Sumitomo Mitsui Financial : Consolidated financial results for the fiscal year ended March 31, 2021

May 14, 2021

Sumitomo Mitsui Financial Group, Inc.

Consolidated financial results for the fiscal year ended March 31, 2021

Head office: 1-2, Marunouchi 1-chome,Chiyoda-ku, Tokyo, Japan

Stock exchange listings: Tokyo Stock Exchange, Nagoya Stock Exchange, New York Stock Exchange

URL: https://www.smfg.co.jp/english/

President: Jun Ohta

Date of ordinary general meeting of shareholders: June 29, 2021 Date of payment of year-end dividends: June 30, 2021

Annual securities report (Yukashoken hokokusho) issuing date: June 29, 2021

Investors meeting presentation for financial results: Scheduled

				Note: Amounts less than one million yen have been rounded down.
	1. Consolidated financial results (for the fiscal year ended March 31, 2021)
	(1) Operating results			(Millions of yen, except per share data and percentages)
			Ordinary income		Ordinary profit		Profit attributable to
					owners of parent
	Fiscal year ended March 31, 2021	¥3,902,307	(15.0) %	¥ 711,018	(23.7) %	¥ 512,812	(27.1) %
	Fiscal year ended March 31, 2020		4,591,873	(4.4)		932,064	(17.9)		703,883	(3.1)
	Notes: 1. Comprehensive income:
	(a) for the fiscal year ended March 31, 2021: ¥1,465,014 million [292.8%]
	(b) for the fiscal year ended March 31, 2020: ¥	372,971 million [(53.1)%]

2. Percentages shown in ordinary income, ordinary profit, profit attributable to owners of parent and comprehensive income are the increase (decrease) from the previous fiscal year.

		Earnings	Earnings per	Return on		Ordinary profit Ordinary profit
		per share	share (Diluted)	net assets		on total assets				on ordinary
							income
	Fiscal year ended March 31, 2021	¥	374.26	¥	374.08		4.6 %			0.3 %				18.2 %
	Fiscal year ended March 31, 2020		511.87			511.57		6.6			0.4					20.3
	Note: Equity in gains (losses) of affiliates:
	(a) for the fiscal year ended March 31, 2021: ¥ 24,972 million	(b) for the fiscal year ended March 31, 2020: ¥ 56,051 million
	(2) Financial position									(Millions of yen, except per share data and percentages)
		Total assets					Net assets	Net assets ratio		Net assets per share
	As of March 31, 2021	¥ 242,584,308		¥	11,899,046				4.9 %			¥			8,629.73
	As of March 31, 2020							10,784,903				4.9						7,827.50
	219,863,518
	Notes: 1. Stockholders' equity:
	(a) as of March 31, 2021: ¥11,826,418 million	(b) as of March 31, 2020: ¥ 10,719,969 million
	2. Net assets ratio = {(Net assets - Stock acquisition rights - Non-controlling interests) / Total assets} X 100
	(3) Cash flows																	(Millions of yen)
		Cash flows from	Cash flows from	Cash flows from			Cash and cash
				equivalents at
		operating activities investing activities	financing activities
				year-end
	Fiscal year ended March 31, 2021	¥	18,795,951		¥	(7,679,878)	¥	(562,580)			¥			66,811,212
	Fiscal year ended March 31, 2020		7,087,460				(3,011,660)		(1,024,554)						56,097,807
	2. Dividends on common stock									(Millions of yen, except per share data and percentages)
				Cash dividends per share		Total		Dividend			Ratio of
		1st		2nd	3rd			4th		dividends				dividends to
					Annual		payout ratio
		quarter quarter	quarter	quarter	(annual)									net assets
	Fiscal year
	ended March 31, 2020	¥ ―	¥	90	¥ ―			¥ 100	¥ 190	¥ 260,205		37.0 %		2.4 %
	ended March 31, 2021	―			95	―			95	190	260,381		50.8				2.3
	ending March 31, 2022 (forecast)	―			100	―			100	200						45.7 %

Notes: 1. Dividend payout ratio = (Total dividends on common stock / Profit attributable to owners of parent) X 100

2. Ratio of dividends to net assets = Total dividends on common stock / {(Beginning balance of Stockholders' equity + Ending balance of Stockholders' equity) / 2}X 100

3. Earnings forecast on a consolidated basis (for the fiscal year ending March 31, 2022)

(Millions of yen, except per share data and percentages)

	Profit attributable to owners of parent	Earnings per share
Fiscal year ending March 31, 2022	¥ 600,000	17.0 %	¥ 437.82

Notes: Forecasted earnings per share is calculated by dividing forecasted profit attributable to owners of parent by the number of issued common stocks (excluding treasury stocks) as of March 31, 2021.

[Notes]

1. There were no changes in material consolidated subsidiaries in the fiscal year.
2. Changes in accounting policies, changes in accounting estimates and restatements

(a) Changes in accounting policies due to application of new or revised accounting standards	: Yes
(b) Changes in accounting policies due to reasons other than above (a)	: Yes
(c) Changes in accounting estimates	: No
(d) Restatements	: No

Note: For more details, see page 2 "I. Matters related to summary information (Notes)."
(3) Number of shares issued (common stock)
	As of March 31, 2021		As of March 31, 2020
(a) Number of shares issued (including treasury stocks)	1,374,040,061 shares		1,373,171,556 shares
(b) Number of treasury stocks	3,612,302 shares		3,645,043 shares
	Fiscal year ended		Fiscal year ended
	March 31, 2021		March 31, 2020
(c) Average number of shares issued in the year	1,370,213,741 shares		1,375,118,034 shares

Note: Number of shares used in calculating "Earnings per share" (on a consolidated basis) is reported on page 15 "(Per share

	data)".
	[Reference] Summary of financial information on a non-consolidated basis
	Non-consolidated financial results (for the fiscal year ended March 31, 2021)
	(1) Operating results								(Millions of yen, except per share data and percentages)
			Operating income		Operating profit		Ordinary profit		Net income
	Fiscal year
	ended March 31, 2021	¥ 483,459	(42.0)%	¥ 288,137	(54.9)%	¥ 279,402	(55.6)%	¥ 281,966	(55.7)%
	ended March 31, 2020		833,835		59.6		639,310		83.7		629,263		84.4		636,128		34.1
			Earnings		Earnings
			per share		per share (diluted)
	Fiscal year
	ended March 31, 2021	¥	205.78	¥	205.68
	ended March 31, 2020			462.60			462.33

Note: Percentages shown in operating income, operating profit, ordinary profit and net income are the increase (decrease) from the previous fiscal year.

(2) Financial position			(Millions of yen, except per share data and percentages)
	Total assets	Net assets		Net assets ratio	Net assets per share
As of March 31, 2021	¥ 15,025,382	¥ 5,983,656	39.8%	¥ 4,364.96
As of March 31, 2020	14,225,470	5,966,267		41.9	4,354.94
Note: Stockholders' equity
(a) as of March 31, 2021:	¥ 5,981,865 million (b) as of March 31, 2020: ¥ 5,964,203 million

[Note on audit procedures]

This report is out of the scope of the audit procedures.

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 Sumitomo Mitsui Financial Group, Inc. ("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.

Sumitomo Mitsui Financial Group, Inc.

	Table of contents
I. Matters related to summary information (Notes)	2
1.	Changes in accounting policies due to application of new or revised accounting standards	2
2.	Changes in accounting policies due to reasons other than above 1.	2
II. Operating and financial review	3
1.	Consolidated operating results for the fiscal year ended March 31, 2021 (fiscal 2020)	3
2.	Consolidated financial position as of March 31, 2021	4
III.	Basic approach to the selection of accounting standards	4
Ⅳ.	Consolidated financial statements	5
1.	Consolidated balance sheets	5
2.	Consolidated statements of income and consolidated statements of comprehensive income	7
3.	Consolidated statements of changes in net assets	9
4.	Consolidated statements of cash flows	12
5.	Notes to consolidated financial statements	14
	Note on going concern	14
	Segment information	14
	Per share data	15
	Significant subsequent events	15

* Appendix: Financial results for the fiscal year ended March 31, 2021 supplementary information

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Sumitomo Mitsui Financial Group, Inc.

I. Matters related to summary information (Notes)

1. Changes in accounting policies due to application of new or revised accounting standards Accounting Standard etc. for Fair Value Measurement

The Company has applied "Accounting Standard for Fair Value Measurement" (ASBJ Statement No.30, July 4, 2019) and "Implementation Guidance on Accounting Standard for Fair Value Measurement" (ASBJ Guidance No.31, July 4, 2019) from the beginning of the fiscal year ended March 31, 2021.

Due to this application, the measurement of the fair value of stocks with market price (including foreign stocks, hereinafter the same) in other securities is changed from the fair value method based on their average prices during the final month of fiscal year to the fair value method based on their fiscal year-end market prices. Derivative transactions are carried at fair value reflecting one's own credit risks and counterparty's credit risks etc.

As for stocks with market price, in accordance with transitional treatment stipulated in Item 19 of "Accounting Standards for Fair Value Measurement" and Item 44-2 of "Accounting Standard for Financial Instruments," (ASBJ Statement No.10, July 4, 2019), the Company has applied new accounting policies since the beginning of the fiscal year ended March 31, 2021. As for fair value of derivative transactions, in accordance with transitional treatment stipulated in Item 20 of "Accounting Standards for Fair Value Measurement," the cumulative effects are adjusted to "Retained earnings" of the beginning of the fiscal year ended March 31, 2021, in the case that the new accounting policy is retroactively applied previous to the beginning of the fiscal year ended March 31, 2021.

As a result, "Trading assets" decreased by ¥66,010 million, "Other assets" decreased by ¥29,768 million, "Deferred tax assets" increased by ¥2,306 million, "Trading liabilities" decreased by ¥21,557 million, "Other liabilities" decreased by ¥14,495 million, "Deferred tax liabilities" decreased by ¥15,570 million, "Retained earnings" decreased by ¥41,849 million, and "Net assets per share" decreased by ¥30.56 at the beginning of the fiscal year ended March 31, 2021.

2. Changes in accounting policies due to reasons other than above 1.

Changes in Recognition of installment-sales-related income and installment-sales-related expenses

As for recognition of installment-sales-related income and installment-sales-related expenses, Sumitomo Mitsui Finance and Leasing Company, Limited (Hereinafter, "SMFL"), which conducts leasing business, had been applying a method for which installment-sales-related income and installment-sales-related expenses are recognized on a due-date basis over the full period of the installment sales in accordance with "Implementation Guidance on Accounting Standards for Leasing Transactions" (ASBJ Guidance No.16, March 25, 2011). However, from the beginning of the fiscal year ended March 31, 2021, the net amount, which is calculated by deducting installment-sales-related expenses from installment-sales-related income, has been recorded as "Interest on deferred payment."

This change is made to properly reflect the fund transaction under the financial type installment-sales transactions on the consolidated financial statements due to SMFL became an equity method affiliate and other reasons.

These changes in accounting policies are applied retroactively, and therefore the consolidated financial statements for the fiscal year ended March 31, 2020 reflect the retroactive application. As a result, comparing before and after the retroactive application, "Ordinary income", "Ordinary expenses", and "Other operating expenses" decreased by ¥722,440 million respectively, "Interest income" increased by ¥30,335 million, and "Other operating income" decreased by ¥752,775 million, and there are no effects on "Ordinary profit", "Income before income taxes", "Profit" and "Profit attributable to owners of parent" for the fiscal year ended March 31, 2020. There is also no cumulative effect on "Net assets" at the beginning of the fiscal year ended March 31, 2020.

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Sumitomo Mitsui Financial Group, Inc.

II. Operating and financial review

1. Consolidated operating results for the fiscal year ended March 31, 2021 (fiscal 2020)

1. Operating results

In fiscal 2020, net business profit decreased by ¥1.0 billion to ¥1,084.0 billion. The primary reasons were decrease in equity in gains of affiliates due to an increase in credit costs at SMBC Aviation Capital Limited and investees in Asia, despite an increase in gross profit resulting from strong performance in wealth management business and overseas securities business, and success of nimble portfolio management in the Global Markets Business Unit.

Total credit cost increased by ¥189.9 billion year-on-year to ¥360.5 billion, due to incurring credit costs both in domestic and global businesses resulting from the spread of the novel coronavirus disease (COVID-19), and precautionary provisions recorded in order to prepare for possible future losses.

As a result, ordinary profit decreased by ¥221.0 billion year-on-year to ¥711.0 billion.

In addition, profit attributable to owners of parent decreased by ¥191.1 billion year-on-year to ¥512.8 billion, because impairment losses on goodwill of Sumitomo Mitsui DS Asset Management Company, Limited were recognized.

Consolidated			(Billions of yen)
		Fiscal year ended	Change from the
		fiscal year ended
		March 31, 2021
		March 31, 2020
	Net business profit	¥	1,084.0	¥	(1.0)
	Gross profit		2,806.2		37.6
	General and administrative expenses		(1,747.1)		(7.5)
	Equity in gains of affiliates		25.0		(31.1)
	Total credit cost		(360.5)		(189.9)
	Ordinary profit		711.0		(221.0)
	Profit attributable to owners of parent		512.8		(191.1)
SMBC non-consolidated
	Banking profit *	¥	665.2	¥	61.2
	Gross banking profit		1,481.7		69.7
	Expenses (excluding non-recurring losses)		(816.5)		(8.4)
	Total credit cost		(242.7)		(193.1)
	Ordinary profit		436.1		(47.9)
	Net income		338.0		20.7

1. • Banking profit (before provision for general reserve for possible loan losses)
2. Earnings forecast for the fiscal year ending March 31, 2022 (fiscal 2021)

Earnings forecast for profit attributable to owners of parent is expected to amount to ¥ 600.0 billion.

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