SUMITOMO MITSUI FINANCIAL GROUP, INC.

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Sumitomo Mitsui Financial : General Manager, Financial Accounting Dept - Form 6-K

06/30/2022 | 06:23am EDT
General Manager, Financial Accounting Dept.

Date: June 30, 2022

Sumitomo Mitsui Financial Group, Inc.

Notice Regarding the Filing of Annual Report on Form 20-F

with the U.S. Securities and Exchange Commission

TOKYO, June 30, 2022 --- Sumitomo Mitsui Financial Group, Inc. (the "Company," President and Group Chief Executive Officer: Jun Ohta) hereby announces that, on June 29, 2022 (Eastern Daylight Time), the Company filed an annual report on Form 20-F with the U.S. Securities and Exchange Commission ("SEC").

A copy of the annual report on Form 20-F can be viewed and obtained at the Company's website at https://www.smfg.co.jp/english/investor/financial/disclosure.html or on EDGAR, the SEC's Electronic Data Gathering, Analysis, and Retrieval system. Holders of the Company's American Depositary Receipts may request a hard copy of the Company's complete audited financial statements free of charge through the Company's website.

Attachment:

(Reference 1) Consolidated Financial Statements (IFRS)

(Reference 2) Reconciliation with Japanese GAAP

This document contains a summary of the Company's consolidated financial information under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board that was disclosed in its annual report on Form 20-F filed with the U.S. Securities and Exchange Commission on June 29, 2022. This document does not contain all of the information in the Form 20-F that may be important to you. You should read the entire Form 20-F carefully to obtain a comprehensive understanding of the Company's business and financial data under IFRS and related issues.

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 the Company and its management with respect to the Company's 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 the Company's securities portfolio; incurrence of significant credit-related costs; the Company's ability to successfully implement its business strategy through its subsidiaries, affiliates and alliance partners; and exposure to new risks as the Company expands the scope of its 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. The Company undertakes no obligation to update or revise any forward-looking statements. Please refer to the Company's most recent disclosure documents such as its annual report on Form 20-F and other documents submitted to the U.S. Securities and Exchange Commission, as well as its earnings press releases, for a more detailed description of the risks and uncertainties that may affect its financial conditions, its operating results, and investors' decisions.

- 1 -

(Reference 1) Consolidated Financial Statements (IFRS)

Consolidated Statements of Financial Position

(In millions)
At March 31,
2021
At March 31,
2022

Assets:

Cash and deposits with banks

¥ 73,090,816 ¥ 75,697,521

Call loans and bills bought

2,553,468 1,965,135

Reverse repurchase agreements and cash collateral on securities borrowed

11,738,072 11,303,930

Trading assets

3,140,736 3,736,296

Derivative financial instruments

5,521,617 6,443,748

Financial assets at fair value through profit or loss

1,744,848 1,695,585

Investment securities

31,051,461 32,749,405

Loans and advances

97,714,938 104,635,815

Investments in associates and joint ventures

886,685 1,009,738

Property, plant and equipment

1,754,661 1,762,996

Intangible assets

819,720 992,849

Other assets

4,945,631 6,063,907

Current tax assets

33,376 44,941

Deferred tax assets

28,958 58,981

Total assets

¥ 235,024,987 ¥ 248,160,847

Liabilities:

Deposits

¥ 155,493,654 ¥ 162,593,492

Call money and bills sold

1,368,515 1,130,000

Repurchase agreements and cash collateral on securities lent

18,509,906 20,113,162

Trading liabilities

2,080,826 3,181,992

Derivative financial instruments

4,949,433 6,966,336

Financial liabilities designated at fair value through profit or loss

239,519 455,734

Borrowings

19,423,355 20,584,651

Debt securities in issue

11,228,600 11,428,437

Provisions

224,274 227,784

Other liabilities

8,777,502 8,386,774

Current tax liabilities

53,718 51,513

Deferred tax liabilities

399,535 259,280

Total liabilities

222,748,837 235,379,155

Equity:

Capital stock

2,341,274 2,341,878

Capital surplus

722,595 645,382

Retained earnings

6,078,208 6,434,605

Treasury stock

(13,699 ) (13,403)

Equity excluding other reserves

9,128,378 9,408,462

Other reserves

2,430,857 2,546,294

Equity attributable to shareholders of Sumitomo Mitsui Financial Group, Inc.

11,559,235 11,954,756

Non-controlling interests

68,379 93,325

Equity attributable to other equity instruments holders

648,536 733,611

Total equity

12,276,150 12,781,692

Total equity and liabilities

¥ 235,024,987 ¥ 248,160,847

- 2 -

Consolidated Income Statements

(In millions, except per share data)
For the fiscal year ended March 31,
2021 2022

Interest income

¥ 1,780,370 ¥ 1,747,654

Interest expense

397,245 303,716

Net interest income

1,383,125 1,443,938

Fee and commission income

1,174,382 1,248,225

Fee and commission expense

201,723 209,762

Net fee and commission income

972,659 1,038,463

Net trading income

237,746 280,339

Net income from financial assets and liabilities at fair value through profit or loss

280,012 200,249

Net investment income

153,820 65,744

Other income

138,223 108,727

Total operating income

3,165,585 3,137,460

Impairment charges on financial assets

282,486 279,978

Net operating income

2,883,099 2,857,482

General and administrative expenses

1,679,115 1,801,621

Other expenses

283,879 368,559

Operating expenses

1,962,994 2,170,180

Share of post-tax profit (loss) of associates and joint ventures

36,373 (10,838)

Profit before tax

956,478 676,464

Income tax expense

251,402 161,389

Net profit

¥ 705,076 ¥ 515,075

Profit attributable to:

Shareholders of Sumitomo Mitsui Financial Group, Inc.

¥ 687,483 ¥ 499,573

Non-controlling interests

4,471 4,771

Other equity instruments holders

13,122 10,731

Earnings per share:

Basic

¥ 501.73 ¥ 364.46

Diluted

501.49 364.31

- 3 -

Consolidated Statements of Comprehensive Income

(In millions)
For the fiscal year ended March 31,
2021 2022

Net profit

¥ 705,076 ¥ 515,075

Other comprehensive income:

Items that will not be reclassified to profit or loss:

Remeasurements of defined benefit plans:

Gains (losses) arising during the period, before tax

327,681 33,081

Equity instruments at fair value through other comprehensive income:

Gains (losses) arising during the period, before tax

1,183,628 102,183

Own credit on financial liabilities designated at fair value through profit or loss:

Gains (losses) arising during the period, before tax

(4,981 ) 5,729

Share of other comprehensive income (loss) of associates and joint ventures

6,375 944

Income tax relating to items that will not be reclassified

(465,333 ) (43,341)

Total items that will not be reclassified to profit or loss, net of tax

1,047,370 98,596

Items that may be reclassified subsequently to profit or loss:

Debt instruments at fair value through other comprehensive income:

Gains (losses) arising during the period, before tax

(186,656 ) (512,814)

Reclassification adjustments for (gains) losses included in net profit, before tax

(79,711 ) 113,334

Exchange differences on translating foreign operations:

Gains (losses) arising during the period, before tax

86,842 404,292

Reclassification adjustments for (gains) losses included in net profit, before tax

446 192

Share of other comprehensive income (loss) of associates and joint ventures

2,960 30,891

Income tax relating to items that may be reclassified

82,405 113,538

Total items that may be reclassified subsequently to profit or loss, net of tax

(93,714 ) 149,433

Other comprehensive income, net of tax

953,656 248,029

Total comprehensive income

¥ 1,658,732 ¥ 763,104

Total comprehensive income attributable to:

Shareholders of Sumitomo Mitsui Financial Group, Inc.

¥ 1,640,700 ¥ 746,012

Non-controlling interests

4,910 6,361

Other equity instruments holders

13,122 10,731

- 4 -

(Reference 2) Reconciliation with Japanese GAAP

(In billions)

At and for the fiscal year ended

March 31, 2022

Total equity Net profit

IFRS

¥ 12,781.7 ¥ 515.1

Differences arising from different accounting for:

1. Scope of consolidation

137.3 (3.0)

2. Derivative financial instruments

(179.8) (136.9)

3. Investment securities

(424.1) 189.2

4. Loans and advances

406.6 54.4

5. Investments in associates and joint ventures

177.3 61.5

6. Property, plant and equipment

15.5 (9.0)

7. Lease accounting

1.9 0.9

8. Defined benefit plans

69.8 67.0

9. Deferred tax assets

(36.1) 6.8

10. Foreign currency translation

- 40.7

11. Classification of equity and liability

(738.5) (10.9)

Others

(12.7) (0.8)

Tax effect of the above

(1.6) (59.9)

Japanese GAAP

¥ 12,197.3 ¥ 715.1

A brief explanation of adjustments with significant impacts arising from differences in equity and/or net profit between Japanese GAAP and IFRS is provided below. For a more detailed explanation, please refer to "Item 5. Operating and Financial Review and Prospects - Reconciliation with Japanese GAAP" in the annual report on Form 20-F filed on June 29, 2022 (Eastern Daylight Time).

Scope of Consolidation (Item 1)

Under IFRS, the Group consolidates an entity when it "controls" the entity. In general, the Group considers that it controls an entity when it has the existing rights that give it the current ability to direct the operating and financing policies by owning more than half of the voting power, or by legal or contractual arrangements.

All types of entities, irrespective of their purpose or legal form, are consolidated under IFRS when the substance of the relationship between the entities and the Group indicates that the entities are controlled by the Group. Therefore certain entities such as securitization vehicles which are not consolidated under Japanese GAAP are consolidated under IFRS.

- 5 -

Derivative financial instruments (Item 2)

(Hedge accounting)

The Group applies hedge accounting under Japanese GAAP. However, the qualifying criteria for certain hedge accounting under IFRS are more rigorous than those under Japanese GAAP. Therefore, except for fair value hedge accounting and hedge accounting for net investments in foreign operations the Group applies under IFRS, the effects of hedge accounting under Japanese GAAP have been reversed under IFRS.

Investment securities (Item 3)

(Fair value measurement of investment securities)

Under Japanese GAAP, stocks and financial instruments similar to stocks that are not traded in an active market, such as unlisted stocks, are measured at cost if they are classified as available-for-sale, whereas, under IFRS, those are measured at fair values determined by using valuation techniques.

(Changes in fair value of investment securities)

Under Japanese GAAP, the changes in fair value of available-for-sale financial assets are recognized in other comprehensive income and subsequently transferred to profit or loss on their disposal. Under IFRS, the Group made an irrevocable election for some equity instruments to present subsequent changes in fair value in other comprehensive income. The changes in fair value of those equity instruments presented in other comprehensive income are not subsequently transferred to profit or loss.

Some available-for-sale financial assets under Japanese GAAP, including investment funds, are classified as financial assets measured at fair value through profit or loss, and therefore the changes in their fair values are recognized in profit or loss under IFRS.

Loans and advances (Item 4)

(Impairment of loans and advances)

Under Japanese GAAP, the allowance for loan losses is calculated based on credit assessments at the end of the reporting period. A collective allowance is calculated using historical loss experience based on historical results according to the obligor grade, adding forward looking information as appropriate. The allowance for specifically identified significant loans is calculated by the discounted cash flow ("DCF") method, which is based on the present value of reasonably estimated cash flows discounted at the original contractual interest rate of the relevant loan. For the remaining loans, an individual allowance is calculated based on the estimated uncollectible amount considering historical loss experience and the recoveries from collateral, guarantees and any other collectible cash flows.

Under IFRS, measurement of expected credit losses ("ECL") depends on whether the credit risk on the financial asset has increased significantly since initial recognition. If there is not a significant increase in credit risk on that financial asset since initial recognition, an allowance is measured at an amount equal to 12-month expected credit losses. Otherwise, an allowance is measured at an amount equal to lifetime expected credit losses. The allowance for loan losses for individually significant impaired loans is calculated by the DCF method based on the present value of estimated future cash flows discounted at the financial asset's original effective interest rate, which differs from the calculation of the DCF method under Japanese GAAP. The scope of loans that are subject to the DCF method under IFRS is wider than that under Japanese GAAP. ECL are measured in a way that reflects not only past events, but also current conditions and forecasts of future economic conditions.

(Loan origination fees and costs)

Under Japanese GAAP, loan origination fees and costs are generally recognized in the consolidated income statement as incurred. Under IFRS, loan origination fees and costs that are incremental and directly attributable to the origination of a loan are deferred and thus, included in the calculation of the effective interest rate.

- 6 -

Deferred tax assets (Item 9)

Under IFRS, deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. For example, deferred tax assets for deductible temporary differences relating to impairment of financial instruments of which the timing of the reversal is difficult to estimate cannot be recognized under Japanese GAAP, whereas they can be recognized under IFRS to the extent that it is probable that future taxable profit will be available.

Classification of equity and liability (Item 11)

Under IFRS, a financial instrument or its component parts are classified as equity instruments or financial liabilities in accordance with the substance of the contractual arrangement and the definitions of financial liabilities and equity instruments. A financial instrument is classified as a financial liability if there is a contractual obligation to deliver cash or another financial asset other than a fixed number of equity shares in exchange for a fixed amount of cash or another financial asset. In the absence of such a contractual obligation, the financial instrument is classified as an equity instrument.

- 7 -

Disclaimer

Sumitomo Mitsui Financial Group Inc. published this content on 30 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 June 2022 10:22:07 UTC.


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