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ANANNUUALALRERPEOPORTRT 2200009 9 YEAYERAERNEDNEDEMDAMRACRHC3H1,3210, 029009 Aiming to become a globally competitive financial services group with the highest trust We are a group of highly qualified professionals that can provide truly valuable financial services to our customers. Each of us thinks and acts with pride as experts in each business area in order to LEAD the competition in creating and delivering customer VALUE in a continually changing business environment. This material contains certain forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may materially differ from those contained in the forward-looking statements as a result of various factors. Important factors that might cause such a material difference include, but are not limited to, those economic conditions referred to in this material as assumptions. In addition, the following items are among the factors that could cause actual results to differ materially from the forward-looking statements in this material: business conditions in the banking industry, the regulatory environment, new legislation, competition with other financial services companies, changing technology and evolving banking industry standards and similar matters. CONTENTS •Message from the Management............................... 2 •Business Overview ................................................... 10 •Group Companies .................................................... 18 •Financial Highlights .................................................. 20 •Financial Review....................................................... 24 •Risk Management..................................................... 34 •Corporate Social Responsibility (CSR)..................... 50 •Initiatives for Enhancing Customer Satisfaction (CS) and Quality ............................................................ 51 •Corporate Governance............................................. 52 •Internal Audit System ............................................... 53 •Compliance .............................................................. 54 •Environmental Preservation Initiatives ...................... 56 •Social Contribution Activities.................................... 60 •Human Resources.................................................... 64 •Financial Section and Corporate Data ..................... 67 Financial Section ..................................................................... 68 Corporate Data........................................................................ 195 These activities are supported by our three core strengths: Our Mission • To provide optimum added value to our customers and together with them achieve growth To create sustainable shareholder value through Solu tion & • Execution business growth • To provide a challenging and professionally reward- Spirit of Innovation We LEAD the business by using all ing work environment for our dedicated employees the knowledge and experiences of We LEAD the market by our group to solve the issues of our providing innovative, customers, whether individuals Company Name: Sumitomo Mitsui Financial Group, Inc. globally competitive services or corporates, identified through a Business Description: that meet customer needs. deep understanding of their needs Management of banking subsidiaries (under the stipulations of and financial situations. Japan’s Banking Law) and of non-bank subsidiaries, as well as per- formance of ancillary functions Establishment: December 2, 2002 Head Office: 1-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo, Japan Speed Chairman of the Board: Masayuki Oku (Concurrent President at Sumitomo Mitsui Banking Corporation) We LEAD the pace by President: Teisuke Kitayama providing our customers (Concurrent Chairman of the Board of Directors at Sumitomo Mitsui with desirable services in a Banking Corporation) timely manner with speed Capital: ¥1,420.9 billion (as of March 31, 2009) and determination. Stock Exchange Listings: Tokyo Stock Exchange (First Section) Osaka Securities Exchange (First Section) Nagoya Stock Exchange (First Section) We create new VALUE by forming teams of Sumitomo Mitsui Financial Group, Inc. Public Relations Department specialists in various fields and providing optimal services to 1-2, Yurakucho 1-chome, Chiyoda-ku, our customers through two-way communication. Tokyo 100-0006, Japan TEL: +81-3-5512-3411 As a result, we will be selected as a truly trusted partner. Sumitomo Mitsui Banking Corporation Public Relations Department 1-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo 100-0006, Japan TEL: +81-3-3501-1111 September 2009 SMFG 2009 1 Message from the Management We would like to thank you for your continued support and patronage. In this annual report, we review the initiatives implemented in fiscal 2008, ended March 31, 2009, and explain our management policies for fiscal 2009. Principal Initiatives in Fiscal 2008 to the issuance of preferred securities and a decrease in risk-adjusted assets resulting from the implementation of the Having designated fiscal 2008 as the year for “taking a Advanced Internal Ratings Based (AIRB) approach under step forward to accomplish medium- and long-term growth, the Basel II framework, the new BIS capital standards. while coping with uncertainty in business environment,” we We also steadily implemented initiatives for future continued to focus on two initiatives: “strengthening tar- growth, including establishing an intermediate holding geted growth business areas” and “fortifying platform for company for our credit card business, entering into capital supporting sustainable growth.” and business alliances with overseas commercial banks, In the period under review, uncertainty in the business and continuously upgrading our risk management systems. environment intensified as the global economic downturn, caused by the financial crisis sparked by the September Fiscal 2009 Management Policies 2008 failure of Lehman Brothers, deepened. Against this backdrop, SMBC increased its nonconsolidated banking The business environment is expected to remain uncertain profit by ¥3.7 billion, chiefly through an increase in net while various initiatives and efforts to structure a new regu- interest income in international operations and an improve- latory framework are being implemented globally to stabi- ment in losses on bonds. However, to our great regret, lize the financial system. Under these circumstances, we SMFG reported a consolidated net loss of ¥373.5 billion in have designated fiscal 2009 as a year for “establishing the fiscal 2008 mainly because impairment losses on stocks next foundation for future growth, while continuing to and the increase in credit cost were higher than we had strengthen businesses consistent with our philosophy of anticipated. Other factors include measures — such as an ‘following the basics.’” In the core operations of Group additional loan loss provision in preparation for further eco- companies, we will maintain stringent control of expenses, nomic deterioration and a more conservative recognition of credit cost, and risk-adjusted assets, while “realizing a deferred tax assets — to quickly adapt to these changes in solid financial base as a global player” and “strengthening our business environment and promote a steady recovery targeted growth business areas” for medium- to long-term of our earnings from fiscal 2009. Meanwhile, SMFG’s con- growth. solidated Tier I ratio at the end of March 2009 was above 8% — 8.22%, up 1.28% from the previous year — due primarily (1) Control expenses, credit cost and risk-adjusted assets Our aim is to consistently sustain an overhead ratio of less than 50% for SMBC on a nonconsolidated basis. To this end, we are prioritizing expenditures based on scale, tim- ing, effect and other factors, in order to better allocate our limited resources to growth business areas and increase Teisuke Kitayama business efficiency. President To control credit cost, we are further enhancing our Sumitomo Mitsui ability to identify and quantify risk in order to spot and rec- Financial Group, Inc. tify potential problems and conduct business with a thor- ough focus on the bottom-line profit. We have been making steady progress in complying with Basel II capital stan- dards. We started using the Advanced Measurement Approach (AMA) to measure operational risk from the end of March 2008. We continuously strive to establish a more sophisticated risk management framework as shown in the implementation of the AIRB approach to measure credit 2 SMFG 2009 risk from the end of March 2009. Furthermore, SMBC has growth, thereby increasing shareholder value over the been reinforcing its overseas credit risk management medium and long term. framework, including upgrading the status of the Credit We will also continue to examine the listing of SMFG Management Dept. within the International Banking Unit in stock on the New York Stock Exchange to strengthen our cor- April 2009. It also established in April 2009 the Risk porate base for globalizing operations and other purposes. Management Unit to more holistically manage risks (mar- ket, liquidity, credit and operational) borne by financial (3) Strengthening targeted growth institutions. business areas In controlling risk-adjusted assets, we are dedicated to • Solution providing for corporations, maintaining SMFG’s consolidated Tier I ratio at around 8%, Investment banking, trust business one of our medium- and long-term

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