Sumitomo Mitsui Banking Corporation
Fixed Income Investor PresentationSeptember 2013
The financial figures for SMFG and SMBC included in this presentation are prepared in accordance with generally accepted accounting principles in Japan, or Japanese GAAP
1
Disclaimer
This presentation is being provided to you for your information and may not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purpose, without the prior written consent of Sumitomo Mitsui Banking Corporation (“SMBC”). All information included in this presentation speaks as of the date of this presentation (or earlier, if so indicated) and is subject to change without notice. This presentation is based on information provided by SMBC and publicly available sources. Neither SMBC nor its affiliates make any representation or warranty, express or implied as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of any of the information or opinions in this presentation. The information contained herein does not constitute an offer or solicitation of securities for sale in the United States or anywhere else. Securities may not be offered or sold in the United States unless they are registered under applicable law or exempt from registration. No money, securities or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted.This presentation 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 SMBC and its management with respect to Sumitomo Mitsui Financial Group, Inc.’s and SMBC’s 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” 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 as a result of various factors, such as any deterioration in Japanese and global economic conditions and financial markets; future declines in securities prices on Japanese stock markets or other global markets; failure to satisfy capital adequacy requirements; incurrence of significant credit-related costs; a significant downgrade of our credit ratings; failure to achieve the goals of our business strategy; exposure to new risks as SMBC expands the scope of its business; the success of SMBC's business strategies and alliances; reduction of recoverability of certain tax deferred assets; failure of SMBC's information technology systems; financial difficulties of counterparties and other financial institutions; regulatory sanctions; insufficient liquidity; changes in laws and regulations affecting SMBC's business; and SMBC's ability to maintain competitiveness. SMBC undertakes no obligation to update or revise any forward-looking statements.
2
SMFG / SMBC overview*1
(As of Mar. 31, 2013)(Non-consolidated)
SMBC’s business franchise SMBC’s profitability
FY3/13 Core operating entity within the SMFG franchise
Heritage dating back more than 400 years
27 million retail customer deposit accounts
103 thousand domestic corporate loan clients
439 domestic branches
60+ overseas franchises*3
Ratings (Moody’s / S&P)*4 Aa3 / A+(As of Mar. 31, 2013, and as of Aug. 31, 2013 for the ratings)
SMFG is one of the three largest banking groups in Japan with an established global presence
Designated as one of the G-SIBs
(As of Aug. 30, 2013 for market capitalization and as of Mar. 31, 2013 for the others)
SMFG (Sumitomo Mitsui Financial Group)
*1 Exchange rate as of Mar. 29, 2013; USD 1.00=JPY 94.01, except for market capitalization, where exchange rate as of Aug 30, 2013; USD 1.00=JPY 98.33 was applied*2 Total balance of bonds with maturities classified as “Other securities” and bonds of held-to-maturity; total of Japanese government bonds, Japanese local government bonds and Japanese corporate
bonds*3 SMBC’s branches and subsidiaries *4 SMBC’s long-term senior unsecured bond ratings*5 Before provision for general reserve for possible loan losses *6 Expenses divided by gross banking profit
(Consolidated)
Total assets JPY 149 tn / USD 1.58 tn
Tier I ratio 10.93%
Market capitalization(TSE:8316 / NYSE:SMFG) JPY 6.2 tn / USD 63 bn
(Non-consolidated)
SMBC’s asset quality and liquidity
65.0%
JPY 60 tn / USD 636 bn
JPY 92 tn / USD 978 bn
JPY 126 tn / USD 1,339 bn
JPY 29 tn / USD 307 bn
1.60%Non-performing loan ratio
Loan-to-deposit ratio
Loans
Deposits
Total assets
Yen bonds*2
JPY 1,540 bn / USD 16.4 bn
JPY 812 bn / USD 8.6 bn
JPY 618 bn / USD 6.6 bn
47.3%
*5
Gross banking profit
Banking profit*5
(before provisions)
Net income
Overhead ratio*6
Common Equity Tier I ratio 9.38%
3
Japan Research InstituteOther business
SMBC Nikko Securities
SMBC Friend Securities
Securities Services
SMBC Aviation Capital
40%
10%
Leasing
60%
Sumitomo Mitsui Card
Cedyna
SMBC Consumer Finance*3
100%
66%34%
Consumer FinanceSMFG Card & Credit
Sumitomo Mitsui Finance and LeasingSumitomo Corporation
NTT docomo
Sumitomo Mitsui Asset Management
Daiwa SB investments
【No. of accounts:approx. 2.4 mn】
【No. of card holders:approx. 22 mn】
【No. of existing customers:approx. 19 mn】
【No. of accounts of unsecured loans: approx. 1.4 mn】
Group structure*1
Sumitomo Mitsui Financial Group
100%
60%
30%JPY 149 tnConsolidated total assets
10.93%Consolidated Tier I ratio
*1 As of Mar. 31, 2013*2 Excluding negotiable certificates of deposits*3 Renamed to SMBC Consumer Finance from Promise on Jul. 1, 2012
100%
100%
100%
100%
44%
100%
40%
Sumitomo Mitsui Banking Corporation
Total assets JPY 126 tn
Deposits*2 JPY 80 tn
Loans JPY 60 tn
# of retail accounts 27 mn
103,000# of corporate loan clients
4
Credit ratings of G-SIBs by Moody’s*
Apr. 2001 Jul. 2007 Aug. 2013
Aaa • Bank of America• Bank of New York Mellon• Citibank• JPMorgan Chase Bank
• Royal Bank of Scotland• UBS• Wells Fargo Bank
Aa1 • Bank of America• Crédit Agricole
• Wells Fargo Bank• UBS
• Banco Santander• Barclays Bank• BBVA• BNP Paribas• Crédit Agricole• Credit Suisse
• Deutsche Bank• HSBC Bank• ING Bank• Nordea Bank• Société Générale• State Street Bank & Trust
• Bank of New York Mellon
Aa2 • Bank of New York Mellon• Barclays Bank• BBVA• Citibank• HSBC Bank
• ING Bank• JPMorgan Chase Bank• Royal Bank of Scotland• State Street Bank & Trust
• SMBC• BPCE(Banque Populaire)• BTMU
• Mizuho Bank• UniCredit
• State Street Bank & Trust
Aa3 • Banco Santander• BNP Paribas• BPCE(Banque Populaire)
• Deutsche Bank• Société Générale• UniCredit
• Goldman Sachs Bank • Morgan Stanley Bank • SMBC• BTMU• HSBC Bank
• JPMorgan Chase Bank• Nordea Bank• Wells Fargo Bank
A1 • Credit Suisse • Bank of China • Bank of China• Credit Suisse
• Mizuho Bank• Standard Chartered
A2 • BTMU • Standard Chartered • Standard Chartered • Barclays Bank• BNP Paribas• BPCE(Banque Populaire)• Crédit Agricole• Deutsche Bank
• Goldman Sachs Bank• ING Bank• Société Générale• UBS
A3 • SMBC • Mizuho Bank • Bank of America• Citibank
• Morgan Stanley Bank• Royal Bank of Scotland
Baa1 • Bank of China
Baa2 • Banco Santander• UniCredit
Baa3 • BBVA
SMBC
SMBC
SMBC
* Long-term issuer ratings (if not available, long-term deposit ratings) of operating banks
Growth International business Synergies between SMBC and SMBC Nikko
Profitability Financial results of FY3/2013 & 1Q, FY3/2014 Sources of profitability Loan balance & spread
5
Highlights
Financial soundness Capital Asset quality Liquidity Foreign currency funding
Financial results of FY3/2013 and 1Q, FY3/2014
(JPY bn)FY3/2012Results
FY3/2013Results
Apr.-Jul. 2013ResultsYOY
changeYOY
change
Gross banking profit 1,532.5 1,540.1 +7.6 428.0 +28.7
Gains (losses) on bonds 152.5 113.8 (38.7) 14.5 (64.7)
Expenses*1 (719.5) (727.7) (8.2) (185.6) (0.1)
<Overhead ratio>*2 46.9% 47.3% +0.4% 43.4% (3.5)%
Banking profit (before provisions)*3 813.0 812.4 (0.6) 242.4 +28.6
Total credit cost (58.6) (19.5) +39.1 24.9 +25.4
Gains (losses) on stocks (15.2) (35.7) (20.5) 72.2 141.5
Ordinary profit 695.3 670.9 (24.5) 314.1 +181.7
Net income 478.0 617.8 +139.8 214.8 +143.8
Ordinary profit 935.6 1,073.7 +138.2 459.3 +221.7
Net income 518.5 794.1 +275.5 288.3 +170.5
SMB
Cno
n-co
nsol
idat
ed
Ref
eren
ce:
SMFG
cons
olid
ated
*1 Excluding non-recurring losses*2 Expenses divided by gross banking profit *3 Before provision for general reserve for possible loan losses
6
30.4
19.6 21.7
0
10
20
30
40
SMBC BTMU Mizuho
Sources of profitability
(JPY mn)
Banking profit (before provisions)per employee*1,2 Domestic loan-to-deposit spread*1
*1 Based on each company’s FY3/13 disclosure. The figures shown in the graph are: the non-consolidated figures for SMBC and BTMU, and the sum of Mizuho Bank and Mizuho Corporate Bank for Mizuho
*2 Before provision for general reserve for possible loan losses, excluding gains (losses) on bonds, divided by the average number of employees (average number at the beginning and end of the period for BTMU and Mizuho)
1.49%
1.19%
1.13%
1.0%
1.2%
1.4%
1.6%
SMBC BTMU Mizuho
7
0.0%
47.2 47.6
9.2
12.2
35
40
45
50
55
60
65
Mar. 08 Mar. 09 Mar. 10 Mar. 11 Mar. 12 Mar. 13
Overseas loans
Domestic loans
G1-G3
G4-G6
G7 (excluding G7R)
Default (G7R, G8-G10)
Others
J1-J3
J4-J6
J7 (excluding J7R)
Default (J7R, J8-J10)
Japanese government, etc
Others
Loan balance & exposures
Loan balance
(SMBC non-consolidated)
56.4
(JPY tn)
Exposures by obligor grade as of Mar. 2013*1
(corporate, sovereign and bank)(SMFG consolidated)
Overseas exposures
Domestic exposures
*1 Exposures include credit to domestic and overseas commercial/industrial companies, individuals for business purposes, sovereigns, public sector entities, and financial institutions.See appendix for details on obligor grade
8
59.8
Loan spread*1
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
Sep.08
Mar.09
Sep.09
Mar.10
Sep.10
Mar.11
Sep.11
Mar.12
Sep.12
Mar.13
Large corporations (Corporate Banking Unit)
Medium-sized enterprises and SMEs (Middle Market Banking Unit)
*1 Managerial accounting basis. Average loan spread of existing loans*2 SMBC non-consolidated*3 Sum of SMBC, SMBC Europe and SMBC (China)
Domestic*2 Overseas*3
9
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
Sep.08
Mar.09
Sep.09
Mar.10
Sep.10
Mar.11
Sep.11
Mar.12
Sep.12
Mar.13
Growth International business Synergies between SMBC and SMBC Nikko
Profitability Financial results of FY3/2013 & 1Q, FY3/2014 Sources of profitability Loan balance & spread
10
Highlights
Financial soundness Capital Asset quality Liquidity Foreign currency funding
International business (1) - profit and loan balanceOverseas banking profit (before provisions) and ratio*1
(JPY bn)
Overseas loan balance (USD)*2
(USD bn)
*1 Managerial accounting basis. Sum of SMBC and major overseas banking subsidiaries. Based on the medium-term management plan assumed exchange rate of USD1=JPY85 since FY3/12*2 Managerial accounting basis, exchanged at respective period-end FX rates. Sum of SMBC, SMBC Europe and SMBC (China) 11
23%
26%
30%
0%
10%
20%
30%
40%
0
50
100
150
200
250
3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13
Overseas banking profit (left axis)
Overseas banking profit ratio (right axis)
FY
30 30.739
5058
34 25
30
38
47 37
34
34
40
41
0
25
50
75
100
125
150
Mar. 09 Mar. 10 Mar. 11 Mar. 12 Mar.13
EMEA
Americas
Asia
101
90
104
128
146
International business (2) - products with a competitive advantage
SMBC was awarded as the Global Bank of the Year 2012 by Project Finance International Magazine, the leading publication of global project finance industry
Team with high expertise committed to obtainingmandates
Leverage relationships with customers and ECAs to work on transactions with both Japanese and non-Japanese sponsors
(USD mn)
*1 Source: Thomson Reuters (Mandated Arrangers)*2 Project finance: Asia Pacific, Loan syndication: Asia (excl. Japan), all international currency syndicated and club loans*3 Source: “ASIAMONEY”: Cash Management Poll (Aug. 2013)
Project finance Trade finance related profit
Cash management service
Global Asia*2 Japan
Project Finance #3 #5
Loan Syndication #7 #1 #2
League tables (Jan. – Dec. 2012)*1
Cash management service (CMS) as voted by corporations
Large corporations 5th
Medium corporations 5th
Small corporations 5th
JPY CMSas voted by financial institutions
1st
Cash management providers’ ranking (in Asia Pacific)*3
#1 among Japanese banksfor eight consecutive years
CMS in Asia
Aim to be one of
the top three global banks#1 for eight
consecutive years
0
100
200
300
400
FY3/11 FY3/12 FY3/13
EMEAAmericasAsia
12
International business (3) - our footprint in Asia
Strategic partners*2
China Bank of China
Industrial andCommercial Bank of China
Agricultural Bank of China
Korea Kookmin Bank
Taiwan First Commercial Bank
Hong Kong Bank of East Asia
Philippines Metrobank
Vietnam Vietnam Eximbank
Malaysia RHB Bank
Indonesia Bank TabunganPensiunan Nasional
Bank Central Asia
Cambodia ACLEDA Bank
India Kotak Mahindra Bank
Loan balance in Asian countries(Geographic classification based on domicile of borrowers)*1
KoreaChina
Thailand
Singapore Indonesia
TaiwanHong KongIndia
(JPY bn)
Australia
0200400600800
1,000
Mar.10
Mar.11
Mar.12
Mar.13
0200400600800
1,000
Mar.10
Mar.11
Mar.12
Mar.13
0200400600800
1,000
Mar.10
Mar.11
Mar.12
Mar.13
0200400600800
1,000
Mar.10
Mar.11
Mar.12
Mar.13
0200400600800
1,000
Mar.10
Mar.11
Mar.12
Mar.13
0200400600800
1,000
Mar.10
Mar.11
Mar.12
Mar.13
0200400600800
1,000
Mar.10
Mar.11
Mar.12
Mar.13
0200400600800
1,000
Mar.10
Mar.11
Mar.12
Mar.13
0200400600800
1,000
Mar.10
Mar.11
Mar.12
Mar.13
*1 Sum of SMBC, SMBC Europe and SMBC (China). Loan balances are calculated in JPY from each country’s local currency at the exchange rate as of Mar. 29, 2013*2 SMBC has an equity stake in the underlined banks 13
Leasing company Nationality No. of Aircrafts
1 GECAS US 1,742
2 ILFC US 1,033
3 BBAM US 332
SMBC AC + Sumisho Acft Asset Mgt 318
4 AerCap Netherlands 297
5 Aviation Capital Group US 270
6 CIT Aerospace US 268
7 AWAS Ireland 244
8 Boeing Capital Corp US 236
9 SMBC AC Ireland 232
10 BOC Aviation Singapore 198
23 Sumisho Aircraft Asset Management Netherlands 86
International business (4) - SMBC Aviation Capital
FY3/13 topics and future goalsFY3/13 topics and future goals Number of aircraft ranking*Number of aircraft ranking*
* As of Dec. 31, 2012 (Source: Flightglobal Insight “Aircraft Finance 2013”)
Future goals
14
SMFG Group merged the following aircraft leasing business into SMBC Aviation Capital in March 2013:
SMFL Aircraft Capital Corporation B.V. (Netherlands),SMFL Aircraft Capital Japan Co., Ltd. (Japan) and Sumisho Aircraft Asset Management B.V. (Netherlands)
Realize “One Stop Shop” structure with the three businesses in order to meet various needs of the aircraft industry and aircraft investors
Capture increasing aircraft demand by leveraging economies of scale
Build a sustainable profit structure through a “Buy and Sell” business model
FY3/13 topics
Investment overviewInvestment overview
Investment amount:As of May 10, 2013, approx. JPY 92 bn, IDR 6,500 per share
Share holding:24.26% as of May 10, 2013 held by SMBC
SMBC plans to hold 40% stake subject to the approval by regulatory authorities. BTPN will be treated as an affiliated company
Unique business model of BTPNUnique business model of BTPN
15*1 Bank Tabungan Pensiunan Nasional Tbk PT*2 Exchange rate as of May 8, 2013; IDR 1,000=JPY 10.2, USD 0.1
Focus on wealthy customers
LiabilityAsset
Loan to pension recipients
Loans to small shop owners
Deposit taking
Pension banking
Micro-financing
International business (5) - Investment in BTPN*1
Overview of BTPNOverview of BTPN
Established in 1958 to serve retired military personnel through pension banking services.
Ranked 16th by asset size and 7th by market cap. among Indonesian banks
Listing in Indonesian Stock Exchange:IDX ticker “BTPN”Market Cap. as of May 8, 2013:IDR 33,289.6 bn
(approx. JPY 326 bn)
Synergies between SMBC and SMBC Nikko
16
0
500
1,000
1,500
Apr.-Jun.12 Jul.-Sep.12 Oct.-Dec.12 Jan.-Mar.13 Apr.-Jun.13
Investment banking businessFixed income business
(JPY bn) FY3/2013 Apr.-Jun.2013 YOY
changeQOQ
change
Net operating revenue 274.7 103.2 +48.0 +3.6
SG&A expenses (200.2) (61.3) (15.5) (2.1)
Ordinary income 75.7 42.2 +32.4 +1.3
Net income*1 45.7 26.7 +22.8 (0.1)
Rank Mkt share
Global equity & equity-related (book runner, underwriting amount)*1 #4 8.4%
JPY denominated bonds(lead manager, underwriting amount)*2 #5 15.4%
Financial advisor(M&A, transaction volume)*3 #3 25.9%
Financial advisor(M&A, No. of deals)*3 #3 3.6%
(No. of referrals)
SMBC Nikko‘s consolidated financial performanceSMBC Nikko‘s consolidated financial performance
*1 Source: SMBC Nikko, based on data from Thomson Reuters. Japanese corporate related only*2 Source: SMBC Nikko. Consisting of corporate bonds, FILP agency bonds, municipality bonds,
and samurai bonds*3 Source: Thomson Reuters. Japanese corporate related only. Excluding real estate deals
Net operating revenue relating to sales of investment trusts and foreign bonds
Net operating revenue relating to sales of investment trusts and foreign bonds
Synergies between SMBC and SMBC NikkoSynergies between SMBC and SMBC Nikko League tables (Apr.-Jun. 2013, SMBC Nikko)League tables (Apr.-Jun. 2013, SMBC Nikko)
Retail Commenced banking-securities integration in May 2013
Actively refer customers between SMBC and SMBC Nikko (SMBC: 15 offices, SMBC Nikko: 10 offices)
Wholesale
0
10
20
30
40
50
Apr.-Jun.12 Jul.-Sep.12 Oct.-Dec.12 Jan.-Mar.13 Apr.-Jun.13
(JPY bn) Subscription comissions from investment trustsNet trading incomes
Productsales
(JPY bn)
Investmenttrusts 521.2 395.9 649.7 1,053.2 1,131.9
Foreignbonds 622.0 517.9 547.8 700.0 837.1
Growth International business Synergies between SMBC and SMBC Nikko
Profitability Financial results of FY3/2013 & 1Q, FY3/2014 Sources of profitability Loan balance & spread
17
Highlights
Financial soundness Capital Asset quality Liquidity Foreign currency funding
Resilient capital base
Common Equity Tier I capital ratio - Basel III fully-loaded basis (pro forma)*1
7.6%
8.6%
7.7%
9.3%
11.1%
8.2%
9.9%
8.0%
8.7% 8.7% 9.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Mizuho FG SMFG RBS BAC MUFG Barclays BNP DB JPM Citi HSBC
*1 SMFG, Mizuho FG, and MUFG began phased implementation of Basel III pursuant to FSA guidelines on Mar. 31, 2013. Ratios for these banks represent the announced full implementation basis scheduled to be applied from Mar. 2019 without permitted grandfathering and as of 2013. The ratio for Mizuho FG excludes Eleventh Series Class XI Preferred Stock of JPY 340.6 bn. Ratios for SMFG and MUFG are estimates announced by each bank. For the other banks, the ratios represent full implementation basis estimates announced by each bank as of Dec. 2012. Detailed guidelines for the application of Basel III are yet to be adopted by banking regulators in the United States and the European Union
*2 According to the list published by the Financial Stability Board in Nov. 2012
Minimum requirement
7%
Minimum requirement
+G-SIBs surcharge*2
18
Bucket 1(1.0%)
Bucket 2(1.5%)
Bucket 3(2.0%)
Bucket 4(2.5%)
1.81% 1.86%
1.60%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Mar. 08 Mar. 09 Mar. 10 Mar. 11 Mar. 12 Mar. 13
Substandard loansDoubtful assetsBankrupt / quasi-bankrupt assetsNon-performing loan ratio (right axis)
19
Asset quality - solid loan portfolio
Balance of non-performing loans
(SMBC non-consolidated)
1.131.18
(JPY tn)
Mar. 12 Mar. 13Coverage ratio* 89.93% 92.63%
1.09
* Ratio of the collateral, guarantees and specific and general reserves to total non-performing loans
Total credit cost
9459
20
15bp
9bp3bp
0
15
30
45
60
75
90
0
100
200
300
400
500
600
FY3/08 3/09 3/10 3/11 3/12 3/13
Total credit cost (left axis)Total credit cost / total claims (right axis)
(JPY bn)(SMBC non-consolidated)
(bp)
1.9 1.8
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
0
5
10
15
20
25
30
35
Mar. 02 Mar. 03 Mar. 04 Mar. 05 Mar. 06 Mar. 07 Mar. 08 Mar. 09 Mar. 10 Mar. 11 Mar. 12 Mar. 13
More than 10 yearsMore than 5 years to 10 yearsMore than 1 year to 5 years1 year or lessAverage duration (right axis)
20
Asset quality - bond portfolio
Yen bond portfolio*1
Balance (JPY tn)
31.5
*2
(Years)
of which more than 1 year to 2 years JGBs comprise : JPY 5.8 tn,a decrease of JPY 2.8 tn compared to Mar.12
(SMBC non-consolidated)
*1 Total balance of bonds with maturities classified as “other securities” and bonds of held-to-maturity; total of JGBs, Japanese local government bonds and Japanese corporate bonds*2 Excluding bonds of held-to-maturity, bonds for which hedge-accounting is applied, and private placement bonds. Duration of 15-year floating rate JGBs is regarded as zero. Duration at Mar. 02 is for
JGB portfolio*3 15-year floating-rate JGBs have been carried at their reasonably estimated amounts from Mar. 09
of which 15-year floating-rate JGBs comprise : approx. JPY 1.8 tn
Unrealizedgains (losses)
(JPY bn)*3104.4 95.3
28.9
21
Liquidity - supported by a sticky domestic deposit base
*2
Loan-to-deposit ratio*1
*1 Based on each company’s financial statements, as of Mar. 31, 2013 for SMBC, The Bank of Tokyo-Mitsubishi UFJ (“BTMU”) and Mizuho, and as of Dec. 31, 2012 for the others. Figures of SMBC, BTMU and Mizuho are on a non-consolidated basis. The others are on a consolidated basis
*2 Aggregate of Mizuho Bank and Mizuho Corporate Bank
61%61%
65% 67% 69% 70%74%
82%
96%
110%117%
0%
20%
40%
60%
80%
100%
120%
BTMU JPM SMBC Mizuho DB Citi HSBC BAC RBS Barclays BNP
55 68 73
82 96
10190
104
128
146
0
20
40
60
80
100
120
140
160
180
200
Mar. 09 Mar. 10 Mar. 11 Mar. 12 Mar. 13
CDs & CP (less than 3 months)CDs & CP (3 months or more)Deposits (incl. deposits from central banks)Overseas loan balance
Foreign currency funding
Overseas deposit & loan balance*1
(USD bn)
Diversification of foreign currency funding
*1 Managerial accounting basis, exchanged at respective period-end FX rates. Sum of SMBC, SMBC Europe and SMBC (China)*2 Includes senior funding only 22
USD76%
EUR7%
GBP4%
AUD13%
Capital markets funding after Apr. 2012*2
Total: USD9.6 bn
USD and EUR CP program for short-term funding Periodic benchmark bond transactions to diversify our medium-to
long term funding alternatives Non-JPY denominated senior bonds: issued to international
investors– USD denominated bonds issued via 3(a)(2) format– Also issued GBP denominated bonds this March and EUR
denominated bonds this July USD and AUD denominated senior bonds: issued to
Japanese domestic retail investors Other transactions include AUD denominated transferable
deposits: issued through our Sydney branch to international investors
70
91
106
136
178
406080
100120140160180
3 5 10
Why SUMIBK?
23
Highlights
Our periodic issuance since July 2010 provides high degree of liquidity to the bonds
The only Japanese commercial bank issuer to be included in the Barclays U.S. Aggregate Index – 3(a)(2) format gives additional comfort to the investors especially in the U.S.
Achieved stable secondary performance in the recent three issuances
– Demand from Asian investors supports secondary trading 406080
100120140160180
3 5 10
SUMIBK Secondary level (5 year Fixed) vs. Index*
Secondary trading level*
(bps) July 2013January 2013
Tenor (years)
406080
100120140160180
3 5 10
July 2012
Tenor (years) Tenor (years)
(bps) (bps)
Re-offer spread G-spread (1 month later)
SUMIBK 3(a)(2) format Credit Curve (G-spread)*
0
30
60
90
120
150
0 2 4 6 8 10
144A format 3(a)(2) format USD senior bonds issued in Jul. 2013
(bps)
* G-spread as of Aug. 26, 2013, Source: Bloomberg
( )
60
70
80
90
100
110
120
Jul.12 Jul.21 Jul.30 Aug.8 Aug.17 Aug.26
G-spread: SUMIBK2.5 (July 2013)
CDX IG 5-year
(bps)
2013
7.0
4.5
5.8
4.5
14.3
12.0
11.0
2.01.5
2.01.5
3.0
2.02.0
3.5x
3.0x
2.9x
3.0x
4.8x
6.0x
5.5x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Jul. 2010 Jan. 2011 Jul. 2011 Jan. 2012 Jul. 2012 Jan. 2013 Jul. 2013
Total Book Size (LHS)
Issue Size (LHS)
Orderbook / issue size (RHS)
CDX IG 5-year (RHS)
60
80
100
120
140
USD senior bonds issuance record
24
USD senior bonds overall demands Geographical breakdown of allocation
US Asia Europe and others
3(a)(2) format144A format(USD bn) (bp)
70.0%
74.3%
85.4%
76.5%
19.5%
18.2%
9.4%
15.6%
10.5%
7.6%
5.2%
7.9%
3-year
5-year
10-year
Total
0% 20% 40% 60% 80% 100%
USD senior bonds – in Jul. 2013
60.7%
47.6%
68.7%
58.3%
29.4%
41.2%
23.0%
31.8%
9.9%
11.3%
8.2%
9.9%
3-year
5-year
10-year
Total
0% 20% 40% 60% 80% 100%
USD senior bonds – after Jul. 2012*2
(FIX +FRN)
(FIX +FRN)
*1 Source: Bloomberg*2 Percentages are calculated by weighted average of amount issued of Jul. 2012, Jan. and Jul. 2013.
*1
Capital markets funding profile
25
US$120 US$150 US$120 US$150A$540 A$430
A$760
A$130 A$430A$140
A$620 A$130
US$3,500
US$3,500
US$5,000
US$2,000
US$650
US$1,400
US$3,600US$2,400
US$2,000
US$500 US$500
US$1,250
US$700
€500
€500
£250
£250
US$1,500
US$1,500
US$327
€750
€750 €331
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
FY3/10Issuance
3/11Issuance
3/12Issuance
3/13Issuance
3/14 YTDIssuance
3/14Maturity
3/15Maturity
3/16Maturity
3/17Maturity
3/18Maturity
3/19Maturity
3/20Maturity
3/21Maturity
3/22Maturity
3/23Maturity
3/24Maturity
Perpetual
Senior bonds to institutional investorsSenior bonds to retail investors
Subordinated bonds to institutional investors
(USD mn)
MaturityIssuance
Foreign currency bonds issued since 2010
26
Issue date Sub/Senior Format Tenor Maturity date Amount (mn) Coupon Spread* Ticker
USD denominated
Jul. 22, 2010 Senior 144A/RegS3 years Jul. 22, 2013 USD 1,000 2.15% +118bp SUMIBK 2.15 Corp5 years Jul. 22, 2015 USD 1,000 3.15% +137.5bp SUMIBK 3.15 Corp
Jan. 14, 2011 Senior 144A/RegS3 years Jan. 14, 2014 USD 650 1.95% +90bp SUMIBK 1.95 Corp5 years Jan. 14, 2016 USD 850 3.10% +103bp SUMIBK 3.1 Corp
Jul. 22, 2011 Senior 144A/RegS3 years Jul. 22, 2014 USD 400 1.90% +130bp SUMIBK 1.9 Corp (07/22/14)3 years Jul. 22, 2014 USD 500 LIBOR+0.95% LIBOR+0.95% SUMIBK Float 07/22/14 Corp5 years Jul. 22, 2016 USD 1,100 2.90% +150bp SUMIBK 2.9 Corp
Jan. 12, 2012 Senior 144A/RegS3 years Jan. 12, 2015 USD 500 1.90% +155bp SUMIBK 1.9 Corp (01/12/15) 5 years Jan. 12, 2017 USD 500 2.65% +180bp SUMIBK 2.65 Corp
10 years Jan. 12, 2022 USD 500 3.95% +200bp SUMIBK 3.95 Corp (01/12/22)Mar. 1, 2012 Sub RegS 10 years Mar. 1, 2022 USD 1,500 4.85% +285bp SUMIBK 4.85 Corp
Jul. 18, 2012 Senior 3(a)(2)3 years Jul. 18, 2015 USD 1,000 1.35% +100bp SUMIBK 1.35 Corp5 years Jul. 18, 2017 USD 1,250 1.80% +120bp SUMIBK 1.8 Corp
10 years Jul. 18, 2022 USD 750 3.20% +170bp SUMIBK 3.2 Corp
Jan. 18, 2013 Senior 3(a)(2)3 years Jan. 18, 2016 USD 750 0.90% +58bp SUMIBK 0.9 Corp5 years Jan. 18, 2018 USD 750 1.50% +77bp SUMIBK 1.5 Corp
10 years Jan. 18, 2023 USD 500 3.00% +117bp SUMIBK 3 CorpMar. 25, 2013 Senior Domestic Retail 5 years Mar. 12, 2018 USD 120 1.21% -- SUMIBK 1.21 CorpJun. 24, 2013 Senior Domestic Retail 6 years Jun. 13, 2019 USD 150 1.88% -- SUMIBK 1.88 Corp
Jul. 19, 2013 Senior 3(a)(2)
3 years Jul. 19, 2016 USD 500 1.45% +85bp SUMIBK 1.45 Corp3 years Jul. 19, 2016 USD 300 LIBOR+0.67% LIBOR+0.67% SUMIBK Float 07/19/16 Corp5 years Jul. 19, 2018 USD 500 2.50% +115bp SUMIBK 2.5 Corp
10 years Jul. 19, 2023 USD 700 3.95% +140bp SUMIBK 3.95 Corp (07/19/23)GBP denominated
Mar. 18, 2013 Senior RegS (EMTN) 3 years Mar. 18, 2016 GBP 250 LIBOR+0.55% LIBOR+0.55% SUMIBK Float 03/18/16 CorpEuro denominated
Nov. 9, 2010 Sub 144A/RegS 10 years Nov. 9, 2020 Euro 750 4.00% +130bp SUMIBK 4 CorpJul. 24, 2013 Senior RegS (EMTN) 10 years Jul. 24, 2023 Euro 500 2.75% +98bp SUMIBK 2.75 Corp
AUD denominatedMar. 16, 2010 Senior Domestic Retail 3 years Mar. 14, 2013 AUD 540 5.76% -- SUMIBK 5.76 CorpDec. 21, 2011 Senior Domestic Retail 3 years Dec. 18, 2014 AUD 430 4.28% -- SUMIBK 4.28 CorpJun. 21, 2012 Senior Domestic Retail 4 years Jun. 21, 2016 AUD 420 4.07% -- SUMIBK 4.07 CorpDec. 19, 2012 Senior Domestic Retail 4 years Dec. 19, 2016 AUD 200 3.47% -- SUMIBK 3.47 CorpMar. 25, 2013 Senior Domestic Retail 3 years Mar. 1, 2016 AUD 140 3.29% -- SUMIBK 3.29 CorpJun. 24, 2013 Senior Domestic Retail 4 years Jun. 13, 2017 AUD 130 3.45% -- SUMIBK 3.45 Corp
* Gray background bonds mean that the bonds have already redeemed.* Spread over US Treasury except for Euro denominated bonds (over Mid Swap)
50
70
90
110
130
150
170
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13
G-s
prea
d (b
ps)
SMBC bonds - secondary spread
* Source: Bloomberg, Barclays US Aggregate Financial Institutions Index 27
SUMIBK 0.9 01/18/16
Barclays US Aggregate Financial Institutions Index
SUMIBK 3 01/18/23
SUMIBK 1.5 01/18/18
CDX IG 5-year
Appendix
Trends in key figures, 1Q FY3/2014
29
473.0
217.3
121.3173.1
(8.0)
254.7
94.3 58.6 19.5 (24.9)
40
159
3
68
3117
23
FY3/10 FY3/11 FY3/12 FY3/13 1Q, FY3/14
1,658.11,726.31,857.7
1,690.31,571.8
1,055.51,093.51,126.3 1,182.81,100.7
1.53%1.60%1.86%1.81%1.74%
2.22%2.27%2.59%2.43%2.25%
Mar.10 Mar.11 Mar.12 Mar.13 Jun.13
Total credit cost and Total credit cost ratio*3Total credit cost and Total credit cost ratio*3
902.1
62.9161.3
586.4
370.9475.0
1,121.6 1,126.3
0
500
1,000
Mar.10 Mar.11 Mar.12 Mar.13 Jun.13
Stocks Bonds Others Total
*1 SMBC non-consolidated basis. Balance sheet amount *2 NPL ratio = NPLs based on the Financial Reconstruction Act (excluding normal assets) / Total claims*3 Total credit cost ratio = Total credit cost / Total claims
49.5 47.8 47.2 47.6 47.5
7.1 7.4 9.2 12.2 12.7
Mar.10 Mar.11 Mar.12 Mar.13 Jun.13
Overseas offices and offshore banking accountsDomestic offices (excluding offshore banking account)
Unrealized gains (losses) on other securitiesUnrealized gains (losses) on other securities
NPLs and NPL ratio*2NPLs and NPL ratio*2Loan balanceLoan balance
56.6 55.2 56.459.8 60.2 SMBC
non-consolidated
SMFGconsolidated
(SMBC non-consolidated)
(SMFG consolidated)
SMBCnon-consolidated
SMFGconsolidated
Coverage ratio(Mar. 2013)
SMFG consolidated 85.84%
SMBC non-consolidated 92.63%
JGBs classified as other securities*1 JPY 23.6 tn JPY 20.7 tn JPY 11.5 tn
(JPY bn)
(JPY bn)
(JPY tn)
(JPY bn)
Current Japanese economy
30
10
11
12
13
14
Jun.12
Jul.12
Aug.12
Sep.12
Oct.12
Nov.12
Dec.12
Jan.13
Feb.13
Mar.13
Apr.13
May13
Jun.13
Jul.13
(JPY tn)
(15.0)(12.5)(10.0)(7.5)(5.0)(2.5)0.0+2.5+5.0
(%)Commercial sales for retail (left axis)
YOY change (right axis)
BOJ Tankan survey - Business conditions DI*1BOJ Tankan survey - Business conditions DI*1 Retail sales*3Retail sales*3
(0.6)
(0.4)
(0.2)
0.0
0.2
0.4
0.6
0.8
Jun.12
Jul.12
Aug.12
Sep.12
Oct.12
Nov.12
Dec.12
Jan.13
Feb.13
Mar.13
Apr.13
May13
Jun.13
Jul.13
Core CPI for Japan
Core CPI for Ku-area of Tokyo
*1 Actual results. Diffusion index of “Favorable” minus “Unfavorable” *2 Source: Statistics Bureau. Core CPI: All items, less fresh foods. Ku-area of Tokyo: 23 wards of Tokyo*3 Source: Current Survey of Commerce, METI *4 Source: Cabinet Office. Original series. Volatile orders stand for orders for ships and those from electric power companies
(15)
(10)
(5)
0
5
10
15
20
Jun.12
Jul.12
Aug.12
Sep.12
Oct.12
Nov.12
Dec.12
Jan.13
Feb.13
Mar.13
Apr.13
May13
Jun.13
Large enterprises - Manufacturing
Large enterprises - Non-manufacturing
(%pt)
Consumer price index (YOY change)*2Consumer price index (YOY change)*2 Orders received for machinery*4Orders received for machinery*4
500
600
700
800
900
1,000
1,100
1,200
Jun.12
Jul.12
Aug.12
Sep.12
Oct.12
Nov.12
Dec.12
Jan.13
Feb.13
Mar.13
Apr.13
May13
Jun.13
(JPY bn)
(15)
(10)
(5)
0
+5
+10
+15
+20(%)
Total value of machinery orders for private sectorexcluding volatile orders (left axis)YOY change (right axis)
(%)
Trend of investment trusts sales and lending in Japan
(JPY bn)
31
Sales of investment trusts*1 YoY increase/decrease of loan balance*2
(3,000)
(2,000)
(1,000)
0
1,000
2,000
3,000
4,000
5,000
6,000
Apr.12
May Jun. Jul. Aug.Sep. Oct. Nov.Dec. Jan.13
Feb. Mar. Apr. May Jun.
(JPY bn)
SME
Corporation
*1 Sales of publicly offered investment trusts (Stock investmetn). Source: The Investment Trusts Association, Japan*2 Period end balance. Source: Bank of Japan
0
1,000
2,000
3,000
4,000
5,000
6,000
Apr.12
May Jun. Jul. Aug.Sep. Oct. Nov.Dec. Jan.13
Feb.Mar. Apr. May Jun. Jul.
“Abenomics” and “Quantitative and Qualitative Monetary Easing”
32
Pull-out of deflation/recover economy/ achieve nominal GDP growth rate of above 3%
Achieve the price stability target of 2% in terms of the YoY rate of change in the CPI at the earliest possible time, with a time horizon of about 2 years.
“Quantitative and Qualitative Monetary Easing”By BOJ (Announced on Apr. 4, 2013)
Targets
Support demand
Boost competitiveness of Japanese corporations
+
+
Policies : “Three arrows”
2% inflation target Strengthen monetary easing by BOJ Strengthen co-ordination between the government
and BOJ to overcome deflation Establish a public (MOF and BOJ) - private
investment fund for purchasing foreign bonds
2% inflation target Strengthen monetary easing by BOJ Strengthen co-ordination between the government
and BOJ to overcome deflation Establish a public (MOF and BOJ) - private
investment fund for purchasing foreign bonds
Aggressive monetary policyAggressive monetary policy
Formulate JPY 10.3 tn yen of supplementary budget for FY12
Adopt flexible economic / fiscal policies in the next 2-3 years
Institute large scale public investment based on national land reconstruction plan
Achieve primary balance surplus in 2020
Formulate JPY 10.3 tn yen of supplementary budget for FY12
Adopt flexible economic / fiscal policies in the next 2-3 years
Institute large scale public investment based on national land reconstruction plan
Achieve primary balance surplus in 2020
Flexible fiscal policyFlexible fiscal policy
Aim to be “trading / industrial investment nation” in the next 5 years
Deregulate aggressively and reduce corporate tax rate
Extend overseas investments, economicpartnership agreements and international natural resources strategy to capture growth of Asia
Aim to be “trading / industrial investment nation” in the next 5 years
Deregulate aggressively and reduce corporate tax rate
Extend overseas investments, economicpartnership agreements and international natural resources strategy to capture growth of Asia
Growth strategyGrowth strategy
Operating target Monetary base
Monetary base JPY 270 tn at end-2014(doubled from 2012)
Increase in JGB purchases
All maturities including 40-year bonds
JPY 7+ tn per month
Average remaining maturity: approx.7 years(extended from approx.3
years at 2012)
Increase in ETF purchases
Increase amounts outstanding at an annual
pace of JPY 1 tn(doubled from 2013)
Increase in J-REIT purchases
Increase amounts outstanding at an annual
pace of JPY 30 bn(tripled from 2013)
Recovery of export by easing excessive yen appreciation
Increase of domestic demand led by rise in stock prices
Japanese national wealth
33
Japan
Germany
Canada
U.K.
France
ItalyU.S.
Spain(100)
(80)
(60)
(40)
(20)
0
20
40
60
80(% of GDP)Closing Assets 8,451 Closing liabilities plus
net worth8,451
Households 2,556 Households 360
Financial assets 1,512 Non-financialcorporations 1,157
Non-financial assets 1,044 Stocks 349
Land 694 Financial corporations 2,825
Non-financial corporations 1,836 Stocks 85
Financial assets 816 General government 1,096
Non-financial assets 1,020 Closing liabilities 5,455
Land 282 Net worth 2,996
Financial corporations 2,885 Households 2,195
General government 1,087 Non-financialcorporations
678
Financial assets 496
Financial assets 5,721 Financial corporations 61
Non-financial assets 2,730 General government (19)
Net external assets :JPY 296 tn
(Dec. 12)
To Nominal GDP: 231.5%
Balance Sheet of Japan (as of Dec. 2011, JPY tn)*1Balance Sheet of Japan (as of Dec. 2011, JPY tn)*1 Net international investment position*2Net international investment position*2
*1 Source:Cabinet office (Jan. 2013)*2 Source:IMF.Stat
2007 2008 2009 2010 2011 2012
Performance by business unit*1
*1 SMBC non-consolidated. Managerial accounting basis*2 After adjustment of internal rates, etc.
(JPY bn) FY3/12 FY3/13 YOY change*2
Consumer Banking Unit
Gross banking profit 383.7 374.9 +4.4Expenses 289.5 284.4 (5.4)
Banking profit (before provisions) 94.2 90.5 +9.8
Middle Market Banking Unit
Gross banking profit 422.9 412.2 (5.0)Expenses 222.8 216.7 (2.3)
Banking profit (before provisions) 200.1 195.5 (2.7)
Corporate Banking Unit
Gross banking profit 212.6 208.0 +2.6Expenses 38.2 39.6 +0.6
Banking profit (before provisions) 174.4 168.4 +2.0
International Banking Unit
Gross banking profit 197.4 240.5 +33.0Expenses 64.9 72.9 +8.4
Banking profit (before provisions) 132.5 167.6 +24.6
Marketing unitsGross banking profit 1,216.6 1,235.6 +35.0Expenses 615.4 613.6 +1.3
Banking profit (before provisions) 601.2 622.0 +33.7
Treasury UnitGross banking profit 319.3 295.3 (24.0)Expenses 19.2 21.0 +1.5
Banking profit (before provisions) 300.1 274.3 (25.5)
HeadquartersGross banking profit (3.4) 9.2 (3.4)Expenses 84.9 93.1 +5.4
Banking profit (before provisions) (88.3) (83.9) (8.8)
TotalGross banking profit 1,532.5 1,540.1 +7.6Expenses 719.5 727.7 +8.2
Banking profit (before provisions) 813.0 812.4 (0.6)
34
Overseas loan balance classified by borrower type(Geographic classification based on booking office)*
0
25
50
75
100
125
150
Mar. 10 Mar. 11 Mar. 12 Mar. 13
Non-Japanese corporations and others (product type lending)Japanese corporations
0
25
50
75
100
Total Asia Americas EMEA
Non-Japanese corporations and othersJapanese corporations
0
25
50
75
100
Hong Kong China Singapore Sydney Bangkok Seoul
Non-Japanese corporations and othersJapanese corporations
(%)
Total By region (Mar. 2013)
Major marketing channels in Asia (Mar. 2013)
(USD bn) (%)
* Managerial accounting basis. Sum of SMBC, SMBC Europe and SMBC (China)35
Overseas loan balance classified by industry and domicile (Geographic classification based on domicile of borrowers)*
By industryBy industry By domicileBy domicile
0%
25%
50%
75%
100%
Mar.09 Mar.10 Mar.11 Mar.12 Mar.13
Others
IT
Electronics
Automobile andmachinery
Retail, wholesaleand commodities
Construction andreal estate
Various services
Transportation
Finance andinsurance
Material andenergy
0
5
10
15
Mar.09 Mar.10 Mar.11 Mar.12 Mar.13
Pacific, etc
Africa
Middle East
NorthenEurope
EasternEurope
WesternEurope
Central andSouth America
North America
Asia
* Managerial accounting basis. Sum of SMBC, SMBC Europe and SMBC (China) 36
(JPY tn)
Exposure to GIIPS countriesExposure to GIIPS countries - approx. USD 6.3 bn*1 as of March 2013
*1 Aircraft leasing by the newly consolidated SMBC Aviation Capital is approx. USD 0.49 bn in total; USD 0.33 bn in Ireland, USD 0.11 bn in Spain, USD 0.04 bn in Greece and USD 0.01 bn in Italy*2 Secondary holdings of government bonds in SMBC Nikko, with USD 0.70 mn in Italy and USD 0.02mn in Greece
(SMFG consolidated)
approx. USD 3.2 bn*1
Italy
To large corporationsand project finance
approx. USD 0.04 bnPortugal
approx. USD 0.07 bn*1
Greece
Aircraft leasing
approx. USD 0.6 bn*1
Ireland
Aircraft leasing
approx. USD 2.4 bn*1
Spain
To large corporationsand project finance
Gov’t bonds issued byGIIPS countries*2 approx. USD 0.7 mn
37
Obligor grading system
Obligor grade Definition Borrower category Domestic
(C&I*), etc. Overseas (C&I*), etc.
J1 G1 Very high certainty of debt repayment
Normal borrowers
J2 G2 High certainty of debt repayment
J3 G3 Satisfactory certainty of debt repayment
J4 G4 Debt repayment is likely but this could change in cases of significant changes in economic trends or business environment
J5 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 significant changes in economic trends or business environment
J6 G6 Currently no problem with debt repayment, but there are unstable business and financial factors that could lead to debt repayment problems
J7 G7 Close monitoring is required due to problems in meeting loan terms and conditions, sluggish/unstable business, or financial problems
Borrowers requiring caution
J7R G7R (Of which substandard borrowers) Substandard borrowers
J8 G8 Currently not bankrupt, but experiencing business difficulties, making insufficient progress in restructuring, and highly likely to go bankrupt
Potentially bankrupt borrowers
J9 G9 Though not yet legally or formally bankrupt, has serious business difficulties and rehabilitation is unlikely; thus, effectively bankrupt
Effectively bankrupt borrowers
J10 G10 Legally or formally bankrupt Bankrupt borrowers
* Commercial/Industrial38
Support for growing markets
Growth Industry Cluster Dept.
Support growth of emerging countries including Asia through leading a consortium of Japanese corporations with technological strength and municipalities.
Approaches for energy related businessExample
Approaches for emerging countriesExample
39
Renewable energy Solar energy, wind energy, etc.
Water Water supply and sewerage, recycled water, desalination, etc.
Environment Eco-city development, energy-saving facilities, etc.
Natural resources Coal, natural gas, etc.
Healthcare Medical, nursing, etc.
Agriculture Global expansion, etc.
India: Delhi-Mumbai Industrial Corridor Vietnam:Water, urban development, power Malaysia: Eco-city project Thailand: Upgrade industrial park Mongolia: Refurbish and construct electricity transmission
and distribution systems China: Healthcare, eco-city project
Exploration for mines / FS /development
Production /operation
Transportationinfrastructure
Port / terminalinfrastructure
End use(e.g. powergeneration)
M&A Project finance Business matching
Trade finance
Project finance ECA finance Ship finance
Project finance Corporate finance
Project finance Corporate finance
Dom
estic
(Jap
an)
Initial investment /
off-takingneeds
Relatedinfrastructuredevelopment
Powergeneration
Ove
rsea
s
• Relationship management• Financing
• Consulting
• M&A advisory• Equity / bond underwriting• Finance lease• Operating lease
Tailor-made solutions for corporate clients
40
主なサービス/プロダクツ
Business and asset succession Testamentary trust Workplace banking, etc.
M&A, alliance Financing Capital strategy, etc.
M&A, alliance for globally operating corporations Foreign currency funding, settlement (incl. CMS) Overseas expansion advisory, etc.
Bank - Securitiescollaboration
Domestic - Overseascollaboration
103 thousand corporate loan clients
Corporate Advisory Division
Offer industrial knowledge and know-how on corporate restructuring, etc.
Global Advisory Dept.Offer knowledge and information on
local regulations, business cultures and local companies, etc.
Private Advisory Dept.Offer experience and know-how on
business succession and asset management, etc.
Investment Banking Unit
Consumer Banking Unit
International Banking Unit
Investment Banking Unit
Broker-dealer / investment bankingBroker-dealer / investment banking International businessInternational business
Middle market and consumer banking combined operation Middle market and consumer banking combined operation
Middle market - Consumercollaboration
Largecorporations
Medium-sizedcorporations
SMEs
Integration of bank and securities businesses
Enhanced
Enhanced
Financial consulting for retail customers
41
We aim to continue maximizing synergies between SMBC, a mega-bank and SMBC Nikko, a top-notch securities company in Japan
Solid business infrastructureSolid business infrastructure
Coming era of inheritance
Advanced IT and network-society
Acceleration on savings to investment
JV with Barclays
Securities intermediarybusinesses
“Bank and Trade”
Mega-trends
AUM at SMBC: approx. JPY 70 tn No. of consultants: approx. 5,000 No. of marketing channels: approx. 600
Remote banking
Housing loans, card loans, insurance products
Investment management, testamentary trust,
apartment loans
Customized services
Since Oct. 2012
Since Jun. 2010
Since Apr. 2010
Going forward
Integration of bank and securities
businesses
Inheritance and succession business
Present
Japanese Individual Saving Accounts (ISA)
Asset and business succession
Asset transfer between generations
Asset building segmentMass segment
Private banking/Upper affluent segment
Asset managementsegment
(100)
(50)
0
50
FY3/2012 FY3/2013
(JPY bn)
SMBC Consumer Finance
500
600
700
800
Mar.11 Mar.12Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.Jan.13Feb. Mar.
(JPY bn)
Consumer loans outstanding*1Consumer loans outstanding*1
0
200
400
600
800
Mar. 12 Mar. 13
(JPY bn)
of which for regional financial institutions, etc.
Loan guarantee balance*1Loan guarantee balance*1 Consolidated net incomeConsolidated net income
*1 SMBC Consumer Finance non-consolidated basis*2 Made provisions in 2Q FY3/12 to prepare for interest refund claims
Tianjin(Started operations in Mar.13)
Shenzhen
Thailand
TaiwanHong Kong
0
5
10
15
20
Jun. Sep. Dec. Mar.
FY2010FY2011FY2012
(Thousand)
0
10
20
30
40
Jun. Sep. Dec. Mar.
FY2010FY2011FY2012
(Thousand)
Overseas operationsOverseas operationsTransaction-record disclosure requests*1Transaction-record
disclosure requests*1
Shenyang
Interest refund claims*1Interest refund claims*1
*2
(150)
(200)
42
0
0%
20%
40%
60%
80%
0
200
400
600
800
3/08 3/09 3/10 3/11 3/12 3/13
52%54%
57%
63% 63%67% 68%
72%
85% 87%91%
0%
20%
40%
60%
80%
100%
Expenses - controlled both in SMBC and on a group-wide basis
(JPY bn)
Expenses*1 Overhead ratio on a group consolidated basis*2
45.6%
719.5699.2
*1 Excluding non-recurring losses*2 Based on each company’s disclosure. G&A expenses (for Japanese banks, excluding non-recurring losses of subsidiary banks) divided by top-line profit (net of insurance claims).
FY3/13 results for SMFG, MUFG and Mizuho FG, and FY12/12 for others
FY3/13 YOY Change727.7 +8.2
Personnel expensesNon-personnel expensesOverhead ratio
46.9% 47.3%
727.7
43
(SMBC non-consolidated)
FY
Equity holdingsBalance of equity holdings*1
1.62
24%
0%
20%
40%
60%
80%
100%
120%
140%
160%
0
1
2
3
4
5
6
Apr.01
Mar.02
Mar.03
Mar.04
Mar.05
Mar.06
Mar.07
Mar.08
Mar.09
Mar.10
Mar.11
Mar.12
Mar.13
Equity holdings (acquisition cost on SMBC non-consolidated, left axis)
Percentage of equity holdings to SMFG consolidated Tier I (right axis)
(JPY tn)
Reduced un-hedged equity holdings to
below 25% of SMFGTier I capital
*2
*1 Balance of domestic stocks classified as other securities at fair value*2 Until Mar. 2002, percentage to SMBC consolidated Tier I. On Mar. 2013, percentage to SMFG consolidated Tier I based on Basel III*3 Shares of SMFG related to share exchange for acquiring former Promise are excluded. Amount of un-hedged equity
*3
44
Summary of the Japanese regulatory capital framework
Transition period Fully implementedBasel II
Additional loss absorbency requirement for G-SIFIs
In March 2012, the Japanese FSA amended requirements regarding bank capital*1
Effective from the end of March 2013 to conform with the fiscal year end of Japanese banks Basically consistent with Basel III text
Phase-in of deductions*3 - 20% 40% 60% 80% 100% 100% 100% 100% 100%
Grandfathering ofcapital instruments 90% 80% 70% 60% 50% 40% 30% 20% 10% -
8.0% 8.0% 8.0% 8.0%8.625%
9.25%9.875%
10.5% 10.5% 10.5% 10.5%
*1 Drafts of other rules that are to be implemented after 2014, such as rules on capital buffers and liquidity standards, will be published at a later stage*2 With an empty bucket of 3.5% to discourage further systemicness*3 Including amounts exceeding the limit for deferred tax assets, mortgage servicing rights and investment in capital instruments of unconsolidated financial institutions
3.5% 4.0% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5%
0.625% 1.25% 1.875% 2.5% 2.5% 2.5% 2.5%
1.0%1.5% 1.5%
1.5%1.5%
1.5%1.5% 1.5% 1.5% 1.5%
3.5% 2.5% 2.0%2.0%
2.0%2.0%
2.0% 2.0% 2.0% 2.0%
0%
2%
4%
6%
8%
10%
12%
14%
Mar. 12 Mar. 13 Mar. 14 Mar. 15 Mar. 16 Mar. 17 Mar. 18 Mar. 19 Mar. 20 Mar. 21 Mar. 22
Tier IIAdditional Tier ICapital conservation bufferMinimum common equity Tier I ratio
Bucket 4 (2.5%)*2
Bucket 1 (1.0%)
45
46
Act on Special Measures for Strengthening Financial Functions
Pre-emptive capital injection
Measure under Item 2Financial assistance
exceeding payout cost
*1 Scheduled to come into effect by Mar. 2014 *2 Failed: ceased or likely to cease repaying its deposit. *3 Negative net worth, etc.: to be or likely to be with negative net worth or to be or likely to be unable to pay its debts as they become due *4 According to the report on orderly resolution regime for financial institutions in Japan published by the Financial System Council, it is considered appropriate that
contractual bail-in options attached to subordinated debts are exercised when a financial institution in question is at insolvency and above measures are implemented.
Failed orwith negative net worth
Point of non-
viability
Yes
Q&A published by FSA on Dec. 12,
2012
No
Measures Status oftargeted institution
Arti
cle
102
of
Dep
osit
Insu
ranc
e A
ct (D
IA)
Measure under Item 1Pre-emptive capital injection
Measure under Item 3Nationalization
Specific measure under Item 2
Financial assistance
Failed andwith negative net worth
Non Item 2 or 3 measure
financial institutions(undercapitalized)
No
With negative net worth, etc.*3
To be clarified by
the cabinet order*4
Banksonly
Appliedentities
Financial institutionsincluding
banks and BHCs
Banks and
BHCs
Systemicrisk
NotRequired
Required(Credit
system in Japan or in
a certain region)
-
No. of cases
1
1
27Not failed*2 or with negative net worth
Exis
ting
mea
sure
sM
easu
res
to
be n
ewly
Im
plem
ente
d*1
Arti
cle
126-
2 of
DIA
Specific measure under Item 1Liquidity support
Pre-emptive capital injection
Notwith negative net worth
Public support and point of non-viability in Japan
Required(Financial
system such as financial market in Japan)
Trend of bottom line profitsSMBC’s non-consolidated net income
421478
618
(500)
(250)
0
250
500
750
FY3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13
(JPY bn)
47
Trend of major income componentsGross banking profit
(JPY bn)
(JPY bn)
Expenses
(JPY bn)
(JPY bn)
833 813 812
0
500
1,000
1,500
2,000
02 03 04 05 06 07 08 09 10 11 12 13
1,532 1,533 1,540
0
500
1,000
1,500
2,000
02 03 04 05 06 07 08 09 10 11 12 13
(JPY bn) (JPY bn)
94 59 20 0
500
1,000
1,500
2,000
02 03 04 05 06 07 08 09 10 11 12 13
699 719 728
0
500
1,000
1,500
2,000
02 03 04 05 06 07 08 09 10 11 12 13FY3/FY3/
FY3/
(SMBC non-consolidated)
Banking profit (before provisions) Total credit cost
FY3/
48
Top Related