Investor Meeting FY3/2024
May 17, 2024
Copyright © 2024 Sumitomo Mitsui Financial Group. All Rights Reserved.
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 managements 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 conditions and our operating results, and investors' decisions.
Exchange rates (TTM)
Mar. 23 | Mar. 24 | |
USD | 133.54 | 151.33 |
EUR | 145.75 | 163.24 |
Definitions
SMFG | Sumitomo Mitsui Financial Group, Inc. |
SMBC | Sumitomo Mitsui Banking Corporation |
SMBC Trust | SMBC Trust Bank |
SMFL | Sumitomo Mitsui Finance and Leasing |
SMBC Nikko | SMBC Nikko Securities |
SMCC | Sumitomo Mitsui Card Company |
SMBCCF | SMBC Consumer Finance |
SMDAM | Sumitomo Mitsui DS Asset Management |
SMBCAC | SMBC Aviation Capital |
SMICC | SMFG India Credit Company |
(Former Fullerton India) | |
Major local subsidiaries | SMBC Bank International, SMBC Bank EU, |
SMBC (China) | |
Expenses | Excl. non-recurring losses |
(non-consolidated) | |
Net business profit | Before provision for general reserve for possible |
loan losses | |
Retail Business Unit (RT) | Domestic retail business |
Wholesale Business Unit (WS) | Domestic wholesale business |
Global Business Unit (GB) | International business |
Global Markets Business Unit | Market / Treasury related businesses |
(GM) | |
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Agenda
Ⅰ
Ⅱ
Ⅲ
Our Journey | /////////////////////////////////////////// | 4 |
Enhance Corporate Value | //////////////////////////// | 11 |
⚫Improve ROE | ///////////////////////////////////////////////////////////// 13 |
- Control cost of capital
and increase expected growth rate | /////////////////////////// | 24 |
Capital Policy | /////////////////////////////////////////////////////////// | 33 |
ⅣFinancial Results of FY3/2024///////////////////////////////////////////////////// 40
Appendix | /////////////////////////////////////////////////////////// | 55 |
Copyright © 2024 Sumitomo Mitsui Financial Group. | 3 |
All Rights Reserved. |
Our Journey
Our Vision
Vision
A trusted global solution provider
committed to the growth of our customers and advancement of society
Integrity
Passion
Solidarity
Engage with stakeholders fairly and sincerely
Challenge for future growth with courage
Unite the power of individuals as One Team
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Business environment
Pursue opportunities for further growth as the environment has become more positive than our initial assumptions, while remaining aware of the potential for significant market and economic volatility.
Economy
and
Market
Corporate
governance
Domestic economy is improving /
Overseas economy remains stornger than expected
FY3/25 | FY3/26 | Strategies | |||||
NIRP continues | |||||||
Policy | Japan | remains unchanged | |||||
0.1% | 0.1% | ||||||
Rate | |||||||
3.5% | 2.5% | ||||||
(Maximum) | U.S. | ||||||
Challenge for | |||||||
5.0% | 4.5% | ||||||
FX rate | USD | JPY 120 | JPY 120 | Upper: Original | higher goals | ||
Bottom: Revised | |||||||
JPY 140 | JPY 140 | ||||||
Accelerate reduction of | Benefit from | ||||||
equity holdings | gains on stocks | ⚫Sale of U.S. freight car leasing | |||||
due to the high stock price | business | ||||||
FY3/24 | ⚫ | ||||||
Impairment of goodwill on FE Credit |
⚫Forward looking provision
Top risks
Volatile financial and | Change of globalism |
economic environment | |
Decline in the vitality of | Increasing external threats |
Japanese society | |
Address risks
proactively
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Simulation of rise on JPY interest rates
B/S JPY 145 tn (Mar. 24) | Impact on net interest income*1 | ||
(JPY tn) | (JPY bn) | Lift of NIRP | per +10bps |
JPY + 40 bn | JPY + 40 bn | ||||||
200 | |||||||
Floating rate | Saving | ||||||
30 | 150 | ||||||
Loans | 85 | ||||||
Prime rate | |||||||
100 | |||||||
10 | o/w | ||||||
Fixed rate | Interest- | Deposits | 50 | ||||
20 | bearing | ||||||
JGB etc. | 80 | ||||||
0 | |||||||
10 | |||||||
Time | (50) | ||||||
BoJ's | 20 | ||||||
Current | (100) | ||||||
current | |||||||
account | 15 | ||||||
60 | (150) | Mar. 24 | Assumptions | ||||
Other deposits | |||||||
Capital funding | Floating rate loans | +10bps | |||||
Market funding | Prime rate loans | - | |||||
Yen swap etc. | |||||||
Fixed rate loans | - | +10bps increase | |||||
Investment | Funding | BoJ's current account | +10bps | in both short-term | |||
JGB | +10bps | and long-term rate | |||||
Saving deposits | +2bps | ||||||
Time deposits | +3bps |
Initiatives for
rising interest rates
Loan
- Secure appropriate spread and improve profitability
JGB etc.
- Grasp market trends and flexibly control balances
Deposit
- Acquire sticky liquid deposits with Olive
*1 Based on assumption of no change in balance sheet | Copyright © 2024 Sumitomo Mitsui Financial Group. | 7 |
All Rights Reserved. |
Results of FY3/24
Both consolidated net business profit and bottom-line profit saw a strong increase due to a favorable environment and the growth of every Business Unit, alongside proactive preparation for potential risks.
Breakdown of consolidated net business profit
(JPY bn)
GM | 1,560.2 | |
GB | +49.8 | |
+121.2 | ||
WS | ||
+74.8 | ||
RT | ||
+37.7 | ||
Full-year | ||
target | ||
1,400 | ||
1,276.4 | ||
+283.8 | ||
o/w environment factors +140 | ||
(FX +80, FF rate +60) | ||
FY3/23 | FY3/24 |
Breakdown of bottom-line profit
(JPY bn) | Growth strategy | Gains of stocks*1 | |
+84 | +66 | 962.9 | |
One-off | |||
items | Full-year | ||
(78) | |||
target | |||
Environment | |||
805.8 | • FX +45 | 920 | |
• FF rate +40 | |||
FY3/23 | FY3/24 |
(Major items)
- Impairment of FE Credit in Vietnam: (46)
- Additional impairment of Aircraft leasing*2: (11) Prepare for
⚫ | Forward-looking provisions: (25) | potential risks |
- Loss from sales of U.S. freight car leasing business: (82)
- Receipt of insurance claims on aircraft leasing*3: +48
- Absence ofone-off items in FY3/23*4: +38
*1 | Incl. an impairment of JPY 39 bn for overseas investment | ||
*2 | Impaired the entire remainig book value *3 Received for 19 of the 34 aircraft previously leased to Russian airlines | Copyright © 2024 Sumitomo Mitsui Financial Group. | 8 |
*4 | Gains on change in equity (Bank of East Asia), impairment of aircraft leasing, impairment of branches, etc. | All Rights Reserved. |
Target of FY3/25
Aim to achieve a bottom-line profit exceeding JPY 1 tn for the first time
by further strengthening core earnings on top of capturing a favorable business environment.
Result | Target | |||||||
(JPY bn) | FY3/24 | FY3/25 | YoY | |||||
Consolidated net | 1,560.2 | 1,620 | +59.8) | |||||
business profit | ||||||||
Credit cost | 274.0 | 260 | (14.0) | |||||
Ordinary profit | 1,466.1 | 1,560 | +93.9) | |||||
Profit attributable to | 962.9 | 1,060 | +97.1) | |||||
owner of parent | ||||||||
[Assumption] | (Mar. 24) | (FY3/25) | ||||||
Policy rate | Japan | 0.1% | 0.1% | |||||
(Max) | U.S. | 5.5% | 5.0% | |||||
FX | USD | JPY 151.33 | JPY 140 | |||||
Breakdown of bottom-line profit
(JPY bn) | 1,060 |
Growth
strategy
+70
Others
962.9
Environment | ||
• | FX | (30) |
• | Policy rate (Japan) | +30) |
• | Policy rate (U.S.) | (7) |
FY3/24 | FY3/25 | |
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Financial goal in five years
ROCET1 10.5%
12%
11%
10%
9.4%
ROE*18.3%excl. unrealized gains
7.5%
9%
8%
9%
Final year of the next Medium-Term Management Plan
ROE of 9%
Bottom-line profits
6.5% | 7.0% |
ROE | |
1,060 bn
962.9 bn
JPY 805.8 bn
JPY ↓
Interest rate ↑
Stock price ↑
Mid-1,100bn
JPY ↑
Interest rate ↓
Stock price ↓
far exceeding JPY 1tn
[Assumption] | FY3/26 | FY3/29 | |
Policy | Japan | 0.1% | 0.1-0.5% |
rate | |||
U.S. | 4.5% | 2.0-3.0% | |
(max) | |||
FX | USD | 140 | 120-140 |
Bottom-line profit
FY3/23FY3/24FY3/25
FY3/26 FY3/29
*1 | Profits attributable to owners of parent | × 100 |
{(Total shareholders equity at the beginning of period + Foreign currency adjustments at the beginning of the period) + (Total shareholders equity at the end of the period + Foreign currency adjustments at the end of the period)} /2
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Sumitomo Mitsui Financial Group Inc. published this content on 17 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 May 2024 05:11:06 UTC.