(Net assets)
Capital stock
1,770,996
1,770,996
1-a
Capital surplus
1,774,554
1,774,554
1-b
Retained earnings
3,496,700
3,276,915
1-c
Treasury stock
(210,003)
(210,003)
1-d
Total stockholders’ equity
6,832,248
6,612,463
Net unrealized gains or losses on other securities
1,803,310
1,040,472
Net deferred gains or losses on hedges
(618,692)
(282,793)
5
Land revaluation excess
24,744
24,813
Total valuation and translation adjustments
1,209,362
782,492
(a)
Total net assets
8,041,611
7,394,955
Total liabilities and net assets
249,722,179
235,337,464
Note: The regulatory balance sheet is the same as the accounting balance sheet.
Basel III Information
304
SMBC
SMBC GROUP ANNUAL REPORT 2024
(Millions of yen, except percentages)
Basel III
Template No. Items
a
b
c
As of March
31,2024
As of March
31,2023
Reference
to Template
CC2
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
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)
4,838
—
55
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)
45,399
40,062
57
Tier 2 capital: regulatory adjustments
(I)
50,237
40,062
Tier 2 capital (T2)
58
Tier 2 capital (T2) ((H)-(I))
(J)
1,054,938
874,798
Total capital (TC = T1 + T2)
59
Total capital (TC = T1 + T2) ((G)+(J))
(K)
10,638,137
9,098,386
Risk weighted assets (6)
60
Total risk-weighted assets (RWA)
(L)
74,498,621
65,103,047
Capital ratios (7)
61
Common Equity Tier 1 risk-weighted capital ratio ((C)/(L))
10.35%
10.81%
62
Tier 1 risk-weighted capital ratio ((G)/(L))
12.86%
12.63%
63
Total risk-weighted capital ratio ((K)/(L))
14.27%
13.97%
Regulatory adjustments (8)
72
Non-significant investments in the capital and other TLAC liabilities of other financials that are
below the thresholds for deduction (before risk weighting)
778,284
526,616
73
Significant investments in the common stock of other financials that are below the thresholds
for deduction (before risk weighting)
522,362
271,975
74
Mortgage servicing rights that are below the thresholds for deduction (before risk weighting)
—
—
75
Deferred tax assets arising from temporary differences that are below the thresholds for
deduction (before risk weighting)
—
61
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)
25,247
5,010
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”)
157,055
148,246
79
Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
407,292
291,919
(Millions of yen)
Items
As of March
31,2024
As of March
31,2023
Required capital ((L) ✕ 8%)
5,959,889
5,208,243
Basel III Information
307
SMBC
SMBC GROUP ANNUAL REPORT 2024
4. Deferred tax assets
(1) Balance sheet
(Millions of yen)
Balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Deferred tax liabilities
429,760
150,223
4-a
Deferred tax liabilities for land revaluation
27,316
27,952
4-b
Tax effects on intangible fixed assets
104,712
87,569
Tax effects on prepaid pension cost
146,880
151,975
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability
excluding those arising from temporary differences
(net of related tax liability)
—
0
This item does not agree with the
amount reported on the balance sheet
due to offsetting of assets and
liabilities.
10
Deferred tax assets arising from temporary
differences (net of related tax liability)
—
61
This item does not agree with the
amount reported on the balance sheet
due to offsetting of assets and
liabilities.
Amount exceeding the 10% threshold on
specified items
—
—
21
Amount exceeding the 15% threshold on
specified items
—
—
25
Deferred tax assets arising from temporary
differences that are below the thresholds for
deduction (before risk weighting)
—
61
75
5. Deferred gains or losses on derivatives under hedge accounting
(1) Balance sheet
(Millions of yen)
Balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Net deferred gains or losses on hedges
(618,692)
(282,793)
5
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Net deferred gains or losses on hedges
(698,455)
(344,457)
Excluding those items whose valuation
differences arising from hedged items
are recognized as “Total valuation and
translation adjustments”
11
6. Items associated with investments in the capital of financial institutions
(1) Balance sheet
(Millions of yen)
Balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Trading assets
2,702,185
2,379,930
Including trading account securities
and derivatives for trading assets
6-a
Securities
34,666,605
32,210,394
6-b
Loans and bills discounted
101,124,712
94,307,397
Including subordinated loans
6-c
Other assets
8,879,250
7,129,287
Including derivatives
6-d
Trading liabilities
1,823,239
1,643,213
Including trading account securities
sold and derivatives for trading
liabilities
6-e
Other liabilities
9,427,116
6,991,747
Including derivatives
6-f
Basel III Information
306
SMBC
SMBC GROUP ANNUAL REPORT 2024
(Appended Table)
1. Stockholders’ equity
(1) Balance sheet
(Millions of yen)
Balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Capital stock
1,770,996
1,770,996
Including eligible Tier 1 capital
instruments subject to transitional
arrangement
1-a
Capital surplus
1,774,554
1,774,554
Including eligible Tier 1 capital
instruments subject to transitional
arrangement
1-b
Retained earnings
3,496,700
3,276,915
1-c
Treasury stock
(210,003)
(210,003) Eligible Tier 1 capital instruments
subject to transitional arrangement
1-d
Total stockholders’ equity
6,832,248
6,612,463
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Directly issued qualifying common share capital plus
related capital surplus and retained earnings
6,832,248
6,612,463
Stockholders’ equity attributable to
common shares (before adjusting
national specific regulatory adjustments
(earnings to be distributed))
of which: capital and capital surplus
3,335,548
3,335,548
1a
of which: retained earnings
3,496,700
3,276,915
2
of which: treasury stock (–)
—
—
1c
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
—
—
Stockholders’ equity attributable to
preferred shares with a loss
absorbency clause upon entering into
effectively bankruptcy
31a
2. Intangible fixed assets
(1) Balance sheet
(Millions of yen)
Balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Intangible fixed assets
341,974
285,986
2
Income taxes related to above
104,712
87,569
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Goodwill
—
—
8
Other intangibles other than goodwill and mortgage
servicing rights
237,262
198,417
Software and other
9
Mortgage servicing rights
—
—
Amount exceeding the 10% threshold on
specified items
—
—
20
Amount exceeding the 15% threshold on
specified items
—
—
24
Mortgage servicing rights that are below the
thresholds for deduction (before risk weighting)
—
—
74
3. Prepaid pension cost
(1) Balance sheet
(Millions of yen)
Balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Prepaid pension cost
479,688
496,328
3
Income taxes related to above
146,880
151,975
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Prepaid pension cost
332,807
344,352
15
Basel III Information
309
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ Composition of Leverage Ratio
(In million yen)
Basel Ⅲ Template
No.
Items
As of March 31,
2024
As of March 31,
2023
1
Total assets reported in the balance sheet
249,722,179
3
Adjustment for securitised exposures that meet the operational requirements for the
recognition of risk transference
—
4
Adjustments for exemption of central bank reserves (–)
57,765,831
5
Adjustment for fiduciary assets recognised on the balance sheet pursuant to the operative
accounting framework but excluded from the leverage ratio exposure measure (–)
6
Adjustments for regular-way purchases and sales of financial assets subject to trade date
accounting
306,966
7
Adjustments for eligible cash pooling transactions
—
8
Adjustments for total exposures related to derivatives transactions, etc.
(1,031,152)
8a
Total exposures related to derivatives transactions, etc.
7,215,830
8b
The amount of deductions from the exposures above (line 8a) (–)
8,246,983
9
Adjustment for total exposures related to repo transactions, etc.
350,524
9a
Total exposures related to repo transactions, etc.
4,670,673
9b
The amount of deductions from the exposures above (line 9a) (–)
4,320,149
10
Adjustments for total off-balance sheet exposures
31,933,189
11
The amount of adjustments associated with Tier 1 capital (specific and general provisions) (–)
—
12
Other adjustments
(16,930,213)
12a
The amount of adjustments associated with Tier 1 capital (excluding specific and general
provisions) (–)
737,050
12b
The amount of customers’ liabilities for acceptances and guarantees (–)
15,712,360
12c
The amount of receivables arising from providing collateral, provided where deducted from
the balance sheet pursuant to the operative accounting framework
—
12d
The amount of receivables arising from providing cash variation margin (–)
480,802
13
Total exposures
206,585,662
Basel III Information
308
SMBC
SMBC GROUP ANNUAL REPORT 2024
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
Remarks
Basel III Template
No.
Investments in own capital instruments
—
—
Common Equity Tier 1 capital
—
—
16
Additional Tier 1 capital
—
—
37
Tier 2 capital
—
—
52
Reciprocal cross-holdings in the capital of banking,
financial and insurance entities
—
—
Common Equity Tier 1 capital
—
—
17
Additional Tier 1 capital
—
—
38
Tier 2 capital and other TLAC liabilities
—
—
53
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)
867,125
526,616
Common Equity Tier 1 capital
69,027
—
18
Additional Tier 1 capital
14,973
—
39
Tier 2 capital and other TLAC liabilities
4,838
—
54
Non-significant investments in the capital
and other TLAC liabilities of other financials
that are below the thresholds for deductions
(before risk weighting)
778,284
526,616
72
Significant investments in the capital of banking,
financial and insurance entities that are outside the
scope of regulatory consolidation (net of eligible
short positions)
650,740
395,016
Amount exceeding the 10% threshold on
specified items
—
—
19
Amount exceeding the 15% threshold on
specified items
—
—
23
Additional Tier 1 capital
82,978
82,978
40
Tier 2 capital and other TLAC liabilities
45,399
40,062
55
Significant investments in the common stock
of other financials that are below the
thresholds for deductions (before risk
weighting)
522,362
271,975
73
7. Other capital instruments
(1) Balance sheet
(Millions of yen)
Balance sheet items
As of March
31, 2024
As of March
31, 2023
Remarks
Ref. No.
Borrowed money
25,119,261 21,905,262
7-a
Bonds
472,161
641,410
7-b
Total
25,591,423 22,546,672
(2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2024
As of March
31, 2023
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
1,967,330
1,267,000
32
Directly issued qualifying Tier 2 instruments plus
related capital surplus of which: classified as
liabilities under applicable accounting standards
948,121
766,614
46
Basel III Information
311
SMBC
SMBC GROUP ANNUAL REPORT 2024
(In million yen, %)
Corresponding line #
on Basel III disclosure
template (Table2)
Corresponding line #
on Basel III disclosure
template (Table1)
Items
As of March 31,
2024
As of March 31,
2023
On-balance sheet exposures (1)
1
On-balance sheet exposures before deducting adjustment items
151,924,241
1a
1
Total assets reported in the balance sheet
177,795,337
1b
3
The amount of assets that are deducted from the total assets reported
in the balance sheet (except adjustment items) (–)
25,871,095
2
7
The amount of adjustment items pertaining to Tier 1 capital (–)
625,749
3
Total on-balance sheet exposures
(a)
151,298,492
Exposures related to derivative transactions (2)
4
Replacement cost associated with derivatives transactions, etc. (with
the 1.4 alpha factor applied)
Replacement cost associated with derivatives transactions, etc.
1,984,843
5
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.
3,326,932
The amount of receivables arising from providing cash margin in
relation to derivatives transactions, etc.
799,059
6
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
—
7
The amount of deductions of receivables (out of those arising from
providing cash variation margin) (-)
99,504
8
The amount of client-cleared trade exposures for which a bank acting
as clearing member is not obliged to make any indemnification (-)
9
Adjusted effective notional amount of written credit derivatives
—
10
The amount of deductions from effective notional amount of written
credit derivatives (-)
—
11
4
Total exposures related to derivative transactions
(b)
6,011,330
Exposures related to repo transactions (3)
12
The amount of assets related to repo transactions, etc.
3,035,720
13
The amount of deductions from the assets above (line 12) (-)
—
14
The exposures for counterparty credit risk for repo transactions, etc.
239,786
15
The exposures for agent repo transaction
16
5
Total exposures related to repo transactions, etc.
(c)
3,275,507
Exposures related to off-balance sheet transactions (4)
17
Notional amount of off-balance sheet transactions
70,838,317
18
The amount of adjustments for conversion in relation to off-balance
sheet transactions (-)
39,153,765
19
6
Total exposures related to off-balance sheet transactions
(d)
31,684,551
Leverage ratio (5)
20
The amount of capital (Tier 1 capital)
(e)
8,223,587
21
8
Total exposures ((a)+(b)+(c)+(d))
(f)
192,269,881
22
Leverage ratio ((e)/(f))
4.27%
Minimum leverage ratio requirement
3.00%
Leverage ratio (including deposits with the Bank of Japan) (6)
Total exposures
(f)
192,269,881
The amount of deposits with the Bank of Japan
57,542,126
Total exposures (including deposits with the Bank of Japan)
(f’)
249,812,008
Leverage ratio (including deposits with the Bank of Japan) ((e)/(f’))
3.29%
Basel III Information
310
SMBC
SMBC GROUP ANNUAL REPORT 2024
(In million yen, %)
Basel Ⅲ Template
No.
Items
As of March 31,
2024
As of March 31,
2023
On-balance sheet exposures (1)
1
On-balance sheet exposures before deducting adjustments
163,983,822
2
The amount of receivables arising from providing collateral, provided where deducted from
the balance sheet pursuant to the operative accounting framework
—
3
The amount of receivables arising from providing cash variation margin (–)
480,802
4
Adjustment for securities received under repo transactions that are recognised as assets (–)
—
5
The amount of adjustments associated with Tier 1 capital (specific and general provisions) (–)
—
6
The amount of adjustments associated with Tier 1 capital (excluding specific and general
provisions) (–)
737,050
7
Total on-balance sheet exposures
(a)
162,765,968
Exposures related to derivatives transactions, etc. (2)
8
Replacement cost associated with derivatives transactions, etc. (with the 1.4 alpha factor
applied)
2,881,503
9
Add-on amounts for potential future exposure associated with derivatives transactions, etc.
(with the 1.4 alpha factor applied)
4,326,760
10
Exempted central counterparty (CCP) leg of client-cleared trade exposures (–)
—
11
Adjusted effective notional amount of written credit derivatives
7,566
12
The amount of deductions from effective notional amount of written credit derivatives (–)
—
13
Total exposures related to derivatives transactions, etc.
(b)
7,215,830
Exposures related to repo transactions, etc. (3)
14
The amount of assets related to repo transactions, etc.
4,320,149
15
The amount of deductions from the assets above (line 14) (–)
—
16
The exposures for counterparty credit risk for repo transactions, etc.
350,524
17
The exposures for agent repo transaction
18
Total exposures related to repo transactions, etc.
(c)
4,670,673
Exposures related to off-balance sheet transactions (4)
19
Notional amount of off-balance sheet items
78,721,904
20
The amount of adjustments for conversion to off-balance sheet exposures (–)
46,788,715
22
Total off-balance sheet exposures
(d)
31,933,189
Leverage ratio (5)
23
The amount of capital (Tier 1 capital)
(e)
9,583,198
24
Total exposures ((a)+(b)+(c)+(d))
(f)
206,585,662
25
Leverage ratio ((e)/(f))
4.63%
26
Minimum leverage ratio requirement
3.00%
27
Applicable leverage buffer requirement
—
Leverage ratio (including due from Bank of Japan) (6)
Total exposures
(f)
206,585,662
The amount of due from Bank of Japan
57,765,831
Total exposures (including due from Bank of Japan)
(f’)
264,351,493
Leverage ratio (including due from Bank of Japan) ((e)/(f’))
3.62%
Disclosure of mean values (7)
28
Mean value of assets related to repo transactions, etc. (after the deductions) ((g)+(h))
3,341,732
Mean value of assets related to repo transactions, etc.
(g)
3,341,732
Mean value of deductions from the assets above (–)
(h)
—
29
Quarter-end value of assets related to repo transactions, etc. (after the deductions) ((i)+(j))
4,320,149
14
Quarter-end value of assets related to repo transactions, etc.
(i)
4,320,149
15
Quarter-end value of deductions from the assets above (line 14) (–)
(j)
—
30
Total exposures
(including mean value above (line 28), but excluding due from Bank of Japan)
(k)
205,607,245
30a
Total exposures
(including mean value above (line 28) and due from Bank of Japan)
(l)
263,373,076
31
Leverage ratio
(including mean value above (line 28), but excluding due from Bank of Japan) ((e)/(k))
4.66%
31a
Leverage ratio
(including mean value above (line 28) and due from Bank of Japan) ((e)/(l))
3.63%
Basel III Information
313
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ Disclosure of Quantitative Information about Liquidity Coverage Ratio (Non-Consolidated)
(In million yen, %, the number of data)
Item
Current Quarter
(From 2024/1/1
To 2024/3/31)
Prior Quarter
(From 2023/10/1
To 2023/12/31)
High-Quality Liquid Assets (1)
1
Total high-quality liquid assets (HQLA)
76,544,953
77,332,230
Cash Outflows (2)
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
2
Cash outflows related to unsecured retail funding
59,702,057
4,586,124
59,151,274
4,559,080
3
of which, Stable deposits
19,781,252
593,437
19,380,864
581,425
4
of which, Less stable deposits
39,920,805
3,992,687
39,770,409
3,977,654
5
Cash outflows related to unsecured wholesale funding
88,885,990
44,427,261
87,688,995
43,509,399
6
of which, Qualifying operational deposits
—
—
—
—
7
of which, Cash outflows related to unsecured wholesale funding
other than qualifying operational deposits and debt securities
82,268,930
37,810,200
81,892,227
37,712,631
8
of which, Debt securities
6,617,060
6,617,060
5,796,767
5,796,767
9
Cash outflows related to secured funding, etc.
391,535
238,379
10
Cash outflows related to derivative transactions, etc. funding
programs, credit and liquidity facilities
34,533,355
12,232,202
34,140,511
12,100,957
11
of which, Cash outflows related to derivative transactions, etc.
688,285
688,285
743,555
743,555
12
of which, Cash outflows related to funding programs
390,248
390,248
478,837
478,837
13
of which, Cash outflows related to credit and liquidity facilities
33,454,821
11,153,668
32,918,118
10,878,563
14
Cash outflows related to contractual funding obligations, etc.
8,436,060
3,895,150
8,082,746
3,910,479
15
Cash outflows related to contingencies
83,875,831
2,051,291
83,974,148
2,052,756
16
Total cash outflows
67,583,565
66,371,053
Cash Inflows (3)
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
TOTAL
UNWEIGHTED
VALUE
TOTAL
WEIGHTED
VALUE
17
Cash inflows related to secured lending, etc.
1,662,975
227,530
1,284,031
78,202
18
Cash inflows related to collection of loans, etc.
15,864,324
11,214,463
13,509,345
9,679,124
19
Other cash inflows
2,725,030
1,515,818
3,365,019
1,379,872
20
Total cash inflows
20,252,330
12,957,813
18,158,396
11,137,199
Non-Consolidated Liquidity Coverage Ratio (4)
21
Total HQLA allowed to be included in the calculation
76,544,953
77,332,230
22
Net cash outflows
54,625,751
55,233,853
23
Non-consolidated liquidity coverage ratio (LCR)
140.1%
140.0%
24
The number of data used to calculate the average value
58
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
(In million yen)
Item
Current Quarter
(From 2024/1/1
To 2024/3/31)
Prior Quarter
(From 2023/10/1
To 2023/12/31)
1
Cash and due from banks
70,745,007
71,032,722
2
Securities
5,799,945
6,299,507
3
of which, government bonds, etc.
3,297,588
3,796,071
4
of which, municipal bonds, etc.
28,612
36,642
5
of which, other bonds
869,605
943,643
6
of which, stocks
1,604,139
1,523,149
7
Total high-quality liquid assets (HQLA)
76,544,953
77,332,230
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.
Basel III Information
312
SMBC
SMBC GROUP ANNUAL REPORT 2024
Liquidity Coverage Ratio Information (Non-consolidated)
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.
Sumitomo Mitsui Banking Corporation
Basel III Information
315
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ Disclosure of Quantitative Information about Net Stable Funding Ratio (Non-consolidated)
(In million yen, %)
Item
Current Quarter (From 2024/1/1 To 2024/3/31)
Prior Quarter (From 2023/10/1 To 2023/12/31)
Unweighted value by residual maturity
Weighted
value
Unweighted value by residual maturity
Weighted
value
No maturity < 6 months 6 months to
< 1 year
≥ 1 year
No maturity < 6 months 6 months to
< 1 year
≥ 1 year
Available stable funding (ASF) items (1)
1
Capital; of which:
8,041,611
355,506
10,507
2,916,496
10,963,361
7,596,190
235,568
85,987
2,848,040
10,487,225
2
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
8,041,611
0
0
2,738,547
10,780,158
7,596,190
0
0
2,677,523
10,273,713
3
Other capital instruments that are
not included in the above category
0
355,506
10,507
177,948
183,202
0
235,568
85,987
170,517
213,511
4
Funding from retail and small
business customers; of which:
59,959,908
0
0
110,462
55,078,228
60,050,212
0
0
104,035
55,171,889
5
Stable deposits
20,076,959
0
0
0
19,073,111
20,453,260
0
0
0
19,430,597
6
Less stable deposits
39,882,949
0
0
110,462
36,005,116
39,596,952
0
0
104,035
35,741,292
7
Wholesale funding; of which:
72,032,695
51,600,933
7,921,803
18,627,849
58,879,107
68,123,877
52,684,338
4,929,869
20,326,550
57,234,975
8
Operational deposits
—
—
—
—
—
—
—
—
—
—
9
Other wholesale funding
72,032,695
51,600,933
7,921,803
18,627,849
58,879,107
68,123,877
52,684,338
4,929,869
20,326,550
57,234,975
10 Liabilities with matching
interdependent assets
—
—
—
—
—
—
—
—
—
—
11 Other liabilities; of which:
1,635,971
2,153,841
246,027
660,664
1,577
1,403,736
1,811,013
260,093
143,791
6,733
12
Derivative liabilities
660,664
143,791
13
All other liabilities and equity not
included in the above categories
1,635,971
2,153,841
246,027
0
1,577
1,403,736
1,811,013
260,093
0
6,733
14 Total available stable funding
124,922,274
122,900,824
Required stable funding (RSF) items (2)
15 HQLA
3,266,446
3,119,416
16 Deposits held at financial
institutions for operational purposes
540,326
0
0
0
270,163
429,484
0
0
0
214,742
17
Loans, repo transactions-related
assets, securities and other similar
assets; of which:
1,750,726
33,555,119
14,264,815
70,696,491
80,291,055
1,604,138
36,050,646
9,479,036
67,856,457
76,473,110
18
Loans to- and repo transactions
with- financial institutions
(secured by level 1 HQLA)
0
2,501,534
0
0
266,478
0
2,238,116
0
0
46,568
19
Loans to- and repo transactions
with- financial institutions (not
included in item 18)
301,531
9,513,640
5,599,504
13,214,092
17,567,713
235,344
11,016,735
3,142,933
11,939,023
15,224,103
20
Loans and repo transactions-
related assets (not included in
item 18, 19 and 22); of which:
977,989
19,701,561
7,830,966
44,342,734
50,664,980
901,444
21,008,218
5,486,158
42,839,413
49,631,016
21
With a risk weight of less than or
equal to 35% under the Standardised
Approach for credit risk
27,372
3,491,130
1,326,829
4,286,527
4,486,137
126
2,185,107
322,469
908,726
1,252,462
22
Residential mortgages; of which:
0
293,439
291,528
10,625,610
8,181,196
0
291,555
291,509
10,515,609
7,941,357
23
With a risk weight of less than or
equal to 35% under the Standardised
Approach for credit risk
0
166,105
165,540
5,715,284
3,880,758
0
160,659
160,451
6,442,214
4,347,994
24
Securities that are not in default
and do not qualify as HQLA and
other similar assets
471,204
1,544,942
542,816
2,514,053
3,610,686
467,349
1,496,020
558,433
2,562,410
3,630,064
25 Assets with matching
interdependent liabilities
—
—
—
—
—
—
—
—
—
—
26 Other assets; of which:
9,205,877
506,292
95,961
4,011,748
13,393,597
8,895,287
384,580
87,793
3,359,756
12,487,422
27
Physical traded commodities,
including gold
0
0
0
0
28
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)
725,614
616,772
791,773
673,007
29
Derivative assets
0
0
0
0
30
Derivative liabilities (before deduction
of variation margin posted)
146,686
146,686
117,541
117,541
31
All other assets not included in
the above categories
9,205,877
506,292
95,961
3,139,447
12,630,138
8,895,287
384,580
87,793
2,450,441
11,696,874
32 Off-balance sheet items
119,227,142
2,363,560
114,384,923
2,302,066
33 Total required stable funding
99,584,823
94,596,759
34
Non-Consolidated net stable funding ratio (NSFR)
125.4%
129.9%
Basel III Information
314
SMBC
SMBC GROUP ANNUAL REPORT 2024
Net Stable Funding Ratio Information (Non-consolidated)
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.
Sumitomo Mitsui Banking Corporation
Basel III Information
317
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
Resecuritisation transaction
Of securitisation transactions, it is a transaction with securitisation expo-
sure for some or all of the underlying assets. However, this excludes
cases such as when all of the underlying assets are securitization expo-
sures and the bank is able to demonstrate that the cash flows to and
from the bank could be replicated in all circumstances and conditions by
an exposure to the securitization of a pool of assets that contains no se-
curitization exposures, etc.
Risk capital
The amount of capital required to cover the theoretical maximum poten-
tial loss arising from risks of business operations. It differs from the mini-
mum 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.
SA-CCR
An approach for calculating credit equivalent amounts (exposure
amounts) of transactions of derivative instruments, etc. Under SA-CCR,
exposure amount is calculated by multiplying 1.4 by the sum of the re-
placement cost calculated by mark-to-market valuation of a transaction
and the amount of future exposure obtained by multiplying the notional
principal by a multiplier according to instrument types and the remaining
term.
Securitisation transaction
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 or all of the exposure to the third party.
Servicer risk
The risk of becoming unable to claim the receivables, in cases of which
the bankruptcy of the supplier/servicer occurs prior to collecting receiv-
ables, in securitisation and purchased claims transactions.
Simple risk weight method
One of the market-based approaches for calculating the risk-weighted
asset amount for the equity exposure, etc. by multiplying the listed
shares and unlisted shares with risk weights of 300% and 400%, re-
spectively.
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 Special-
ised Lending.
Small-sized consolidated subsidiaries
Consolidated subsidiaries that have an extremely small impact on the
level of the consolidated LCR.
Specialized Lending (SL)
General term used for project finance, object finance, commodity finance
and lending for commercial real estate.
Standardised method
A method of calculating market risk equivalent amount using the formula
determined by the Financial Services Agency.
The Internal Ratings-Based (IRB) Approach
An approach for calculating the risk asset by applying PD (Probability of
Default) estimated internally by a financial institution which conducts so-
phisticated risk management. There are two methods to calculate expo-
sures to corporate clients, etc.: the Advanced Internal Ratings-Based
(AIRB) Approach and the Foundation Internal Ratings-Based (FIRB) Ap-
proach. The former uses self-estimated LGD and EAD values, while the
latter uses LGD and EAD values designated by the authorities.
The Standardised Approach (SA)
An approach for 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, re-
tail, etc.).
Standardised approach
A method for calculating operational risk equivalent amounts by multiply-
ing the amount of the Business Indicator Component (BIC) by the Inter-
nal Loss Multiplier (ILM).
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.
Basel III Information
316
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
ABL
Abbreviation for Asset Based Lending
Lending having movable assets as collateral such as accounts receiv-
able and/or inventory.
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 Servic-
es Agency officially informs Japanese banks of regulations regarding
capital adequacy ratio based on the Basel Agreement.
CCF
Abbreviation for Credit Conversion Factor
Ratio required for converting commitments and off-balance sheet items
such as guarantees into on-balance sheet credit exposure equivalents.
CCP-related exposure
Exposure to a central counterparty (CCP) that interposes itself between
counterparties to contracts traded in one or more financial markets, be-
coming the buyer to every seller and the seller to every buyer and there-
by ensuring the future performance of open contracts.
CDS
Abbreviation for Credit Default Swap
Derivative transactions which transfer the credit risk.
Credit Risk Mitigation (CRM) techniques
Techniques for reducing credit risk by guarantees, collateral and pur-
chase of credit derivatives, etc.
Credit risk-weighted assets
Total assets (lending exposures, including credit equivalent amount of
off-balance sheet transactions, etc.) which is re-evaluated according to
the level of credit risk.
CVA
Abbreviation for Credit Valuation Adjustment
Adjustment to a derivative price to reflect counterparty credit in the valu-
ation of a derivative transaction.
EL
Abbreviation for Expected Loss
Average loss expected to occur over the coming one year.
Full BA-CVA
An approach for calculating CVA risk equivalent amounts. EAD of a de-
rivative transaction, the remaining maturity, the counterparty’s industry
and credit rating are used as input variables and the formula specified by
the authorities is used for calculation. Hedging effects of BA-CVA eligible
hedging transactions are recognized.
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.
Internal models approach
An approach for calculating market risk equivalent amount using models
unique to each bank.
LGD
Abbreviation for Loss Given Default
Percentage of loss assumed in the event of default by obligor; ratio of
uncollectible amount of the exposure owned in the event of default.
Liquidity 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.
Market risk equivalent amount
Pursuant to the Basel Capital Accord, the required capital amount im-
posed on the market-related risk calculated for the risk categories mainly
in the trading book: interest rates, credit spreads, equities, foreign ex-
changes, and commodities.
Market-based approach
A method of calculating the risk assets of equity exposures, etc., by us-
ing the simple risk weight method or internal model method. We use the
simple risk weight method for calculation of risk assets.
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
Of credit provided for purchasing ships or aircraft, a type of finance for
which the only source of repayments is profits generated from said tan-
gible assets; and said tangible assets serve as collateral, and there is an
appreciable extent of control over said tangible assets and profits gener-
ated from 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 securitisation exposure; or in cases of providing the
back-up line for ABCP issued by the securitisation conduit for the pur-
pose 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 a consolidated basis.
Project finance
Of credit provided for specified businesses such as electric power plants
and transportation infrastructure, a type of finance for which the only
source of repayments is profits generated from said businesses and tan-
gible assets of said businesses serve as collateral, and there is an appre-
ciable extent of control over said tangible assets and profits generated
from said tangible assets.
Qualifying Revolving Retail Exposures (QRRE)
Exposure which may fluctuate up to the upper limit set forth by an agree-
ment 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.
Reduced BA-CVA
An approach for calculating CVA risk equivalent amounts. EAD of a de-
rivative transaction, the remaining maturity, the counterparty’s industry
and credit rating are used as input variables and the formula specified by
the authorities is used for calculation.
Glossary
Basel III Information
319
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ 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.
II.
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.
III. Individual remuneration shall reflect the assigned roles and responsibilities as well as the performance of the respective Executive.
IV.
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.
V.
SMBC Group’s executive compensation shall discourage excessive risk-taking and foster a prudent risk culture expected of a finan-
cial institution.
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.
II.
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 (performance-linked portion, which varies in light of the business environ-
ment and performance) at 40% to 60%, in accordance with the corporate titles of each Executive, 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.
III. In order to enhance shareholding of the Executives and align their interests with shareholders, the Programme targets its stock-based compen-
sation components at 25% to 45% of total remuneration, in accordance with the corporate titles of each Executive, if paid at standard levels.
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.
VI. 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:
Target index
Weight
SMFG Net Business profit*1
Annual growth/Target achievement
50%
SMFG Net income*2
Annual growth/Target achievement
50%
*1 The Group’s consolidated net business profit
*2 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
Weight
Financial index
ROCET1*3
20%
Base expense*4
20%
Gross profit*5
15%
Net income
15%
Share index
TSR (Total shareholder return)
15%
Non-financial index
Create social value*6
15%
*1 (Qualitative evaluation) The Compensation Committee determines the score within a range of plus or minus 5% of such figure taking into account comprehensively
two items, “Initiatives in new business areas” and “Compliance, customer-oriented initiatives, and risk management.”
*2 (Knock-out provision) If the “CET1 ratio (Post-Basel III reforms basis, excluding 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.
*3 Post-Basel III reforms basis, excluding net unrealized gains (losses) on other securities
Compensation
318
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
■ 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., Limited and overseas subsidiaries such as SMBC Bank International plc.
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
Number of Meetings Held
(April 1, 2023 to March 31, 2024)
Compensation Committee (Sumitomo Mitsui Financial Group) �����������������������������������������������������������������������
7
Executive Nomination and Compensation Committee (SMBC Nikko Securities Inc�) �������������������������������������
8
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.
Compensation
Sumitomo Mitsui Financial Group
321
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
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
(Headcount, millions of yen)
Item
No�
(a)
(b)
Officers
Employees and
others
1
Fixed compensation
Number of applicable officers, employees and others
21
723
2
Total fixed compensation (3+5+7)
1,289
34,427
3
of which: cash compensation
1,149
33,576
4
of which in 3: deferred amount
—
—
5
of which: amount of stock compensation or stock-linked
compensation
80
390
6
of which in 5: deferred amount
80
390
7
of which: other compensation
60
461
8
of which in 7: deferred amount
—
—
9
Variable
compensation
Number of applicable officers, employees and others
19
716
10
Total variable compensation (11+13+15)
1,205
30,038
11
of which: cash compensation
391
27,518
12
of which in 11: deferred amount
—
4,572
13
of which: amount of stock compensation or stock-linked
compensation
814
2,519
14
of which in 13: deferred amount
814
1,599
15
of which: amount of other compensation
—
—
16
of which in 15: deferred amount
—
—
17
Retirement
allowance
Number of applicable officers, employees and others
—
590
18
Amount of retirement allowance
—
2,844
19
of which: deferred amount
—
37
20
Other compensation
Number of applicable officers, employees and others
—
30
21
Amount of other compensation
—
211
22
of which: deferred amount
—
4
23
Total compensation, etc� (2+10+18+21)
2,495
67,520
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)
Bonus guarantee
One-off recruitment payment
Additional retirement allowance
Headcount
Total amount
Headcount
Total amount
Headcount
Total amount
Officers
—
—
—
—
—
—
Employees and others
18
1,650
10
386
4
259
■ Other Information Regarding Compensation Structures of Sumitomo Mitsui Financial Group and its Group
Companies
Deferred compensation, etc.
(Millions of yen)
(a)
(b)
(c)
(d)
(e)
Balance of
deferred
compensation,
etc�
Of the amount in
(a), balance of
deferred
compensation,
etc� subjected to
adjustment or
prone to
fluctuations
With respect to post
allocation
compensation, amount
of fluctuation after
adjustment not linked
to fluctuations of
criteria in the
applicable fiscal year
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
Amount of cash compensation
—
—
—
—
—
Amount of stock compensation
or stock-linked compensation
1,189
1,033
—
404
1,387
Amount of other compensation
—
—
—
—
—
Employees
and others
Amount of cash compensation
9,224
2,089
—
—
2,788
Amount of stock compensation
or stock-linked compensation
4,278
4,193
—
284
1,346
Amount of other compensation
—
—
—
—
27
Total amount
14,692
7,316
—
689
5,550
Compensation
320
Sumitomo Mitsui Financial Group
SMBC GROUP ANNUAL REPORT 2024
*4 General and administrative expenses excluding “revenue-linked cost,” “prior investment cost” and others
*5 The Group’s consolidated gross profit
*6 The Compensation Committee will determine the evaluation with respect to the “Create social value” based on the percentage of achievement of KPIs related to the
environment (Financed Emissions reduction and amount of sustainability financing provided) and employees (employee engagement and DE&I) as well as the prog-
ress of initiatives with respect to the five key challenges identified by SMBC Group (i.e., environment, DE&I/human rights, declining birthrate and aging popula-
tion, regrowth of Japan, and poverty and inequality).
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,
remunerations under the Plans could be reduced or fully forfeited.
IX. 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 (performance-linked portion, which is
variable in light of the business environment and performance) at 40% to 60%, in accordance with the corporate titles of each
Executive, 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
Compensation
323
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ Assessment of Design and Operation of Compensation Structure
Compensation Policy
Compensation Policies for Officers, Employees and Others
(1) For Officers
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.
SMBC Group’s executive compensation aims at providing appropriate incentives toward the realization of our mission and our
vision.
II.
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.
III. Individual remuneration shall reflect the assigned roles and responsibilities as well as the performance of the respective Executive.
IV.
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.
V.
SMBC Group’s executive compensation shall discourage excessive risk-taking and foster a prudent risk culture expected of a
financial institution.
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.
II.
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 (performance-linked portion, which varies in light
of the business environment and performance) at 40% to 60%, in accordance with the corporate titles of each Executive, 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.
III. 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% to 45% of total
remuneration in accordance with the corporate titles of each Executive, if paid at standard levels.
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,
reflecting the roles, responsibilities, etc.
VI. 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:
Target index
Weight
SMBC Banking profit*1
Annual growth/Target achievement
50%
SMBC Net income (Pre-Tax)*2
Annual growth/Target achievement
25%
SMFG Net income*3
Annual growth/Target achievement
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.
Compensation
322
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ Compensation Framework of SMBC Group
1. Scope of Officers and Employees
The scope of officers, employees and others whose compensation is subject to disclosure under the revised Cabinet Office on Disclosure of
Corporate Affairs, etc. and other ordinances are as described below.
(1) Scope of Officers
Officers subject to compensation disclosure are directors and corporate auditors of SMBC during the fiscal year under review.
(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
Ltd. and overseas subsidiaries such as SMBC Bank International plc.
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 318).
Compensation
Sumitomo Mitsui Banking Corporation (SMBC) and Its Group Companies
325
SMBC
SMBC GROUP ANNUAL REPORT 2024
■ 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)
(Headcount, millions of yen)
Item
No�
(a)
(b)
Officers
Employees and
others
1
Fixed compensation
Number of applicable officers, employees and others
18
694
2
Total fixed compensation (3+5+7)
1,042
33,268
3
of which: cash compensation
955
32,371
4
of which in 3: deferred amount
—
—
5
of which: amount of stock compensation or stock-linked
compensation
55
407
6
of which in 5: deferred amount
55
407
7
of which: other compensation
31
490
8
of which in 7: deferred amount
—
—
9
Variable
compensation
Number of applicable officers, employees and others
17
687
10
Total variable compensation (11+13+15)
888
28,843
11
of which: cash compensation
302
26,306
12
of which in 11: deferred amount
—
4,434
13
of which: amount of stock compensation or stock-linked
compensation
586
2,536
14
of which in 13: deferred amount
586
1,615
15
of which: amount of other compensation
—
—
16
of which in 15: deferred amount
—
—
17
Retirement
allowance
Number of applicable officers, employees and others
—
589
18
Amount of retirement allowance
—
2,807
19
of which: deferred amount
—
—
20
Other compensation
Number of applicable officers, employees and others
—
30
21
Amount of other compensation
—
211
22
of which: deferred amount
—
4
23
Total compensation, etc� (2+10+18+21)
1,930
65,130
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.
(Headcount, millions of yen)
(a)
(b)
(c)
(d)
(e)
(f)
Bonus guarantee
One-off recruitment payment
Additional retirement allowance
Headcount
Total amount
Headcount
Total amount
Headcount
Total amount
Officers
—
—
—
—
—
—
Employees and others
18
1,650
10
386
4
259
Compensation
324
SMBC
SMBC GROUP ANNUAL REPORT 2024
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
Weight
Financial index
ROCET1*3
20%
Base expense*4
20%
Gross profit*5
15%
Net income
15%
Share index
TSR (Total shareholder return)
15%
Non-financial index
Create social value*6
15%
*1 (Qualitative evaluation) The Compensation Committee determines the score within a range of plus or minus 5% of such figure taking into account comprehensively
two items, “Initiatives in new business areas” and “Compliance, customer-oriented initiatives, and risk management.”
*2 (Knock-out provision) If the “CET1 ratio (Post-Basel III reforms basis, excluding 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.
*3 Post-Basel III reforms basis, excluding net unrealized gains (losses) on other securities
*4 General and administrative expenses excluding “revenue-linked cost,” “prior investment cost” and others
*5 The Group’s consolidated gross profit
*6 The Compensation Committee will determine the evaluation with respect to the “Create social value” based on the percentage of achievement of KPIs related to the
environment (Financed Emissions reduction and amount of sustainability financing provided) and employees (employee engagement and DE&I) as well as the prog-
ress of initiatives with respect to the five key challenges identified by SMBC Group (i.e., environment, DE&I/human rights, declining birthrate and aging popula-
tion, regrowth of Japan, and poverty and inequality).
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-
nerations under the Plans could be reduced or fully forfeited.
IX. 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.
II.
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.
III. The details of the determination in II above are reported to SMBC Audit and Supervisory Committee.
IV.
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.
V.
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.
■ 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 320).
Compensation
327
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SMBC GROUP ANNUAL REPORT 2024
■ Other Information Regarding Compensation Structures of Sumitomo Mitsui Financial Group and its Group
Companies
Amount of Deferred Compensation, Etc. (SMBC consolidated)
Deferred compensation, etc.
(Millions of yen)
(a)
(b)
(c)
(d)
(e)
Balance of
deferred
compensation,
etc�
Of the amount in
(a), balance of
deferred
compensation,
etc� subjected to
adjustment or
prone to
fluctuations
With respect to
post allocation
compensation,
amount of
fluctuation after
adjustment not
linked to
fluctuations of
criteria in the
applicable fiscal
year
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
Amount of cash compensation
—
—
—
—
—
Amount of stock compensation
or stock-linked compensation
1,058
909
—
261
873
Amount of other compensation
—
—
—
—
—
Employees
and others
Amount of cash compensation
9,198
2,089
—
—
2,780
Amount of stock compensation
or stock-linked compensation
4,331
4,251
—
294
1,358
Amount of other compensation
—
—
—
—
27
Total amount
14,589
7,250
—
555
5,039
Amount of Deferred Compensation, Etc. (SMBC non-consolidated)
Deferred compensation, etc.
(Millions of yen)
(a)
(b)
(c)
(d)
(e)
Balance of
deferred
compensation,
etc�
Of the amount in
(a), balance of
deferred
compensation,
etc� subjected to
adjustment or
prone to
fluctuations
With respect to
post allocation
compensation,
amount of
fluctuation after
adjustment not
linked to
fluctuations of
criteria in the
applicable fiscal
year
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
Amount of cash compensation
—
—
—
—
—
Amount of stock compensation
or stock-linked compensation
1,058
909
—
261
873
Amount of other compensation
—
—
—
—
—
Employees
and others
Amount of cash compensation
9,198
2,089
—
—
2,780
Amount of stock compensation
or stock-linked compensation
4,331
4,251
—
294
1,358
Amount of other compensation
—
—
—
—
27
Total amount
14,589
7,250
—
555
5,039
Compensation
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SMBC GROUP ANNUAL REPORT 2024
1. Compensation Allocated in the Applicable Fiscal Year (SMBC non-consolidated)
(Headcount, millions of yen)
Item
No�
(a)
(b)
Officers
Employees and
others
1
Fixed compensation
Number of applicable officers, employees and others
18
694
2
Total fixed compensation (3+5+7)
1,042
33,268
3
of which: cash compensation
955
32,371
4
of which in 3: deferred amount
—
—
5
of which: amount of stock compensation or stock-linked
compensation
55
407
6
of which in 5: deferred amount
55
407
7
of which: other compensation
31
490
8
of which in 7: deferred amount
—
—
9
Variable
compensation
Number of applicable officers, employees and others
17
687
10
Total variable compensation (11+13+15)
888
28,843
11
of which: cash compensation
302
26,306
12
of which in 11: deferred amount
—
4,434
13
of which: amount of stock compensation or stock-linked
compensation
586
2,536
14
of which in 13: deferred amount
586
1,615
15
of which: amount of other compensation
—
—
16
of which in 15: deferred amount
—
—
17
Retirement
allowance
Number of applicable officers, employees and others
—
589
18
Amount of retirement allowance
—
2,807
19
of which: deferred amount
—
—
20
Other compensation
Number of applicable officers, employees and others
—
30
21
Amount of other compensation
—
211
22
of which: deferred amount
—
4
23
Total compensation, etc� (2+10+18+21)
1,930
65,130
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.
(Headcount, millions of yen)
(a)
(b)
(c)
(d)
(e)
(f)
Bonus guarantee
One-off recruitment payment
Additional retirement allowance
Headcount
Total amount
Headcount
Total amount
Headcount
Total amount
Officers
—
—
—
—
—
—
Employees and others
18
1,650
10
386
4
259
Compensation
SMBC Group Home Page
https://www.smfg.co.jp (Japanese)
https://www.smfg.co.jp/english/ (English)
Medium-term Management Plan
–Toward “Fulfilled Growth”–
https://www.smfg.co.jp/fulfilledgrowth/article/005/ (Japanese)
Investor Relations
https://www.smfg.co.jp/investor/ (Japanese)
https://www.smfg.co.jp/english/investor/ (English)
Sustainability
https://www.smfg.co.jp/sustainability/ (Japanese)
https://www.smfg.co.jp/english/sustainability/ (English)
DX-link
https://www.smfg.co.jp/english/dx_link/
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