20-F

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                     

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number: 001-34919

Kabushiki Kaisha Mitsui Sumitomo Financial Group

(Exact name of Registrant as specified in its charter)

SUMITOMO MITSUI FINANCIAL GROUP, INC.

(Translation of registrant’s name into English)

Japan	1-2, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-0005,  Japan
(Jurisdiction of incorporation or organization)	(Address of principal executive offices)

Takeshi Mikami

1-2, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-0005, Japan

Telephone: +81-3-3282-8111        Facsimile: +81-3-4333-9954

(Name, telephone, e-mail and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act

Title of Each Class	Name of Each Exchange on which registered
Common stock, without par value	The New York Stock Exchange*

* Not for trading, but only in connection with the listing of the American Depositary Shares, each American Depositary Share representing 1/5 of one share of the registrant’s common stock.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

At March 31, 2018, the following shares of capital stock were outstanding: 1,414,443,390 shares of common stock (including 3,884,968 shares of common stock held by the registrant and its consolidated subsidiaries and equity-method associates as treasury stock).

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ☐    No  ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☐    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  ☒ Accelerated Filer  ☐ Non-accelerated Filer  ☐ Emerging Growth Company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.    ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board  ☒ Other  ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    Item 17  ☐    Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

TABLE OF CONTENTS

			Page
Certain Defined Terms, Conventions and Presentation of Financial Information				1
Cautionary Statement Regarding Forward-Looking Statements				2
PART I				3
	Item 1.	Identity of Directors, Senior Management and Advisers		3
	Item 2.	Offer Statistics and Expected Timetable		3
	Item 3.	Key Information		3
	3.A.	Selected Financial Data		3
	3.B.	Capitalization and Indebtedness		5
	3.C.	Reasons for the Offer and Use of Proceeds		5
	3.D.	Risk Factors		5
	Item 4.	Information on the Company		19
	4.A.	History and Development of the Company		19
	4.B.	Business Overview		20
	4.C.	Organizational Structure		54
	4.D.	Property, Plant and Equipment		56
	Item 4A.	Unresolved Staff Comments		57
	Item 5.	Operating and Financial Review and Prospects		57
	5.A.	Operating Results		66
	5.B.	Liquidity and Capital Resources		105
	5.C.	Research, Development, Patents and Licenses		111
	5.D.	Trend Information		111
	5.E.	Off-Balance Sheet Arrangements		111
	5.F.	Tabular Disclosure of Contractual Obligations		112
	5.G.	Safe Harbor		112
	Item 6.	Directors, Senior Management and Employees		112
	6.A.	Directors and Senior Management		112
	6.B.	Compensation		120
	6.C.	Board Practices		121
	6.D.	Employees		124
	6.E.	Share Ownership		125
	Item 7.	Major Shareholders and Related Party Transactions		128
	7.A.	Major Shareholders		128
	7.B.	Related Party Transactions		129
	7.C.	Interests of Experts and Counsel		129
	Item 8.	Financial Information		129
	8.A.	Consolidated Statements and Other Financial Information		129
	8.B.	Significant Changes		130
	Item 9.	The Offer and Listing		130
	9.A.	Offer and Listing Details		130
	9.B.	Plan of Distribution		132
	9.C.	Markets		132
	9.D.	Selling Shareholders		132
	9.E.	Dilution		132
	9.F.	Expenses of the Issue		133
	Item 10.	Additional Information		133
	10.A.	Share Capital		133
	10.B.	Memorandum and Articles of Incorporation		133
	10.C.	Material Contracts		143
	10.D.	Exchange Controls		143

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			Page
	10.E.	Taxation		144
	10.F.	Dividends and Paying Agents		148
	10.G.	Statement by Experts		148
	10.H.	Documents on Display		148
	10.I.	Subsidiary Information		149
	Item 11.	Quantitative and Qualitative Disclosures about Credit, Market and Other Risk		149
	Item 12.	Description of Securities other than Equity Securities		164
	12.A.	Debt Securities		164
	12.B.	Warrants and Rights		164
	12.C.	Other Securities		164
	12.D.	American Depositary Shares		164
PART II				166
	Item 13.	Defaults, Dividend Arrearages and Delinquencies		166
	Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		166
	Item 15.	Controls and Procedures		166
	Item 16A.	Audit Committee Financial Expert		167
	Item 16B.	Code of Ethics		167
	Item 16C.	Principal Accountant Fees and Services		167
	Item 16D.	Exemptions from the Listing Standards for the Audit Committee		168
	Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		168
	Item 16F.	Change in Registrant’s Certifying Accountant		169
	Item 16G.	Corporate Governance		169
	Item 16H.	Mine Safety Disclosure		170
PART III				171
	Item 17.	Financial Statements		171
	Item 18.	Financial Statements		171
	Item 19.	Exhibits		171
Signatures				173
Selected Statistical Data				A-1
Index to Consolidated Financial Statements				F-1

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CERTAIN DEFINED TERMS, CONVENTIONS AND

PRESENTATION OF FINANCIAL INFORMATION

As used in this annual report, unless the context otherwise requires, “SMFG,” the “Company,” “we,” “us,” “our” and similar terms refer to Sumitomo Mitsui Financial Group, Inc. as well as to its subsidiaries, as the context requires. “SMBC” refers to Sumitomo Mitsui Banking Corporation, which is one of our commercial banking subsidiaries, or to Sumitomo Mitsui Banking Corporation and its subsidiaries taken as a whole, depending on the context. References to the “SMBC Group” are to us and our subsidiaries and affiliates taken as a whole.

In this annual report, all of our financial information is presented on a consolidated basis, unless we state otherwise. As used in this annual report, “IFRS” means International Financial Reporting Standards as issued by the International Accounting Standards Boards (“IASB”) and “Japanese GAAP” means accounting principles generally accepted in Japan. Our consolidated financial information in this annual report has been prepared in accordance with IFRS, except for the risk-weighted capital ratios, the segment results of operation and some other specifically identified information, which are prepared in accordance with Japanese banking regulations or Japanese GAAP. Unless otherwise stated or the context otherwise requires, all financial information contained in this annual report is expressed in Japanese yen.

Our fiscal year ends on March 31.

Unless otherwise specified or required by the context: references to “days” are to calendar days; references to “years” are to calendar years and to “fiscal years” are to our fiscal years ending on March 31; references to “$,” “dollars” and “U.S. dollars” are to United States dollars; references to “euros” and “€” are to the currency of those member states of the European Union which are participating in the European Economic and Monetary Union pursuant to the Treaty on European Union; references to “£” and “British pounds sterling” are to the currency of the United Kingdom; and references to “yen” and “¥” are to Japanese yen. Unless otherwise specified, when converting currencies into yen we use our median exchange rates for buying and selling spot dollars, or other currencies, by telegraphic transfer against yen as determined at the end of the relevant fiscal period.

Unless otherwise indicated, in this annual report, where information is presented in millions, billions or trillions of yen or thousands, millions or billions of dollars, amounts of less than one thousand, one million, one billion or one trillion, as the case may be, have been rounded. Accordingly, the total of figures presented in columns or otherwise may not equal the total of the individual items. Except for capital ratios, which have been truncated, percentage data, unless we state otherwise have been subjected to rounding adjustments for the convenience of the reader.

1

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended (“Securities Exchange Act of 1934”). When included in this annual report, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “probability,” “risk,” “project,” “should,” “seek,” “target,” “will” and similar expressions, among others, identify forward-looking statements. You can also identify forward-looking statements in the discussions of strategy, plans or intentions. Such statements, which include, but are not limited to, statements contained in “Item 3. Key Information—Risk Factors,” “Item 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk,” reflect our current views with respect to future events and are inherently subject to risks, uncertainties and assumptions, including the risk factors described in this annual report. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described here as anticipated, believed, estimated, expected or intended.

The U.S. Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information to encourage companies to provide prospective information about themselves. We rely on this safe harbor in making these forward-looking statements.

Forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors, and the differences may be material. Potential risks and uncertainties include, without limitation, the following:

• deterioration of Japanese and global economic conditions and financial markets;

• declines in the value of our securities portfolio;

• changes in the level or volatility of market rates or prices;

• constraints on our operations due to capital adequacy requirements;

• problems of other financial institutions;

• adverse regulatory developments or changes in government policies;

• incurrence of significant credit-related costs;

• a significant downgrade of our credit ratings;

• exposure to new risks as we expand the scope of our business;

• our ability to successfully implement our business strategy through our subsidiaries, affiliates and alliance partners;

• the industry specific risks of the consumer finance industry;

• the recoverability of deferred tax assets;

• insufficient liquidity; and

• litigation and regulatory proceedings.

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 the filing of this annual report. We expressly disclaim any obligation to update or to announce publicly any revision to any of the forward-looking statements contained in this annual report to reflect any changes in events, conditions, circumstances or other developments upon which any such statement is based. The information contained in this annual report identifies important factors in addition to those referred to above that could cause differences in our actual results.

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PART I

Item 1. Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

3.A.    SELECTED FINANCIAL DATA

Selected Financial Data

The following selected financial data at and for each of the five fiscal years ended March 31, 2018, 2017, 2016, 2015 and 2014 have been derived from our consolidated financial statements. You should read this data together with “Item 5. Operating and Financial Review and Prospects” and our consolidated financial statements included elsewhere in this annual report.

	For the fiscal year ended and at March 31,
	2018			2017		2016		2015		2014
	(In millions, except per share data)
Consolidated income statement data:
Interest income	¥	2,144,070		¥	1,900,261	¥	1,872,584	¥	1,782,621	¥	1,714,044
Interest expense		733,969			502,338		431,101		371,107		320,511
Net interest income		1,410,101			1,397,923		1,441,483		1,411,514		1,393,533
Fee and commission income		1,131,364			1,066,412		1,031,680		1,002,766		1,003,169
Fee and commission expense		178,867			181,573		131,381		129,253		127,959
Net fee and commission income		952,497			884,839		900,299		873,513		875,210
Net trading income		270,464			183,963		462,682		127,759		135,218
Net income (loss) from financial assets at fair value through profit or loss		(667	)		2,018		12,260		22,678		58,586
Net investment income		424,097			305,327		375,229		371,064		332,265
Other income		755,855			573,825		496,273		525,905		429,541
Total operating income		3,812,347			3,347,895		3,688,226		3,332,433		3,224,353
Impairment charges (reversals) on financial assets		136,808			212,967		148,356		90,138		(14,275	)
Net operating income		3,675,539			3,134,928		3,539,870		3,242,295		3,238,628
General and administrative expenses		1,813,121			1,752,135		1,706,263		1,621,897		1,522,990
Other expenses		792,765			531,759		538,963		505,614		428,780
Operating expenses		2,605,886			2,283,894		2,245,226		2,127,511		1,951,770
Share of post-tax profit of associates and joint ventures		49,323			29,318		31,056		18,124		19,454
Profit before tax		1,118,976			880,352		1,325,700		1,132,908		1,306,312
Income tax expense		229,378			139,766		372,878		409,947		414,076
Net profit	¥	889,598		¥	740,586	¥	952,822	¥	722,961	¥	892,236

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	For the fiscal year ended and at March 31,
	2018		2017		2016		2015		2014
	(In millions, except per share data)
Profit attributable to:
Shareholders of Sumitomo Mitsui Financial Group, Inc.	¥	759,998	¥	627,870	¥	843,920	¥	614,070	¥	766,388
Non-controlling interests		119,878		104,787		106,129		108,891		125,848
Other equity instruments holders		9,722		7,929		2,773		—		—
Earnings per share:
Basic	¥	539	¥	459	¥	617	¥	449	¥	561
Diluted		538		458		617		449		561
Weighted average number of common shares in issue (in thousands of shares)		1,410,442		1,369,231		1,367,229		1,367,258		1,366,186
Dividends per share in respect of each fiscal year:
Common stock	¥	155	¥	150	¥	155	¥	125	¥	125
	$	1.46	$	1.34	$	1.38	$	1.04	$	1.22
Consolidated statement of financial position data:
Total assets	¥	192,175,566	¥	191,150,981	¥	180,172,652	¥	179,181,466	¥	158,631,041
Loans and advances		85,129,070		95,273,845		88,862,371		86,971,716		81,244,982
Total liabilities		179,679,767		179,263,698		169,130,553		168,160,616		149,215,851
Deposits		128,461,527		130,295,290		125,940,797		115,833,980		108,370,494
Borrowings		10,652,481		12,245,943		9,914,129		11,217,052		8,463,363
Debt securities in issue		10,569,117		11,165,623		10,829,612		11,051,431		8,769,094
Total equity		12,495,799		11,887,283		11,042,099		11,020,850		9,415,190
Capital stock		2,338,743		2,337,896		2,337,896		2,337,896		2,337,896

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Exchange Rates

We maintain our accounts in yen. The following table sets forth for the indicated periods the median exchange rates for buying and selling spot dollars by telegraphic transfer against yen as determined by SMBC, expressed in Japanese yen per $1.00.

	High		Low		Period end		Average(1)
	(Yen per dollar)
Fiscal year ended March 31,
2014	¥	105.37	¥	92.91	¥	102.88	¥	100.47
2015		121.59		101.25		120.15		110.61
2016		125.51		111.17		112.62		120.12
2017		118.20		99.81		112.19		108.69
2018		114.38		104.94		106.25		110.66
Most recent six months:
December		113.65		112.40		113.00		113.03
January		113.16		108.73		108.77		110.87
February		109.87		106.29		107.30		107.97
March		106.97		104.94		106.25		106.08
April		109.37		105.85		109.26		107.45
May		111.10		108.43		108.67		109.76
June (through June 15, 2018)		110.73		108.96		110.73		109.99

(1) Average exchange rates have been calculated by using the average of the exchange rates on the last day of each month during a fiscal year, except for the monthly average rates, which represent the averages of the exchange rates for each day of the relevant months.

The median exchange rate quotation by SMBC for buying and selling spot dollars by telegraphic transfer against yen on June 15, 2018 was ¥110.73 = $1.00.

These exchange rates are reference rates and are neither necessarily the rates used to calculate ratios nor the rates used to convert dollars to yen in the consolidated financial statements included elsewhere in this annual report.

3.B.    CAPITALIZATION AND INDEBTEDNESS

Not applicable.

3.C.    REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

3.D.    RISK FACTORS

Investing in our securities involves risks. You should carefully consider the risks described below as well as all the other information in this annual report, including, but not limited to, our consolidated financial statements and related notes included elsewhere in this annual report and “Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk.” Our business, operating results and financial condition could be adversely affected by any factors, including, but not limited to, those discussed below. The trading prices of our securities could also decline due to any of these factors including, but not limited to, those discussed below. Moreover, this annual report contains forward-looking statements that involve risks and uncertainties. Our actual results could also differ from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, the risks faced by us described below and elsewhere in this annual report. See “Cautionary Statement Regarding Forward-Looking Statements.” Forward-looking statements in this section are made only as of the filing date of this annual report.

5

Risks Related to the Economic and Financial Environment

We may be adversely affected if Japanese and global economic conditions and financial markets deteriorate.

Our financial condition and results of operations are materially affected by general economic conditions and financial markets in Japan and foreign countries, which would be influenced by the changes of various factors. These include fiscal and monetary policies, and laws, regulations and policies on financial markets. Those factors include, for example, the Japanese consumption tax rate. The Japanese consumption tax rate was scheduled to increase from 8% to 10% in April 2017. However, the increase in the consumption tax rate to 10% was postponed until October 2019. Furthermore, geopolitical instability in various parts of the world, including North Africa, the Middle East, Asia and Eastern Europe and material changes in regional economic or political unions or associations between countries, including, for example, the United Kingdom’s exit from the European Union, could also contribute to economic instability in those and other regions, which could adversely affect Japanese and global economic conditions.

The deterioration of Japanese and global economic conditions, or financial market turmoil, could result in a worsening of our liquidity and capital conditions, an increase in our credit costs, and an increase in impairment of our investment securities and, as a result, adversely affect our business, financial condition and results of operations.

Future declines of securities prices on Japanese stock markets or other global markets could cause us to experience realized and unrealized losses on our equity securities portfolio, which could negatively affect our financial condition, results of operations and regulatory capital position.

The reported value of our available-for-sale equity instruments accounted for 3.0% of our total assets at March 31, 2018, approximately 88.4% of which were Japanese equity securities. This value depends mainly on prices of the instruments in the stock market. In addition, the reported value, gross unrealized gains and losses, and cost of those available-for-sale equity instruments at March 31, 2018 are described in “Item 5.A. Operating Results—Investment Securities.”

The value of a listed equity security is measured at its market price. Declines in the Japanese stock markets or other global markets could result in realized and unrealized losses on the securities in our equity securities portfolio, adversely affecting our results of operations and financial condition.

Our regulatory capital position and that of SMBC depend in part on the fair value of our equity securities portfolio. Substantial declines in the Japanese stock markets or other global markets would negatively affect our and SMBC’s capital positions, and limit SMBC’s ability to make distributions to us.

We will further reduce our holdings of strategic equity investments in order to reduce financial risks. Any disposal by us of equity holdings of our customers’ shares could adversely affect our relationships with those customers.

Changes in the levels or volatility of market rates or prices could adversely affect our financial condition and results of operations.

We engage in trading and investing activities dealing with various kinds of financial instruments such as bonds, equities, currencies, derivatives and funds. For example, we have substantial investments in debt securities. At March 31, 2018, we had ¥8 trillion of Japanese government bonds classified as available-for-sale financial assets, which accounted for approximately 4.0% of our total assets.

Our financial condition and results of operations could be adversely affected by actual changes or volatility in interest rates, foreign exchange rates and market prices of other investment securities. Increases in interest

6

rates could substantially decrease the value of our fixed income portfolio, and any unexpected changes in yield curves could adversely affect the value of our bond and interest rate derivative positions, resulting in lower-than-expected revenues from trading and investment activities. Market volatility may also result in significant unrealized losses or impairment losses on such instruments. Furthermore, the downgrading of investment securities by credit rating agencies may also cause declines in the value of our securities portfolio.

Risks Related to Our Business

Failure to satisfy capital adequacy requirements could constrain our and SMBC’s operations.

We and SMBC are subject to capital adequacy requirements established by the Financial Services Agency of Japan (“FSA”). The current requirements reflect the principal risk-weighted capital measures of the Basel III rules text published by the Basel Committee on Banking Supervision (“BCBS”) in December 2010 and are being phased in from March 2013 to March 2019. Compared to the previous requirements, the current requirements increase both the quality and quantity of the risk-weighted capital base.

With respect to the quality of the capital base, certain capital instruments, including existing preferred securities and subordinated debt, are eligible for inclusion as Tier 1 capital or Tier 2 capital only for the phase-out period. Preferred stocks convertible into common stocks no longer qualify as Common Equity Tier 1 capital but would qualify as Additional Tier 1 capital if they satisfy certain requirements including the requirement of loss absorbency at the point of non-viability under the Basel III rules. In addition, securities with step-up clauses will no longer qualify as Additional Tier 1 capital, and if the relevant security is classified as a liability for accounting purposes, it must satisfy the requirement of loss absorbency at a pre-specified trigger point, which must be 5.125% or more of Common Equity Tier 1 risk-weighted capital ratio as well as the aforementioned requirement of loss absorbency at the point of non-viability to qualify as Additional Tier 1 capital. With respect to Tier 2 capital, under the Basel III rules, the relevant security must satisfy the requirement of loss absorbency at the point of non-viability to qualify as Tier 2 capital, and subordinated debt securities callable at the initiative of the issuer within five years or with step-up clauses can no longer qualify as Tier 2 capital.

With respect to the quantity of the capital base, the minimum Common Equity Tier 1 risk-weighted capital ratios applicable to us and SMBC have been 4.5% since March 2015. Moreover, we are required to hold a capital conservation buffer to withstand future periods of stress and a countercyclical buffer as additional capital to reduce the buildup of systemic risk in periods and locations of excessive credit growth. The capital conservation buffer started to be phased in from March 2016, with the initial ratio of 0.625% reaching 2.5% by March 2019. Under the phase-in arrangement, we are currently required to maintain 1.875% of Common Equity Tier 1 risk-weighted capital as a percentage of risk weighted assets. As a result, the total minimum Common Equity Tier 1 risk-weighted capital ratio will be increased to 7%, and the total minimum risk-weighted capital ratio will be increased to 10.5% in March 2019. The countercyclical buffer, which started to be phased in from March 2016, is calculated as the weighted average of the buffers in effect in the jurisdictions to which we have credit exposure, with a maximum of 2.5% when fully implemented in March 2019.

In addition, the requirements for additional capital, in the form of a capital surcharge above the Basel III minimum requirement, have been applied from 2016 to those financial institutions identified by the Financial Stability Board (“FSB”) as Global Systemically Important Banks (“G-SIBs”), including us. This requirement is commonly referred to as the G-SIB capital surcharge. Based on the list, we will be required to maintain an additional 1% of Common Equity Tier 1 capital as a percentage of risk-weighted assets when the requirement is fully applied from 2019. Under the phase-in requirements, we are currently required to maintain 0.75% of Common Equity Tier 1 capital as a percentage of risk-weighted assets. G-SIBs will also be subject to a global standard for Total Loss-Absorbing Capacity (“TLAC”), which defines certain minimum requirements for total loss-absorbing capacity so that if G-SIBs fail, they will have sufficient loss absorbing and recapitalization capacity available in resolution. In November 2015, the FSB published the final TLAC standard. As a G-SIB, we will be subject to the final TLAC standard, as implemented in Japan.

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At March 31, 2018, on a consolidated basis, our total risk-weighted capital ratio, Tier 1 risk-weighted capital ratio and Common Equity Tier 1 risk-weighted capital ratio were 19.36 %,16.69 % and 14.50 %, compared to the minimum required ratios of 10.655%, 8.655% and 7.155%, respectively. All the minimum required ratios stated above include the capital conservation buffer of 1.875%, the G-SIB capital surcharge of 0.75% and the countercyclical buffer of 0.03%.

Our and SMBC’s capital ratios could decline as a result of decreases in Tier 1 and Tier 2 capital or increases in risk-weighted assets. The following circumstances, among others, could reduce our risk-weighted capital ratio and that of SMBC:

• declines in the value of securities;

• inability to refinance existing subordinated debt obligations or preferred securities eligible for inclusion as Tier 1 capital or Tier 2 capital only for the phase-out period with those qualified as regulatory capital under the new capital adequacy requirements which phased in from March 2013; and

• increases in risk-weighted assets resulting from business growth, strategic investments, borrower downgrades, changes in parameters such as probability of default (“PD”) or regulatory reforms.

We and SMBC have adopted the advanced internal rating-based (“IRB”) approach for measuring exposure to credit risk and the advanced measurement approach (“AMA”) to measure exposure to operational risk. If the FSA revokes its approval of such implementation or otherwise changes its approach to measure capital adequacy ratios, our and SMBC’s ability to maintain capital at the required levels may be adversely affected.

On December 7, 2017, the Group of Central Bank Governors and Heads of Supervision (the “GHOS”) endorsed the outstanding Basel III regulatory reforms. The endorsed reforms include the following elements:

• a revised standardized approach for credit risk;

• revisions to the internal ratings-based approach for credit risk;

• revisions to the credit valuation adjustment framework;

• a revised standardized approach for operational risk;

• revisions to the measurement of the leverage ratio and a leverage ratio buffer for G-SIBs; and

• revision to the capital floor.

We will be subject to the final Basel III reform, as implemented in Japan.

If our or SMBC’s capital ratios fall below required levels, the FSA may require us or SMBC to take a variety of corrective actions, including withdrawal from all international operations or suspension of all or part of our operations, which may indirectly affect our ability to fulfill our contractual obligations or may result in restrictions on our businesses. Failure to maintain capital levels under the capital buffer requirements under Basel III and the requirement for the G-SIB capital surcharge will result in restrictions on capital distributions, such as dividends, share buybacks, discretionary payments on other Tier 1 capital instruments and bonuses. In addition, some of our and SMBC’s domestic and overseas subsidiaries are also subject to local capital ratio requirements. Failure of those subsidiaries to meet local requirements may result in administrative actions or sanctions imposed by local regulatory authorities.

We may incur losses as a result of financial difficulties of counterparties and other financial institutions.

We regularly execute transactions with counterparties in the financial services industry. Many of these transactions expose us to credit risk in the event of deterioration of creditworthiness of a counterparty or client. With respect to secured transactions, our credit risk may be exacerbated when the collateral cannot be foreclosed on or is liquidated at prices not sufficient to recover the full amount of the loan or other exposures due to us.

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Losses from our investments in and loans to other financial institutions could materially and adversely affect our business, financial condition and results of operations. We may also be requested to participate in providing assistance to distressed financial institutions that are not our subsidiaries. In addition, if the funds collected by the Deposit Insurance Corporation of Japan (“DIC”) are insufficient to insure the deposits of failed Japanese banks, the insurance premiums that we pay to the DIC will likely be increased, which could adversely affect our business and results of operations.

Adverse regulatory developments or changes in government policies could have a negative impact on our results of operations.

Our businesses are subject to extensive regulation and associated regulatory risks, including the effects of changes in the laws, regulations, policies, voluntary codes of practice and interpretations in Japan and the other jurisdictions in which we operate. Those changes and their effects on us are unpredictable and beyond our control.

Changes in the regulatory environment may adversely affect our financial condition and results of operations. In particular, the financial crisis in 2008 has led to calls for significant financial reform measures, and various governments are at different stages of enacting or implementing legislation that affects financial institutions.

In response to the turmoil following the financial crisis, regulatory authorities reviewed and revised capital adequacy guidelines, particularly in relation to quality of capital and accounting standards; such revisions could adversely affect our capital ratios. In December 2010, the BCBS published the Basel III rules text, setting out certain changes to capital requirements which include raising the quality of banks’ capital bases, enhancing risk coverage, inhibiting leverage, reducing pro-cyclicality and introducing liquidity regulation, many of which have been fully applied or phased-in in Japan based on the Basel III implementation schedule.

The FSA’s Financial Inspection Manual for financial institutions and related guidelines are revised or amended from time to time. On December 15, 2017, the FSA issued a plan to repeal the FSA’s Financial Inspection Manual after April 1, 2019, and published a report outlining its new supervisory approaches. Our compliance with changes in the FSA’s inspection process under the new supervisory approaches could result in an increase in our administrative expenses, which could have an adverse effect on our results of operations and financial condition.

The FSA and regulatory authorities in the United States and other jurisdictions, along with the United Nations, have in recent years made the prevention of money laundering and terrorism financing a focus of governmental policy relating to financial institutions. Any adverse regulatory action or change in regulatory focus, whether as a result of inspections or regulatory developments, may negatively affect our banking operations and may require expensive remediation.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) provides a broad framework for significant regulatory changes across most areas of U.S. financial regulations. The Dodd-Frank Act addresses, among other issues, systemic risk oversight, bank capital standards, the resolution of failing systemically significant financial institutions, over-the-counter (“OTC”) derivatives, the ability of banking entities to engage in proprietary trading activities and invest in hedge funds and private equity funds, consumer and investor protection, and securitization. The Dodd-Frank Act as well as other post-financial crisis regulatory reforms in the United States have increased costs, imposed limitations on activities and resulted in an increased intensity in regulatory enforcement and fines across the banking and financial services sector. The current U.S. Presidential administration has expressed different policy goals with respect to regulation of the U.S. financial system, but the impact that the U.S. Presidential administration’s policy goals or any new or proposed legislation could have on the regulatory requirements currently imposed on us remains uncertain.

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Significant regulatory developments could adversely affect our capital ratios and results of operations. For further details, see “Item 4.B. Business Overview—Regulations in Japan, Regulations in the United States, and Regulations in Other Jurisdictions.” Since changes in regulation or fiscal or other policies and their effects are unpredictable and beyond our control, we may not be able to comply with those changes at all times, despite our efforts, or may have to incur increased costs or make changes to our operations in order to do so. Any such failures to comply with those changes could result in administrative or judicial proceedings against us, including suspension of our business and financial penalties, which could materially and adversely affect our business, reputation, results of operations and financial condition.

Changes in the competitive and financial environment and financial systems could have a negative effect on the financial services industry and us.

Deregulation of the financial system, consolidation among financial institutions, diversification within the financial services industry, and the expanded presence of foreign financial institutions and investors have made the Japanese financial services market highly competitive. Moreover, competition in overseas markets has intensified due to global consolidation, convergence and alliances among financial institutions. We compete with various types of financial services companies, including:

• banking groups, including Japan’s other major banking groups;

• government-controlled and government-affiliated entities;

• regional banking institutions;

• major investment banks; and

• non-bank financial institutions.

Increased competition in Japan may put downward pressure on prices for our financial services, cause us to lose market share or require us to incur additional expenses in order to remain competitive. Internationally, various forms of financial support provided by foreign governments to foreign banks and other financial institutions may reduce the cost of capital to those institutions and otherwise give them competitive advantages. In addition, the development of new technologies in the “Fintech” and other sectors, along with the corresponding rise of new entrants from these sectors into the financial services industry, may further intensify competition in the business environments in which we operate, and as a result, we may be forced to adapt our business to compete more effectively. There can be no assurance that we will be able to respond effectively to current or future competition.

The changes in the financial environment in Japan may also have a negative effect on the Japanese financial services industry. For example, prolonged monetary easing by the Bank of Japan (“BOJ”) may continue to lower the domestic interest spreads. This may significantly affect the businesses of commercial banks in Japan, including us. For further information on the BOJ’s monetary policy measures, see “Item 5. Operating and Financial Review and Prospects—Overview—Factors Affecting Results of Operation.”

Adverse economic conditions and deterioration of the financial conditions of our customers could increase our credit costs.

Our non-performing loans (“NPLs”) and credit costs for corporate and individual customers may increase significantly if:

• domestic or global economic conditions worsen or do not improve;

• our customers do not repay their loans, due to reasons including deterioration of their financial conditions; and

• the value of collateral declines.

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We have substantial exposure to corporate customers in the following sectors: real estate and goods rental and leasing, manufacturing, transportation, communications and public enterprises, wholesale and retail, and services, including electric utilities, and to individual customers mainly through housing loans. The financial conditions of those customers may be subject to changes in the industry-specific economic conditions, including, for example, fluctuations in the prices of oil, gas and other natural resources, as well as general economic conditions. In addition, adverse region-specific economic conditions could worsen our customers’ financial conditions or could decrease the value of our collateral provided to us in such regions. As a result, we may be required to record increases in our allowance for loan losses.

Moreover, for certain borrowers, we may choose to engage in debt-for-equity swaps or provide partial debt write-offs, additional financing or other forms of assistance as an alternative to exercising our full legal rights as a creditor if we believe that doing so may increase our ultimate recoverable amount of the loan. We may be required to, or choose to, provide new or additional financing to customers who may incur unexpected liabilities, have difficulty in the future in continuing operations, encounter difficulties or need to devote significant resources to repair their infrastructures, as a result of natural disasters or other calamities.

In addition, changes in laws or government policies may have an adverse impact on the rights of creditors. For example, the Government of Japan has provided or may provide in the future government guarantees and other government support measures in response to the financial crisis or other unexpected incidents such as large-scale natural disasters and any subsequent collateral events. Even if our current or future loans to borrowers have received or will receive any government support measures, it is unclear to what extent those loans will benefit, directly or indirectly, from the current or any future government guarantees or support measures.

In addition, our NPLs may increase and there may be additional credit costs if we fail to accurately estimate the incurred losses in our loan portfolio. These estimates require difficult, subjective and complex judgments such as credit evaluation of our borrowers, valuation of collateral and forecasts of economic conditions.

The ratio of impaired loans and advances to the total loans and advances, both net of allowance for loan losses, were 0.6%, 0.7% and 0.8% at March 31, 2018, 2017 and 2016, respectively. For further information, see “Item 5.A. Operating Results—Loans and Advances.”

A significant downgrade of our credit ratings could have a negative effect on us.

At the date of this annual report, the Company has the issuer ratings of A1/P-1 from Moody’s Japan K.K., (“Moody’s”), the issuer credit rating of A- from S&P Global Ratings Japan Inc. (“S&P”) and the foreign and local currency issuer default ratings of A/F1 from Fitch Ratings Japan Limited (“Fitch”). There can be no assurance that these ratings will be maintained.

A material downgrade of our credit ratings may have various effects including, but not limited to, the following:

• we may have to accept less favorable terms in our transactions with counterparties, including capital raising activities, or may be unable to enter into certain transactions;

• foreign regulatory bodies may impose restrictions on our overseas operations;

• existing agreements or transactions may be cancelled; and

• we may be required to provide additional collateral in connection with derivatives transactions.

Any of these or other effects of a downgrade of our credit ratings could have a negative impact on the profitability of our treasury and other operations, and could adversely affect our regulatory capital position, liquidity position, financial condition and results of operations. For more information about our credit ratings, see “Item 5.B. Liquidity and Capital Resources.”

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We face significant challenges in achieving the goals of our business strategy, and our business may not be successful.

In May 2017, we announced a new medium-term management plan through March 2020. We believe that we have targeted appropriate business areas. However, our initiatives to offer new products and services and to increase sales of our existing products and services may not succeed, if market conditions do not stabilize, market opportunities develop more slowly than expected, our initiatives have less potential than we envisioned originally or the profitability of these products and services is undermined by competitive pressures. Consequently, we may be unable to achieve or maintain profitability in our targeted business areas.

In order to implement our business strategy successfully, we need to hire and train qualified personnel continuously and in a proactive manner, as well as to attract and retain employees with professional experience and specialized product knowledge. However, we face competition from other commercial banks, investment banks, consumer finance companies and other financial services providers in hiring highly competent employees. There can be no assurance that we will succeed in attracting, integrating and retaining appropriately qualified personnel.

We are exposed to new risks as we expand our businesses, the range of our products and services, and geographic scope of our businesses overseas.

As part of our business strategies we have expanded and may continue to expand our businesses or our range of products and services beyond our core business, commercial banking. This could expose us to new risks, such as adverse regulatory changes, more competition or deterioration in the operating environments that affect those businesses, products and services. Some of those risks could be types with which we have no or only limited experience. As a result, our risk management systems may prove to be insufficient and may not be effective in all cases or to the degree required.

In accordance with our strategy to further increase our presence in the international financial markets, we may continue to expand the scale of our overseas businesses, especially in emerging economies, notably Asian countries and regions. The expansion of our overseas businesses may further increase our exposure to risks of adverse developments in foreign economies and markets, including interest rate and foreign exchange rate risk, regulatory risk and political risk. Our overseas expansion also exposes us to the compliance risks and the credit and market risks specific to the countries and regions in which we operate, including the risk of deteriorating conditions in the credit profile of overseas borrowers.

Failure of our business strategies through our subsidiaries, affiliates and other business alliance partners could negatively affect our financial condition and results of operations, including impairment losses on goodwill or investments.

Aligned with our business strategies, we have made and may undertake acquisition of a subsidiary, investments in affiliates and other business alliance partners, and reorganization within SMBC Group companies. It is uncertain whether we will receive the expected benefits from those business strategies, due to any adverse regulatory changes, worsening of economic conditions, increased competition or other factors that may negatively affect the related business activities. Furthermore, unanticipated costs and liabilities may be incurred in connection with those business strategies, including liabilities from the claims related to the businesses prior to our business alliances, and cost from actions by regulatory authorities.

When we acquire a subsidiary, we may recognize goodwill and intangible assets. Impairment losses on goodwill or intangible assets in connection with acquisitions must be recognized when the recoverable amount of goodwill or intangible assets of the business is lower than the carrying amount at the time of impairment testing, which is performed annually or whenever there is an indication that the goodwill or intangible assets may be impaired.

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We account for some of our investments in affiliates under the equity method. Therefore, net losses incurred by equity method investees may cause us to record our share of the net losses. Furthermore, we may lose the capital which we have invested in business alliances or may incur impairment losses on securities acquired in such alliances. We may also be required under contractual or other arrangements to provide financial support, including credit support and equity investments, to business alliance partners in the future. Additionally, we may also incur credit costs from our credit exposure to such partners.

We are exposed to the industry specific risks of the consumer finance industry.

Changes in the legal environment have severely and adversely affected the business performance of consumer lending and credit card companies. We have exposures to the risks specific to the consumer finance industry through our subsidiaries, including Cedyna Financial Corporation (“Cedyna”) and SMBC Consumer Finance Co., Ltd. (“SMBC Consumer Finance”).

Consumer lending and credit card companies had offered unsecured personal loans, which included loans with so-called “gray zone” interest in excess of the maximum rate prescribed by the Interest Rate Restriction Act (ranging from 15% to 20%) up to the 29.2% maximum rate permitted under the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates (“Contributions Act”). However, amendments to laws regulating moneylenders, which increased the authority of government regulators, prohibited gray zone interest and introduced an upper limit on aggregate credit extensions to an individual by moneylenders at one-third of the borrower’s annual income, were promulgated in 2006 and became fully effective in June 2010. After the promulgation of such amendments, Cedyna, SMBC Consumer Finance and other companies engaged in related business reduced their interest rates on loans in preparation for the prohibition of gray zone interest. As a consequence, margins earned by those companies, as well as the amounts of loans extended, decreased.

In addition, as a result of court decisions unfavorable to those companies, claims for refunds of amounts paid in excess of the applicable maximum allowed rate by the Interest Rate Restriction Act have increased substantially. Although Cedyna, SMBC Consumer Finance and other subsidiaries have each recorded a provision for claims for refunds of gray zone interest on loans, we may be required to recognize additional losses if such provisions are determined to be insufficient, and the additional losses could have an adverse effect on our results of operations and financial condition.

Inability to generate sufficient future taxable profits or adverse changes to tax laws, regulatory requirements or accounting standards could have a negative impact on the recoverability of certain deferred tax assets.

We recognize deferred tax assets relating to tax losses carried forward and deductible temporary differences only to the extent that it is probable that future taxable profit will be available against which the tax losses carried forward and the temporary differences can be utilized. The deferred tax assets are quantified on the basis of currently enacted tax rates and accounting standards and are subject to change as a result of future changes to tax laws or the rules for computing taxable profits and allowable losses. Failure to generate sufficient future taxable profits or changes in tax laws or accounting standards may reduce our estimated recoverable amount of net deferred tax assets. Such a reduction could have an adverse effect on our financial condition and results of operations.

Declines in returns on our plan assets or revised actuarial assumptions for retirement benefits may adversely affect our financial condition and results of operations.

SMBC and some of our other subsidiaries have various defined benefit plans. We have experienced in the past, and may experience in the future, declines in returns on plan assets and changes in the discount rates and other actuarial assumptions. If returns on plan assets decrease, or if we revise the discount rates and other assumptions, the deficit of the impacted defined benefit plan may increase and adversely affect our financial

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condition and results of operations. Because more than half of our plan assets are composed of equity instruments, the plan assets are greatly affected by volatility in the prices of equity securities. Substantial declines in the prices for publicly traded Japanese stocks would negatively affect our plan assets. For further information, see Note 23 “Retirement Benefits” to our consolidated financial statements included elsewhere in this annual report.

Our liquidity could be adversely affected by actual or perceived weaknesses in our businesses and by factors we cannot control, such as a general decline in the level of business activity in the financial services sector.

We need liquidity to maintain our lending activities, meet deposit withdrawals, pay our operating expenses and pay interest on and principal of debt and dividends on capital stock. Adverse market and economic conditions in the domestic and global economies may limit or adversely affect our access to liquidity required to operate our business. If our counterparties or the markets are reluctant to finance our operations due to factors including actual or perceived weaknesses in our businesses as a result of large losses, changes in our credit ratings, or a general decline in the level of business activity in the financial services sector, we may be unable to meet our payment obligations when they become due or only be able to meet them with funding obtained on unfavorable terms. Circumstances unrelated to our businesses and outside of our control, such as, but not limited to, adverse economic conditions, disruptions in the financial markets or negative developments concerning other financial institutions perceived to be comparable to us, may also limit or adversely affect our ability to replace maturing liabilities in a timely manner. Without sufficient liquidity, we will be forced to curtail our operations, which could adversely affect our business, results of operations and financial condition.

Sales of our shares by us may have an adverse effect on the market price of our shares and may dilute existing shareholders.

We may issue shares from the unissued portion of our authorized share capital and sell shares held as treasury stock, generally without a shareholder vote. Sales of shares in the future may be at prices below prevailing market prices and may be dilutive.

Our business relies on our information technology systems, which are at risk of being damaged or failing as a result of various incidents including cyberattacks, and their failure could harm our relationships with customers or adversely affect our provision of services to customers.

In all aspects of our business, we use information technology systems to deliver services to and execute transactions on behalf of our customers as well as for back-office operations. We therefore depend on the capacity and reliability of the electronic and information technology systems supporting our operations. We may encounter service disruptions in the future, owing to failures of these information technology systems. Our information technology systems are at risk of being damaged or failing as a result of quality problems, human errors, natural disasters, power losses, sabotage, acts of terrorism, cyberattacks and similar events.

In particular, cybersecurity risks for financial institutions have significantly increased in recent years. This is partly because of the continuous introduction of new technologies and the use of the Internet and telecommunications technologies as well as the elaboration of the cyberattacks, which include computer viruses, malicious code, phishing attacks or other security breaches. As we rely on information technology systems in our business and our receipt and handling of confidential personal information from our customers, any impairment, compromise or destruction of such systems may interfere with, or temporarily prevent us from, continuing our operations. In addition, we also face indirect cybersecurity risks relating to our customers and other third parties, including counterparties in the financial services industry. As a result of increasing consolidation, interdependence and complexity of financial entities and technology systems, a technology failure or cyberattack could have a material impact on counterparties or other market participants, including us. Any third-party technology failure or cyberattack could adversely affect our ability to execute transactions or deliver services to our clients effectively. For example, vulnerabilities in third-party technology systems may be exploited in ways that increase the risk our information technology systems are exposed to cyberattacks.

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Accordingly, we have taken steps to protect information technology systems from these risks, including by establishing data recovery capability and functionality, and to address all contingencies that could arise in the event of a major disruption of services. Particularly, we have adopted our “Declaration of Cyber Security Management” in order to further strengthen our cybersecurity capabilities. In this declaration, our management recognizes cybersecurity as a major management issue and takes a leadership role in implementing measures such as allocating appropriate resources based on discussions at the meetings of the Management Committee and the board of directors, establishing a special department and manual for emergencies and enhancing security measures for our services including internet banking services.

However, these measures may not be sufficient, especially considering the increasing frequency and sophistication of recent cyberattacks. In addition, we may not be prepared to address all contingencies that could arise in the event of a major disruption of services. The failure to address such contingencies could harm our relationships with customers or adversely affect our provision of services to customers.

We handle personal information obtained from our individual and corporate customers in relation to our banking, securities, consumer lending, credit card, asset management and other businesses. The systems we have implemented to protect the confidentiality of personal information, including those designed to meet the strict requirements of the Act on the Protection of Personal Information, may not be effective in preventing disclosure of personal information by unauthorized access from a third party. Leakage of personal information could expose us to demands for compensation or lawsuits for ensuing economic losses or emotional distress, administrative actions or sanctions, additional expenses associated with making necessary changes to our systems and reputational harm. As a result, our business, financial condition and results of operations could be materially and adversely affected.

Fraud, misconduct or other unlawful behavior by directors, officers and employees or third parties could subject us to losses and regulatory sanctions.

We are exposed to potential losses resulting from fraud, misconduct and other unlawful behavior by directors, officers and employees. Directors, officers and employees may bind us to transactions that exceed authorized limits or present unacceptable risks, hide from us and from our customers unauthorized activities, improperly use confidential information or otherwise abuse customer confidences. Third parties may engage in fraudulent activities, including fraudulent use of bank accounts or the use of false identities to open accounts for money laundering, tax evasion or other illegal purposes. Third parties could also use stolen or forged ATM cards, engage in credit card fraud or transfer funds illegally through online banking fraud, and we may be required to indemnify victims of such fraud for related losses. In the broad range of businesses in which we engage, fraud, misconduct and other unlawful behavior are difficult to prevent or detect. In addition, with or without actual fraud, misconduct and other unlawful behavior by directors, officers and employees, investigations, administrative actions or litigation could commence in relation to them. Furthermore, we may not be able to recover the losses caused by these activities, including possible deterioration of our reputation.

Transactions involving Iran and other countries and targets that are subject to U.S. or other financial sanctions may lead some potential customers and investors to avoid doing business with us or investing in our securities or may limit our business operations.

U.S. law generally prohibits or substantially restricts U.S. persons from doing business with countries, a region and persons that are the subject of sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) or other agencies (“Restricted Targets” which include Iran, North Korea, Syria, Cuba and the Crimea region of Ukraine). Other applicable financial sanctions are administered by the Ministry of Finance of Japan and authorities in other countries.

We maintain a SMBC Group-wide policy designed to ensure compliance with U.S. and other applicable sanctions laws and regulations. Our non-U.S. offices engage in transactions relating to the Restricted Targets in compliance with applicable laws and regulations. These activities include remittance of Japanese yen with

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respect to our customers’ export or import transactions, maintenance of correspondent banking accounts with Iranian banks, including the Central Bank of Iran, and the payment of fees in Japanese yen to certain Iranian banks in connection with performance bonds issued in the past by SMBC through these Iranian banks related to our customers’ projects in Iran. The performance bonds expired and have not been renewed, but SMBC continues to be obligated to pay certain fees to the Iranian banks. In addition, we maintain a representative office in Iran that mainly performs an information-collecting function and liaising with non-SDN Iranian parties on behalf of our non-U.S. offices.

We do not believe that our operations relating to the Restricted Targets materially affect our business, financial condition or results of operations. A limited number of potential violations of U.S. economic sanctions by SMBC have been identified and voluntarily disclosed to OFAC. These transactions resulted from the inherent limitation on information about underlying transactions that can be obtained in the course of normal banking operations, inadvertent operational errors, or from the lack of familiarity of some personnel of SMBC with the requirements of the relevant regulations in the past. We have continuously strengthened our SMBC Group-wide OFAC and other financial sanctions compliance program in an effort to prevent the recurrence of such potential violations. We settled some of the voluntarily disclosed potential violations with OFAC and the others were closed without a penalty. However, in light of the inadvertent nature of such potential violations and the degree to which our strengthened compliance program aims to mitigate the risk of potential violations, we do not believe that our settlement with OFAC, or any possible penalties that OFAC may impose with respect to the other potential violations that remain unsettled, will have a material impact on our reputation, financial condition or results of operations, or on the prices of our securities.

We are aware of initiatives by U.S. states and U.S. institutional investors, such as pension funds, to adopt laws, regulations or policies prohibiting transactions with or investment in, or requiring divestment from, entities engaged in certain business with Iran and other Restricted Targets. It is possible that such laws and initiatives may result in our inability to enter into transactions with those entities that are subject to such prohibitions or to retain or acquire such entities as customers or investors in our securities.

In recent years, the U.S. government implemented a number of sanctions targeting non-U.S. persons for activities undertaken outside the United States (“secondary sanctions”) that involve specific sanctions targets or certain activities including, among other things, certain transactions related to Iran’s energy, petrochemical, shipping or shipbuilding sectors. Pursuant to the July 14, 2015 Joint Comprehensive Plan of Action (“JCPOA”) agreed to by the five permanent members of the United Nations Security Council plus Germany and Iran, with the European Union, on January 16, 2016 (“Implementation Day”), the United States lifted U.S. nuclear-related secondary sanctions targeting Iran. Even after Implementation Day, certain secondary sanctions remained in effect, including those targeting significant transactions involving Iranian or Iran-related Specially Designated Nationals and Blocked Persons (“SDNs”). However, on May 8, 2018, President Trump announced that he was terminating the United States’ participation in the JCPOA and that all nuclear-related secondary sanctions authorities targeting Iran would be reinstated after specified wind down periods. In accordance with applicable laws and regulations, SMBC intends to provide certain services, including settlement services in connection with customers’ trade transactions between Japan and Iran, to the extent that such activities are not targeted by remaining secondary sanctions. For more details of relevant laws and regulations, see “Item 4.B. Business Overview—Regulations in the United States—Laws Prohibiting Money Laundering and Terrorist Financing.”

In addition, the U.S. government and authorities in other countries have enacted a series of Ukraine-related sanctions, including those under the U.S. Ukraine-Related Sanctions Regulations, the U.S. Ukraine Freedom Support Act of 2014 and “sectoral” sanctions on the financial, energy and defense sectors of the Russian economy.

The laws, regulations and sanctions referenced above or similar legislative or regulatory developments in the U.S., Japan or other jurisdictions where applicable, may further limit our business operations. If we were determined to have engaged in activities targeted by certain U.S. statutes, Executive Orders or regulations, we

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could lose our ability to open or maintain correspondent or payable-through accounts with U.S. financial institutions, among other potential sanctions. In addition, depending on sociopolitical developments, even though we take measures designed to ensure compliance with applicable laws and regulations, our reputation may suffer due to our association with the Restricted Targets. The above circumstances could have a significant adverse effect on our business or the prices of our securities.

Our business operations are exposed to risks of natural disasters, terrorism, pandemics and other calamities.

Our business operations are subject to the risks of natural disasters, terrorism, pandemics, blackouts, geopolitical incidents and other calamities, any of which could impair our business operations. Despite our preparation of operation manuals and other backup measures and procedures, such calamities could cause us to suspend operations and could adversely affect our businesses, financial condition and results of operations. Large-scale natural disasters such as the Great East Japan Earthquake of March 2011 and any subsequent collateral events, may adversely affect economic conditions in general, the financial conditions of our corporate and individual customers and stock market prices, or cause other negative effects, any or all of which could materially and adversely affect our financial condition and results of operations owing to, for example, an associated increase in the amount of credit-related costs or an increase in losses related to our holdings of securities.

Our risk management policies and procedures may not adequately address unidentified or unanticipated risks.

We are exposed to a variety of operational, legal and regulatory risks throughout our organization. Management of these risks requires, among other things, policies and procedures to properly record and verify large numbers of transactions and events. However, these policies and procedures may not be fully effective or sufficient. We have devoted significant resources to strengthening our risk management policies and procedures and expect to continue doing so in the future. Nevertheless, particularly in light of the continuing evolution of our operations and expansion into new areas, our policies and procedures designed to identify, monitor and manage risks may not be fully effective. Some of our methods of managing risks are based upon our use of observed historical market behavior and thus may not accurately predict future risks. Violations of laws including the Japanese antitrust and fair trade laws by us or by SMBC may result in administrative sanctions. Furthermore, investigations, administrative actions or litigation could commence in relation to violations, which may involve costs and may result in deterioration of our reputation.

Our business could be adversely affected by litigation and regulatory proceedings globally.

We conduct business in many locations in and outside of Japan. We face the risk of litigation and regulatory proceedings in connection with our operations. For example, if we engage in activities targeted by certain U.S. sanctions, this could result in the imposition of monetary penalties or other restrictions by the U.S. government against us. Lawsuits and regulatory actions may result in penalties or settlements of very large indeterminate amounts or limit our operations, and costs to defend either could be substantial. Moreover, SMBC and one of its subsidiaries contribute to financial benchmarks such as the Tokyo Interbank Offered Rate (“TIBOR”) and the London Interbank Offered Rate (“LIBOR”) for certain specific currencies. These benchmarks are widely referenced in jurisdictions in which we operate and do not operate. We face or may face some investigations, litigation and regulatory proceedings, and an adverse regulatory decision, judgment or ruling, including in jurisdictions we do not operate in, could have a material adverse effect on our business, results of operations and financial condition.

Damage to our reputation may have an adverse effect on our business and results of operations.

Maintaining our reputation is vital to our ability to attract and maintain customers, investors and employees. Our reputation could be damaged through a variety of circumstances, including, among others, fraud or other

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misconduct or unlawful behavior by directors, officers or employees, systems failures, compliance failures, investigations, adverse litigation judgments or regulatory decisions, or unfavorable outcomes of governmental inspections. Negative media coverage of Japan’s financial services industry or us, even if inaccurate or not applicable to us, may have a materially adverse effect on our brand image and may undermine depositor confidence, thereby affecting our businesses and results of operations. For example, actual or rumored investigations of us or our directors, officers or employees, or actual or rumored litigation or regulatory proceedings, or media coverage of the same, may have a material adverse effect on our reputation and could negatively affect the prices of our securities. Actions by the financial services industry generally or by certain members in the industry can also adversely affect customers’ confidence on the financial services industry. Such reputational harm could also lead to a decreased customer base, reduced revenues and higher operating costs.

Our failure to establish, maintain and apply adequate internal controls over financial reporting could negatively impact investor confidence in the reliability of our financial statements.

In order to operate as a global financial institution, it is essential for us to have effective internal controls, corporate compliance functions, and accounting systems to manage our assets and operations.

As a New York Stock Exchange (“NYSE”)-listed company and a registrant with the U.S. Securities and Exchange Commission (“SEC”) under section 404 of the U.S. Sarbanes-Oxley Act of 2002, our management is required to assess the effectiveness of our internal control over financial reporting and disclose whether such internal controls are effective. Our independent registered public accounting firm has to conduct an audit to evaluate and then render an opinion on the effectiveness of our internal control over financial reporting. The Financial Instruments and Exchange Act of Japan (“FIEA”) also requires companies listed on a Japanese stock exchange, such as us, to file, together with their annual securities reports required by the FIEA, audited internal control reports assessing the effectiveness of their internal controls over financial reporting.

We have established internal controls over financial reporting, as well as rules for evaluating those controls, in order to provide reasonable assurance of the reliability of our financial reporting and the preparation of financial statements. However, these controls may not prevent or detect errors. Any evaluation of effectiveness to future periods is subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. To the extent any issues are identified through the foregoing processes, there can be no assurance that we will be able to resolve them in a timely manner or at all. If this occurs, our reputation may be damaged, which could lead to a decline in investor confidence in us.

Other Risks

It may not be possible for investors to effect service of process within the United States upon us or our directors or senior management, or to enforce against us or those persons judgments obtained in U.S. courts predicated upon the civil liability provisions of the U.S. federal or state securities laws.

We are a joint stock corporation incorporated under the laws of Japan. Almost all of our directors and senior management reside outside the United States. Many of our assets and the assets of these persons are located in Japan and elsewhere outside the United States. It may not be possible, therefore, for U.S. investors to affect service of process within the United States upon us or these persons or to enforce, against us or these persons, judgments obtained in U.S. courts predicated upon the civil liability provisions of the federal or state securities laws. We believe that there is doubt as to the enforceability in Japan, in original actions or in actions to enforce judgments of U.S. courts, of claims predicated solely upon the U.S. federal or state securities laws mainly because the Civil Execution Act of Japan requires Japanese courts to deny requests for the enforcement of judgments of foreign courts if foreign judgments fail to satisfy the requirements prescribed by the Civil Execution Act, including requirements that:

• the jurisdiction of the foreign court be recognized under laws, regulations, treaties or conventions;

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• proper service of process be made on relevant defendants, or relevant defendants be given appropriate protection if such service is not received;

• the judgment and proceedings of the foreign court not be repugnant to public policy as applied in Japan; and

• there exist reciprocity as to the recognition by a court of the relevant foreign jurisdiction of a final judgment of a Japanese court.

Judgments obtained in U.S. courts, predicated upon the civil liability provisions of the U.S. federal or state securities laws, may not satisfy these requirements.

As a holder of our American Depositary Shares (“ADSs”), you have fewer rights than a shareholder of record in our shareholder register because you must act through the depositary to exercise these rights.

The rights of our shareholders under Japanese law to take actions such as voting their shares, receiving dividends and distributions, bringing derivative actions, examining our accounting books and records and exercising appraisal rights are available only to our shareholders of record. Because the depositary, through its custodian, is the record holder of the shares underlying the ADSs, only the depositary can exercise shareholder rights relating to the deposited shares. ADS holders will not be able to directly bring a derivative action, examine our accounting books and records or exercise appraisal rights.

Pursuant to the deposit agreement among us, the depositary and the holders and beneficial owners of ADSs, the depositary will endeavor to exercise voting and other rights associated with shares underlying ADSs in accordance with instructions given by ADS holders, and the depositary will also pay to ADS holders dividends and distributions collected from us. However, the depositary is permitted under the deposit agreement to exercise reasonable discretion in carrying out those instructions or in making distributions, and is not liable for failure to carry out instructions or make distributions as long as it acts in good faith. Therefore, ADS holders may not be able to exercise voting or other rights associated with the shares underlying ADSs in the manner that they intend, or may lose some or all of the value of dividends or distributions collected from us. Moreover, the deposit agreement may be amended or terminated by us and the depositary without any reason, or consent from or notice to ADS holders. As a result, ADS holders may not be able to exercise rights in connection with the deposited shares exercised in the way they wish or at all.

ADS holders are dependent on the depositary for certain communications from us. We send to the depositary most of our communications to ADS holders in Japanese. ADS holders may not receive all of our communications in the same manner as or on an equal basis with shareholders of record in our shareholder register.

Item 4. Information on the Company

4.A.    HISTORY AND DEVELOPMENT OF THE COMPANY

Legal and Commercial Name

Our legal name is Sumitomo Mitsui Financial Group, Inc. Our commercial name is Sumitomo Mitsui Financial Group.

Date of Incorporation

We were established in December 2002.

Domicile and Legal Form

We are a joint stock corporation incorporated with limited liability under the laws of Japan. Our address is: Sumitomo Mitsui Financial Group, Inc., 1-2, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-0005, Japan. Our telephone number is: +81-3-3282-8111.

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History and Development

We were established in December 2002 as a holding company for the SMBC Group through a statutory share transfer (kabushiki-iten) of all of the outstanding equity securities of the former SMBC in exchange for our newly issued securities. Upon our formation and completion of the statutory share transfer, the former SMBC became our direct, wholly owned subsidiary. SMBC was established in March 2003 through the merger of the former SMBC with Wakashio Bank, which was established in 1996 as a subsidiary of Sakura Bank. The former SMBC was established in April 2001 through the merger of Sumitomo Bank and Sakura Bank, which was established through the merger of Taiyo Kobe Bank and Mitsui Bank in 1990. Mitsui and Sumitomo started their banking businesses in 1876 and 1895, respectively. The origins of both banking businesses can be traced back to the seventeenth century.

We had previously employed a board of corporate auditors governance system. In order to further enhance our solid corporate governance system, we transitioned to a company with three statutory committees: a nominating committee, an audit committee and a compensation committee on June 29, 2017. For further information, see “Item 6.C. Board Practices.”

Information Concerning the Principal Capital Expenditures and Divestitures

In April 2016, Sumitomo Mitsui Finance and Leasing Company, Limited (“SMFL”) acquired General Electric Company (“GE”) group’s leasing business in Japan for ¥181 billion by acquiring a 100% equity interest in GE Japan GK (“GE Japan”). The acquired leasing business is comprised mainly of equipment/asset leasing, small-ticket leasing, and automotive leasing. In September 2016, GE Japan changed its corporate name to SMFL Capital Company, Limited.

Public Takeover Offers

Not applicable.

4.B.    BUSINESS OVERVIEW

Overview

We are the holding company for the SMBC Group. The SMBC Group is comprised of SMBC, SMBC Trust Bank Ltd. (“SMBC Trust Bank”), SMFL, SMBC Nikko Securities Inc. (“SMBC Nikko Securities”), Sumitomo Mitsui Card Company, Limited (“Sumitomo Mitsui Card”), Cedyna Financial Corporation(“Cedyna”), SMBC Consumer Finance Co., Ltd. (“SMBC Consumer Finance”), The Japan Research Institute, Limited (“The Japan Research Institute”), Sumitomo Mitsui Asset Management Company, Limited (“SMAM”) and other subsidiaries and affiliates. We are one of the three largest financial groups in Japan and offer a diverse range of financial services, including commercial banking, leasing, securities, consumer finance and other services.

On April 1, 2017, we introduced SMBC Group-wide business units, which determine strategies for each customer segment across SMBC Group companies, to further enhance our capability to meet our customers’ diversified needs. In connection with the introduction of such business units, beginning with the fiscal year ended March 31, 2018, we have also reorganized our business segments, which formerly consisted of Commercial Banking, Leasing, Securities and Consumer Finance, with the remaining operations recorded in Others, into Wholesale Business, Retail Business, International Business and Global Markets Business, with the remaining operations recorded in Head office account and others. See “Item 4.C. Organizational Structure.”

On March 23, 2018, with the aim of enhancing our corporate group’s brand value, we announced that “SMBC” would be designated as our corporate group’s master brand from April 2018. In line with this change, our corporate group, which was formerly referred to as the “Sumitomo Mitsui Financial Group” or its acronym “SMFG,” is now referred to as the “SMBC Group.” “Sumitomo Mitsui Financial Group” continues to be used as the holding company’s name.

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Management Philosophy

Our SMBC Group-wide management philosophy is as follows:

• we grow and prosper together with our customers, by providing services of greater value to them;

• we aim to maximize our shareholders’ value through the continuous growth of our business; and

• we create a work environment that encourages and rewards diligent and highly-motivated employees.

In addition to our SMBC Group-wide management philosophy, we have also established a code of conduct. Our code of conduct is designed to be a guideline for the conduct of our directors, officers and employees in the realization of our SMBC Group-wide management philosophy in all areas. Our code of conduct is as follows:

• to strive to increase shareholder value whilst also maintaining healthy relationships with customers, employees and other stakeholders. To give utmost consideration to the trust which people have in the firm, to abide by all laws and regulations, to maintain a high ethical standard, and to act fairly and sincerely;

• to continue improving our knowledge and capability and, at the same time, to raise our productivity in order to provide superior financial services at competitive prices;

• to establish a top brand global financial group by understanding the needs of each customer and by providing valuable services which meet those needs;

• to be selective and focused in the implementation of our business strategy, to define and develop the competitive advantages which we have over our competitors and, by allocating managerial resources strategically to those businesses, to become a top player in our selected markets;

• to be creative, proactive and courageous in order to be in a leading position in all business areas and always a step ahead of our competitors;

• to build a strong organization based on market practice and sound principles whilst reflecting our diverse values. To delegate internal authority under an efficient and effective management system which facilitates speedy decision-making and execution; and

• to support our business growth and the development of our employees by setting challenging targets within an evaluation and compensation framework which emphasizes their capabilities and achievements.

Environment

We recognize preservation of the environment as one of our most important management objectives and strive to achieve harmony with the natural environment in our corporate activities.

Basic Philosophy Regarding the SMBC Group’s Environmental Activities

Recognizing the importance of realizing a sustainable society as one of our most important tasks, we make continuous efforts to harmonize environmental preservation and pollution control with corporate activities, in order to support the economy and contribute to the betterment of society as a whole.

We and our principal SMBC Group companies have obtained ISO 14001 certification, the international standard for environmental management systems. Every year we set environmental objectives which we systematically pursue through environmental activities based on a PDCA (Plan, Do, Check and Act) cycle. SMBC and some of our other SMBC Group companies adopted “Principles for Financial Action towards a Sustainable Society” in October 2011, which have been set forth for the purposes of making environmental financing widely-known and improving the quality of environmental financing.

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In our Credit Policy, which describes the universal and basic philosophies, guidelines and rules for credit operations, SMBC declares its policy of prohibiting credit for problematic loans in terms of public responsibility, or extending credit for loans which may have a significant negative impact on the global environment and to the society. For large-scale projects which may potentially exert a major impact on the environment and society, SMBC adopts the Equator Principles, a set of guidelines developed by private-sector financial institutions for managing environmental and social risk related to financing large-scale projects, and conducts environmental and social risk assessments.

SMBC has policies for specific sectors listed below, which may have environmental and social influences such as adverse impact on human rights and climate change. These policies have been reflected in our Credit Policy.

• Coal-fired power plants;

• Palm oil plantation developments;

• Deforestation;

• Cluster munitions and other slaughter weapons manufacturing; and

• Soil contamination and asbestos.

Description of Operations and Principal Activities

Wholesale Business Unit

The Wholesale Business Unit provides financing, investment management, risk hedging and settlement services as well as financial solutions that respond to wide-ranging client needs in relation to M&A and other advisory services and leasing, primarily for large-and mid-sized corporate clients in Japan. This business unit mainly consists of the wholesale businesses of SMBC, SMBC Nikko Securities, SMBC Trust Bank and SMFL.

Financing and Investment Management

The Wholesale Business Unit provides financing services that include bilateral loans, syndicated loans, commitment lines, structured finance, project finance, nonrecourse loans to and investments in corporate customers directly or through private equity funds, securitization, debt and equity underwriting and corporate bond trustee and registrar services.

The Wholesale Business Unit also provides investment management services such as deposits and investment trusts. In addition, this business unit offers a wide range of securities products including structured bonds and subordinated bonds to corporate clients through SMBC and SMBC Nikko Securities.

Risk Hedging

The Wholesale Business Unit provides various risk hedging services including forward exchange contracts and derivatives to meet our customers’ demand for hedging risks such as interest rate risk or foreign exchange rate risk in their transactions. This business unit also provides guarantee services including stand-by credit, performance bond and credit guarantee services.

Settlement

The Wholesale Business Unit offers a variety of products and services including remittance, cash management, trade finance for export and import activities and supply chain finance to optimize customers’ cash flows and business flows.

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M&A and Other Advisory Services

The Wholesale Business Unit responds to customers’ diversifying business strategies and management issues by providing solutions custom-tailored to their business characteristics and growth stage.

The Wholesale Business Unit caters to large corporate clients in their global business activities by leveraging the collective strength of SMBC Group companies. For example, SMBC and SMBC Nikko Securities support the entire deal process of cross-border M&A projects on a collaborative basis.

For mid-sized companies, the Wholesale Business Unit provides a wide range of financial services including direct investment, LBO financing, debt restructuring, support for initial public offering and M&A advisory to enhance our customers’ corporate value, working in conjunction with private equity funds as necessary. In real estate and related businesses, this business unit provides a full lineup of services including brokerage and asset management by SMBC Trust Bank and funding support mainly by SMBC.

For start-up companies, the Wholesale Business Unit offers support in accordance with clients’ stage of growth such as management consulting, venture investment, financing and support for initial public offerings.

For clients considering business overseas, the Wholesale Business Unit provides tailored information on local laws and regulations and on Japanese companies already present in target countries. For clients who already have business overseas, each SMBC Group company collaborates to provide high quality solutions in areas such as business expansion and reorganization.

Leasing

The Wholesale Business Unit provides a wide range of leasing services including equipment, operating and leveraged leasing mainly through SMFL. SMFL is one of the major leasing companies in Japan. We have a 60% equity interest in SMFL, while the remaining 40% is held by Sumitomo Corporation (“Sumitomo Corp”), a non-affiliate.

On April 1, 2016, SMFL acquired GE group’s leasing business in Japan by acquiring a 100% equity interest in GE Japan. The acquired leasing business is comprised mainly of equipment/asset leasing, small-ticket leasing and automotive leasing. On September 5, 2016, GE Japan changed its corporate name to SMFL Capital Company, Limited.

We announced on November 6, 2017 that we had entered into a basic agreement with Sumitomo Corp concerning the reorganization of our joint leasing partnership, and concluded on March 30, 2018 the final agreement regarding the reorganization, subject to the approval of foreign and domestic regulatory authorities. The completion of the reorganization is tentatively scheduled from November 2018 to January 2019. In this reorganization, we will transfer a portion of our shares of SMFL, a company jointly owned by us and Sumitomo Corp, to SMFL. Following the share transfer, our equity interest in SMFL will decrease from the current 60% to 50% while Sumitomo Corp’s equity interest will increase from 40% to 50%. As a result, SMFL will cease to be our consolidated subsidiary and will become our joint venture, and its consolidated subsidiaries SMBC Aviation Capital Limited, which belongs to the International Business Unit, and SMFL Capital Company, Limited will become our equity method investees. Subsequently, SMFL Capital Company, Limited will be merged into SMFL.

Retail Business Unit

The Retail Business Unit provides financial services to both consumers residing in Japan and domestic small-sized companies and mainly consists of the retail businesses of SMBC, SMBC Nikko Securities and SMBC Trust Bank together with three consumer finance companies, Sumitomo Mitsui Card, Cedyna and SMBC Consumer Finance.

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This business unit offers a wide range of products and services for consumers, including wealth management, settlement services, consumer finance and housing loans, in order to address the financial needs of all individual customers.

Wealth Management

The Retail Business Unit offers a variety of financial services including personal bank accounts, deposit products such as ordinary deposits, time deposits and foreign currency deposits, investment trust, equity, bond and insurance products.

In addition, SMBC and SMBC Nikko Securities are promoting greater collaboration in order to meet customers’ diverse needs for asset management by leveraging their respective strengths of a broad client base and a high advisory capability.

On January 1, 2018, SMBC Nikko Securities merged with SMBC Friend Securities Co., Ltd., which had been our wholly owned subsidiary. This merger was made for the purpose of strengthening our securities business by reinforcing consulting-type sales, enhancing productivity through the optimization of sales personnel staffing and achieving cost saving synergies through the consolidation of overlapping management infrastructure.

In addition, the Retail Business Unit, through SMBC Trust Bank, offers extensive trust services tailored to the needs of customers, such as wealth management solutions.

In November 2015, SMBC Trust Bank acquired the retail banking business of Citibank Japan Ltd., a wholly owned subsidiary of Citigroup Inc. This acquisition was made for the purpose of expanding our business model to offer additional products and services to our customers, including foreign currency investment products and global services.

Settlement

The Retail Business Unit conducts credit card, installment and solution businesses and provides customers with secure and convenient payment methods.

In the credit card business, Sumitomo Mitsui Card and Cedyna conduct a comprehensive credit card business with a strong brand, and offer a variety of settlement and finance services to meet diverse customer needs.

Sumitomo Mitsui Card is a leading company in Japan’s credit card industry, having introduced the Visa brand into the Japanese market. We, Sumitomo Mitsui Card, SMBC and NTT DoCoMo, Inc. (“NTT DoCoMo”) formed a strategic business and capital alliance in credit payment service. We have a 66% equity interest in Sumitomo Mitsui Card, while the remaining 34% is held by NTT DoCoMo. Pursuant to the alliance, Sumitomo Mitsui Card offers a credit payment service using NTT DoCoMo’s mobile phones equipped with contactless IC chips. In addition, Sumitomo Mitsui Card issues a variety of affiliated credit cards in cooperation with partners including, but not limited to, railway companies, airline companies, department stores and online retailers to satisfy both these partners’ and cardholders’ needs.

Cedyna conducts credit card, installment (such as shopping credit and automobile loan) and solution (such as collection outsourcing and factoring) businesses. On April 1, 2016, Cedyna merged with SAKURA CARD CO., LTD., which had been our subsidiary and engaged in the credit card business, to further enhance its capability to meet the wide range of customer needs and deliver higher value-added products and services.

SMBC, Sumitomo Mitsui Card and Cedyna are leveraging their strengths to address cashless payment needs and integrate marketing and business operations.

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Consumer Finance

The Retail Business Unit offers a variety of consumer loan products including unsecured card loan products mainly through SMBC and SMBC Consumer Finance to meet the wide range of individual customers’ demand for funds. Also, SMBC Consumer Finance guarantees certain consumer loans made by SMBC and other financial institutions.

In addition, SMBC and SMBC Mobit Co., LTD., (“SMBC Mobit”) which is a wholly owned subsidiary of SMBC Consumer Finance engaged in the card loan business, are strengthening their partnership. For example, a loan card from SMBC Mobit can be applied for or received through automated contract machines in SMBC branch offices.

Housing Loans

The Retail Business Unit provides housing loans with a variety of terms and interest rates, including fixed-rate loans with 2- to 35-year terms, to meet diversified customer needs. As an example of a product addressing a specific customer need, this business unit offers a housing loan combined with an insurance policy that covers the repayment of the outstanding loan balance in the event the borrower is diagnosed with certain diseases. Housing loans are principally secured by collateral or supported by guarantees.

The Retail Business Unit operations are mainly conducted through a large and well developed branch network. We had a domestic network consisting of 441 SMBC branch offices, 26 SMBC Trust Bank branch offices, 148 SMBC Nikko Securities branch offices and 959 SMBC Consumer Finance staffed and unstaffed branch offices at March 31, 2018. Some SMBC branches provide financial consulting services for asset management and housing loans during extended hours, including weekday evenings, weekends and national holidays, for the convenience of individual customers.

The Retail Business Unit also operates an extensive network of ATMs in Japan. At March 31, 2018, SMBC offers its customers’ access to 56,012 ATMs, some of which are SMBC’s ATMs and the majority of which are ATMs made available through arrangements with other ATM providers such as convenience store chains. SMBC Consumer Finance offers its customers’ access to 1,967 automatic contract machines and ATMs at March 31, 2018.

This business unit also offers internet banking services for consumers. At March 31, 2018, SMBC’s internet banking services had approximately 16 million registered users. The users are able to transfer funds, perform balance inquiries, make time deposits and foreign currency deposits, and buy and sell investment trusts over the internet, as well as over mobile phones and traditional telephones.

Moreover, in credit card business, there are approximately 27 million and 16 million card holders of Sumitomo Mitsui Card and Cedyna at March 31, 2018.

The Retail Business Unit is implementing an initiative to supply customers with convenient and easy-to-use services by utilizing digital technologies and expand consulting space for individual clients at SMBC branches, while pushing ahead with digitalization of administrative processes and the transfer of administrative functions of branches to administration centers. These reforms will enable us to reduce costs while providing customers with convenient and high quality services.

The Retail Business Unit promotes digitalization in a variety of areas, including a debit card offering that addresses cashless payment needs, a smartphone application that allows our customers to easily and seamlessly view information on transactions with SMBC, SMBC Nikko Securities and Sumitomo Mitsui Card, an automated chat service utilizing artificial intelligence and a biometric authentication platform.

This business unit also provides private banking and asset succession consulting for high-net-worth individuals.

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For small-sized companies, this business unit provides a wide array of financial products and services to comprehensively address business owners’ needs as both corporate managers and individuals such as business and asset succession.

International Business Unit

The International Business Unit supports the global businesses of a diverse range of clients, such as Japanese companies operating overseas, non-Japanese companies, financial institutions, and government agencies and public corporations of various countries. This business unit mainly consists of the international businesses of SMBC, SMBC Nikko Securities, SMBC Trust Bank, SMFL and their foreign subsidiaries. At March 31, 2018, we have global network of 129 offices in 40 countries and regions.

Banking Business

The International Business Unit provides a variety of tailored products and services to meet customer and market requirements, including loans, deposits, clearing services, trade finance, project finance, loan syndication, derivatives and global cash management services.

At March 31, 2018, SMBC’s international network consisted of 18 branches, 22 sub-branches and 4 representative offices and SMBC seeks to meet customers’ needs globally, together with the network of SMBC’s foreign banking subsidiaries such as Sumitomo Mitsui Banking Corporation Europe Limited with 7 offices and Sumitomo Mitsui Banking Corporation (China) Limited with 16 offices and foreign banking associates, including PT Bank Tabungan Pensiunan Nasional Tbk, The Bank of East Asia, Limited, ACLEDA Bank Plc. and Vietnam Export Import Commercial Joint Stock Bank.

Securities Business

In overseas markets, the International Business Unit provides services such as underwriting activities, Japanese stockbroking and M&A advisory through SMBC Nikko Capital Markets Limited and SMBC Nikko Securities America, Inc., which are subsidiaries of SMBC in the United Kingdom and the United States respectively. In addition, this business unit provides Japanese stockbroking and M&A advisory services through SMBC Nikko Securities (Hong Kong) Limited and SMBC Nikko Securities (Singapore) Pte. Ltd., and M&A advisory related services through SMBC Nikko Investment Consulting (Shanghai) Limited. Together with other SMBC Nikko Securities’ subsidiaries and affiliates, this business unit offers high quality financial services to clients on a global basis.

Leasing Business

The International Business Unit provides a variety of leasing services related to the construction machinery, transportation equipment, industrial machinery, medical equipment and other categories mainly through SMFL’s offices overseas. This business unit also offers aircraft leasing services through SMBC Aviation Capital Limited, a subsidiary of SMFL, and railcar leasing services through SMBC Rail Services LLC, which is a railcar operating leasing company and a subsidiary of SMBC Leasing and Finance, Inc.

For detailed information on the reorganization of our joint leasing partnership, see “Wholesale Business Unit—Leasing” in this section.

On June 1, 2017, we, through SMBC Rail Services LLC, acquired all membership interests of American Railcar Leasing LLC, one of the leading railcar leasing companies in the United States. We pursued this acquisition based on our expectation that railcar leasing business in the United States will experience further growth and high profitability due to stable demand for rail freight transportation, which is the core infrastructure for inland logistics. Through this acquisition, we aim to expand our railcar leasing business and services by further enhancing our fleet portfolio to appropriately meet diverse needs of clients in a wide range of industries.

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Global Markets Business Unit

The Global Markets Business Unit offers solutions through foreign exchange products, derivatives, bonds, stocks and other marketable financial products and also undertakes asset liability management operations, which help comprehensively control balance sheet liquidity risks and interest rate risks. This business unit consists of the Treasury Unit of SMBC and the Product Unit of SMBC Nikko Securities.

Asset Liability Management and Portfolio Management

The Global Markets Business Unit maintains high profitability and stability by establishing a portfolio with highly liquid products and focusing on products for which investment appetite is high, and by carrying out portfolio rebalancing in a nimble and dynamic manner in response to changes in market conditions.

Foreign Currency Funding

To support our overseas businesses, this business unit strives to improve the stability of our foreign currency funding by diversifying funding methods and expanding the scope of investors we target. At the same time, this business unit keeps appropriate control of the balance sheet in response to international financial regulations.

Sales and Trading

The Global Markets Business Unit provides detailed information on market conditions and economic trends to address customers’ hedging and asset management needs, expands its product lineup in foreign exchange, derivative, bond, stock and other products and supplies timely solutions to increase customer satisfaction and SMBC Group earnings.

In addition, this business unit encourages the use of electronic transactions such as its electronic foreign exchange execution platform available via the Internet to respond to the needs of a wider range of customers.

Other Major Business

System Development, Data Processing, Management Consulting and Economic Research

We provide financial consultation services relating to management reforms, IT, the planning and development of strategic information systems and outsourcing. We also conduct diverse activities including domestic and international economic research and analysis, policy recommendations and business incubation. We offer these services mainly through The Japan Research Institute.

Asset Management

We engage in the investment advisory and investment trust management businesses.

On July 29, 2016, we acquired an additional 20% of the outstanding shares of SMAM and increased our equity interest in SMAM to 60%. As a result, SMAM, our former associate, became our subsidiary. On May 11, 2018, we announced that we had concluded a memorandum of understanding regarding a merger of SMAM and Daiwa SB Investments Ltd., our associate, in April 2019, subject to the approval of regulatory authorities. We expect the merged company to enhance its investment management capabilities and business foundations, in addition to expanding the scale of its operations. The merged company is scheduled to become our subsidiary.

Others

Our associates Kansai Urban Banking Corporation (“KUBC”) and THE MINATO BANK, LTD. (“The Minato Bank”) engage in commercial banking business in Kansai area.

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In March 2017, we announced our plan to integrate KUBC, The Minato Bank and The Kinki Osaka Bank, Ltd., which is a regional financial institution based in Kansai area and a wholly owned subsidiary of Resona Holdings, Inc. (“Resona Holdings”), a financial holding company head quartered in Japan. In September 2017, we executed a business integration agreement in connection with the plan. As part of this business integration, KUBC and The Minato Bank ceased to be our subsidiaries and became our equity-method associates. In addition, through a series of transactions including share exchanges effected in April 2018, the three banks became wholly owned subsidiaries of Kansai Mirai Financial Group, Inc., an intermediate holding company established by Resona Holdings, and Kansai Mirai Financial Group, Inc. became our equity-method associate.

Credit Loss Protection Agreement with Goldman Sachs

To expand its overseas portfolio and revenue, SMBC entered into agreements with Goldman Sachs in 2003 to provide credit protection to Goldman Sachs’ extension of credit to their investment grade clients in exchange for receiving a proportion of the fees and interest income from the borrowers. In connection with the agreements, Goldman Sachs established certain wholly owned subsidiaries (“William Street Entities”) that might make credit commitments and extensions. Goldman Sachs entered into credit loss protection arrangements with SMBC in order to hedge in part the credit risk to its investment in the William Street Entities. SMBC, through its Cayman Islands branch, would issue letters of credit in exchange for fees equal to a portion of the fees and interest to be paid by the borrowers to the William Street Entities. The first letter of credit (“FLC”), was issued in 2003 in a maximum available amount of $1 billion, and is available over a 20-year period, subject to early termination or extension. Also, from time to time over a 20-year period, subject to early termination or extension and other conditions, upon the request of Goldman Sachs, SMBC has issued letters of credit and may issue one or more additional letters of credit (each a second letter of credit (“SLC Series”) exposing SMBC to risk rated BBB/Baa2 or higher in an aggregate maximum available amount of $1.125 billion). Goldman Sachs may draw on the letters of credit in the event that Goldman Sachs realizes certain losses (“Specified Losses”), with respect to loan commitments or loans extended thereunder that Goldman Sachs has entered into with specified borrowers approved by SMBC and Goldman Sachs.

Under the FLC, Goldman Sachs is entitled to draw from time to time amounts equal to approximately 95% of Specified Losses, up to an aggregate stated amount of $1 billion. Under the SLC Series, Goldman Sachs is entitled, subject to certain conditions, to draw from time to time amounts equal to approximately 70% of Specified Losses above specified loss thresholds, up to an aggregate stated amount of $1.125 billion. Goldman Sachs has made a small number of drawdowns under the FLC in accordance with its terms.

In connection with these credit arrangements, SMBC pays Goldman Sachs an administration fee based on the aggregate amount of commitments covered by the FLC.

The credit loss protection arrangements contain a number of provisions that give SMBC some control over the determination of borrowers to which it has potential exposure under the FLC and any SLC Series:

• Goldman Sachs may make credit commitments covered by the arrangements only to borrowers approved by SMBC.

• Unless SMBC and Goldman Sachs agree otherwise, the borrowers covered by the FLC and any SLC Series that are rated by both of the two major rating agencies must be rated investment grade by at least one, and borrowers that are rated only by one of the two major rating agencies must be rated investment grade by that rating agency. If neither of the two major rating agencies rates a borrower, then further credit to the borrower shall no longer be covered by the FLC or any SLC Series, if SMBC and Goldman Sachs determine the borrower’s credit conditions are lower than investment grade.

• If the ratings of an approved borrower fall below investment grade in the judgment of both major rating agencies (or, if a borrower is rated investment grade by only one agency, and that agency downgrades the borrower below investment grade), further credit to that borrower will no longer be covered by these arrangements, unless SMBC and Goldman Sachs otherwise agree.

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SMBC, through a separate bankruptcy-remote Cayman Islands subsidiary, has collateralized the obligations on the FLC and a portion of the SLC Series by buying $1.505 billion of Goldman Sachs demand notes and pledging those demand notes to Goldman Sachs. If Goldman Sachs activates an SLC Series that is not collateralized, SMBC through its Cayman Islands subsidiary will be required to purchase and pledge additional Goldman Sachs demand notes with a principal amount equal to the stated amount of that SLC Series. Subject to certain conditions, SMBC has the right to substitute as collateral high quality liquid securities for the Goldman Sachs demand notes.

These arrangements are designed to collateralize SMBC’s obligations in the event SMBC’s Cayman Islands branch fails to perform on the FLC or any SLC Series, including as a result of our insolvency or the insolvency of SMBC or SMBC’s Cayman Islands branch.

If Goldman Sachs’ credit rating, as determined by either of the two major credit rating agencies, falls below investment grade, Goldman Sachs is obligated to provide collateral to SMBC to support Goldman Sachs’ obligations under the Goldman Sachs demand notes. As an initial 15-year period under the letters of credit lapsed in February 2018, SMBC and Goldman Sachs have been able to negotiate in good faith to extend the terms of the letter of credit arrangements for one additional five-year term taking it up to 25 years. Before the expiration of the initial 20-year term, in certain circumstances, the letter of credit arrangements with SMBC may be terminated by SMBC or Goldman Sachs, in which event Goldman Sachs would be obligated to prepay any outstanding demand notes. In circumstances related primarily to the creditworthiness of SMBC or a breach of its representations or covenants, Goldman Sachs may draw on the letters of credit for early termination amounts of up to the remaining undrawn or available amount on the letters of credit. In connection with draws on the letters of credit of early termination amounts, Goldman Sachs would have to prepay any outstanding demand notes. Goldman Sachs also would be obligated to pay SMBC on the originally scheduled expiration date of the letter of credit arrangements an amount equal to the early termination amounts minus the losses that would have been reimbursed under the letters of credit had they not terminated early.

Management Policies

On May 15, 2017, we announced our new medium-term management plan, “SMFG Next Stage” (currently “SMBC Group Next Stage”), for the three-years through March 2020. By combining the SMBC Group’s strengths with more focused business management, we aim to be the financial institution of choice for our customers, to achieve sustainable growth and to enhance corporate value through the provision of products and services that add value to our customers. Under the medium-term management plan, we have established the following three core policies in order to achieve sustainable growth and reach the next stage of our journey towards our vision for the next decade of becoming “a global financial group that, by earning the highest trust of our customers, leads the growth of Japan and the Asian region.”

Disciplined business management

With the environment for financial institutions expected to remain challenging, we aim to focus on capital, asset, and cost efficiencies to grow our bottom-line profit in a sustainable manner, in other words to become a profitable financial institution through sustained discipline.

While maintaining our competitiveness in the stable domestic market, we intend to allocate resources across our portfolio of businesses in order to prioritize business fields which enhance capital efficiency. In addition, as risk-weighted assets are expected to increase on the back of tightening of international financial regulations, we intend to further strengthen control of our risk-weighted assets. Specifically, by assessing risks based on our risk appetite framework, we intend to seek to recalibrate our business portfolio by reducing low-margin assets whilst investing in more profitable and asset-efficient businesses.

Meanwhile, we intend to optimize workflows and share infrastructures among SMBC Group companies by fully utilizing digital technology. Specifically, we intend to enhance productivity on an SMBC Group-wide basis by reorganizing our retail branches and group structure such as through the merging of our security subsidiaries.

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Focus on our strengths to generate growth

Based on our core competencies and the opportunities we see for growth we have identified the following “Seven Core Business Areas” which we wish to prioritize as shown below:

• Hold the number one retail banking franchise in Japan;

• Build on our lead position in the Japanese medium-sized enterprise market;

• Increase market share in Corporate & Investment Banking in key global markets;

• Establish a top-tier position in product lines where we are competitive globally;

• Accelerate our “Asia-centric” strategy;

• Strengthen sales and trading capability; and

• Develop asset-light businesses: trust banking and asset management.

In addition to strengthening our domestic businesses, where we possess competitive advantages and can make steady profits, we aim to implement growth strategies in international businesses and global products which are based on the strengths we have. Further, we aim to generate new strengths that will contribute to our future growth.

Integration across the SMBC Group and globally to achieve sustainable growth

Governance and management structure to maximize our business potential. We transitioned from a company with a board of auditors to a company with three statutory committees in order to enhance our corporate governance system as a Global Systemically Important Financial Institution, “G-SIFI” on June 29, 2017. To maximize business opportunities on an SMBC Group-wide and global basis, we have established SMBC Group-wide business units and introduced a Group Chief Officers system (“CxO system”). Specifically, we intend to seek to meet the needs of a wide range of clients by executing strategies and strengthening services on an SMBC Group-wide basis. Further, we intend to optimize resource allocation by sharing management resources, for example by exchanging employees among SMBC Group companies. In addition, we intend to control the allocation of human resources and IT investment on an SMBC Group-wide basis by enhancing the capabilities of our planning and management functions. In order to support these initiatives, we intend to introduce management frameworks, such as setting ROE targets for each business unit, and improved management information systems. In addition, we have revised the executive pay system by introducing stock-based compensation which is linked to financial targets within our medium-term management plan and to our stock performance in order to tighten the link with business performance. We also raised the ratio of stock-based compensation for executives in order to ensure the business is well aligned with the shareholder’s perspective.

Digitalization. With the rapid advance of digitalization, we aim to proactively introduce new technologies and promote digitalization in various areas such as enhancing the customer experience, generating new businesses, improving productivity and efficiency, and upgrading management infrastructure. Specifically, in order to enhance the customer experience, we intend to implement advanced digital solutions such as utilizing paperless transactions at retail branches and digital contracts with corporate customers. We intend to generate new businesses through digitalization focusing on creating new platforms such as a biometric authentication business. In order to improve productivity and efficiency, we intend to digitalize certain back-office operations at branches and introduce public cloud servicing, which will also lead to work style reform. Furthermore, we intend to enhance data-based management by digitalizing information and “visualizing” the management system.

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Revenues by Region

The following table sets forth the percentage of our total operating income under IFRS for the fiscal years ended March 31, 2018, 2017, and 2016, based on the total operating income of our offices in the indicated regions. For each of the periods presented, we earned more than half of our total operating income in Japan, where we compete with other major Japanese banking groups and financial service providers. We earned the remainder in the Americas, Europe and Middle East, and Asia and Oceania, where we mainly compete with global financial institutions.

	For the fiscal year ended March 31,
	2018			2017			2016
Region:
Japan		70	%		70	%		77	%
Foreign:
Americas		9	%		9	%		5	%
Europe and Middle East		13	%		12	%		10	%
Asia and Oceania (excluding Japan)		8	%		9	%		8	%
Total		100	%		100	%		100	%

Seasonality

Our business is not materially affected by seasonality.

Sources and Availability of Raw Materials

We are not reliant on any particular source of raw materials.

Marketing Channels

See “—Description of Operations and Principal Activities” for a discussion of our marketing channels.

Regulations in Japan

Our businesses are subject to extensive regulation, including the effects of changes in the laws, regulations, policies, voluntary codes of practice and interpretations in Japan. On the other hand, deregulation of banking activities in Japan, and more generally of the Japanese financial system, has proceeded, which has made the Japanese banking industry highly competitive.

Supervisory and regulatory authorities

Pursuant to the Banking Act, the FSA has the authority in Japan to supervise banks, bank holding companies and banks’ principal shareholders, meaning bank shareholders having 20% (or 15% in some cases) or more of the voting rights of a bank. The BOJ also has supervisory authority over banks in Japan based primarily on its contractual agreements and transactions with Japanese banks. Only companies licensed by the Prime Minister are defined as banks under the Banking Act, and licenses may be granted only to a kabushiki kaisha, a joint stock corporation, with paid-up capital of ¥2 billion or more.

The Financial Services Agency of Japan

The Prime Minister has supervisory authority over banks in Japan, which is generally delegated to the Financial Services Agency of Japan (“FSA”) except for matters prescribed by cabinet order. The Minister for Financial Services has the power to direct the FSA. Under the Banking Act, the FSA has supervisory control over banks, bank holding companies and banks’ principal shareholders in Japan, except for matters to which the Prime Minister retains authority.

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The FSA’s authority includes granting and revoking of operating licenses, and approving business activities such as becoming a principal shareholder, establishment of subsidiaries or overseas offices, mergers, corporate splits or business transfers, and dissolutions or discontinuations of business by existing banks, etc.

The FSA may also instruct a Japanese bank to suspend its business or to remove directors if the bank violates laws, other regulations or their articles of incorporation or commits acts contrary to public policy. The FSA may also direct a Japanese bank in financial difficulty to take certain actions, such as holding certain property in Japan for the protection of depositors. Under the prompt corrective action (“PCA”) system, the FSA may take corrective actions in the case of capital deterioration of financial institutions.

The Ministry of Finance and the FSA have introduced a number of regulatory measures into the banking sector in Japan to secure sound management of banks, as well as measures to increase the transparency of the regulatory process, such as bank holding company regulations, single customer credit limits, disclosure regulations, regulations regarding reserves for loan losses and inspections.

The Banking Act authorizes the FSA to inspect banks and bank holding companies in Japan at any time and with any frequency. The FSA monitors the financial soundness of banks and the status and performance of their control systems and reviews their compliance with laws and regulations. The FSA has issued guidelines on its inspection of financial institutions called the Financial Inspection Manual. The Financial Inspection Manual itself does not have the force of law, but the FSA’s inspections of banks are based on the Financial Inspection Manual, which emphasizes the need for bank self-assessment rather than assessment based on the advice of the government authority and risk management by each bank instead of a mere assessment of its assets. On December 15, 2017, the FSA published a report outlining its new supervisory approaches which include expanding the scope of its supervisory approaches from a backward-looking, element-by-element compliance check to substantive, forward-looking and holistic analysis and judgment. According to the report, the FSA will repeal the FSA’s Financial Inspection Manual after April 1, 2019. Following an inspection, the FSA may exercise its authority over a bank under the Banking Act to suspend or terminate its banking business.

The Ministry of Finance

The Ministry of Finance conducts examinations of banks in relation to foreign exchange transactions under the Foreign Exchange and Foreign Trade Act.

The Bank of Japan

The Bank of Japan (“BOJ”) is the central bank of Japan and serves as the principal instrument for the execution of Japan’s monetary policy. The BOJ implements monetary policy mainly by adjusting its basic loan rate, open market operations and imposing deposit reserve requirements. All banks in Japan maintain deposits with the BOJ and rely substantially upon obtaining borrowings from and rediscounting bills with the BOJ. Moreover, most banks in Japan maintain current accounts under agreements with the BOJ pursuant to which the BOJ can conclude a contract with SMBC concerning on-site examinations. BOJ supervision is intended to support the effective execution of monetary policy, while FSA supervision aims to maintain the sound operations of banks in Japan and promote the security of depositors. Through its examinations, the BOJ seeks to identify problems at an early stage and give corrective guidance where necessary.

Regulations Regarding Capital Adequacy and Liquidity

Capital Adequacy Requirement

In 1988, the BCBS issued the Basel Capital Accord. The Basel Capital Accord sets minimum risk-weighted capital ratios for the purpose of maintaining sound management of banks which have international operations. The minimum risk-weighted capital ratio required was 8% on both a consolidated and nonconsolidated basis. In

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2004, the BCBS issued the amended Basel Capital Accord (“Basel II”), which includes detailed measurement of credit risk, the addition of operational risk, a supervisory review process and market discipline through disclosure. These amendments did not change the minimum risk-weighted capital ratio of 8% applicable to banks with international operations (including SMBC). These rules took effect in Japan in 2007, and since 2008, banks are able to apply the advanced IRB approach for credit risk and the AMA for operational risk.

In July 2009, the BCBS approved a final package of measures to enhance certain elements of the Basel II framework, which includes an increase of the risk weights of resecuritization instruments and revisions of certain trading book rules (referred to as “Basel 2.5”), and the FSA’s capital adequacy guidelines which reflect such framework have been applied in Japan from December 2011.

In September 2009, the GHOS reached an agreement on several key measures to strengthen regulation of the banking sector, and in December 2009 the BCBS published a consultative document entitled “Strengthening the resilience of the banking sector” containing proposals on these measures centering on several core areas. The BCBS’ proposals focused on raising the quality, consistency and transparency of the regulatory capital base through measures including a requirement that the predominant form of Tier 1 capital must be common shares and retained earnings; limitations on the use of hybrid instruments with an incentive to redeem; a requirement that regulatory adjustments, including deductions of the amount of net deferred tax assets which rely on the future profitability of a bank, be applied to common equity generally; and a requirement for additional disclosure regarding regulatory capital levels.

The BCBS’ proposals also cover the following key areas:

• strengthening the risk coverage of the capital framework;

• introducing a leverage ratio as a supplementary measure to the Basel II risk-based framework with a view to migrating to a Pillar 1 (minimum capital requirement) treatment based on appropriate review and calibration (for further information, see “Leverage Ratio” below);

• introducing measures to promote the build-up of capital buffers in good times that can be drawn upon in periods of stress; and

• introducing minimum liquidity standards for internationally active banks that include a 30-day liquidity coverage ratio requirement underpinned by a longer-term structural liquidity ratio (for further information, see “Liquidity Requirement” below).

In July 2010, the GHOS reached a broad agreement on the overall design of the BCBS’ capital and liquidity reform package. In addition, in August 2010, the BCBS issued for consultation a proposal to enhance the loss absorbency function of regulatory capital. In September 2010, the GHOS announced a substantial strengthening of existing capital requirements. The framework of the proposed reform was endorsed by the G-20 leaders at their Seoul summit in November 2010. These capital reforms increased the minimum common equity requirement from 2% to 4.5% and will require banks to hold a capital conservation buffer of 2.5% to withstand future periods of stress, bringing the total common equity requirement to 7%. The Tier 1 capital requirement also increased from 4% to 6% (increasing to 8.5% when included together with the above capital conservation buffer). The total capital requirement remains at 8% but will increase to 10.5% with the capital conservation buffer by January 2019. In addition, a countercyclical buffer within a range of 0% to 2.5% of Common Equity Tier 1 capital has been implemented according to national circumstances. The GHOS also agreed on transitional arrangements for implementing the new standards. Under the transitional arrangements, these new capital requirements are being phased in between January 1, 2013 and January 1, 2019. In December 2010, the BCBS published the new Basel III rules text. To reflect changes made by the BCBS, the FSA changed its capital adequacy guidelines. The FSA’s changes have mostly been applied from March 31, 2013, which generally reflect the main measures of the minimum capital requirements of the BCBS that started to be phased in on January 1, 2013 and will be fully applied from March 2019. The FSA’s changes which reflect capital buffer requirements under Basel III and the G-SIB capital surcharge described below have been applied from March 31, 2016.

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In September 2013, the BCBS and the International Organization of Securities Commissions (“IOSCO”) released the final framework for margin requirements for non-centrally cleared derivatives (“2013 framework”). This framework will require high quality liquid assets to be posted as margin on non-centrally cleared derivative transactions, which could adversely affect our liquidity position. The requirements were originally planned to be phased in over a four-year period beginning in December 2015 with the largest, most active and most systemically important participants in the derivatives market, including us. In March 2015, the BCBS and IOSCO released revisions to the 2013 framework, which delayed the beginning of the phase-in period for collecting and posting initial margin on non-centrally cleared trades from December 2015 to September 2016. The full phase-in schedule has been adjusted to reflect this nine-month delay. The revisions also institute a six-month phase-in period of the requirement to exchange variation margin, which began in September 2016.

In addition to the above-mentioned minimum capital requirements and capital buffer requirements under Basel III, organizations identified by the FSB as G-SIBs, which includes us, are required to maintain an additional 1% to 2.5% of Common Equity Tier 1 capital as a percentage of risk-weighted assets based on the organization’s size, interconnectedness, substitutability, complexity and cross-jurisdictional activity as determined by the FSB. This G-SIB capital surcharge requirement started to be phased in from January 2016 and will be fully implemented in January 2019. The amount of G-SIB capital surcharge that applies to us based on the FSB’s determination will be 1% of risk-weighted assets when the requirement is fully applied from 2019. The FSB updates its list of G-SIBs on an annual basis.

G-SIBs will also be subject to a global standard for TLAC, which establishes a minimum requirement for loss-absorbing and recapitalization capacity available in resolution at G-SIBs, to ensure that they can be resolved in an orderly manner without putting public funds at risk. In November 2015, as part of its agenda to address risks arising from G-SIBs, the FSB published the final TLAC standard. The final TLAC standard defines certain minimum requirements for instruments and liabilities so that if a G-SIB fails, it will have sufficient loss-absorbing and recapitalization capacity available to ensure that it can be resolved in an orderly manner which minimizes potential impact on financial stability, maintains the continuity of critical functions and avoids exposing public funds to loss. In addition, in April 2016, the FSA published a paper entitled “The FSA’s Approach to Introduce the TLAC Framework” (“FSA’s Approach”) which was revised in April 2018. This describes the FSA’s approach for the introduction of TLAC requirements in Japan, although it remains subject to change based on future international discussions. According to the FSA’s Approach, the preferred resolution strategy for G-SIBs in Japan is Single Point of Entry resolution, in which resolution powers are applied to the top-level entity of a banking group by a single national resolution authority, although the actual measures to be taken will be determined on a case-by-case basis considering the actual condition of the relevant Japanese G-SIB in crisis. To implement this Single Point of Entry resolution strategy effectively, the FSA plans to require bank holding companies of Japanese G-SIBs, which will be the resolution entities, to (i) meet the minimum external TLAC requirements provided under the FSB’s TLAC standard (being at least 16% of their risk-weighted assets starting from March 2019 and at least 18% of their risk-weighted assets starting from March 2022), and (ii) cause their material subsidiaries that are designated as systemically important by the FSA or that are subject to TLAC requirements or similar requirements by the relevant foreign authorities, including but not limited to certain material sub-groups as provided in the FSB’s TLAC standard, to maintain a certain level of capital and debt recognized by the FSA as internal TLAC, in order that losses incurred at the material sub-group can be absorbed by the bank holding company through such internal TLAC with the involvement of the FSA. In addition, according to the FSA’s Approach, Japanese G-SIBs are expected to be allowed to count Japan’s deposit insurance fund reserves in an amount equivalent to 2.5% of their risk-weighted assets from March 2019 and 3.5% of their risk-weighted assets from March 2022 as external TLAC.

The final TLAC standard also prescribes a minimum TLAC requirement of at least 6% of the resolution group’s Basel III leverage ratio denominator starting from March 2019, increasing to at least 6.75% starting from March 2022, and according to the FSA’s Approach, the same external TLAC requirements on the leverage ratio basis are planned to be required for bank holding companies of Japanese G-SIBs. As a G-SIB, we will be subject to the final TLAC standard, as implemented in Japan.

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Furthermore, as a disincentive for G-SIBs facing the maximum G-SIB capital surcharge to “increase materially their global systemic importance in the future,” an additional 1% capital surcharge could be applied. So long as we are identified as a G-SIB, we are also subject to stronger supervisory mandates and higher supervisory expectations for risk management functions, data aggregation capabilities, risk governance and internal controls. The substance of this heightened supervision has not yet been fixed, but we anticipate that at a minimum any rules will contain more stringent reporting requirements and impose common frameworks for data aggregation and internal risk management processes on G-SIBs.

Because we have been identified as a G-SIB, we are also subject to, among other things, resolution-related requirements described in the FSB’s “Key Attributes of Effective Resolution Regimes for Financial Institutions.” In particular, the FSB has required the initial group of G-SIBs to have in place a recovery and resolution plan, including a group-level plan, containing various specified elements, to be subject to regular resolvability assessments. Under the Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc., issued by the FSA, as part of crisis management, financial institutions identified as G-SIBs must prepare and submit a recovery plan, which includes a description of events that would trigger implementation of the recovery plan and the analysis of the recovery options to the FSA, and the FSA must prepare the resolution plan for each G-SIB.

On December 7, 2017, the GHOS endorsed the outstanding Basel III regulatory reforms. The endorsed reforms include the following elements:

• a revised standardized approach for credit risk;

• revisions to the internal ratings-based approach for credit risk, where the use of the most advanced internally modeled approaches for low-default portfolios will be limited;

• revisions to the credit valuation adjustment framework, including the removal of the internally modeled approach and the introduction of a revised standardized approach;

• a revised standardized approach for operational risk, which will replace the existing standardized approaches and the advanced measurement approach;

• revisions to the measurement of the leverage ratio and a leverage ratio buffer for G-SIBs; and

• revisions to the capital floor, under which banks’ risk-weighted assets must be no lower than 72.5% of total risk-weighted assets as calculated using only the standardized approaches under the revised Basel III framework, and a requirement that banks disclose their risk-weighted assets based on such standardized approaches.

The revised framework, other than revisions to the capital floor, will take effect from January 1, 2022. The revisions to the capital floor will be phased in from January 1, 2022, with an initial capital floor of 50%, and will reach 72.5% by January 1, 2027.

Our securities subsidiaries in Japan are also subject to capital adequacy requirements under the FIEA. Under the requirements, securities firms must maintain a minimum capital adequacy ratio of 120% on a nonconsolidated basis and must file periodic reports with the Commissioner of the FSA or the Director-General of the appropriate Local Finance Bureau, and also publicly disclose their capital adequacy ratio on a quarterly basis. In addition, securities firms whose total assets exceed ¥1,000 billion are required to maintain this minimum capital adequacy ratio on a consolidated basis. This requirement on a consolidated basis is applied in addition to and in a manner similar to the requirements on a nonconsolidated basis referred to above. Failure to meet the capital adequacy requirements will trigger mandatory regulatory action. For example, in the case of the requirement on a nonconsolidated basis, a securities firm with a capital adequacy ratio of greater than 120%, but less than 140% will be required to file daily reports with the Commissioner of the FSA or the Director-General of the appropriate Local Finance Bureau. A securities firm with a capital adequacy ratio of less than 120% may be ordered to change its business conduct, place its property in trust or be subject to other supervisory orders, as the

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relevant authorities deem appropriate. A securities firm with a capital adequacy ratio of less than 100% may be subject to temporary suspension of all or part of its business operations or cancellation of its license to act as a securities broker and dealer.

The capital adequacy ratio for securities firms is defined as the ratio of adjusted capital to a quantified total of business risks, which include market risks, counterparty risks and operational risks (e.g., risks in carrying out daily business activities, such as administrative problems with securities transactions and clerical mistakes) quantified in the manner specified by a rule promulgated under the FIEA. Adjusted capital is defined as net worth less illiquid assets, as determined in accordance with Japanese GAAP. Net worth consists mainly of stated capital, additional paid-in capital, retained earnings, reserves for securities transactions, certain allowances for doubtful current accounts, net unrealized gains (losses) in the market value of investment securities, and subordinated debt. Illiquid assets generally include non-current market assets, certain deposits and advances, and prepaid expenses.

Leverage Ratio

In March 2015, the FSA published its leverage ratio guidelines which have been applied from March 31, 2015 to help ensure broad and adequate capture of both on- and off-balance sheet sources of leverage for internationally active banks. The FSA’s leverage ratio guidelines are based on the text of the leverage ratio framework and disclosure requirements issued by the BCBS in January 2014. From January 1, 2013 to January 1, 2017, the BCBS monitored banks’ leverage ratio data to assess whether the design and calibration of its indicated minimum leverage ratio of 3% was appropriate.

In January 2016, the GHOS agreed that the leverage ratio should be based on a Tier 1 definition of capital and should comprise a minimum level of 3%. On December 7, 2017, the definition and requirements of the leverage ratio were revised as part of the revised Basel III reforms. Under the revised Basel III reforms, in addition to meeting the minimum leverage ratio, G-SIBs are required to meet a leverage ratio buffer, which will take the form of a Tier 1 capital buffer set at 50% of the applicable G-SIB capital surcharge. Various refinements were also made to the definition of the leverage ratio exposure measure. The leverage ratio requirements under the definition based on the framework issued by the BCBS in January 2014 were implemented as a Pillar 1 measurement from January 2018, and those under the revised definition and the leverage ratio buffer requirement for the G-SIBs will be implemented as a Pillar 1 measurement from January 1, 2022.

Liquidity Requirement

In October 2014, the FSA published its guidelines for liquidity coverage ratio (“LCR”) applicable to banks with international operations that have been applied from March 31, 2015. These guidelines are based on the full text of the LCR standard issued by the BCBS in January 2013. LCR is intended to promote resilience to potential liquidity disruptions over a thirty-day horizon and help ensure that global banks have sufficient, unencumbered, high-quality liquid assets to offset the net cash outflows they could encounter under an acute short-term stress scenario. Under the FSA’s LCR guidelines, banks with international operations must maintain LCR of at least 100% on both a consolidated basis and a nonconsolidated basis, while the minimum LCR requirements are being phased in between March 31, 2015 and March 31, 2019 with an increase of 10% in each year starting from 60%.

In October 2014, the BCBS issued the final standard for the net stable funding ratio (“NSFR”), which requires a minimum amount of stable sources of funding at a bank relative to the liquidity profiles of the bank’s assets, as well as the potential for contingent liquidity needs arising from off-balance sheet commitments, over a one-year horizon. The NSFR was scheduled to be introduced as a minimum standard by January 1, 2018.We will be subject to the NSFR requirement, as implemented in Japan, but the FSA has not published any guidelines for the NSFR.

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Self-Assessment, Reserves and Related Disclosure

Financial institutions, including SMBC, are required to establish self-assessment programs to, among other things, analyze their assets giving due consideration to accounting principles and other applicable rules and to classify their assets into categories taking into account the likelihood of repayment and the risk of impairment to the value of the assets. These classifications determine whether an addition to or reduction in reserves or write-offs is necessary.

Pursuant to the Japanese Institute of Certified Public Accountants (“JICPA”) guidelines, the outcome of each financial institution’s self-assessment leads to substantially all of a bank’s loans and other claims on customers being analyzed by classifying obligors into five categories: (1) normal borrowers; (2) borrowers requiring caution; (3) potentially bankrupt borrowers; (4) effectively bankrupt borrowers; and (5) bankrupt borrowers. The reserve for possible loan losses is then calculated based on the obligor categories.

FSA guidelines require banks to classify their assets not only by the five categories of obligor but also by four categories of quality. SMBC has adopted its own internal guidelines for self-assessment which conform to guidelines currently in effect and comply with the PCA system requirements.

Based on the results of the self-assessment discussed above, SMBC is required to establish a reserve for its loan portfolio in an amount SMBC considers adequate at a balance sheet date. Three categories of reserves SMBC establishes, for statutory purposes, along with the Accounting Standards for Banks issued by the Japanese Bankers Association, are a general reserve, a specific reserve and a reserve for specific overseas loan losses.

Under the Banking Act, banks and bank holding companies must disclose their non- and under-performing loans (consolidated and nonconsolidated) as risk-monitored loans. Risk-monitored loans are classified into four categories: (1) bankrupt loans, (2) non-accrual loans, (3) past due loans (three months or more) and (4) restructured loans. Banks and bank holding companies are required to submit to the FSA annual reports on their business including the amount of risk-monitored loans. Banks and bank holding companies must disclose their financial statements on an annual basis. The financial statements consist of the balance sheet and income statement, and explanatory documents regarding business and asset conditions, each prepared under the Banking Act both on a nonconsolidated and consolidated basis.

Independent of the Banking Act disclosure regulations, the Act Concerning Emergency Measures for the Revitalization of Financial Functions requires banks to disclose their loans and their other problem assets. Under this law, assets are classified into four categories: (1) bankrupt and quasi-bankrupt assets, (2) doubtful assets, (3) substandard assets and (4) normal assets. Generally, bankrupt and quasi-bankrupt assets correspond to the total of bankrupt loans and the lower tier of the non-accrual loans (the borrowers of which are effectively bankrupt) under the Banking Act disclosure. Doubtful assets generally correspond to the higher tier portion of the non-accrual loans (the borrowers of which are not, but have the potential to become, bankrupt). The substandard assets generally correspond to the total of the restructured loans and past due loans (three months or more). Bankrupt and quasi-bankrupt assets and doubtful assets also include non-loan assets, for example, securities lending, foreign exchange, accrued interest, advanced payments and customers’ liabilities for acceptances and guarantees.

Prompt Corrective Action System

Under the Prompt Corrective Action (“PCA”) system, the FSA may take corrective actions depending upon the extent of capital deterioration of a financial institution. The FSA may require a bank to submit and implement a capital reform plan, if;

• the total risk-weighted capital ratio of a bank with international operations becomes less than 8% but not less than 4%;

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• the Common Equity Tier 1 risk-weighted capital ratio becomes less than 4.5% but not less than 2.25%; or

• the Tier 1 risk-weighted capital ratio becomes less than 6% but not less than 3%.

The FSA may order a bank to (1) submit and implement a plan for improving its capital; (2) prohibit or restrict the payment of dividends to shareholders or bonuses to officers; (3) reduce assets or restrict any increase in assets; (4) prohibit or restrict the acceptance of deposits under terms less advantageous than ordinary terms; (5) reduce the business of some offices; (6) eliminate some offices other than the head office; (7) reduce or prevent the launching of non-banking businesses; or (8) take certain other actions, if;

• the total risk-weighted capital ratio of a bank with international operations declines to less than 4% but not less than 2%;

• the Common Equity Tier 1 risk-weighted capital ratio becomes less than 2.25% but not less than 1.13%; or

• the Tier 1 risk-weighted capital ratio becomes less than 3% but not less than 1.5%.

The FSA may order a bank to conduct any one of the following: (1) a capital increase; (2) a substantial reduction in its business; (3) a merger; or (4) abolishment of its banking business, if;

• the total risk-weighted capital ratio of a bank with international operations declines to less than 2% but not less than 0%;

• the Common Equity Tier 1 risk-weighted capital ratio becomes less than 1.13% but not less than 0%; or

• the Tier 1 risk-weighted capital ratio becomes less than 1.5% but not less than 0%.

The FSA may order the bank to suspend all or part of its business, if the total risk-weighted capital ratio, the Common Equity Tier 1 risk-weighted capital ratio or Tier 1 risk-weighted capital ratio of a bank with international operations declines below 0%.

The FSA may take actions similar to the actions the FSA may take with respect to a bank, if;

• the total risk-weighted capital ratio of a bank holding company that holds a bank with international operations declines to levels below 8%;

• the Common Equity Tier 1 risk-weighted capital ratio declines to levels below 4.5%; or

• the Tier 1 risk-weighted capital ratio declines to levels below 6%.

Prompt Warning System

The prompt warning system currently in effect allows the FSA to take precautionary measures to maintain and promote the sound operation of financial institutions before those financial institutions become subject to the PCA system. These measures include requiring a financial institution to reform: (1) profitability, if deemed necessary to improve profitability based upon a fundamental profit index; (2) credit risk management, if deemed necessary to reform management of credit risk based upon the degree of large credit concentration and other circumstances; (3) stability, if deemed necessary to reform management of market and other risks based upon, in particular, the effect of securities price fluctuations; and (4) cash flow management, if deemed necessary to reform management of liquidity risks based upon deposit trends and level of reserve for liquidity.

Restrictions on Capital Distributions

Under the FSA’s capital adequacy guidelines and related ordinances, if a bank fails to maintain capital levels under the capital buffer requirements in accordance with Basel III and the G-SIB capital surcharge, the

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FSA may order a bank to submit and implement a reasonable capital distribution constraint plan to restore the capital levels. This plan shall include restrictions on capital distributions, such as dividends, share buybacks, discretionary payments on other Tier 1 capital instruments and bonuses, in such amount as determined depending on the degree of insufficiency of such requirements.

Regulations for Stabilizing the Financial System

Deposit Insurance System

The Deposit Insurance Act was enacted to protect depositors when deposit-taking institutions fail to meet their obligations. The Deposit Insurance Corporation of Japan (“DIC”) implements the law and is supervised by the Prime Minister and the Minister of Finance. Subject to limited exceptions, the Prime Minister’s authority is delegated to the FSA Commissioner.

From April 2015 to March 2017, the DIC received annual insurance premiums from member deposit-taking institutions amounting to 0.054% of deposits primarily for payment and settlement purposes and 0.041% of deposits for other deposits, and from April 2017 to March 2018, they amounted to 0.049% and 0.036%, respectively. Furthermore, from April 2018, they amounted to 0.046% and 0.033% respectively.

Premiums held by the DIC may be either deposited at deposit-taking institutions or used to purchase marketable securities. The insurance money may be paid out to depositors in case of a suspension of repayments of deposits, banking license revocation, dissolution or bankruptcy of a bank. Payouts are generally limited to a maximum of ¥10 million of principal amount together with any interest accrued with respect to each depositor. Only non-interest-bearing deposits that are redeemable upon demand and used by depositors primarily for payment and settlement functions are protected in full.

City banks (including SMBC), regional banks (including member banks of the second association of regional banks), trust banks, credit associations, credit cooperatives, labor banks and Japan Post Bank participate in the deposit insurance system on a compulsory basis.

The Deposit Insurance Act also provides a permanent system for resolving failed deposit-taking institutions.

The basic method for resolving a failed deposit-taking institution under the Deposit Insurance Act is cessation of the business by paying insurance money to depositors up to the principal amount of ¥10 million plus accrued interest per depositor, or pay-off or transfer of the business to another deposit-taking institution, with financial assistance provided within the cost of pay-off. Under the Deposit Insurance Act, transfer of business is regarded as the primary method. In order to affect a prompt transfer of business, the following framework has been established:

• a Financial Reorganization Administrator is appointed by the FSA Commissioner and takes control of the management and assets of the failed deposit-taking institution. The administrator is expected to diligently search for a deposit-taking institution which will succeed to the business of the failed institution;

• if no successor deposit-taking institution can be immediately found, a “bridge bank” will be established by the DIC for the purpose of temporarily maintaining the operations of the failed deposit-taking institution, and the bridge bank will seek to transfer the failed deposit-taking institution’s assets to another deposit-taking institution or dissolve the failed deposit-taking institution; and

• in order to facilitate or encourage a deposit-taking institution to succeed to a failed business, financial aid may be provided by the DIC to any successor deposit-taking institution to enhance its capital after succession or to indemnify it for losses incurred as a result of the succession.

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Where it is anticipated that the failure of a deposit-taking institution may cause an extremely grave problem in maintaining the financial order in Japan or the region where the deposit-taking institution is operating, the following exceptional measures may be taken following deliberation by Japan’s Financial Crisis Response Council:

• the DIC may subscribe for shares or other instruments issued by the relevant deposit-taking institution or the holding company thereof and require the institution to submit to the DIC a plan to reestablish sound management (Item 1 measures) (dai ichigo sochi);

• once the deposit-taking institution fails, financial aid exceeding the cost of pay-off may be available to the institution (Item 2 measures) (dai nigo sochi); and

• if the failed institution is a bank and the problem cannot be avoided by other measures, then the DIC may acquire all of the shares of the bank (Item 3 measures) (dai sango sochi).

In order to fund the above-mentioned activities, the DIC may borrow from financial institutions or issue bonds which may be guaranteed by the Government of Japan.

In addition, on June 12, 2013, a bill to amend the Deposit Insurance Act which includes establishment of a new orderly resolution regime of financial institutions was enacted and became effective on March 6, 2014. Financial institutions including banks, securities companies and insurance companies and their holding companies will be subject to the new resolution regime that includes, among others, the following features.

Under the new resolution regime, where the Prime Minister recognizes that the failure of a financial institution which falls into either of (a) or (b) below may cause significant disruption in the financial markets or other financial systems in Japan if measures described in (a) (specified Item 1 measures) (tokutei dai ichigo sochi) or measures described in (b) (specified Item 2 measures) (tokutei dai nigo sochi) are not taken, the Prime Minister may confirm that any of the following measures need to be applied to the financial institution following deliberation by Japan’s Financial Crisis Response Council:

(a) if the financial institution is not a financial institution whose liabilities exceed its assets, which means it is unable to fully perform its obligations with its assets, the DIC shall supervise the operation of business and management and disposal of assets of that financial institution, and may provide it with loans or guarantees necessary to avoid the risk of significant disruption in the financial systems in Japan, or subscribe for shares or subordinated bonds of, or lend subordinated loans to, the financial institution, taking into consideration the financial condition of the financial institution;

(b) if the financial institution is a financial institution whose liabilities exceed or are likely to exceed its assets or which has suspended or is likely to suspend payment of its obligations, the DIC shall supervise the operation of business and management and disposal of assets of that financial institution and may provide financial aid necessary to assist a merger, business transfer, corporate split or other reorganization in respect to such failed financial institution; and

if a measure set out in (b) above is determined to be taken with respect to a financial institution, the Prime Minister may order that the financial institution’s operations of business and management and disposal of assets be placed under the special control of the DIC. The business or liabilities of the financial institution subject to the special supervision by the DIC as set forth above may also be transferred to a “bridge bank” established by the DIC for the purpose of the temporary maintenance and continuation of operations of, or repayment of the liabilities of, such financial institution, and the bridge bank will seek to transfer the financial institution’s business or liabilities to another financial institution or dissolve the financial institution. The financial aid provided by the DIC to assist a merger, business transfer, corporate split or other reorganization in respect to the financial institution set out in (b) above may take the form of a monetary grant, loan or deposit of funds, purchase of assets, guarantee or assumption of debts, subscription of preferred stock or subordinated bonds, subordinated loan, or loss sharing.

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The expenses for implementation of the measures for these crisis management operations will be borne by the financial industry; provided, however, the Government of Japan may provide subsidies to the DIC within the limit to be specified in the government budget in cases where it is likely to cause extremely serious hindrance to the maintenance of the credit system in Japan or significant turmoil in the financial market or other financial system of Japan if such expenses are to be borne only by the financial industry.

In March 2014, the FSA made an announcement clarifying the requirement of loss absorbency at the point of non-viability for additional Tier 1 instruments and Tier 2 instruments under Basel III issued by banks and bank holding companies. According to the announcement, (i) additional Tier 1 instruments and Tier 2 instruments under Basel III issued by a bank must be written-down or converted into common shares when the Prime Minister of Japan confirms (nintei) that the above-described “Item 2 measures (dai nigo sochi),” “Item 3 measures (dai sango sochi),” or “specified Item 2 measures (tokutei dai nigo sochi)” need to be applied to the bank and (ii) additional Tier 1 instruments and Tier 2 instruments under Basel III issued by a bank holding company must be written-down or converted into common shares when the Prime Minister of Japan confirms (nintei) that the above-described “specified Item 2 measures (tokutei dai nigo sochi)” need to be applied to the bank holding company. The FSA also stated in the announcement that the trigger event for loss absorbency at the point of non-viability with respect to such instruments should be construed in accordance with the then effective financial crisis response framework for banks and bank holding companies that have failed or are likely to fail, since the purpose of such write-down or conversion required under Basel III is to ensure that all classes of these capital instruments fully absorb losses at the point of non-viability before taxpayers are exposed to loss.

Special Measures Act Concerning Facilitation of Reorganization by Financial Institutions, Etc.

Under the Special Measures Act Concerning Facilitation of Reorganization by Financial Institutions, Etc.: (1) for one year after the merger or transfer of the entire business of a deposit-taking institution, the maximum amount to be covered by the deposit insurance will be ¥10 million multiplied by the number of parties to the merger or business transfer; and (2) the procedures are simplified to a certain extent in connection with the transfer of an entire business or a merger with another deposit-taking institution by a deposit-taking institution that is made in accordance with a management base-strengthening plan that has been approved by the Government of Japan.

Single Customer Credit Limit

The Banking Act restricts the aggregate amount of credit and loans that may be extended to any single customer in order to avoid the excessive concentration of credit risks and promote the fair and extensive use of bank credit. To tighten the restrictions under Japanese law to meet international standards, the Banking Act and the related cabinet order were amended in June 2013 and October 2014, respectively and those amendments became effective in December 2014. As a result of the amendments, the credit limit of bank holding companies, banks or bank groups for any single customer, including certain of the customer’s affiliates, was lowered from 40% to 25% of the total qualifying capital of the bank holding company, bank or bank group, with certain adjustments.

Restrictions on Activities of a Bank Holding Company

Under the Banking Act, a bank holding company is prohibited from carrying on any business other than management of its subsidiaries and other incidental businesses. A bank holding company may have any of the following as a subsidiary: a bank, a securities company, an insurance company or a foreign subsidiary that engages in the banking, securities or insurance business. In addition, a bank holding company may have as a subsidiary any company that engages in finance-related business, such as a credit card company, a leasing company or an investment advisory company. Certain companies that are designated by ministerial ordinance as those that cultivate new business fields may also become the subsidiary of a bank holding company.

An amendment to the Banking Act was promulgated in June 2016. Among other things, the amendment (1) requires a bank holding company to enhance group management, by measures including establishment of a

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basic policy of such group, coordination of conflicts of interest among group companies, development of a group compliance system and others; (2) permits a bank holding company or a group company, with prior approval of the Government of Japan, to manage certain businesses of other group companies that are common and duplicative; and (3) permits a bank or a bank holding company, with prior approval of the government, to hold voting rights of companies conducting businesses that contribute to or are expected to contribute to the sophistication of the banking business or the enhancement of customer convenience by utilizing information technology or other technologies, regardless of the shareholding restriction described below. The amendment became effective from April 2017.

Restriction on Aggregate Shareholdings by a Bank

The Act Concerning Restriction on Shareholdings by Banks requires Japanese banks and their qualified subsidiaries to limit the aggregate market value (excluding unrealized gains, if any) of their equity securities holdings to an amount equal to 100% of their consolidated Tier 1 capital, with adjustments, in order to reduce exposure to stock price fluctuations. Treasury shares, shares issued by subsidiaries, shares not listed on any stock exchange or not registered with any OTC market, shares held as trust assets, and shares acquired through debt-for-equity swaps in restructuring transactions are excluded from this limitation. In order to facilitate the disposition of shares of listed stocks held by banks while preventing adverse effects caused by sales of large amounts of shares in a short period of time, share purchases by the Banks’ Shareholdings Purchase Corporation of listed shares have been restarted from March 2009.

Shareholding Restrictions Applicable to a Bank Holding Company and a Bank

The provision of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade which prohibits banks from holding more than 5% of the voting rights of non-financial companies in Japan does not apply to bank holding companies. However, the Banking Act generally prohibits a bank holding company and its subsidiaries, on an aggregated basis, from holding more than 15% of the voting rights of certain types of companies which are not permitted to become subsidiaries of bank holding companies. Also, the Banking Act generally prohibits a bank and its subsidiaries, on an aggregated basis, from holding more than 5% of the voting rights of certain types of companies which are not permitted to become subsidiaries of banks.

Examination and Reporting Applicable to Shareholders of a Bank

The FSA may request the submission of reports or other materials from a bank and/or its bank holding company, or inspect the bank and/or the bank holding company, if necessary, in order to secure the sound and appropriate operation of the business of a bank.

Under the Banking Act, a person who desires to hold 20% (in some exceptional cases, 15%) or more of the voting rights of a bank is required to obtain advance approval of the FSA Commissioner. In addition, the FSA may request the submission of reports or materials from, or may conduct an inspection of, any principal shareholder who holds 20% (in some exceptional cases, 15%) or more of the voting rights of a bank if the FSA deems the action necessary in order to secure the sound and appropriate operation of the business of the bank. Under limited circumstances, the FSA may order the principal shareholder to take such measures as the FSA deems necessary.

Furthermore, any person who becomes a holder of more than 5% of the voting rights of a bank holding company or a bank must report the ownership of the voting rights to the Director General of the relevant local finance bureau within five business days. This requirement is separate from the significant shareholdings report required under the FIEA. In addition, a similar report must be made in respect of any subsequent change of 1% or more in any previously reported holding or in respect of any change in material matters set out in reports previously filed, with some exceptions.

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Regulations for Protection of Customers

Protection of Personal Information

The Act on the Protection of Personal Information and related rules, regulations and guidelines impose requirements on businesses that use databases containing personal information, including appropriate custody of personal information and restrictions on information sharing with third parties.

Act on Sales, Etc. of Financial Products

Due to deregulatory measures in the banking and other financial services industries, more financial products, including highly structured and other complicated products, may now be marketed to a broad base of customers. The Act on Sales, Etc. of Financial Products was enacted to better protect customers from incurring unexpected losses as a result of purchasing these financial products. Under this law, sellers of financial products have a duty to their potential customers to explain important matters (i.e., the nature and magnitude of risk involved) regarding the financial products that they sell. If a seller fails to comply with the duty, the loss in value of the purchased investment product due to the failure to explain is refutably presumed to be the amount of the customer’s loss. An amendment to this law, together with other related laws including the FIEA, became effective in September 2007. The amended law enlarges the scope of the duty of financial services providers to inform customers of important matters related to the financial products that they offer.

Act Concerning Protection of Depositors and Relief for Victims of Certain Types of Fraud

The Act Concerning Protection of Depositors from Illegal Withdrawals Made by Forged or Stolen Cards requires financial institutions to establish internal systems to prevent illegal withdrawals of deposits made using forged or stolen bank cards. The law also requires financial institutions to compensate depositors for any amount illegally withdrawn using forged or stolen bankcards, subject to certain conditions.

The Act Concerning Payment of Dividends for Relief of Damages from Funds in Account used in connection with Crimes requires that financial institutions take appropriate measures against various crimes including the closing of accounts used in connection with fraud and other crimes. The law also requires financial institutions to make, in accordance with specified procedures, payments from funds collected from the closed accounts to victims of certain crimes.

Laws Prohibiting Money Laundering and Terrorist Financing

Act on Prevention of Transfer of Criminal Proceeds

Under the Act on Prevention of Transfer of Criminal Proceeds, which addresses money laundering and terrorism concerns, financial institutions and certain other entities, such as credit card companies, are required to perform customer identification, submit suspicious transaction reports and keep records of their transactions.

Foreign Exchange and Foreign Trade Act of Japan

Under the Foreign Exchange and Foreign Trade Act, SMBC is required to confirm that necessary permission from the relevant authorities is obtained by the customer or obtain necessary permission itself, for certain transaction involving targets who are designated under the law and the relevant orders thereunder including North Korea or Iran.

Act on Special Measures Concerning International Terrorist Assets-Freezing, etc. Conducted by the Government Taking into Consideration United Nations Security Council Resolution 1267, etc.

Under the Act on Special Measures Concerning International Terrorist Assets-Freezing, etc. Conducted by the Government Taking into Consideration United Nations Security Council Resolution 1267, etc., SMBC is generally prohibited to conduct certain transactions including donating or lending of money, securities or real estates or refunding of deposit with International Terrorist, who are designated under the law.

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Other Regulations Related to Our Business

Financial Instruments and Exchange Act of Japan

The Financial Instruments and Exchange Act of Japan (“FIEA”) regulates the securities industry and most aspects of securities transactions in Japan, including public offerings, private placements and secondary trading of securities, ongoing disclosure by securities issuers, tender offers for securities, organization and operation of securities exchanges and self-regulatory organizations and registration of securities companies. The Prime Minister has the authority to regulate the securities industry and securities companies, which authority is delegated to the FSA Commissioner under the FIEA. The Securities and Exchange Surveillance Commission, an external agency of the FSA, is independent from the Agency’s other bureaus and is vested with authority to conduct day-to-day monitoring of the securities markets and to investigate irregular activities that hinder fair trading of securities, including inspection of securities companies as well as banks in connection with their securities business. Furthermore, the FSA Commissioner delegates certain authority to the Director General of the Local Finance Bureau to inspect local securities companies and their branches. A violation of applicable laws and regulations may result in various administrative sanctions, including revocation of registration or authorization, suspension of business or an order to discharge any Director or Executive Officer who has failed to comply with applicable laws and regulations. Securities companies are also subject to the rules and regulations of the Japanese stock exchanges and the Japan Securities Dealers Association, a self-regulatory organization of securities companies.

Regulation of the Consumer Finance Business

In order to resolve the problems of heavily indebted borrowers and to effect proper regulation of the consumer finance business, in June 2010, maximum legal interest rates were reduced to levels prescribed by the Interest Rate Restriction Act, ranging from 15% to 20%, and gray zone interest, which is interest on loans in excess of rates prescribed by the Interest Rate Restriction Act up to the 29.2% maximum rate permitted under the Contributions Act, was abolished. Judicial decisions have strictly interpreted the conditions under which consumer finance companies may retain gray zone interest. As a result, claims for refunds of gray zone interest increased substantially. Amendments to the Money Lending Business Act provide an additional upper limit on aggregate borrowings by an individual from all moneylenders over which moneylenders may not extend further loans, as well as stricter regulation and supervision of moneylender activities.

Installment Sales Act

In order to ensure the fairness of transactions with respect to installment and other sales, prevent damage to consumers and manage credit card numbers, the Installment Sales Act imposes requirements on those who conduct installment sales businesses. In June 2008, revisions to the Installment Sales Act were enacted, most of which became effective in December 2009. The revisions impose more stringent and expanded requirements for credit card companies, including, among other things: (1) wider coverage of installment sales under the regulations; (2) measures to prevent inappropriate extensions of credit for certain credit transactions; (3) measures to prevent excessive lending for certain credit transactions that include requirements to investigate the payment ability of consumers by use of designated credit information organizations and prohibition of execution of credit agreements that exceed the payment ability of consumers; and (4) measures to protect certain information, such as credit numbers.

Base Erosion and Profit Shifting (BEPS)

In July 2013, the Organization for Economic Co-operation and Development (“OECD”) published the Action Plan on Base Erosion and Profit Shifting (“BEPS”) in order to prevent exploiting of gaps and mismatches in tax rules and artificial shifting of profits to low or no-tax locations. In October 2015, OECD published the final package of measures for a comprehensive, coherent and coordinated reform of the international tax rules for 15 key areas. These measures will apply once they are implemented either in domestic laws or in the network of

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bilateral tax treaties. Some of the deliverables published by OECD have been partially reflected to Japanese tax regulations by the tax reforms adopted from 2015 through 2018.

Common Reporting Standard (CRS)

In order to prevent tax evasion and avoidance through offshore financial accounts, the OECD developed the Common Reporting Standards (“CRS”), which calls on jurisdictions to obtain information on financial accounts of non-residents from their financial institutions and automatically exchange that information with other jurisdictions. From the perspective of implementation of the exchange of information based on CRS, the Act on Special Provisions of the Income Tax Act, the Corporation Tax Act and the Local Tax Act Incidental to Enforcement of Tax Treaties as well as the cabinet and ministerial ordinances thereunder has been amended as part of the tax reform of 2015, which became effective on January 1, 2017, and those who open a financial account with a financial institution located in Japan must submit a self-certification indicating the name of the jurisdiction of residence, etc. From 2018, each financial institution must report information pertaining to financial accounts of specific non-residents and the information is automatically exchanged with tax administrations of each jurisdiction on an annual basis.

Deregulation

The developments toward deregulation of the financial system including those described below have made the Japanese banking industry highly competitive.

Deregulation of Bank Engagement in the Securities Business

The gradual relaxation of the restrictions under the Securities and Exchange Act allowed banks to engage in the following business lines, after taking appropriate registration measures with the FSA:

• underwriting and dealing in Japanese government bonds, Japanese municipal bonds, Japanese government guaranteed bonds, commercial paper and certain bonds issued by special purpose companies;

• selling beneficiary certificates of investment trusts and securities issued by an investment company; and

• dealing in listed or OTC securities or derivatives transactions as well as in the securities intermediary business.

In addition, amendments to the FIEA and the Banking Act relating to firewalls and conflicts of interest between banks, securities companies and insurance companies became effective on June 1, 2009. The amendment relating to firewalls abolished the ban on certain officers and employees from holding concurrent posts in banks, securities companies and insurance companies, and relaxed restrictions on the transfer of non-public customer information. On the other hand, the amendment relating to conflicts of interest requires those financial institutions, including banks, to implement proper information management procedures and to develop appropriate internal systems to prevent customer interests from being unfairly harmed through trading by the companies or by other companies within their group. For example, the companies may be required to create information barriers between departments and monitor how it executes transactions with customers.

Deregulation of Insurance Products

The gradual deregulation of the financial services industry permitted banks in Japan to offer an increased variety of insurance products, including pension-type insurance to the full range, as an agent.

Privatization of Japan Post Holdings Co., Ltd.’s subsidiaries

In December 2014, under the Postal Privatization Act, Japan Post Holdings Co., Ltd. (“Japan Post Holdings”), a joint stock corporation that holds shares of operating companies, published a plan for the listing of

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Japan Post Holdings, Japan Post Bank, one of the world’s largest deposit-taking institutions, and Japan Post Insurance Co., Ltd. (“Japan Post Insurance”) and the gradual disposition of its shares of Japan Post Bank and Japan Post Insurance down to approximately 50% ownership. In November 2015, each of Japan Post Holdings, Japan Post Bank and Japan Post Insurance publicly offered approximately 11% of their outstanding shares, respectively, and they were listed on the Tokyo Stock Exchange. Japan Post Bank is required to receive prior approval of the Government of Japan to expand its business until Japan Post Holdings disposes of at least half of the shares of Japan Post Bank.

Regulations in the United States

As a result of its operations in the United States, SMBC and the Company are subject to extensive federal and state banking and securities supervision and regulation. SMBC engages in U.S. banking activities directly through its branches in Los Angeles, San Francisco and New York and through its representative offices in Houston, Silicon Valley and Chicago. SMBC also controls a U.S. banking subsidiary, Manufacturers Bank, and a U.S. broker-dealer subsidiary, SMBC Nikko Securities America, Inc.

SMBC’s New York branch is supervised by the Federal Reserve Bank of New York and the New York State Department of Financial Services, but its deposits are not insured (or eligible to be insured) by the Federal Deposit Insurance Corporation (“FDIC”). SMBC’s Los Angeles and San Francisco branches are supervised by the Federal Reserve Bank of San Francisco and the California Department of Business Oversight, but their deposits are not insured (or eligible to be insured) by the FDIC. SMBC’s representative office in Houston is subject to regulation and examination by the Texas Department of Banking and the Federal Reserve Bank of Dallas. SMBC’s representative office in Silicon Valley is subject to regulation and examination by the California Department of Business Oversight and the Federal Reserve Bank of San Francisco. The SMBC’s representative office in Chicago is subject to regulation and examination by the Illinois Department of Financial and Professional Regulation and the Federal Reserve Bank of Chicago.

SMBC and the Company are qualifying foreign banking organizations under the U.S. International Banking Act of 1978, as amended (“International Banking Act”), and as such are subject to regulation as bank holding companies under the U.S. Bank Holding Company Act of 1956, as amended (“Bank Holding Company Act”). Additionally, SMBC and the Company are bank holding companies by virtue of their ownership of Manufacturers Bank. As a result, SMBC, the Company and their U.S. operations are subject to regulation, supervision and examination by the Federal Reserve Board as their U.S. “umbrella supervisor.”

Manufacturers Bank is a California state-chartered bank that is not a member of the Federal Reserve System. As a state non-member bank the deposits of which are insured by the FDIC, Manufacturers Bank is subject to regulation, supervision and examination by the FDIC and the California Department of Business Oversight.

In order to further expand our business in the U.S., we and SMBC obtained financial holding company status under the Bank Holding Company Act in May 2013, which authorizes the expansion of the scope of services we provide in the U.S., including the underwriting, dealing and making markets in, securities and other investment banking services.

Restrictions on Business Activities

As described below, federal and state banking laws and regulations restrict SMBC’s and the Company’s ability to engage, directly or indirectly through subsidiaries, in certain activities in the United States.

SMBC and the Company are required to obtain the prior approval of the Federal Reserve Board before directly or indirectly acquiring the ownership or control of more than 5% of any class of voting shares of U.S. banks, certain other depository institutions and bank or depository institution holding companies. Under the Bank

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Holding Company Act and the Federal Reserve Board regulations, SMBC is required to serve as a source of financial strength to Manufacturers Bank. In addition, SMBC’s U.S. banking operations (including Manufacturers Bank and SMBC’s U.S. branches) are also restricted from engaging in certain “tying” arrangements involving products and services.

As financial holding companies, we, SMBC and the companies under our control are permitted to engage in a broader range of activities in the U.S. and abroad than permitted for bank holding companies and their subsidiaries. Unless otherwise limited by the Federal Reserve Board, financial holding companies generally can engage, directly or indirectly in the U.S. and abroad, in financial activities, either de novo or by acquisition, by providing after-the-fact notice to the Federal Reserve Board. These financial activities include underwriting, dealing and making markets in securities, insurance underwriting and brokerage and making merchant banking investments in non-financial companies for a limited period of time, as long as the financial holding company does not directly or indirectly manage the non-financial companies’ day-to-day activities, and the financial holding company’s banking subsidiaries engage only in permitted cross-marketing with the non-financial companies. If we or SMBC cease to qualify as financial holding companies, we could be barred from new financial activities or acquisitions, and have to discontinue the broader range of activities permitted to financial holding companies.

Other Prudential Restrictions

SMBC’s U.S. branches and Manufacturers Bank are subject to requirements and restrictions under U.S. federal and state law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be made and limitations on the types of investments that may be made and the types of services that may be offered. Various consumer laws and regulations also affect the operations of Manufacturers Bank, and to a limited extent, SMBC’s New York and California branches.

In addition, under U.S. federal banking laws, state-chartered banks (such as Manufacturers Bank) and state-licensed branches and agencies of foreign banks (such as SMBC’s New York branch) may not, as a general matter, engage as a principal in any type of activity not permissible for their federally chartered or licensed counterparts, unless (i) in the case of state-chartered banks, the FDIC determines that the additional activity would pose no significant risk to the FDIC’s Deposit Insurance Fund and is consistent with sound banking practices and (ii) in the case of state-licensed branches and agencies of foreign banks, the Federal Reserve Board determines that the additional activity is consistent with sound banking practices. The U.S. federal banking laws also subject state branches and agencies of foreign banks to the same single-borrower lending limits that apply to federal branches or agencies, which are substantially similar to the lending limits applicable to national banks. For SMBC’s U.S. branches, these single-borrower lending limits are based on the worldwide capital of SMBC.

Under the International Banking Act, the Federal Reserve Board may terminate the activities of any U.S. office of a foreign bank if it determines (i) that the foreign bank is not subject to comprehensive supervision on a consolidated basis in its home country (unless the home country is making demonstrable progress toward establishing such supervision), (ii) that there is reasonable cause to believe that such foreign bank or its affiliate has violated the law or engaged in an unsafe or unsound banking practice in the United States and, as a result of such violation or practice, the continued operation of the U.S. office would be inconsistent with the public interest or with the purposes of federal banking laws, or (iii) for a foreign bank that presents a risk to the stability of the United States financial system, the home country of the foreign bank has not adopted, or made demonstrable progress toward adopting, an appropriate system of financial regulation to mitigate such risk.

There are various qualitative and quantitative restrictions on the extent to which the Company and its subsidiaries can borrow or otherwise obtain credit from its U.S. bank subsidiary, Manufacturers Bank, or engage in certain other transactions involving that subsidiary. In general, these transactions must be on terms that would ordinarily be offered by Manufacturers Bank to unaffiliated entities, and credit transactions must be secured by designated amounts of specified collateral. In addition, certain transactions, such as certain purchases by

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Manufacturers Bank from SMBC or its non-bank subsidiaries, are subject to volume limitations. Effective in July 2012, the Dodd-Frank Act (discussed below) subjects credit exposure arising from derivative transactions, securities borrowing and lending transactions, and repurchase/reverse repurchase agreements to these collateral and volume transactions limitations.

Regulatory Requirements Applicable to Financial Holding Companies

As financial holding companies, we and SMBC are subject to additional regulatory requirements. For example, we, SMBC and Manufacturers Bank, which is our U.S. insured depository institution subsidiary, must be “well capitalized,” meaning maintenance of a Tier 1 risk-based capital ratio of at least 6% and a total risk-based capital ratio of at least 10% under the revised capital standards of Basel III, which became effective on January 1, 2015 in the U.S. In addition, we, SMBC and Manufacturers Bank must be “well managed,” including maintenance of examination ratings that are at least satisfactory. Further, SMBC is also required to be well capitalized and well managed under its home country standards, which must be comparable to those required for a U.S. bank. Failure to comply with such requirements would require us and SMBC to prepare a remediation plan, and we would not be able to undertake new business activities or acquisitions based on our status as a financial holding company during any period of noncompliance without the prior approval of the Federal Reserve Board. Divestiture or termination of certain business activities in the U.S. may also be required as a consequence of failure to correct such conditions within 180 days.

Regulations for Stabilizing the Financial System

U.S. Financial Regulatory Reform

Both the scope of the U.S. laws and regulations and the intensity of supervision have increased in recent years, in response to the financial crisis as well as other factors such as technological and market changes. Regulatory enforcement and fines have also increased across the banking and financial services sector. Many of these changes have occurred as a result of the Dodd-Frank Act and its implementing regulations, most of which are now in place, and have resulted in or are anticipated to result in additional costs and impose certain limitations on our and SMBC’s business activities. The current U.S. Presidential administration has expressed different policy goals with respect to financial regulation, but the impact that such U.S. Presidential administration’s policy goals or any new or proposed legislation could have on the regulatory requirements currently imposed on us and SMBC remains uncertain.

In 2013, the Federal Reserve Board, the SEC, the Office of the Comptroller of the Currency (“OCC”), the FDIC, and the Commodity Futures Trading Commission (“CFTC”) adopted final rules implementing what is known as the “Volcker Rule.” The final rules restrict the ability of banking entities, such as us and SMBC, to engage as principal in proprietary trading activities, or sponsor, invest in, or retain investments in certain private equity, hedge or similar funds, but a number of exclusions and exemptions limit the final rules’ extraterritorial reach.

The Dodd-Frank Act provides regulators with tools to impose greater capital, leverage and liquidity requirements and other prudential standards, particularly for financial institutions that pose significant systemic risk and bank holding companies with assets of $50 billion or more. In imposing heightened prudential standards on non-U.S. financial institutions such as us and SMBC, the Federal Reserve Board is directed to take into account the principle of national treatment and equality of competitive opportunity, and the extent to which the non-U.S. bank holding company is subject to comparable home country standards.

In 2014, the Federal Reserve Board adopted final rules that apply enhanced prudential standards to the U.S. operations of large non-U.S. banking organizations, including us. The final rules became effective on July 1, 2016, and require each of certain large non-U.S. banking organizations, such as us, to certify that it is subject to home country capital standards that are broadly consistent with the Basel capital framework, including Basel III;

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conduct home country capital stress tests that are comparable to U.S. standards; comply with a certain liquidity requirements, including, among other things, a U.S. liquidity buffer requirement for its U.S. branches and agencies based on the results of internal liquidity stress testing; and establish a U.S. risk committee that periodically reviews the risk management policies and oversees the risk management framework of its U.S. operations.

Under the final rules, non-U.S. banking organizations with combined U.S. assets (excluding assets held by its U.S. branches and agencies) of $50 billion or more, are required to establish a separately capitalized top-tier U.S. intermediate holding company. However, this requirement does not apply to us because we do not meet this threshold. Although proposed rules have been released, the final rules for single counterparty credit limits and for early remediation have yet to be promulgated.

The Dodd-Frank Act removed a longstanding prohibition on the payment of interest on demand deposits by Manufacturers Bank and SMBC’s three branches in the United States. In addition, the Dodd-Frank Act requires that the lending limits take into account credit exposure arising from derivative transactions and securities lending, securities borrowing, and repurchase agreements and reverse repurchase agreements with counterparties. In 2013, the OCC adopted the final rules that implement these new lending limits, and our New York, Los Angeles, and San Francisco branches must comply with these limits, in addition to existing state lending limits that apply to the branches. Additionally, as a California state-chartered bank, Manufacturers Bank is subject to state lending limits, which also apply to credit exposure arising from derivative transactions.

The Dodd-Frank Act also provides for an extensive framework for the regulation of OTC derivatives, including mandatory clearing, exchange trading and transaction reporting of certain OTC derivatives. In 2012, the final joint rules of the CFTC and the SEC that further define “swap” and “security based swap” became effective. As a result, certain entities are required to register with the CFTC as “swap dealers” or “major swap participants” and our subsidiary, SMBC Capital Markets, Inc., became provisionally registered as a swap dealer on December 31, 2012. Mandatory clearing, trade execution and reporting requirements for swaps took effect in 2013. Registration as a security-based swap dealer is not required until the SEC finalizes certain security-based swap rules that are still in proposed form.

Furthermore, the Dodd-Frank Act requires the SEC to establish rules requiring issuers with listed securities, which may include non-U.S. private issuers such as us, to establish a “clawback” policy to recoup previously awarded compensation in the event of an accounting restatement. The Dodd-Frank Act also grants the SEC discretionary rule-making authority to impose a new fiduciary standard on brokers, dealers and investment advisers, and expands the extraterritorial jurisdiction of U.S. courts over actions brought by the SEC or the United States with respect to violations of the antifraud provisions in the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940.

On May 24, 2018, President Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act, which is the first significant legislative reform of the Dodd Frank Act. Although this legislation makes changes to several major provisions of the Dodd Frank Act, the changes mainly relate to smaller U.S. banks and to U.S. bank holding companies, and have we expected them to limited effect upon the SMBC Group.

Laws Prohibiting Money Laundering and Terrorist Financing

The Bank Secrecy Act / USA PATRIOT Act of 2001

The Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001 (“PATRIOT Act”) contains measures to prevent and detect the financing of terrorism and international money laundering by imposing significant compliance and due diligence obligations, creating crimes, providing for penalties and expanding the extraterritorial jurisdiction of the United States. The Bank Secrecy Act, as amended, imposes anti-money

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laundering compliance obligations on U.S. financial institutions, including the U.S. offices of foreign banks. The passage of the PATRIOT Act and other events have resulted in heightened scrutiny of compliance with the Bank Secrecy Act and anti-money laundering rules by federal and state regulatory and law enforcement authorities. Certain provisions of the PATRIOT Act expired in June 2015 and were extended in part by the USA FREEDOM Act of 2015, enacted in June 2015.

U.S. Sanctions Targeting Iran Related Activities

Starting in 2010, the U.S. government implemented various sanctions targeting non-U.S. parties that engage in specified Iran-related activities. Various statutes, Executive Orders and regulations, including the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 (which, among other things, amended the Iran Sanctions Act of 1996, Section 1245 of the National Defense Authorization Act for Fiscal Year 2012, Executive Orders 13622 and 13645, the Iran Threat Reduction and Syria Human Rights Act of 2012, and the Iran Freedom and Counter-Proliferation Act of 2012, authorize or authorized the imposition of sanctions on parties that engage in, among other things, certain activities relating to Iran’s energy, petroleum, shipping or shipbuilding sectors or that facilitate “significant” transactions or provide “significant financial services” for certain Iran-linked individuals or entities or the Islamic Revolutionary Guard Corps.

Prior to U.S. withdrawal from the JCPOA (discussed below), the United States along with the European Union provided Iran with certain sanctions relief. On Implementation Day, the United States government revoked certain Iran-related Executive Orders, temporarily waived certain statutory provisions (in certain cases, extending temporary sanctions waivers that had previously been in effect), and removed various individuals and entities from the Specially Designated Nationals and Blocked Persons List (the “SDN List”) maintained by OFAC. However, U.S. persons continued to be generally prohibited from engaging in transactions involving Iran. In addition, certain U.S. secondary sanctions targeting Iran remained in effect, including those targeting significant transactions involving Iranian or Iran-related SDNs or the Islamic Revolutionary Guard Corps. Non-U.S. financial institutions that engaged in sanctionable activity could lose their ability to open or maintain correspondent or payable-through accounts with U.S. financial institutions, among other possible sanctions. It is SMBC’s policy not to conduct activities targeted by secondary sanctions.

On May 8, 2018, President Trump announced that he was terminating the United States’ participation in the JCPOA and issued a National Security Presidential Memorandum directing his administration to immediately begin the process of fully re-imposing sanctions that target critical sectors of Iran’s economy, including the energy, petrochemical, and financial sectors. This includes the resumption of U.S. efforts to reduce Iran’s crude oil sales, which will be backed by the potential threat of correspondent account sanctions targeting foreign financial institutions once the applicable wind-down period has ended, subject (as before the JCPOA) to exceptions from such sanctions for countries determined by the U.S. State Department to have significantly reduced purchases of crude oil from Iran. Depending on the particular sanctions measure, the United States provides for either a 90-day or 180-day period from May 8, 2018 in which activities permitted under or consistent with the JCPOA can be wound down. Following the conclusion of the applicable wind-down period, persons engaged in such activities involving Iran will face exposure to secondary sanctions or enforcement actions under U.S. law. Additionally, the U.S. government has indicated that no later than November 5, 2018, the U.S. government will re-impose, as appropriate, sanctions on persons removed on Implementation Day from the SDN List or other sanctions lists.

Ukraine Freedom Support Act of 2014, as Amended

In order to deter the Russian government from further destabilizing and invading Ukraine, the U.S. government enacted H.R. 5859, the Ukraine Freedom Support Act of 2014 (signed into law on December 18, 2014). Among other things, the Act, as amended by the Countering America’s Adversaries Through Sanctions Act of 2017 (signed into law on August, 2017), mandates prohibitions or strict limitations on the opening or maintaining of correspondent or payable-through accounts in the United States by non-U.S. financial institutions

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determined by the U.S. government (i) to have knowingly engaged in on or after December 18, 2014 in significant transactions involving certain activities described in the Act, including those involving individuals or entities on whom sanctions are imposed pursuant to the Act for making a significant investment in a project for the extraction of deepwater, Arctic offshore or shale formation crude oil in Russia, or (ii) to have knowingly facilitated, on or after June 16, 2015, a significant financial transaction on behalf of any Russian individual or entity included on the SDN List pursuant to Ukraine-related sanction programs.

Foreign Account Tax Compliance Act

Provisions of the U.S. tax law commonly referred to as the Foreign Account Tax Compliance Act (“FATCA”), which became effective on July 1, 2014, aims to prevent U.S. persons from hiding their financial assets or evading their U.S. federal income tax obligations by the use of offshore accounts. A foreign financial institution that has entered into an agreement with the U.S. Internal Revenue Service (“IRS”) pursuant to which it agrees to comply with FATCA, referred to as a “participating foreign financial institution” (“PFFI”), is required to perform specified due diligence, reporting and withholding functions (a “PFFI agreement”). Specifically, under FATCA, a PFFI is required to ascertain the U.S. status of customers through specified due diligence and report certain information annually to the IRS. In cases where customers are not compliant with FATCA, PFFIs are obligated to carry out specified reporting and withholding procedures as prescribed. The consequences for foreign financial institutions that are not compliant with FATCA include being subjected to a 30% withholding tax on certain withholdable payments from U.S. sources and reporting to the IRS.

The United States entered into intergovernmental agreements or reached agreements in substance with more than 100 countries in furtherance of the objectives of FATCA, which modify the operation of FATCA with respect to financial institutions located in those countries. The United States and Japan have entered into an intergovernmental agreement to facilitate the implementation of FATCA pursuant to which Japanese financial institutions (such as us and certain of SMBC Group companies) are directed by the Japanese authorities to register with the IRS and fulfill obligations consistent with those required under a PFFI agreement. We have registered with the IRS to become a PFFI. We are committed to complying with FATCA as a PFFI and abiding by the terms of our PFFI agreement with the IRS within the jurisdictions in which we operate and in accordance with the time frame set out by the IRS. We intend to closely monitor FATCA developments and evolving industry practices to ensure continued compliance with FATCA moving forward.

Other Regulations in the United States

In the United States, SMBC’s U.S.-registered broker-dealer subsidiary, SMBC Nikko Securities America, Inc. is regulated by the SEC. Broker-dealers are subject to regulations that cover all aspects of the securities business, including:

• sales methods;

• trade practices among broker-dealers;

• use and safekeeping of customers’ funds and securities;

• capital structure;

• record-keeping;

• the financing of customers’ purchases; and

• the conduct of directors, officers and employees.

In addition, SMBC Nikko Securities America, Inc. is a member of and regulated by the Financial Industry Regulatory Authority and is regulated by the individual state securities authorities in the states in which it operates. The U.S. government agencies and self-regulatory organizations, as well as state securities authorities

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in the United States having jurisdiction over SMBC’s U.S. broker-dealer affiliates, are empowered to conduct administrative proceedings that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer or its directors, officers or employees.

Regulations in Other Jurisdictions

Elsewhere in the world, our operations are subject to regulation and control by local central banks and monetary authorities.

Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934

Section 13(r) of the Securities Exchange Act of 1934, as amended, requires an issuer to disclose whether it or any of its affiliates knowingly engaged in certain activities or transactions relating to Iran or with individuals or entities designated by the U.S. government under specified Executive Orders, even if those activities are not prohibited by U.S. law and are conducted outside the United States by non-U.S. affiliates. During the twelve months ended March 31, 2018, one affiliate of SMFG, SMBC, engaged in activities subject to disclosure under Section 13(r). SMBC conducted these activities consistent with its internal policies and procedures, the policies and procedures of SMFG, and applicable laws and regulations, and to the extent they are not sanctionable under U.S. secondary sanctions.

SMBC issued letters of credit and provided remittance and other settlement services in connection with customers’ trade transactions between Japan and Iran. These transactions principally involved the importation of oil into Japan or exportation of civilian commercial products from Japan and were conducted with Iranian banks, including the Central Bank of Iran and one other bank owned by the Government of Iran. SMBC supported a Japanese importing company by paying bills of exchange in connection with imports of crude oil from an Iranian oil company owned by the Government of Iran. These transactions did not involve entities or other persons on the SDN List and did not involve the settlement of U.S. dollar-denominated payments cleared through U.S. banks. SMBC has informed SMFG that it intends to continue to engage in these types of transactions to the extent permitted under applicable regulations and to the extent they are not sanctionable under U.S. secondary sanctions. For the twelve months ended March 31, 2018, the gross revenue related to these transactions was ¥10.9 million, representing about 0.0003% of SMFG’s total interest and fee income. SMFG does not allocate direct costs to interest and fee income and therefore does not calculate net profits with respect to these transactions.

SMBC has issued performance bonds that supported various projects, including the construction of petroleum plants in Iran. Some of these performance bonds had counterparties that were entities controlled by the Government of Iran. Some of these performance bonds have matured, and SMBC has not renewed and will not renew them, but SMBC continues to have obligations under the matured performance bonds until they are returned or cancelled by the beneficiaries. SMBC has also received fees from its customers on whose behalf it issued the performance bonds. For the twelve months ended March 31, 2018, the gross revenue relating to these transactions was ¥21.7 million, representing less than 0.0007% of SMFG’s total interest and fee income. As noted above, SMFG does not allocate direct costs to interest and fee income and therefore does not calculate net profits with respect to these transactions. SMBC has informed SMFG that it intends to continue to accept fee income from its customers for whose account the performance bonds were issued and to pay the relevant fees to the Iranian banks, to the extent authorized by the Ministry of Finance of Japan or otherwise permitted under applicable regulations, until the bonds are returned or cancelled. However, SMBC strongly urges the relevant customers to ask the beneficiaries to agree to return or cancel the matured performance bonds.

SMBC has frozen an account of an Iranian bank designated under Executive Order 13224 pursuant to Japanese foreign exchange laws, and has frozen the U.S. dollar accounts of all Iranian banks. SMBC still maintains three Japanese yen accounts of government-owned Iranian banks, including an account for the Central Bank of Iran, and certain transactions described in this disclosure were conducted through the use of such

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accounts. These transactions were conducted in accordance with Japanese law, and we do not believe that the transactions were sanctionable under U.S. sanctions that were in effect at the time the transactions occurred. The gross revenue attributable to the accounts of government-owned Iranian banks for the twelve months ended March 31, 2018, was less than ¥0.8 million, representing less than 0.0001% of SMFG’s total interest and fee income. SMFG does not allocate direct costs to interest and fee income and therefore does not calculate net profits with respect to these transactions. SMBC has informed SMFG that it intends to continue to maintain the Iranian accounts described above to the extent permitted under applicable laws and regulations and to the extent the activities are not targeted by secondary sanctions.

As of the date of this annual report, to our knowledge, there is no other activity for the twelve months ended March 31, 2018 that requires disclosure under Section 13(r) of the Securities Exchange Act of 1934.

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4.C.    ORGANIZATIONAL STRUCTURE

The following chart presents our corporate structure summary at March 31, 2018.

(1) These companies are our associates.

(2) Chart indicates the classification of SMBC Group companies into each of SMBC Group-wide business segments.

As the ultimate holding company of the SMBC Group, we are responsible for:

• group strategy and management;

• group resource allocation;

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• group financial accounting;

• investor relations;

• capital strategy;

• group IT strategy;

• HR management for group executives;

• group risk management, internal control and compliance;

• compensation schemes; and

• efficiently harmonizing our operations on a SMBC Group-wide basis.

Principal Subsidiaries

Our principal subsidiaries at March 31, 2018 are shown in the list below. We consolidate all entities that we control. We control an entity when we are exposed, or have rights, to variable returns from our involvement with the entity and have the ability to affect those returns through our power over the entity.

Principal domestic subsidiaries

Company Name	Proportion of Ownership Interest(1)		Proportion of Voting Rights(1)			Main Business
	(%)		(%)
Sumitomo Mitsui Banking Corporation		100.0		100.0		Commercial banking
SMBC Trust Bank Ltd.		100.0		100.0		Trust Banking
SMBC Guarantee Co., Ltd.		100.0		100.0		Credit guarantee
Sumitomo Mitsui Finance and Leasing Company, Limited		60.0		60.0		Leasing
SMFL Capital Company, Limited		100.0		100.0		Leasing
SMBC Nikko Securities Inc.		100.0		100.0		Securities
Sumitomo Mitsui Card Company, Limited		65.9		65.9		Credit card
Cedyna Financial Corporation		100.0		100.0		Credit card and consumer credit
SMBC Consumer Finance Co., Ltd.		100.0		100.0		Consumer lending
SMBC Mobit Co., Ltd.		100.0		100.0		Consumer lending
SMM Auto Finance, Inc.		51.0		51.0		Automobile sales financing
SMBC Finance Service Co., Ltd.		100.0		100.0		Collecting agent and factoring
The Japan Research Institute, Limited		100.0		100.0		System development, data processing, management consulting and economic research
Sumitomo Mitsui Asset Management Company, Limited		60.0		60.0		Investment advisory and investment trust management
SAKURA KCS Corporation		47.4		47.4	(2)	System engineering and data processing
NCore Co., Ltd.		51.0		51.0		Data processing service and consulting
SMBC Venture Capital Co., Ltd.		40.0		40.0	(2)	Venture capital
SMBC Consulting Co., Ltd.		100.0		100.0		Management consulting and information services
Japan Pension Navigator Co., Ltd.		69.7		69.7		Operational management of defined contribution pension plans

(1) Percentages of proportion of ownership interest and proportion of voting rights have been truncated.

(2) These companies are accounted for as subsidiaries, despite our holdings of less than 50% of the voting rights, because we are able to govern the financial and operating policies of these companies under a statute or an agreement, or by designating the majority of the members of the board of directors.

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Principal foreign subsidiaries

Company Name	Country of Incorporation	Proportion of Ownership Interest(1)		Proportion of Voting Rights(1)		Main Business
		(%)		(%)
Sumitomo Mitsui Banking Corporation Europe Limited	U.K.		100.0		100.0	Commercial banking
Sumitomo Mitsui Banking Corporation (China) Limited	China		100.0		100.0	Commercial banking
Manufacturers Bank	U.S.A.		100.0		100.0	Commercial banking
Banco Sumitomo Mitsui Brasileiro S.A.	Brazil		100.0		100.0	Commercial banking
JSC Sumitomo Mitsui Rus Bank	Russia		100.0		100.0	Commercial banking
PT Bank Sumitomo Mitsui Indonesia	Indonesia		98.4		98.4	Commercial banking
Sumitomo Mitsui Banking Corporation Malaysia Berhad	Malaysia		100.0		100.0	Commercial banking
SMBC Leasing and Finance, Inc.	U.S.A.		100.0		100.0	Leasing
SMBC Aviation Capital Limited	Ireland		90.0		90.0	Leasing
SMBC Nikko Securities America, Inc.	U.S.A.		100.0		100.0	Securities
SMBC Nikko Capital Markets Limited	U.K.		100.0		100.0	Securities
SMBC Capital Markets, Inc.	U.S.A.		100.0		100.0	Derivatives

(1) Percentages of proportion of ownership interest and proportion of voting rights have been truncated.

4.D.    PROPERTY, PLANT AND EQUIPMENT

The assets for rent we own for the purpose of operating leases mainly consist of aircraft for the leasing business. We own or lease the land and buildings in which we conduct our business. Most of the property that we operate in Japan is owned by us to be used by our branches. In contrast, our international operations are conducted out of leased premises. Our head office building in Marunouchi is leased from a third party. Our largest property is SMBC’s East Tower in Marunouchi, with a net carrying value of ¥172 billion, including the land and building, at March 31, 2018.

The following table shows the net carrying amount of our tangible fixed assets at March 31, 2018.

	At March 31, 2018
	(In millions)
Assets for rent	¥	580,687
Land		459,567
Buildings		331,997
Leased assets		6,149
Others		131,732
Total	¥	1,510,132

For more information, see Note 12 “Property, Plant and Equipment” to our consolidated financial statements included elsewhere in this annual report.

The total area of land related to our material office and other properties at March 31, 2018 was approximately 703,000 square meters for owned land and approximately 14,000 square meters for leased land.

We are not aware of any material environmental issues that may affect the utilization of our assets.

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Item 4A. Unresolved Staff Comments

None.

Item 5. Operating and Financial Review and Prospects

The discussion below should be read together with “Item 3.A. Selected Financial Data” and our consolidated financial statements and related notes included elsewhere in this annual report. Unless otherwise indicated, we present our information on a consolidated basis.

OVERVIEW

Operating Environment

Our results of operations and financial condition are significantly affected by developments in Japan as well as the global economy.

For the fiscal year ended March 31, 2018, Japanese gross domestic product (“GDP”) increased by 1.6%, compared with an increase of 1.2% in the previous fiscal year, based on data published in June 2018 by the Cabinet Office of the Government of Japan.

For the fiscal year ended March 31, 2018, the Japanese economy continued to recover gradually. The quarter-on-quarter growth rate of Japanese GDP was 0.5% for the period from April to June 2017, primarily due to an increase in private consumption. For the period from July to September 2017, Japanese GDP increased by 0.5% on a quarter-on-quarter basis, reflecting the improvement in exports of goods and services. For the period from October to December 2017, Japanese GDP increased by 0.3% on a quarter-on-quarter basis with private consumption increasing. However, for the period from January to March 2018, Japanese GDP decreased by 0.2% on a quarter-on-quarter basis.

Private consumption, which accounts for about 56% of Japanese GDP, increased by 0.9% for the fiscal year ended March 31, 2018, reflecting the steady improvement in the employment and income situation. For the period from April to June 2017, it increased by 0.7% on a quarter-on-quarter basis. However, it decreased by 0.7% on a quarter-on-quarter basis for the period from July to September 2017. This is partly due to a temporary correction to the rapid increase in the previous quarter and the negative impact of unusual weather conditions on private consumption. Although, it increased by 0.3% on a quarter-on-quarter basis for the period from October to December 2017, it decreased by 0.1% on a quarter-on-quarter basis for the period from January to March 2018.

Private investment, which accounts for about 19% of Japanese GDP, consists of capital investments by business and private residential investments. Capital investments by business increased by 3.2% for the fiscal year ended March 31, 2018, since corporate earnings remained at a high level. For the period from April to June 2017, capital investments by business increased by 0.9% on a quarter-on-quarter basis. For the periods from July to September 2017 and October to December 2017, they increased, on a quarter-on-quarter basis, by 1.0% and 0.7%, respectively. Thereafter, for the period from January to March 2018, they increased by 0.3% on a quarter-on-quarter basis. Private residential investments decreased by 0.3% for the fiscal year ended March 31, 2018. For the period from April to June 2017, they increased by 0.9% on a quarter-on-quarter basis. However, for the periods from July to September 2017 and October to December 2017, they decreased, on a quarter-on-quarter basis, by 1.6% and 2.7%, respectively, reflecting the downward trend of both the number of dwelling units and the area of floor space for construction starts of dwellings in the second half of the previous fiscal year. Then, for the period from January to March 2018, they decreased by 1.8% on a quarter-on-quarter basis.

Changes in private inventories contributed Japanese GDP growth by 0.1 percentage points for the fiscal year ended March 31, 2018. For the period from April to June 2017, they pulled down Japanese GDP growth by 0.1 percentage points on a quarter-on-quarter basis. However, they contributed Japanese GDP growth, on a quarter-on-quarter basis, by 0.4 percentage points for the period from July to September 2017 and by 0.2 percentage points for

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the period from October to December 2017, respectively. Thereafter, for the period from January to March 2018, they pulled down Japanese GDP growth by 0.2 percentage points on a quarter-on-quarter basis.

The ratio of exports of goods and services to Japanese GDP was about 17%, and exports of goods and services increased by 6.2% for the fiscal year ended March 31, 2018. For the period from April to June 2017, they decreased by 0.1% on a quarter-on-quarter basis. However, for the periods from July to September 2017 and October to December 2017, they increased, on a quarter-on-quarter basis, by 2.0% and 2.2%, respectively, primarily due to the recovery of exports to some Asian countries. Thereafter, for the period from January to March 2018, they increased by 0.6% on a quarter-on-quarter basis.

Imports of goods and services were subtracted in calculating Japanese GDP. The ratio of imports of goods and services to Japanese GDP was about 17%, and imports of goods and services increased by 4.0% for the fiscal year ended March 31, 2018. For the period from April to June 2017, they increased by 1.8% on a quarter-on-quarter basis, reflecting robust private consumption. Although they decreased by 1.3% on a quarter-on-quarter basis for the period from July to September 2017, they increased by 3.1% on a quarter-on-quarter basis for the period from October to December 2017. Thereafter, for the period from January to March 2018, they increased by 0.3% on a quarter-on-quarter basis.

Industrial production, as a whole, increased moderately throughout the fiscal year ended March 31, 2018, reflecting the increase in domestic and foreign demand.

The employment situation continued to improve during the fiscal year ended March 31, 2018, reflecting a growing labor shortage. The active job openings-to-applicants ratio continued to steadily improve. In addition, the unemployment rate remained relatively low, and it was 2.5% in March 2018, a decrease of 0.3 percentage points from the same month of the previous year, based on the Labor Force Survey by the Statistics Bureau in the Ministry of Internal Affairs and Communications. Compensation of employees increased by 1.7% for the fiscal year ended March 31, 2018, reflecting the current employment situation. This was the third consecutive year that compensation of employees increased.

Further, according to Teikoku Databank, a research institution in Japan, there were approximately 8,300 corporate bankruptcies in Japan during the fiscal year ended March 31, 2018, an increase of 1.6% from the previous fiscal year, involving approximately ¥1.7 trillion in total liabilities, a decrease of 13.0% from the previous fiscal year.

Interest rates in Japanese financial and capital markets are affected by the monetary policy measures of the BOJ. In 2016, in addition to the existing provision of ample funds, the BOJ introduced “quantitative and qualitative monetary easing with a negative interest rate” as part of its “quantitative and qualitative monetary easing,” and “quantitative and qualitative monetary easing with yield curve control.” Under this policy framework, the BOJ would keep short-term interest rates down by maintaining its policy of applying a negative interest rate of minus 0.1% to certain excess reserves of financial institutions held at the BOJ. Moreover, the BOJ indicated it would purchase Japanese government bonds so that the yield of the 10-year Japanese government bonds would be close to around 0% to control long-term interest rates. Under such circumstances, the uncollateralized overnight call rate, which is the benchmark short-term interest rate, remained negative for the fiscal year ended March 31, 2018. The yield on newly issued Japanese government bonds with a maturity of 10 years, which is the benchmark long-term interest rate, was at around 0% for the same period.

The Nikkei Stock Average, which is a price-weighted average of 225 stocks listed on the Tokyo Stock Exchange First Section, rose from ¥18,909.26 at March 31, 2017 to ¥24,124.15 at January 23, 2018, its highest closing level since November 1991. However, it then dropped to ¥21,454.30 at March 30, 2018.

The yen appreciated against the U.S. dollar from ¥111.80 at March 31, 2017 to ¥106.19 at March 30, 2018, according to the statistical data published by the BOJ.

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The global economy, as a whole, continued to recover gradually for the fiscal year ended March 31, 2018.

For the fiscal year ended March 31, 2018, the U.S. economy continued to recover, supported by robust private consumption, reflecting the gradual improvement in the employment and income situation. The European economy continued to recover steadily for the fiscal year ended March 31, 2018. On the other hand, the Chinese economy, as a whole, was picking up gradually for the fiscal year ended March 31, 2018, although it showed some signs of slowing down in the middle of the fiscal year. The growth momentum in other Asian economies showed some signs of picking up for the fiscal year ended March 31, 2018.

In addition to economic factors and conditions, we expect that our results of operations and financial condition will be significantly affected by regulatory trends such as the Basel III reforms and the Dodd-Frank Act. For a more detailed description of regulations to which we are subject, risks associated with regulatory development and our management policy under this environment, see “Item 3.D. Risk Factors—Risks Related to Our Business,” “Item 4.B. Business Overview—Regulations in Japan, Regulations in the United States, Regulations in Other Jurisdictions and Description of Operations and Principal Activities—Management Policies.”

Factors Affecting Results of Operation

Income (Loss)

We have three principal sources of operating income: net interest income, net fee and commission income, and net income from trading/investment securities.

Net Interest Income. Net interest income, or the difference between interest income and interest expense, is determined by:

• the amount of interest-earning assets and interest-bearing liabilities;

• the interest spread;

• the general level of interest rates; and

• the proportion of interest-earning assets to interest-bearing liabilities.

Our principal interest-earning assets are loans and advances, investment securities, and deposits with banks. Our principal interest-bearing liabilities are deposits, borrowings and debt securities in issue. The interest income and expense on trading assets and liabilities and financial assets at fair value through profit or loss are not included in net interest income. Our net interest income is earned mainly by SMBC. SMBC controls its exposure to interest rate fluctuations through asset and liability management operations.

SMBC, like other banks in Japan, makes most domestic loans based on a short-term interest rate, the TIBOR, or a short-term prime rate, which are generally intended to reflect its cost of short-term yen funding and significantly affected by the monetary policy of the BOJ.

The BOJ announced in October 2014 the expansion of its “quantitative and qualitative monetary easing” introduced in April 2013, and in December 2015 the introduction of “supplementary measures for quantitative and qualitative monetary easing,” in order to achieve the price stability target of 2% in terms of the year-on-year rate of increase in the consumer price index. In January 2016, the BOJ announced the introduction of “quantitative and qualitative monetary easing with a negative interest rate” (“negative interest rate policy”), and began to implement a negative interest rate policy in February 2016. Under the negative interest rate policy, the BOJ has adopted a multi-tier system where the outstanding balance of each financial institution’s current account at the BOJ is divided into three tiers, to each of which a positive interest rate, a zero interest rate and a negative interest rate of minus 0.1 percent are applied, respectively. After these policy interest rate changes, SMBC

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lowered its ordinary deposit rate by 0.019 percentage points from 0.02% to 0.001% in February 2016. Thereafter, in September 2016, the BOJ announced the introduction of “quantitative and qualitative monetary easing with yield curve control.” Under this policy framework, the BOJ indicated it would purchase Japanese government bonds so that the yield of the 10-year Japanese government bonds would be close to around 0% to control long-term interest rates. In addition, the BOJ would keep short-term interest rates down by maintaining its policy of applying a negative interest rate of minus 0.1% to certain excess reserves of financial institutions held at the BOJ.

The following table sets forth SMBC’s short-term prime rate, three-month TIBOR, ordinary deposit rate, long-term prime rate and ten-year swap rate, at the dates indicated:

	At March 31,
	2018			2017			2016
Short-term prime rate		1.475	%		1.475	%		1.475	%
Three-month TIBOR		0.069			0.057			0.099
Ordinary deposit rate		0.001			0.001			0.001
Long-term prime rate		1.000			0.950			0.950
Ten-year swap rate		0.261			0.265			0.149

It is difficult to earn a wide interest spread when interest rates are at a low level, as they currently are in Japan. When interest rates rise from extremely low levels, interest spreads at commercial banks generally increase. However, interest spreads may temporarily decrease immediately after an increase in interest rates because it may take time for banks to increase lending rates correspondingly, in contrast to their funding rates. After an adjustment period, lending rates generally also increase and banks are able to secure a wider interest spread than in a low interest rate environment. Conversely, interest spreads may temporarily increase immediately after a decrease in interest rates because it may take time for banks to decrease lending rates correspondingly, in contrast to their funding rates. After an adjustment period, lending rates generally also decrease and banks generally are not able to maintain a wide interest spread.

Net Fee and Commission Income. We earn fees and commissions from a variety of services. The primary components of SMBC’s net fee and commission income are fees and commissions related to money remittances and transfers, investment trusts, loans (such as loan commitment fees and loan arrangement fees), securities transactions (such as bond trustee fees and bond recording agency fees) and guarantees and acceptances. Other fees and commissions include fees from investment banking and electronic banking.

In addition, we earn a significant amount of fees and commissions from our credit card business, conducted through Sumitomo Mitsui Card and Cedyna, and from our securities business, conducted through SMBC Nikko Securities and SMBC Friend Securities (until January 1, 2018, the date of the merger with SMBC Nikko Securities). The principal components of Sumitomo Mitsui Card’s and Cedyna’s fees and commissions are membership fees from retailers and annual cardholder membership fees, while those of SMBC Nikko Securities’ and SMBC Friend Securities’ fees and commissions are subscription and agent commissions from investment trusts and underwriting commissions.

The principal factors affecting fees and commissions are the demand for the services provided, the fees charged for those services and fees charged by competitors for similar services. The volume of services provided also affects profitability, as our fee businesses have significant economies of scale. In order to diversify sources of revenue and enhance return on assets, we are expanding our fees and commissions businesses, including sales of investment trusts and life insurance products, and investment banking businesses.

Net Income from Trading/Investment Securities. We undertake significant trading activities involving a variety of financial instruments, including derivatives. Our income from these activities is subject to volatility caused by, among other things, changes in interest rates, foreign exchange rates, equity prices or other market variables. Any unexpected change in interest rates could affect the fair value of our interest rate derivative

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positions and our net income from trading activities. Net trading income consists of margins made on market-making and our customer business as well as changes in fair value of trading assets and liabilities and derivative financial instruments. It also includes net interest and dividend income on these instruments.

We have substantial investments in debt securities as available-for-sale financial assets. In particular, Japanese government bonds represent a significant part of our bond portfolio. We also own debt securities denominated in foreign currencies, principally the U.S. dollars. We also have investments in equity securities as available-for-sale financial assets, which include our strategic investments in stocks issued by our customers. Net investment income includes the gains and losses arising from the sales or redemptions of available-for-sale financial assets and the dividend income earned from available-for-sale equity instruments. Increases in interest rates or declines in equity prices could substantially decrease the fair value of our available-for-sale financial assets.

Operating income from other than these three principal sources is included in “Net income from financial assets at fair value through profit or loss” or “Other income.” Net income from financial assets at fair value through profit or loss includes gains and losses arising from sales and the change in the fair value of the instruments such as hybrid instruments classified as financial assets at fair value through profit or loss. It also includes interest and dividend income on these instruments. Other income consists primarily of income from operating leases conducted by SMFL and income related to IT solution services.

Expenses

Impairment Charges on Financial Assets. Our impairment charges are recorded primarily due to impairment on loans and advances and on investment securities.

Impairment charges on loans and advances are affected by the economic environment and financial conditions of borrowers. During periods of economic slowdown, corporate and individual borrowers are generally more likely to suffer credit rating downgrades, or become delinquent or default on their borrowings. The slowdown in the domestic or global economy may increase credit costs relating to a wide range of industries.

Declines in market prices for domestic and foreign investment securities may result in our recording impairment charges. We assess at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity instruments classified as available-for-sale, a significant or prolonged decline in the fair value of the instrument below its cost is also considered to be such evidence in determining whether the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss, measured as the difference between the cost and the current fair value less any impairment charges on that financial asset previously recognized in profit or loss, is removed from equity and recognized in profit or loss.

General and Administrative Expenses. General and administrative expenses consist primarily of personnel expenses (salaries and related expenses), depreciation and amortization expenses, and other expenses (rent and lease expenses, premiums for deposit insurance, publicity and advertising expenses, and communication expenses).

Other Expenses. Other expenses consist primarily of cost of operating leases, costs related to IT solution services and IT systems, losses on disposal of property, plant and equipment, and other intangible assets, and impairment losses of property, plant and equipment.

Unrealized Gains or Losses on Investment Securities Portfolio

Changes in the fair value of domestic and foreign investment securities result in an increase or a decrease in unrealized gains or losses on available-for-sale financial assets. Unrealized gains or losses arising from changes in the fair value of the investments in these securities are recognized directly in equity, until they are derecognized or impaired.

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Most of our domestic equity instruments consist of publicly traded Japanese stocks. The Nikkei Stock Average increased by 12.8% from ¥16,758.67 at March 31, 2016, to ¥18,909.26 at March 31, 2017, and increased by 13.5% to ¥21,454.30 at March 30, 2018. At March 31, 2018, we had net unrealized gains on domestic equity securities of ¥2,924,591 million, an increase of ¥228,469 million from ¥2,696,122 million at March 31, 2017. For more information, see “Item 5.A. Operating Results—Financial Condition—Investment Securities.”

Strengthening of Equity Capital

In response to the imposition of more stringent regulatory capital requirements, we have been taking a proactive approach to managing our risk-weighted capital ratio by focusing on increasing qualifying capital, including by building up our retained earnings, identifying risks, and controlling risk-weighted assets.

Foreign Currency Fluctuations

The average exchange rate used to convert dollars to yen in the consolidated financial statements included elsewhere in this annual report for the fiscal year ended March 31, 2018 was ¥110.86 per $1.00, compared to the previous fiscal year’s average exchange rate of ¥108.36 per $1.00. The percentage of revenue we earned from our foreign operations for both fiscal years ended March 31, 2018 and 2017 were 30%. For more information, see “Item 4.B. Business Overview—Revenues by Region.”

Critical Accounting Estimates and Judgments

Our financial position and results of operations are influenced by estimates and judgments that management employs in the course of preparation of our consolidated financial statements. We identified the following areas of significant accounting policies to be particularly sensitive in terms of estimates and judgments made by management. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable.

Allowance for Loan Losses

Allowance for loan losses represents management’s estimate of the losses incurred in the loan portfolios at the end of each reporting period. Management exercises judgment in making assumptions and estimations when calculating the allowance for loan losses on both individually and collectively assessed loans.

The allowance for loan losses for individually significant impaired loans is estimated by management based on the expected future cash flows, taking into account factors such as historical loss information, the appropriateness of the borrower’s business plan or operational improvement plan, the status of progress of its plan, the overall support from financial institutions, and the realizable value of any collateral held. The allowance for loan losses is the difference between the carrying amount of a loan and the discounted present value of expected future cash flows that are estimated by management. The actual future cash flows may differ from the estimates by management and consequently may cause actual loan losses to differ from the reported allowance for loan losses.

The allowance for loan losses for impaired loans that are not individually significant and non-impaired loans is collectively calculated based on the historical loss experience for loans which have similar credit risk characteristics to those in the current loan portfolio using statistical methods. These statistical methods are subject to estimation uncertainty. In normal circumstances, the use of statistical methods evidenced by historical information provides the most objective methodology in assessing inherent losses on loans with similar credit risk characteristics. However, in certain circumstances, the use of historical loss experience alone may not be representative of current loss experiences and as a result it may provide less relevant information about the loss incurred in a given portfolio at the end of the reporting period, particularly in a situation where there have been

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changes in economic conditions. In these circumstances, we make a judgment to update the historical loss experience based on the most recent loss information, taking into account, among others, the effect of the current economic environment. To estimate the allowance for loan losses for non-impaired loans, which reflects incurred but not yet identified losses for the period between the impairment occurring and the loss being identified, management develops assumptions and methodologies to estimate the loss identification period.

Management estimates and judgments may change from time to time as the economic environment changes or new information becomes available. Changes in these estimates and judgments will result in a different allowance for loan losses and may have a direct impact on impairment charges. Impairment charges on loans and advances amounting to ¥126,623 million, ¥141,457 million and ¥118,750 million were recognized for the fiscal years ended March 31, 2018, 2017 and 2016, respectively.

Fair Value of Financial Instruments

Some of our financial instruments are measured at fair value with changes in fair value recognized in profit or loss, such as trading assets and liabilities, financial assets at fair value through profit or loss, and derivative financial instruments. Available-for-sale financial assets are also measured at fair value with changes in fair value reported in other comprehensive income.

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Our financial assets and liabilities measured at fair value are mostly valued based on quoted prices in active markets, or using valuation techniques that incorporate inputs, other than quoted market prices, that are observable either directly or indirectly in the market, including dealers’ quotes. We principally use valuation techniques that are commonly used by market participants to price the instruments. To the extent practical, the valuation models make maximum use of observable data. However, for certain financial assets and liabilities, the fair values are measured by using valuation techniques with significant unobservable inputs. In such cases, significant management estimates are made, resulting in a less objective measurement of fair value.

The risk management departments in each subsidiary regularly review significant valuation methodologies and recalibrate model parameters and inputs, both observable and unobservable, in an effort to ensure an appropriate estimation of fair value has been made. Where significant management judgments are required in valuation, we establish a valuation control framework to validate the valuation models and fair values calculated based on such valuation models. Under the framework, the accounting department is responsible for ensuring that the accounting policies and procedures to determine the fair values are in compliance with the relevant accounting standards.

If the fair value at the trade date, which is measured using a valuation technique with significant unobservable inputs, differs from the transaction price, any gain or loss on the trade date is adjusted to be deferred. Management judgment is required to determine whether significant unobservable inputs exist in the valuation technique.

The financial assets and liabilities are classified into one of three levels within a fair value hierarchy based on the inputs used in the fair value measurement. The three levels of the fair value hierarchy are as follows:

• Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

• Level 3. Significant unobservable inputs for the asset or liability.

Management judgment is involved in determining the level of hierarchy to which each financial instrument should be categorized and in periodical assessments of market liquidity for inputs and price transparency.

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In addition to the fair value hierarchy disclosure, we provide a sensitivity analysis of the impact on the Level 3 financial instruments carried at fair value by using reasonably possible alternatives for the unobservable parameters in Note 43 “Fair Value of Financial Assets and Liabilities” to our consolidated financial statements included elsewhere in this annual report. The determination of reasonably possible alternatives requires significant management judgment.

Impairment of Available-for-sale Financial Assets

Available-for-sale financial assets are measured at fair value with changes in fair value reported in available-for-sale financial assets reserve as a separate component of equity until the financial assets are either derecognized or become impaired. If there is objective evidence of impairment as a result of loss events which have an impact on the estimated future cash flows of the financial assets that can be reliably estimated, the cumulative loss previously recognized in equity is removed and recognized in profit or loss as an impairment charge.

We exercise judgment in determining whether there is objective evidence of occurrence of loss events which result in a decrease in estimated future cash flows. The estimation of future cash flows also requires judgment. In the assessment of impairment of available-for-sale equity instruments, we also consider whether there has been a significant or prolonged decline in fair value below their cost. The determination of what is a significant or prolonged decline requires management judgment.

Impairment may occur when there is objective evidence of deterioration in the financial conditions of the investee, industry and sector performance, or changes in operating and financing cash flows. The determination of impairment in this respect also includes significant management judgment.

Management estimates and judgments may change from time to time upon future events that may or may not occur and changes in these estimates and judgments could adversely affect the carrying amounts of available-for-sale financial assets. Impairment charges on available-for-sale financial assets reclassified from equity to profit or loss totaled ¥10,185 million, ¥71,510 million and ¥29,606 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively.

Impairment of Goodwill

Goodwill is tested for impairment at least annually and whenever events or changes in circumstances indicate that it may be impaired. The first step of the impairment test is identifying the cash-generating units (“CGUs”), which represent the smallest identifiable groups of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Goodwill is then allocated to the CGUs, considering how the goodwill is recognized and other relevant factors.

In the impairment test, the carrying amount of the CGU to which goodwill is allocated is compared against its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. Such recoverable amounts are determined based on significant management judgments and assumptions.

We determine the recoverable amount using the estimated future cash flows, pre-tax discount rates, growth rates and other factors. The estimation of future cash flows inherently reflects management judgments, even though such forecasts are prepared taking into account actual past performance and external economic data. The pre-tax discount rates and growth rates may be significantly affected by market interest rates or other market conditions, which are beyond management’s control, and therefore significant management judgments are made to determine these assumptions.

These management judgments are made based on the facts and circumstances at the time of the impairment test, and may vary depending on the situation and time. Changes in management judgments may result in

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different impairment test results and different impairment losses recognized. For the fiscal years ended March 31, 2018, 2017 and 2016, impairment losses on goodwill were ¥28,607 million, ¥74,616 million and ¥1,124 million, respectively.

Provision for Interest Repayment

Provision for interest repayment represents management’s estimate of future claims for the refund of gray zone interest, taking into account historical experience such as the number of customer claims for a refund, the amount of repayments and the characteristics of customers, and the length of the period during which claims are expected to be received in the future.

Management estimates and judgments may change from time to time as the legal environment and market conditions change or new information becomes available. Changes in these estimates and judgments could affect the balance of provision for interest repayment. Provision for interest repayment is recorded in provisions as a liability, and it totaled ¥145,179 million and ¥157,333 million at March 31, 2018 and 2017, respectively.

Retirement Benefits

We have defined benefit plans such as defined benefit pension plans and lump-sum severance indemnity plans. The present value of the defined benefit obligation is calculated based on actuarial valuations that are dependent upon a number of assumptions, including discount rates, mortality rates and future salary (benefit) increases. The discount rates are equivalent to market yields of AA credit-rated corporate bonds that have terms to maturity approximating those of the related obligations. Future mortality rates are based on the official mortality table generally used for actuarial assumptions in Japan. Other assumptions used for the calculation of the defined benefit obligation are based on historical records. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty. While we believe that these assumptions are appropriate, any change in these assumptions will impact actuarial gains and losses, as well as the present value of the defined benefit obligations and the net retirement benefit expense for each period. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in the year, and return on plan assets excluding interest income are recognized in other comprehensive income and are never reclassified to profit or loss.

The difference between the fair value of the plan assets and the present value of the defined benefit obligation at the end of the reporting period is recognized as assets and liabilities in the consolidated statement of financial position. When this calculation for each plan results in a benefit to us, the recognized asset is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. An economic benefit is available to us, if it is realizable during the life of the plan or on settlement of the plan obligation. The net total of assets and liabilities in the consolidated statement of financial position amounted to net assets of ¥279,567 million and ¥192,772 million at March 31, 2018 and 2017, respectively.

Deferred Tax Assets

We recognize deferred tax assets relating to tax losses carried forward and deductible temporary differences, only to the extent that it is probable that future taxable profit will be available against which the tax losses carried forward and the deductible temporary differences can be utilized. This assessment requires significant management judgments and assumptions. Future taxable profit is estimated based on, among other relevant factors, forecasted results of operations, which are based on historical financial performance and the business plans that management believes to be prudent and feasible. While we carefully assess the realization of tax losses carried forward and deductible temporary differences, the actual taxable profit in the future may be less than the forecast. The deferred tax assets amounted to ¥19,436 million and ¥81,961 million in the consolidated statement of financial position at March 31, 2018 and 2017, respectively, while the net total of deferred tax assets and liabilities amounted to net liabilities of ¥378,305 million and ¥238,240 million at March 31, 2018 and 2017, respectively.

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New and Amended Accounting Standards and Recent Accounting Pronouncements

See “New and Amended Accounting Standards Adopted by the SMBC Group” and “Recent Accounting Pronouncements” under Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements included elsewhere in this annual report.

5.A.    OPERATING RESULTS

Under the economic and financial circumstances described in “Item 5. Operating and Financial Review and Prospects—Overview—Operating Environment,” we made a profit through our commercial banking and other financial services businesses. Our total operating income increased by ¥464,452 million from ¥3,347,895 million for the fiscal year ended March 31, 2017 to ¥3,812,347 million for the fiscal year ended March 31, 2018, primarily due to increases in net investment income and other income. Our net profit increased by ¥149,012 million from ¥740,586 million for the fiscal year ended March 31, 2017 to ¥889,598 million for the fiscal year ended March 31, 2018, due to the increase in total operating income described above, which was partially offset by an increase in operating expenses.

Our total assets increased by ¥1,024,585 million from ¥191,150,981 million at March 31, 2017 to ¥192,175,566 million at March 31, 2018, primarily due to increases in cash and deposits with banks and investment securities, which were partially offset by a decrease in loans and advances.

Our total liabilities increased by ¥416,069 million from ¥179,263,698 million at March 31, 2017 to ¥179,679,767 million at March 31, 2018, primarily due to an increase in repurchase agreements and cash collateral on securities lent, which was partially offset by a decrease in deposits.

Our total equity increased by ¥608,516 million from ¥11,887,283 million at March 31, 2017 to ¥12,495,799 million at March 31, 2018, primarily due to increases in retained earnings and other reserves, which were partially offset by a decrease in non-controlling interests.

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Operating Results

The following table presents information as to our income, expenses and net profit for the fiscal years ended March 31, 2018, 2017 and 2016.

	For the fiscal year ended March 31,
	2018			2017		2016
	(In millions, except per share data)
Interest income	¥	2,144,070		¥	1,900,261	¥	1,872,584
Interest expense		733,969			502,338		431,101
Net interest income		1,410,101			1,397,923		1,441,483
Fee and commission income		1,131,364			1,066,412		1,031,680
Fee and commission expense		178,867			181,573		131,381
Net fee and commission income		952,497			884,839		900,299
Net trading income		270,464			183,963		462,682
Net income (loss) from financial assets at fair value through profit or loss		(667	)		2,018		12,260
Net investment income		424,097			305,327		375,229
Other income		755,855			573,825		496,273
Total operating income		3,812,347			3,347,895		3,688,226
Impairment charges on financial assets		136,808			212,967		148,356
Net operating income		3,675,539			3,134,928		3,539,870
General and administrative expenses		1,813,121			1,752,135		1,706,263
Other expenses		792,765			531,759		538,963
Operating expenses		2,605,886			2,283,894		2,245,226
Share of post-tax profit of associates and joint ventures		49,323			29,318		31,056
Profit before tax		1,118,976			880,352		1,325,700
Income tax expense		229,378			139,766		372,878
Net profit	¥	889,598		¥	740,586	¥	952,822
Profit attributable to:
Shareholders of Sumitomo Mitsui Financial Group, Inc.	¥	759,998		¥	627,870	¥	843,920
Non-controlling interests		119,878			104,787		106,129
Other equity instruments holders		9,722			7,929		2,773
Earnings per share:
Basic	¥	538.84		¥	458.56	¥	617.25
Diluted		538.43			458.18		616.83

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Total operating income increased by ¥464,452 million, or 14%, from ¥3,347,895 million for the fiscal year ended March 31, 2017 to ¥3,812,347 million for the fiscal year ended March 31, 2018, primarily due to increases in net investment income of ¥118,770 million and other income of ¥182,030 million. In addition, due to a decrease in impairment charges on financial assets, net operating income increased by ¥540,611 million from ¥3,134,928 million for the fiscal year ended March 31, 2017 to ¥3,675,539 million for the fiscal year ended March 31, 2018.

Net profit increased by ¥149,012 million from ¥740,586 million for the fiscal year ended March 31, 2017 to ¥889,598 million for the fiscal year ended March 31, 2018, as a result of the increase in net operating income described above, which was partially offset by an increase in other expenses.

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Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Total operating income decreased by ¥340,331 million, or 9%, from ¥3,688,226 million for the fiscal year ended March 31, 2016 to ¥3,347,895 million for the fiscal year ended March 31, 2017, primarily due to a decrease in net trading income of ¥278,719 million. In addition, due to an increase in impairment charges on financial assets, net operating income also decreased by ¥404,942 million from ¥3,539,870 million for the fiscal year ended March 31, 2016 to ¥3,134,928 million for the fiscal year ended March 31, 2017.

Net profit decreased by ¥212,236 million from ¥952,822 million for the fiscal year ended March 31, 2016 to ¥740,586 million for the fiscal year ended March 31, 2017, as a result of the decrease in net operating income described above, which was partially offset by a decrease in income tax expense.

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Net Interest Income

The following tables show the average balances of our statement of financial position items, related interest income, interest expense, net interest income and average rates for the fiscal years ended March 31, 2018, 2017 and 2016.

	For the fiscal year ended March 31,
	2018							2017							2016
	Average balance(3)		Interest income		Average rate			Average balance(3)		Interest income		Average rate			Average balance(3)		Interest income		Average rate
	(In millions, except percentages)
Interest-earning assets:
Interest-earning deposits with other banks:
Domestic offices	¥	848,242	¥	4,536		0.53	%	¥	762,460	¥	4,099		0.54	%	¥	768,976	¥	4,771		0.62	%
Foreign offices		4,873,905		73,681		1.51	%		4,617,409		41,671		0.90	%		5,786,836		35,701		0.62	%
Total		5,722,147		78,217		1.37	%		5,379,869		45,770		0.85	%		6,555,812		40,472		0.62	%
Call loans and bills bought:
Domestic offices		81,336		412		0.51	%		76,227		467		0.61	%		147,992		861		0.58	%
Foreign offices		1,730,409		18,950		1.10	%		1,303,429		11,598		0.89	%		967,442		20,967		2.17	%
Total		1,811,745		19,362		1.07	%		1,379,656		12,065		0.87	%		1,115,434		21,828		1.96	%
Reverse repurchase agreements and cash collateral on securities borrowed:
Domestic offices		8,120,363		14,563		0.18	%		7,443,668		12,151		0.16	%		6,675,810		10,763		0.16	%
Foreign offices		1,222,180		25,458		2.08	%		1,009,997		17,450		1.73	%		741,623		11,248		1.52	%
Total		9,342,543		40,021		0.43	%		8,453,665		29,601		0.35	%		7,417,433		22,011		0.30	%
Held-to-maturity investments(1):
Domestic offices		784,339		3,244		0.41	%		1,809,777		6,756		0.37	%		2,964,539		12,880		0.43	%
Total		784,339		3,244		0.41	%		1,809,777		6,756		0.37	%		2,964,539		12,880		0.43	%
Available-for-sale financial assets(1):
Domestic offices		9,799,861		44,053		0.45	%		7,477,480		41,561		0.56	%		10,878,176		38,701		0.36	%
Foreign offices		3,406,370		54,998		1.61	%		2,945,084		39,031		1.33	%		2,425,249		33,331		1.37	%
Total		13,206,231		99,051		0.75	%		10,422,564		80,592		0.77	%		13,303,425		72,032		0.54	%
Loans and advances(2):
Domestic offices		68,551,116		1,093,584		1.60	%		66,948,344		1,082,058		1.62	%		63,177,259		1,091,538		1.73	%
Foreign offices		28,121,904		810,591		2.88	%		25,298,515		643,419		2.54	%		26,272,983		611,823		2.33	%
Total		96,673,020		1,904,175		1.97	%		92,246,859		1,725,477		1.87	%		89,450,242		1,703,361		1.90	%
Total interest-earning assets:
Domestic offices		88,185,257		1,160,392		1.32	%		84,517,956		1,147,092		1.36	%		84,612,752		1,159,514		1.37	%
Foreign offices		39,354,768		983,678		2.50	%		35,174,434		753,169		2.14	%		36,194,133		713,070		1.97	%
Total	¥	127,540,025	¥	2,144,070		1.68	%	¥	119,692,390	¥	1,900,261		1.59	%	¥	120,806,885	¥	1,872,584		1.55	%

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	For the fiscal year ended March 31,
	2018							2017							2016
	Average balance(3)		Interest expense		Average rate			Average balance(3)		Interest expense		Average rate			Average balance(3)		Interest expense		Average rate
	(In millions, except percentages)
Interest-bearing liabilities:
Deposits:
Domestic offices	¥	87,138,742	¥	44,941		0.05	%	¥	82,738,015	¥	35,881		0.04	%	¥	78,458,170	¥	48,032		0.06	%
Foreign offices		25,413,734		337,812		1.33	%		23,383,002		213,147		0.91	%		22,838,530		154,280		0.68	%
Total		112,552,476		382,753		0.34	%		106,121,017		249,028		0.23	%		101,296,700		202,312		0.20	%
Call money and bills sold:
Domestic offices		845,376		302		0.04	%		603,065		92		0.02	%		2,199,407		1,524		0.07	%
Foreign offices		801,565		8,461		1.06	%		618,949		5,194		0.84	%		663,310		4,059		0.61	%
Total		1,646,941		8,763		0.53	%		1,222,014		5,286		0.43	%		2,862,717		5,583		0.20	%
Repurchase agreements and cash collateral on securities lent:
Domestic offices		10,015,944		16,774		0.17	%		7,149,638		5,616		0.08	%		7,172,312		8,582		0.12	%
Foreign offices		4,205,510		44,567		1.06	%		3,081,806		15,007		0.49	%		2,009,593		6,523		0.32	%
Total		14,221,454		61,341		0.43	%		10,231,444		20,623		0.20	%		9,181,905		15,105		0.16	%
Borrowings:
Domestic office		11,331,752		61,460		0.54	%		8,113,368		58,772		0.72	%		10,251,890		56,353		0.55	%
Foreign offices		983,616		27,736		2.82	%		847,353		21,063		2.49	%		823,446		15,850		1.92	%
Total		12,315,368		89,196		0.72	%		8,960,721		79,835		0.89	%		11,075,336		72,203		0.65	%
Debt securities in issue:
Domestic offices		9,298,368		166,769		1.79	%		8,320,124		130,613		1.57	%		7,999,705		120,285		1.50	%
Foreign offices		2,180,438		24,005		1.10	%		2,193,406		16,324		0.74	%		3,044,714		14,887		0.49	%
Total		11,478,806		190,774		1.66	%		10,513,530		146,937		1.40	%		11,044,419		135,172		1.22	%
Other interest-bearing liabilities:
Domestic offices		102,683		524		0.51	%		95,660		579		0.61	%		93,104		676		0.73	%
Foreign offices		23,466		618		2.63	%		3,531		50		1.42	%		1,960		50		2.55	%
Total		126,149		1,142		0.91	%		99,191		629		0.63	%		95,064		726		0.76	%
Total interest-bearing liabilities:
Domestic offices		118,732,865		290,770		0.24	%		107,019,870		231,553		0.22	%		106,174,588		235,452		0.22	%
Foreign offices		33,608,329		443,199		1.32	%		30,128,047		270,785		0.90	%		29,381,553		195,649		0.67	%
Total	¥	152,341,194	¥	733,969		0.48	%	¥	137,147,917	¥	502,338		0.37	%	¥	135,556,141	¥	431,101		0.32	%
Net interest income and interest rate spread			¥	1,410,101		1.20	%			¥	1,397,923		1.22	%			¥	1,441,483		1.23	%

(1) Taxable investment securities and non-taxable investment securities are not disclosed separately because the aggregate effect of these average balances and interest income would not be material. In addition, the yields on tax-exempt obligations have not been calculated on a tax equivalent basis because the effect of such calculation would not be material.

(2) Loans and advances include impaired loans and advances. The amortized portion of net loan origination fees (costs) is included in interest income on loans and advances.

(3) Average balances are generally based on a daily average. Weekly, month-end or quarter-end averages are used for certain average balances where it is not practical to obtain applicable daily averages. The allocations of amounts between domestic and foreign are based on the location of the office.

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The following tables show changes in our interest income, interest expense and net interest income based on changes in volume and changes in rate for the fiscal year ended March 31, 2018 compared to the fiscal year ended March 31, 2017, and those for the fiscal year ended March 31, 2017 compared to the fiscal year ended March 31, 2016.

	Fiscal year ended March 31, 2018 compared to fiscal year ended March 31, 2017 Increase / (decrease)									Fiscal year ended March 31, 2017 compared to fiscal year ended March 31, 2016 Increase / (decrease)
	Volume			Rate			Net change			Volume			Rate			Net change
	(In millions)
Interest income:
Interest-earning deposits with other banks:
Domestic offices	¥	456		¥	(19	)	¥	437		¥	(40	)	¥	(632	)	¥	(672	)
Foreign offices		2,427			29,583			32,010			(8,263	)		14,233			5,970
Total		2,883			29,564			32,447			(8,303	)		13,601			5,298
Call loans and bills bought:
Domestic offices		30			(85	)		(55	)		(436	)		42			(394	)
Foreign offices		4,321			3,031			7,352			5,697			(15,066	)		(9,369	)
Total		4,351			2,946			7,297			5,261			(15,024	)		(9,763	)
Reverse repurchase agreements and cash collateral on securities borrowed:
Domestic offices		1,140			1,272			2,412			1,229			159			1,388
Foreign offices		4,049			3,959			8,008			4,487			1,715			6,202
Total		5,189			5,231			10,420			5,716			1,874			7,590
Held-to-maturity investments:
Domestic offices		(4,139	)		627			(3,512	)		(4,455	)		(1,669	)		(6,124	)
Total		(4,139	)		627			(3,512	)		(4,455	)		(1,669	)		(6,124	)
Available-for-sale financial assets:
Domestic offices		11,440			(8,948	)		2,492			(14,692	)		17,552			2,860
Foreign offices		6,686			9,281			15,967			6,939			(1,239	)		5,700
Total		18,126			333			18,459			(7,753	)		16,313			8,560
Loans and advances:
Domestic offices		25,753			(14,227	)		11,526			63,231			(72,711	)		(9,480	)
Foreign offices		76,079			91,093			167,172			(23,302	)		54,898			31,596
Total		101,832			76,866			178,698			39,929			(17,813	)		22,116
Total interest income:
Domestic offices		34,680			(21,380	)		13,300			44,837			(57,259	)		(12,422	)
Foreign offices		93,562			136,947			230,509			(14,442	)		54,541			40,099
Total	¥	128,242		¥	115,567		¥	243,809		¥	30,395		¥	(2,718	)	¥	27,677

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	Fiscal year ended March 31, 2018 compared to fiscal year ended March 31, 2017 Increase / (decrease)									Fiscal year ended March 31, 2017 compared to fiscal year ended March 31, 2016 Increase / (decrease)
	Volume			Rate			Net change			Volume			Rate			Net change
	(In millions)
Interest expense:
Deposits:
Domestic offices	¥	1,837		¥	7,223		¥	9,060		¥	2,448		¥	(14,599	)	¥	(12,151	)
Foreign offices		19,830			104,835			124,665			3,785			55,082			58,867
Total		21,667			112,058			133,725			6,233			40,483			46,716
Call money and bills sold:
Domestic offices		62			148			210			(715	)		(717	)		(1,432	)
Foreign offices		1,747			1,520			3,267			(286	)		1,421			1,135
Total		1,809			1,668			3,477			(1,001	)		704			(297	)
Repurchase agreements and cash collateral on securities lent:
Domestic offices		2,971			8,187			11,158			(27	)		(2,939	)		(2,966	)
Foreign offices		7,035			22,525			29,560			4,344			4,140			8,484
Total		10,006			30,712			40,718			4,317			1,201			5,518
Borrowings:
Domestic offices		19,619			(16,931	)		2,688			(13,227	)		15,646			2,419
Foreign offices		3,639			3,034			6,673			471			4,742			5,213
Total		23,258			(13,897	)		9,361			(12,756)			20,388			7,632
Debt securities in issue:
Domestic offices		16,340			19,816			36,156			4,910			5,418			10,328
Foreign offices		(97	)		7,778			7,681			(4,925	)		6,362			1,437
Total		16,243			27,594			43,837			(15	)		11,780			11,765
Other interest-bearing liabilities:
Domestic offices		41			(96	)		(55	)		18			(115	)		(97	)
Foreign offices		493			75			568			29			(29	)		0
Total		534			(21	)		513			47			(144	)		(97	)
Total interest expense:
Domestic offices		40,870			18,347			59,217			(6,593	)		2,694			(3,899	)
Foreign offices		32,647			139,767			172,414			3,418			71,718			75,136
Total	¥	73,517		¥	158,114		¥	231,631		¥	(3,175	)	¥	74,412		¥	71,237
Net interest income:
Domestic offices	¥	(6,190	)	¥	(39,727	)	¥	(45,917	)	¥	51,430		¥	(59,953	)	¥	(8,523	)
Foreign offices		60,915			(2,820	)		58,095			(17,860	)		(17,177	)		(35,037	)
Total	¥	54,725		¥	(42,547	)	¥	12,178		¥	33,570		¥	(77,130	)	¥	(43,560	)

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Interest Income

Our interest income increased by ¥243,809 million, or 13%, from ¥1,900,261 million for the fiscal year ended March 31, 2017 to ¥2,144,070 million for the fiscal year ended March 31, 2018, primarily due to an increase in interest income on loans and advances. Interest income on loans and advances increased by

72

¥178,698 million, or 10%, from ¥1,725,477 million for the fiscal year ended March 31, 2017 to ¥1,904,175 million for the fiscal year ended March 31, 2018, primarily due to performance in our foreign offices. Interest income on loans and advances at foreign offices increased by ¥167,172 million, or 26%, from ¥643,419 million for the fiscal year ended March 31, 2017 to ¥810,591 million for the fiscal year ended March 31, 2018, due to increases in both the average rate and volume of loans to foreign customers. Interest income on loans and advances at domestic offices slightly increased by ¥11,526 million, or 1%, from ¥1,082,058 million for the fiscal year ended March 31, 2017 to ¥1,093,584 million for the fiscal year ended March 31, 2018, due to an increase in volume which was partially offset by a decrease in the average rate reflecting the continuing intense competition in the commercial banking industry.

Interest Expense

Our interest expense increased by ¥231,631 million, or 46%, from ¥502,338 million for the fiscal year ended March 31, 2017 to ¥733,969 million for the fiscal year ended March 31, 2018, primarily due to increases in interest expense on deposits and debt securities in issue. Our interest expense on deposits increased by ¥133,725 million, or 54%, from ¥249,028 million for the fiscal year ended March 31, 2017 to ¥382,753 million for the fiscal year ended March 31, 2018, primarily due to an increase at foreign offices reflecting an increase in the average rate. Interest expense on debt securities in issue increased by ¥43,837 million, or 30%, from ¥146,937 million for the fiscal year ended March 31, 2017 to ¥190,774 million for the fiscal year ended March 31, 2018, primarily due to increases in both the average rate and volume.

Net Interest Income

Our net interest income increased by ¥12,178 million, or 1%, from ¥1,397,923 million for the fiscal year ended March 31, 2017 to ¥1,410,101 million for the fiscal year ended March 31, 2018. The net interest income increased primarily due to an increase in interest income on loans and advances, which was partially offset by increases in interest expense on deposits and debt securities in issue.

From the fiscal year ended March 31, 2017 to March 31, 2018, the average rate on loans and advances at domestic offices decreased by 0.02 percentage points from 1.62% to 1.60%, primarily due to the continuing intense competition in the commercial banking industry. The average rate on loans and advances at foreign offices increased by 0.34 percentage points from 2.54% to 2.88%. As a result, the total for loans and advances increased by 0.10 percentage points from 1.87% to 1.97%. On the other hand, the average rate on deposits increased by 0.11 percentage points from 0.23% to 0.34%, primarily due to an increase in the average rate on deposits at foreign offices by 0.42 percentage points from 0.91% to 1.33%.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Interest Income

Our interest income increased by ¥27,677 million, or 1%, from ¥1,872,584 million for the fiscal year ended March 31, 2016 to ¥1,900,261 million for the fiscal year ended March 31, 2017, primarily due to an increase in interest income on loans and advances. Interest income on loans and advances increased by ¥22,116 million, or 1%, from ¥1,703,361 million for the fiscal year ended March 31, 2016 to ¥1,725,477 million for the fiscal year ended March 31, 2017, primarily due to performance in our foreign offices. Interest income on loans and advances at foreign offices increased by ¥31,596 million, or 5%, from ¥611,823 million for the fiscal year ended March 31, 2016 to ¥643,419 million for the fiscal year ended March 31, 2017, due to an increase in the average rate of loans to foreign customers, which was partially offset by a decrease in volume reflecting the appreciations of the yen against other currencies compared to the previous fiscal year. Interest income on loans and advances at domestic offices decreased by ¥9,480 million, or 1%, from ¥1,091,538 million for the fiscal year ended March 31, 2016 to ¥1,082,058 million for the fiscal year ended March 31, 2017, due to a decrease in the average rate reflecting a decrease in market interest rates and continuing intense competition in the commercial banking industry, which was substantially offset by an increase in volume.

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Interest Expense

Our interest expense increased by ¥71,237 million, or 17%, from ¥431,101 million for the fiscal year ended March 31, 2016 to ¥502,338 million for the fiscal year ended March 31, 2017, primarily due to increases in interest expense on deposits and debt securities in issue. Our interest expense on deposits increased by ¥46,716 million, or 23%, from ¥202,312 million for the fiscal year ended March 31, 2016 to ¥249,028 million for the fiscal year ended March 31, 2017, primarily due to an increase at foreign offices reflecting an increase in the average rate, which was partially offset by a decrease in the average rate at domestic offices. Interest expense on debt securities in issue increased by ¥11,765 million, or 9%, from ¥135,172 million for the fiscal year ended March 31, 2016 to ¥146,937 million for the fiscal year ended March 31, 2017, primarily due to an increase in average rate.

Net Interest Income

Our net interest income decreased by ¥43,560 million, or 3%, from ¥1,441,483 million for the fiscal year ended March 31, 2016 to ¥1,397,923 million for the fiscal year ended March 31, 2017. The net interest income decreased primarily due to increases in interest expense on deposits and debt securities in issue, which were partially offset by an increase in interest income on loans and advances.

From the fiscal year ended March 31, 2016 to March 31, 2017, the average rate on loans and advances at domestic offices decreased by 0.11 percentage points from 1.73% to 1.62%, primarily due to a decrease in market interest rates and the continuing intense competition in the commercial banking industry. The average rate on loans and advances at foreign offices increased by 0.21 percentage points from 2.33% to 2.54%. As a result, the total for loans and advances slightly decreased by 0.03 percentage points from 1.90% to 1.87%. On the other hand, the average rate on deposits at domestic offices slightly decreased by 0.02 percentage points from 0.06% to 0.04%, and the average rate on deposits at foreign offices increased by 0.23 percentage points from 0.68% to 0.91%, resulting in the total for deposits increasing by 0.03 percentage points from 0.20% to 0.23%.

Net Fee and Commission Income

The following table sets forth our net fee and commission income for the periods shown.

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Fee and commission income from:
Loans	¥	120,998	¥	128,305	¥	121,934
Credit card business		289,509		261,253		253,136
Guarantees		62,934		58,221		55,618
Securities-related business		147,016		146,655		133,019
Deposits		16,169		15,929		14,882
Remittances and transfers		140,621		138,029		133,110
Safe deposits		5,224		5,414		5,511
Trust fees		3,854		3,607		3,619
Investment trusts		154,419		126,590		116,057
Agency		16,577		16,753		16,432
Others		174,043		165,656		178,362
Total fee and commission income		1,131,364		1,066,412		1,031,680
Fee and commission expense from:
Remittances and transfers		40,214		39,419		38,358
Guarantees		3,750		3,434		3,071
Others		134,903		138,720		89,952
Total fee and commission expense		178,867		181,573		131,381
Net fee and commission income	¥	952,497	¥	884,839	¥	900,299

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Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Fee and commission income increased by ¥64,952 million, or 6%, from ¥1,066,412 million for the fiscal year ended March 31, 2017 to ¥1,131,364 million for the fiscal year ended March 31, 2018. Primary sources of fee and commission income are fees obtained through our credit card business, fees and commissions obtained through investment trusts, fees obtained through securities-related business, remittance and transfer fees, and loan transaction fees. The increase in fee and commission income was primarily due to increases in fees obtained through credit card business along with business expansion and fees and commissions obtained through investment trusts reflecting the rise in stock prices and expansion of our investment trust management business.

Fee and commission expense was ¥178,867 million for the fiscal year ended March 31, 2018, decreased by ¥2,706 million, or 1%, from ¥181,573 million for the fiscal year ended March 31, 2017.

As a result, net fee and commission income increased by ¥67,658 million, or 8%, from ¥884,839 million for the fiscal year ended March 31, 2017 to ¥952,497 million for the fiscal year ended March 31, 2018.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Fee and commission income increased by ¥34,732 million, or 3%, from ¥1,031,680 million for the fiscal year ended March 31, 2016 to ¥1,066,412 million for the fiscal year ended March 31, 2017. Primary sources of fee and commission income are fees obtained through our credit card business, fees obtained through securities-related business, remittance and transfer fees, loan transaction fees, and fees and commissions obtained through investment trusts. The increase in fee and commission income was primarily due to increases in fees obtained through securities-related business, mainly equity underwriting commissions, and fee and commissions obtained through investment trusts reflecting the inclusion of fees related to investment trusts at SMAM.

Fee and commission expense was ¥181,573 million for the fiscal year ended March 31, 2017, increased by ¥50,192 million, or 38%, from ¥131,381 million for the fiscal year ended March 31, 2016. The inclusion of fee and commission expense of SMAM contributed to the increase in total fee and commission expense.

As a result, net fee and commission income decreased by ¥15,460 million, or 2%, from ¥900,299 million for the fiscal year ended March 31, 2016 to ¥884,839 million for the fiscal year ended March 31, 2017.

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Net Income (Loss) from Trading, Financial Assets at Fair Value Through Profit or Loss and Investment Securities

The following table sets forth our net income (loss) from trading, financial assets at fair value through profit or loss and investment securities for the periods shown.

	For the fiscal year ended March 31,
	2018			2017		2016
	(In millions)
Net trading income:
Interest rate	¥	128,137		¥	79,650	¥	240,763
Foreign exchange		87,322			51,143		204,349
Equity		48,047			39,478		18,019
Credit		5,735			13,063		(2,641	)
Others		1,223			629		2,192
Total net trading income	¥	270,464		¥	183,963	¥	462,682
Net income (loss) from financial assets at fair value through profit or loss:
Net income (loss) from debt instruments	¥	(1,775	)	¥	428	¥	11,311
Net income from equity instruments		1,108			1,590		949
Total net income (loss) from financial assets at fair value through profit or loss	¥	(667	)	¥	2,018	¥	12,260
Net investment income:
Net gain from disposal of debt instruments	¥	4,187		¥	39,484	¥	71,641
Net gain from disposal of equity instruments		281,036			142,016		175,494
Dividend income		138,874			123,827		128,094
Total net investment income	¥	424,097		¥	305,327	¥	375,229

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Net trading income, which includes income and losses from trading assets and liabilities and derivative financial instruments, increased by ¥86,501 million from ¥183,963 million for the fiscal year ended March 31, 2017 to ¥270,464 million for the fiscal year ended March 31, 2018. The increase was primarily due to an increase in net trading income from interest rate related transactions and foreign exchange transactions related to the “economic hedges.”

We have carried out hedging transactions to hedge both the interest rate risk of financial assets and liabilities and the foreign exchange risk of foreign currency denominated assets and liabilities. Of those hedges, the economic hedges are economically effective for risk management but are not accounted for as hedge accounting under IFRS.

As for the economic hedges against the interest rate risk, hedged items include loans, borrowings and debt securities in issue, and hedging instruments are derivative financial instruments such as interest rate swaps. The economic hedges against the foreign exchange risk are classified into three types: (1) net investments in foreign operations hedged by using foreign currency denominated financial liabilities such as deposits and borrowings, and derivative financial instruments, (2) foreign currency denominated equity instruments classified as available-for-sale financial assets hedged by using foreign currency denominated financial liabilities, and (3) foreign currency denominated financial assets and liabilities, such as loans and deposits hedged by using derivative financial instruments such as currency swaps.

76

The economic hedge transactions lead to accounting mismatches (i.e., when the gains or losses on the hedged items and hedging instruments do not arise at the same time, or the hedged items and hedging instruments do not offset each other either in profit or loss, or in other comprehensive income). Accordingly, large fluctuations in interest rates and/or large depreciations or appreciations of the yen against other currencies may result in significant fluctuations in net trading income from interest rate related transactions and/or foreign exchange transactions.

The increase in net trading income from interest rate related transactions was primarily due to a decrease in losses from interest rate hedging instruments for the economic hedges, reflecting a smaller increase in U.S. interest rates during the fiscal year ended March 31, 2018 compared to the previous fiscal year.

As for net trading income from foreign exchange transactions, the fluctuation between the fiscal years ended March 31, 2018 and 2017 was smaller than that between the fiscal years ended March 31, 2017 and 2016. We started to apply hedge accounting on April 1, 2017 to part of the hedge transactions whose hedged items were net investments in foreign operations, which had been previously included in the economic hedges. As a result, part of the accounting mismatches from economic hedge transactions were eliminated, and this contributed to reducing the above-mentioned fluctuation.

Net income (loss) from financial assets at fair value through profit or loss decreased by ¥2,685 million from a net income of ¥2,018 million for the fiscal year ended March 31, 2017 to a net loss of ¥667 million for the fiscal year ended March 31, 2018, primarily due to a decrease in the fair value of debt instruments.

Net investment income increased by ¥118,770 million from ¥305,327 million for the fiscal year ended March 31, 2017 to ¥424,097 million for the fiscal year ended March 31, 2018. This was primarily due to an increase in net gains from sales of equity index-linked investment trusts, which was partially offset by a decrease in net gains from sales of bonds.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Net trading income, which includes income and losses from trading assets and liabilities and derivative financial instruments, decreased by ¥278,719 million from ¥462,682 million for the fiscal year ended March 31, 2016 to ¥183,963 million for the fiscal year ended March 31, 2017. The decrease was primarily due to a decrease in net trading income from interest rate related transactions and foreign exchange transactions related to the economic hedges as described in the previous section.

The decrease in net trading income from interest rate related transactions reflected a rise in U.S. interest rates. The decrease in net trading income from foreign exchange transactions was primarily due to a decrease in the impact of the appreciation of the yen against the U.S. dollar on gains or losses arising from foreign exchange. The yen exchange rate against the U.S. dollar was ¥112.19, ¥112.62 and ¥120.15 at March 31, 2017, 2016 and 2015, respectively. This resulted in the 0.43-yen appreciation of the yen against the U.S. dollar during the fiscal year ended March 31, 2017, which was smaller than the 7.53-yen appreciation during the previous fiscal year. For further information about the yen exchange rates, see “Item 3. Key Information—3.A. Selected Financial Data—Exchange Rates.”

Net income from financial assets at fair value through profit or loss decreased by ¥10,242 million from ¥12,260 million for the fiscal year ended March 31, 2016 to ¥2,018 million for the fiscal year ended March 31, 2017, primarily due to a decrease in gains arising from sales and changes in the fair value of debt instruments.

Net investment income decreased by ¥69,902 million from ¥375,229 million for the fiscal year ended March 31, 2016 to ¥305,327 million for the fiscal year ended March 31, 2017. This was primarily due to a decrease in net gains from sales of equity index-linked investment trusts and bonds.

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Other Income

The following table sets forth our other income for the periods shown.

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Income from operating leases	¥	276,850	¥	250,460	¥	206,561
Income related to disposal of assets leased		322,673		152,564		155,280
Income related to IT solution services		29,172		37,678		33,991
Gains on disposal of property, plant and equipment, and other intangible assets		852		937		3,714
Reversal of impairment losses of investments in associates and joint ventures		8,123		—		4,847
Gains on step acquisition of subsidiaries		—		20,344		118
Gains on step acquisition of associates and joint ventures		—		—		1,714
Others		118,185		111,842		90,048
Total other income	¥	755,855	¥	573,825	¥	496,273

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Other income increased by ¥182,030 million, or 32%, from ¥573,825 million for the fiscal year ended March 31, 2017 to ¥755,855 million for the fiscal year ended March 31, 2018, primarily due to increases in income related to the disposal of assets leased and income from operating leases.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Other income increased by ¥77,552 million, or 16%, from ¥496,273 million for the fiscal year ended March 31, 2016 to ¥573,825 million for the fiscal year ended March 31, 2017. The increase was primarily due to increases in income from operating leases reflecting the inclusion of GE group’s leasing business in Japan, which we acquired on April 1, 2016, and gains on step acquisition of subsidiaries related to the acquisition of SMAM.

Impairment Charges on Financial Assets

The following table sets forth our impairment charges on financial assets for the periods shown.

	For the fiscal year ended March 31,
	2018		2017		2016
			(In millions)
Loans and advances	¥	126,623	¥	141,457	¥	118,750
Available-for-sale financial assets		10,185		71,510		29,606
Total impairment charges on financial assets	¥	136,808	¥	212,967	¥	148,356

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Our impairment charges on financial assets consist of losses relating to loans and advances and available-for-sale financial assets. Impairment charges on loans and advances are mainly affected by the economic environment and financial conditions of borrowers. On the other hand, impairment charges on available-for-sale financial assets are mainly affected by not only the economic environment and financial conditions of issuers but the fair value of the financial instruments, such as market prices on stock markets in the case of equity instruments.

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Impairment charges on loans and advances decreased by ¥14,834 million from ¥141,457 million for the fiscal year ended March 31, 2017 to ¥126,623 million for the fiscal year ended March 31, 2018. The decrease was primarily due to a decrease in the provision for loan losses reflecting gradual recovery of the Japanese and global economy.

For detailed information on provision for loan losses, see “—Financial Condition—Allowance for Loan Losses.”

Impairment charges on available-for-sale financial assets decreased by ¥61,325 million from ¥71,510 million for the fiscal year ended March 31, 2017 to ¥10,185 million for the fiscal year ended March 31, 2018, primarily due to a decrease in impairment charges on investment trusts, mainly those investing in Japanese or foreign stocks.

In determining the amount of impairment charges at the end of each reporting period, we consider whether there is objective evidence of impairment as a result of loss events, such as any significant financial difficulty of the issuer. Our assessments of issuers are focused by industry and geographical area, taking into consideration the adverse impact of any specific issues such as significant changes in the technological, market, economic or legal environment of the issuer indicating that the cost of our investment may not be recovered. Additionally, in the case of available-for-sale equity instruments, we take into consideration whether there has been a significant or prolonged decline in the fair value of the equity instruments below their cost.

For the fiscal year ended March 31, 2018, the types of securities on which the impairment charges were recognized included investments in limited partnerships and investment trusts.

For detailed information on our available-for-sale financial assets, which include a diversified portfolio of domestic equity instruments, see “—Financial Condition—Investment Securities.”

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Impairment charges on loans and advances increased by ¥22,707 million from ¥118,750 million for the fiscal year ended March 31, 2016 to ¥141,457 million for the fiscal year ended March 31, 2017, primarily due to an increase in impairment charges on loans and advances to our domestic customers.

For detailed information on provision for loan losses, see “—Financial Condition—Allowance for Loan Losses.”

Impairment charges on available-for-sale financial assets increased by ¥41,904 million from ¥29,606 million for the fiscal year ended March 31, 2016 to ¥71,510 million for the fiscal year ended March 31, 2017, primarily due to an increase in impairment charges on investment trusts, mainly those investing in Japanese or foreign stocks. Most of these impairment charges reflected the decline in the Nikkei Stock Average and the appreciation of the yen against the U.S. dollar for the first half of the fiscal year ended March 31, 2017.

For detailed information on our available-for-sale financial assets, which include a diversified portfolio of domestic equity instruments, see “—Financial Condition—Investment Securities.”

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General and Administrative Expenses

The following table sets forth our general and administrative expenses for the periods shown.

	For the fiscal year ended March 31,
	2018		2017		2016
			(In millions)
Personnel expenses	¥	864,396	¥	833,755	¥	785,547
Depreciation and amortization		171,043		172,496		157,672
Rent and lease expenses		117,400		115,425		117,482
Building and maintenance expenses		11,167		10,657		13,966
Supplies expenses		16,902		16,694		16,628
Communication expenses		38,171		37,250		36,634
Publicity and advertising expenses		80,464		79,570		79,453
Taxes and dues		83,976		85,967		76,695
Outsourcing expenses		96,733		96,063		91,837
Premiums for deposit insurance		37,938		38,180		36,175
Office equipment expenses		54,708		49,127		47,621
Others		240,223		216,951		246,553
Total general and administrative expenses	¥	1,813,121	¥	1,752,135	¥	1,706,263

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

General and administrative expenses increased by ¥60,986 million, or 3%, from ¥1,752,135 million for the fiscal year ended March 31, 2017 to ¥1,813,121 million for the fiscal year ended March 31, 2018. This was primarily due to increases in general and administrative expenses of SMBC Nikko Securities and Sumitomo Mitsui Card related to their business development, which were partially offset by SMBC Group-wide expense control initiatives.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

General and administrative expenses increased by ¥45,872 million, or 3%, from ¥1,706,263 million for the fiscal year ended March 31, 2016 to ¥1,752,135 million for the fiscal year ended March 31, 2017, primarily due to the full inclusion of general and administrative expenses of SMBC Trust Bank, which acquired the retail banking business of Citibank Japan Ltd. in November 2015, and the inclusion of GE group’s leasing business in Japan, which we acquired on April 1, 2016.

Other Expenses

The following table sets forth our other expenses for the periods shown.

	For the fiscal year ended March 31,
	2018		2017		2016
			(In millions)
Cost of operating leases	¥	144,708	¥	126,320	¥	95,440
Cost related to disposal of assets leased		310,460		140,255		140,083
Cost related to IT solution services and IT systems		92,975		92,247		90,563
Provision for interest repayment		49,879		11,439		141,024
Losses on disposal of property, plant and equipment, and other intangible assets		4,913		6,041		4,302
Impairment losses of property, plant and equipment		27,816		6,396		4,237
Impairment losses of intangible assets		35,666		74,788		1,278
Losses on sale of investments in subsidiaries and associates		28,250		—		24
Impairment losses of investments in associates and joint ventures		19,851		14,941		17,306
Others		78,247		59,332		44,706
Total other expenses	¥	792,765	¥	531,759	¥	538,963

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Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Other expenses increased by ¥261,006 million, or 49%, from ¥531,759 million for the fiscal year ended March 31, 2017 to ¥792,765 million for the fiscal year ended March 31, 2018, primarily due to increases in cost related to disposal of assets leased, cost of operating leases and provision for interest repayment.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Other expenses decreased by ¥7,204 million, or 1%, from ¥538,963 million for the fiscal year ended March 31, 2016 to ¥531,759 million for the fiscal year ended March 31, 2017, primarily due to a decrease in provision for interest repayment, which was partially offset by increases in impairment losses of intangible assets and cost of operating leases.

Share of Post-tax Profit of Associates and Joint Ventures

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Share of post-tax profit of associates and joint ventures increased by ¥20,005 million from ¥29,318 million for the fiscal year ended March 31, 2017 to ¥49,323 million for the fiscal year ended March 31, 2018. This was primarily due to an increase in profit of The Bank of East Asia, Limited, reflecting gains on sale of its subsidiary.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Share of post-tax profit of associates and joint ventures decreased by ¥1,738 million from ¥31,056 million for the fiscal year ended March 31, 2016 to ¥29,318 million for the fiscal year ended March 31, 2017, primarily due to a decrease in our share of the profit of foreign associates and joint ventures.

Income Tax Expense

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Income tax expense increased by ¥89,612 million from ¥139,766 million for the fiscal year ended March 31, 2017 to ¥229,378 million for the fiscal year ended March 31, 2018, primarily due to a correction to the reversal of the write-down of deferred tax assets in the previous fiscal year in accordance with the adoption of the consolidated corporate-tax system in Japan from the fiscal year beginning April 1, 2017. For further information on the consolidated corporate tax-system, see Note 22 “Deferred Income Tax” to our consolidated financial statements included elsewhere in this annual report.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Income tax expense decreased by ¥233,112 million from ¥372,878 million for the fiscal year ended March 31, 2016 to ¥139,766 million for the fiscal year ended March 31, 2017, due to a decrease in deferred tax expense. The decrease was primarily due to an increase of deductible temporary differences attributable to derivative financial instruments, and the reversal of the write-down of deferred tax assets at March 31, 2017 in accordance with the application to the Commissioner of the National Tax Agency for permission to adopt the consolidated corporate-tax system in Japan from the fiscal year beginning April 1, 2017. Under this system, the taxable profits or losses on a consolidated basis are calculated by aggregating those of the parent company and its wholly owned domestic subsidiaries (a “tax consolidated group”), and any unused tax losses carried forward, except for certain specified consolidated tax losses carried forward, by one company can be used by another company within the tax consolidated group for Japanese national corporation tax purposes. For further information on the consolidated corporate tax-system, see Note 22 “Deferred Income Tax” to our consolidated financial statements included elsewhere in this annual report.

81

Business Segment Analysis

Our business segment information is prepared based on the internal reporting system utilized by our management to assess the performance of our business segments under Japanese GAAP. We have four main business segments: the Wholesale Business Unit, the Retail Business Unit, the International Business Unit and the Global Markets Business Unit, with the remaining operations recorded in Head office account and others. We changed our business segment information for the fiscal year ended March 31, 2018 in connection with the introduction of SMBC Group-wide business units, which determine strategies for each customer segment across the SMBC Group companies. The business segment was previously reported as Commercial Banking, Leasing, Securities and Consumer Finance, with the remaining operations recorded in Others. Comparative information has been restated.

Our organizational charts are provided in “Item 4.C. Organizational Structure.” Since figures reported to management are prepared under Japanese GAAP, the segment information does not agree to figures in the consolidated financial statements under IFRS. This difference is addressed in Note 4 “Segment Analysis—Reconciliation of Segmental Results of Operations to Consolidated Income Statement” to our consolidated financial statements included elsewhere in this annual report.

Segmental Results of Operations

For the fiscal year ended March 31, 2018:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	772.9		¥	1,311.7		¥	632.0		¥	356.2		¥	(91.7	)	¥	2,981.1
General and administrative expenses		(347.9	)		(1,027.7	)		(280.7	)		(53.9	)		(106.0	)		(1,816.2	)
Others(2)		53.7			15.6			46.9			17.5			(94.8	)		38.9
Consolidated net business profit	¥	478.7		¥	299.6		¥	398.2		¥	319.8		¥	(292.5	)	¥	1,203.8

Consolidated Gross Profit by Business Segment

(For the fiscal year ended March 31, 2018)

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For the fiscal year ended March 31, 2017:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	776.4		¥	1,313.9		¥	566.1		¥	346.8		¥	(82.5	)	¥	2,920.7
General and administrative expenses		(344.8	)		(1,041.1	)		(241.2	)		(50.2	)		(135.1	)		(1,812.4	)
Others(2)		45.6			12.1			38.5			8.2			(79.8	)		24.6
Consolidated net business profit	¥	477.2		¥	284.9		¥	363.4		¥	304.8		¥	(297.4	)	¥	1,132.9

For the fiscal year ended March 31, 2016:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	749.2		¥	1,272.7		¥	588.8		¥	354.1		¥	(60.8	)	¥	2,904.0
General and administrative expenses		(325.3	)		(1,000.6	)		(236.5	)		(49.2	)		(113.2	)		(1,724.8	)
Others(2)		48.0			10.0			(23.9	)		8.8			(79.2	)		(36.3	)
Consolidated net business profit	¥	471.9		¥	282.1		¥	328.4		¥	313.7		¥	(253.2	)	¥	1,142.9

(1) Consolidated gross profit = (Interest income – Interest expenses) + Trust fees + (Fee and commission income – Fee and commission expenses) + (Trading income – Trading losses) + (Other operating income – Other operating expenses).

(2) “Others” includes share of profit or loss of equity-method associates and cooperated profit and loss, that is, profit and loss double-accounted for in the managerial accounting.

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Wholesale Business Unit

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Consolidated gross profit decreased by ¥3 billion from ¥776 billion for the fiscal year ended March 31, 2017 to ¥773 billion for the fiscal year ended March 31, 2018. This was primarily due to a decrease in consolidated gross profit related to securities business, which was partially offset by an increase in consolidated gross profit related to leasing business.

General and administrative expenses increased by ¥3 billion from ¥345 billion for the fiscal year ended March 31, 2017 to ¥348 billion for the fiscal year ended March 31, 2018.

Others increased by ¥8 billion from ¥46 billion for the fiscal year ended March 31, 2017 to ¥54 billion for the fiscal year ended March 31, 2018.

As a result, consolidated net business profit increased by ¥2 billion from ¥477 billion for the fiscal year ended March 31, 2017 to ¥479 billion for the fiscal year ended March 31, 2018.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Consolidated gross profit increased by ¥27 billion from ¥749 billion for the fiscal year ended March 31, 2016 to ¥776 billion for the fiscal year ended March 31, 2017. This was primarily due to an increase in consolidated gross profit related to leasing business as a result of the inclusion of SMFL Capital Company, Limited, which became a subsidiary of SMFL in April 2016.

General and administrative expenses increased by ¥20 billion from ¥325 billion for the fiscal year ended March 31, 2016 to ¥345 billion for the fiscal year ended March 31, 2017.

Others decreased by ¥2 billion from ¥48 billion for the fiscal year ended March 31, 2016 to ¥46 billion for the fiscal year ended March 31, 2017.

As a result, consolidated net business profit increased by ¥5 billion from ¥472 billion for the fiscal year ended March 31, 2016 to ¥477 billion for the fiscal year ended March 31, 2017.

Retail Business Unit

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Consolidated gross profit decreased by ¥2 billion from ¥1,314 billion for the fiscal year ended March 31, 2017 to ¥1,312 billion for the fiscal year ended March 31, 2018. Income on loans of SMBC decreased, although consolidated gross profit related to wealth management business and credit card business increased.

General and administrative expenses decreased by ¥13 billion from ¥1,041 billion for the fiscal year ended March 31, 2017 to ¥1,028 billion for the fiscal year ended March 31, 2018.

Others increased by ¥4 billion from ¥12 billion for the fiscal year ended March 31, 2017 to ¥16 billion for the fiscal year ended March 31, 2018.

As a result, consolidated net business profit increased by ¥15 billion from ¥285 billion for the fiscal year ended March 31, 2017 to ¥300 billion for the fiscal year ended March 31, 2018.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Consolidated gross profit increased by ¥41 billion from ¥1,273 billion for the fiscal year ended March 31, 2016 to ¥1,314 billion for the fiscal year ended March 31, 2017. This was primarily due to an increase in gross profit of SMBC Nikko Securities, Sumitomo Mitsui Card and SMBC Consumer Finance.

84

General and administrative expenses increased by ¥40 billion from ¥1,001 billion for the fiscal year ended March 31, 2016 to ¥1,041 billion for the fiscal year ended March 31, 2017.

Others increased by ¥2 billion from ¥10 billion for the fiscal year ended March 31, 2016 to ¥12 billion for the fiscal year ended March 31, 2017.

As a result, consolidated net business profit increased by ¥3 billion from ¥282 billion for the fiscal year ended March 31, 2016 to ¥285 billion for the fiscal year ended March 31, 2017.

International Business Unit

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Consolidated gross profit increased by ¥66 billion from ¥566 billion for the fiscal year ended March 31, 2017 to ¥632 billion for the fiscal year ended March 31, 2018. This was primarily due to an increase in non-asset related income.

General and administrative expenses increased by ¥40 billion from ¥241 billion for the fiscal year ended March 31, 2017 to ¥281 billion for the fiscal year ended March 31, 2018.

Others increased by ¥8 billion from ¥39 billion for the fiscal year ended March 31, 2017 to ¥47 billion for the fiscal year ended March 31, 2018. This was primarily due to an increase in profit of The Bank of East Asia, Limited, which is our equity-method associate, reflecting gains on sale of its subsidiary.

As a result, consolidated net business profit increased by ¥35 billion from ¥363 billion for the fiscal year ended March 31, 2017 to ¥398 billion for the fiscal year ended March 31, 2018.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Consolidated gross profit decreased by ¥23 billion from ¥589 billion for the fiscal year ended March 31, 2016 to ¥566 billion for the fiscal year ended March 31, 2017. This was primarily due to a decrease in consolidated gross profit related to commercial banking business of SMBC.

General and administrative expenses increased by ¥4 billion from ¥237 billion for the fiscal year ended March 31, 2016 to ¥241 billion for the fiscal year ended March 31, 2017.

Others increased by ¥63 billion from a loss of ¥24 billion for the fiscal year ended March 31, 2016 to ¥39 billion for the fiscal year ended March 31, 2017. This was because a part of goodwill related to PT Bank Tabungan Pensiunan Nasional Tbk, which is our equity-method associate, was impaired in the previous fiscal year.

As a result, consolidated net business profit increased by ¥35 billion from ¥328 billion for the fiscal year ended March 31, 2016 to ¥363 billion for the fiscal year ended March 31, 2017.

Global Markets Business Unit

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

Consolidated gross profit increased by ¥9 billion from ¥347 billion for the fiscal year ended March 31, 2017 to ¥356 billion for the fiscal year ended March 31, 2018. This was primarily due to a nimble portfolio management with a focus on Japanese stocks in the volatile market environment.

General and administrative expenses increased by ¥4 billion from ¥50 billion for the fiscal year ended March 31, 2017 to ¥54 billion for the fiscal year ended March 31, 2018.

85

Others increased by ¥10 billion from ¥8 billion for the fiscal year ended March 31, 2017 to ¥18 billion for the fiscal year ended March 31, 2018.

As a result, consolidated net business profit increased by ¥15 billion from ¥305 billion for the fiscal year ended March 31, 2017 to ¥320 billion for the fiscal year ended March 31, 2018.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

Consolidated gross profit decreased by ¥7 billion from ¥354 billion for the fiscal year ended March 31, 2016 to ¥347 billion for the fiscal year ended March 31, 2017. This was primarily due to a decrease in profits from equity index-linked investment trusts.

General and administrative expenses increased by ¥1 billion from ¥49 billion for the fiscal year ended March 31, 2016 to ¥50 billion for the fiscal year ended March 31, 2017.

Others decreased by ¥1 billion from ¥9 billion for the fiscal year ended March 31, 2016 to ¥8 billion for the fiscal year ended March 31, 2017.

As a result, consolidated net business profit decreased by ¥9 billion from ¥314 billion for the fiscal year ended March 31, 2016 to ¥305 billion for the fiscal year ended March 31, 2017.

Financial Condition

Assets

Our total assets increased by ¥1,024,585 million from ¥191,150,981 million at March 31, 2017 to ¥192,175,566 million at March 31, 2018. The increase was primarily due to increases in cash and deposits with banks and investment securities, despite of the exclusion of all the assets, including loans and advances, of Kansai Urban Banking Corporation (“KUBC”) and THE MINATO BANK, LTD. (“The Minato Bank”), which ceased to be our subsidiaries and became our equity-method associates for the fiscal year ended March 31, 2018.

Our assets at March 31, 2018 and 2017 were as follows.

	At March 31,
	2018		2017
	(In millions)
Cash and deposits with banks	¥	54,696,069	¥	47,330,155
Call loans and bills bought		1,881,880		1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed		8,491,703		8,924,385
Trading assets		3,169,123		3,776,671
Derivative financial instruments		3,885,271		4,063,982
Financial assets at fair value through profit or loss		1,547,672		1,599,093
Investment securities		20,495,075		19,073,937
Loans and advances		85,129,070		95,273,845
Investments in associates and joint ventures		730,414		675,704
Property, plant and equipment		1,510,132		2,686,055
Intangible assets		835,902		1,096,568
Other assets		4,043,908		4,321,724
Current tax assets		87,961		240,385
Deferred tax assets		19,436		81,961
Assets held for sale		5,651,950		134,307
Total assets	¥	192,175,566	¥	191,150,981

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Loans and Advances

Our main operating activity is the lending business. We make loans and extend other types of credit principally to corporate and individual customers in Japan and to corporate and sovereign customers in foreign countries.

At March 31, 2018, our loans and advances were ¥85,129,070 million, or 44% of total assets, representing a decrease of ¥10,144,775 million, or 11%, from ¥95,273,845 million at March 31, 2017. The decrease in loans and advances was primarily due to the exclusion of loans and advances made by KUBC and The Minato Bank, and the reclassification of loans and advances made by SMFL to assets held for sale. KUBC and The Minato Bank ceased to be our subsidiaries and became our equity-method associates for the fiscal year ended March 31, 2018 and SMFL will cease to be our consolidated subsidiary and will become our joint venture for the fiscal year ending March 31, 2019. For more information, see “Item 4.B.Business Overview—Description of Operations and Principal Activities.” In addition, decreases in loans and advances of SMBC to the Government of Japan and domestic corporate customers contributed to the decrease in loans and advances.

Domestic

Through SMBC and other banking and non-bank subsidiaries, we make loans to a broad range of industrial, commercial and individual customers in Japan. The following table shows our outstanding loans and advances to customers whose domiciles are in Japan, classified by industry, before deducting the allowance for loan losses, and adjusting unearned income, unamortized premiums-net and deferred loan fees-net at the dates indicated.

	At March 31,
	2018		2017
	(In millions)
Manufacturing	¥	7,961,620	¥	9,578,147
Agriculture, forestry, fisheries and mining		145,957		174,021
Construction		947,765		1,151,989
Transportation, communications and public enterprises		5,424,054		5,365,225
Wholesale and retail		5,288,767		5,721,005
Finance and insurance		2,777,862		2,844,546
Real estate and goods rental and leasing		9,017,664		10,101,846
Services		4,255,228		4,885,247
Municipalities		1,000,286		1,216,211
Lease financing		14,629		2,706,641
Consumer(1)		16,363,489		19,096,755
Others(2)		4,633,306		5,178,461
Total domestic	¥	57,830,627	¥	68,020,094

(1) The balance in Consumer mainly consists of housing loans. The housing loan balances amounted to ¥11,482,678 million and ¥13,766,771 million at March 31, 2018 and 2017, respectively.

(2) The balance in Others includes loans and advances to the Government of Japan.

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Foreign

The following table shows the outstanding loans and advances to our customers whose domiciles are not in Japan, classified by industry, before deducting the allowance for loan losses, and adjusting unearned income, unamortized premiums-net and deferred loan fees-net at the dates indicated.

	At March 31,
	2018		2017
	(In millions)
Public sector	¥	372,008	¥	299,746
Financial institutions		4,496,646		4,588,001
Commerce and industry		21,023,885		21,041,905
Lease financing		357,660		404,658
Others		1,779,101		1,836,322
Total foreign	¥	28,029,300	¥	28,170,632

Allowance for Loan Losses

We calculate the allowance for loan losses using the latest assignment of obligor grades (our internal credit rating) and supplementary data such as the borrowers’ operating cash flows, realizable value of collateral and recent economic conditions.

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017

For the fiscal year ended March 31, 2018, the allowance for loan losses decreased by ¥188,780 million, or 28%, from ¥680,456 million at March 31, 2017 to ¥491,676 million at March 31, 2018. The decrease was primarily due to the exclusion of the allowance for loans and advances made by KUBC and The Minato Bank, which ceased to be our subsidiaries and became our equity-method associates for the fiscal year ended March 31, 2018. The allowance for loans and advances made by SMFL which will cease to be our consolidated subsidiary and will become our joint venture for the fiscal year ending March 31, 2019 was also excluded.

The provision for loan losses decreased by ¥14,834 million from ¥141,457 million for the fiscal year ended March 31, 2017 to ¥126,623 million for the fiscal year ended March 31, 2018. The decrease was primarily due to a decrease in the provision for loan losses reflecting gradual recovery of the Japanese and global economy.

Charge-offs decreased by ¥5,448 million from the previous fiscal year to ¥185,060 million for the fiscal year ended March 31, 2018. Charge-offs of domestic loans and advances increased by ¥4,153 million compared to the previous fiscal year to ¥161,526 million for the fiscal year ended March 31, 2018, primarily due to an increase in charge-offs related to consumer loans. Charge-offs of foreign loans and advances decreased by ¥9,601 million compared to the previous fiscal year to ¥23,534 million for the fiscal year ended March 31, 2018, primarily due to a decrease in charge-offs related to customers from the commerce and industry.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

For the fiscal year ended March 31, 2017, the allowance for loan losses decreased by ¥42,261 million, or 6%, from ¥722,717 million at March 31, 2016 to ¥680,456 million at March 31, 2017. The balance of the allowance for loan losses increases when the provision for loan losses is recognized and decreases when charge-offs are recognized through the sales of loans and write-offs. As we recorded a provision for loan losses of ¥141,457 million and charge-offs of ¥190,508 million for the fiscal year ended March 31, 2017, and charge-offs exceeded the provision for loan losses, the overall allowance for loan losses decreased.

The provision for loan losses increased by ¥22,707 million from ¥118,750 million for the fiscal year ended March 31, 2016 to ¥141,457 million for the fiscal year ended March 31, 2017. The increase was primarily due to an increase in the provision for loan losses related to our domestic customers.

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Charge-offs decreased by ¥3,141 million from the previous fiscal year to ¥190,508 million for the fiscal year ended March 31, 2017. Charge-offs of domestic loans and advances decreased by ¥16,058 million compared to the previous fiscal year to ¥157,373 million for the fiscal year ended March 31, 2017, primarily due to a decrease in charge-offs related to customers from the real estate and goods rental and leasing. Charge-offs of foreign loans and advances increased by ¥12,917 million compared to the previous fiscal year to ¥33,135 million for the fiscal year ended March 31, 2017, primarily due to an increase in charge-offs related to customers from the commerce and industry.

The following table shows our allowance for loan losses for each of the periods indicated.

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Allowance for loan losses at beginning of period	¥	680,456		¥	722,717		¥	793,552
Provision for loan losses		126,623			141,457			118,750
Charge-offs:
Domestic		161,526			157,373			173,431
Foreign		23,534			33,135			20,218
Total		185,060			190,508			193,649
Recoveries:
Domestic		9,658			9,852			9,477
Foreign		574			445			871
Total		10,232			10,297			10,348
Net charge-offs		174,828			180,211			183,301
Others(1)		(140,575	)		(3,507	)		(6,284	)
Allowance for loan losses at end of period	¥	491,676		¥	680,456		¥	722,717

(1) Others mainly include the exclusion of the allowance for loans and advances made by KUBC and The Minato Bank, both of which had been our subsidiaries but became our equity-method associates, and the exclusion of the allowance for loans and advances made by SMFL which were reclassified as assets held for sale during the fiscal year ended March 31, 2018. The amount for the fiscal year ended March 31, 2017 and 2016 mainly includes foreign exchange transactions.

Impaired Loans and Advances

A portion of the total domestic and foreign loans and advances consists of impaired loans and advances, which are comprised of “potentially bankrupt, effectively bankrupt and bankrupt (loans and advances),” “past due three months or more (loans),” “restructured (loans)” and “other impaired (loans and advances).” The loans and advances for which management has serious doubts about the ability of the borrowers to comply in the near future with the repayment terms are wholly included in impaired loans and advances.

“Potentially bankrupt, effectively bankrupt and bankrupt (loans and advances)” comprise loans and advances to borrowers that are perceived to have a high risk of falling into bankruptcy, may not have been legally or formally declared bankrupt but are essentially bankrupt, or have been legally or formally declared bankrupt.

Loans classified as “past due three months or more (loans)” represent those loans that are three months or more past due as to principal or interest, which are not included in “potentially bankrupt, effectively bankrupt and bankrupt (loans and advances).”

The category “restructured (loans)” comprises loans not included above for which the terms of the loans have been modified to grant concessions because of problems with the borrower.

“Other impaired (loans and advances)” represent impaired loans and advances, which are not included in “potentially bankrupt, effectively bankrupt and bankrupt (loans and advances),” “past due three months or more

89

(loans),” or “restructured (loans),” but for which information about credit problems cause management to classify them as impaired loans and advances.

The following table shows the distribution of impaired loans and advances by “potentially bankrupt, effectively bankrupt and bankrupt (loans and advances),” “past due three months or more (loans),” “restructured (loans)” and “other impaired (loans and advances)” at March 31, 2018 and 2017 by domicile and type of industry of the borrowers. At March 31, 2018, gross impaired loans and advances were ¥878,868 million, a decrease of ¥349,820 million from ¥1,228,688 million at March 31, 2017. The ratio of gross impaired loans and advances to the outstanding loans and advances before deducting the allowance for loan losses, and adjusting unearned income, unamortized premiums-net and deferred loan fees-net was 1.0% at March 31, 2018, a decrease of 0.3 percentage points from 1.3% at March 31, 2017.

	At March 31,
	2018			2017
	(In millions)
Potentially bankrupt, effectively bankrupt and bankrupt (loans and  advances):
Domestic:
Manufacturing	¥	62,322		¥	106,178
Agriculture, forestry, fisheries and mining		6,369			2,250
Construction		10,439			24,430
Transportation, communications and public enterprises		15,494			23,692
Wholesale and retail		74,332			104,472
Finance and insurance		3,021			4,135
Real estate and goods rental and leasing		32,634			126,179
Services		50,858			91,943
Lease financing		—			7,513
Consumer		157,221			194,721
Others		23,081			25,059
Total domestic		435,771			710,572
Foreign:
Financial institutions		30			29
Commerce and industry		144,975			157,227
Lease financing		—			11,892
Others		22,383			23,890
Total foreign		167,388			193,038
Total		603,159			903,610
Past due three months or more (loans):
Domestic		21,649			20,808
Foreign		—			11,449
Total		21,649			32,257
Restructured (loans):
Domestic		136,582			155,100
Foreign		17,567			25,741
Total		154,149			180,841
Other impaired (loans and advances):
Domestic		93,175			103,777
Foreign		6,736			8,203
Total		99,911			111,980
Gross impaired loans and advances		878,868			1,228,688
Less: Allowance for loan losses for impaired loans and advances		(369,386	)		(532,451	)
Net impaired loans and advances	¥	509,482		¥	696,237

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In addition to the discussion in this section, see Note 45 “Financial Risk Management—Credit Risk” to our consolidated financial statements included elsewhere in this annual report.

Investment Securities

Our investment securities, including available-for-sale financial assets and held-to-maturity investments, totaled ¥20,495,075 million at March 31, 2018, an increase of ¥1,421,138 million, or 7%, from ¥19,073,937 million at March 31, 2017. The increase in our investment securities was primarily due to an increase in our holdings of Japanese government bonds.

Our bond portfolio is principally held for asset and liability management purposes. Our bond portfolio mostly consisted of Japanese government bonds, U.S. Treasury securities and bonds issued by other governments and official institutions.

Our held-to-maturity investments amounted to ¥372,459 million at March 31, 2018, a decrease of ¥800,960 million, or 68%, from ¥1,173,419 million at March 31, 2017, primarily due to redemptions at maturity of Japanese government bonds, which are the principal components of our held-to-maturity investments portfolio.

Domestic available-for-sale financial assets included ¥8,028,936 million of domestic debt instruments at March 31, 2018, an increase of ¥1,859,932 million, or 30%, from ¥6,169,004 million at March 31, 2017. The increase was primarily due to an increase in our holdings of Japanese government bonds. Moreover, we manage the average duration of our Japanese government bonds to be short, and Japanese government bonds with a maturity of less than five years accounted for 91% of our total Japanese government bonds at March 31, 2018. As for our foreign available-for-sale financial assets, we had ¥6,253,770 million of foreign debt instruments, which was an increase of ¥299,004 million, or 5%, from ¥5,954,766 million at March 31, 2017. Most of our foreign debt instruments, including mortgage-backed securities, are issued or guaranteed by foreign governments, government agencies or official institutions. The increase was primarily due to an increase in our holdings of bonds issued by other governments and official institutions. Net unrealized losses on our foreign debt instruments amounted to ¥165,863 million at March 31, 2018, as compared to net unrealized losses of ¥128,474 million at March 31, 2017. This was primarily due to a rise in U.S. interest rates. Of our foreign debt instruments, 57% had a maturity of less than five years.

We had ¥5,161,734 million of domestic equity instruments and ¥678,176 million of foreign equity instruments at March 31, 2018. Our domestic equity instruments, which consisted principally of publicly traded Japanese stocks and included common and preferred stocks issued by our customers, increased by ¥44,105 million, or 1%, from ¥5,117,629 million at March 31, 2017. Net unrealized gains on our domestic equity instruments increased by ¥228,469 million, or 8%, from ¥2,696,122 million at March 31, 2017 to ¥2,924,591 million at March 31, 2018. The increase was primarily due to a rise in the market prices of these stocks in a market environment where, as described in “Item 5. Operating and Financial Review and Prospects—Overview—Operating Environment,” the Nikkei Stock Average rose from ¥18,909.26 at March 31, 2017 to ¥21,454.30 at March 30, 2018. Net unrealized gains on our foreign equity instruments increased by ¥39,573 million, or 13%, from ¥296,448 million at March 31, 2017 to ¥336,021 million at March 31, 2018, mainly reflecting favorable conditions in overseas stock markets.

We recognize the risks associated with our equity portfolio, owing to its volatility, and have been actively looking to minimize the negative effect of holding a large equity portfolio through economic hedging and derivative transactions.

We have no transactions pursuant to repurchase agreements, securities lending transactions or other transactions involving the transfer of financial assets with an obligation to repurchase such transferred assets that are treated as sales for accounting purposes.

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The following tables show the amortized cost, gross unrealized gains and losses and fair value of our investment securities, which are classified as held-to-maturity investments and available-for-sale financial assets at March 31, 2018, 2017 and 2016.

	At March 31, 2018
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
	(In millions)
Held-to-maturity investments:
Domestic:
Japanese government bonds	¥	372,459	¥	2,138	¥	—	¥	374,597
Japanese municipal bonds		—		—		—		—
Japanese corporate bonds		—		—		—		—
Total domestic		372,459		2,138		—		374,597
Foreign		—		—		—		—
Total	¥	372,459	¥	2,138	¥	—	¥	374,597
Available-for-sale financial assets:
Domestic:
Japanese government bonds	¥	7,675,028	¥	14,554	¥	4,279	¥	7,685,303
Japanese municipal bonds		47,079		49		96		47,032
Japanese corporate bonds		295,503		1,221		123		296,601
Total domestic debt instruments		8,017,610		15,824		4,498		8,028,936
Equity instruments		2,237,143		2,946,737		22,146		5,161,734
Total domestic		10,254,753		2,962,561		26,644		13,190,670
Foreign:
U.S. Treasury and other U.S. government agency bonds		3,387,109		1,723		142,186		3,246,646
Bonds issued by other governments and official institutions		2,192,099		4,203		8,852		2,187,450
Mortgage-backed securities		509,104		31		20,952		488,183
Other debt instruments		331,321		507		337		331,491
Total foreign debt instruments		6,419,633		6,464		172,327		6,253,770
Equity instruments		342,155		340,366		4,345		678,176
Total foreign		6,761,788		346,830		176,672		6,931,946
Total	¥	17,016,541	¥	3,309,391	¥	203,316	¥	20,122,616

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	At March 31, 2017
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
	(In millions)
Held-to-maturity investments:
Domestic:
Japanese government bonds	¥	1,160,751	¥	6,865	¥	—	¥	1,167,616
Japanese municipal bonds		7,463		12		—		7,475
Japanese corporate bonds		5,205		23		—		5,228
Total domestic		1,173,419		6,900		—		1,180,319
Foreign		—		—		—		—
Total	¥	1,173,419	¥	6,900	¥	—	¥	1,180,319
Available-for-sale financial assets:
Domestic:
Japanese government bonds	¥	5,704,875	¥	23,952	¥	6,153	¥	5,722,674
Japanese municipal bonds		83,253		77		550		82,780
Japanese corporate bonds		361,656		2,459		565		363,550
Total domestic debt instruments		6,149,784		26,488		7,268		6,169,004
Equity instruments		2,421,507		2,699,446		3,324		5,117,629
Total domestic		8,571,291		2,725,934		10,592		11,286,633
Foreign:
U.S. Treasury and other U.S. government agency bonds		3,565,748		2,352		99,837		3,468,263
Bonds issued by other governments and official institutions		1,687,959		512		18,618		1,669,853
Mortgage-backed securities		646,206		33		12,610		633,629
Other debt instruments		183,327		300		606		183,021
Total foreign debt instruments		6,083,240		3,197		131,671		5,954,766
Equity instruments		362,671		296,706		258		659,119
Total foreign		6,445,911		299,903		131,929		6,613,885
Total	¥	15,017,202	¥	3,025,837	¥	142,521	¥	17,900,518

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	At March 31, 2016
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
	(In millions)
Held-to-maturity investments:
Domestic:
Japanese government bonds	¥	2,241,491	¥	16,574	¥	—	¥	2,258,065
Japanese municipal bonds		20,849		26		3		20,872
Japanese corporate bonds		5,202		28		—		5,230
Total domestic		2,267,542		16,628		3		2,284,167
Foreign		—		—		—		—
Total	¥	2,267,542	¥	16,628	¥	3	¥	2,284,167
Available-for-sale financial assets:
Domestic:
Japanese government bonds	¥	6,481,951	¥	47,906	¥	1,282	¥	6,528,575
Japanese municipal bonds		31,081		157		17		31,221
Japanese corporate bonds		303,894		3,687		85		307,496
Total domestic debt instruments		6,816,926		51,750		1,384		6,867,292
Equity instruments		2,319,411		2,385,454		36,566		4,668,299
Total domestic		9,136,337		2,437,204		37,950		11,535,591
Foreign:
U.S. Treasury and other U.S. government agency bonds		2,243,096		5,237		2,203		2,246,130
Bonds issued by other governments and official institutions		2,130,938		10,107		2,052		2,138,993
Mortgage-backed securities		978,315		6,692		486		984,521
Other debt instruments		112,312		713		51		112,974
Total foreign debt instruments		5,464,661		22,749		4,792		5,482,618
Equity instruments		375,016		227,025		22,445		579,596
Total foreign		5,839,677		249,774		27,237		6,062,214
Total	¥	14,976,014	¥	2,686,978	¥	65,187	¥	17,597,805

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The following tables show the fair value and gross unrealized losses of our investment securities, aggregated by the length of time that the individual securities have been in a continuous unrealized loss position at March 31, 2018, 2017 and 2016. None of the available-for-sale equity instruments included in the tables have been in a continuous unrealized loss position for twelve months or more, since a significant or prolonged decline in the fair value of an equity instrument below its cost is considered to be an objective evidence of impairment and in such case the unrealized losses are reclassified from equity to profit or loss.

	At March 31, 2018
	Less than twelve months				Twelve months or more				Total
	Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
	(In millions)
Held-to-maturity investments:
Domestic:
Japanese government bonds	¥	2,001	¥	—	¥	—	¥	—	¥	2,001	¥	—
Japanese municipal bonds		—		—		—		—		—		—
Japanese corporate bonds		—		—		—		—		—		—
Total domestic		2,001		—		—		—		2,001		—
Foreign		—		—		—		—		—		—
Total	¥	2,001	¥	—	¥	—	¥	—	¥	2,001	¥	—
Available-for-sale financial assets:
Domestic:
Japanese government bonds	¥	2,847,250	¥	559	¥	1,353,121	¥	3,720	¥	4,200,371	¥	4,279
Japanese municipal bonds		964		1		31,916		95		32,880		96
Japanese corporate bonds		6,801		2		72,061		121		78,862		123
Total domestic debt instruments		2,855,015		562		1,457,098		3,936		4,312,113		4,498
Equity instruments		506,969		22,146		—		—		506,969		22,146
Total domestic		3,361,984		22,708		1,457,098		3,936		4,819,082		26,644
Foreign:
U.S. Treasury and other U.S. government agency bonds		1,509,509		41,946		1,229,979		100,240		2,739,488		142,186
Bonds issued by other governments and official institutions		1,039,848		739		219,608		8,113		1,259,456		8,852
Mortgage-backed securities		1,124		1		482,141		20,951		483,265		20,952
Other debt instruments		141,058		161		17,269		176		158,327		337
Total foreign debt instruments		2,691,539		42,847		1,948,997		129,480		4,640,536		172,327
Equity instruments		65,105		4,345		—		—		65,105		4,345
Total foreign		2,756,644		47,192		1,948,997		129,480		4,705,641		176,672
Total	¥	6,118,628	¥	69,900	¥	3,406,095	¥	133,416	¥	9,524,723	¥	203,316

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	At March 31, 2017
	Less than twelve months				Twelve months or more				Total
	Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
	(In millions)
Held-to-maturity investments:
Domestic:
Japanese government bonds	¥	—	¥	—	¥	—	¥	—	¥	—	¥	—
Japanese municipal bonds		—		—		—		—		—		—
Japanese corporate bonds		—		—		—		—		—		—
Total domestic		—		—		—		—		—		—
Foreign		—		—		—		—		—		—
Total	¥	—	¥	—	¥	—	¥	—	¥	—	¥	—
Available-for-sale financial assets:
Domestic:
Japanese government bonds	¥	1,427,268	¥	6,153	¥	—	¥	—	¥	1,427,268	¥	6,153
Japanese municipal bonds		68,154		543		2,383		7		70,537		550
Japanese corporate bonds		126,267		560		2,307		5		128,574		565
Total domestic debt instruments		1,621,689		7,256		4,690		12		1,626,379		7,268
Equity instruments		170,399		3,324		—		—		170,399		3,324
Total domestic		1,792,088		10,580		4,690		12		1,796,778		10,592
Foreign:
U.S. Treasury and other U.S. government agency bonds		1,590,352		40,549		685,367		59,288		2,275,719		99,837
Bonds issued by other governments and official institutions		1,238,536		18,587		60,616		31		1,299,152		18,618
Mortgage-backed securities		618,451		12,370		10,317		240		628,768		12,610
Other debt instruments		61,230		350		6,182		256		67,412		606
Total foreign debt instruments		3,508,569		71,856		762,482		59,815		4,271,051		131,671
Equity instruments		10,105		258		—		—		10,105		258
Total foreign		3,518,674		72,114		762,482		59,815		4,281,156		131,929
Total	¥	5,310,762	¥	82,694	¥	767,172	¥	59,827	¥	6,077,934	¥	142,521

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	At March 31, 2016
	Less than twelve months				Twelve months or more				Total
	Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
	(In millions)
Held-to-maturity investments:
Domestic:
Japanese government bonds	¥	—	¥	—	¥	—	¥	—	¥	—	¥	—
Japanese municipal bonds		4,386		3		—		—		4,386		3
Japanese corporate bonds		—		—		—		—		—		—
Total domestic		4,386		3		—		—		4,386		3
Foreign		—		—		—		—		—		—
Total	¥	4,386	¥	3	¥	—	¥	—	¥	4,386	¥	3
Available-for-sale financial assets:
Domestic:
Japanese government bonds	¥	675,693	¥	1,282	¥	—	¥	—	¥	675,693	¥	1,282
Japanese municipal bonds		3,893		16		775		1		4,668		17
Japanese corporate bonds		42,692		82		860		3		43,552		85
Total domestic debt instruments		722,278		1,380		1,635		4		723,913		1,384
Equity instruments		425,494		36,566		—		—		425,494		36,566
Total domestic		1,147,772		37,946		1,635		4		1,149,407		37,950
Foreign:
U.S. Treasury and other U.S. government agency bonds		857,102		2,164		22,474		39		879,576		2,203
Bonds issued by other governments and official institutions		938,377		2,012		32,063		40		970,440		2,052
Mortgage-backed securities		8,294		44		12,013		442		20,307		486
Other debt instruments		44,965		30		2,077		21		47,042		51
Total foreign debt instruments		1,848,738		4,250		68,627		542		1,917,365		4,792
Equity instruments		160,245		22,445		—		—		160,245		22,445
Total foreign		2,008,983		26,695		68,627		542		2,077,610		27,237
Total	¥	3,156,755	¥	64,641	¥	70,262	¥	546	¥	3,227,017	¥	65,187

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Trading Assets

The following table shows our trading assets at March 31, 2018 and 2017. Our trading assets were ¥3,169,123 million at March 31, 2018, a decrease of ¥607,548 million from ¥3,776,671 million at March 31, 2017. The decrease was primarily due to a decrease in our holdings of Japanese government bonds.

	At March 31,
	2018		2017
	(In millions)
Debt instruments	¥	2,841,148	¥	3,339,928
Equity instruments		327,975		436,743
Total trading assets	¥	3,169,123	¥	3,776,671

Financial Assets at Fair Value Through Profit or Loss

The following table shows the fair value of our financial assets at fair value through profit or loss at March 31, 2018 and 2017. The fair value was ¥1,547,672 million at March 31, 2018, a decrease of ¥51,421 million from ¥1,599,093 million at March 31, 2017. The decrease was primarily due to a decrease in our holdings of debt instruments.

	At March 31,
	2018		2017
	(In millions)
Debt instruments	¥	1,528,921	¥	1,582,957
Equity instruments		18,751		16,136
Total financial assets at fair value through profit or loss	¥	1,547,672	¥	1,599,093

Liabilities

Our total liabilities increased by ¥416,069 million from ¥179,263,698 million at March 31, 2017 to ¥179,679,767 million at March 31, 2018. Although all the liabilities of KUBC and The Minato Bank, which ceased to be our subsidiaries and became our equity-method associates for the fiscal year ended March 31, 2018, were excluded, deposits other than those at KUBC and The Minato Bank increased.

The following table shows our liabilities at March 31, 2018 and 2017.

	At March 31,
	2018		2017
	(In millions)
Deposits	¥	128,461,527	¥	130,295,290
Call money and bills sold		1,190,929		2,088,020
Repurchase agreements and cash collateral on securities lent		12,022,593		9,424,506
Trading liabilities		2,143,899		2,071,584
Derivative financial instruments		3,498,016		3,889,694
Borrowings		10,652,481		12,245,943
Debt securities in issue		10,569,117		11,165,623
Provisions		188,267		194,700
Other liabilities		6,882,740		7,461,101
Current tax liabilities		55,516		79,371
Deferred tax liabilities		397,741		320,201
Liabilities directly associated with the assets held for sale		3,616,941		27,665
Total liabilities	¥	179,679,767	¥	179,263,698

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Deposits

We offer a wide range of standard banking accounts through the offices of our banking subsidiaries in Japan, including non-interest-bearing demand deposits, interest-bearing demand deposits, deposits at notice, time deposits and negotiable certificates of deposit. Domestic deposits, approximately 80% of total deposits, are our principal source of funds for our domestic operations. The deposits in the domestic offices of our banking subsidiaries are principally from individuals and private corporations, with the balance from governmental bodies (including municipal authorities) and financial institutions.

SMBC’s foreign offices accept deposits mainly in U.S. dollars, but also in yen and other currencies, and are active participants in the Euro-currency market as well as the United States domestic money market. Foreign deposits mainly consist of stable types of deposits, such as deposits at notice, time deposits, and negotiable certificates of deposit.

Our deposit balances at March 31, 2018 were ¥128,461,527 million, a decrease of ¥1,833,763 million, or 1%, from ¥130,295,290 million at March 31, 2017, primarily due to a decrease in time deposits at domestic offices, which was partially offset by an increase in demand deposits at domestic offices. The decrease in time deposits was mainly due to the exclusion of time deposits of KUBC and The Minato Bank, which ceased to be our subsidiaries and became our equity-method associates for the fiscal year ended March 31, 2018.

The following table shows a breakdown of our domestic and foreign offices’ deposits at the dates indicated.

	At March 31,
	2018		2017
	(In millions)
Domestic offices:
Non-interest-bearing demand deposits	¥	20,370,064	¥	18,737,973
Interest-bearing demand deposits		49,580,166		48,879,089
Deposits at notice		855,978		1,066,201
Time deposits		18,185,591		22,269,409
Negotiable certificates of deposit		5,408,021		6,021,236
Others		7,338,619		7,290,869
Total domestic offices		101,738,439		104,264,777
Foreign offices:
Non-interest-bearing demand deposits		1,241,450		1,115,579
Interest-bearing demand deposits		2,574,099		2,402,906
Deposits at notice		9,499,686		9,264,068
Time deposits		7,469,541		7,256,466
Negotiable certificates of deposit		5,812,264		5,859,702
Others		126,048		131,792
Total foreign offices		26,723,088		26,030,513
Total deposits	¥	128,461,527	¥	130,295,290

Borrowings

Borrowings include short-term borrowings, unsubordinated and subordinated long-term borrowings, liabilities associated with securitization transactions of our own assets, and lease obligations. At March 31, 2018, our borrowings were ¥10,652,481 million, a decrease of ¥1,593,462 million, or 13%, from ¥12,245,943 million at March 31, 2017, primarily due to the reclassification of borrowings of SMFL to liabilities directly associated with the assets held for sale during the fiscal year ended March 31, 2018.

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At March 31, 2018, our short-term borrowings accounted for 37% of our total borrowings, and our long-term borrowings accounted for 52% of our total borrowings.

The following table shows the balances with respect to our borrowings at March 31, 2018 and 2017.

	At March 31,
	2018		2017
	(In millions)
Short-term borrowings	¥	3,943,140	¥	7,546,496
Long-term borrowings:
Unsubordinated		5,230,453		3,138,582
Subordinated		265,000		284,200
Liabilities associated with securitization transactions		1,204,722		1,169,741
Lease obligations		9,166		106,924
Total borrowings	¥	10,652,481	¥	12,245,943

For more information, see Note 18 “Borrowings” to our consolidated financial statements included elsewhere in this annual report, which sets forth summaries of short- and long-term borrowings with their contractual interest rates and currencies.

Debt Securities in Issue

Debt securities in issue at March 31, 2018 were ¥10,569,117 million, a decrease of ¥596,506 million, or 5%, from ¥11,165,623 million at March 31, 2017, primarily due to a decrease in commercial paper, which was partially offset by an increase in bonds reflecting our efforts to expand foreign currency funding sources. The decrease in commercial paper was mainly due to the reclassification of commercial paper of SMFL to liabilities directly associated with the assets held for sale during the fiscal year ended March 31, 2018.

	At March 31,
	2018		2017
	(In millions)
Commercial paper	¥	2,467,645	¥	3,518,346
Bonds		6,490,965		5,940,252
Subordinated bonds		1,610,507		1,707,025
Total debt securities in issue	¥	10,569,117	¥	11,165,623

For additional information, see Note 19 “Debt Securities in Issue” to our consolidated financial statements included elsewhere in this annual report, which sets forth summaries of debt securities in issue with their contractual interest rates and currencies.

In the normal course of business, we enter into contractual obligations that require future cash payments. “Item 5.F. Tabular Disclosure of Contractual Obligations” sets forth a summary of our contractual cash obligations at March 31, 2018.

Total Equity

Our total equity increased by ¥608,516 million from ¥11,887,283 million at March 31, 2017 to ¥12,495,799 million at March 31, 2018, primarily due to increases in retained earnings and other reserves, which were partially offset by a decrease in non-controlling interests resulting from the disposal of subsidiaries and the redemption of preferred securities. The increase in retained earnings mainly reflected our net profit. The increase in other reserves was primarily due to an increase in available-for-sale financial assets reserve reflecting a rise in market prices of domestic equity instruments.

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	At March 31,
	2018			2017
	(In millions)
Capital stock	¥	2,338,743		¥	2,337,896
Capital surplus		863,505			864,052
Retained earnings		5,149,193			4,609,496
Other reserves		2,324,349			2,134,042
Treasury stock		(12,493	)		(12,913	)
Equity attributable to shareholders of Sumitomo Mitsui Financial Group, Inc.		10,663,297			9,932,573
Non-controlling interests		1,232,980			1,505,001
Equity attributable to other equity instruments holders		599,522			449,709
Total equity	¥	12,495,799		¥	11,887,283

For more information, see Note 24 “Shareholders’ Equity” and Note 25 “Non-controlling Interests and Equity Attributable to Other Equity Instruments Holders” to our consolidated financial statements included elsewhere in this annual report.

Reconciliation with Japanese GAAP

Our consolidated financial statements are prepared in accordance with IFRS as summarized in Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements included elsewhere in this annual report. These policies differ in some respects from Japanese GAAP. For reporting under the FIEA and Japanese banking regulations, we prepare our annual financial results in accordance with Japanese GAAP. To show the major reconciling items between our IFRS and Japanese GAAP consolidated financial statements, we have provided below, with respect to our most recent fiscal year, a reconciliation of consolidated net profit and total equity under IFRS with those amounts under Japanese GAAP.

	At and for the fiscal year ended March 31, 2018
	Total equity			Net profit
	(In millions)
IFRS	¥	12,495,799		¥	889,598
Differences arising from different accounting for:
1.   Scope of consolidation		129,045			1,644
2.   Derivative financial instruments		104,938			20,650
3.   Investment securities		(355,744	)		(68,792	)
4.   Loans and advances		61,241			33,508
5.   Investments in associates and joint ventures		(61,761	)		1,612
6.   Property, plant and equipment		(11,439	)		(984	)
7.   Lease accounting		3,535			515
8.   Defined benefit plans		65,069			13,233
9.   Deferred tax assets		(84,621	)		(35,051	)
10. Foreign currency translation		—			(12,664	)
11. Classification of equity and liability		(603,528	)		(14,062	)
Others		(128,865	)		15,216
Tax effect of the above		(777	)		(6,097	)
Japanese GAAP	¥	11,612,892		¥	838,326

The explanations below summarize certain differences between IFRS and Japanese GAAP that may be significant. The paragraphs below refer to the corresponding items as set forth in the table above.

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1. Scope of consolidation

Under Japanese GAAP, we consolidate an entity when we effectively control the decision making body of the entity’s operating and financing policies. Control is generally presumed to exist when we own more than half of the voting power, or own from 40% to 50% of the voting power and certain facts exist indicating control. Certain entities established for securitization are presumed not to be controlled. Under IFRS, we consolidate an entity when we control the entity. Control is generally presumed to exist when we are exposed, or have rights, to variable returns from our involvement with the entity and have the ability to affect those returns through our power over the entity. The existence and effect of potential voting rights that are deemed to be substantive are taken into account when assessing the control. When assessing control of an entity under IFRS, we apply a single consolidation model to all types of entities, irrespective of their nature. This results in a difference in the scope of consolidation between Japanese GAAP and IFRS. Most significantly, certain entities designed for special purpose such as securitization, usually in the form of trusts under the Trust Act of Japan, are not consolidated under Japanese GAAP but consolidated under IFRS. Accordingly, both the cumulative gains on transfers of financial assets to these securitization vehicles and amortization of our retained subordinate interest under Japanese GAAP were not recognized under IFRS due to consolidation of such vehicles.

2. Derivative financial instruments

Under Japanese GAAP, an embedded derivative shall be separately accounted for when the host contract may suffer losses arising from the embedded derivative. Also, an entity may separately account for an embedded derivative if the entity manages it separately, even though the criteria for separation are not fully met. Under IFRS, an embedded derivative shall be separated from the host contract and accounted for as a derivative if, and only if its economic characteristics and risks are not closely related to those of the host contract. Accordingly, certain embedded derivatives that are separately accounted for under Japanese GAAP but do not meet the criteria for separation under IFRS are adjusted such that they are combined with the host contract, and vice versa. In addition, the separation of the embedded derivatives from the host contract is adjusted so as not to result in any gain or loss at initial recognition under IFRS.

We apply hedge accounting under Japanese GAAP. However, IFRS imposes onerous documentation and effectiveness testing requirements on entities wishing to apply hedge accounting. The result of these requirements is that it is more difficult to achieve hedge accounting under IFRS than under Japanese GAAP. The effects of hedge accounting under Japanese GAAP have therefore been reversed under IFRS, except for hedge accounting for net investments in foreign operations which was adopted on April 1, 2017.

Japanese GAAP and IFRS require OTC derivatives to be measured at fair value. In principle, there is no significant difference in the definitions of fair value, but in practice there is diversity in the application of valuation techniques used for fair value under Japanese GAAP and IFRS. Therefore to meet the requirements of fair value under IFRS, adjustments have been made to the fair values under Japanese GAAP to reflect credit risk adjustments for OTC derivatives. Certain guarantees under Japanese GAAP do not meet the definition of a financial guarantee under IFRS but meet that of a derivative. These guarantees are measured at fair value and the change in fair value is recognized in the consolidated income statement under IFRS.

3. Investment securities

Under Japanese GAAP, certain financial assets classified as available-for-sale, such as unlisted stocks, are measured at cost. However, under IFRS available-for-sale financial assets (and financial assets at fair value through profit or loss) should be measured at fair value. The fair value of financial instruments where there is no quoted price in an active market is determined by using valuation techniques. In addition, the fair values of financial instruments under Japanese GAAP have been adjusted in order to meet the requirements of fair value under IFRS. For example, we use the last 1-month average of the closing transaction prices for the fair value measurement of available-for-sale financial assets (listed stocks) under Japanese GAAP, whereas closing spot

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prices are used under IFRS. Additionally under IFRS, we classify certain hybrid instruments as financial assets at fair value through profit or loss as we are unable to measure the embedded derivative separately from its host contract although it is required to separate the embedded derivative from the host contract. Accordingly, the change in fair value of such hybrid instruments is recognized in profit or loss.

Under Japanese GAAP, we recognize impairment of available-for-sale equity instruments if the decline in fair value below the cost, less previously recognized impairment loss, is in general 50% or more. Under IFRS, we assess whether there is objective evidence that available-for-sale equity instruments are impaired, including a significant or prolonged decline in the fair value below cost and other qualitative impairment indicators. Additionally, under Japanese GAAP, we reverse impairment losses recognized in a previous interim period, whereas the reversal of the impairment losses on equity instruments is not allowed under IFRS.

4. Loans and advances

Under Japanese GAAP, the reserve for possible loan losses 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 loan. The reserve for possible loan losses for the remaining loans is collectively calculated using the historical loss experience, or individually calculated based on the estimated uncollectible amount considering the historical loss experience and the recoveries from collateral, guarantees and any other collectible cash flows. The historical loss experience for 1 year or 3 years, according to the obligor grade, is calculated basically based on the averaged historical results of at least the past three years. Under IFRS, the allowance for loan losses for individually significant impaired loans is calculated by the DCF method based on the best estimate of cash flows discounted at the original effective interest rate which differs from the calculation of the DCF method under Japanese GAAP. The scope of the loans that are subject to the DCF method under IFRS is wider than that under Japanese GAAP. The allowance for loan losses for the remaining loans is collectively calculated by homogeneous group using statistical methods based on the historical loss experience and incorporating the effect of the time value of money. A qualitative analysis based on related economic factors is then performed to reflect the current conditions at the end of the reporting period. The allowance for the non-impaired loan losses is calculated as incurred but not yet identified losses for the period between the impairment occurring and the loss being identified, which are different from the expected losses under Japanese GAAP.

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.

Under Japanese GAAP, loan commitments are not recognized in the consolidated statement of financial position. Provision for the credit risk on these commitments is included as part of the reserve for possible loan losses. Under IFRS, loan commitments are not recognized in the consolidated statement of financial position and a provision for the expected losses to us in relation to the loan commitments is measured based on IAS 37 “Provisions, Contingent Liabilities and Contingent Assets.” Under Japanese GAAP, all guarantee contracts are accounted for by accruing both asset and liability accounts at the nominal guarantee amount. A provision for the credit risk of the guarantee is calculated using the same method as the reserve for possible loan losses and is included as part of it. Under IFRS, a financial guarantee contract is specifically defined in IAS 39 “Financial Instruments: Recognition and Measurement” as a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of the debt instruments. Financial guarantees are initially recognized at fair value and subsequently measured at the higher of the amount determined in accordance with IAS 37 or the amount initially recognized (i.e., fair value) less, when appropriate, cumulative amortization recognized in accordance with IAS 18 “Revenue.”

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5. Investments in associates and joint ventures

Under Japanese GAAP, although goodwill related to investments in associates and joint ventures is included in the carrying amount of the investments, we are required to recognize and measure impairment losses only on goodwill separately from the investments if impairment indicators for the goodwill are identified. Under IFRS, for investments in associates and joint ventures, if we identify objective evidence of impairment, the entire carrying amount of the investment is tested for impairment since goodwill is not separately recognized on the initial acquisition of the investment. Additionally, the net profit of associates is adjusted for differences between Japanese GAAP and IFRS in accordance with our accounting policy prior to applying the equity method under IFRS.

6. Property, plant and equipment

For certain assets that are depreciated using the declining balance method under Japanese GAAP, we apply the straight-line method of depreciation to those assets under IFRS as we consider that the straight-line method most closely reflects the expected pattern of consumption of the future economic benefits embodied in those assets. Additionally under IFRS, residual values of assets are reviewed at least at the end of each reporting period. After reviews of all categories of property, plant and equipment, the residual values of assets are considered to be zero under IFRS, whereas residual values are assigned to certain assets under Japanese GAAP.

7. Lease accounting

We account for finance lease transactions without a transfer of ownership commencing before April 1, 2008 as operating leases under Japanese GAAP. However, such accounting treatment is not allowed under IFRS. Thus, we made certain adjustments for those transactions in order to comply with the accounting treatment under IFRS. From the fiscal year beginning after April 1, 2008, a new Japanese GAAP standard for lease accounting became effective, which removed the differences for finance leases (with or without a transfer of ownership) between Japanese GAAP and IFRS. Therefore, no adjustment is needed for finance lease transactions entered into after April 1, 2008.

8. Defined benefit plans

Under Japanese GAAP, the present value of the defined benefit obligation is measured using the market yields of long-term Japanese government bonds as discount rates. Additionally, the discount rates for the previous reporting period can be used for the current reporting period, if the change in the present value of the defined benefit obligation caused by a change in the discount rates from the previous reporting period to the current reporting period is less than 10%. Under IFRS, the present value of the defined benefit obligation is measured by discounting the estimated timing and amount of benefit payments using the discount rates reflecting market yields on high quality corporate bonds at the end of each reporting period.

Under Japanese GAAP, the expected rates of return on plan assets for the previous reporting period can be used for the current reporting period, unless the impact of the profit or loss for the current reporting period is considered to be significant. Under IFRS, the interest cost and expected return on plan assets are replaced with a net interest amount which is calculated by applying the discount rate to the net defined benefit liability (asset).

Under Japanese GAAP, the actuarial gains and losses are recognized in other comprehensive income, and are amortized using the straight-line method. Under IFRS, actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in the year, and return on plan assets excluding interest income are recognized in other comprehensive income and are never reclassified to profit and loss.

Under Japanese GAAP, past service costs are recognized in other comprehensive income and are amortized using the straight-line method. Under IFRS, past service costs are recognized immediately in the consolidated income statement.

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9. Deferred tax assets

Under Japanese GAAP, we recognize deferred tax assets to the extent that the realization of the tax benefit is highly probable based on the schedule. 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.

10. Foreign currency translation

Under Japanese GAAP, the income statement items of foreign operations are translated into Japanese yen, our presentation currency, using the (spot) closing rate, whereas under IFRS they are translated into the presentation currency using the exchange rate at the dates of the transactions or, if the exchange rates do not fluctuate significantly, at average exchange rates. In addition, under Japanese GAAP, certain foreign operations’ monetary items denominated in foreign currencies are translated into Japanese yen using the exchange rate at the end of the reporting period. However, under IFRS the monetary items for which settlement is neither planned nor likely to occur in the foreseeable future are translated using the exchange rates at the dates of initial transactions.

11. Classification of equity and liability

Under Japanese GAAP, a financial instrument is generally classified as an equity instrument or a financial liability in light of its legal form. 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.

5.B.    LIQUIDITY AND CAPITAL RESOURCES

We consistently endeavor to enhance the management of our liquidity profile and strengthen our capital base to meet our customers’ loan requirements and deposit withdrawals and respond to unforeseen situations such as adverse movements in stock, foreign currency, interest rate and other markets, or changes in general domestic or international conditions.

Liquidity

We derive funding for our operations both from domestic and international sources. Our domestic funding is derived primarily from deposits placed with SMBC by its corporate and individual customers, and also from call money (inter-bank), bills sold (inter-bank promissory notes), repurchase agreements, borrowings, and negotiable certificates of deposit issued by SMBC to domestic and international customers. Our international sources of funds are principally from deposits from corporate customers and foreign central banks, negotiable certificates of deposit, bonds, commercial paper, and also from repurchase agreements and cash collateral on securities lent. We closely monitor maturity gaps and foreign exchange exposure in order to manage our liquidity profile.

As shown in the following table, total deposits decreased by ¥1,833,763 million, or 1%, from ¥130,295,290 million at March 31, 2017 to ¥128,461,527 million at March 31, 2018. The balance of deposits at March 31, 2018 exceeded the balance of loans and advances by ¥43,332,457 million, primarily due to the stable deposit base in Japan. Our loan-to-deposit ratio (total loans and advances divided by total deposits) in the same period was 66%, which contributed greatly to the reduction of our liquidity risk. Our balances of large-

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denomination domestic yen time deposits are stable due to the historically high rollover rate of our corporate customers and individual depositors.

	At March 31,
	2018		2017
	(In millions)
Loans and advances	¥	85,129,070	¥	95,273,845
Deposits		128,461,527		130,295,290

We have invested the excess balance of deposits against loans and advances primarily in marketable securities and other highly liquid assets, such as Japanese government bonds. SMBC’s Treasury Unit actively monitors the movement of interest rates and maturity profile of its bond portfolio as part of SMBC’s overall risk management. The bonds can be used to enhance liquidity. When needed, they can be used as collateral for call money or other money market funding or short-term borrowings from the BOJ.

Secondary sources of liquidity include short-term debts, such as call money, bills sold, and commercial paper issued at an inter-bank or other wholesale markets. We also issue long-term debts, including both senior and subordinated debts, as additional sources of liquidity. With short- and long-term debts, we can diversify our funding sources, effectively manage our funding costs and enhance our capital adequacy ratios when appropriate.

We source our funding in foreign currencies primarily from financial institutions, general corporations, and institutional investors, through short- and long-term financing. Even if we encounter declines in our credit quality or that of Japan in the future, we expect to be able to purchase foreign currencies in sufficient amounts using the yen funds raised through our domestic customer base. As further measures to support our foreign currency liquidity, we hold foreign debt securities, maintain credit lines and swap facilities denominated in foreign currencies, and pledge collateral to the U.S. Federal Reserve Bank.

We maintain management and control systems to support our ability to access liquidity on a stable and cost-effective basis. For further information, see “Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk—Market Risk and Liquidity Risk—Framework for Market and Liquidity Risk Management.”

We believe we are able to access such sources of liquidity on a stable and flexible basis by keeping credit ratings at a high level. The following table shows credit ratings assigned to the Company by Moody’s, S&P and Fitch at May 31, 2018:

At May 31, 2018
Moody’s			S&P			Fitch
Long-term	Outlook	Short-term	Long-term	Outlook	Short-term	Long-term	Outlook	Short-term
A1	S	P-1	A-	P	—	A	S	F1

The following table shows credit ratings assigned to SMBC by Moody’s, S&P and Fitch at May 31, 2018:

At May 31, 2018
Moody’s			S&P			Fitch
Long-term	Outlook	Short-term	Long-term	Outlook	Short-term	Long-term	Outlook	Short-term
A1	S	P-1	A	P	A-1	A	S	F1

We are assigned credit ratings by major domestic and international credit rating agencies. Credit ratings do not constitute recommendations to purchase, sell or hold a security, and rating agencies may review or indicate an intention to review ratings at any time. While the methodology and rating system vary among rating agencies, credit ratings are generally based on information provided by us or independent sources, and can be influenced

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by the credit ratings of Japanese government bonds and broader views of the Japanese financial system. Any downgrade in or withdrawal of these credit ratings, or any adverse change in these ratings relative to other financial institutions, could increase our borrowing costs, reduce our access to the capital markets and otherwise negatively affect our ability to raise funds, which in turn could have a negative impact on our liquidity position.

The guidelines published by FSA for LCR applicable to banks with international operations are based on the full text of the LCR standard issued by the BCBS in January 2013. Under these guidelines, banks with international operations must maintain LCR of at least 100% on both a consolidated basis and a nonconsolidated basis, while the minimum LCR requirements are being phased in between March 31, 2015 and March 31, 2019 with an increase of 10% in each year starting from 60%. The following table shows the LCRs of the Company and SMBC for the three months ended March 31, 2018. Each figure is calculated based on our financial statements prepared in accordance with Japanese GAAP, as required by the FSA’s LCR guidelines.

	For the three months ended March 31, 2018(1)
SMFG (consolidated)		127.7	%
SMBC (consolidated)		131.4	%
SMBC (nonconsolidated)		133.7	%

(1) Under the FSA’s LCR guidelines, LCR is set as the three-month average of the daily LCR for the three months ended March 31, 2018, which is calculated by dividing the balance of high-quality liquid assets by the total net cash outflows on a daily basis for the same three months.

For further information, see “Item 4.B. Business Overview—Regulations in Japan—Regulations Regarding Capital Adequacy and Liquidity—Liquidity Requirement.”

Capital Management

With regard to capital management, we strictly abide by the capital adequacy guidelines set by the FSA. Japan’s capital adequacy guidelines are based on the Basel Capital Accord, which was proposed by the BCBS for uniform application to all banks which have international operations in industrialized countries. Japan’s capital adequacy guidelines may be different from those of central banks or supervisory bodies of other countries because they have been designed by the FSA to suit the Japanese banking environment. Our banking subsidiaries outside of Japan are also subject to the local capital ratio requirements.

Each figure for the FSA capital adequacy guidelines is calculated based on our financial statements prepared under Japanese GAAP.

The FSA capital adequacy guidelines permit Japanese banks to choose from the standardized approach (“SA”), the foundation IRB approach and the advanced IRB approach for credit risk, and the basic indicator approach (“BIA”), the standardized approach (“TSA”) and the AMA for operational risk. To be eligible to adopt the foundation IRB approach or the advanced IRB approach for credit risk, and the TSA or the AMA for operational risk, a Japanese bank must establish advanced risk management systems and receive prior approval from the FSA.

We and SMBC have adopted the advanced IRB approach since March 31, 2009 and the AMA since March 31, 2008.

In December 2010, the BCBS published the new Basel III rules text to implement the Basel III framework, which sets out higher and better-quality capital, better risk coverage, the introduction of a leverage ratio as a backstop to the risk-based requirement, measures to promote the build-up of capital that can be drawn down in periods of stress, and the introduction of two global liquidity standards. The main measures of the minimum capital requirements in the Basel III framework began on January 1, 2013 and will be fully applied from January 1, 2019.

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These capital reforms increase the minimum common equity requirement from 2% to 4.5% and require banks to hold a capital conservation buffer, which started to be phased in from January 2016 with the initial ratio of 0.625% and will reach 2.5% by January 2019, to withstand future periods of stress, bringing the total common equity requirement to 7%. The Tier 1 capital requirement was also increased from 4% to 6%, resulting in a total requirement of 8.5% when combined with the above-mentioned conservation buffer. The total capital requirement remains at the existing level of 8% but will increase to 10.5% by January 2019 due to the capital conservation buffer. Furthermore, a countercyclical buffer within a range of 0% to 2.5% of common equity or other fully loss-absorbing capital has been implemented according to national circumstances. The GHOS also agreed on transitional arrangements for implementing the new requirements.

In addition to the above-mentioned minimum capital requirements and capital buffer requirements under Basel III, organizations identified by the FSB as G-SIBs, which includes us, are required to maintain an additional 1% to 2.5% of Common Equity Tier 1 capital as a percentage of risk-weighted assets, which is commonly referred to as the G-SIB capital surcharge, based on the organization’s size, interconnectedness, substitutability, complexity and cross-jurisdictional activity as determined by the FSB. The amount of G-SIB capital surcharge that applies to us based on the FSB’s determination will be 1% of risk-weighted assets when the requirements are fully applied from 2019. Under the phase-in arrangement for the G-SIB capital surcharge, we are currently required to maintain 0.75% of Common Equity Tier 1 capital as a percentage of risk-weighted assets.

To reflect the Basel III framework, the FSA changed its capital adequacy guidelines. Under the FSA capital adequacy guidelines, the new capital requirements are being phased in from March 31, 2013 through March 31, 2019. The minimum Common Equity Tier 1 capital requirement and Tier 1 capital requirement have been 4.5% and 6%, respectively since March 2015. The capital conservation buffer, countercyclical buffer and the G-SIB capital surcharge started to be phased in from March 31, 2016 under the FSA capital adequacy guidelines.

On December 7, 2017, the GHOS endorsed the outstanding Basel III regulatory reforms. For further details regarding the finalized Basel III reforms, see “Item 4.B. Business Overview—Regulations in Japan—Regulations Regarding Capital Adequacy and Liquidity—Capital Adequacy Requirement.”

In March 2015, the FSA published its leverage ratio guidelines, which have been applied from March 31, 2015, to help ensure broad and adequate capture of both on- and off-balance sheet sources of leverage for internationally active banks. The FSA’s leverage ratio guidelines are based on the text of the leverage ratio framework and disclosure requirements issued by the BCBS in January 2014.

Under the text of the leverage ratio framework, the BCBS indicated the minimum leverage ratio as 3% and monitored banks’ leverage ratio data in order to assess whether the design and calibration of a minimum leverage ratio of 3% is appropriate from January 1, 2013 to January 1, 2017.

On December 7, 2017, the definition and requirements of the leverage ratio were revised as part of the finalized Basel III reforms, under which the leverage ratio will be based on a Tier 1 definition of capital and the minimum leverage ratio will be 3%. Under the finalized Basel III reforms, G-SIBs are required to meet a leverage ratio buffer, which will take the form of a Tier 1 capital buffer set at 50% of the applicable G-SIB capital surcharge.

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The table below presents our risk-weighted capital ratios, total capital, risk-weighted assets and leverage ratio under Japanese GAAP at March 31, 2018, based on the Basel III rules.

	At March 31, 2018
	(In billions, except percentages)
SMFG Consolidated:
Total risk-weighted capital ratio		19.36	%
Tier 1 risk-weighted capital ratio		16.69	%
Common Equity Tier 1 risk-weighted capital ratio		14.50	%
Total capital (Common Equity Tier 1 capital + Additional Tier 1 capital + Tier 2 capital)	¥	12,304.1
Tier 1 capital (Common Equity Tier 1 capital + Additional Tier 1 capital)		10,610.2
Common Equity Tier 1 capital		9,217.4
Risk-weighted assets		63,540.3
The amount of minimum total capital requirements(1)		5,083.2
Leverage ratio		5.01	%

(1) The amount of minimum total capital requirements is calculated by multiplying risk-weighted assets by 8%.

Common Equity Tier 1 capital consists primarily of capital stock, capital surplus and retained earnings relating to common shares, and non-controlling interests that meet the criteria set forth in the FSA capital adequacy guidelines for inclusion in Common Equity Tier 1 capital.

Non-controlling interests arising from the issue of common shares by a fully consolidated subsidiary of a bank may receive recognition in Common Equity Tier 1 capital only if: (1) the instrument giving rise to the non-controlling interest would, if issued by the bank, meet all of the criteria set forth in the FSA capital adequacy guidelines for classification as common shares for regulatory capital purposes; and (2) the subsidiary that issued the instrument is itself a bank or other financial institution subject to similar capital adequacy guidelines.

Non-controlling interests that will no longer qualify as Common Equity Tier 1 capital, Additional Tier 1 capital, or Tier 2 capital under Basel III started to be excluded from March 31, 2014 by increments of 20% and were fully phased out on March 31, 2018.

Regulatory adjustments such as goodwill and other intangibles, deferred tax assets, investment in the common equity capital of banking financial and insurance entities and defined benefit pension fund assets and liabilities are applied mainly to the calculation of Common Equity Tier 1 capital in the form of a deduction. Such regulatory adjustments were phased in from March 31, 2014 through March 31, 2018.

Additional Tier 1 capital consists primarily of preferred securities and perpetual subordinated bonds.

Tier 2 capital consists primarily of subordinated debt securities.

Capital instruments such as preferred securities and subordinated debt issued on or after March 31, 2013 must meet the new requirements to be included in regulatory capital. Capital instruments issued prior to March 31, 2013 that do not meet the requirements set forth in the FSA capital adequacy guidelines no longer qualify as Additional Tier 1 or Tier 2 capital. However, if those capital instruments meet the requirements for transitional arrangements set forth in such guidelines, they can qualify as Additional Tier 1 or Tier 2 capital during the phase-out period beginning March 31, 2013. The remaining balance of those non-qualifying capital instruments recognized as Additional Tier 1 or Tier 2 capital are being reduced in annual 10% increments and will be fully phased out by March 31, 2022.

At March 31, 2018, our consolidated total capital was ¥12,304 billion, Tier 1 capital was ¥10,610 billion, and Common Equity Tier 1 capital was ¥9,217 billion. Our total risk-weighted assets at March 31, 2018 were ¥63,540 billion.

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On a consolidated basis, our total risk-weighted capital ratio was 19.36%, Tier 1 risk-weighted capital ratio was 16.69%, Common Equity Tier 1 risk-weighted capital ratio was 14.50% and leverage ratio was 5.01% at March 31, 2018.

Our capital position and SMBC’s capital position depend in part on the fair market value of our investment securities portfolio, since unrealized gains and losses are included in the amount of regulatory capital. At March 31, 2013, unrealized gains and losses were counted as Tier 2 capital and Additional Tier 1 capital, respectively, but started to be counted as Common Equity Tier 1 capital from March 31, 2014 by increments of 20% and have been fully counted as Common Equity Tier 1 capital since March 31, 2018. Since our other securities (including money held in trust) with a readily ascertainable market value included unrealized gains and losses, substantial fluctuations in the Japanese stock markets may affect our capital position and the capital position of SMBC.

In addition, our capital position and SMBC’s capital position would be negatively affected if deferred tax assets cannot be recognized. Under Japanese GAAP, a company will lose its ability to recognize deferred tax assets if, in principle, it has substantial amounts of negative annual taxable income for each of past three consecutive years and current fiscal year, and is expected to have significant negative taxable income in the following fiscal year.

Set forth below is a table of risk-weighted capital ratios, total capital, risk-weighted assets and leverage ratio of SMBC at March 31, 2018 on a consolidated and nonconsolidated basis.

	At March 31, 2018
	(In billions, except percentages)
SMBC Consolidated:
Total risk-weighted capital ratio		21.14	%
Tier 1 risk-weighted capital ratio		18.22	%
Common Equity Tier 1 risk-weighted capital ratio		15.29	%
Total capital (Common Equity Tier 1 capital + Additional Tier 1 capital + Tier 2 capital)	¥	10,931.1
Tier 1 capital (Common Equity Tier 1 capital + Additional Tier 1 capital)		9,423.7
Common Equity Tier 1 capital		7,908.7
Risk-weighted assets		51,707.5
The amount of minimum total capital requirements(1)		4,136.6
Leverage ratio		4.84	%
SMBC Nonconsolidated:
Total risk-weighted capital ratio		21.11	%
Tier 1 risk-weighted capital ratio		18.11	%
Common Equity Tier 1 risk-weighted capital ratio		15.07	%
Total capital (Common Equity Tier 1 capital + Additional Tier 1 capital + Tier 2 capital)	¥	10,346.1
Tier 1 capital (Common Equity Tier 1 capital + Additional Tier 1 capital)		8,875.3
Common Equity Tier 1 capital		7,384.9
Risk-weighted assets		49,001.9
The amount of minimum total capital requirements(1)		3,920.1

(1) The amount of minimum total capital requirements is calculated by multiplying risk-weighted assets by 8%.

Our securities subsidiary in Japan, SMBC Nikko Securities is also subject to capital adequacy requirements under the FIEA described in “Item 4.B. Business Overview—Regulations in Japan—Regulations Regarding Capital Adequacy and Liquidity.” At March 31, 2018, the capital adequacy ratio was 446.5% for SMBC Nikko Securities, and sufficiently above 140%, below which level it would be required to file daily reports with the Commissioner of the FSA.

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5.C.    RESEARCH, DEVELOPMENT, PATENTS AND LICENSES

We did not conduct any significant research and development activities for the fiscal year ended March 31, 2018. However, there are certain research and development activities for our information system infrastructure.

5.D.    TREND INFORMATION

Our trend information is contained elsewhere in this annual report, including but not limited to “Item 4.B. Business Overview,” and “—A. Operating Results,” and “—B. Liquidity and Capital Resources” in this Item.

5.E.    OFF-BALANCE SHEET ARRANGEMENTS

To meet our customers’ financing needs, we engage in various types of off-balance sheet arrangements in the ordinary course of business.

Our arrangements include loan commitments, financial guarantees and other credit-related contingent liabilities. Loan commitment contracts on overdrafts and loans are agreements to lend up to a prescribed amount to customers, as long as there is no violation of any condition established in the contracts. Financial guarantees are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of the debt instrument. Other credit-related contingent liabilities include performance bonds, which are contracts that provide compensation if another party fails to perform the contractual obligation.

The table below shows the nominal amounts of undrawn loan commitments, and financial guarantees and other credit-related contingent liabilities at March 31, 2018 and 2017.

	At March 31,
	2018		2017
	(In millions)
Loan commitments	¥	60,107,128	¥	62,357,210
Financial guarantees and other credit-related contingent liabilities		8,426,245		7,924,711
Total	¥	68,533,373	¥	70,281,921

The nominal amounts of these off-balance sheet instruments generally represent the maximum potential amounts of future payments without consideration of possible recoveries under recourse provisions or from collateral held. For example, since many of these loan commitments are expected to expire without being drawn down, the total amount of unused commitments does not necessarily represent an actual future cash flow requirement. Many of these loan commitments include clauses under which we can reject an application from customers or reduce the contract amounts in cases where economic conditions change, we need to secure claims, or some other significant event occurs. In addition, we may request the customers to pledge collateral such as premises and securities at the time of the contracts, and take necessary measures such as monitoring customers’ financial positions, revising contracts when the need arises and securing claims after the contracts are made. We regularly review the credit quality of the customer based on our risk management system as set forth in “Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk” and Note 45 “Financial Risk Management” to our consolidated financial statements included elsewhere in this annual report.

In addition to the above-mentioned off-balance sheet arrangements, some of the SMBC Group’s off-balance sheet arrangements are related to activities of structured entities. For further information, see Note 48 “Structured Entities” to our consolidated financial statements included elsewhere in this annual report.

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5.F.    TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

In the normal course of business, we enter into contractual obligations that require future cash payments. The following table sets forth a summary of our contractual cash obligations at March 31, 2018.

	At March 31, 2018
	Due in one year or less		Due from one year to three years		Due from three years to five years		Due after five years		Total(1)
					(In millions)
Time deposits	¥	21,663,526	¥	2,681,152	¥	652,130	¥	644,395	¥	25,641,203
Negotiable certificate of deposits		10,760,779		427,726		31,780		0		11,220,285
Borrowings		7,262,141		601,326		652,481		2,126,169		10,642,117
Debt securities in issue		3,357,935		1,818,271		2,185,578		3,227,737		10,589,521
Capital (finance) lease obligation		2,567		2,999		1,665		3,086		10,317
Operating lease obligation		42,329		73,930		55,368		121,419		293,046
Purchase obligation(2)		33,442		20,934		5,735		0		60,111
Total	¥	43,122,719	¥	5,626,338	¥	3,584,737	¥	6,122,806	¥	58,456,600

(1) The amount of interest on debt instruments is not included in the maturity table above due to its insignificance.

(2) Purchase obligation in the above table includes the contractual commitments to purchase goods or services of construction and information technology that are binding on us for the payment of more than ¥100 million.

5.G.    SAFE HARBOR

See the discussion under “Cautionary Statement Regarding Forward-Looking Statements.”

Item 6. Directors, Senior Management and Employees

6.A.    DIRECTORS AND SENIOR MANAGEMENT

Directors and Senior Management

We had previously employed a board of corporate auditors governance system. In order to further enhance our solid corporate governance system, we transitioned to a company with three statutory committees on June 29, 2017.

Under the Companies Act, a company with three statutory committees is required to have a nominating committee, an audit committee and a compensation committee, each of which consisting of members of the board of directors and of which the majority of the members must be outside directors. In addition to the three statutory committees, we have voluntarily established our risk committee. Also, under the Companies Act, a company with three statutory committees must have one or more corporate executive officers elected by resolution of the board of directors. Corporate executive officers decide on the execution of the operations of the company that were delegated to them by resolution of the board of directors. The board of directors decides on the execution of operations of the company, including basic management policy, and supervises the execution of duties by corporate executive officers.

Our board of directors is comprised of seventeen directors, seven of whom are outside directors as defined under the Companies Act. In addition, our board of directors has elected nine corporate executive officers.

For more information, see “Item 6.C. Board Practices.”

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Directors

At June 28, 2018, the following directors held the indicated positions with us:

Name (Date of birth)	Current positions and principal outside positions	Business experience
Koichi Miyata (November 16, 1953)	Chairman of the Board of the Company Chairman of the Board of SMBC	April 1976	Joined Mitsui Bank
		June 2003	Executive Officer of SMBC
		October 2006	Managing Executive Officer of SMBC
		April 2009	Director and Senior Managing Executive Officer of SMBC
		April 2010	Senior Managing Executive Officer of the Company
		June 2010	Director of the Company
		April 2011	Director and President of the Company
			Director of SMBC
		April 2017	Chairman of the Board of the Company (to present)
			Chairman of the Board of SMBC (to present)
Takeshi Kunibe (March 8, 1954)	Director President of the Company (Representative Corporate Executive Officer) Group Chief Executive Officer, or CEO	April 1976	Joined Sumitomo Bank
		June 2003	Executive Officer of SMBC
		October 2006	Managing Executive Officer of SMBC
		April 2007	Managing Executive Officer of the Company
		June 2007	Director of the Company
		April 2009	Director and Senior Managing Executive Officer of SMBC
		April 2011	President and Chief Executive Officer of SMBC
		April 2017	President of the Company
			Resigned as Director of SMBC
		June 2017	Director President of the Company (to present)
Makoto Takashima (March 31, 1958)	Director of the Company President of SMBC	April 1982	Joined Sumitomo Bank
		April 2009	Executive Officer of SMBC
		April 2012	Managing Executive Officer of SMBC
		April 2014	Senior Managing Executive Officer of SMBC
		December 2016	Director and Senior Managing Executive Officer of SMBC
		April 2017	President of SMBC (to present)
		June 2017	Director of the Company (to present)
Kozo Ogino (May 9, 1958)	Director Deputy President and Corporate Executive Officer of the Company Group Chief Risk Officer, or CRO Officer in charge of Corporate Risk Management Department and Credit & Investment Planning Department	April 1981	Joined Mitsui Bank
		April 2010	Executive Officer of SMBC
		April 2011	Managing Executive Officer of SMBC
		April 2013	Managing Executive Officer of the Company
		June 2013	Director of the Company
	Director and Deputy President of SMBC	April 2014	Director and Senior Managing Executive Officer of SMBC
		April 2017	Director and Deputy President of the Company
			Director and Deputy President of SMBC (to present)
		June 2017	Director Deputy President and Corporate Executive Officer of the Company (to present)

113

Name (Date of birth)	Current positions and principal outside positions	Business experience
Jun Ohta (February 12, 1958)	Director Deputy President and Corporate Executive Officer of the Company (Representative Corporate Executive Officer) Group Chief Financial Officer, or CFO, and Group Chief Strategy Officer, or CSO Officer in charge of Public Relations Department, Corporate Planning Department, Financial Accounting Department and Subsidiaries & Affiliates Department Director and Deputy President of SMBC	April 1982	Joined Sumitomo Bank
		April 2009	Executive Officer of SMBC
		April 2012	Managing Executive Officer of SMBC
		April 2013	Managing Executive Officer of the Company
		April 2014	Senior Managing Executive Officer of the Company
			Senior Managing Executive Officer of SMBC
		June 2014	Director of the Company
		April 2015	Director and Senior Managing Executive Officer of SMBC
		April 2017	Director and Deputy President of the Company
			Resigned as Director of SMBC
		June 2017	Director Deputy President and Corporate Executive Officer of the Company (to present)
		March 2018	Director and Deputy President of SMBC (to present)
Katsunori Tanizaki (April 12, 1957)	Director Senior Managing Corporate Executive Officer of the Company Group Chief Information Officer, or CIO, and Group Chief Digital Innovation Officer, or CDIO Officer in charge of IT Planning Department, IT Innovation Department, Data Management Department and Operations Planning Department Director and Senior Managing Executive Officer of SMBC	April 1982	Joined Sumitomo Bank
		April 2010	Executive Officer of SMBC
		April 2011	General Manager of IT Planning Department of the Company
		April 2013	Managing Executive Officer of SMBC
		April 2015	Senior Managing Executive Officer of the Company
			Director and Senior Managing Executive Officer of SMBC (to present)
		June 2015	Director of the Company
		April 2017	Director and Senior Managing Executive Officer of the Company
		June 2017	Director Senior Managing Corporate Executive Officer of the Company (to present)
Toshikazu Yaku (March 3, 1962)	Director Senior Managing Corporate Executive Officer of the Company Group Chief Compliance Officer, or CCO, and Group Chief Human Resources Officer, or CHRO Officer in charge of Human Resources Department, Quality Management Department, General Affairs Department and Administrative Services Department Director and Senior Managing Executive Officer of SMBC	April 1984	Joined Sumitomo Bank
		April 2012	General Manager of Human Resources Department of the Company
			Executive Officer of SMBC
		April 2014	Managing Executive Officer of SMBC
		April 2016	Managing Executive Officer of the Company
		March 2017	Director and Managing Executive Officer of SMBC
		April 2017	Senior Managing Executive Officer of the Company
			Director and Senior Managing Executive Officer of SMBC (to present)
		June 2017	Director Senior Managing Corporate Executive Officer of the Company (to present)

114

Name (Date of birth)	Current positions and principal outside positions	Business experience
Toshiyuki Teramoto (September 15, 1958)	Director of the Company Corporate Auditor of SMBC	April 1981	Joined Mitsui Bank
		April 2008	Executive Officer of SMBC
		April 2011	Managing Executive Officer of SMBC
		April 2014	Director and Senior Managing Executive Officer of SMBC
		April 2015	Senior Managing Executive Officer of the Company
		June 2015	Director of the Company
		April 2016	Director of SMBC
		June 2016	Standing Corporate Auditor of the Company
			Corporate Auditor of SMBC (to present)
		June 2017	Director of the Company (to present)
Toru Mikami (August 27, 1960)	Director of the Company	April 1984	Joined Sumitomo Bank
		April 2006	General Manager of Legal Department of SMBC
		April 2013	Co-General Manager of General Affairs Department of the Company
		April 2015	Senior Manager of Head Office of SMBC
		June 2015	Standing Corporate Auditor of the Company
		June 2017	Director of the Company (to present)
Tetsuya Kubo (September 24, 1953)	Director of the Company Representative Director, Chairman of SMBC Nikko Securities Inc. (“SMBC Nikko Securities”)	April 1976	Joined Sumitomo Bank
		June 2003	Executive Officer of SMBC
		July 2006	Managing Executive Officer of SMBC
		April 2008	Managing Executive Officer of the Company
		April 2009	Senior Managing Executive Officer of the Company
			Director and Senior Managing Executive Officer of SMBC
		April 2011	Deputy President and Executive Officer of the Company
			Director and Deputy President of SMBC
			Director of SMBC Nikko Securities
		June 2011	Director of the Company
		March 2013	Resigned as Director of the Company
			Resigned as Director of SMBC
		April 2013	Representative Director, President & CEO of SMBC Nikko Securities
		April 2016	Representative Director, Chairman of SMBC Nikko Securities (to present)
		June 2016	Director of the Company (to present)
Masayuki Matsumoto(1) (April 14, 1944)	Director of the Company Special Advisor of Central Japan Railway Company	April 1967	Joined the Japanese National Railways
		April 1987	Joined Central Japan Railway Company
		June 2004	President and Representative Director of Central Japan Railway Company
		April 2010	Vice Chairman and Representative Director of Central Japan Railway Company
		January 2011	Resigned as Director of Central Japan Railway Company
		January 2011	President of Japan Broadcasting Corporation
		January 2014	Retired from Japan Broadcasting Corporation
		April 2014	Special Advisor of Central Japan Railway Company (to present)
		June 2015	Director of SMBC
		June 2017	Director of the Company (to present)
			Retired as Director of SMBC

115

Name (Date of birth)	Current positions and principal outside positions	Business experience
Arthur M. Mitchell(1) (July 23, 1947)	Director of the Company	July 1976	Registered as an attorney at law, admitted in New York, the U.S.A. (to present)
		January 2003	General Counsel of the Asian Development Bank
		September 2007	Joined White & Case LLP
		January 2008	Registered as Foreign Attorney in Japan (to present)
			Registered Foreign Attorney in Japan at White & Case LLP (to present)
		June 2015	Director of the Company (to present)
Shozo Yamazaki(1) (September 12, 1948)	Director of the Company	November 1970	Joined Tohmatsu Awoki & Co. (currently Deloitte Touche Tohmatsu LLC)
		September 1974	Registered as a certified public accountant (to present)
		July 1991	Representative Partner of Tohmatsu & Co. (currently Deloitte Touche Tohmatsu LLC)
		June 2010	Retired from Deloitte Touche Tohmatsu LLC
		July 2010	Chairman and President of The Japanese Institute of Certified Public Accountants
		July 2013	Advisor of The Japanese Institute of Certified Public Accountants (to present)
		April 2014	Professor of Tohoku University Accounting School
		June 2017	Director of the Company (to present)
Masaharu Kohno(1) (December 21, 1948)	Director of the Company	April 1973	Joined Ministry of Foreign Affairs of Japan
		August 2005	Director-General of Foreign Policy Bureau in Ministry of Foreign Affairs of Japan
		January 2007	Deputy Minister for Foreign Affairs (in charge of economy) of Ministry of Foreign Affairs of Japan
		February 2009	Ambassador of Japan to Russia
		May 2009	Ambassador of Japan to Russia, Armenia, Turkmenistan and Belarus
		March 2011	Ambassador of Japan to Italy
		May 2011	Ambassador of Japan to Italy, Albania, San Marino and Malta
		September 2014	Retired from office
		June 2015	Director of the Company (to present)
Yoshinobu Tsutsui(1) (January 30, 1954)	Director of the Company Chairman of Nippon Life Insurance Company	April 1977	Joined Nippon Life Insurance Company
		July 2004	Director of Nippon Life Insurance Company
		January 2007	Director and Executive Officer of Nippon Life Insurance Company
		March 2007	Director and Managing Executive Officer of Nippon Life Insurance Company
		March 2009	Director and Senior Managing Executive Officer of Nippon Life Insurance Company
		March 2010	Representative Director and Senior Managing Executive Officer of Nippon Life Insurance Company
		April 2011	President of Nippon Life Insurance Company
		June 2017	Director of the Company (to present)
		April 2018	Chairman of Nippon Life Insurance Company (to present)

116

Name (Date of birth)	Current positions and principal outside positions	Business experience
Katsuyoshi Shinbo(1) (April 8, 1955)	Director of the Company	April 1984	Registered as an attorney at law (to present)
		November 1999	Attorney at law at Shinbo Law Office (currently Shinbo & Partners) (to present)
		June 2015	Corporate Auditor of SMBC
		June 2017	Director of the Company (to present)
			Resigned as Corporate Auditor of SMBC
Eriko Sakurai(1) (November 16, 1960)	Director of the Company	June 1987	Joined Dow Corning Corporation
	Chairman and Chief Executive Officer of Dow Corning Toray Co., Ltd. President and Representative Director of Dow Silicones Holding Japan Co., Ltd.	May 2008	Director of Dow Corning Toray Co., Ltd.
		March 2009	Chairman and Chief Executive Officer of Dow Corning Toray Co., Ltd. (to present)
		May 2011	Regional President -Japan/Korea of Dow Corning Corporation
		February 2015	President and Representative Director of Dow Corning Holding Japan Co., Ltd. (currently Dow Silicones Holding Japan Co., Ltd.) (to present)
		June 2015	Director of the Company (to present)

(1) Messrs. and Ms. Matsumoto, Mitchell, Yamazaki, Kohno, Tsutsui, Shinbo and Sakurai satisfy the requirements for an “outside director” under the Companies Act.

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Corporate Executive Officers

At June 28, 2018, the following corporate executive officers held the indicated positions with us:

Name (Date of birth)	Current positions and principal outside positions	Business experience
Takeshi Kunibe (March 8, 1954)	See “Directors” under this Item 6.A.	See “Directors” under this Item 6.A.
Kozo Ogino (May 9, 1958)	See “Directors” under this Item 6.A.	See “Directors” under this Item 6.A.
Manabu Narita (March 29, 1959)	Deputy President and Corporate Executive Officer of the Company Director and Deputy President of SMBC Head of Wholesale Business Unit	April 1981	Joined Sumitomo Bank
		April 2008	Executive Officer of SMBC
		April 2011	Managing Executive Officer of SMBC
		April 2013	Managing Executive Officer of the Company
		June 2013	Director of the Company
		April 2014	Resigned as Director of the Company
			Director and Senior Managing Executive Officer of SMBC
		April 2015	Senior Managing Executive Officer of SMBC
		March 2017	Director and Senior Managing Executive Officer of SMBC
		April 2017	Deputy President and Executive Officer of the Company
			Director and Deputy President of SMBC (to present)
		June 2017	Deputy President and Corporate Executive Officer of the Company (to present)
Jun Ohta (February 12, 1958)	See “Directors” under this Item 6.A.	See “Directors” under this Item 6.A.
Katsunori Tanizaki (April 12, 1957)	See “Directors” under this Item 6.A.	See “Directors” under this Item 6.A.
Toshikazu Yaku (March 3, 1962)	See “Directors” under this Item 6.A.	See “Directors” under this Item 6.A.
Masahiko Oshima (September 13, 1960)	Senior Managing Corporate Executive Officer of the Company Senior Managing Executive Officer of SMBC Head of International Business Unit	April 1984	Joined Mitsui Bank
		April 2012	Executive Officer of SMBC
		April 2014	Managing Executive Officer of SMBC
		March 2017	Director and Managing Executive Officer of SMBC
		April 2017	Director and Senior Managing Executive Officer of SMBC
		April 2018	Senior Managing Corporate Executive Officer of the Company (to present)
			Senior Managing Executive Officer of SMBC (to present)

118

Name (Date of birth)	Current positions and principal outside positions	Business experience
Naoki Tamura (July 9, 1961)	Senior Managing Corporate Executive Officer of the Company Senior Managing Executive Officer of SMBC Head of Retail Business Unit	April 1984	Joined Sumitomo Bank
		April 2012	Co-General Manager of Corporate Risk Management Department of the Company
			Executive Officer of SMBC
		April 2015	Managing Executive Officer of SMBC
		April 2017	Managing Executive Officer of the Company
		April 2018	Senior Managing Corporate Executive Officer of the Company (to present)
			Senior Managing Executive Officer of SMBC (to present)
Hiroshi Munemasa (February 1, 1962)	Senior Managing Corporate Executive Officer of the Company Senior Managing Executive Officer of SMBC Head of Global Markets Business Unit	April 1985	Joined Sumitomo Bank
		April 2013	Executive Officer of SMBC
		April 2015	Managing Executive Officer of SMBC
		April 2017	Managing Executive Officer of the Company
		June 2017	Managing Corporate Executive Officer of the Company
		April 2018	Senior Managing Corporate Executive Officer of the Company (to present)
			Senior Managing Executive Officer of SMBC (to present)

Familial Relationships

There are no familial relationships between any of the directors and corporate executive officers listed above.

Arrangements and Understandings

There is no arrangement or understanding with any major shareholder, customer, supplier or other party, pursuant to which any of the directors and corporate executive officers listed above were selected as a director or member of corporate executive officers.

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6.B.    COMPENSATION

On June 29, 2017, we transitioned from a board of corporate auditors governance system to a company with three statutory committees: a nominating committee, an audit committee and a compensation committee. The following provides information before and after the transition.

Before the transition, compensation for each individual director and corporate auditor was determined by our board of directors and by consultation among our corporate auditors, respectively, in accordance with our internal rules and our standard practice of approval at our general meeting of shareholders. The shareholders’ approval specified the upper limit of the aggregate amount of compensation or calculation methods. To ensure objectivity in the process of determining such compensation, bonuses and stock options to our board of directors and the board of directors of SMBC, we had voluntarily formed a compensation committee in which an outside director served as the chairman of the committee.

After the transition, the compensation committee is responsible for establishing policy in regard to the determination of compensation of our directors and corporate executive officers. In addition, the committee determines the contents of the compensation of the individual directors and corporate executive officers in accordance with this policy. For more information, see “Item 6.C. Board Practices.”

The aggregate amounts of compensation paid by us during the fiscal year ended March 31, 2018 to our directors, corporate auditors and corporate executive officers were ¥586 million, ¥44 million and ¥656 million, respectively.

The following table sets forth the details of individual compensation, disclosed pursuant to the provision of the FIEA and related ordinance, by SMFG and its subsidiaries in amounts equal to or exceeding ¥100 million during the fiscal year ended March 31, 2018:

	Compensation
Director	Aggregate amount		Paid by	Annual salary		Stock compensation		Bonus
	(In millions)(1)
Koichi Miyata	¥	141	SMFG	¥	40	¥	11	¥	19
			SMBC		40		9		19
Takeshi Kunibe	¥	147	SMFG	¥	86	¥	18	¥	39
			SMBC		—		2		—
Makoto Takashima	¥	149	SMFG	¥	10	¥	—	¥	—
			SMBC		71		28		39
Jun Ohta	¥	101	SMFG	¥	61	¥	11	¥	27
			SMBC		—		0		—
Tetsuya Kubo	¥	126	SMFG	¥	14	¥	—	¥	—
			SMBC Nikko Securities		54		—		58

(1) Amounts less than one million yen have been truncated.

Prior to the revision of our executive compensation policy discussed below, we had introduced compensation-type stock options to directors, corporate auditors, and executive officers of SMFG and SMBC (“SMFG Stock Acquisition Rights”), which served as an incentive for them to further contribute to the equity appreciation and achieve better corporate performance through sharing the benefits and risks of the share price performance with our shareholders.

On July 10, 2017, our compensation committee resolved to revise our executive compensation policy and to introduce new stock compensation plans that utilize restricted stock, while discontinuing the issuance of new stock options. The plans allot shares of restricted stock to directors (excluding outside directors), corporate

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executive officers, and executive officers of SMFG and directors (excluding outside directors), executive officers and corporate auditors (excluding outside corporate auditors), etc. of SMBC, in order to (a) provide more appropriate incentives for executives by strengthening linkages with SMFG’s short-, medium- and long-term performance, and (b) further align the interests of executives with those of shareholders, increase the weight of stock compensation, and enhance the shareholding of our executives.

For more information about stock option plans and compensation plans utilizing restricted stock, see “Item 6.E. Share Ownership” or Note 39 “Share-Based Payment” to our consolidated financial statements included elsewhere in this annual report.

6.C.    BOARD PRACTICES

General

The Companies Act permits three types of governance systems for large public companies. The first system is for companies with a board of corporate auditors, and the second one is for companies with an audit and supervisory committee. The last one is for companies with three statutory committees: a nominating committee, an audit committee and a compensation committee.

We had previously employed a board of corporate auditors governance system. In order to further enhance our solid corporate governance system, we transitioned to a company with three statutory committees on June 29, 2017.

Under the Companies Act, a company with three statutory committees is required to have a nominating committee, an audit committee and a compensation committee, each of which consisting of members of the board of directors and of which the majority of the members must be outside directors. In addition to the three statutory committees, we have voluntarily established our risk committee.

“Outside director” means a director of any corporation who satisfies all of the following requirements: (a) a person who is not an executive director, corporate executive officer (shikkoyaku), or an employee, including a manager (“Executive Director, etc.”), and has not been an Executive Director, etc. of such corporation or any of its subsidiaries for the ten years prior to assuming his/her office; (b) if the person has been a director, accounting advisor or corporate auditor of such corporation or any of its subsidiaries (excluding a person who has been an Executive Director, etc.) at any time within the ten years prior to assuming his/her office, a person who has not been an Executive Director, etc. of such corporation or any of its subsidiaries for the ten years prior to assuming his/her office as director, accounting advisor, or corporate auditor; (c) a person who is not a parent corporation or any entity which is prescribed by the applicable Ordinance of the Ministry of Justice as a person who controls the management of the corporation (excluding entities who are juridical persons) (“parent corporation, etc.”) of such corporation (limited to a natural person) or director or corporate executive officer (shikkoyaku), or other employee, including a manager, of a parent corporation, etc.; (d) a person who is not an Executive Director, etc. of a subsidiary or any entity which is prescribed by the applicable Ordinance of the Ministry of Justice as the juridical person for which management is controlled by the person other than the corporation (“subsidiary, etc.”) of a parent corporation, etc. of such corporation; and (e) a person who is not a spouse or relative within the second degree of kinship of a director or corporate executive officer (shikkoyaku), manager, or other important employee of such corporation, or its parent corporation, etc. (limited to a natural person).

To ensure the compliance of our execution of our business operations with legal regulations and generally accepted practices, the outside directors are selected from among experts (including certified public accountants, lawyers and persons with consulting or business management experience).

Also, under the Companies Act, a company with three statutory committees must have one or more corporate executive officers elected by resolution of the board of directors. Corporate executive officers decide on the execution of the operations of the company that were delegated to them by resolution of the board of directors.

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Pursuant to Article 4 of our articles of incorporation, we maintain a corporate governance system consisting of a general meeting of shareholders, individual directors, a board of directors, a nominating committee, an audit committee, a compensation committee, corporate executive officers and an accounting auditor as its primary components.

Board of directors

Our articles of incorporation provide for a board of directors consisting of not fewer than three directors. We currently have seventeen directors. All directors are elected by our shareholders at a general meeting of shareholders. The term of office of a director expires upon conclusion of the ordinary general meeting of shareholders to be held for the last fiscal year ending within one year after the election of the director. Directors may serve any number of consecutive terms.

By resolution, our board of directors elects or removes corporate executive officers and representative executive officers. Our board of directors may elect directors with titles (yakutsuki-torishimariyaku) and corporate executive officers with titles (yakutsuki-shikkoyaku) and assign or change the designation of the duties of corporate executive officers by resolution. In addition, our board of directors elects or removes members of each statutory committee.

The Companies Act requires the board of directors to decide on the execution of operations of a company, including basic management policy, and supervise the execution of duties by corporate executive officers. In addition, the board of directors may, by resolution of the same, delegate decisions on the execution of the operations to corporate executive officers, to the extent permitted by the Companies Act.

Nominating committee

The nominating committee determines the contents of proposals regarding the election and dismissal of directors to be submitted to a general meeting of shareholders. The committee also deliberates on matters relating to the appointment of our president and president of SMBC.

Under the Companies Act, we are required to have a nominating committee that consists of members of our board of directors, and the majority of the members must be outside directors. Currently, the chairman of the nominating committee is Yoshinobu Tsutsui, who is an outside director. Other outside directors on the nominating committee are Masayuki Matsumoto, Arthur M. Mitchell, Masaharu Kohno and Eriko Sakurai. The other director on the nominating committee is Koichi Miyata, the chairman of the board.

Audit committee

The audit committee is responsible for auditing the execution of duties by corporate executive officers and directors, preparing audit reports and determining the contents of proposals regarding the election or dismissal of, or refusal to reelect, accounting auditors under the Companies Act to be submitted to a general meeting of shareholders. In addition, the committee inspects our operations and those of our major subsidiaries.

Under the Companies Act, we are required to have an audit committee that consists of members of our board of directors, and the majority of the members must be outside directors. Currently, the chairman of the audit committee is Masayuki Matsumoto, who is an outside director. Other outside directors on the audit committee are Shozo Yamazaki and Katsuyoshi Shinbo. Other directors on the audit committee are Toshiyuki Teramoto and Toru Mikami.

Compensation committee

The compensation committee is responsible for establishing policy in regard to the determination of compensation of our directors and corporate executive officers. In addition, the committee determines the

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contents of the compensation of the individual directors and corporate executive officers in accordance with this policy.

Under the Companies Act, we are required to have a compensation committee that consists of members of our board of directors, and the majority of the members must be outside directors. Currently, the chairman of the compensation committee is Katsuyoshi Shinbo, who is an outside director. Other outside directors on the compensation committee are Arthur M. Mitchell, Yoshinobu Tsutsui and Eriko Sakurai. Other directors on the compensation committee are Koichi Miyata, the chairman of the board, and Takeshi Kunibe, our president.

Risk committee

In addition to the three statutory committees mentioned above, we have voluntarily established our risk committee. The risk committee supervises and reports to our board of directors on material SMBC Group-wide risk management and compliance issues.

Corporate executive officers

Under the Companies Act, a company with three statutory committees must have one or more corporate executive officers. We currently have nine corporate executive officers. All corporate executive officers are elected by our directors at a board of directors meeting. The term of office of a corporate executive officer expires upon conclusion of the first board of directors meeting called after conclusion of the ordinary general meeting of shareholders for the last business year ending within one year from the time of their election. The board of directors shall appoint representative executive officers from among the corporate executive officers.

Our President and Group Chief Executive Officer (“CEO”) executes business affairs in accordance with resolutions adopted by the board of directors. Our deputy presidents and executive officers, senior managing executive officers and managing executive officers assist the President and Group CEO in the management of our day-to-day operations. Our chairman of the board serves as the chairman of and presides over our board of directors. This is done in order to separate the role of our president, whose responsibility is to exercise overall supervision of our business activities and SMBC Group companies, from the role of our chairman.

At the operational level, we have created the Management Committee to act as the top decision-making body with respect to business administration and management supervision of the entire the SMBC Group. The committee, composed of one or more corporate executive officers, the president of SMBC, the president of SMBC Nikko Securities and the person designated by our President and Group CEO considers important matters relating to the execution of business in accordance with the basic policies set by the board of directors and based on discussions held by the committee members.

Corporate Governance Practices

For the purpose of protecting the interests of shareholders in general, some Japanese securities exchanges, including the Tokyo Stock Exchange, requires a listed company to have, from amongst its outside directors or outside corporate auditors, at least one independent director or corporate auditor who does not have conflicting interests with shareholders as specified under the rule. All companies on these securities exchanges are required to report the name of such independent director or corporate auditor, which is disclosed to the public. In addition, the Japan’s Corporate Governance Code (“Corporate Governance Code”) formulated by the Tokyo Stock Exchange, which establishes fundamental principles for effective corporate governance at listed companies in Japan and took effect in June 2015, provides that listed companies should appoint at least two independent directors. The independence standard for such independent directors will be determined by the subject listed company taking into consideration the independence standards of the Japanese stock exchanges. We also established the SMFG Corporate Governance Guideline in consideration of the content of the Corporate Governance Code and such Corporate Governance Guideline provides that one-third or more of the directors, and at least two of them, will be elected as independent outside directors. We designated all seven outside directors as independent directors.

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Companies listed on the NYSE, must comply with certain corporate governance standards provided under Section 303A of the NYSE Listed Company Manual. However, NYSE-listed companies that are foreign private issuers, including us, are permitted to follow home country practices in lieu of certain provisions of Section 303A if such foreign private issuers meet certain criteria. See “Item 16G. Corporate Governance” for a summary of significant ways in which our corporate governance practices differ from those required to be followed by NYSE-listed U.S. companies.

Exemption from Liability

Under the Companies Act and our articles of incorporation, we may exempt our non-executive directors, etc. from liabilities to us arising in connection with their failure to execute their duties, within the limits stipulated by applicable laws and regulations. Pursuant to such authority, we have entered into a liability limitation agreement with each outside director, etc. which limits the maximum amount of their liability to the Company arising in connection with a failure to execute their duties to the greater of either ¥10 million or the minimum liability amount prescribed in applicable laws.

Benefits upon Termination of Employment

Neither we nor our subsidiaries maintain any directors’ service contracts providing for benefits upon termination of employment.

6.D.    EMPLOYEES

At March 31, 2018, 2017 and 2016, on a consolidated basis, we had approximately 73,000, 77,200 and 73,700 employees, respectively, including locally hired staff in our foreign offices but excluding temporary employees. We also had an average of approximately 15,100 temporary employees during the fiscal year ended March 31, 2018.

The following tables show our full-time employees at March 31, 2018 on a consolidated basis under Japanese GAAP broken down based on business segment and geographical location:

	Percentage of full-time employees at March 31, 2018
Business segment:
Wholesale Business Unit		13	%
Retail Business Unit		48
International Business Unit		14
Global Markets Business Unit		2
Head office account and others		23
Total		100	%

	Percentage of full-time employees at March 31, 2018
Location:
Japan		87	%
Americas		3
Europe and Middle East		2
Asia and Oceania		8
Total		100	%

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Most of our employees are members of workers’ unions, which negotiate with management concerning remuneration and working conditions. We consider our labor relations to be good.

We consider our level of remuneration, fringe benefits (including an employee share ownership program), working conditions and other allowances, which include lump-sum payments and annuities to employees upon retirement, to be generally competitive with those offered by other large enterprises in Japan.

6.E.    SHARE OWNERSHIP

Shareholdings by Directors and Senior Management

The following table shows the number of shares of our common stock owned by our directors and corporate executive officers at June 28, 2018:

	Number of shares owned
Directors and corporate executive officers:
Koichi Miyata		29,651
Takeshi Kunibe		49,839
Makoto Takashima		24,195
Kozo Ogino		17,119
Jun Ohta		18,919
Katsunori Tanizaki		14,675
Toshikazu Yaku		15,849
Toshiyuki Teramoto		8,500
Toru Mikami		1,300
Tetsuya Kubo		7,731
Masayuki Matsumoto		300
Arthur M. Mitchell		100
Shozo Yamazaki		100
Masaharu Kohno		—
Yoshinobu Tsutsui		—
Katsuyoshi Shinbo		300
Eriko Sakurai		500
Manabu Narita		17,341
Masahiko Oshima		16,549
Naoki Tamura		9,217
Hiroshi Munemasa		7,617

None of our directors or corporate executive officers is the owner of more than one percent of our common stock, and no director or corporate executive officers has voting rights with respect to our common stock that are different from any other holder of our common stock.

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Stock Option Plans and Other Remuneration for Directors and Senior Management

Stock Option Plans

The following table provides an overview of the significant terms and conditions of the SMFG Stock Acquisition Rights, that we issued prior to the revision of our executive compensation policy in July 2017 (discussed below):

	Date of resolution	Number of grantees	Shares granted	Exercise period	Exercise price
SMFG Stock Acquisition Rights (1st series)	July 28, 2010	82 directors, corporate auditors and executive officers of SMFG and SMBC	102,600 shares of common stock of the Company	August 13, 2010 to August 12, 2040	¥1 per share granted upon exercise of each stock acquisition right, multiplied by the number of shares granted
SMFG Stock Acquisition Rights (2nd series)	July 29, 2011	85 directors, corporate auditors and executive officers of SMFG and SMBC	268,200 shares of common stock of the Company	August 16, 2011 to August 15, 2041	¥1 per share granted upon exercise of each stock acquisition right, multiplied by the number of shares granted
SMFG Stock Acquisition Rights (3rd series)	July 30, 2012	85 directors, corporate auditors and executive officers of SMFG and SMBC	280,500 shares of common stock of the Company	August 15, 2012 to August 14, 2042	¥1 per share granted upon exercise of each stock acquisition right, multiplied by the number of shares granted
SMFG Stock Acquisition Rights (4th series)	July 29, 2013	82 directors, corporate auditors and executive officers of SMFG and SMBC	115,700 shares of common stock of the Company	August 14, 2013 to August 13, 2043	¥1 per share granted upon exercise of each stock acquisition right, multiplied by the number of shares granted
SMFG Stock Acquisition Rights (5th series)	July 30, 2014	82 directors, corporate auditors and executive officers of SMFG and SMBC	121,900 shares of common stock of the Company	August 15, 2014 to August 14, 2044	¥1 per share granted upon exercise of each stock acquisition right, multiplied by the number of shares granted
SMFG Stock Acquisition Rights (6th series)	July 31, 2015	83 directors, corporate auditors and executive officers of SMFG and SMBC	132,400 shares of common stock of the Company	August 18, 2015 to August 17, 2045	¥1 per share granted upon exercise of each stock acquisition right, multiplied by the number of shares granted

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	Date of resolution	Number of grantees	Shares granted	Exercise period	Exercise price
SMFG Stock Acquisition Rights (7th series)	July 26, 2016	89 directors, corporate auditors and executive officers of SMFG and SMBC	201,200 shares of common stock of the Company	August 15, 2016 to August 14, 2046	¥1 per share granted upon exercise of each stock acquisition right, multiplied by the number of shares granted

Compensation Plans Utilizing Restricted Stock

On July 10, 2017, our compensation committee resolved to revise our executive compensation policy and to introduce new stock compensation plans that utilize restricted stock, while discontinuing the issuance of new stock options.

The plans consist of Stock Compensation Plan I (“Plan I”), which determines remuneration primarily based on our medium-term performance, Stock Compensation Plan II (“Plan II”), which determines remuneration primarily based on our annual performance and Stock Compensation Plan III (“Plan III”), which determines remuneration primarily based on corporate title.

Plan I (medium-term performance share plan) has an evaluation period of three years starting from the fiscal year ended March 31, 2018, corresponding with the our medium-term management plan. Executives are initially allotted shares of restricted stock equivalent to the monetary amount determined based on the executive’s corporate title. After the completion of the evaluation period, our compensation committee will review the progress of our medium-term management plan, performance of our common stock, and results of customer satisfaction surveys and other factors, to determine a final amount to be released from transfer restrictions. In case the final amount falls below the initial amount, we will retrieve all or part of the allotted shares at no cost.

Under Plan II (annual performance share plan), executives are allotted shares of restricted stock equivalent to a certain portion of the monetary amount determined based on the annual performance of SMFG and SMBC, as well as on the individual performance of the executives reviewed both from short-term and medium-to-long-term perspectives. The remainder will be paid to the executives as a cash bonus. Transfer restrictions on these shares are released evenly over the three-year period following the year of allotment.

Under Plan III (promotion reward plan), executives are allotted shares of restricted stock equivalent to pre-determined compensation amounts per title, reflecting the increased responsibilities derived from promotions. Restrictions shall apply to the shares until the earlier of 30 years from allotment or when the executive retires from office.

The eligible executives for the plans are directors (excluding outside directors), corporate executive officers and executive officers of SMFG and directors (excluding outside directors), executive officers and corporate auditors (excluding outside corporate auditors), etc. of SMBC, who are designated by the SMFG compensation committee or by SMBC and residing and serving in Japan. However, members of the SMFG audit committee and SMBC corporate auditors will only be eligible for Plan III.

The allotment agreements that we enter into with executives under the plans restrict disposal of the allotted shares in any manner, including transfers of ownership or granting of security interest and, also provide that we may retrieve all or part of the allotted shares at no cost in case the our compensation committee reaches certain decisions such as the non-achievement of financial targets. The agreements also include provisions for forfeiture and claw-back of vested stock in order to restrain excessive risk-taking and foster a prudent risk culture expected of a financial institution.

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On July 10, 2017, our President and Group CEO, as delegated by our board of directors, determined the issuance of restricted stock to be allotted pursuant to the plans. The following table provides details of the issuance and allotment of the new shares:

Date of issue	Issue price	Class and total number of shares issued	Allottees and number of shares to be allotted
July 26, 2017	¥4,372 per share	387,765 shares of common stock of the Company	SMFG directors: 7 persons 36,278 shares SMFG corporate executive officers: 4 persons 12,863 shares SMFG executive officers: 27 persons 47,077 shares SMBC directors: 10 persons 71,703 shares SMBC executive officers, etc.: 59 persons 219,844 shares

Employee Stock Ownership Associations

We have employee stock ownership associations in Japan for our and our subsidiaries’ employees. Members of the employee stock ownership associations set aside certain amounts from their monthly salary to purchase our common stock through the relevant employee stock ownership association. The administrator of each association makes open-market purchases of our common stock for the account of the association on a monthly basis. We and our subsidiaries contribute matching funds equivalent to 5% of the amount purchased by the relevant association. At March 31, 2018, none of the employee stock ownership associations held more than 1% of our common stock.

Item 7. Major Shareholders and Related Party Transactions

7.A.    MAJOR SHAREHOLDERS

Major Shareholders

Our major shareholders, appearing on our register of common shareholders at March 31, 2018, were as follows:

	Number of shares held(2)		Percentage of shares issued(1)(2)
Name:
Japan Trustee Services Bank, Ltd. (Trust Account)		82,563,000		5.85	%
The Master Trust Bank of Japan, Ltd. (Trust Account)		72,716,900		5.15	%
NATSCUMCO		39,842,032		2.82	%
Japan Trustee Services Bank, Ltd. (Trust Account 9)		30,932,300		2.19	%
Japan Trustee Services Bank, Ltd. (Trust Account 5)		28,529,200		2.02	%
STATE STREET BANK WEST CLIENT—TREATY 505234		24,748,158		1.75	%
Japan Trustee Services Bank, Ltd. (Trust Account 1)		21,209,100		1.50	%
Japan Trustee Services Bank, Ltd. (Trust Account 2)		20,939,400		1.48	%
Barclays Securities Japan Limited		18,477,000		1.30	%
Japan Trustee Services Bank, Ltd. (Trust Account 7)		18,442,300		1.30	%

(1) Percentages are calculated based on the total number of shares of common stock then issued, excluding our treasury stock, and have been truncated to the nearest second decimal point.

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(2) On January 29, 2018, BlackRock, Inc. submitted a Schedule 13G to the SEC, indicating that BlackRock, Inc. and its subsidiaries beneficially held 102,228,728 shares of our common stock, representing 7.2% of our outstanding common stock at December 31, 2017. On February 8, 2018, Sumitomo Mitsui Trust Holdings, Inc. submitted a Schedule 13G to the SEC, indicating that Sumitomo Mitsui Trust Holdings, Inc. and its subsidiaries beneficially held 70,946,700 shares of our common stock, representing 5.0% of our outstanding common stock at December 31, 2017. However, we have not confirmed the status of any of these shareholdings at March 31, 2018.

Our major shareholders do not have different voting rights.

Shareholders in the United States

Because some of our common stock was held by brokers or other nominees, the number of shares held by and the number of beneficiary holders with addresses in the United States is not fully ascertainable. At March 31, 2018, there were 244 record holders of our common stock with addresses in the United States, whose shareholdings represented approximately 21% of our outstanding common stock on that date.

Control of the Company

To our knowledge, we are not directly or indirectly owned or controlled by any another corporation(s), by any foreign government or by any other natural or legal person(s), severally or jointly.

Arrangements for Change in Control of the Company

We know of no arrangements the operation of which may at a later time result in a change of control.

7.B.    RELATED PARTY TRANSACTIONS

We and our banking subsidiaries had, and expect to have in the future, banking transactions and other transactions in the ordinary course of business with our related parties. For the fiscal year ended March 31, 2018, such transactions included, but were not limited to, loans, deposits and guarantees. Furthermore, such transactions were immaterial and were made at prevailing market rates, terms and conditions, and did not involve more than the normal risk of collectibility or present other unfavorable features.

During the fiscal year ended March 31, 2018, none of our directors, corporate executive officers or corporate auditors, and none of the close members of their respective families, had any transactions that were material or any transactions that were unusual in their nature or conditions, involving goods, services or tangible or intangible assets, to which we were a party, and no such transactions were proposed at March 31, 2018. During the fiscal year ended March 31, 2018, we made no loans to our directors, corporate executive officers or corporate auditors other than those that were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, and did not involve more than the normal risk of collectibility or present other unfavorable features.

7.C.    INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

Item 8. Financial Information

8.A.    CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

Financial Statements

All relevant financial statements are attached hereto. See “Item 18. Financial Statements.” See “Item 5.A. Operating Results—Reconciliation with Japanese GAAP” for a reconciliation of consolidated net profit and total equity for the fiscal year ended March 31, 2018 under IFRS, with those amounts under Japanese GAAP.

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Export Sales

Not applicable.

Legal Proceedings

We are party to routine litigation incidental to our business, none of which is currently expected to have a material adverse effect on our financial condition or results of operations. However, there can be no assurance that an adverse decision in one or more of these lawsuits will not have a material adverse effect.

Dividend Policy and Dividends

The declaration, payment and determination of any year-end dividend are subject to the approval of shareholders of our common stock at our general meeting of shareholders and to statutory restrictions. The declaration, payment and determination of the amount of any interim dividend require a resolution of our board of directors and are subject to statutory restrictions. Dividend payments are made to shareholders or pledgees of record at the record dates for each payment. March 31 is the record date for year-end dividends and September 30 is the record date for interim dividends. The payment of year-end and interim dividends on common stock is subject to prior payment of dividends on our preferred stock, if any.

We have a basic policy of enhancing shareholder value in a sustainable manner by balancing financial soundness, return to shareholders, and investment for growth. We adopt a progressive dividend policy, which does not reduce dividends and at least maintains or increases dividends each year, supported by our sustainable earnings growth, and seek to achieve a dividend payout ratio of 40% on a consolidated net profit basis under Japanese GAAP during the period of the next medium-term management plan.

The following table shows historical aggregate dividend payments per share of our common stock for each of the fiscal years from the fiscal year ended March 31, 2016 through the fiscal year ended March 31, 2018:

	Dividend per share
	Paid(1)		Declared(2)
Fiscal year ended March 31,
2016	¥	150	¥	155
2017		150		150
2018		170		155

(1) Dividend per share based on dividends in respect of each fiscal year including dividends proposed after current fiscal year-end but not recognized in the financial statements and excluding dividends in respect of the previous fiscal year declared in current fiscal year.

(2) Dividend per share based on dividends declared and recognized in the financial statements during each fiscal year.

8.B.    SIGNIFICANT CHANGES

Except as otherwise described in this annual report, no significant change in our financial position has occurred since the date of the financial statements included elsewhere in this annual report.

Item 9. The Offer and Listing

9.A.    OFFER AND LISTING DETAILS

Offering Details

Not applicable.

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Price History of the Shares

Market Price Information for Our American Depositary Shares

The following table sets forth, for the periods indicated, the high and low trading prices, and average daily trading volume for our ADSs on the NYSE since the fiscal year ended March 31, 2014.

	Price per ADS				Average daily trading volume
	High		Low
	(In dollars)				(Number of shares)
Fiscal year ended March 31, except quarter and month data:
2014	$	10.59	$	7.32		1,600,359
2015		8.83		6.74		1,760,924
2016		9.28		5.01		2,218,760
2017:
First quarter		6.88		5.51		1,773,474
Second quarter		7.33		5.43		1,090,648
Third quarter		8.30		6.39		963,498
Fourth quarter		8.09		7.21		875,551
Full year		8.30		5.43		1,179,005
2018:
First quarter		7.92		6.93		1,930,520
Second quarter		7.98		7.33		980,554
Third quarter		8.86		7.64		927,306
Fourth quarter		9.67		8.33		1,389,541
Full year		9.67		6.93		1,306,320
Most recent six months:
December		8.86		8.08		856,752
January		9.67		8.69		1,180,933
February		9.35		8.56		1,440,803
March		8.77		8.33		1,551,769
April		8.66		8.13		854,574
May		8.65		8.15		1,304,442
June (through June 15, 2018)		8.49		8.14		767,975

Market Price Information for Our Shares

See “Item 9.C. Markets” for information on the stock exchanges on which our common stock is listed.

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The following table sets forth, for the periods indicated, the high and low trading prices, and average daily trading volume for our common stock since the fiscal year ended March 31, 2014 on the Tokyo Stock Exchange.

	Price per shares				Average daily trading volume
	High		Low
	(In yen)				(Number of shares)
Fiscal year ended March 31, except quarter and month data:
2014	¥	5,470	¥	3,545		9,052,026
2015		4,915		3,800		7,609,582
2016		5,770		2,820		9,245,903
2017:
First quarter		3,895		2,792		9,404,657
Second quarter		3,805		2,767		10,467,334
Third quarter		4,768		3,293		10,275,844
Fourth quarter		4,634		4,045		7,194,184
Full year		4,768		2,767		9,340,124
2018:
First quarter		4,448		3,760		7,140,268
Second quarter		4,450		3,973		5,975,613
Third quarter		5,009		4,278		7,787,789
Fourth quarter		5,333		4,375		7,639,756
Full year		5,333		3,760		7,129,686
Most recent six months:
December		5,009		4,541		8,780,181
January		5,333		4,878		8,452,326
February		5,139		4,642		8,299,626
March		4,642		4,375		6,307,548
April		4,711		4,338		6,487,225
May		4,807		4,413		6,187,924
June (through June 15, 2018)		4,665		4,461		5,563,336

9.B.    PLAN OF DISTRIBUTION

Not applicable.

9.C.    MARKETS

The primary trading market for our common stock is the Tokyo Stock Exchange (First Section), and our common stock is also listed on the Nagoya Stock Exchange (First Section). Our common stock is not listed on any stock exchange outside of Japan.

Our ADSs have been listed on the NYSE since November 1, 2010 and are quoted under the ticker symbol “SMFG.”

9.D.    SELLING SHAREHOLDERS

Not applicable.

9 .E.    DILUTION

Not applicable.

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9.F.    EXPENSES OF THE ISSUE

Not applicable.

Item 10. Additional Information

10.A.    SHARE CAPITAL

Not applicable.

10.B.    MEMORANDUM AND ARTICLES OF INCORPORATION

Set out below is information concerning our share capital, including a summary of provisions of our articles of incorporation and share handling regulations and of the Companies Act relating to joint stock corporations (kabushiki-kaisha) and related legislation, each as currently in effect.

Register and Entry, Objects and Purposes of the Company

The Company is a joint stock corporation (kabushiki-kaisha) incorporated in Japan under the Companies Act (kaishaho) of Japan. It is registered in the commercial register (shogyo-tokibo) maintained by the Chiyoda Branch Office of the Tokyo Bureau of Legal Affairs.

Article 2 of our articles of incorporation provides that our purpose is to engage in the following business activities:

• management of banks and other corporations which are permitted to become, or to be established as, subsidiaries under the Banking Act and any business incidental thereto; and

• in addition to the businesses provided in the foregoing item, any business in which a bank holding company is permitted to engage under the Banking Act.

Provisions Relating to Directors

We had previously employed a board of corporate auditors governance system. In order to further enhance our solid corporate governance system, we transitioned to a company with three statutory committees: a nominating committee, an audit committee and a compensation committee, on June 29, 2017. The Companies Act requires the board of directors to decide on the execution of operations of a company, including basic management policy, and supervise the execution of duties by corporate executive officers. In addition, the board of directors may delegate decisions on the execution of the operations to corporate executive officers, to the extent permitted by the Companies Act. The Companies Act and our articles of incorporation, bylaws and associated internal rules issued pursuant to the articles provide in summary as follows:

• a director is not entitled to vote on a proposal or arrangement or contract in which the director has a special interest;

• the amount of compensation to each of our directors is determined by the compensation committee, which consists of members of our board of directors, the majority of whom must be outside directors;

• the board of directors has authority to approve transactions between the directors and us;

• there are no provisions requiring the mandatory retirement of directors at a specified age; and

• share ownership is not required in order to be eligible to serve as a director.

Rights, Preferences and Restrictions of the Shares

A joint stock corporation is a legal entity incorporated under the Companies Act. The rights of shareholders of a joint stock corporation are represented by shares of stock in the corporation, and shareholders’ liability is limited to the amount of the subscription for the shares.

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We may issue shares within our authorized but unissued share capital following a resolution by our board of directors. An increase in our authorized share capital requires an amendment of our articles of incorporation, which generally requires approval of our common and preferred shareholders, if any.

Common Stock

General

On January 5, 2009, a central clearing system of shares of Japanese listed companies was enacted under the Act Concerning Book-Entry Transfer of Corporate Bonds, Shares and Other Securities (“Book-Entry Transfer Act”) and the shares of all Japanese companies listed on any Japanese stock exchange, including our shares, became subject to this system, and all share certificates of companies then listed in Japan became null and void on the effective date of the Book-Entry Transfer Act.

Under the clearing system, a person must have an account at an account managing institution or at Japan Securities Depository Center, Inc. (“JASDEC”) in order to purchase, hold, sell or otherwise dispose of listed shares. Account managing institutions include financial instruments traders (i.e., securities companies), banks, trust companies and certain other financial institutions which meet the requirements prescribed by the Book-Entry Transfer Act, and only those financial institutions that meet further stringent requirements of the Book-Entry Transfer Act can open accounts directly at JASDEC. Under the Book-Entry Transfer Act, any transfer of shares is effected through book entry, and title to the shares passes to the transferee at the time when the transferred number of the shares is recorded in the transferee’s account at an account managing institution. The holder of an account at an account managing institution is presumed to be the legal owner of the shares held in such account.

Under the Companies Act and the Book-Entry Transfer Act, in order to assert shareholders’ rights against us, a shareholder’s name and address must be registered in our register of shareholders, except in limited circumstances. Under the clearing system, such registration is made upon our receipt of the necessary information from JASDEC. Nonresidents of Japan or non-Japanese corporations without a permanent establishment in Japan (“Nonresident Shareholders”) are required to appoint a standing proxy in Japan or provide a mailing address in Japan. Each Nonresident Shareholder must give notice of a standing proxy or a mailing address to the relevant account managing institution. That notice will be forwarded to us through JASDEC. Japanese securities companies and commercial banks customarily act as standing proxies and provide related services for standard fees. Notices from us to Nonresident Shareholders are delivered to standing proxies or their mailing addresses in Japan.

Our transfer agent is Sumitomo Mitsui Trust Bank, Limited.

Distributions of Surplus

As a holding company, we expect that most of our cash flow will come from dividends that SMBC pays us. Under some circumstances, various statutory or contractual provisions may restrict the dividends SMBC can pay us. For example, if SMBC does not have sufficient distributable amounts, it will be unable to pay dividends and we, in turn, may be unable to pay dividends on shares of our common stock. Therefore, our ability to pay dividends mainly depends on the financial performance of our principal operating subsidiary, SMBC.

Under the Companies Act, distribution of cash or other assets by a joint stock corporation to its shareholders, including dividends, takes the form of distributions of surplus (as described in “—Restriction on Distributions of Surplus”). We are permitted to make distributions of surplus to our shareholders any number of times per fiscal year, subject to limitations described in “—Restriction on Distributions of Surplus.” Distributions of surplus are required in principle to be authorized by a resolution of a general meeting of shareholders. Distributions of surplus are, however, permitted pursuant to a resolution of the board of directors if:

(1) our articles of incorporation so provide (our current articles of incorporation do not have a provision to that effect);

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(2) the normal term of office of our directors is no longer than one year (our current articles of incorporation provide that the normal term of office of our directors expires upon the close of the general meeting of shareholders to be held for the last fiscal year ending within one year after the election); and

(3) our nonconsolidated annual financial statements and certain documents for the latest fiscal year fairly present our assets and profit or loss, as required by an ordinance of the Ministry of Justice.

In an exception to the above rule, even if the requirements described in (1) through (3) are not met, we are permitted to make distributions of surplus in cash to our shareholders by resolutions of the board of directors once per fiscal year if our articles of incorporation so provide. Our current articles of incorporation provide for distributions of surplus as interim dividends, the record date for which is September 30 of each year.

Distributions of surplus may be made in cash or in kind in proportion to the number of shares of common stock held by each shareholder. A resolution of a general meeting of shareholders or by the board of directors authorizing a distribution of surplus must specify the kind and aggregate book value of assets to be distributed, the manner of allocation of the assets to shareholders, and the effective date of the distribution. If a distribution of surplus is to be made in kind, we may, pursuant to a resolution of a general meeting of shareholders or by the board of directors, grant the right to our shareholders to require us to make the distribution in cash instead of in kind. If that right is not granted to shareholders, then the relevant distribution of surplus must be approved by a special resolution of a general meeting of shareholders.

Under our articles of incorporation, the record dates for annual dividends and interim dividends are March 31 and September 30, respectively, in each year. In Japan, both “ex-dividend date” (the date from which purchasers at shares through Japanese stock exchanges will not be entitled to the dividends to be paid to registered shareholders as any record date) and the record date for dividends precede the date of determination of the amount of the dividend to be paid. The ex-dividend date of the shares of common stock is generally the third business day prior to the record date. Under our articles of incorporation, we are not obligated to pay any distributions of surplus to be made in cash which have not been received after five years from the commencement date of those distributions.

Restriction on Distributions of Surplus

Payment of dividends on shares of common stock is also subject to the prior payment of dividends on shares of preferred stock, if any. In the event we pay an interim dividend on shares of our common stock, the interim dividend payment is also subject to the prior payment of interim dividends on the shares of preferred stock, if any.

When we make a distribution of surplus, we must set aside in our capital reserve or retained earnings reserve an amount equal to one-tenth of the amount of surplus so distributed as required by an ordinance of the Ministry of Justice.

The amount of surplus at any given time must be calculated in accordance with the following formula:

A + B + C + D – (E + F + G)

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In the above formula:

“A”	=	the total amount of other capital surplus and other retained earnings, each being the amount that appears on our nonconsolidated balance sheet as of the end of the last fiscal year;
“B”	=	if we have disposed of treasury stock after the end of the last fiscal year, the amount of the consideration for that treasury stock received by us less the book value thereof;
“C”	=	if we have reduced our stated capital after the end of the last fiscal year, the amount of that reduction less the portion thereof that has been transferred to capital reserve or retained earnings reserve, if any:
“D”	=	if we have reduced our capital reserve or retained earnings reserve after the end of the last fiscal year, the amount of that reduction less the portion thereof that has been transferred to stated capital, if any:
“E”	=	if we have cancelled treasury stock after the end of the last fiscal year, the book value of that treasury stock;
“F”	=	if we have distributed surplus to our shareholders after the end of the last fiscal year, the total book value of the surplus so distributed; and
“G”	=	other amounts set forth in an ordinance of the Ministry of Justice, including:

• if we have reduced surplus and increased our stated capital, capital reserve or retained earnings reserve after the end of the last fiscal year, the amount of that reduction; and

• if we have distributed surplus to shareholders after the end of the last fiscal year, the amount set aside in our capital reserve or retained earnings reserve, if any, as required by ordinances of the Ministry of Justice.

The aggregate book value of surplus distributed by us may not exceed a prescribed distributable amount as calculated on the effective date of the distribution. Our prescribed distributable amount at any given time shall be the amount of surplus less the aggregate of (a) the book value of our treasury stock, (b) the amount of consideration for any treasury stock we disposed of after the end of the last fiscal year, (c) the sum of net unrealized losses on other securities and unrealized losses on land valuation, and (d) other amounts set forth in an ordinance of the Ministry of Justice, including (if the sum of one-half of our goodwill and deferred assets exceeds the total of the stated capital, capital reserve and retained earnings reserve, each being the amount in our nonconsolidated balance sheet at the end of the last fiscal year) all or a certain part of the exceeding amount as calculated in accordance with the ordinances of the Ministry of Justice. If we have prepared interim financial statements in accordance with the ordinances of the Ministry of Justice as described below, and if the interim financial statements have been approved by the board of directors or (if so required) by a general meeting of shareholders, then the prescribed distributable amount must be adjusted to take into account the amount of profit or loss, and the amount of consideration for any of our treasury stock disposed of by us, during the period for which the interim financial statements have been prepared. We will be permitted to prepare nonconsolidated interim financial statements consisting of a balance sheet at any date subsequent to the end of the last fiscal year and an income statement for the period from the first day of the current fiscal year to the date of the balance sheet. Interim financial statements so prepared by us must be audited by our audit committee and accounting auditors, as required by an ordinance of the Ministry of Justice.

Voting Rights

Holders of shares of common stock have one voting right for each unit of shares held by them. Except as otherwise provided by law or by our articles of incorporation, a resolution can be adopted at a general meeting of shareholders by the holder of a majority of the total number of the voting rights represented at the meeting. In our articles of incorporation the quorum to elect directors is one-third of the total number of voting rights. Our shareholders are not entitled to cumulative voting in the election of directors. Our shareholders may cast their

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votes by mail or via the internet. Our shareholders may also exercise their voting rights through proxies, provided that the proxies are also holders of shares with voting rights.

The Companies Act provides that certain important matters shall be approved by a special resolution of a general meeting of shareholders. Under our articles of incorporation, the quorum for a special resolution is one-third of the total number of voting rights and the approval of at least two-thirds of the voting rights represented at the meeting is required for adopting a special resolution. Important matters include:

• amending the articles of incorporation (except for amendments that may be authorized by the board of directors under the Companies Act);

• reducing stated capital which meets certain requirements, with some exceptions;

• dissolving, merging or consolidating requiring shareholders’ approval;

• establishing a parent and a wholly owned subsidiary relationship by way of a share transfer (kabushiki-iten) or share exchange (kabushiki-kokan) requiring shareholders’ approval;

• transferring the whole or a substantial part of our business;

• transferring all or part of the shares of a subsidiary which meets certain requirements;

• taking over the whole business of another company requiring shareholders’ approval;

• corporate split requiring shareholders’ approval;

• consolidating shares of common stock;

• acquiring shares of common stock from a specific shareholder other than one of our subsidiaries;

• issuing or transferring new shares or existing shares held by us as treasury stock to persons other than the shareholders at a specially favorable price;

• issuing stock acquisition rights (including those incorporated in bonds with stock acquisition rights) to persons other than the shareholders under specially favorable conditions;

• exempting some liability of a director or corporate executive officer; and

• distributing surplus in-kind if shareholders are not granted the right to require us to make a distribution in cash instead of in-kind.

Capital and Reserves

When we issue new shares, the amount of the cash or assets paid or contributed by subscribers for new shares (with some exceptions) is required to be accounted for as stated capital, although we may account for an amount not exceeding one-half of the cash or assets as capital reserve by resolutions of the board of directors.

We may reduce our capital reserve or retained earnings reserve generally by resolution of a general meeting of shareholders. We may account for the whole or any part of the reduction as stated capital if we so decide by the same resolution. On the other hand, we may reduce our stated capital generally by special resolution of a general meeting of shareholders and may account for the whole or any part of the reduction as capital reserve if we so decide by the same resolution. We may reduce our surplus and increase either (1) stated capital or (2) capital reserve and/or retained earnings reserve by the same amount, in either case by resolution of a general meeting of shareholders.

Stock Splits

We may at any time split our outstanding shares of common stock into a greater number of shares of common stock by resolution of the board of directors. When a stock split is to be made, so long as our only class

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of outstanding stock is the common stock, we may increase the number of authorized shares in the same ratio as that of the stock split by amending our articles of incorporation. We may effect such an amendment by resolution of the board of directors without shareholder approval.

We must give public notice of a stock split, specifying the record date therefore, not less than two weeks prior to the record date.

Unit Share System

We have a unit share system, under which 100 shares of our common stock constitute one unit. Under the unit share system, shareholders have one voting right for each unit of shares held by them at a general meeting of shareholders, and shares constituting a fractional unit carry no voting rights. Under our articles of incorporation, the holders of shares constituting a fractional unit do not have shareholder rights except for those specified in the Companies Act or an ordinance of the Ministry of Justice, which include the rights (1) to receive dividends, (2) to receive cash or other assets in case of consolidation or split of shares, share exchange or share transfer, or merger, or (3) to be allotted rights to subscribe for free new shares and stock acquisition rights when those rights are granted to shareholders. We may cease to use the unit share system by amendment to the articles of incorporation without shareholders’ approval even though amendments to the articles of incorporation generally require a special resolution of the general meeting of shareholders.

A holder of shares of our common stock constituting less than one unit may at any time request us to purchase those shares. In addition, a holder of shares of our common stock constituting less than one unit may at any time request us to sell to it the number of shares necessary to raise its share ownership to a whole unit. Under the clearing system operated by JASDEC, such request must be made through the financial institution where the shareholder has opened its account.

The price at which shares of our common stock constituting less than one unit will be purchased or sold by us pursuant to such request will be equal to either (a) the closing price of shares of our common stock reported by the Tokyo Stock Exchange on the day when such request is received by our transfer agent, or (b) if no sale takes place on the Tokyo Stock Exchange on that day, the price at which sale of such shares is executed on the Tokyo Stock Exchange immediately thereafter. Pursuant to our share handling regulations, an amount equal to the applicable brokerage commission will be deducted from the price so determined.

Under the new clearing system, shares constituting less than one unit are transferable. Under the rules of the Japanese stock exchanges, however, shares constituting less than one unit do not comprise a trading unit, except in limited circumstances, and accordingly, may not be sold on the Japanese stock exchanges.

Liquidation Rights

In the event of our liquidation, the assets remaining after payment of all debts, liquidation expenses, taxes and required distribution payments to preferred shareholders, if any, will be distributed among shareholders of common stock in proportion to the respective number of shares which they hold. For liquidation preference for residual assets to the holders of preferred stock, see “—Preferred Stock—Liquidation Rights.”

Redemption Provisions and Sinking Fund Provisions

Our common stock has no redemption provisions or sinking fund provisions.

Liability to Further Calls or Assessments

Our shares of common stock outstanding, including shares represented by the ADSs, are fully paid and nonassessable.

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Legal Restrictions on Acquisitions of Shares

The FIEA and its related regulations require any person who has become solely or jointly a beneficial holder of more than 5% of the total issued shares of capital stock of a company listed on any Japanese stock exchange, to file with the director of an appropriate local finance bureau of the Ministry of Finance within five business days a report concerning the shareholdings. With some exceptions, a similar report must also be filed in respect of any subsequent change of 1% or more in those holdings or any change in material matters set out in reports previously filed. For this purpose, shares issuable to a holder upon conversion of convertible securities or exercise of share subscription warrants or stock acquisition rights are taken into account in determining both the number of shares held by such holder and the issuer’s total issued share capital. Copies of each report must also be furnished to all the Japanese stock exchanges on which the shares are listed.

Under the Banking Act, a person who desires to hold 20% (in some exceptional cases, 15%) or more of the voting rights of a bank is required to obtain advance approval of the FSA Commissioner. In addition, any person who becomes a holder of more than 5% of the voting rights of a bank holding company or a bank must report the ownership of the voting rights to the director of an appropriate local finance bureau within five business days. This requirement is separate from the significant shareholdings report required under the FIEA. See “Item 4.B. Business Overview—Regulations in Japan—Regulations for Stabilizing the Financial System—Examination and Reporting Applicable to Shareholders of a Bank.”

Subscription Rights

Holders of shares of our common stock have no preemptive rights. Authorized but unissued shares of common stock may be issued at the times, and upon the terms the board of directors determines, subject to the limitations as to the issuance of new shares of common stock at a specially favorable price mentioned in “—Voting Rights” above. The board of directors may, however, determine that the holders of shares of common stock be given subscription rights to new shares of common stock, in which case they must be given on uniform terms to all holders of shares of common stock at a record date of which not less than two weeks’ prior public notice must be given. Each of the shareholders to whom subscription rights is given must also be given at least two weeks’ prior notice of the date on which the rights expire.

Stock Acquisition Rights

We may issue stock acquisition rights (shinkabu-yoyakuken). Holders of stock acquisition rights are entitled to acquire shares from us upon payment of the applicable exercise price and subject to other terms and conditions thereof. We may also issue bonds with stock acquisition rights (shinkabu-yoyakuken-tsuki-shasai). The issuance of stock acquisition rights and bonds with stock acquisition rights may be authorized by the board of directors unless it is made under specially favorable conditions, as described in “—Voting Rights.”

Record Date

March 31 is the record date for the payment of year-end dividends and the determination of shareholders entitled to vote at the ordinary general meeting of shareholders. September 30 is the record date for payment of interim dividends. In addition, by determination by corporate executive officers under the authority delegated by the board of directors and after giving at least two weeks’ prior public notice, we may at any time set a record date in order to determine the shareholders who are entitled to certain rights pertaining to the common stock.

Under the Book-Entry Transfer Act, we are required to give notice of each record date to JASDEC at least two weeks prior to such record date. JASDEC is required to give us notice of the names and addresses of our shareholders, the numbers of shares held by them, and other relevant information at a record date promptly after we set it.

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Our Acquisition of Our Own Shares of Common Stock

We may acquire shares of our common stock (1) by way of purchase on any Japanese stock exchange on which shares of our common stock are listed, or by way of tender offer (in either case, pursuant to an ordinary resolution of a general meeting of shareholders or a resolution of the board of directors), (2) from a specific shareholder other than any of our subsidiaries (pursuant to a special resolution of a general meeting of shareholders), or (3) from any of our subsidiaries (pursuant to a resolution of the board of directors). In the case of (2) above, any other shareholder may make a request to a director, at least five days prior to the relevant general meeting of shareholders, to include the shareholder as a seller in the proposed purchase. However, that right is not available if the purchase price or any other consideration to be received by the relevant specific shareholder does not exceed the then market price of the shares to be purchased from the shareholder.

The total amount of the purchase price of shares of common stock may not exceed the prescribed distributable amount, as described in “—Common Stock—Restriction on Distributions of Surplus.”

We may hold the shares of common stock acquired, and may generally dispose of or cancel those shares by resolution of the board of directors.

Disposal of Shares of Our Common Stock Held by Shareholders Whose Location Is Unknown

We are not required to send notices to a shareholder if notices have failed to arrive for five consecutive years or more at his or her address in our register of shareholders unless we are notified of a new address. If the shareholder also fails to receive distributions of surplus on the shares for five or more consecutive years at his or her address in our register of shareholders or otherwise as specified, then we may in general dispose of those shares at their then-market price and hold or deposit the proceeds of that disposal on behalf of that shareholder.

Preferred Stock

The following is a summary of information concerning provisions of our articles of incorporation.

General

At the date of this annual report, under our articles of incorporation, we are authorized to issue 167,000 shares of Type 5 preferred stock, 167,000 shares of Type 7 preferred stock, 115,000 shares of Type 8 preferred stock and 115,000 shares of Type 9 preferred stock. In June 2013, our articles of incorporation were amended to delete the provisions regarding Type 6 preferred stock, as these provisions have become unnecessary.

In March 2005, we issued 70,001 shares of our 1st series Type 6 preferred stock for an aggregate issue price of ¥210 billion. The Type 6 preferred stock was allocated using a third-party allocation of shares at a price of ¥3,000,000 per share, ¥1,500,000 of which was accounted for as stated capital. Sumitomo Life Insurance Company acquired 23,334 shares, Nippon Life Insurance Company acquired 20,000 shares, Mitsui Life Insurance Company, Limited acquired 16,667 shares and Mitsui Sumitomo Insurance Company, Limited acquired 10,000 shares. On April 1, 2011, we acquired and cancelled all of the outstanding 1st series Type 6 preferred stock.

At the date of this annual report, we have no preferred stock outstanding. The following is a summary of the relevant provisions of our articles of incorporation regarding preferred stock.

Preferred Dividends

Our articles of incorporation provide that, if we pay dividends, we must pay cash dividends to holders of shares of our preferred stock in preference to the holders of our common stock. If preferred interim dividends stipulated in our articles of incorporation were paid during the relevant fiscal year, the amount of the preferred interim dividends shall be subtracted from the amount of annual preferred dividends.

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Our failure to declare annual preferred dividends in full in respect of any fiscal year on a series of preferred stock gives the holders of that preferred stock certain voting rights.

Liquidation Rights

In the event of our voluntary or involuntary liquidation, holders of our preferred stock will be entitled, equally in rank as among themselves and in preference over shares of our common stock, to receive out of our residual assets upon liquidation a distribution of ¥3,000,000 per share.

Preferred stockholders are not entitled to any further dividends or other participation or distribution of our residual assets upon our liquidation.

Voting Rights

Our articles of incorporation provide that holders of preferred stock are only entitled to receive notice of, and to vote at, a general meeting of shareholders;

• from the commencement of our ordinary general meeting of shareholders if an agenda for approval to declare a preferred dividend is not submitted to the meeting; or

• from the close of our ordinary general meeting of shareholders if a proposed resolution to declare a preferred dividend is not approved at the meeting.

In both cases, these rights of our preferred stockholders lapse when a resolution of a general meeting of shareholders declaring a preferred dividend is approved.

The Companies Act provides that a separate resolution of a meeting of the holders of the preferred stock is required in order to approve certain matters which would prejudice their interests, including;

• amendments to the articles of incorporation to add new classes of shares to be issued, alter the terms of the shares or increase the number of shares or authorized number of any class of shares, with certain exceptions;

• consolidations or splits of shares;

• dividends of shares or stock acquisition rights to shareholders without any consideration;

• grants of preemptive rights for new shares or stock acquisition rights;

• amalgamations or mergers;

• certain corporate splits;

• share exchanges;

• share transfers; and

• other matters set forth in the articles of incorporation.

Except for the amendments described above, the articles of incorporation may expressly permit certain of the above matters to be approved without a separate resolution. Our articles of incorporation do not include that express permission.

Ranking

If issued, the outstanding shares of our preferred stock would rank pari passu with each other as to participation in our profits or assets, including dividends and distributions of residual assets upon our liquidation.

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Unless holders of our preferred stock give approval, we may not create or issue any other shares ranking in priority in terms of the right to receive distributions of surplus or the right to receive distributions of residual assets or otherwise in priority to the preferred stock already issued. However, without obtaining the consent of holders of the preferred stock, we may issue other preferred stock ranking pari passu with the preferred stock already issued as to the order of participation in our profits or assets, carrying rights to preferred dividends, or terms of conversion that our board of directors may determine, subject to limitations set forth in our articles of incorporation and the Companies Act.

Purchase or Redemption of Preferred Stock

Subject to the requirements of the Companies Act, we may purchase out of our prescribed distributable amounts any shares of our preferred stock outstanding at any time and cancel that preferred stock. In June 2013, we amended our articles of incorporation in order to qualify our preferred stock for inclusion in our regulatory capital in accordance with the new FSA capital adequacy guidelines based on the Basel III framework. Under the amended articles of incorporation, we will acquire our outstanding preferred stock without consideration or in exchange for common stock if we become non-viable.

Mandatory Redemption Provisions and Sinking Fund Provisions

Our articles of incorporation do not provide any mandatory redemption provisions and sinking fund provisions.

Stock Splits

Our articles of incorporation provide that no stock split shall be made to the preferred stock unless otherwise provided for in any law or regulation.

Subscription Rights

Our articles of incorporation provide that we shall not grant holders of preferred stock any right to subscribe for new shares or stock acquisition rights.

Conditions to Change Shareholders’ Rights

Our articles of incorporation do not specify what actions or quorums are required to change the rights of holders of our stock.

General Meeting of Shareholders

Our ordinary general meeting of shareholders is held within three months after the end of each fiscal year. In addition, we may hold an extraordinary general meeting of shareholders whenever necessary. Notice of a general meeting of shareholders stating the place, the time and the purpose thereof, and certain matters set forth in the Companies Act and in ordinances of the Ministry of Justice, must be given to each holder of shares of common stock with voting rights (or to the standing proxy or mailing address in Japan of a nonresident shareholder) at least two weeks prior to the date set for the meeting. The record date for an ordinary general meeting of shareholders is March 31 of each year.

Any shareholder or group of shareholders holding at least three percent of the total outstanding voting rights, for a continuous period of six months or longer, may require the convocation of a general meeting of shareholders for a particular purpose. Unless such a general meeting of shareholders is convened promptly, or a convocation notice of a meeting which is to be held not later than eight weeks from the day of such demand is dispatched, the requiring shareholders may, upon obtaining court approval, convene such general meeting of shareholders.

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Any shareholder holding at least 300 voting rights or one percent of our total number of voting rights for six months or longer may propose a matter to be considered at a general meeting of shareholders by submitting a written request to a director at least eight weeks prior to the date of the meeting. Any of the minimum percentages, time periods and number of voting rights necessary for exercising the minority shareholder rights described above may be decreased or shortened if our articles of incorporation so provide. Our articles of incorporation currently do not include any of those provisions.

To attend a general meeting of shareholders in person or by proxy, shareholders must provide proof of identity upon request. Shareholders may appoint a proxy by a written power of attorney for the meeting. Such proxy must be one of our shareholders with voting rights.

Limitations on the Rights to Hold Our Common Stock by Foreign Investors

There are no specific limitations imposed by the laws of Japan, our articles of incorporation, or our other constituent documents, on the rights of nonresidents or foreign shareholders to hold or exercise voting rights on our shares of common stock or preferred stock. For more information, See “Common Stock—Voting Rights.”

Anti-Change in Control Provisions

There is no provision in our articles of incorporation that would have the effect of delaying, deferring or preventing a change in control of us, and that would operate only with respect to a merger, consolidation, acquisition or corporate restructuring involving us.

Provisions Governing Changes in the Company’s Capital

We have no conditions more stringent than are required by law imposed by our articles of incorporation governing changes in capital.

10.C.    MATERIAL CONTRACTS

All contracts that we are currently a party to, or were a party to during our two most recently completed fiscal years up to the date of this annual report, were entered into in the ordinary course of business or were otherwise immaterial.

10.D.    EXCHANGE CONTROLS

Japanese Foreign Exchange Regulations

The Foreign Exchange and Foreign Trade Act of Japan, and the cabinet orders and ministerial ordinances, collectively known as the Foreign Exchange Act, set forth, among other things, the regulations relating to the receipt by nonresidents of Japan of payment with respect to our shares, and the acquisition and holding of our shares by nonresidents of Japan and foreign investors, both as defined below.

Nonresidents of Japan are individuals who are not residents in Japan and corporations whose principal offices are located outside Japan. Generally, branches and offices of nonresident corporations located in Japan are regarded as residents of Japan while the branches and offices of Japanese corporations located outside Japan are regarded as nonresidents of Japan.

“Foreign investors” are defined as:

• individuals not residing in Japan;

• corporations which are organized under the laws of foreign countries or whose principal offices are located outside Japan;

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• corporations of which 50% or more of the voting rights are held, directly or indirectly, by individuals not residing in Japan and/or corporations which are organized under the laws of foreign countries or whose principal offices are located outside Japan; and

• corporations, a majority of officers (or a majority of officers having the power of representation) of which are individuals not residing in Japan.

Acquisition of Shares

In general, a nonresident who acquires our shares from a resident of Japan is not subject to any prior filing requirement, although the Foreign Exchange Act authorizes the Minister of Finance of Japan and the Ministers responsible for the business to require a prior submission for any such acquisition in certain limited circumstances.

If a foreign investor acquires shares of our common stock, and, together with parties who have a special relationship with such foreign investor, holds 10% or more of the issued shares of our common stock as a result of the acquisition, the foreign investor must file a report of the acquisition with the Minister of Finance and any other competent minister by the fifteenth day of the month immediately following the month to which the date of such acquisition belongs.

Except for the general limitation under Japanese antitrust and antimonopoly regulations against shareholdings in the capital stock of a Japanese corporation, which lead or may lead to a restraint of trade or monopoly, and general limitations under the Companies Act or our articles of incorporation on the rights of shareholders applicable, regardless of residence or nationality, there is no limitation under Japanese law and regulations applicable to us, or under our articles of incorporation on the rights of nonresident or foreign shareholders to hold or exercise voting rights on our shares.

Dividends and Proceeds of Sale

Under the Foreign Exchange Act, dividends paid on, and the proceeds of sales in Japan of, shares held by nonresidents of Japan, may, in general, be converted into any foreign currency and repatriated abroad. The acquisition of our shares by nonresidents by way of a stock split is not, in general, subject to any notification or reporting requirements.

10.E.    TAXATION

Japanese Taxation

The following is a summary of the principal Japanese national tax consequences to owners of shares of our common stock or ADSs representing shares of our common stock who are Nonresident Shareholders. The statements regarding Japanese tax laws set forth below are based on the laws and treaties currently in force and as interpreted by the Japanese tax authorities at the date of this annual report and are subject to changes in the applicable Japanese law or tax treaties, conventions or agreements, or in the interpretation thereof, occurring after that date. This summary does not include all possible tax considerations which may apply to a particular investor and potential investors are advised to satisfy themselves as to the overall tax consequences of the acquisition, ownership and disposition of shares of our common stock or ADSs, including specifically the tax consequences under Japanese law, the laws of the jurisdiction of which they are resident, and any tax treaty, convention or agreement between Japan and their country of residence, by consulting their own tax advisors.

For the purpose of Japanese taxation, a Nonresident Shareholder of ADSs will generally be treated as the owner of the shares underlying the ADSs, which may be evidenced by one or more American Depositary Receipts (“ADRs”).

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Generally, a Nonresident Shareholder of shares of our common stock or ADSs will be subject to Japanese income tax collected by way of withholding on dividends we pay. Stock splits are, in general, not subject to Japanese income tax or corporation tax.

In the absence of any applicable tax treaty, convention or agreement reducing the maximum rate of Japanese withholding tax or allowing exemption from Japanese withholding tax, the rate of Japanese withholding tax applicable to dividends paid by a Japanese corporation to Nonresident Shareholders is generally 20.42%. However, with respect to dividends paid on listed shares issued by a Japanese corporation (including shares of our common stock or ADSs) to Nonresident Shareholders, except for any individual shareholder who owns 3% or more of the total number of shares issued by the relevant Japanese corporation, the aforementioned 20.42% withholding tax rate is reduced to 15.315% for dividends due and payable on or before December 31, 2037. Due to the imposition of a special additional withholding tax (2.1% of the original withholding tax amount) to secure funds for reconstruction from the Great East Japan Earthquake, the original withholding tax rate of 15% and 20%, as applicable, has been effectively increased, respectively, to 15.315% and 20.42%, during the period beginning on January 1, 2013 and ending on December 31, 2037.

At the date of this annual report, Japan has income tax treaties in force, whereby the above-mentioned withholding tax rate is reduced, generally, to 15% for portfolio investors, with, among others, Canada, Denmark, Finland, Germany, Ireland, Italy, Luxembourg, New Zealand, Norway, Singapore and Spain, while the income tax treaties with, among others, Australia, France, Hong Kong, the Netherlands, Portugal, Sweden, Switzerland, the United Kingdom and the United States generally reduce the withholding tax rate to 10% for portfolio investors. In addition, under the income tax treaty between Japan and the United States, dividends paid to pension funds which are qualified U.S. residents eligible to enjoy treaty benefits are exempt from Japanese income taxation by way of withholding or otherwise unless the dividends are derived from the carrying on of a business, directly or indirectly, by those pension funds. Under the income tax treaties with the Netherlands, Switzerland and the United Kingdom, similar treatment will be applied to dividends. Under Japanese tax law, any reduced maximum rate applicable under a tax treaty will be available when the maximum rate is below the rate otherwise applicable under Japanese tax law referred to in the preceding paragraph with respect to the dividends to be paid by us on shares of common stock or ADSs. A Nonresident Shareholder of shares of our common stock who is entitled, under any tax treaty, to a reduced rate of Japanese withholding tax, or exemption therefrom, as the case may be, is required to submit an Application Form for Income Tax Convention Regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends (together with any other required forms and documents) in advance, through the withholding agent, to the relevant tax authority before payment of dividends. A standing proxy for a Nonresident Shareholder may provide the application services. See “Item 10.B. Memorandum and Articles of Incorporation—Common Stock—General.” In addition, a simplified special filing procedure is available for Nonresident Shareholders to claim treaty benefits of exemption from or reduction of Japanese withholding tax by submitting a Special Application Form for Income Tax Convention Regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends of Listed Stocks (together with any other required forms and documents). With respect to ADSs, this reduced rate or exemption will be applicable to Nonresident Shareholders of ADSs if the Depositary or its agent submits two Application Forms (one before payment of dividends and the other within eight months after the record date concerning such payment of dividends), together with certain other documents. To claim this reduced rate or exemption, Nonresident Shareholders of ADSs will be required to file a proof of taxpayer status, residence and beneficial ownership, as applicable, and to provide other information or documents as may be required by the Depositary. A Nonresident Shareholder who is entitled, under any applicable tax treaty, to a reduced rate of Japanese withholding tax below the rate otherwise applicable under Japanese tax law mentioned above, or exemption therefrom, as the case may be, but fails to submit the required application in advance may nevertheless be entitled to claim a refund from the relevant Japanese tax authority of withholding taxes withheld in excess of the rate under an applicable tax treaty (if the Nonresident Shareholder is entitled to a reduced treaty rate under the applicable tax treaty) or the full amount of tax withheld (if the Nonresident Shareholder is entitled to an exemption under the applicable tax treaty), as the case may be, by complying with certain subsequent filing procedures. We do not assume any responsibility to ensure withholding at the reduced treaty rate, or exemption

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therefrom, for shareholders who would be so eligible under an applicable tax treaty but where the required procedures as stated above are not followed.

Gains derived from the sale outside Japan of shares of our common stock or ADSs by a Nonresident Shareholder who is a portfolio investor are, in general, not subject to Japanese income tax or corporation tax.

Any deposits or withdrawals of shares of our common stock by a Nonresident Shareholder in exchange for ADSs are, in general, not subject to Japanese income or corporation tax.

Japanese inheritance and gift taxes at progressive rates may be payable by an individual who has acquired shares of our common stock or ADSs from another individual as a legatee, heir or donee, even if the individual is not a Japanese resident.

Potential investors should consult with their own tax advisors regarding the Japanese tax consequences of the ownership and disposition of shares of common stock or ADSs in light of their particular situations.

United States Federal Income Taxation

The following is a discussion of material U.S. federal income tax consequences to the U.S. Holders described below of owning and disposing of shares or ADSs, but it does not purport to be a comprehensive description of all the tax considerations that may be relevant to a particular person’s decision to hold the shares or ADSs. This discussion does not address U.S. state, local or non-U.S. tax consequences. As used herein, a U.S. Holder is a beneficial owner of shares or ADSs that is, for U.S. federal income tax purposes: (1) a citizen or individual resident of the United States; (2) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or (3) an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

The discussion applies only to U.S. Holders who hold the shares or ADSs as capital assets for U.S. federal income tax purposes. The discussion does not address any alternative minimum or Medicare contribution tax consequences, nor does it address all of the tax consequences which may be applicable to special classes of holders, such as:

• certain financial institutions;

• insurance companies;

• dealers and certain traders in securities;

• persons holding shares or ADSs as part of a hedge, straddle, conversion or other integrated transaction;

• persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

• regulated investment companies;

• real estate investment trusts;

• partnerships or other entities classified as partnerships for U.S. federal income tax purposes;

• tax-exempt entities, “individual retirement accounts” or “Roth IRAs”;

• persons who acquired our shares or ADSs pursuant to the exercise of an employee stock option or otherwise as compensation;

• persons holding shares or ADSs that own or are deemed to own 10% or more of our voting stock; or

• persons holding shares or ADSs in connection with a trade or business conducted outside the United States.

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If a partnership holds shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding shares or ADSs, and partners in such partnerships, should consult their own tax advisors.

This discussion is based on the Internal Revenue Code of 1986, as amended, administrative pronouncements, judicial decisions and final, temporary and proposed United States Treasury regulations, as well as the double taxation treaty between Japan and the United States (“Treaty”) all as of the date hereof. These laws are subject to change, possibly on a retroactive basis. It is also based in part on representations by the Depositary and assumes that each obligation under the Deposit Agreement and any related agreement or undertaking will be performed in accordance with its terms.

In general, a U.S. Holder who owns ADSs will be treated as the owner of the underlying shares represented by those ADSs for U.S. federal income tax purposes. Accordingly, no gain or loss will be recognized if a U.S. Holder exchanges ADSs for the underlying shares represented by those ADSs.

The U.S. Treasury has expressed concern that parties to whom ADSs are released before shares are delivered to the depositary, or intermediaries in the chain of ownership between holders and the issuer of the security underlying the ADSs, may be taking actions that are inconsistent with the claiming of foreign tax credits by holders of ADSs. These actions would also be inconsistent with the claiming of the reduced rate of tax, described below, applicable to dividends received by certain noncorporate holders. Accordingly, the creditability of Japanese taxes, and the availability of the reduced tax rate for dividends received by certain noncorporate U.S. Holders, each described below, could be affected by actions taken by such parties or intermediaries.

U.S. Holders should consult their own tax advisors concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of shares or ADSs in their particular circumstances.

This discussion assumes that we are not, and will not become, a passive foreign investment company (a “PFIC”), as described below.

Taxation of Distributions

Distributions received by a U.S. Holder on shares or ADSs, including the amount of any Japanese taxes withheld, other than certain pro rata distributions of shares, will constitute foreign-source dividend income to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, we expect that distributions generally will be reported to a U.S. Holder as dividends. The amount of the dividend a U.S. Holder will be required to include in income will equal the U.S. dollar value of the yen dividend, calculated by reference to the exchange rate in effect on the date the payment is received by the holder, or in the case of ADSs, by the Depositary, regardless of whether the payment is converted into U.S. dollars on the date of receipt. If the dividend is converted into U.S. dollars on the date of receipt, the U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect of the dividend payment. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt. Any foreign currency gain or loss realized by a U.S. Holder on a sale or other disposition of yen will be U.S.-source ordinary income or loss. Corporate U.S. Holders will not be entitled to claim a dividends-received deduction with respect to our dividends. Subject to applicable limitations, and the discussion above regarding concerns expressed by the U.S. Treasury, dividends received from us by certain noncorporate U.S. Holders may be taxable at favorable rates. Noncorporate U.S. Holders should consult their own tax advisors to determine whether they are subject to any special rules that limit their ability to be taxed at these favorable rates.

Subject to applicable restrictions and limitations that vary depending upon the U.S. Holder’s circumstances and the discussion above regarding concerns expressed by the U.S. Treasury, Japanese taxes withheld from dividends on shares or ADSs (at a rate not exceeding the applicable rate provided by the Treaty, in the case of a

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U.S. Holder who is eligible for the Treaty’s benefits) will be creditable against the U.S. Holder’s U.S. federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to two categories of income, passive income and general income. The rules governing foreign tax credits are complex. Instead of claiming a credit, a U.S. Holder may elect to deduct such Japanese taxes in computing its taxable income, subject to generally applicable limitations. U.S. Holders should consult their own tax advisors regarding the availability of foreign tax credits and deductions in their particular circumstances.

Sale and Other Disposition of the Shares or ADSs

A U.S. Holder will generally recognize capital gain or loss on the sale or other disposition of shares or ADSs, which will be long-term capital gain or loss if the U.S. Holder has held the shares or ADSs for more than one year. The amount of the U.S. Holder’s gain or loss will equal the difference between the amount realized on the sale or other disposition and the U.S. Holder’s tax basis in the shares or ADSs, each as determined in U.S. dollars. The deductibility of capital losses is subject to limitations. Any gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes.

PFIC Rules

Based upon certain proposed Treasury regulations that are not yet in effect, but are generally proposed to become effective for taxable years beginning after December 31, 1994, we believe that we were not a PFIC for U.S. federal income tax purposes for our taxable year ended March 31, 2018. However, since proposed Treasury regulations may not be finalized in their current form, and since PFIC status depends upon the composition of our income and assets and the market value of our assets from time to time, there can be no assurance that we will not be a PFIC for any taxable year. If we were a PFIC for any taxable year during which a U.S. Holder held shares, certain adverse U.S. federal income tax consequences could apply to the U.S. Holder.

Information Reporting and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries may be subject to information reporting and backup withholding unless the U.S. Holder is an exempt recipient or, in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is timely furnished to the Internal Revenue Service.

Certain U.S. Holders who are individuals (or entities closely held by individuals) may be required to report information relating to their ownership of an interest in certain foreign financial assets, including stock of a non-U.S. person, generally on Form 8938, subject to exceptions (including an exception for stock held in a financial account, in which the account may be reportable if maintained by a non-U.S. financial institution). U.S. Holders should consult their tax advisors regarding their reporting obligations with respect to the shares or ADSs.

10.F.     DIVIDENDS AND PAYING AGENTS

Not applicable.

10.G.     STATEMENT BY EXPERTS

Not applicable.

10.H.     DOCUMENTS ON DISPLAY

We are subject to the reporting requirements of the Securities Exchange Act of 1934. In accordance with these requirements, we file annual reports on Form 20-F and furnish periodic reports on Form 6-K with the SEC.

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These materials, including this annual report and the exhibits thereto, may be inspected and copied at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC in the United States at 1-800-SEC-0330. The SEC also maintains a website at https://www.sec.gov that contains reports and proxy information regarding issuers that file electronically with the SEC. Some of the information may also be found on our website at http://www.smfg.co.jp.

10.I.     SUBSIDIARY INFORMATION

Not applicable.

Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk

On April 1, 2017, we introduced SMBC Group-wide business units and a CxO system. In addition, we transitioned to a company with three statutory committees: a nominating committee, an audit committee and a compensation committee from a board of corporate auditors governance system, following approval at our ordinary general meeting of shareholders held on June 29, 2017. In connection with the foregoing, we changed our risk management system, including by introducing a Group Chief Risk Officer (“CRO”) who reports to the board of directors and its internal committees and conducting various meetings for business executions to centrally identify and manage risks.

Quantitative and Qualitative Information about Risk Management

Basic Approach

As risks in the financial services industry increase in diversity and complexity, risk management (identifying, measuring, and controlling risk) has never been more important in the management of a financial institution.

We conduct business operations based on our overarching Risk Appetite Framework (“RAF”).

Risk Appetite Framework

We introduced RAF to ensure that risk and return levels are appropriate. RAF clarifies the types and levels of risk that we are willing to take on or are prepared to tolerate in order to grow profits based on an accurate understanding of the operating environment and the inherent risks (risk appetite). RAF also contains provisions for controlling SMBC Group-wide risk. Accordingly, RAF provides a central pillar of business management alongside business strategy.

Our basic position and risk appetite specifics are set out in an internal document for SMBC Group-wide use.

Risk Appetite

We have a Risk Appetite Statement that provides a qualitative explanation of our approach to risk taking and risk management for each category: soundness, profitability, liquidity, credit, market, operational and conduct. We also have quantitative measures (i.e. Risk Appetite Measures) that function as benchmarks for risks that we are considering taking and for risk / return.

For the soundness category, our Risk Appetite Statement has “maintain a sufficient level of capital to support sustainable growth” as the overall policy. It also includes specific policies for the fiscal year in question based on our view of the environment and risk. The common equity Tier 1 ratio, the leverage ratio, and several other indicators have been established as Risk Appetite Measures.

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Risk appetite has been established for specific business units or strategies as necessary based on our overall risk appetite.

Operation of Risk Appetite Framework

The process of setting risk appetite for each fiscal year begins with discussions and the sharing of information on the current and future business environment and risks by the Management Committee and the board of directors. Risks that threaten to severely impact management are identified as Top Risks. Risk appetite is then decided on the basis of risk analyses (stress testing) that illustrate the impact if a risk might be realized. Business strategy and policies for the conduct of business are drawn up on the basis of the risk appetite decisions.

The outlooks for the operating environment and risks, including Top Risks, are continuously updated over the course of the fiscal year’s business and the situations relating to risk appetite are regularly monitored through the status of Risk Appetite Measures. Risk Appetite Measures and business strategies are revised as necessary.

Three risk management levels are set for Risk Appetite Measures, which are monitored accordingly.

Comprehensive Risk Management

The risks that need to be managed on an SMBC Group-wide basis have been defined as credit risk, market risk, liquidity risk, and operational risk. Risks are managed based on their characteristics.

In addition, necessary guidance is provided to SMBC Group companies in identifying categories of risk they need to address in their particular businesses. These risk categories are continuously reviewed and new ones may be added in response to changes in the operating environment.

Thorough assessments of the operating environment and risks, including Top Risks, are carried out to ensure effective operation of RAF, after which risks are managed systematically through frameworks for risk analysis via stress testing and risk capital management.

Types of Risk to be Managed

We classify risk into the following categories:

Credit Risk. Credit risk is the possibility of a loss arising from a credit event, such as deterioration in the financial condition of a borrower, that causes an asset (including off-balance sheet transactions) to lose value or become worthless.

Market Risk. Market risk is the possibility that fluctuations in interest rates, foreign exchange rates or stock prices will change the market value of financial products, leading to a loss.

Liquidity Risk. Liquidity risk is the risk that there may be difficulties in raising funds needed for settlements, as a result of the mismatching of uses of funds and sources of funds or unexpected outflows of funds, which may make it necessary to raise funds at higher rates than normal.

Operational Risk. Operational risk is the possibility of losses arising from inadequate or failed internal processes, people, and systems or from external events.

Top Risks

We identify those risks that threaten to significantly impact management as Top Risks.

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The selection of Top Risks involves comprehensive screening of risk factors, evaluation of each risk scenario’s possibility of occurrence and potential impact on management, and discussion in the Risk Management Committee and the Management Committee. Top Risks are utilized to enhance risk management by being incorporated into discussions of RAF and the formulation of business strategies and into the creation of risk scenarios for stress testing.

Stress Testing

In the current volatile business environment, stress testing is essential for analyzing and estimating the effects of stress events brought about by risks such as economic recession and market turbulence. When establishing our medium-term management plan or annual business plan, we conduct stress testing to appraise the likely financial impact of various stress events on the SMBC Group, so that we can prepare actions in advance to deal with such events as they occur.

Stress testing consists of four processes: scenario design, scenario finalization, calculation of the impact on financial items, and confirmation by the Management Committee. In the scenario design process, scenarios are designed by the Corporate Risk Management Department after compiling information on our Top Risks and the views of related departments on such factors as future global trends. In the scenario finalization process, scenarios are revised as necessary based on the outcome of discussions between specialists and related departments. In the calculation of the impact on financial items process, we calculate the financial impact under each scenario and analyze their aggregate on financial items such as the Common Equity Tier 1 ratios. After these three processes, the scenarios and impact on financial items are reported to the Management Committee for verification of the appropriateness of business strategy.

Risk Capital Management

In managing credit risk, market risk, and operational risk affecting the entire SMBC Group, we apply a uniform standard, risk capital based on value at risk (“VaR”), for use in monitoring and managing risks. This standard is applied while taking into account the characteristics of each risk and of the businesses of SMBC Group companies. Specific risk capital measures include setting upper limits for risk exposure based on SMBC Group-wide and business unit risk appetite and SMBC Group-wide management constitution. Each business unit operates business operation within that limit. Through these precautions, we practice management that maintains an appropriate balance between risks and returns based on a comprehensive perspective and secure sufficient financial soundness.

Disclosures of the objectives, policies and processes to manage each risk and the methods used to measure each risk have been included in “Credit Risk,” “Market Risk and Liquidity Risk” and “Operational Risk.”

Risk Management System

Top management plays an active role in the risk management process out of recognition for the importance of risk management. The SMBC Group-wide basic policies for risk management are determined by the Management Committee before being authorized by the board of directors.

In line with these basic policies for risk management, the functions for managing major risks are consolidated within the Risk Management Unit, which is independent from business units, and we seek to refine our risk management system through such means as enhancing comprehensive reviews of each risk category. In addition, the Internal Audit Unit conducts internal audits on the status of risk management to verify that risk is appropriately managed.

Risk management systems are in place at individual SMBC Group companies that have been established based on the characteristics of their particular businesses and in accordance with the basic policies. Furthermore,

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we are sharing information on SMBC Group-wide risk management and strengthening related systems through the Group CRO Committee, which consists of the Group CRO and risk management representatives from strategically important SMBC Group companies.

Risk Committee

The Risk Committee is an internal committee of the board of directors, composed of outside directors as well as experts from inside and outside of the Company who possess specialized insight.

The Risk Committee meets regularly to discuss risk management topics, including Top Risks and RAF, from a specialist viewpoint. The results are reported to the board of directors as necessary.

Risk Management Committee

Chaired by the Group CRO and consisting of representatives from risk management divisions and business units, the Risk Management Committee is tasked with compiling and sharing information related to SMBC Group-wide risk management and discussing this information as necessary.

The committee discusses risks, RAF, and other matters related to all areas of risk management and reports its results to the Management Committee.

Implementation of Basel Regulation

Basel III is an international agreement on minimum capital, leverage, liquidity and other requirements applicable to internationally active banks. The Basel III capital framework was implemented in Japan from March 31, 2013 pursuant to revised capital adequacy guidelines adopted by the FSA, subject to the phase-in of some requirements, as contemplated by Basel III.

The framework of Basel III is a continuation of Basel II, with multiple approaches to calculating capital requirements; we adopted the advanced IRB approach for credit risk from March 31, 2009, and the AMA for operational risk from March 31, 2008.

Detailed information on our capital ratios is included in “Item 4.B. Business Overview—Regulations in Japan—Regulations Regarding Capital Adequacy and Liquidity” and “Item 5.B. Liquidity and Capital Resources—Capital Management.”

Credit Risk

Credit risk is the risk of incurring losses from decline or loss of the value of an asset (including off-balance sheet items) that is caused by a credit event including but not limited to the deterioration of financial condition of a borrower. Overseas credits transactions also entail country risk, which is closely related to credit risk. Country risk is the risk of incurring losses caused by changes in political or economic conditions. Credit exposures arise primarily from lending activities such as loans and advances, acquiring investment securities, derivative transactions, and off-balance sheet transactions such as unused portion of loan commitments.

Credit Risk Management System

Credit risk is the most significant risk to which we are exposed. The purpose of credit risk management is to keep the credit risk exposure to a permissible level relative to capital, to maintain the quality of assets and to ensure returns commensurate with risk.

At the SMBC Group, the Group CRO formulates credit risk management policies each year on the basis of SMBC Group-wide basic policies for risk management. The Credit & Investment Planning Department,

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responsible for the comprehensive management of credit risk, drafts and administers credit risk regulations including the SMBC Group credit policies, manages non-performing loans (“NPLs”), and performs other aspects of credit portfolio management. Also, the Credit Risk Committee deliberates on matters related to SMBC Group-wide credit portfolios. SMBC Group companies follow the fundamental principles established by us to assess and manage credit risk. Each of SMBC Group companies manages credit risk according to the nature of its business, and assesses and manages the credit risks of individual loans and credit portfolios quantitatively, using consistent standards.

At SMBC, our significant banking subsidiary, the Credit & Investment Planning Department within the Risk Management Unit is responsible for the comprehensive management of credit risk. This department drafts and administers credit policies, the internal rating system, credit authority guidelines, and credit application guidelines, and manages NPLs, including impaired loans, and other aspects of credit portfolio management. The department also cooperates with the Corporate Risk Management Department in quantifying credit risk (risk capital and risk-weighted assets) and controls SMBC’s entire credit risk. Further, the Credit Portfolio Management Department within the Credit & Investment Planning Department strives to stabilize the credit portfolio and manage the risk through credit derivatives, loan asset sales and other instruments.

The credit departments of SMBC within each business unit conduct credit risk management for loans handled by its unit and manage portfolios of its unit. The credit limits they use are based on the baseline amounts that the Credit & Investment Planning Department establishes for each grading category, with particular attention paid to evaluating and managing customers or loans perceived to have particularly high credit risk. The Corporate Research Department engages in research on industries and analyzes the business and financial conditions of borrower enterprises to detect early signs of problems or growth potential. The Credit Administration Department is responsible for handling NPLs of borrowers classified as potentially bankrupt or lower, and formulates plans for workouts, including write-offs, and corporate rehabilitation. The department closely liaises with SMBC Servicer Co., Ltd., an SMBC Group company, which engages in related services to efficiently reduce the amount of NPLs, including through the sale of loans.

The Internal Audit Unit of SMBC, operating independently of the business units, audits asset quality, accuracy of grading and state of credit risk management, and reports the results directly to the board of directors and the Management Committee.

SMBC has established the Credit Risk Committee to undertake control of credit risk and to ensure the overall soundness of the loan operations.

Credit Risk Management Methods

To effectively manage the risk involved in individual loans as well as the credit portfolio as a whole, we first acknowledge that every loan entails credit risk, assess the credit risk posed by each borrower and loan using an internal rating system, and quantify that risk for control purposes.

Credit Risk Evaluation

At SMBC, the Credit & Investment Planning Department manages an internal rating system for each asset control category set according to portfolio characteristics. For example, credits to commercial and industrial (“C&I”) companies, individuals for business purposes (domestic only), sovereigns, public sector entities, and financial institutions are assigned an “obligor grade,” which indicates the borrower’s creditworthiness, and/or “facility grade,” which indicates the collectability of assets taking into account the transaction conditions such as guarantee/collateral, and tenor. The business units determine an obligor grade by first assigning a financial grade using a financial strength grading model and data obtained from the obligor’s financial statements, including net worth and cash flows. The financial grade is then adjusted taking into account the actual state of the obligor’s financial position and qualitative factors to derive the obligor grade. The qualitative factors mainly include the

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expected future cash flows taking into account factors such as historical loss information, the appropriateness of the borrower’s business plan or operational improvement plan, the status of progress of its plan, and the overall support from financial institutions. In the event that the borrower is domiciled overseas, internal ratings for credit are made after taking into consideration the country rank, which represents an assessment of the credit quality of each country based on its political and economic situation, as well as its current account balance and external debt. Obligor grades and facility grades are reviewed once a year and as otherwise necessary, such as when there are changes in the credit situation. Our subsidiaries carry out credit risk evaluations in line with SMBC.

There are also grading systems for loans to individuals such as housing loans and structured finance including project finance, where the repayment source is limited to the cash flows generated by a particular business or asset. For example, the obligor grade of housing loans is determined taking into account various relevant factors such as proportion of the repayment to revenue, proportion of down payment to the value and past due information.

The Credit & Investment Planning Department of SMBC centrally manages the internal rating systems, and designs, operates, supervises and validates the grading models. It validates the grading models (including statistical validation) of main assets following the procedure manual once a year to ensure their effectiveness and suitability.

Quantification of Credit Risk

At SMBC, credit risk quantification refers to the process of estimating the degree of credit risk of a portfolio or individual loan taking into account not just the obligor’s probability of default (“PD”), but also the concentration of risk in a specific customer or industry and the loss impact of fluctuations in the value of collateral, such as real estate and securities.

Specifically, the PD by grade, loss given default (“LGD”), credit quality correlation among obligors, and other parameter values are estimated using the historical data of obligors and facilities stored in a database to calculate the credit risk. Then, based on these parameters, SMBC runs a simulation of simultaneous default using the Monte Carlo Simulation to calculate SMBC’s maximum loss exposure to the estimated amount of the maximum losses that may be incurred. Based on these quantitative results, SMBC allocates risk capital.

Risk quantification is also executed for purposes such as to determine the portfolio’s risk concentration or to simulate economic movements (stress tests), and the results are used for making optimal decisions across the whole range of business operations, including formulating business plans and providing a standard against which individual credit applications are assessed.

Credit Assessment

At SMBC, the credit assessment of corporate loans involves a variety of financial analyses, including cash flows, to predict an enterprise’s capability of loan repayment and its growth prospects. These quantitative measures, when combined with qualitative analyses of industrial trends, the enterprise’s research and development capabilities, the competitiveness of its products or services, and its management caliber, result in a comprehensive credit assessment. The loan application is analyzed in terms of the intended utilization of the funds and the repayment schedule. In the assessment of housing loans for individuals, SMBC employs a credit assessment model based on credit data amassed and analyzed by SMBC over many years, taking into account various relevant factors including proportion of the repayment to revenue, proportion of down payment to the value and past due information.

Credit Monitoring

At SMBC, in addition to analyzing loans at the application stage, the Credit Monitoring System is utilized to reassess obligor grades, and review credit policies for each obligor so that problems can be detected at an early

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stage, and quick and effective action can be taken. The system includes annual monitoring that is carried out each time the financial results of the obligor enterprise are obtained, as well as ad-hoc monitoring that is performed each time credit conditions change.

Credit Portfolio Management

Risk-Taking Within the Scope of Capital

To keep the credit risk exposure to a permissible level relative to capital, the Corporate Risk Management Department of the Company sets a credit risk capital limit for internal control purposes. Under this limit, sub-limits are set for each business unit. The Corporate Risk Management Department conducts monthly monitoring to make sure that these limits are being followed.

Controlling Concentration Risk

As our equity capital may be materially impaired in the event that the credit concentration risk becomes apparent, the Credit & Investment Planning Department of the Company therefore takes measures to manage concentration risks, such as introducing large exposure limits and conducting intensive loan reviews for obligors with large exposures, with an increased focus on industrial sectors with an excessive concentration of credit risk. Further, to manage country risk, SMBC’s Credit Department of the International Banking Unit has credit limit guidelines based on each country’s creditworthiness.

Toward Active Portfolio Management

SMBC’s Credit Portfolio Management Department makes use of credit derivatives, loan asset sales, and other instruments to proactively and flexibly manage its portfolio to stabilize credit risk.

Market Risk and Liquidity Risk

Market risk is the possibility that fluctuations in interest rates, foreign exchange rates, stock prices or other market prices will change the market value of financial products, leading to a loss. The purpose of market risk management is to keep the market risk exposure to a permissible level relative to capital.

Liquidity risk is defined as the uncertainty around our ability to meet our debt obligations without incurring unacceptably large losses. An example of such risk is the possible inability to meet our current and future cash flow/collateral needs, both expected and unexpected. In such cases, we may be required to raise funds at less than favorable rates or be unable to raise sufficient funds for settlement. The purpose of liquidity risk management is to ensure that we are in a position to address our liquidity obligations through monitoring the liquidity gap between assets and liabilities, and by maintaining highly liquid supplementary funding resources.

On the basis of the SMBC Group-wide basic policies for risk management, we have a quantitative management process to control market and liquidity risks on an SMBC Group-wide basis by setting allowable risk limits by company. We at least annually review and identify which companies primarily carry the market and liquidity risks within the SMBC Group. We set permissible levels and upper limits of risk for each identified company in consideration of those companies’ business plans. We ensure that each identified company establishes a risk management system that is appropriate to the risks it faces, and has built-in transparent risk management processes which clearly separates front, middle and back office operations, and establishes a control system of mutual checks and balances.

Framework for Market and Liquidity Risk Management

The board of directors authorizes important matters relating to the management of market and liquidity risks, such as the basic policies and risk limits, which are decided by the Management Committee.

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The Corporate Risk Management Department, which is independent of the business units that directly handle market transactions, manages market and liquidity risks in an integrated manner. The Corporate Risk Management Department not only monitors the current risk situations but also reports regularly to the Management Committee and the board of directors. Furthermore, the Asset Liability Management (“ALM”) Committee meets on a quarterly basis to examine reports on the state of market risk management and to discuss our ALM operation policies. Furthermore, SMBC’s ALM Committee meets on a monthly basis to examine reports on the state of observance of SMBC’s limits on market and liquidity risks and to discuss SMBC’s ALM operations.

The Internal Audit Unit of SMBC also periodically performs internal audits to verify that the risk management framework is functioning properly.

Market Risk Management Methods

Market Risk Management Process

We manage market risk derived from trading activities and non-trading activities, including strategic equity investment and other transactions within the risk capital limit, which is determined by taking into account our shareholders’ equity and other principal indicators of our financial position. We also establish an upper limit on VaR and losses within the risk capital limits.

Our market risk can be divided into various factors: interest rates, foreign exchange rates, equity prices and option risks. We manage each of these risks by employing the VaR method as well as supplemental indicators suitable for managing each risk, such as the basis point value (“BPV”).

VaR is the largest predicted loss that is possible given a fixed confidence interval. For example, our VaR indicates the largest loss that is possible for a holding period of one day and a confidence interval of 99.0%. BPV is the amount of change in assessed value as a result of a one-basis-point (0.01%) movement in interest rates.

Market Risk Measurement Techniques—Value at Risk

The principal SMBC Group companies’ internal VaR model makes use of historical data to prepare scenarios for market fluctuations and, by conducting simulations of gains and losses on a net position basis, the model estimates the maximum losses that may occur. The VaR calculation method we employ for both trading and non-trading activities is based mainly on the following:

• the historical simulation method;

• a one-sided confidence interval of 99.0%;

• a one-day holding period (a one-year holding period for the strategic equity investment portfolio); and

• an observation period of four years (ten years for the strategic equity investment portfolio).

This method is reviewed periodically and refined, if necessary.

The relationship between the VaR calculated by the model and the actual profit and loss data is back-tested periodically. The back-testing results for the SMBC Group’s trading accounts during the fiscal year ended March 31, 2018 are shown below. There were no significant excess losses, which demonstrate that the SMBC Group’s VaR model, with a one-sided confidence interval of 99.0%, is sufficiently reliable.

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Back-Testing Results (Trading Book—SMFG consolidated)

(in ¥100 million)

Trading Activities

Most of our trading activity is undertaken to accommodate the needs of commercial banking customers for interest rate and foreign exchange transactions. However, some interest rate and foreign exchange rate positions are taken using derivatives and other on-balance sheet instruments with the objective of earning a profit from favorable movements in market rates. The overall objective of managing market risk is to avoid unexpected losses due to changes in market prices.

Non-trading Activities

The market risk for non-trading activity arises principally from the interest rate risk of our ALM operations, or banking, including loans, debt investment securities, deposits, and long- and short-term borrowings, and from the equity risk of our strategic investments. ALM operations are regularly reviewed and discussed by the ALM Committee so as not to be heavily exposed to market fluctuations. Strategic equity investment is a portfolio that consists principally of publicly traded Japanese equities. This portfolio, like that of other financial institutions in Japan, has historically included shares of our customers.

VaR Summary for the Fiscal Years Ended March 31, 2018 and 2017

The following tables show our VaR by risk category and these figures are prepared based on the internal reporting provided to management.

Our material market risk exposure categories consist of interest rate risk, foreign exchange risk, equities and commodities risk and others. The section headed “VaR for Trading Activity” shows our VaR for instruments entered into for trading purposes and the VaR model for the trading book includes principal consolidated subsidiaries. The section headed “VaR for Non-Trading Activity” shows our VaR for instruments entered into for purposes other than trading purposes. “Strategic Equity Investment” in the “VaR for Non-Trading Activity” section is a portfolio that consists principally of publicly traded Japanese equities. This portfolio, like that of other financial institutions in Japan, has historically included shares of our customers.

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VaR for Trading Activity

	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	3.2	¥	4.3	¥	3.9	¥	3.6	¥	11.2
Minimum		1.3		1.2		0.0		1.4		3.5
Daily average		2.1		2.4		1.5		2.3		7.2
At March 31, 2018		2.6		3.6		0.0		3.2		8.1
SMFG Consolidated
Maximum	¥	30.9	¥	5.0	¥	11.4	¥	3.6	¥	39.5
Minimum		6.7		1.5		4.3		1.4		14.5
Daily average		12.3		3.0		6.3		2.3		22.1
At March 31, 2018		11.3		4.3		4.3		3.2		21.5
	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	19.2	¥	3.1	¥	5.3	¥	2.5	¥	22.6
Minimum		1.5		1.0		0.3		1.2		3.9
Daily average		8.1		1.7		1.8		1.7		11.8
At March 31, 2017		1.9		1.2		0.4		1.7		3.9
SMFG Consolidated
Maximum	¥	27.9	¥	3.9	¥	5.8	¥	2.5	¥	34.0
Minimum		10.3		1.2		1.1		1.2		13.1
Daily average		16.1		1.9		3.1		1.7		21.4
At March 31, 2017		16.7		1.6		4.2		1.7		23.6

(1) Total for “Maximum,” “Minimum,” and “Daily average” represent the maximum, minimum and daily average of the total of the trading book. For certain subsidiaries, we employ the standardized method and/or the historical simulation method for the VaR calculation method.

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VaR for Non-trading Activity

• Banking

	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	31.5	¥	0.0	¥	39.9	¥	0.0	¥	54.5
Minimum		25.2		0.0		21.5		0.0		38.0
Daily average		27.4		0.0		30.4		0.0		44.4
At March 31, 2018		31.3		0.0		28.1		0.0		45.7
SMFG Consolidated
Maximum	¥	34.0	¥	0.0	¥	39.9	¥	0.0	¥	57.0
Minimum		27.8		0.0		21.6		0.0		40.8
Daily average		30.2		0.0		30.5		0.0		47.2
At March 31, 2018		33.7		0.0		28.1		0.0		48.2
	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	34.2	¥	0.0	¥	38.9	¥	0.0	¥	49.9
Minimum		23.2		0.0		24.7		0.0		37.8
Daily average		27.0		0.0		32.1		0.0		43.0
At March 31, 2017		27.4		0.0		34.2		0.0		44.1
SMFG Consolidated
Maximum	¥	37.3	¥	0.0	¥	38.9	¥	0.0	¥	53.2
Minimum		26.4		0.0		24.8		0.0		40.2
Daily average		30.0		0.0		32.2		0.0		46.1
At March 31, 2017		30.6		0.0		34.3		0.0		47.4

(1) Total for “Maximum,” “Minimum,” and “Daily average” represent the maximum, minimum and daily average of the total of the banking book.

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• Strategic Equity Investment

	Equities risk
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	1,622.9
Minimum		1,309.8
Daily average		1,456.6
At March 31, 2018		1,389.4
SMFG Consolidated
Maximum	¥	1,855.9
Minimum		1,488.1
Daily average		1,664.2
At March 31, 2018		1,603.6
	Equities risk
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	1,421.0
Minimum		1,146.2
Daily average		1,303.7
At March 31, 2017		1,361.8
SMFG Consolidated
Maximum	¥	1,603.9
Minimum		1,272.8
Daily average		1,460.5
At March 31, 2017		1,544.5

Stress Tests

The market occasionally undergoes extreme fluctuations that exceed projections. Therefore, to manage market risk, it is important to run simulations of situations that may occur only once in many years, or so-called stress tests. To prepare for unexpected market swings, we perform stress tests on a monthly basis based on various scenarios.

The limitations of the VaR methodology include the following:

• The use of historical data as a proxy for estimating future events may underestimate the probability of extreme market movements. Past market movement is not necessarily a good indicator of future events;

• The use of a holding period assumes that all positions can be liquidated or hedged in that period of time. This assumption does not fully capture the market risk arising during periods of illiquidity, when liquidation or hedging in that period of time may not be possible;

• The use of a confidence level neither takes account of, nor makes any statement about, any losses that might occur beyond this level of confidence; and

• VaR does not capture all of the complex effects of the risk factors on the value of positions and portfolios and could underestimate potential losses.

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Additional Information for Certain Risks

Interest Rate Risk

To supplement the above limitations of VaR methodologies, the SMBC Group adopts various indices to measure and monitor the sensitivity of interest rates, including delta, gamma and vega risks. The SMBC Group considers BPV as one of the most significant indices to manage interest rate risk. BPV is the amount of change in the value to the banking and trading book as a result of a one-basis-point (0.01%) movement in interest rates. The principal SMBC Group companies use BPV to monitor interest rate risk, not only on a net basis, but also by term to prevent the concentration of interest rate risk in a specific period. In addition, as previously addressed, the SMBC Group enhances the risk management methods of VaR and BPV by using them in combination with back-testing and stress tests.

Interest rate risk substantially changes depending on the method used for recognizing the expected maturity dates of demand deposits that can be withdrawn at any time or the method used for estimating the timing of cancellation prior to maturity of time deposits and consumer housing loans. At SMBC, the maturity of demand deposits that are expected to be left with SMBC for a prolonged period is regarded to be at the longest five years (2.5 years on average), and the cancellation prior to maturity of time deposits and consumer housing loans is estimated based on historical data.

Based on the standards for interest rate risk in the banking book issued by the BCBS in April 2016, the FSA revised the related regulatory guidelines pertaining to monitoring of interest rate risks in the banking book in December 2017. The revised disclosure requirements with respect to the changes in economic value of equity (“DEVE”) and changes in net interest income (“DNII”) in the banking book as a result of interest rate shocks have been applied from March 31, 2018. The tables below present DEVE and DNII of SMBC and SMFG on a consolidated basis at March 31, 2018, respectively.

DEVE is defined as a decline in economic value as a result of an interest rate shock. It is calculated by multiplying the interest rate sensitivity (excluding credit spread) and interest rate change. The FSA implements a “materiality test” to identify banks taking excessive interest rate risks. Under the materiality test, the FSA monitors the ratio of DEVE to Tier 1 capital based on a set of prescribed interest rate shock scenarios. The threshold applied by the FSA is 15% and the ratios for SMBC and SMFG on a consolidated basis at March 31, 2018 were 4.8% and 4.2%, respectively.

DNII is defined as a decline in interest income over a rolling 12-month period as a result of an interest rate shock. It is calculated assuming a constant balance sheet over a forward-looking rolling 12-month period.

	At March 31, 2018
	DEVE		DNII
	(In billions)
SMBC Consolidated
Parallel shock up	¥	450.8	¥	(298.9	)
Parallel shock down		0.0		446.5
Steepener shock		234.6		—
Flattener shock		14.5		—
Short rate shock up		69.9		—
Short rate shock down		0.2		—
Maximum		450.8		446.5

	At March 31, 2018
	(In billions)
Tier 1 Capital	¥	9,423.7

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	At March 31, 2018
	DEVE		DNII
	(In billions)
SMFG Consolidated
Parallel shock up	¥	450.8	¥	(298.9	)
Parallel shock down		0.0		446.5
Steepener shock		234.6		—
Flattener shock		14.5		—
Short rate shock up		69.9		—
Short rate shock down		0.2		—
Maximum		450.8		446.5

	At March 31, 2018
	(In billions)
Tier 1 Capital	¥	10,610.2

Note: DEVE and DNII are calculated by currency at SMBC consolidated level and the results are aggregated across the various currencies. For DNII, only Japanese yen and U.S. dollars are included in the calculation. These are the material currencies where interest rate sensitive assets and liabilities are more than 5% of total assets and liabilities. In addition, DEVE and DNII at March 31, 2017 are not disclosed because the calculation of them is not required for the regulatory purpose.

Under the related regulatory guidelines prior to the revisions pertaining to monitoring of interest rate risks in the banking book published by the FSA in December 2017, a bank would fall into the category of “outlier bank,” as stipulated under Pillar 2 of the Basel Capital Accord, in the event the economic value of a bank declines by more than 20% of total capital as a result of interest rate shocks. This ratio, known as the outlier ratio, was 1.5% for SMBC on a consolidated basis at March 31, 2017, substantially below the 20% criterion. The decline in economic value based on the outlier framework of SMBC on a consolidated basis is shown in the following table.

	At March 31, 2017
	(In billions, except percentages)
SMBC Consolidated
Total	¥	150.5
Impact of yen interest rates		77.2
Impact of U.S. dollar interest rates		50.8
Impact of euro interest rates		8.8
Percentage of total capital		1.5	%

Note: Decline in economic value is the decline of the present value of a banking portfolio after interest rate shocks (1st and 99th percentile of observed interest rate changes using a one-year holding period and an observation period of five years).

Foreign Exchange Risk

The principal SMBC Group companies set risk limits for each currency to manage the concentration of the foreign currency position. The foreign exchange risk is immaterial as shown above in VaR by risk category.

Strategic Equity Investment Risk

We establish limits on allowable risk for strategic equity investments, and monitor the observance of those limits to keep stock price fluctuation risk within acceptable parameters. We have been reducing our strategic equity investments, and the balance is within a permitted level, which is less than 100% of our consolidated Tier 1 Capital. See “Item 4.B. Business Overview—Regulations in Japan—Regulations for Stabilizing the Financial System—Restriction on Aggregate Shareholdings by a Bank.”

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Liquidity Risk Management Methods

We regard liquidity risk as one of the major risks. We manage liquidity risk based on a framework consisting of setting upper limits for “funding gaps,” maintaining high-quality liquid assets in line with the SMBC Group’s risk appetite and establishing contingency plans.

A funding gap is defined as a maturity mismatch between a source of funds and the use of funds. We actively manage this funding gap by setting limits on the size of gaps over a given time horizon and limiting reliance on short-term funding. These limits are established on both an SMBC Group company basis and individual branch basis, taking into account cash management planning, systemic factors and funding status, among other factors. Additionally, funding gap limits are set for individual currencies if necessary. We actively monitor funding gaps on a daily basis. Further, stress tests are regularly carried out by simulating the impact triggered, for example, by the outflow of deposits or having difficulties in funding from money markets, in order to thoroughly comprehend the amount required to fund when the liquidity risk is realized. We also monitor quantitative indicators of the levels of risk exposure to be assumed, such as Liquidity Coverage Ratio. In addition, SMBC, the SMBC Group’s major banking subsidiary, establishes quantitative alert system based on early warning indicators to detect liquidity risks promptly and systematically. Additionally, funding liquidity is maintained by holding assets, such as central bank reserves and government bonds which can be immediately converted to cash, in line with the SMBC Group’s risk appetite, in order to smoothly raise the required funds even during market disruption.

Furthermore, contingency plans are developed at each SMBC Group company to respond to the liquidity risk when being realized, by creating detailed action plans such as lowering the upper limit for the funding gap, depending on the existing situation (i.e. normal, concerned, or critical) and the respective circumstances.

Operational Risk

Operational risk is the possibility of losses arising from inadequate or failed internal processes, people and systems or from external events. Specifically, it covers processing risk, system risk, legal risk, human resources risk, reputational risk and tangible asset risk. We have prepared operational risk management regulations to define the basic rules to be observed across SMBC Group. Under these regulations, we are working to raise the level of sophistication of our management of operational risk across the SMBC Group by providing an effective framework for the identification, assessment, control and monitoring of significant risk factors and by establishing a system for executing contingency and business continuity plans.

Processing risk is the possibility of losses arising from negligent processing by directors and employees, and from accidents or misconducts. We have clarified the divisions responsible for the oversight functions for processing risk management, and we are working to raise the level of sophistication of our management of processing risk across the whole SMBC Group by establishing systems for managing the processing risks faced by SMBC Group companies, ensuring in-office inspection, minimizing losses in the event of processing risk materialization by drafting exhaustive contingency plans, and carrying out thorough quantification of the risk under management as basic principles.

System risk is the possibility of a loss arising from nonconformity to the business strategies, inappropriate technologies applied, changes to the development plan and delay in development when building an information system, and the risk of loss incurred due to the breakdown including those caused by cyberattack, malfunction, deficiency or unauthorized use (unauthorized alteration, destruction, duplication and leakage of the information). We have set the following as basic principles: recognizing information systems as an essential part of management strategy taking into account advances in IT, minimizing system risk by drafting regulations and specific management standards, (including a security policy) and establishing contingency plans to minimize losses if a system risk materializes.

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Item 12. Description of Securities other than Equity Securities

12.A.    DEBT SECURITIES

Not applicable.

12.B.    WARRANTS AND RIGHTS

Not applicable.

12.C.    OTHER SECURITIES

Not applicable.

12.D.    AMERICAN DEPOSITARY SHARES

Under the terms of the deposit agreement, an ADS holder may have to pay the following service fees to the depositary:

Service	Fees
Issuance of ADSs	Up to U.S. 5¢ per ADS issued
Cancellation of ADSs	Up to U.S. 5¢ per ADS canceled
Distribution of cash dividends or other cash distributions	Up to U.S. 5¢ per ADS held
Distribution of ADSs pursuant to stock dividends, free stock distributions or exercises of rights	Up to U.S. 5¢ per ADS held
Distribution of securities other than ADSs or rights to purchase additional ADSs	Up to U.S. 5¢ per ADS held
Depositary services	Up to U.S. 5¢ per ADS held on the applicable record date(s) established by the depositary

An ADS holder will also be responsible for paying certain fees and expenses incurred by the depositary and certain taxes and governmental charges such as:

• taxes (including applicable interest and penalties) and other governmental charges;

• the registration fees applicable to transfers of shares or other deposited securities to or from the name of the custodian, the depositary or any nominees upon the making of deposits or withdrawals, respectively;

• the cable, telex and facsimile transmission and delivery expenses expressly provided in the deposit agreement to be at the expense of the person depositing or withdrawing shares or holders and beneficial owners of ADSs;

• the expenses and charges incurred by the depositary in the conversion of foreign currency;

• the fees and expenses incurred by the depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to shares, deposited securities, ADSs and ADRs; and

• the fees and expenses incurred by the depositary, the custodian or any nominee in connection with the servicing or delivery of deposited securities.

Depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary by the brokers (on behalf of their clients) receiving the newly issued ADSs from the depositary and by the brokers (on behalf of their clients) delivering the ADSs to the depositary for cancellation. The brokers in turn charge these transaction fees to their clients.

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Citibank, N.A., as depositary, has agreed to reimburse the Company for certain expenses the Company incurs in connection with its ADR program, subject to certain ceilings. During the fiscal year ended March 31, 2018, we received $525,000.00 as reimbursement for such expenses.

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PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

None.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

None.

Item 15. Controls and Procedures

Disclosure Controls and Procedures

We carried out an evaluation under the supervision and with the participation of our management, including Takeshi Kunibe, our Director President, and Jun Ohta, our Director Deputy President and Corporate Executive Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) at March 31, 2018. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based upon the evaluation referred to above, Mr. Kunibe and Mr. Ohta concluded that the design and operation of our disclosure controls and procedures at March 31, 2018 were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Our internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management evaluated the effectiveness of our internal control over financial reporting at March 31, 2018 based on the criteria established in “Internal Control—Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation, management has concluded that we maintained effective internal control over financial reporting at March 31, 2018.

166

The effectiveness of our internal control over financial reporting at March 31, 2018 has been audited by KPMG AZSA, our independent registered public accounting firm, as stated in their report appearing on page F-4.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the period covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16A. Audit Committee Financial Expert

Our board of directors has determined that Mr. Shozo Yamazaki is an “audit committee financial expert” as defined in Item 16A of Form 20-F and is “independent” as defined in the listing standards of the NYSE.

Item 16B. Code of Ethics

We have adopted a code of ethics, which is comprised of internal rules included in our business ethics and compliance manual, each of which applies to all our directors, officers and other employees.

On December 27, 2017, with the purpose of enhancing our risk management structure, including compliance, we revised our previous internal rules and established “Principles of Action on Compliance and Risk” and “Policies on Compliance Management.”

A copy of the sections of our business ethics and compliance manual equivalent to the “code of ethics” (as defined in paragraph (b) of Item 16B of Form 20-F) is attached as Exhibit 11 to this annual report.

No waivers of the business ethics and compliance manual have been granted to any of our directors, officers or other employees, during the fiscal year ended March 31, 2018.

Item 16C. Principal Accountant Fees and Services

Fees for Services Provided by KPMG AZSA and its Affiliates

The aggregate fees billed by KPMG AZSA, our independent registered public accounting firm, and its affiliates, for the fiscal years ended March 31, 2018 and 2017 are presented in the following table:

	For the fiscal year ended March 31,
	2018		2017
	(In millions)
Audit fees(1)	¥	5,275	¥	4,764
Audit-related fees(2)		227		206
Tax fees(3)		190		148
All other fees(4)		90		58
Total	¥	5,782	¥	5,176

(1) Audit fees primarily include fees for the audit of our and our subsidiaries’ annual financial statements and fees for the services that are normally provided in connection with our statutory and regulatory filings.

(2) Audit-related fees primarily include fees for attestation and related services that are not reported under audit fees.

(3) Tax fees primarily include fees for tax compliance, assistance with preparation of tax return filings and tax advisory services.

(4) All other fees include fees for advisory services in relation to consideration of examining the effectiveness of subsidiaries’ internal audit systems.

167

Pre-Approval Policies and Procedures

Pursuant to Rule 2-01(c)(7) of Regulation S-X, our audit committee pre-approves all engagements with KPMG AZSA and its affiliates. Under the policies and procedures established by our audit committee, the Company and its subsidiaries must apply to our audit committee for pre-approval on either a periodic basis twice a year for services expected to be performed in the coming months or case-by-case basis before entering into the engagement with KPMG AZSA and its affiliates to perform audit and permitted non-audit services.

Pre-approval is granted by our audit committee prior to entering into the engagement. Additionally, if necessary, full-time audit committee members may consider any case-by-case application for pre-approval on behalf of our audit committee prior to the next scheduled audit committee meeting. Such pre-approvals made by full-time audit committee members are reported to our audit committee at the next scheduled audit committee meeting.

Fees approved pursuant to the procedures described in paragraph 2-01(c)(7)(i)(C) of Regulation S-X, which provides for an exception to the general requirement for pre-approval in certain circumstances, were none for the fiscal years ended March 31, 2018 and 2017.

Item 16D. Exemptions from the Listing Standards for the Audit Committee

Not applicable.

We had previously employed a board of corporate auditors governance system. In order to further enhance our solid corporate governance system, we transitioned to a company with three statutory committees: a nominating committee, an audit committee and a compensation committee, on June 29, 2017. For further information, see “Item 6.C. Board Practices.”

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table sets forth purchases of our common stock by us and our affiliated purchasers during the fiscal year ended March 31, 2018:

	Total number of shares purchased(1)		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Maximum number of shares that may yet be purchased under the plans or programs
April 1 to April 30, 2017		1,446	¥	3,931		—		—
May 1 to May 31, 2017		1,463		4,145		—		—
June 1 to June 30, 2017		1,813		4,162		—		—
July 1 to July 31, 2017		2,675		4,313		—		—
August 1 to August 31, 2017		2,919		4,171		—		—
September 1 to September 30, 2017		2,596		4,153		—		—
October 1 to October 31, 2017		3,146		4,360		—		—
November 1 to November 30, 2017		2,403		4,512		—		—
December 1 to December 31, 2017		4,749		4,785		—		—
January 1 to January 31, 2018		4,046		5,164		—		—
February 1 to February 28, 2018		2,363		4,843		—		—
March 1 to March 31, 2018		1,935		4,615		—		—
Total		31,554	¥	4,511		—		—

(1) A total of 31,554 shares were purchased other than through a publicly announced plan or program during the fiscal year ended March 31, 2018, due to our purchases of shares constituting less than one unit from registered holders of such shares at the current market prices of those shares.

168

On May 14, 2018, we announced that our board of directors resolved to repurchase shares of our common stock and cancel all the repurchased shares. The resolution authorized the repurchase of up to the lesser of (i) an aggregate of 20,000,000 shares of our common stock and (ii) an aggregate of ¥70 billion between May 15, 2018 and July 31, 2018. On June 19, 2018, we completed the repurchase, acquiring 15,368,300 shares of our common stock for ¥70 billion in aggregate. The cancellation of all the repurchased shares is scheduled on August 20, 2018.

Item 16F. Change in Registrant’s Certifying Accountant

None.

Item 16G. Corporate Governance

Companies listed on the NYSE must comply with certain corporate governance standards provided under Section 303A of the NYSE Listed Company Manual. However, NYSE-listed companies that are foreign private issuers, including us, are permitted to follow home country practices in lieu of certain provisions of Section 303A if such foreign private issuers meet certain criteria. We rely on the exemption for home country practices concerning the listing of our ADSs on the NYSE.

Under the Companies Act, we are required to have a corporate governance system with (i) a board of corporate auditors, (ii) an audit and supervisory committee, or (iii) three statutory committees: a nominating committee, an audit committee and a compensation committee. We had previously employed a board of corporate auditors governance system. On June 29, 2017, we transitioned to a company with three statutory committees, following approval at our ordinary general meeting of shareholders.

Foreign private issuers listed on the NYSE are required to provide to their U.S. investors a brief, general summary of the significant differences of corporate governance practices that differ from U.S. companies under NYSE listing standards. The following is a summary of the significant ways in which our corporate governance practices differ from NYSE standards followed by U.S. companies:

• U.S. companies listed on the NYSE are required to have a majority of directors that meet the independence requirements under Section 303A of the NYSE’s Listed Company Manual. Under the Companies Act, we are required to have three statutory committees consisting of members of our board of directors, of which the majority must be outside directors. Currently, seven of our seventeen directors are outside directors who meet the requirements under the Companies Act.

• U.S. companies listed on the NYSE are required to have an audit committee composed entirely of independent directors. Under the Companies Act, we are required to have an audit committee that consists of three or more members of our board of directors, of which the majority must be outside directors. Currently, three of the five members of our audit committee are outside directors that meet the requirements under the Companies Act. Our audit committee satisfies the requirements of Rule 10A-3 under the Exchange Act, including the independence requirements thereunder.

• A NYSE-listed U.S. company is required to have a nominating/corporate governance committee and a compensation committee, all of which must be composed entirely of independent directors. The members of the compensation committee must satisfy additional requirements set forth in Section 303A.02(a)(ii) of the NYSE Listed Company Manual. A compensation committee must also have the authority to, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser. This authority is subject to the committee’s consideration of certain criteria set forth in Section 303A.05(c) of the NYSE Listed Company Manual regarding the independence of the adviser. Under the Companies Act, we are required to establish a nominating committee and a compensation committee, each of which consisting of at least three directors and of which the majority of the members must be outside directors. Currently, five of the six members of our nominating committee and four of the six members of compensation committee are outside directors who meet the requirements under the Companies Act.

169

• A NYSE-listed U.S. company must hold regularly scheduled executive sessions where participants are limited to non-management directors. Under the Companies Act, Japanese corporations are not obliged to hold executive sessions where participants are limited to non-management directors.

• A NYSE-listed U.S. company must adopt a code of business conduct and ethics and must post the code on its website. While we are not required to adopt such code under Japanese law or the rules of stock exchanges in Japan on which we are listed, we maintain our code of conduct and ethics as our standard for corporate conduct to be observed by our directors, officers and employees.

• A NYSE-listed U.S. company must adopt corporate governance guidelines and must post the guidelines on its website. While we are not required to adopt such guidelines under Japanese law, the rules of the stock exchanges in Japan on which we are listed, including the Tokyo Stock Exchange, require listed companies, including us, to comply with the principles of the Corporate Governance Code established by those stock exchanges and, in cases of noncompliance with some or all of the principles, to disclose the reasons for such noncompliance. We established the SMFG Corporate Governance Guideline, in consideration of the Corporate Governance Code, to present our basic views and guidelines on corporate governance and improve our corporate governance system. Our Corporate Governance Guideline is available on our website at http://www.smfg.co.jp.

• A NYSE-listed U.S. company must generally obtain shareholder approval with respect to any equity compensation plan, subject to limited exemptions. Under the Companies Act, companies with three statutory committees such as us are not required to obtain shareholder approval with respect to equity compensation plans. In this case, the compensation committee is required to establish policies in regard to the determination of compensation of the directors and corporate executive officers, including stock compensation plans that utilize restricted stock, and determines the contents of compensation of the individual directors and corporate executive officers in accordance with such policies. For details of the equity compensation plan introduced by us, see “Item 6.E. Share Ownership.”

Item 16H. Mine Safety Disclosure

Not applicable.

170

PART III

Item 17. Financial Statements

We have responded to Item 18 in lieu of this item.

Item 18. Financial Statements

The information required by this item is set forth in our consolidated financial statements starting on page F-1 of this annual report.

Item 19. Exhibits

We have filed the following documents as exhibits to this document:

Exhibit 1.1	Articles of Incorporation of Sumitomo Mitsui Financial Group, Inc., as amended on June  29, 2017, incorporated by reference from our registration statement on Form 20-F (Commission file number 001-34919) filed on June 29, 2017
Exhibit 1.2	Regulations of the Board of Directors of Sumitomo Mitsui Financial Group, Inc., as amended on June 29, 2017, incorporated by reference from our registration statement on Form 20-F (Commission file number 001-34919) filed on June 29, 2017
Exhibit 1.3	Share Handling Regulations of Sumitomo Mitsui Financial Group, Inc., as amended on June  29, 2017, incorporated by reference from our registration statement on Form 20-F (Commission file number 001-34919) filed on June 29, 2017
Exhibit 2.1	Form of Deposit Agreement among the registrant, Citibank, N.A., as Depositary, and all owners and holders from time to time of American Depositary Shares issued thereunder, incorporated by reference from our registration statement on Form 20-F (Commission file number 001-34919) filed on October 20, 2010
Exhibit 8	List of subsidiaries of Sumitomo Mitsui Financial Group, Inc., at March 31, 2018
Exhibit 11	Code of Ethics of Sumitomo Mitsui Financial Group, Inc., as amended on June 22, 2018
Exhibit 12.1	CEO Certification Required by Rule 13a-14(a) (17 CFR 240.13a-14(a))
Exhibit 12.2	CFO Certification Required by Rule 13a-14(a) (17 CFR 240.13a-14(a))
Exhibit 13.1	Certification Required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) and Section  1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)
Exhibit 13.2	Certification Required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) and Section  1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)
Exhibit 15.1	Consent of Independent Registered Public Accounting Firm
Exhibit 101. INS	XBRL Instance Document
Exhibit 101. SCH	XBRL Taxonomy Extension Schema
Exhibit 101. CAL	XBRL Taxonomy Extension Calculation Linkbase
Exhibit 101. DEF	XBRL Taxonomy Extension Definition Linkbase
Exhibit 101. LAB	XBRL Taxonomy Extension Label Linkbase
Exhibit 101. PRE	XBRL Taxonomy Extension Presentation Linkbase

171

We have not included as exhibits certain instruments with respect to our long-term debt. The total amount of our long-term debt securities or that of our subsidiaries, authorized under any instrument does not exceed 10% of our total assets. We hereby agree to furnish to the SEC, upon its request, a copy of any instrument defining the rights of holders of our long-term debt or that of our subsidiaries for which consolidated or unconsolidated financial statements are required to be filed.

172

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Sumitomo Mitsui Financial Group, Inc.
By:	/s/ Takeshi Kunibe
	Name:	Takeshi Kunibe
	Title:	President and Group Chief Executive Officer

Date: June 28, 2018

173

SELECTED STATISTICAL DATA

I. Distribution of Assets, Liabilities and Equity; Interest Rates and Interest Differential

Average Statements of Financial Positions, Interest and Average Rates

The following tables show the average balances of our statement of financial positions items and related interest and average interest rates for the fiscal years ended March 31, 2018, 2017 and 2016. Average balances are generally based on a daily average. Weekly, month-end or quarter-end averages are used for certain average balances where it is not practical to obtain the applicable daily averages. The average balances determined by such methods are considered to be representative of our operations. The allocation of amounts between domestic and foreign is based on the location of the office.

	For the fiscal year ended March 31,
	2018								2017							2016
	Average balance			Interest income			Average rate		Average balance			Interest income		Average rate		Average balance			Interest income		Average rate
	(In millions, except percentages)
Interest-earning assets:
Interest-earning deposits with other banks:
Domestic offices		¥       848,242			¥       4,536			0.53%		¥       762,460			¥       4,099		0.54%		¥       768,976			¥       4,771		0.62%
Foreign offices		4,873,905			73,681			1.51%		4,617,409			41,671		0.90%		5,786,836			35,701		0.62%
Total		5,722,147			78,217			1.37%		5,379,869			45,770		0.85%		6,555,812			40,472		0.62%
Call loans and bills bought:
Domestic offices		81,336			412			0.51%		76,227			467		0.61%		147,992			861		0.58%
Foreign offices		1,730,409			18,950			1.10%		1,303,429			11,598		0.89%		967,442			20,967		2.17%
Total		1,811,745			19,362			1.07%		1,379,656			12,065		0.87%		1,115,434			21,828		1.96%
Reverse repurchase agreements and cash collateral on securities borrowed:
Domestic offices		8,120,363			14,563			0.18%		7,443,668			12,151		0.16%		6,675,810			10,763		0.16%
Foreign offices		1,222,180			25,458			2.08%		1,009,997			17,450		1.73%		741,623			11,248		1.52%
Total		9,342,543			40,021			0.43%		8,453,665			29,601		0.35%		7,417,433			22,011		0.30%
Trading assets(1):
Domestic offices		2,565,770			1,943			0.08%		2,835,336			8,751		0.31%		3,500,759			21,259		0.61%
Foreign offices		176,888			2,857			1.62%		119,777			1,869		1.56%		85,204			1,240		1.46%
Total		2,742,658			4,800			0.18%		2,955,113			10,620		0.36%		3,585,963			22,499		0.63%
Financial assets at fair value through profit or loss(2):
Domestic offices		1,564,439			(23	)		(0.00%)		1,582,142			—		0.00%		1,629,644			4,425		0.27%
Held-to-maturity investments(3):
Domestic offices		784,339			3,244			0.41%		1,809,777			6,756		0.37%		2,964,539			12,880		0.43%
Available-for-sale financial assets(3):
Domestic offices		9,799,861			44,053			0.45%		7,477,480			41,561		0.56%		10,878,176			38,701		0.36%
Foreign offices		3,406,370			54,998			1.61%		2,945,084			39,031		1.33%		2,425,249			33,331		1.37%
Total		13,206,231			99,051			0.75%		10,422,564			80,592		0.77%		13,303,425			72,032		0.54%
Loans and advances(4):
Domestic offices		68,551,116			1,093,584			1.60%		66,948,344			1,082,058		1.62%		63,177,259			1,091,538		1.73%
Foreign offices		28,121,904			810,591			2.88%		25,298,515			643,419		2.54%		26,272,983			611,823		2.33%
Total		96,673,020			1,904,175			1.97%		92,246,859			1,725,477		1.87%		89,450,242			1,703,361		1.90%
Total interest-earning assets:
Domestic offices		92,315,466			1,162,312			1.26%		88,935,434			1,155,843		1.30%		89,743,155			1,185,198		1.32%
Foreign offices		39,531,656			986,535			2.50%		35,294,211			755,038		2.14%		36,279,337			714,310		1.97%
Total		131,847,122			¥2,148,847			1.63%		124,229,645			¥1,910,881		1.54%		126,022,492			¥1,899,508		1.51%
Non-interest-earning assets:
Cash and due from banks		47,107,953								37,551,682							32,203,057
Other non-interest-earning assets		21,130,470								20,498,864							20,359,043
Allowance for loan losses		(653,162	)							(676,296	)						(778,386	)
Total non-interest-earning assets		67,585,261								57,374,250							51,783,714
Total assets		¥199,432,383								¥181,603,895							¥177,806,206
Total assets attributable to foreign offices		23.9	%							23.4	%						24.5	%

A-1

	For the fiscal year ended March 31,
	2018							2017							2016
	Average balance			Interest expense		Average rate		Average balance			Interest expense		Average rate		Average balance			Interest expense		Average rate
	(In millions, except percentages)
Interest-bearing liabilities:
Deposits:
Domestic offices		¥  87,138,742			¥     44,941		0.05%		¥  82,738,015			¥     35,881		0.04%		¥  78,458,170			¥     48,032		0.06%
Foreign offices		25,413,734			337,812		1.33%		23,383,002			213,147		0.91%		22,838,530			154,280		0.68%
Total		112,552,476			382,753		0.34%		106,121,017			249,028		0.23%		101,296,700			202,312		0.20%
Call money and bills sold:
Domestic offices		845,376			302		0.04%		603,065			92		0.02%		2,199,407			1,524		0.07%
Foreign offices		801,565			8,461		1.06%		618,949			5,194		0.84%		663,310			4,059		0.61%
Total		1,646,941			8,763		0.53%		1,222,014			5,286		0.43%		2,862,717			5,583		0.20%
Repurchase agreements and cash collateral on securities lent:
Domestic offices		10,015,944			16,774		0.17%		7,149,638			5,616		0.08%		7,172,312			8,582		0.12%
Foreign offices		4,205,510			44,567		1.06%		3,081,806			15,007		0.49%		2,009,593			6,523		0.32%
Total		14,221,454			61,341		0.43%		10,231,444			20,623		0.20%		9,181,905			15,105		0.16%
Trading liabilities(1):
Domestic offices		2,038,711			6,086		0.30%		2,015,061			10,839		0.54%		2,243,856			17,241		0.77%
Foreign offices		77,691			1,922		2.47%		52,065			616		1.18%		25,565			483		1.89%
Total		2,116,402			8,008		0.38%		2,067,126			11,455		0.55%		2,269,421			17,724		0.78%
Borrowings:
Domestic offices		11,331,752			61,460		0.54%		8,113,368			58,772		0.72%		10,251,890			56,353		0.55%
Foreign offices		983,616			27,736		2.82%		847,353			21,063		2.49%		823,446			15,850		1.92%
Total		12,315,368			89,196		0.72%		8,960,721			79,835		0.89%		11,075,336			72,203		0.65%
Debt securities in issue:
Domestic offices		9,298,368			166,769		1.79%		8,320,124			130,613		1.57%		7,999,705			120,285		1.50%
Foreign offices		2,180,438			24,005		1.10%		2,193,406			16,324		0.74%		3,044,714			14,887		0.49%
Total		11,478,806			190,774		1.66%		10,513,530			146,937		1.40%		11,044,419			135,172		1.22%
Other interest-bearing liabilities:
Domestic offices		102,683			524		0.51%		95,660			579		0.61%		93,104			676		0.73%
Foreign offices		23,466			618		2.63%		3,531			50		1.42%		1,960			50		2.55%
Total		126,149			1,142		0.91%		99,191			629		0.63%		95,064			726		0.76%
Total interest-bearing liabilities:
Domestic offices		120,771,576			296,856		0.25%		109,034,931			242,392		0.22%		108,418,444			252,693		0.23%
Foreign offices		33,686,020			445,121		1.32%		30,180,112			271,401		0.90%		29,407,118			196,132		0.67%
Total		154,457,596			¥   741,977		0.48%		139,215,043			¥   513,793		0.37%		137,825,562			¥   448,825		0.33%
Non-interest-bearing liabilities:
Non-interest-bearing demand deposits		19,997,470							17,736,696							14,715,274
Other non-interest-bearing liabilities		11,490,957							12,230,267							12,999,027
Total non-interest-bearing liabilities		31,488,427							29,966,963							27,714,301
Total equity		13,486,360							12,421,889							12,266,343
Total equity and liabilities		¥199,432,383							¥181,603,895							¥177,806,206
Total liabilities attributable to foreign offices		20.2	%						20.2	%						20.5	%
Net interest income and interest rate spread					¥1,406,870		1.15%					¥1,397,088		1.17%					¥1,450,683		1.18%
Net interest income as a percentage of total interest-earning assets							1.07%							1.12%							1.15%

(1) The net amount of interest income on trading assets and interest expense on trading liabilities is reported as net trading income in our consolidated income statement.

(2) Interest income on financial assets at fair value through profit or loss is reported in net income from financial assets at fair value through profit or loss in our consolidated income statement.

(3) Taxable investment securities and non-taxable investment securities are not disclosed separately because the aggregate effect of these average balances and interest income would not be material. In addition, the yields on tax-exempt obligations have not been calculated on a tax equivalent basis because the effect of such calculation would not be material.

(4) Loans and advances include impaired loans and advances. The amortized portion of net loan origination fees is included in interest income on loans and advances.

A-2

Analysis of Net Interest Income

The following tables show the changes to our net interest income attributable to changes in the volume and changes in the rates for the fiscal year ended March 31, 2018 compared to the fiscal year ended March 31, 2017 and for the fiscal year ended March 31, 2017 compared to the fiscal year ended March 31, 2016.

Changes attributable to the combined impact of changes in the rates and the volume have been allocated proportionately to the changes in the volume and changes in the rates.

	Fiscal year ended March 31, 2018 compared to fiscal year ended March 31, 2017 Increase / (decrease)									Fiscal year ended March 31, 2017 compared to fiscal year ended March 31, 2016 Increase / (decrease)
	Volume			Rate			Net change			Volume			Rate			Net change
	(In millions)
Interest income:
Interest-earning deposits with other banks:
Domestic offices	¥	456		¥	(19	)	¥	437		¥	(40	)	¥	(632	)	¥	(672	)
Foreign offices		2,427			29,583			32,010			(8,263	)		14,233			5,970
Total		2,883			29,564			32,447			(8,303	)		13,601			5,298
Call loans and bills bought:
Domestic offices		30			(85	)		(55	)		(436	)		42			(394	)
Foreign offices		4,321			3,031			7,352			5,697			(15,066	)		(9,369	)
Total		4,351			2,946			7,297			5,261			(15,024	)		(9,763	)
Reverse repurchase agreements and cash collateral on securities borrowed:
Domestic offices		1,140			1,272			2,412			1,229			159			1,388
Foreign offices		4,049			3,959			8,008			4,487			1,715			6,202
Total		5,189			5,231			10,420			5,716			1,874			7,590
Trading assets(1):
Domestic offices		(765	)		(6,043	)		(6,808	)		(3,503	)		(9,005	)		(12,508	)
Foreign offices		923			65			988			534			95			629
Total		158			(5,978	)		(5,820	)		(2,969	)		(8,910	)		(11,879	)
Financial assets at fair value through profit or loss(2):
Domestic offices		(23	)		—			(23	)		(125	)		(4,300	)		(4,425	)
Held-to-maturity investments:
Domestic offices		(4,139	)		627			(3,512	)		(4,455	)		(1,669	)		(6,124	)
Available-for-sale financial assets:
Domestic offices		11,440			(8,948	)		2,492			(14,692	)		17,552			2,860
Foreign offices		6,686			9,281			15,967			6,939			(1,239	)		5,700
Total		18,126			333			18,459			(7,753	)		16,313			8,560
Loans and advances:
Domestic offices		25,753			(14,227	)		11,526			63,231			(72,711	)		(9,480	)
Foreign offices		76,079			91,093			167,172			(23,302	)		54,898			31,596
Total		101,832			76,866			178,698			39,929			(17,813	)		22,116
Total interest income:
Domestic offices		33,892			(27,423	)		6,469			41,209			(70,564	)		(29,355	)
Foreign offices		94,485			137,012			231,497			(13,908	)		54,636			40,728
Total	¥	128,377		¥	109,589		¥	237,966		¥	27,301		¥	(15,928	)	¥	11,373

A-3

	Fiscal year ended March 31, 2018 compared to fiscal year ended March 31, 2017 Increase / (decrease)									Fiscal year ended March 31, 2017 compared to fiscal year ended March 31, 2016 Increase / (decrease)
	Volume			Rate			Net change			Volume			Rate			Net change
	(In millions)
Interest expense:
Deposits:
Domestic offices	¥	1,837		¥	7,223		¥	9,060		¥	2,448		¥	(14,599	)	¥	(12,151	)
Foreign offices		19,830			104,835			124,665			3,785			55,082			58,867
Total		21,667			112,058			133,725			6,233			40,483			46,716
Call money and bills sold:
Domestic offices		62			148			210			(715	)		(717	)		(1,432	)
Foreign offices		1,747			1,520			3,267			(286	)		1,421			1,135
Total		1,809			1,668			3,477			(1,001	)		704			(297	)
Repurchase agreements and cash collateral on securities lent:
Domestic offices		2,971			8,187			11,158			(27	)		(2,939	)		(2,966	)
Foreign offices		7,035			22,525			29,560			4,344			4,140			8,484
Total		10,006			30,712			40,718			4,317			1,201			5,518
Trading liabilities(1):
Domestic offices		126			(4,879	)		(4,753	)		(1,628	)		(4,774	)		(6,402	)
Foreign offices		405			901			1,306			363			(230	)		133
Total		531			(3,978	)		(3,447	)		(1,265	)		(5,004	)		(6,269	)
Borrowings:
Domestic offices		19,619			(16,931	)		2,688			(13,227	)		15,646			2,419
Foreign offices		3,639			3,034			6,673			471			4,742			5,213
Total		23,258			(13,897	)		9,361			(12,756	)		20,388			7,632
Debt securities in issue:
Domestic offices		16,340			19,816			36,156			4,910			5,418			10,328
Foreign offices		(97	)		7,778			7,681			(4,925	)		6,362			1,437
Total		16,243			27,594			43,837			(15	)		11,780			11,765
Other interest-bearing liabilities:
Domestic offices		41			(96	)		(55	)		18			(115	)		(97	)
Foreign offices		493			75			568			29			(29	)		0
Total		534			(21	)		513			47			(144	)		(97	)
Total interest expense:
Domestic offices		40,996			13,468			54,464			(8,221	)		(2,080	)		(10,301	)
Foreign offices		33,052			140,668			173,720			3,781			71,488			75,269
Total	¥	74,048		¥	154,136		¥	228,184		¥	(4,440	)	¥	69,408		¥	64,968
Net interest income:
Domestic offices	¥	(7,104	)	¥	(40,891	)	¥	(47,995	)	¥	49,430		¥	(68,484	)	¥	(19,054	)
Foreign offices		61,433			(3,656	)		57,777			(17,689	)		(16,852	)		(34,541	)
Total	¥	54,329		¥	(44,547	)	¥	9,782		¥	31,741		¥	(85,336	)	¥	(53,595	)

(1) The net amount of interest income on trading assets and interest expense on trading liabilities is reported as net trading income in our consolidated income statement.

(2) Interest income on financial assets at fair value through profit or loss is reported in net income from financial assets at fair value through profit or loss in our consolidated income statement.

A-4

II. Investment Portfolio

The information as to the value of held-to-maturity investments and available-for-sale financial assets at March 31, 2018, 2017 and 2016 is presented on “Item 5.A. Operating Results—Financial Condition—Investment Securities.”

The following table shows the book values, maturities and weighted average yields of held-to-maturity investments and available-for-sale financial assets, excluding equity instruments, at March 31, 2018. Weighted average yields are calculated based on amortized cost. Yields on tax-exempt obligations have not been calculated on a tax equivalent basis because the effect of such a calculation would not be material.

	Not later than one year					Later than one year and not later than five years					Later than five years and not later than ten years					Later than ten years					Total
	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
	(In millions, except percentages)
Held-to-maturity investments:
Domestic:
Japanese government bonds	¥	92,033		1.38	%	¥	280,426		0.13	%	¥	—		—		¥	—		—		¥	372,459		0.44	%
Japanese municipal bonds		—		—			—		—			—		—			—		—			—		—
Japanese corporate bonds		—		—			—		—			—		—			—		—			—		—
Total domestic		92,033		1.38	%		280,426		0.13	%		—		—			—		—			372,459		0.44	%
Foreign:
U.S. Treasury and other U.S. government agency bonds		—		—			—		—			—		—			—		—			—		—
Bonds issued by other governments and official institutions		—		—			—		—			—		—			—		—			—		—
Other debt instruments		—		—			—		—			—		—			—		—			—		—
Total foreign		—		—			—		—			—		—			—		—			—		—
Total	¥	92,033		1.38	%	¥	280,426		0.13	%	¥	—		—		¥	—		—		¥	372,459		0.44	%
Available-for-sale financial assets:
Domestic:
Japanese government bonds	¥	3,077,986		(0.24	%)	¥	3,937,851		(0.04	%)	¥	348,772		(0.02	%)	¥	320,694		0.51	%	¥	7,685,303		(0.09	%)
Japanese municipal bonds		18		2.50	%		21,741		0.05	%		25,255		0.12	%		18		1.73	%		47,032		0.09	%
Japanese corporate bonds		—		—			74,984		0.07	%		48,676		0.19	%		172,941		0.52	%		296,601		0.35	%
Total domestic		3,078,004		(0.24	%)		4,034,576		(0.03	%)		422,703		0.01	%		493,653		0.51	%		8,028,936		(0.06	%)
Foreign:
U.S. Treasury and other U.S. government agency bonds		236,819		1.14	%		1,367,758		1.68	%		1,540,584		1.75	%		101,485		2.88	%		3,246,646		1.71	%
Bonds issued by other governments and official institutions		1,495,513		1.23	%		198,506		2.19	%		315,968		0.53	%		177,463		0.60	%		2,187,450		1.16	%
Mortgage-backed securities(1)		—		—			—		—			232		1.81	%		487,951		3.00	%		488,183		3.00	%
Other debt instruments		223,848		3.19	%		56,973		3.95	%		34,429		1.65	%		16,241		0.43	%		331,491		3.03	%
Total foreign		1,956,180		1.44	%		1,623,237		1.82	%		1,891,213		1.56	%		783,140		2.39	%		6,253,770		1.69	%
Total	¥	5,034,184		0.42	%	¥	5,657,813		0.50	%	¥	2,313,916		1.29	%	¥	1,276,793		1.69	%	¥	14,282,706		0.71	%

(1) Foreign mortgage-backed securities primarily consist of securities of Government National Mortgage Association, which are guaranteed by the U.S. government.

Excluding securities of the U.S. government and U.S. government agencies and corporations and Japanese government bonds, there are no investments in any individual issuers held in our investment portfolio which exceeded 10% of shareholders’ equity in the consolidated statement of financial position at March 31, 2018.

A-5

III. Loan Portfolio

The following table shows our outstanding loans and advances by the domicile and industry type of the borrowers at March 31, 2018, 2017, 2016, 2015 and 2014. The classification of loans and advances by industry is based on the industry segment loan classification as defined by the Bank of Japan (“BOJ”) for regulatory reporting purposes.

	At March 31,
	2018			2017			2016			2015			2014
	(In millions)
Domestic:
Manufacturing	¥	7,961,620		¥	9,578,147		¥	8,298,576		¥	8,061,654		¥	8,018,568
Agriculture, forestry, fisheries and mining		145,957			174,021			184,314			171,855			177,012
Construction		947,765			1,151,989			1,169,900			1,150,616			1,152,388
Transportation, communications and public enterprises		5,424,054			5,365,225			5,258,899			5,175,949			5,086,361
Wholesale and retail		5,288,767			5,721,005			5,548,103			5,664,385			5,505,570
Finance and insurance		2,777,862			2,844,546			2,684,865			2,869,967			2,537,347
Real estate and goods rental and leasing		9,017,664			10,101,846			9,587,757			8,766,724			8,117,000
Services		4,255,228			4,885,247			4,960,352			4,776,706			4,855,536
Municipalities		1,000,286			1,216,211			1,374,306			1,353,949			1,279,010
Lease financing		14,629			2,706,641			2,212,048			2,211,773			2,133,760
Consumer(1)		16,363,489			19,096,755			18,935,521			18,817,259			19,086,241
Others		4,633,306			5,178,461			2,989,278			3,211,240			3,159,438
Total domestic		57,830,627			68,020,094			63,203,919			62,232,077			61,108,231
Foreign:
Public sector		372,008			299,746			236,290			164,495			163,685
Financial institutions		4,496,646			4,588,001			4,067,764			3,880,655			3,450,482
Commerce and industry		21,023,885			21,041,905			20,451,545			20,010,729			16,435,047
Lease financing		357,660			404,658			357,072			308,128			267,394
Others		1,779,101			1,836,322			1,481,455			1,375,624			947,826
Total foreign		28,029,300			28,170,632			26,594,126			25,739,631			21,264,434
Gross loans and advances		85,859,927			96,190,726			89,798,045			87,971,708			82,372,665
Adjust: Unearned income, unamortized premiums-net and deferred loan fees-net		(239,181	)		(236,425	)		(212,957	)		(206,440	)		(177,018	)
Less: Allowance for loan losses		(491,676	)		(680,456	)		(722,717	)		(793,552	)		(950,665	)
Net loans and advances	¥	85,129,070		¥	95,273,845		¥	88,862,371		¥	86,971,716		¥	81,244,982

(1) The balance in Consumer mainly consists of housing loans. The housing loan balances amounted to ¥11,482,678 million, ¥13,766,771 million, ¥13,984,755 million, ¥14,087,453 million and ¥14,420,225 million at March 31, 2018, 2017, 2016, 2015 and 2014, respectively.

A-6

Maturities and Sensitivities of Loans and Advances to Changes in Interest Rates

The following table shows the maturities of loans and advances by the domicile and industry type of the borrower at March 31, 2018.

	Maturity
	Not later than one year		Later than one year and not later than five years		Later than five years		Total
	(In millions)
Domestic:
Manufacturing	¥	4,173,663	¥	2,482,639	¥	1,305,318	¥	7,961,620
Agriculture, forestry, fisheries and mining		38,917		65,018		42,022		145,957
Construction		512,223		320,893		114,649		947,765
Transportation, communications and public enterprises		1,810,550		2,289,942		1,323,562		5,424,054
Wholesale and retail		2,976,092		1,789,409		523,266		5,288,767
Finance and insurance		1,605,481		901,362		271,019		2,777,862
Real estate and goods rental and leasing		1,966,419		3,802,558		3,248,687		9,017,664
Services		1,288,816		1,849,411		1,117,001		4,255,228
Municipalities		446,525		314,224		239,537		1,000,286
Lease financing		2,229		4,787		7,613		14,629
Consumer		3,678,228		4,181,407		8,503,854		16,363,489
Others		1,939,994		1,002,939		1,690,373		4,633,306
Total domestic		20,439,137		19,004,589		18,386,901		57,830,627
Foreign:
Public sector		24,867		292,206		54,935		372,008
Financial institutions		2,039,934		2,152,491		304,221		4,496,646
Commerce and industry		6,651,323		10,046,923		4,325,639		21,023,885
Lease financing		45,285		236,466		75,909		357,660
Others		555,118		879,785		344,198		1,779,101
Total foreign		9,316,527		13,607,871		5,104,902		28,029,300
Total	¥	29,755,664	¥	32,612,460	¥	23,491,803	¥	85,859,927

The above loans and advances due after one year which had predetermined interest rates and floating or adjustable interest rates at March 31, 2018 are shown below:

	Domestic		Foreign		Total
	(In millions)
Predetermined rate	¥	12,233,092	¥	2,343,758	¥	14,576,850
Floating or adjustable rate		25,158,398		16,369,015		41,527,413
Total	¥	37,391,490	¥	18,712,773	¥	56,104,263

Impaired Loans and Advances

Our credit risk elements analyzed by categories for loans and advances differ from those required by the U.S. Securities and Exchange Commission. Our impaired loans and advances are comprised of “potentially bankrupt, effectively bankrupt and bankrupt (loans and advances),” “past due three months or more (loans),” “restructured (loans)” and “other impaired (loans and advances).” “Potentially bankrupt, effectively bankrupt and bankrupt (loans and advances)” comprises of loans and advances to the borrowers that are perceived to have a high risk of falling into bankruptcy, may not have been legally or formally declared bankrupt but are essentially bankrupt, or have been legally or formally declared bankrupt. Loans classified as “past due three months or more

A-7

(loans)” represent those loans that are three months or more past due as to principal or interest, which are not included in “potentially bankrupt, effectively bankrupt and bankrupt (loans and advances).” The category “restructured (loans)” comprises of loans not included above for which the terms of the loans have been modified to grant concessions because of problems with the borrower. Examples of modifications to grant concessions include reductions of the original interest rate, deferrals of interest payments, deductions of the contractual repayment amounts and extensions of principal repayments such as the extension of the repayment date and the suspension of contracted repayments. “Other impaired (loans and advances)” represent impaired loans and advances, which are not included in “potentially bankrupt, effectively bankrupt and bankrupt (loans and advances),” “past due three months or more (loans),” or “restructured (loans),” but for which information about credit problems cause management to classify them as impaired loans and advances. All loans and advances for which management has serious doubts about the ability of the borrowers to comply in the near future with the repayment terms are included in impaired loans and advances.

An allowance is recorded if there is objective evidence of impairment and the carrying value of the loans and advances exceeds the present value of their estimated future cash flows discounted at the original effective interest rate. Cash receipts on impaired loans and advances are recorded as a credit to the balance of loans and advances on the statement of financial position. To the extent that cash receipts are different from expectations built into the calculation of the recoverable amount of the loans and advances, the amount of allowance for loan losses is revised. In accordance with IFRS, the accrual of interest as per the contractual terms is discontinued when loans and advances are determined to be impaired. Interest income recognized in the consolidated income statement on impaired loans and advances represents the accretion of the net present value of the written down amount due to the passage of time based on the original effective interest rate of the loans and advances.

A-8

The following table shows the distribution of impaired loans and advances by “potentially bankrupt, effectively bankrupt and bankrupt (loans and advances),” “past due three months or more (loans),” “restructured (loans),” and “other impaired (loans and advances)” at March 31, 2018, 2017, 2016, 2015 and 2014 by the domicile and industry type of the borrowers.

	At March 31,
	2018			2017			2016			2015			2014
	(In millions)
Potentially bankrupt, effectively bankrupt and bankrupt (loans and advances):
Domestic:
Manufacturing	¥	62,322		¥	106,178		¥	119,318		¥	149,686		¥	183,257
Agriculture, forestry, fisheries and mining		6,369			2,250			2,843			7,146			3,251
Construction		10,439			24,430			25,932			36,903			69,144
Transportation, communications and public enterprises		15,494			23,692			38,008			52,168			56,782
Wholesale and retail		74,332			104,472			125,241			156,753			208,491
Finance and insurance		3,021			4,135			8,302			9,551			13,378
Real estate and goods rental and leasing		32,634			126,179			133,324			198,714			291,665
Services		50,858			91,943			126,781			161,384			192,191
Lease financing		—			7,513			16,122			18,522			21,079
Consumer		157,221			194,721			213,931			223,464			238,563
Others		23,081			25,059			32,503			43,443			59,812
Total domestic		435,771			710,572			842,305			1,057,734			1,337,613
Foreign:
Public sector		—			—			31			14			14
Financial institutions		30			29			28			19,720			2,647
Commerce and industry		144,975			157,227			148,475			146,821			131,254
Lease financing		—			11,892			11,104			8,969			8,623
Others		22,383			23,890			5,682			6,152			4,566
Total foreign		167,388			193,038			165,320			181,676			147,104
Total		603,159			903,610			1,007,625			1,239,410			1,484,717
Past due three months or more (loans):
Domestic		21,649			20,808			21,861			23,586			25,959
Foreign		—			11,449			7,962			398			437
Total		21,649			32,257			29,823			23,984			26,396
Restructured (loans):
Domestic		136,582			155,100			164,035			144,628			247,351
Foreign		17,567			25,741			22,401			43,330			37,475
Total		154,149			180,841			186,436			187,958			284,826
Other impaired (loans and advances):
Domestic		93,175			103,777			126,211			140,858			152,873
Foreign		6,736			8,203			2,492			5,892			1
Total		99,911			111,980			128,703			146,750			152,874
Gross impaired loans and advances		878,868			1,228,688			1,352,587			1,598,102			1,948,813
Less: Allowance for loan losses for impaired loans and advances		(369,386	)		(532,451	)		(613,510	)		(699,207	)		(857,095	)
Net impaired loans and advances	¥	509,482		¥	696,237		¥	739,077		¥	898,895		¥	1,091,718

A-9

Interest Foregone on Impaired Loans and Advances

Interest income which would have been accrued at the original terms on domestic impaired loans and advances during the fiscal year ended March 31, 2018 was ¥26.9 billion, of which ¥14.7 billion was included in profit or loss for the fiscal year then ended. Interest income which would have been accrued at the original terms on foreign impaired loans and advances during the fiscal year ended March 31, 2018 was ¥5.8 billion, of which ¥4.2 billion was included in profit or loss for the fiscal year then ended.

Cross-border Outstanding

Cross-border outstandings are defined as loans, acceptances, interest-earning deposits with other banks, other interest-earning investments and any other monetary assets denominated in Japanese yen or other non-local currencies. Local currency outstandings are netted out from cross-border outstandings. This cross-border disclosure is based on the reports to the BOJ required under Japanese foreign exchange-related laws. The following tables list the country for which cross-border outstandings exceeded 0.75% of consolidated total assets at March 31, 2018, 2017 and 2016.

	At March 31, 2018
	Public institutions		Banks		Others		Total		% of total assets			Undrawn commitments
	(In millions, except percentages)
United Kingdom	¥	5,507	¥	222,918	¥	1,425,584	¥	1,654,009		0.86	%	¥	1,242,180
	At March 31, 2017
	Public institutions		Banks		Others		Total		% of total assets			Undrawn commitments
	(In millions, except percentages)
United Kingdom	¥	4,403	¥	275,243	¥	1,451,955	¥	1,731,601		0.91	%	¥	1,560,865
	At March 31, 2016
	Public institutions		Banks		Others		Total		% of total assets			Undrawn commitments
	(In millions, except percentages)
United Kingdom	¥	1,852	¥	556,271	¥	1,215,588	¥	1,773,711		0.98	%	¥	1,422,058

Loan Concentrations

At March 31, 2018, there were no concentrations of loans and advances to a single industry group of borrowers, as defined by the BOJ industry segment loan and advance classifications, which exceeded 10% of our consolidated total loans and advances, except for loans and advances in a category disclosed in the table of outstanding loans and advances above.

A-10

IV. Summary of Loan Loss Experience

The following table shows an analysis of our loan loss experience by the borrowers’ domicile and industry type for the fiscal years ended March 31, 2018, 2017, 2016, 2015 and 2014.

	For the fiscal year ended March 31,
	2018			2017			2016			2015			2014
	(In millions, except percentages)
Allowance for loan losses at beginning of period	¥	680,456		¥	722,717		¥	793,552		¥	950,665		¥	1,262,478
Provision (credit) for loan losses		126,623			141,457			118,750			79,552			(25,806	)
Charge-offs:
Domestic:
Manufacturing		6,439			9,712			20,992			26,516			25,610
Agriculture, forestry, fisheries and mining		1,772			388			33			112			187
Construction		1,478			1,810			6,407			8,593			20,958
Transportation, communications and public enterprises		1,609			9,731			5,891			8,662			5,309
Wholesale and retail		10,998			13,293			14,824			27,357			27,944
Finance and insurance		121			16			423			1,117			533
Real estate and goods rental and leasing		12,947			6,246			21,017			54,003			73,025
Services		9,548			5,731			14,396			21,143			30,970
Lease financing		511			454			651			1,433			1,582
Consumer		112,265			102,383			87,969			88,795			93,616
Others		3,838			7,609			828			2,932			3,300
Total domestic		161,526			157,373			173,431			240,663			283,034
Foreign:
Financial institutions		—			—			—			1,017			599
Commerce and industry		13,529			24,658			13,236			4,571			14,959
Lease financing		24			177			3			167			1,292
Others		9,981			8,300			6,979			3,478			2,797
Total foreign		23,534			33,135			20,218			9,233			19,647
Total		185,060			190,508			193,649			249,896			302,681
Recoveries:
Domestic:
Manufacturing		27			61			80			62			12
Agriculture, forestry, fisheries and mining		—			5			—			—			—
Construction		5			6			6			17			16
Transportation, communications and public enterprises		1			62			5			14			3
Wholesale and retail		28			86			45			72			19
Finance and insurance		1			—			2			1			—
Real estate and goods rental and leasing		2			1			55			47			20
Services		38			40			61			63			33
Consumer		9,535			9,571			9,223			9,234			9,186
Others		21			20			—			7			4
Total domestic		9,658			9,852			9,477			9,517			9,293
Foreign:
Financial institutions		—			15			109			—			25
Commerce and industry		17			5			335			14			3
Others		557			425			427			366			334
Total foreign		574			445			871			380			362
Total		10,232			10,297			10,348			9,897			9,655
Net charge-offs		174,828			180,211			183,301			239,999			293,026
Others(1)		(140,575	)		(3,507	)		(6,284	)		3,334			7,019
Allowance for loan losses at end of period	¥	491,676		¥	680,456		¥	722,717		¥	793,552		¥	950,665
Ratio of net charge-offs to average loans outstanding during the period		0.18	%		0.20	%		0.20	%		0.28	%		0.36	%
Allowance for loan losses applicable to foreign activities:
Balance at beginning of period	¥	128,347		¥	134,664		¥	100,783		¥	73,030		¥	74,868
Balance at end of period	¥	114,306		¥	128,347		¥	134,664		¥	100,783		¥	73,030
Provision for loan losses	¥	19,872		¥	29,699		¥	60,002		¥	32,712		¥	10,462

(1) Others mainly include the exclusion of the allowance for loans and advances made by KUBC and The Minato Bank, both of which had been our subsidiaries but became our equity-method associates, and the exclusion of the allowance for loans and advances made by

A-11

SMFL which were reclassified as assets held for sale during the fiscal year ended March 31, 2018. The amount for the fiscal years ended March 31, 2017, 2016, 2015 and 2014 mainly includes foreign exchange translations.

The following table shows an allocation of the allowance for loan losses by the borrower’s domicile and industry type at March 31, 2018, 2017, 2016, 2015 and 2014.

	At March 31,
	2018					2017					2016					2015					2014
	Amount		% of loans in each category to total loans			Amount		% of loans in each category to total loans			Amount		% of loans in each category to total loans			Amount		% of loans in each category to total loans			Amount		% of loans in each category to total loans
	(In millions, except percentages)
Domestic:
Manufacturing	¥	67,511		9.27	%	¥	101,936		9.96	%	¥	63,720		9.24	%	¥	82,938		9.16	%	¥	113,463		9.73	%
Agriculture, forestry, fisheries and mining		6,047		0.17	%		2,251		0.18	%		2,712		0.21	%		2,673		0.20	%		3,310		0.21	%
Construction		4,171		1.10	%		14,142		1.20	%		15,212		1.30	%		22,532		1.31	%		40,289		1.40	%
Transportation, communications and public enterprises		8,431		6.32	%		16,237		5.58	%		25,119		5.86	%		30,555		5.88	%		27,196		6.17	%
Wholesale and retail		45,321		6.16	%		54,896		5.95	%		73,230		6.18	%		84,941		6.44	%		116,862		6.68	%
Finance and insurance		3,183		3.24	%		3,982		2.96	%		6,886		2.99	%		7,990		3.26	%		11,209		3.08	%
Real estate and goods rental and leasing		14,650		10.50	%		85,813		10.50	%		94,669		10.68	%		127,205		9.97	%		194,706		9.85	%
Services		32,690		4.96	%		52,282		5.08	%		60,735		5.52	%		77,829		5.43	%		96,465		5.89	%
Municipalities		—		1.17	%		—		1.26	%		1		1.53	%		1		1.54	%		1		1.55	%
Lease financing		—		0.02	%		4,114		2.81	%		11,567		2.46	%		13,600		2.51	%		14,487		2.59	%
Consumer		177,013		19.06	%		194,964		19.85	%		208,274		21.09	%		208,661		21.39	%		215,882		23.17	%
Others		18,353		5.38	%		21,492		5.38	%		25,928		3.32	%		33,844		3.65	%		43,765		3.87	%
Total domestic		377,370		67.35	%		552,109		70.71	%		588,053		70.38	%		692,769		70.74	%		877,635		74.19	%
Foreign:
Public sector		75		0.43	%		88		0.31	%		105		0.26	%		48		0.19	%		303		0.20	%
Financial institutions		2,386		5.24	%		3,186		4.77	%		3,347		4.53	%		1,871		4.41	%		3,325		4.19	%
Commerce and industry		92,255		24.49	%		108,076		21.88	%		117,671		22.78	%		86,007		22.75	%		60,646		19.95	%
Lease financing		1,828		0.42	%		6,713		0.42	%		3,998		0.40	%		4,654		0.35	%		3,285		0.32	%
Others		17,762		2.07	%		10,284		1.91	%		9,543		1.65	%		8,203		1.56	%		5,471		1.15	%
Total foreign		114,306		32.65	%		128,347		29.29	%		134,664		29.62	%		100,783		29.26	%		73,030		25.81	%
Total	¥	491,676		100.00	%	¥	680,456		100.00	%	¥	722,717		100.00	%	¥	793,552		100.00	%	¥	950,665		100.00	%

A-12

V. Deposits

The following table shows the average amount of, and the average rate paid on, the following deposit categories for the fiscal years ended March 31, 2018, 2017 and 2016.

	For the fiscal year ended March 31
	2018					2017					2016
	Average amount		Average rate			Average amount		Average rate			Average amount		Average rate
	(In millions, except percentages)
Domestic offices:
Non-interest-bearing demand deposits	¥	18,803,822		—		¥	16,791,818		—		¥	13,840,697		—
Interest-bearing demand deposits		51,369,924		0.00	%		46,984,288		0.00	%		42,036,200		0.02	%
Deposits at notice		998,707		0.00	%		906,703		0.00	%		779,789		0.02	%
Time deposits		22,202,905		0.06	%		22,678,544		0.07	%		23,703,225		0.10	%
Negotiable certificates of deposit		5,919,870		0.01	%		6,064,857		0.02	%		7,027,345		0.08	%
Others		6,647,336		0.45	%		6,103,623		0.30	%		4,911,611		0.23	%
Total domestic offices		105,942,564					99,529,833					92,298,867
Foreign offices:
Non-interest-bearing demand deposits		1,193,648		—			944,878		—			874,577		—
Interest-bearing demand deposits		2,645,695		0.84	%		2,524,336		0.40	%		1,859,753		0.33	%
Deposits at notice		9,332,778		0.94	%		8,212,986		0.52	%		8,598,461		0.32	%
Time deposits		6,930,572		1.98	%		6,266,975		1.53	%		5,277,263		1.40	%
Negotiable certificates of deposit		6,366,473		1.41	%		6,249,295		1.02	%		6,973,391		0.66	%
Others		138,216		0.49	%		129,410		0.48	%		129,662		0.83	%
Total foreign offices		26,607,382					24,327,880					23,713,107
Total	¥	132,549,946				¥	123,857,713				¥	116,011,974

Deposits at notice represent interest-bearing demand deposits which require the depositor to give two or more days’ notice in advance of withdrawal.

The total amount of deposits by foreign depositors included in domestic offices for the fiscal years ended March 31, 2018, 2017 and 2016 were ¥2,303,112 million, ¥2,078,931 million and ¥1,915,610 million, respectively.

At March 31, 2018, the balances and remaining maturities of time deposits and negotiable certificates of deposit issued by domestic offices in amounts of ¥10 million (approximately $94,118 at the median exchange rate for buying and selling spot dollars for yen by telegraphic transfer as determined by SMBC at the end of the current fiscal year) or more and total foreign deposits issued in amounts of $100,000 or more are shown in the following table.

	Time deposits		Negotiable certificates of deposit		Total
	(In millions)
Domestic offices:
Not later than three months	¥	2,708,722	¥	4,624,795	¥	7,333,517
Later than three months and not later than six months		1,220,955		584,741		1,805,696
Later than six months and not later than one year		3,871,407		120,775		3,992,182
Later than one year		1,815,043		77,710		1,892,753
Total	¥	9,616,127	¥	5,408,021	¥	15,024,148
Foreign offices:	¥	7,488,786	¥	5,812,264	¥	13,301,050

A-13

VI. Return on Equity and Assets

The following table shows the ratio of return on equity and assets for the fiscal years ended March 31, 2018, 2017 and 2016.

	For the fiscal year ended March 31,
	2018			2017			2016
Return on average total assets		0.4	%		0.3	%		0.5	%
Return on average shareholders’ equity		6.6	%		6.0	%		8.1	%
Dividends payout ratio(1):
Basic		28.8	%		32.7	%		25.1	%
Diluted		28.8	%		32.7	%		25.1	%
Average shareholders’ equity to average total assets		5.8	%		5.8	%		5.8	%

(1) Dividends declared per common share as a percentage of net profit per share.

VII. Short-Term Borrowings

The following table shows certain additional information with respect to our short-term borrowings for the fiscal years ended March 31, 2018, 2017 and 2016.

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions, except percentages)
Call money, and payables under repurchase agreements and securities lending transactions:
Average balance outstanding during the period	¥	15,868,395		¥	11,453,458		¥	12,044,622
Maximum balance outstanding at any month-end during the period		19,435,458			15,172,714			16,507,993
Balance at end of period		13,213,522			11,512,526			8,059,930
Weighted average interest rate during the period		0.44	%		0.23	%		0.17	%
Weighted average interest rate on balance at end of period		0.74	%		0.34	%		0.16	%
Commercial paper:
Average balance outstanding during the period		3,390,092			3,456,337			4,555,927
Maximum balance outstanding at any month-end during the period		3,671,388			4,095,896			5,301,064
Balance at end of period		2,467,645			3,518,346			4,169,515
Weighted average interest rate during the period		0.56	%		0.44	%		0.28	%
Weighted average interest rate on balance at end of period		1.30	%		0.54	%		0.38	%
Short-term borrowings:
Average balance outstanding during the period		6,442,910			4,091,095			4,757,270
Maximum balance outstanding at any month-end during the period		7,522,143			7,546,496			5,501,614
Balance at end of period		3,943,140			7,546,496			3,073,509
Weighted average interest rate during the period		0.10	%		0.16	%		0.17	%
Weighted average interest rate on balance at end of period		0.20	%		0.09	%		0.20	%

A-14

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

The following consolidated financial statements and the reports thereon by its independent registered public accounting firm are filed as part of this annual report:

	Page
Report of Independent Registered Public Accounting Firm		F-3
Consolidated Financial Statements
Consolidated Statement of Financial Position at March  31, 2018 and 2017		F-6
Consolidated Income Statement for the Fiscal Years Ended March  31, 2018, 2017 and 2016		F-7
Consolidated Statement of Comprehensive Income for the Fiscal Years Ended March 31, 2018, 2017 and 2016		F-8
Consolidated Statement of Changes in Equity for the Fiscal Years Ended March 31, 2018, 2017 and 2016		F-9
Consolidated Statement of Cash Flows for the Fiscal Years Ended March 31, 2018, 2017 and 2016		F-10
Notes to Consolidated Financial Statements		F-11
1    General Information		F-11
2    Summary of Significant Accounting Policies		F-11
3    Critical Accounting Estimates and Judgments		F-31
4    Segment Analysis		F-34
5    Cash and Deposits with Banks		F-38
6    Trading Assets		F-39
7    Derivative Financial Instruments		F-39
8     Financial Assets at Fair Value Through Profit or Loss		F-42
9    Investment Securities		F-43
10  Loans and Advances		F-44
11  Investments in Associates and Joint Ventures		F-46
12  Property, Plant and Equipment		F-48
13  Leases		F-48
14  Intangible Assets		F-51
15  Other Assets		F-55
16  Deposits		F-55
17  Trading Liabilities		F-56
18  Borrowings		F-57
19  Debt Securities in Issue		F-58
20  Provisions		F-59
21  Other Liabilities		F-60
22  Deferred Income Tax		F-61
23  Retirement Benefits		F-63
24  Shareholders’ Equity		F-68
25   Non-Controlling Interests and Equity Attributable to Other Equity Instruments Holders		F-70
26  Net Interest Income		F-72
27  Net Fee and Commission Income		F-73
28  Net Trading Income		F-73
29   Net Income (Loss) from Financial Assets at Fair Value Through Profit or Loss		F-74
30  Net Investment Income		F-74
31  Other Income		F-74
32  Impairment Charges on Financial Assets		F-75
33  General and Administrative Expenses		F-75
34  Other Expenses		F-76
35  Income Tax Expense		F-76

F-1

	Page
36  Earnings Per Share		F-78
37  Transfers of Financial Assets		F-78
38  Assets Pledged and Received as Collateral		F-80
39  Share-Based Payment		F-81
40  Dividends Per Share		F-83
41  Contingency and Capital Commitments		F-84
42   Analysis of Financial Assets and Liabilities by Measurement Basis		F-85
43  Fair Value of Financial Assets and Liabilities		F-87
44  Offsetting of Financial Assets and Liabilities		F-101
45  Financial Risk Management		F-102
46  Related-Party Transactions		F-128
47  Principal Subsidiaries		F-130
48  Structured Entities		F-131
49  Acquisitions		F-134
50  Assets and Disposal Groups Held for Sale		F-138
51   Current and Non-Current Distinction		F-140
52  Condensed Financial Information of Registrant (SMFG)		F-141

F-2

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Sumitomo Mitsui Financial Group, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of Sumitomo Mitsui Financial Group, Inc. and subsidiaries (the “Group”) as of March 31, 2018 and 2017, the related consolidated income statement and consolidated statements of comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended March 31, 2018 and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as of March 31, 2018 and 2017, and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2018, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Group’s internal control over financial reporting as of March 31, 2018, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated June 22, 2018 expressed an unqualified opinion on the effectiveness of the Group’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG AZSA LLC

We have served as the Group’s auditor since 1976.

Tokyo, Japan

June 22, 2018

F-3

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Sumitomo Mitsui Financial Group, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Sumitomo Mitsui Financial Group, Inc. and subsidiaries’ (the “Group”) internal control over financial reporting as of March 31, 2018, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of March 31, 2018, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Group as of March 31, 2018 and 2017, and the related consolidated income statement and consolidated statements of comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended March 31, 2018, and the related notes (collectively, the “consolidated financial statements”), and our report dated June 22, 2018 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-4

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG AZSA LLC

Tokyo, Japan

June 22, 2018

F-5

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Financial Position

			At March 31,
	Note		2018			2017
			(In millions)
Assets:
Cash and deposits with banks		5	¥	54,696,069		¥	47,330,155
Call loans and bills bought				1,881,880			1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed				8,491,703			8,924,385
Trading assets		6		3,169,123			3,776,671
Derivative financial instruments		7		3,885,271			4,063,982
Financial assets at fair value through profit or loss		8		1,547,672			1,599,093
Investment securities		9		20,495,075			19,073,937
Loans and advances		10		85,129,070			95,273,845
Investments in associates and joint ventures		11		730,414			675,704
Property, plant and equipment		12		1,510,132			2,686,055
Intangible assets		14		835,902			1,096,568
Other assets		15		4,043,908			4,321,724
Current tax assets				87,961			240,385
Deferred tax assets		22		19,436			81,961
Assets held for sale		50		5,651,950			134,307
Total assets			¥	192,175,566		¥	191,150,981
Liabilities:
Deposits		16	¥	128,461,527		¥	130,295,290
Call money and bills sold				1,190,929			2,088,020
Repurchase agreements and cash collateral on securities lent				12,022,593			9,424,506
Trading liabilities		17		2,143,899			2,071,584
Derivative financial instruments		7		3,498,016			3,889,694
Borrowings		18		10,652,481			12,245,943
Debt securities in issue		19		10,569,117			11,165,623
Provisions		20		188,267			194,700
Other liabilities		21		6,882,740			7,461,101
Current tax liabilities				55,516			79,371
Deferred tax liabilities		22		397,741			320,201
Liabilities directly associated with the assets held for sale		50		3,616,941			27,665
Total liabilities				179,679,767			179,263,698
Equity:
Capital stock		24		2,338,743			2,337,896
Capital surplus		24		863,505			864,052
Retained earnings		24		5,149,193			4,609,496
Other reserves		24		2,324,349			2,134,042
Treasury stock		24		(12,493	)		(12,913	)
Equity attributable to shareholders of Sumitomo Mitsui Financial Group, Inc.				10,663,297			9,932,573
Non-controlling interests		25		1,232,980			1,505,001
Equity attributable to other equity instruments holders		25		599,522			449,709
Total equity				12,495,799			11,887,283
Total equity and liabilities			¥	192,175,566		¥	191,150,981

The accompanying notes are an integral part of the Consolidated Financial Statements.

F-6

Consolidated Income Statement

			For the fiscal year ended March 31,
	Note		2018			2017		2016
			(In millions, except per share data)
Interest income			¥	2,144,070		¥	1,900,261	¥	1,872,584
Interest expense				733,969			502,338		431,101
Net interest income		26		1,410,101			1,397,923		1,441,483
Fee and commission income				1,131,364			1,066,412		1,031,680
Fee and commission expense				178,867			181,573		131,381
Net fee and commission income		27		952,497			884,839		900,299
Net trading income		28		270,464			183,963		462,682
Net income (loss) from financial assets at fair value through profit or loss		29		(667	)		2,018		12,260
Net investment income		30		424,097			305,327		375,229
Other income		31		755,855			573,825		496,273
Total operating income				3,812,347			3,347,895		3,688,226
Impairment charges on financial assets		32		136,808			212,967		148,356
Net operating income				3,675,539			3,134,928		3,539,870
General and administrative expenses		33		1,813,121			1,752,135		1,706,263
Other expenses		34		792,765			531,759		538,963
Operating expenses				2,605,886			2,283,894		2,245,226
Share of post-tax profit of associates and joint ventures				49,323			29,318		31,056
Profit before tax				1,118,976			880,352		1,325,700
Income tax expense		35		229,378			139,766		372,878
Net profit			¥	889,598		¥	740,586	¥	952,822
Profit attributable to:
Shareholders of Sumitomo Mitsui Financial Group, Inc.			¥	759,998		¥	627,870	¥	843,920
Non-controlling interests				119,878			104,787		106,129
Other equity instruments holders				9,722			7,929		2,773
Earnings per share:
Basic		36	¥	538.84		¥	458.56	¥	617.25
Diluted		36		538.43			458.18		616.83

The accompanying notes are an integral part of the Consolidated Financial Statements.

F-7

Consolidated Statement of Comprehensive Income

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Net profit	¥	889,598		¥	740,586		¥	952,822
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		73,662			8,134			(154,273	)
Share of other comprehensive income (loss) of associates and joint ventures		58			(462	)		558
Income tax relating to items that will not be reclassified		(22,492	)		(2,315	)		48,550
Total items that will not be reclassified to profit or loss, net of tax		51,228			5,357			(105,165	)
Items that may be reclassified subsequently to profit or loss:
Available-for-sale financial assets:
Gains (losses) arising during the period, before tax		582,435			371,438			(551,572	)
Reclassification adjustments for (gains) losses included in net profit, before tax		(275,038	)		(109,990	)		(217,529	)
Exchange differences on translating foreign operations:
Gains (losses) arising during the period, before tax		(75,409	)		(24,063	)		(219,904	)
Reclassification adjustments for (gains) losses included in net profit, before tax		49			(4	)		8
Share of other comprehensive income (loss) of associates and joint ventures		7,827			(21,140	)		(14,362	)
Income tax relating to items that may be reclassified		(96,246	)		(80,074	)		308,623
Total items that may be reclassified subsequently to profit or loss, net of tax		143,618			136,167			(694,736	)
Other comprehensive income (loss), net of tax		194,846			141,524			(799,901	)
Total comprehensive income	¥	1,084,444		¥	882,110		¥	152,921
Total comprehensive income attributable to:
Shareholders of Sumitomo Mitsui Financial Group, Inc.	¥	948,250		¥	769,957		¥	76,791
Non-controlling interests		126,472			104,224			73,357
Other equity instruments holders		9,722			7,929			2,773

The accompanying notes are an integral part of the Consolidated Financial Statements.

F-8

Consolidated Statement of Changes in Equity

	Capital stock		Capital surplus			Retained earnings			Remeasure- ments of defined benefit plans			Available- for-sale financial assets			Exchange differences on translating foreign operations			Treasury stock			Equity attributable to SMFG’s shareholders			Non- controlling interests			Equity attributable to other equity instruments holders			Total equity
	(In millions)
Balance at March 31, 2015	¥	2,337,896	¥	862,971		¥	3,554,688		¥	120,316		¥	2,234,636		¥	404,132		¥	(175,261	)	¥	9,339,378		¥	1,681,472		¥	—		¥	11,020,850
Comprehensive income:
Net profit		—		—			843,920			—			—			—			—			843,920			106,129			2,773			952,822
Other comprehensive income		—		—			—			(101,331	)		(478,002	)		(187,796	)		—			(767,129	)		(32,772	)		—			(799,901	)
Total comprehensive income		—		—			843,920			(101,331	)		(478,002	)		(187,796	)		—			76,791			73,357			2,773			152,921
Issuance of other equity instruments		—		—			—			—			—			—			—			—			—			299,895			299,895
Acquisition and disposal of subsidiaries and businesses-net		—		—			—			—			—			—			—			—			1,371			—			1,371
Transaction with non-controlling interest shareholders		—		—			(3	)		—			—			—			—			(3	)		58			—			55
Dividends to shareholders		—		—			(211,922	)		—			—			—			—			(211,922	)		(76,710	)		—			(288,632	)
Coupons on other equity instruments		—		—			—			—			—			—			—			—			—			(2,773	)		(2,773	)
Redemption of preferred securities		—		—			—			—			—			—			—			—			(142,000	)		—			(142,000	)
Purchase of treasury stock		—		—			—			—			—			—			(192	)		(192	)		—			—			(192	)
Sale of treasury stock		—		—			—			—			—			—			72			72			—			—			72
Loss on sale of treasury stock		—		(18	)		—			—			—			—			—			(18	)		—			—			(18	)
Others		—		550			—			—			—			—			—			550			—			—			550
Balance at March 31, 2016		2,337,896		863,503			4,186,683			18,985			1,756,634			216,336			(175,381	)		9,204,656			1,537,548			299,895			11,042,099
Comprehensive income:
Net profit		—		—			627,870			—			—			—			—			627,870			104,787			7,929			740,586
Other comprehensive income		—		—			—			3,789			173,260			(34,962	)		—			142,087			(563	)		—			141,524
Total comprehensive income		—		—			627,870			3,789			173,260			(34,962	)		—			769,957			104,224			7,929			882,110
Issuance of other equity instruments		—		—			—			—			—			—			—			—			—			149,916			149,916
Acquisition and disposal of subsidiaries and businesses-net		—		—			—			—			—			—			—			—			14,888			—			14,888
Transaction with non-controlling interest shareholders		—		—			26			—			—			—			—			26			437			—			463
Dividends to shareholders		—		—			(205,083	)		—			—			—			—			(205,083	)		(65,956	)		—			(271,039	)
Coupons on other equity instruments		—		—			—			—			—			—			—			—			—			(7,929	)		(7,929	)
Redemption of preferred securities		—		—			—			—			—			—			—			—			(86,140	)		—			(86,140	)
Purchase of treasury stock		—		—			—			—			—			—			(100	)		(100	)		—			—			(100	)
Sale of treasury stock		—		—			—			—			—			—			162,568			162,568			—			—			162,568
Loss on sale of treasury stock		—		(2	)		—			—			—			—			—			(2	)		—			—			(2	)
Others		—		551			—			—			—			—			—			551			—			(102	)		449
Balance at March 31, 2017		2,337,896		864,052			4,609,496			22,774			1,929,894			181,374			(12,913	)		9,932,573			1,505,001			449,709			11,887,283
Comprehensive income:
Net profit		—		—			759,998			—			—			—			—			759,998			119,878			9,722			889,598
Other comprehensive income		—		—			—			51,273			192,366			(55,387	)		—			188,252			6,594			—			194,846
Total comprehensive income		—		—			759,998			51,273			192,366			(55,387	)		—			948,250			126,472			9,722			1,084,444
Issuance of shares under share-based payment transactions		847		848			—			—			—			—			—			1,695			—			—			1,695
Issuance of other equity instruments		—		—			—			—			—			—			—			—			—			149,916			149,916
Acquisition and disposal of subsidiaries and businesses-net		—		—			(1,190	)		1,190			—			—			—			—			(204,257	)		—			(204,257	)
Transaction with non-controlling interest shareholders		—		—			62			—			—			—			—			62			2,440			—			2,502
Dividends to shareholders		—		—			(218,596	)		—			—			—			—			(218,596	)		(61,676	)		—			(280,272	)
Coupons on other equity instruments		—		—			—			—			—			—			—			—			—			(9,722	)		(9,722	)
Redemption of preferred securities		—		—			—			—			—			—			—			—			(135,000	)		—			(135,000	)
Purchase of treasury stock		—		—			—			—			—			—			(142	)		(142	)		—			—			(142	)
Sale of treasury stock		—		—			—			—			—			—			562			562			—			—			562
Loss on sale of treasury stock		—		(41	)		—			—			—			—			—			(41	)		—			—			(41	)
Share-based payment transactions		—		(1,354	)		—			—			—			—			—			(1,354	)		—			—			(1,354	)
Others		—		—			(577	)		865			—			—			—			288			—			(103	)		185
Balance at March 31, 2018	¥	2,338,743	¥	863,505		¥	5,149,193		¥	76,102		¥	2,122,260		¥	125,987		¥	(12,493	)	¥	10,663,297		¥	1,232,980		¥	599,522		¥	12,495,799

The accompanying notes are an integral part of the Consolidated Financial Statements.

F-9

Consolidated Statement of Cash Flows

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Operating Activities:
Profit before tax	¥	1,118,976		¥	880,352		¥	1,325,700
Adjustments for:
Gains on financial assets at fair value through profit or loss and investment securities		(274,371	)		(112,008	)		(235,415	)
Foreign exchange losses		16,612			241,570			556,073
Provision for loan losses		126,623			141,457			118,750
Depreciation and amortization		310,179			301,638			255,971
Share of post-tax profit of associates and joint ventures		(49,323	)		(29,318	)		(31,056	)
Net changes in assets and liabilities:
Net increase of term deposits with original maturities over three months		(210,821	)		(57,503	)		(11,071	)
Net (increase) decrease of call loans and bills bought		4,436			(640,331	)		(18,233	)
Net (increase) decrease of reverse repurchase agreements and cash collateral on securities borrowed		372,563			(698,940	)		(1,040,858	)
Net (increase) decrease of loans and advances		354,622			(6,267,726	)		(2,258,824	)
Net change of trading assets and liabilities and derivative financial instruments		283,731			(250,579	)		(837,291	)
Net increase of deposits		5,881,032			4,505,200			8,230,157
Net increase (decrease) of call money and bills sold		(778,412	)		911,525			(4,615,144	)
Net increase (decrease) of repurchase agreements and cash collateral on securities lent		2,735,586			2,610,655			(1,974,347	)
Net increase (decrease) of other unsubordinated borrowings and debt securities in issue		991,110			2,437,331			(1,499,201	)
Income taxes paid—net		(105,880	)		(337,299	)		(297,767	)
Other operating activities—net		395,318			104,575			420,231
Net cash and cash equivalents provided by (used in) operating activities		11,171,981			3,740,599			(1,912,325	)
Investing Activities:
Purchases of financial assets at fair value through profit or loss and available-for-sale financial assets		(22,488,127	)		(19,640,194	)		(25,968,442	)
Proceeds from sale of financial assets at fair value through profit or loss and available-for-sale financial assets		13,384,847			13,460,988			22,597,455
Proceeds from maturities of financial assets at fair value through profit or loss and available-for-sale financial assets		6,265,527			6,604,279			6,072,497
Purchases of held-to-maturity investments		(2,001	)		—			(266,243	)
Proceeds from maturities of held-to-maturity investments		792,358			1,093,887			1,394,921
Acquisitions of subsidiaries and businesses, net of cash and cash equivalents acquired		(160,862	)		(199,356	)		2,249,594
Investments in associates and joint ventures		(7,744	)		(16,494	)		(62,334	)
Disposal of subsidiaries and businesses, net of cash and cash equivalents disposed		(852,179	)		—			—
Proceeds from sale of investments in associates and joint ventures		19,415			14,696			762
Purchases of property, plant and equipment, and investment properties		(710,838	)		(491,444	)		(529,151	)
Purchases of intangible assets		(136,100	)		(145,001	)		(158,888	)
Proceeds from sale of property, plant and equipment, investment properties and intangible assets		302,027			169,027			148,650
Other investing activities—net		—			1,192			6,697
Net cash and cash equivalents provided by (used in) investing activities		(3,593,677	)		851,580			5,485,518
Financing Activities:
Proceeds from issuance of subordinated borrowings		—			—			18,000
Redemption of subordinated borrowings		(10,000	)		(11,000	)		(40,262	)
Proceeds from issuance of subordinated bonds		104,866			244,315			276,949
Redemption of subordinated bonds		(180,034	)		(371,640	)		(186,785	)
Redemption of preferred securities		(135,000	)		(86,887	)		(142,000	)
Proceeds from issuance of other equity instruments		149,916			149,887			299,895
Dividends paid to shareholders of Sumitomo Mitsui Financial Group, Inc.		(218,569	)		(205,078	)		(211,952	)
Dividends paid to non-controlling interest shareholders		(62,529	)		(65,860	)		(76,744	)
Coupons paid to other equity instruments holders		(9,722	)		(7,929	)		(2,773	)
Purchase of treasury stock and proceeds from sale of treasury stock—net		379			179,657			(137	)
Purchase of other equity instruments and proceeds from sale of other equity instruments—net		(103	)		(102	)		—
Transactions with non-controlling interest shareholders—net		(6	)		386			156
Net cash and cash equivalents used in financing activities		(360,802	)		(174,251	)		(65,653	)
Effect of exchange rate changes on cash and cash equivalents		(45,865	)		(300,075	)		(489,331	)
Net increase of cash and cash equivalents		7,171,637			4,117,853			3,018,209
Cash and cash equivalents at beginning of period		46,244,819			42,126,966			39,108,757
Cash and cash equivalents at end of period	¥	53,416,456		¥	46,244,819		¥	42,126,966
Net cash and cash equivalents provided by (used in) operating activities includes:
Interest and dividends received	¥	2,249,000		¥	2,025,371		¥	1,996,686
Interest paid		711,432			484,362			421,765

The accompanying notes are an integral part of the Consolidated Financial Statements.

F-10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 GENERAL INFORMATION

Sumitomo Mitsui Financial Group, Inc. (“SMFG” or the “Company”) was established on December 2, 2002, as a holding company for Sumitomo Mitsui Banking Corporation (“SMBC”) and its subsidiaries through a statutory share transfer (kabushiki-iten) of all of the outstanding equity securities of SMBC in exchange for the Company’s newly issued securities. The Company is a joint stock corporation with limited liability (Kabushiki Kaisha) incorporated under the Companies Act of Japan (“Companies Act”). Upon the formation of the Company and the completion of the statutory share transfer, SMBC became a direct, wholly owned subsidiary of the Company. The Company has a primary listing on the Tokyo Stock Exchange (First Section), with further listing on the Nagoya Stock Exchange (First Section). The Company’s American Depositary Shares are listed on the New York Stock Exchange.

The Company and its subsidiaries (the “SMBC Group”) offer a diverse range of financial services, including commercial banking, leasing, securities, consumer finance and other services.

The accompanying consolidated financial statements have been authorized for issue by the Management Committee on June 22, 2018.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all the fiscal years presented, unless otherwise stated.

Basis of Preparation

Compliance with International Financial Reporting Standards

The consolidated financial statements of the SMBC Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Basis of measurement

The consolidated financial statements have been prepared under the historical cost basis except for the following:

• trading assets and liabilities are measured at fair value;

• derivative financial instruments are measured at fair value;

• financial assets at fair value through profit or loss are measured at fair value;

• available-for-sale financial assets are measured at fair value; and

• liabilities and the assets recognized in consolidated statement of financial position in respect of defined benefit plans are the present value of the defined benefit obligation less the fair value of plan assets.

Functional and presentation currency

The consolidated financial statements are presented in Japanese yen, which is also the Company’s functional currency. All financial information presented in Japanese yen has been rounded to the nearest million, except as otherwise indicated.

F-11

Critical accounting estimates and judgments

The preparation of the consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the accounting policies. Actual results may differ from these estimates. The notes to the consolidated financial statements set out areas involving a higher degree of judgment or complexity, or areas where assumptions are significant to the consolidated financial statements, such as allowance for loan losses (Notes 10, 32), fair value of financial instruments (Note 43), impairment of available-for-sale financial assets (Notes 9, 32), impairment of goodwill (Note 14), provision for interest repayment (Note 20), retirement benefits (Note 23) and deferred tax assets (Note 22).

Refer to Note 3 “Critical Accounting Estimates and Judgments” for further information.

New and Amended Accounting Standards Adopted by the SMBC Group

During the fiscal year ended March 31, 2018, a number of amendments to standards have become effective; however, they have not resulted in any material changes to the SMBC Group’s accounting policies.

Consolidation

Subsidiaries

Subsidiaries are all entities controlled by the SMBC Group. The SMBC Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The SMBC Group considers all facts and circumstances whether it controls an entity.

Where the relevant activities are directed through voting or similar rights, the SMBC Group considers that it controls an entity if it has the existing rights that give it the current ability to direct the operating and financing policies of the entity, in general by having a shareholding of more than 50% of the voting rights. The existence and effect of potential voting rights that are deemed to be substantive are taken into account when assessing whether the SMBC Group controls another entity.

Where the voting rights are not the dominant factor in deciding who controls the entity, the assessment of control is more complex and requires greater use of judgment. The SMBC Group assesses whether it controls an entity considering all facts and circumstances, such as the purpose and design of the entity, the relevant activities and how to make decisions about those activities.

The SMBC Group also determines whether it is acting as an agent or a principal in assessing whether it has control of another entity. An agent is a party primarily engaged to act on behalf and for the benefit of another party or parties and therefore does not control the entity. To make such judgments, the SMBC Group considers the overall relationship, especially all of the following factors: the scope of its decision-making authority over the entity, the rights held by other parties, the remuneration to which it is entitled in accordance with the remuneration agreement, and its exposure to variability of returns from other interests that it holds in the entity.

The SMBC Group reassesses whether it controls an entity if facts and circumstances indicate that there are changes to one or more of the elements of control.

Subsidiaries are fully consolidated from the date on which the SMBC Group obtains control. They are deconsolidated from the date on which the SMBC Group loses control.

The acquisition method is used to account for the business combinations including the acquisition of subsidiaries by the SMBC Group. The consideration transferred in a business combination is measured at fair

F-12

value, which is calculated as the sum of the acquisition-date fair values of the assets transferred, the liabilities incurred and the equity interests issued. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The SMBC Group’s previously held equity interest in the acquiree is remeasured at fair value at the acquisition date and any gain or loss is recognized in profit or loss. For each business combination, the SMBC Group measures any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. The excess of the aggregate of the consideration transferred, the amount of any non-controlling interest and the acquisition-date fair value of the SMBC Group’s previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed is recorded as goodwill in the consolidated statement of financial position. If the aggregate of the consideration transferred, the amount of any non-controlling interest and the acquisition-date fair value of the SMBC Group’s previously held equity interest in the acquiree is less than the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, the difference is recognized immediately in the consolidated income statement.

Inter-company transactions, balances and unrealized gains on transactions between the SMBC Group companies are eliminated on consolidation. Unrealized losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred. The accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the SMBC Group.

Non-controlling interests

Changes in the SMBC Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Interests in the equity of subsidiaries not attributable to the SMBC Group are reported in the consolidated statement of financial position as a separate component of equity as non-controlling interests. Profits or losses attributable to non-controlling interests are separately reported in the consolidated income statement.

Associates and joint ventures

An associate is an entity over which the SMBC Group has significant influence, but does not control the financial and operating policy decisions of the entity. Significant influence is generally presumed to exist when the SMBC Group holds 20% or more, but less than 50%, of the voting rights.

Entities that are jointly controlled by more than one party, including the SMBC Group, may be determined to be a joint venture.

The SMBC Group accounts for investments in associates and joint ventures using the equity method from the date on which they become associates or joint ventures. The SMBC Group discontinues the use of the equity method from the date on which the SMBC Group ceases to have significant influence or joint control over the investees.

Under the equity method, the SMBC Group’s investments in associates and joint ventures are initially recognized at cost. The carrying amount of the investments are subsequently increased or decreased to recognize the SMBC Group’s share of the post-acquisition profit or loss of the associate or joint venture and other movements included directly in the equity of the associate or joint venture. The SMBC Group’s share of the results of associates and joint ventures is based on the financial statements of its associates and joint ventures, adjusted to conform with the accounting policies of the SMBC Group. Profits on transactions between the SMBC Group and its associates and joint ventures are eliminated to the extent of the SMBC Group’s interest in the associates or joint ventures. Losses are also eliminated to the extent of the SMBC Group’s interest in the associates or joint ventures unless the transaction provides evidence of impairment in the asset transferred.

F-13

The carrying amounts of the investments in associates and joint ventures include goodwill (net of any accumulated impairment loss) arising on the acquisition of the interests in the entities. Because goodwill arising on the acquisition of the interest in an associate or joint venture is not separately recognized, it is not tested for impairment separately. Instead, the entire carrying amount of the investment in an associate or joint venture is tested for impairment as a single asset by comparing its recoverable amount, which is the higher of value in use and fair value less costs to sell, with its carrying amount, whenever there is any objective evidence that the investment is impaired. An impairment loss recognized in prior periods for the investment is reversed only if there has been a change in the estimates used to determine the recoverable amount of the investment since the last impairment loss was recognized. If this is the case, the carrying amount of the investment is increased to its recoverable amount. That increase is a reversal of an impairment loss.

When the SMBC Group’s share of losses in an associate or joint venture exceeds the SMBC Group’s carrying amount of the investment, the SMBC Group does not recognize further losses, unless it has a binding obligation or has made payments on behalf of the entity.

Segment Reporting

The SMBC Group determines its operating segments based on the management approach, which requires operating segments to be identified on the basis of internal reports about components of the entity that are regularly reviewed by management, in order to allocate resources to a segment and to assess its performance.

Foreign Currency Translation

Items included in the financial statements of each of the SMBC Group companies are measured using the currency of the primary economic environment in which the company operates (“the functional currency”). The consolidated financial statements are presented in Japanese yen, which is also the Company’s functional currency.

Transactions and balances

Foreign currency transactions that are denominated or settled in a foreign currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary items denominated in foreign currencies are translated using the exchange rate at the end of the reporting period. Foreign exchange gains and losses resulting from the retranslation and settlement of monetary items are recognized in the consolidated income statement. Non-monetary items that are measured at fair value in a foreign currency are translated into the functional currency using the exchange rate at the date the fair value is determined. Translation differences on certain of these items, such as equity instruments classified as available-for-sale financial assets, are not included in the consolidated income statement but are recognized directly in equity. Non-monetary items that are measured at historical cost in a foreign currency are translated into the functional currency using the exchange rate at the date of the initial transaction.

Foreign operations

The assets and liabilities of foreign operations are translated into the presentation currency of the SMBC Group using the exchange rate at the end of the reporting period, and their income statements are translated using the exchange rates at the dates of the transactions or average exchange rates where these approximate to actual rates.

The exchange differences arising on the translation of a foreign operation are included in other comprehensive income within equity and subsequently included in profit or loss on full or partial disposal of the operation.

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Financial Assets

At initial recognition, the financial assets of the SMBC Group are classified into one of the following categories: trading assets, derivative financial instruments, financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.

Regular way purchases and sales of trading assets, derivative financial instruments, financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets are recognized on the trade date—the date on which the SMBC Group commits to purchase or sell the assets.

Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or where the SMBC Group has transferred substantially all the risks and rewards of ownership at a consolidated level. The SMBC Group consolidates all subsidiaries in accordance with IFRS 10 “Consolidated Financial Statements” before determining derecognition of financial assets under IAS 39 “Financial Instruments: Recognition and Measurement.”

Trading assets

Financial assets are classified as held for trading and included in “Trading assets” in the consolidated statement of financial position, if they are acquired principally for the purpose of selling in the near term or if they are part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. Trading assets are initially recognized at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair values of trading assets are included in “Net trading income” in the consolidated income statement.

Derivative financial instruments

Derivatives are classified as held for trading unless they are designated as hedging instruments, and included in “Derivative financial instruments” in the consolidated statement of financial position. All derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. Derivatives are initially recognized at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair values of derivatives held for trading are included in “Net trading income” in the consolidated income statement.

The derivative component of a hybrid instrument containing both a derivative and non-derivative component (“host contract”) is referred to as an embedded derivative. Certain embedded derivatives are accounted for as separate derivatives, when their economic characteristics and risks are not closely related to those of the host contract and the hybrid instrument is not carried at fair value through profit or loss. These embedded derivatives are measured at fair value and are presented in the consolidated statement of financial position together with the host contract.

Financial assets at fair value through profit or loss

Financial assets, other than those held for trading, are classified as financial assets at fair value through profit or loss and are included in “Financial assets at fair value through profit or loss” in the consolidated statement of financial position, if they meet one of the following criteria, and are so designated by management:

• the designation eliminates or significantly reduces a measurement or recognition inconsistency;

• a group of financial assets is managed and its performance is evaluated on a fair value basis in accordance with a documented risk management or investment strategy; or

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• the instrument contains one or more embedded derivatives unless (a) the embedded derivative does not significantly modify the cash flows that otherwise would be required by the contract or (b) it is clear with little or no analysis that separation is prohibited.

In addition, the SMBC Group classifies the entire hybrid instrument at fair value through profit or loss when the SMBC Group is required to separate an embedded derivative from its host contract, but is unable to measure the embedded derivative separately either at acquisition or at the end of a subsequent reporting period. Financial assets at fair value through profit or loss are initially recognized at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair value of such financial assets are included in “Net income (loss) from financial assets at fair value through profit or loss” in the consolidated income statement.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than:

• those that the SMBC Group intends to sell immediately or in the near term, which are classified as held for trading, and those that the SMBC Group upon initial recognition designates as at fair value through profit or loss;

• those that the SMBC Group upon initial recognition classifies as available-for-sale; or

• those for which the SMBC Group may not recover substantially all of its initial investment, other than because of credit deterioration.

The financial assets classified as loans and receivables are mainly included in “Loans and advances” in the consolidated statement of financial position. Loans and receivables are initially recognized at fair value plus directly attributable transaction costs, and are subsequently measured at amortized cost using the effective interest method.

When the SMBC Group is the lessor in a lease agreement that transfers substantially all of the risks and rewards incidental to ownership of the asset to the lessee, the arrangement is classified as a finance lease and a receivable equal to the net investment in the lease is recognized and presented within “Loans and advances” in the consolidated statement of financial position.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets quoted in an active market with fixed or determinable payments and fixed maturities that the SMBC Group has the positive intention and ability to hold to maturity. If the SMBC Group were to sell other than an insignificant amount of held-to-maturity investments, the remaining investments in this category would be reclassified as available-for-sale financial assets. Held-to-maturity investments are initially recognized at fair value plus directly attributable transaction costs, and are subsequently measured at amortized cost using the effective interest method.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are classified as available-for-sale at initial recognition or are not classified into any of the other categories described above. Available-for-sale financial assets are initially recognized at fair value plus directly attributable transaction costs, and are subsequently measured at fair value.

Gains and losses arising from changes in the fair value of available-for-sale financial assets are recognized in other comprehensive income, until they are derecognized or impaired. At that time, the cumulative gain or loss

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previously recognized in other comprehensive income is recognized in the consolidated income statement. However, interest income calculated using the effective interest method and foreign currency gains and losses on monetary assets classified as available-for-sale are recognized in the consolidated income statement. Dividends on available-for-sale equity instruments are recognized in the consolidated income statement when the entity’s right to receive payment is established.

Financial Liabilities

Financial liabilities, except for held for trading and derivatives, are initially recognized at fair value net of transaction costs incurred, including premiums, discounts and issuance costs, and subsequently measured at amortized cost based on the effective interest method. Financial liabilities carried at amortized cost are mainly “Deposits,” “Borrowings,” and “Debt securities in issue” included in the consolidated statement of financial position.

Financial liabilities are classified as held for trading if they are incurred principally for the purpose of repurchasing in the near term or if they are part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. Financial liabilities held for trading and derivatives are mainly included in “Trading liabilities” and “Derivative financial instruments,” respectively, in the consolidated statement of financial position. Trading liabilities and derivatives are initially measured at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair values of such trading liabilities and derivatives are included in “Net trading income” in the consolidated income statement.

Financial liabilities are derecognized when they have been redeemed or otherwise extinguished.

Hedge Accounting

On April 1, 2017, the SMBC Group started to apply hedge accounting in order to reflect the effect of risk management activities on its consolidated financial statements to mitigate the foreign currency risk on exchange differences arising from the translation of net investments in foreign operations. The SMBC Group uses currency derivatives and foreign currency denominated financial liabilities as hedging instruments. The effective portion of the gain or loss on the hedging instruments is recognized in other comprehensive income, whereas the ineffective portion of the gain or loss on the hedging instruments is recognized in net trading income in the consolidated income statement. The cumulative gain or loss recognized in other comprehensive income is recognized in the profit or loss on the disposal or partial disposal of the foreign operation. For further information about hedge accounting, see Note 7 “Derivative Financial Instruments—Hedge accounting.”

Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is reported in the consolidated statement of financial position, only if the SMBC Group currently has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis or to realize the asset and settle the liability simultaneously. In all other situations, they are presented on a gross basis.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining the fair value, the SMBC Group gives the highest priority to a quoted price in an active market for identical assets or liabilities. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. If there is no active market for the asset or liability, the SMBC Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are

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available to measure the fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. In cases where the SMBC Group manages a group of financial assets and financial liabilities on the basis of its net credit exposure, the fair value of the group of financial assets and financial liabilities is measured on the basis of the price that would be received to sell a net long position (i.e., an asset) or paid to transfer a net short position (i.e., a liability) for the credit risk exposure provided that certain criteria set forth in IFRS 13 “Fair Value Measurement” are met. Details of fair value measurement are described in Note 43 “Fair Value of Financial Assets and Liabilities.”

Recognition of Deferred Day One Profit and Loss

The best evidence of the fair value of a financial instrument at initial recognition is normally the transaction price (i.e., the fair value of the consideration given or received). However, if the fair value at initial recognition is not evidenced by a quoted price in an active market for an identical asset or liability nor based on a valuation technique that uses only data from observable markets, the difference between the fair value at initial recognition and the transaction price, commonly referred to as “day one profit and loss,” is not recognized as a gain or loss but adjusted to be deferred. The SMBC Group did not have any significant deferred day one profit and loss for the fiscal years ended March 31, 2018 and 2017.

Repurchase and Reverse Repurchase Agreements, and Securities Borrowing and Lending Agreements

In the ordinary course of business, the SMBC Group lends or sells securities under agreements to repurchase them at a predetermined price on a future date (“repos”). Since substantially all the risks and rewards are retained by the SMBC Group, the securities remain on the consolidated statement of financial position and a liability is recorded in respect of the consideration received. On the other hand, the SMBC Group borrows or purchases securities under agreements to resell them at a predetermined price on a future date (“reverse repos”). Since the SMBC Group does not retain the risks and rewards of ownership, these transactions are treated as collateralized loans and the securities are not included in the consolidated statement of financial position.

The difference between the sale and purchase price is accrued over the life of the transactions. Securities lent to counterparties remain on the consolidated statement of financial position. Securities borrowed are not recognized in the consolidated statement of financial position, unless these are sold to third parties, at which point the obligation to repurchase the securities is recorded as a trading liability at fair value and any subsequent gain or loss is included in “Net trading income” in the consolidated income statement.

For the fiscal years ended March 31, 2018 and 2017, there were no transactions pursuant to repurchase agreements, securities lending transactions or other transactions involving the transfer of financial assets with an obligation to repurchase such transferred assets that were treated as sales and hence derecognized for accounting purposes.

Impairment of Financial Assets

Loans and advances and held-to-maturity investments

At the end of each reporting period, the SMBC Group assesses whether there is any objective evidence that a financial asset or a group of financial assets is impaired.

A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The criteria that the SMBC Group uses to determine that there is objective evidence of an impairment loss include:

• significant financial difficulty of an issuer or an obligor;

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• a default or delinquency in interest or principal payments;

• restructuring of a financial asset by the SMBC Group due to the borrower’s financial difficulties on terms that the SMBC Group would not otherwise consider;

• indications that a borrower or issuer will enter bankruptcy;

• disappearance of an active market for a security because of the borrower’s financial difficulties; and

• other observable data relating to a group of assets, such as adverse changes in the payment status of borrowers or issuers in the group, or national or local economic conditions that correlate with defaults in the group.

The SMBC Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If the SMBC Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized are not included in the collective assessment of impairment.

The allowance for individually significant impaired financial assets is measured by the discounted cash flow (“DCF”) method, which is used to calculate the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. If financial assets have a variable interest rate, the discount rate for measuring any impairment loss is the effective interest rate determined under the contract, for the current period. The estimated future cash flows are individually calculated taking into account factors including historical loss information, the appropriateness of the borrower’s business plan or operational improvement plan, the status of progress of its plan, the overall support from financial institutions, and the realizable value of any collateral held.

The collective allowance for financial assets is classified into two types: (1) the allowance for impaired financial assets that are not individually significant, and (2) the allowance for non-impaired financial assets, which reflects incurred but not yet identified (“IBNI”) losses for the period between the impairment occurring and the loss being identified. The collective allowance is estimated by applying historical loss experience to groups of homogenous loans. The historical loss experience data includes the number of borrowers for whom objective evidence of impairment has been identified for the most recent rolling one-year period, and the amount ultimately recovered from impaired financial assets. The SMBC Group has collected and accumulated historical data on amounts ultimately recovered from impaired financial assets. The homogeneous groups are determined on the basis of similar credit risk characteristics. For every group, the SMBC Group’s grading processes are established considering asset type, industry, geographical location, collateral type, past-due status and other relevant characteristics (see Note 45 “Financial Risk Management”). These characteristics are relevant to the estimation of future cash flows for groups of such assets as being indicative of the debtors’ ability to pay all amounts due according to the contractual terms of the assets being evaluated. Historical loss experience is adjusted on the basis of current observable data, including bankruptcy trends after the occurrence of significant events which had a negative effect on the global economy and the economies in which a large portion of the SMBC Group’s assets are located, to reflect the effects of current conditions that did not affect the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not currently exist.

The carrying amount of the asset is reduced by the impairment loss either directly or through the use of an allowance account. Changes in the carrying amount of the allowance account are recognized in the consolidated income statement. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the

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debtor’s credit rating), the previously recognized impairment loss is reversed by adjusting the allowance account. The amount of the reversal is recognized in “Impairment charges on financial assets” in the consolidated income statement.

If a financial asset is determined to be uncollectible, it is written off against the related allowance account. Uncollectible financial assets are normally written off when there is no expectation of further recovery after any collateral is foreclosed and the amount of the loss has been determined. Those assets primarily include loans for borrowers that have been legally or formally declared bankrupt and borrowers that may not have been legally or formally declared bankrupt but are essentially bankrupt.

Loans and advances that would otherwise be past due or impaired, but whose terms have been renegotiated without providing any financial concessions, are not classified as impaired loans and advances as the terms of the renegotiated loans and advances do not result in a decrease in the net present value of the loan discounted at its original effective interest rate. The collective allowance is estimated for these loans and advances by including them in homogenous groups on the basis of applying the SMBC Group’s grading process, taking into account the renegotiation and their consequent higher risk status. These loans and advances are continually assessed for impairment until maturity or derecognition.

In addition, provisions for loan commitments are calculated where it is probable that the SMBC Group will incur a loss and recognized in other provisions (see Note 20 “Provisions”).

Available-for-sale financial assets

At the end of each reporting period, the SMBC Group assesses whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity instruments classified as available-for-sale, a significant or prolonged decline in the fair value of the instruments below cost is also considered in determining whether the assets are impaired. In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as for loans and advances and held-to-maturity investments. If any objective evidence of impairment exists for available-for-sale financial assets, the cumulative loss—measured as the difference between the cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss—is removed from equity and recognized in the consolidated income statement.

Impairment losses recognized in the consolidated income statement on equity instruments classified as available-for-sale are not reversed through the consolidated income statement. For debt instruments classified as available-for-sale, if the fair value recovers in a subsequent period and it can be objectively associated with an event occurring after the impairment loss was recognized in the consolidated income statement, the impairment loss is reversed through the consolidated income statement.

Property, Plant and Equipment

All property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Additions and subsequent expenditures are capitalized only to the extent that they enhance the future economic benefits expected to be derived from the assets. Repairs and maintenance costs are expensed as incurred.

Land is not depreciated. Depreciation of other assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

• Buildings: 7–50 years;

• Leased assets: the shorter of the lease term and the estimated useful life, which is generally 5–20 years; and

• Assets for rent (including assets for aircraft leasing business) and others: 2–40 years.

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The residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount. These are included in “Other income” and “Other expenses” in the consolidated income statement.

Intangible Assets

Goodwill

Goodwill represents the excess of the aggregate of the consideration transferred, the amount of any non-controlling interest and the acquisition-date fair value of the SMBC Group’s previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, and is initially recognized at the date of acquisition. Goodwill is allocated to cash-generating units for the purpose of impairment testing. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of cash inflows from other assets or groups of assets. Impairment testing is performed at least annually and whenever there is an indication that the cash-generating unit may be impaired. When the SMBC Group disposes of all or part of a cash-generating unit to which goodwill is allocated, the goodwill associated with the cash-generating unit is included in the carrying amount of the cash-generating unit when determining the gain or loss on disposal.

Software

Purchased software is carried at cost less accumulated amortization and accumulated impairment losses, if any.

Expenditure on internally generated software is recognized as an asset if the SMBC Group can demonstrate its intention and ability to complete the development and use the software in a manner that will generate future economic benefits and it can reliably measure the costs to complete the development. Internally generated software is carried at capitalized cost less accumulated amortization and accumulated impairment losses, if any. Costs associated with maintaining software are expensed as incurred.

Software is amortized using the straight-line method over the estimated useful life, which is generally 5 to 10 years.

Contractual customer relationships and trademarks

Contractual customer relationships and trademarks acquired in a business combination are recognized at fair value at the acquisition date. Contractual customer relationships and trademarks are carried at cost less accumulated amortization or impairment losses, if any. Contractual customer relationships and trademarks are amortized using the straight-line method over their estimated useful lives, which are generally 10 to 20 years.

Other intangible assets

Other intangible assets primarily consist of leasehold rights. They are recognized only when the SMBC Group legally obtains the rights and can reliably measure the fair value. Leasehold rights have an indefinite useful life and they are not amortized but are tested for impairment annually.

Impairment of Non-Financial Assets

Non-financial assets are reviewed for impairment at the end of each reporting period and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognized in the consolidated income statement if the asset’s carrying amount is greater than its estimated recoverable amount. The recoverable amount

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is estimated as the higher of the asset’s fair value less costs to sell and value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. In addition, irrespective of whether there is any indication of impairment, intangible assets that have an indefinite useful life are tested for impairment annually.

For the purposes of conducting impairment reviews, assets are grouped into cash-generating units to which the assets belong. Non-financial assets other than impaired goodwill are reviewed for possible reversal of the impairment loss at the end of each reporting period. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Assets Held for Sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if their carrying amount will be recovered principally through sale rather than through continuing use. In order to be classified as held for sale, the assets or disposal groups must be available for immediate sale in their present condition and their sale must be highly probable. Such assets or disposal groups are generally measured at the lower of their carrying amount and fair value less costs to sell.

Leases

As lessee

A lease agreement in which the lessor does not transfer to the lessee substantially all the risks and rewards of ownership of assets is classified as an operating lease. The leases entered into by the SMBC Group as a lessee are primarily operating leases. Operating lease payments, net of lease incentives received from the lessor, are recognized in the consolidated income statement on a straight-line basis over the lease term.

A lease agreement in which the lessor transfers to the lessee substantially all the risks and rewards of ownership of assets, with or without ultimate legal title, is classified as a finance lease. For finance leases, the SMBC Group initially recognizes the leased asset at the lower of the fair value of the asset or the present value of the minimum lease payments. Subsequent to initial recognition, assets are accounted for in accordance with the accounting policy applicable to those assets. The corresponding liability to the lessor is recognized as a lease obligation within “Borrowings” in the consolidated statement of financial position. Interest expense is recognized over the term of the lease based on the interest rate implicit in the lease so as to give a constant rate of interest on the remaining balance of the liability.

As lessor

When the SMBC Group acts as a lessor in an operating lease, the assets for rent are included in “Property, plant and equipment” in the consolidated statement of financial position and are depreciated over their expected useful lives on a basis consistent with similar assets in property, plant and equipment. Income from operating leases (net of any incentives given to the lessee) is recognized on a straight-line basis over the lease term and included in “Other income” in the consolidated income statement. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased assets and recognized as an expense on a straight-line basis over the lease term.

When the SMBC Group is a lessor in a finance lease, the leased assets are derecognized and the present value of the future lease payments is recognized as a lease receivable within “Loans and advances” in the consolidated statement of financial position. The difference between the gross receivables, i.e., undiscounted future cash flows, and the present value of the receivables is recognized as unearned finance income. Finance income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the finance lease.

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Sale and leaseback

For sale and leaseback transactions leading to an operating lease, and the transaction took place at fair value, any profit or loss is recognized immediately. If the sale price is at or below fair value, any profit or loss is recognized immediately. However, if the loss is compensated for by future rentals at a below market price, the loss is deferred and amortized over the period that the asset is expected to be used. If the sale price is above fair value, any profit is deferred and amortized over the useful life of the asset. If the fair value of the asset is less than the carrying value of the asset at the date of transaction, that difference is recognized immediately as a loss on the sale.

Cash and Cash Equivalents

For the purposes of the consolidated statement of cash flows, cash and cash equivalents include cash on hand, demand deposits, and other short-term highly liquid financial assets with original maturities of three months or less, which are subject to insignificant risk of changes in their fair value.

Provisions

A provision is recognized if, as a result of a past event, the SMBC Group has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Financial Guarantee Contracts

Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Such financial guarantees are given to banks, financial institutions and other bodies on behalf of customers to secure loans, overdrafts and other banking facilities. Financial guarantees are initially recognized at fair value on the date the guarantee is given.

Subsequent to initial recognition, the SMBC Group’s liabilities under such guarantees are measured at the higher of the initial measurement, less amortization calculated to recognize in the consolidated income statement the fee income earned over the guarantee period, and the best estimate of the expenditure required to settle any financial obligation arising at the end of the reporting period. These estimates are determined based on experience of similar transactions and history of past losses, supplemented by the judgment of management.

Any increase in the liability relating to financial guarantee contracts is included in “Other expenses” in the consolidated income statement.

Employee Benefits

The SMBC Group operates various retirement benefit plans and other employee benefit plans.

Retirement benefits

The SMBC Group has defined benefit plans, such as defined benefit pension plans and lump-sum severance indemnity plans, and defined contribution plans.

Defined benefit plans

The liabilities and the assets recognized in the consolidated statement of financial position in respect of defined benefit plans are the present value of the defined benefit obligation less the fair value of plan assets.

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The present value of the defined benefit obligation is calculated annually by qualified actuaries. In calculating the present value of the defined benefit obligations, the related current service cost, and past service cost, the SMBC Group attributes the retirement benefits to years of service under the benefit formula. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using market yields of AA credit-rated corporate bonds that have terms to maturity approximating those of the related obligations. In cases where there is no deep market in corporate bonds with a sufficiently long maturity to match the estimated maturity of the benefit payments, the SMBC Group uses current market rates of the appropriate term to discount shorter term payments and estimates the discount rates for longer maturities by extrapolating current market rates along the yield curve.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in the year, and return on plan assets excluding interest income are recognized in other comprehensive income and are never reclassified to profit or loss.

Past service costs are recognized immediately in the consolidated income statement.

When the calculations above result in a benefit to the SMBC Group, the recognized asset is limited to the present value of any economic benefits available in the form of any refunds from the plan or reductions in future contributions to the plan. An economic benefit is available to the SMBC Group if it is realizable during the life of the plan or on settlement of the plan obligations.

Defined contribution plans

Contributions to defined contribution plans are recognized as an expense in the consolidated income statement when they are due.

Other long-term employee benefits

The SMBC Group’s net obligation with respect to long-term employee benefits other than retirement benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value and the fair value of any related assets is deducted. The discount rates are market yields of AA credit-rated corporate bonds that have terms to maturity approximating those of the related obligations. The calculation of obligations is performed using the projected unit credit method. Any actuarial gains or losses and past service costs are recognized in the consolidated income statement in the period in which they arise.

Short-term employee benefits

Short-term employee benefits, such as salaries, paid absences and other benefits are accounted for on an accrual basis over the period in which employees have provided services. Bonuses are recognized to the extent that the SMBC Group has a present obligation to its employees that can be measured reliably.

Income Tax

Income tax expense comprises current and deferred taxes. Income tax expense is recognized in the consolidated income statement except for that related to items recognized directly in equity. In such case, the income tax expense is recognized in equity.

Current tax is the expected tax payable or receivable on the taxable profit or loss for the fiscal year.

Deferred taxes are recognized, using the balance sheet liability method, for temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.

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Deferred taxes are determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred tax assets are realized or the deferred tax liabilities are settled.

Deferred tax assets principally arise from tax losses carried forward, impairment of investment securities and loans, and the allowance for loan losses.

Deferred taxes are not recognized for the following temporary differences: (a) the initial recognition of goodwill; (b) the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; and (c) the temporary differences associated with investments in subsidiaries, associates, and joint ventures, when the parent investor is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets relating to tax losses carried forward and deductible temporary differences are recognized, only to the extent that it is probable that future taxable profit will be available against which the tax losses carried forward and the deductible temporary differences can be utilized.

Debt and equity securities in issue

On initial recognition, financial instruments issued by the SMBC Group are classified in accordance with the substance of the contractual agreement as financial liabilities where the contractual arrangement results in the SMBC Group having an obligation to either deliver cash or another financial asset to the holder, or to satisfy the obligation other than by delivering a fixed number of equity shares in exchange for a fixed amount of cash or another financial asset. The instruments or their components are classified as equity where they do not meet the definition of a liability and show evidence of a residual interest in the entity’s assets after deducting all of its liabilities. Compound financial instruments that contain both liability and equity elements are accounted for separately with the equity component being assigned the residual amount after deducting from the entire value of the compound financial instrument the fair value of the liability component which has been determined separately.

Shareholders’ Equity

Stock issuance costs

Incremental costs directly attributable to the issuance of new shares or options including those issued as a result of a business combination transaction are deducted from the proceeds and shown in equity, net of tax.

Dividends on common stock and preferred stock

Dividends on common stock and preferred stock are recognized in equity in the period in which they are approved by the shareholders. Dividends for the fiscal year that are declared after the reporting period are described in Note 40 “Dividends Per Share.”

Treasury stock

Where the Company or any other member of the SMBC Group companies purchase the Company’s common or preferred stock, the consideration paid is deducted from equity as treasury stock until they are cancelled or sold. No gain or loss is recognized on the purchase, sale, or cancellation of the Company’s own equity instruments and the consideration paid or received is recognized in equity.

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Interest Income and Expense

Interest income and expense for all financial instruments, except for those classified as held for trading and financial assets at fair value through profit or loss, are recognized in “Interest income” and “Interest expense” in the consolidated income statement using the effective interest method.

The effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period.

The effective interest rate is the rate that discounts the estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the SMBC Group estimates cash flows, considering the contractual terms of the financial instrument but not including future credit losses. The calculation includes fees and points paid or received between parties to the contract that are an integral part of the effective interest rate of the financial instrument, transaction costs and other premiums or discounts.

Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is thereafter recognized using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. For financial assets measured at amortized cost, the interest rate is the original effective interest rate.

Fee and Commission Income

Fee and commission income includes fee and commission income arising from a diverse range of services that the SMBC Group provides to its customers. Fee and commission income can be divided into two categories: fee and commission income from providing transaction services, and fee and commission income earned from services that are provided over a certain period of time. Fee and commission income earned from providing transaction services is recognized when the service has been completed or the event has occurred. This fee and commission income includes fees on funds transfer and collection services, service charges from deposit accounts, fees and commissions on the securities business, underwriting fees, brokerage fees, and fee and commission income from other services. Fee and commission income earned from services over a period of time is recognized over that service period. This fee and commission income includes fees on credit-related businesses, investment fund businesses, and fee and commission income from other services. Loan commitment fees, together with the related direct cost, for loans that are likely to be drawn down are deferred and recognized as an adjustment to the effective interest rate on the loan. Loan commitment fees are recognized over the term of the commitment period when it is unlikely that a loan will be drawn down.

Net Trading Income

Net trading income consists of margins made on market-making and customer business, as well as changes in fair value of trading assets and liabilities and derivative financial instruments, caused by movements in interest rates, exchange rates, equity prices and other market variables. It also includes net interest and dividend income on trading assets and liabilities.

Net Income (Loss) from Financial Assets at Fair Value through Profit or Loss

Net income (loss) from financial assets at fair value through profit or loss includes all gains and losses arising from changes in the fair value of these financial assets and sales of such assets, and interest and dividend income on these financial assets.

Net Investment Income

Net investment income includes gains and losses on the disposal of available-for-sale financial assets, and dividends from available-for-sale equity instruments.

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Earnings Per Share

The SMBC Group presents basic and diluted earnings per share (“EPS”) data for its common stock. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the SMBC Group by the weighted average number of common stock outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common stock outstanding for the effects of all dilutive potential common stock including share options and other convertible instruments.

Recent Accounting Pronouncements

The SMBC Group is currently assessing the impact of the following standards, amendments to standards, and interpretations that are not yet effective and have not been early adopted:

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)

In September 2014, the IASB issued the narrow-scope amendments to IFRS 10 and IAS 28 “Investments in Associates and Joint Ventures” to address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The effective date of applying the amendments was January 1, 2016 when they were originally issued, however, in December 2015, the IASB issued Effective Date of Amendments to IFRS 10 and IAS 28 to remove the effective date and indicated that a new effective date will be determined at a future date when it has finalized revisions, if any, that result from its research project on the equity accounting. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

IFRS 15 “Revenue from Contracts with Customers”

In May 2014, the IASB published IFRS 15 “Revenue from Contracts with Customers” to establish principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contract with customers. IFRS 15 replaces IAS 18 “Revenue,” IAS 11 “Construction Contracts,” IFRIC 13 “Customer Loyalty Programmes” and other related interpretations. The core principle of IFRS 15 is to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the entity expects to be entitled in exchange for those goods or services. IFRS 15 also requires enhanced disclosures about revenue, provides guidance for transactions that were not previously addressed comprehensively and improves guidance for multiple-element arrangements. The SMBC Group expects the primary impacts of the standard to be the capitalization of the incremental costs of obtaining a contract and costs incurred in fulfilling a contract in the credit card business, and the classification if certain incentives related to point programmes are performance obligations. The SMBC Group initially applies the standard on April 1, 2018. The SMBC Group will apply the standard retrospectively by adjusting the consolidated statement of financial position at the date of initial application, without any requirements to restate previous periods. The SMBC Group’s opening shareholders’ equity is expected to increase by approximately ¥15 billion post-tax, due to the capitalization of contract costs.

IFRS 9 “Financial Instruments”

In July 2014, the IASB published IFRS 9 “Financial Instruments,” which is the comprehensive standard to replace IAS 39. The standard contains the following new requirements for classification and measurement of financial assets and liabilities, impairment of financial assets and hedge accounting.

Classification and measurement

The standard requires all financial assets to be classified into three categories, namely, amortized cost, fair value through other comprehensive income (“FVOCI”) and fair value through profit or loss (“FVPL”), based on

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the business model within which they are held and their contractual cash flow characteristics. A financial asset is measured at amortized cost if the asset is held within a business model whose objective is to hold the asset in order to collect contractual cash flows, and the asset’s contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Financial assets are measured at FVOCI if they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and SPPI requirements are met. Any financial assets that do not meet the criteria of amortized cost or FVOCI should be classified as FVPL, unless an entity makes an irrevocable election for non-trading equity instruments to be measured at FVOCI. Financial assets that would be otherwise measured at amortized cost or FVOCI can be designated at recognition to be measured at FVPL in order to eliminate or significantly reduce an accounting mismatch.

The standard maintains most of the requirements in IAS 39 regarding the classification and measurement of financial liabilities. However, with the new requirements, if an entity chooses to measure a financial liability at fair value, the amount of change in its fair value that is attributable to changes in the credit risk of that liability will be presented in other comprehensive income, rather than in profit or loss.

The SMBC Group has conducted assessments of business model and SPPI requirements to identify classification and measurement of financial assets under the standard. At initial application, the SMBC Group anticipates, with limited exceptions, that:

• Trading assets, derivative financial instruments and financial assets at fair value through profit or loss will be measured at FVPL;

• Available-for-sale debt instruments will be measured at FVOCI;

• Available-for-sale equity instruments will be measured at FVPL or designated as FVOCI; and

• Held-to-maturity investments and loans and advances will be measured at amortized cost.

Impairment

The standard introduces the expected credit loss (“ECL”) model, which is a new model for the recognition of impairment losses, to replace the incurred loss model in IAS 39. The impairment requirements apply to financial assets measured at amortized cost and FVOCI, lease receivables, certain loan commitments and financial guarantee contracts. Under the ECL model, an entity is required to account for expected credit losses from initial recognition of financial instruments and to recognize full lifetime expected losses on a timely basis. The ECL model will result in the recognition of impairment losses earlier than the incurred loss model.

At each reporting date, credit risk on a financial instrument should be assessed and a loss allowance should be measured for expected credit losses resulting from default events that are possible within the next 12 months, if the credit risk has not increased significantly since initial recognition (“Stage 1”). A loss allowance should be recognized at an amount equal to expected credit losses resulting from all possible default events over the expected life of the financial instrument for the financial assets which are assessed to have experienced a significant increase in credit risk (“Stage 2”) or for the credit-impaired financial assets (“Stage 3”). A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. These indicators are similar to those under IAS 39 including significant financial difficulty and default.

Quantitative and qualitative assessments are used to determine whether there has been a significant increase in credit risk on financial instruments. These assessments include comparing the risk of a default occurring on the financial instrument at the reporting date and that at the date of initial recognition. Financial instruments with risk of a default increasing more than the quantitative threshold defined by the SMBC Group are deemed to have experienced a significant increase in credit risk. In addition, financial instruments assessed to have high credit risk from the credit risk management practices of the SMBC Group are transferred to Stage 2. Furthermore, a

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significant increase in credit risk is presumed if principal and/or interest payments are more than 30 days past due.

The standard requires that expected credit losses should be measured to reflect an unbiased and probability-weighted amount, the time value of money, and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. To meet these requirements, the SMBC Group has built ECL models by leveraging the probability of default (“PD”), loss given default (“LGD”) and exposure at default (“EAD”) used in the Basel III regulatory framework, for instance by adjusting certain conservative factors in those PDs and LGDs. For financial assets at Stage 2, the SMBC Group will use the lifetime PDs developed to measure lifetime ECL and consider forward-looking macro-economic information. On the other hand, the discounted cash flow method will be continued to be applied for the measurement of the ECL for individually significant impaired financial assets. The allowance for financial assets in IFRS 9 will increase compared to that in IAS 39, as a result of an increase in the overall level of allowance for non-impaired financial assets. This is primarily due to the requirements under IFRS 9 to measure an allowance equal to 12 months ECL for those financial assets at Stage 1 and lifetime ECL for those at Stage 2, whereas the allowance for those financial assets is calculated for incurred losses with a relatively short loss identification period not longer than 12 months under IAS 39.

Hedge Accounting

The standard introduces a new hedge accounting model, together with corresponding disclosures about risk management activity for those applying hedge accounting. The standard aligns hedge accounting more closely with risk management and adopts a more principle-based approach than that under IAS 39. The standard includes an accounting policy choice to defer the adoption of hedge accounting under the standard and to continue with IAS 39.

Transition impact

The SMBC Group initially applies the standard on April 1, 2018. The SMBC Group will apply the classification and measurement and impairment requirements retrospectively by adjusting the consolidated statement of financial position at the date of initial application, without any requirements to restate previous periods. As for hedge accounting, the SMBC Group started to apply hedge accounting to a part of the hedge transactions whose hedged items were net investments in foreign operations under IAS 39, and has decided to apply the accounting policy to continue with IAS 39 hedge accounting for those hedge transactions. As the amended IFRS 7 “Financial Instruments: Disclosures” will be effective at the time of application of the standard, the SMBC Group will revise the related disclosures for hedge accounting from then.

The SMBC Group’s opening shareholders’ equity is expected to decrease by approximately ¥150 billion post-tax, primarily due to the new requirements for impairment. This estimate is based on accounting policies, assumptions, judgments and estimation techniques that remain subject to change until the SMBC Group finalizes its financial statements for the fiscal year ending March 31, 2019. The adoption of IFRS 9 has no impact on the SMBC Group’s Common Equity Tier 1 capital, as it is calculated under Japanese GAAP.

Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)

In June 2016, the IASB issued narrow-scope amendments to IFRS 2 “Share-based Payment” to clarify how to account for certain types of share-based payment transactions. The amendments are effective for annual periods beginning on or after January 1, 2018 and are not expected to have a material impact on the SMBC Group’s consolidated financial statements.

Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4)

In September 2016, the IASB issued amendments to IFRS 4 “Insurance Contracts” to address concerns arising from implementing the new financial instruments standard, IFRS 9, before implementing the replacement

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standard that the IASB is developing for IFRS 4. These concerns include temporary volatility in reported results. The amendments introduce two approaches. One is an approach for entities that issue insurance contracts. This is applicable only when an entity first applies IFRS 9. The other is an approach for entities whose activities are predominantly connected with insurance. This is effective for annual periods beginning on or after January 1, 2018 and is not expected to have a material impact on the SMBC Group’s consolidated financial statements.

Annual Improvements to IFRSs 2014-2016 Cycle

In December 2016, the IASB issued Annual Improvements to IFRSs 2014-2016 Cycle, which is a collection of amendments to three IFRSs. These are minor amendments that clarify, correct or remove redundant wordings in the standards. These improvements include the amendments effective for annual periods beginning on or after January 1, 2018 and are not expected to have a material impact on the SMBC Group’s consolidated financial statements.

IFRIC Interpretation 22 “Foreign Currency Transactions and Advance Consideration”

In December 2016, the IASB issued IFRIC Interpretation 22 “Foreign Currency Transactions and Advance Consideration” to clarify the date of the transaction for the purpose of determining the exchange rate to use in transactions that involve advance consideration paid or received in a foreign currency in accordance with IAS 21 “The Effects of Changes in Foreign Exchange Rates.” The interpretation is effective for annual periods beginning on or after January 1, 2018 and is not expected to have a material impact on the SMBC Group’s consolidated financial statements.

Transfers of Investment Property (Amendments to IAS 40)

In December 2016, the IASB issued amendments to IAS 40 “Investment Property” to clarify the requirements on transfers to, or from, investment property when, and only when, there is a change in use. The amendments are effective for annual periods beginning on or after January 1, 2018 and are not expected to have a material impact on the SMBC Group’s consolidated financial statements.

IFRS 16 “Leases”

In January 2016, the IASB published IFRS 16 “Leases,” which sets out the principles for the recognition, measurement, presentation and disclosure of leases, replacing IAS 17 “Leases.” The standard introduces a single lessee accounting model and eliminates the classification of leases as either operating leases or finance leases, requiring a lessee to recognize assets and liabilities. A lessor continues to classify its leases as operating leases or finance leases, and to account for them differently. The standard is effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the standard will have on its consolidated financial statements.

IFRIC 23 “Uncertainty over Income Tax Treatments”

In June 2017, the IASB published IFRIC 23 “Uncertainty over Income Tax Treatments,” which clarifies how to apply the recognition and measurement requirements in IAS 12 “Income Taxes” when there is uncertainty over income tax treatments. IAS 12 specifies how to account for current and deferred tax, but not how to reflect the effects of uncertainty. This interpretation adds to the requirements in IAS 12 by specifying how to reflect the effects of uncertainty in accounting for income taxes. The interpretation is effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the interpretation will have on its consolidated financial statements.

Prepayment Features with Negative Compensation (Amendments to IFRS 9)

In October 2017, the IASB issued amendments to IFRS 9 to allow entities to measure particular prepayable financial assets with negative compensation at amortized cost or at fair value through other comprehensive

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income instead of at fair value through profit or loss, if a specified condition is met. The amendments are effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)

In October 2017, the IASB issued amendments to IAS 28 to clarify that entities account for long-term interests in an associate or joint venture, to which the equity method is not applied, using IFRS 9. The amendments are effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

Annual Improvements to IFRSs 2015-2017 Cycle

In December 2017, the IASB issued Annual Improvements to IFRSs 2015-2017 Cycle, which is a collection of amendments to four IFRSs. These are amendments that either clarify the wording in the standard or correct relatively minor oversights or conflicts between existing requirements of the standards. These improvements include the amendments effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

Plan Amendment, Curtailment or Settlement (Amendments to IAS 19)

In February 2018, the IASB issued amendments to IAS 19 “Employee Benefits” to clarify how to determine current service cost and net interest for the period after a change to a defined benefit plan. When a change to a plan such as an amendment, curtailment or settlement takes place, IAS 19 requires an entity to remeasure its net defined benefit liability or asset. The amendments require an entity to use the updated assumptions from this remeasurement to determine current service cost and net interest for the remainder of the reporting period after the change to the plan. The amendments are effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

IFRS 17 “Insurance Contracts”

In May 2017, the IASB published IFRS 17 “Insurance Contracts,” which establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts, replacing IFRS 4. IFRS 4 provided entities dispensation to carry on accounting for insurance contracts using national accounting standards, resulting in a multitude of different approaches. IFRS 17 requires all insurance contracts to be accounted for in a consistent manner. Insurance obligations will be accounted for by using present values instead of historical cost. The standard is effective for annual periods beginning on or after January 1, 2021. The SMBC Group is currently evaluating the potential impact that the adoption of the standard will have on its consolidated financial statements.

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The consolidated financial statements are influenced by estimates and management judgment, which necessarily have to be made in the course of preparation of the consolidated financial statements. Estimates and judgments are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and which are continually evaluated.

Allowance for Loan Losses

Allowance for loan losses represents management’s estimate of the losses incurred in the loan portfolios at the end of each reporting period. Management exercises judgment in making assumptions and estimations when calculating the allowance for loan losses on both individually and collectively assessed loans.

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The allowance for loan losses for individually significant impaired loans is estimated by management based on the expected future cash flows, taking into account factors such as historical loss information, the appropriateness of the borrower’s business plan or operational improvement plan, the status of progress of its plan, the overall support from financial institutions, and the realizable value of any collateral held. The allowance for loan losses for the remaining loans is collectively estimated by grouping financial assets into portfolios on the basis of similar credit risk characteristics and using the historical loss experience for these portfolios adjusted for the effect of the current economic environment. To assess the losses on the loan portfolios where loss events have occurred but not yet been identified, management develops assumptions and methodologies to estimate the loss identification period.

Management estimates and judgments may change from time to time as the economic environment changes or new information becomes available. Changes in these estimates and judgments will result in a different allowance for loan losses and may have a direct impact on impairment charges. Impairment charges on loans and advances amounting to ¥126,623 million, ¥141,457 million and ¥118,750 million were recognized for the fiscal years ended March 31, 2018, 2017 and 2016, respectively. For additional information, refer to Note 10 “Loans and Advances” and Note 32 “Impairment Charges on Financial Assets.”

Fair Value of Financial Instruments

The fair values of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. In these cases, inputs to valuation techniques are based on observable data with respect to similar financial instruments or by using models. Where observable inputs are not available, the fair value is estimated based on appropriate assumptions that a market participant would take into account. Where valuation techniques (for example, models) are used to determine fair values, they are validated and periodically reviewed. The SMBC Group certifies significant valuation models before they are used, and calibrates them to ensure that outputs reflect actual data and comparative market prices. To the extent practical, models use only observable data; however, inputs such as credit risk (both own and counterparty), volatilities and correlations require management to make estimates. Changes in assumptions about these factors could affect the fair values of these financial instruments. More details about the SMBC Group’s valuation techniques, significant unobservable inputs used in determining fair values and sensitivity analyses are given in Note 43 “Fair Value of Financial Assets and Liabilities.”

Impairment of Available-for-sale Financial Assets

Available-for-sale financial assets are impaired if there is objective evidence of impairment as a result of loss events. The SMBC Group exercises judgment in determining whether there is objective evidence of occurrence of loss events, which result in a decrease in estimated future cash flows of the financial assets. The estimation of future cash flows also requires judgment. In the assessment of impairment of available-for-sale equity instruments, the SMBC Group also considers whether there has been a significant or prolonged decline in fair value below their cost. The determination of what is a significant or prolonged decline requires management judgment.

Impairment may occur when there is objective evidence of deterioration in the financial conditions of the investee, industry and sector performance, or changes in operating and financing cash flows. The determination of impairment in this respect also includes significant management judgment.

Management estimates and judgments may change from time to time based upon future events that may or may not occur and changes in these estimates and judgments could adversely affect the carrying amounts of available-for-sale financial assets. Impairment charges on available-for-sale financial assets totaled ¥10,185 million, ¥71,510 million and ¥29,606 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively. For additional information, refer to Note 9 “Investment Securities” and Note 32 “Impairment Charges on Financial Assets.”

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Impairment of Goodwill

Goodwill is tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that it may not be recoverable. If any such indication exists, then its recoverable amount is estimated. The process to determine the recoverable amount is inherently uncertain because such recoverable amount is determined based on a number of management estimates and judgments. The SMBC Group determines the recoverable amount using the estimated future cash flows, pre-tax discount rates, growth rates, and other factors. The estimation of future cash flows inherently reflects management judgments, even though such forecasts are prepared taking into account actual performance and external economic data. The pre-tax discount rates and growth rates may be significantly affected by market interest rates or other market conditions, which are beyond management’s control, and therefore significant management judgments are made to determine these assumptions. These management judgments are made based on the facts and circumstances at the time of the impairment test, and may vary depending on the situation and the time. Changes in management judgments may result in different impairment test results and different impairment amounts recognized. For the fiscal years ended March 31, 2018, 2017 and 2016, impairment losses on goodwill were ¥28,607 million, ¥74,616 million and ¥1,124 million, respectively. For additional information, refer to Note 14 “Intangible Assets.”

Provision for Interest Repayment

Provision for interest repayment represents management’s estimate of future claims for the refund of so-called “gray zone interest” (interest on loans in excess of the maximum rate prescribed by the Interest Rate Restriction Act (ranging from 15% to 20%) up to the 29.2% maximum rate permitted under the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates), taking into account historical experience such as the number of customer claims for a refund, the amount of repayments and the characteristics of customers, and the length of the period during which claims are expected to be received in the future.

Management estimates and judgments may change from time to time as the legal environment and market conditions change or new information becomes available. Changes in these estimates and judgments could affect the balance of provision for interest repayment. Provision for interest repayment is recorded in provisions as a liability, and it totaled ¥145,179 million and ¥157,333 million at March 31, 2018 and 2017, respectively. For additional information, refer to Note 20 “Provisions.”

Retirement Benefits

The SMBC Group has defined benefit plans such as defined benefit pension plans and lump-sum severance indemnity plans. The present value of the defined benefit obligation is calculated based on actuarial valuations that are dependent upon a number of assumptions, including discount rates, mortality rates and future salary (benefit) increases. The discount rates are equivalent to market yields of AA credit-rated corporate bonds that have terms to maturity approximating those of the related obligations. Future mortality rates are based on the official mortality table generally used for actuarial assumptions in Japan. Other assumptions used for the calculation of the defined benefit obligation are based on historical records. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty. Any change in these assumptions will impact actuarial gains and losses, as well as the present value of the defined benefit obligations and the net retirement benefit expense for each period. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in the year, and return on plan assets excluding interest income are recognized in other comprehensive income and are never reclassified to profit or loss.

The difference between the fair value of the plan assets and the present value of the defined benefit obligation at the end of the reporting period is recognized as assets and liabilities in the consolidated statement of financial position. When this calculation for each plan results in a benefit to the SMBC Group, the recognized asset is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. An economic benefit is available to the SMBC Group, if it is

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realizable during the life of the plan or on settlement of the plan obligation. The net total of assets and liabilities in the consolidated statement of financial position amounted to net assets of ¥279,567 million and ¥192,772 million at March 31, 2018 and 2017, respectively. For additional information, refer to Note 23 “Retirement Benefits.”

Deferred Tax Assets

Deferred tax assets relating to tax losses carried forward and deductible temporary differences are recognized, only to the extent that it is probable that future taxable profit will be available against which the tax losses carried forward and the deductible temporary differences can be utilized. This assessment requires significant management estimates and judgments. Future taxable profit is estimated based on, among other relevant factors, forecasted results of operations, which are based on historical financial performance and the business plans that management believes to be prudent and feasible. While the SMBC Group carefully assesses the realization of tax losses carried forward and deductible temporary differences, the actual taxable profit in the future may be less than the forecast. The deferred tax assets amounted to ¥19,436 million and ¥81,961 million in the consolidated statement of financial position at March 31, 2018 and 2017, respectively, while the net total of deferred tax assets and liabilities amounted to net liabilities of ¥378,305 million and ¥238,240 million at March 31, 2018 and 2017, respectively. For additional information, refer to Note 22 “Deferred Income Tax.”

4 SEGMENT ANALYSIS

Business Segments

The SMBC Group’s business segment information is prepared based on the internal reporting system utilized by management to assess the performance of its business segments.

The SMBC Group has four main business segments: the Wholesale Business Unit, the Retail Business Unit, the International Business Unit and the Global Markets Business Unit, with the remaining operations recorded in Head office account and others. The SMBC Group changed its business segment information for the fiscal year ended March 31, 2018 in connection with the introduction of Group-wide business units, which determine strategies for each customer segment across the SMBC Group companies. The business segment was previously reported as Commercial Banking, Leasing, Securities and Consumer Finance, with the remaining operations recorded in Others. Comparative information has been restated.

Wholesale Business Unit

The Wholesale Business Unit provides financing, investment management, risk hedging, and settlement services as well as financial solutions that respond to wide-ranging client needs in relation to M&A and other advisory services and leasing, primarily for large-and mid-sized corporate clients in Japan. This business unit mainly consists of the wholesale businesses of SMBC, SMBC Nikko Securities Inc. (“SMBC Nikko Securities”), SMBC Trust Bank Ltd. (“SMBC Trust Bank”) and Sumitomo Mitsui Finance and Leasing Company, Limited (“SMFL”).

Retail Business Unit

The Retail Business Unit provides financial services to both consumers residing in Japan and domestic small-sized companies, and mainly consists of the retail business of SMBC, SMBC Nikko Securities and SMBC Trust Bank together with three consumer finance companies, Sumitomo Mitsui Card Company, Limited, Cedyna Financial Corporation and SMBC Consumer Finance Co., Ltd. This business unit offers a wide range of products and services for consumers, including wealth management, settlement services, consumer finance and housing loans, in order to address the financial needs of all individual customers. For small-sized companies, this business unit provides a wide array of financial products and services to comprehensively address business owners’ needs as both corporate managers and individuals such as business and asset succession.

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International Business Unit

The International Business Unit supports the global businesses of a diverse range of clients, such as Japanese companies operating overseas, non-Japanese companies, financial institutions, and government agencies and public corporations of various countries. This business unit provides a variety of tailored products and services to meet customer and market requirements, including loans, deposits, clearing services, trade finance, project finance, loan syndication, derivatives and global cash management services. This business unit mainly consists of the international businesses of SMBC, SMBC Nikko Securities, SMBC Trust Bank, SMFL and their foreign subsidiaries.

Global Markets Business Unit

The Global Markets Business Unit offers solutions through foreign exchange products, derivatives, bonds, stocks, and other marketable financial products and also undertakes asset liability management operations, which help comprehensively control balance sheet liquidity risks and interest rate risks. This business unit consists of the Treasury Unit of SMBC and the Product Unit of SMBC Nikko Securities.

Head office account and others

The Head office account and others represent the difference between the aggregate of the Wholesale Business Unit, the Retail Business Unit, the International Business Unit and the Global Markets Business Unit, and the SMBC Group as a whole. It mainly consists of administrative expenses related to headquarters operations and other subsidiaries and equity-method associates, including The Japan Research Institute, Limited and Sumitomo Mitsui Asset Management Company, Limited. It also includes internal transactions between the SMBC Group companies, which are eliminated in the consolidated financial statements.

Measurement of Segment Profit or Loss

The business segment information is prepared under the management approach. Consolidated net business profit is used as a profit indicator of banks in Japan. Consolidated net business profit of each segment is calculated by deducting general and administrative expenses (i.e., the total of personnel expense, non-personnel expense and tax), and by adding or deducting others (i.e., share of profit or loss of equity-method associates, cooperated profit and loss based on internal managerial accounting) to or from consolidated gross profits (i.e., the total of net interest income, trust fees, net fee and commission income, net trading income and net other operating income). While the SMBC Group’s disclosure complies with the requirements on segment information in accordance with IFRS, the figures reported to management and disclosed herein are prepared under accounting principles generally accepted in Japan (“Japanese GAAP”). Consequently, the business segment information does not agree with the figures in the consolidated financial statements under IFRS. These differences are addressed in the “Reconciliation of Segmental Results of Operations to Consolidated Income Statement.”

Information regarding the total assets of each segment is not used by management in deciding how to allocate resources and assess performance. Accordingly, total assets are not included in the business segment information.

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Segmental Results of Operations

For the fiscal year ended March 31, 2018:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	772.9		¥	1,311.7		¥	632.0		¥	356.2		¥	(91.7	)	¥	2,981.1
General and administrative expenses		(347.9	)		(1,027.7	)		(280.7	)		(53.9	)		(106.0	)		(1,816.2	)
Others(2)		53.7			15.6			46.9			17.5			(94.8	)		38.9
Consolidated net business profit	¥	478.7		¥	299.6		¥	398.2		¥	319.8		¥	(292.5	)	¥	1,203.8

For the fiscal year ended March 31, 2017:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	776.4		¥	1,313.9		¥	566.1		¥	346.8		¥	(82.5	)	¥	2,920.7
General and administrative expenses		(344.8	)		(1,041.1	)		(241.2	)		(50.2	)		(135.1	)		(1,812.4	)
Others(2)		45.6			12.1			38.5			8.2			(79.8	)		24.6
Consolidated net business profit	¥	477.2		¥	284.9		¥	363.4		¥	304.8		¥	(297.4	)	¥	1,132.9

For the fiscal year ended March 31, 2016:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	749.2		¥	1,272.7		¥	588.8		¥	354.1		¥	(60.8	)	¥	2,904.0
General and administrative expenses		(325.3	)		(1,000.6	)		(236.5	)		(49.2	)		(113.2	)		(1,724.8	)
Others(2)		48.0			10.0			(23.9	)		8.8			(79.2	)		(36.3	)
Consolidated net business profit	¥	471.9		¥	282.1		¥	328.4		¥	313.7		¥	(253.2	)	¥	1,142.9

(1) Consolidated gross profit = (Interest income – Interest expenses) + Trust fees + (Fee and commission income – Fee and commission expenses) + (Trading income – Trading losses) + (Other operating income – Other operating expenses).

(2) “Others” includes share of profit or loss of equity-method associates and cooperated profit and loss, that is, profit and loss double-accounted for in the managerial accounting.

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Reconciliation of Segmental Results of Operations to Consolidated Income Statement

The figures provided in the tables above are calculated by aggregating the figures used for management reporting under Japanese GAAP for each segment. The total amount of consolidated net business profit that is calculated by each segment based on the internal managerial data is reconciled to profit before tax reported in the consolidated financial statements under IFRS as shown in the following table:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In billions)
Consolidated net business profit	¥	1,203.8		¥	1,132.9		¥	1,142.9
Differences between management reporting and Japanese GAAP:
Total credit costs		(94.2	)		(164.4	)		(102.8	)
Gains on equity instruments		118.9			55.0			69.0
Extraordinary gains or losses and others		(119.6	)		(44.2	)		(128.9	)
Profit before tax under Japanese GAAP		1,108.9			979.3			980.2
Differences between IFRS and Japanese GAAP:
Scope of consolidation		(1.6	)		(12.0	)		(3.1	)
Derivative financial instruments		(20.7	)		(110.9	)		173.1
Investment securities		68.8			(8.8	)		56.6
Loans and advances		(33.5	)		(0.7	)		(35.2	)
Investments in associates and joint ventures		(1.6	)		(15.9	)		53.4
Property, plant and equipment		1.0			1.3			1.3
Lease accounting		(0.5	)		(3.7	)		(1.5	)
Defined benefit plans		(13.2	)		22.9			6.6
Foreign currency translation		12.7			3.6			61.7
Classification of equity and liability		14.1			8.4			5.4
Others		(15.4	)		16.9			27.2
Profit before tax under IFRS	¥	1,119.0		¥	880.4		¥	1,325.7

F-37

Information about Geographical Areas

The following table shows the total operating income in accordance with IFRS by the main geographical areas. The SMBC Group’s services are provided to domestic and foreign clients on a worldwide basis. These include transactions where SMBC’s branches in Japan may deal with customers located in foreign countries and where SMBC’s overseas branches may provide services to Japanese companies.

To identify income attributed to each geographical area for the purposes of this disclosure, they are aggregated based on the geographical location of the booking entity, with the assumption that transactions booked in booking entities are deemed to have occurred in their respective geographical areas.

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Domestic(1):
Japan		¥2,670,858	¥	2,356,627	¥	2,840,058
Total domestic		2,670,858		2,356,627		2,840,058
Foreign(1)(2):
Americas		350,118		313,742		196,399
Europe and Middle East		484,807		401,320		352,232
Asia and Oceania		306,564		276,206		299,537
Total foreign		1,141,489		991,268		848,168
Total operating income(3)		¥3,812,347	¥	3,347,895	¥	3,688,226

(1) The geographical segmentation is determined based on the degrees of the following factors: geographic proximity, similarity of economic activities and relationship of business activities among regions.

(2) Americas includes the United States, Brazil, Canada and others; Europe and Middle East include the United Kingdom, Germany, France and others; Asia and Oceania include China, Singapore, Australia and others except Japan.

(3) Total operating income comprises net interest income, net fee and commission income, net trading income, net income (loss) from financial assets at fair value through profit or loss, net investment income and other income.

5 CASH AND DEPOSITS WITH BANKS

Cash and deposits with banks at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Cash	¥	703,138	¥	1,123,128
Deposits with banks		53,992,931		46,207,027
Total cash and deposits with banks	¥	54,696,069	¥	47,330,155

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The reconciliation of cash and cash equivalents used for the purposes of the consolidated statement of cash flows at March 31, 2018, 2017 and 2016 is shown as follows:

	At March 31,
	2018			2017			2016
	(In millions)
Cash and deposits with banks		¥54,696,069		¥	47,330,155		¥	43,144,654
Less: term deposits with original maturities over three months		(627,837	)		(606,795	)		(597,960	)
Less: cash segregated as deposits and others		(667,099	)		(478,541	)		(419,728	)
Add: cash and cash equivalents included in assets held for sale		15,323			—			—
Cash and cash equivalents		¥53,416,456		¥	46,244,819		¥	42,126,966

Private depository institutions in Japan are required to maintain certain minimum reserve funds with the Bank of Japan, based on average deposit balances and certain other factors. There are similar reserve deposit requirements for the SMBC Group’s foreign offices engaged in banking businesses in foreign countries. At March 31, 2018, 2017 and 2016, the reserve funds required to be maintained by the SMBC Group, which were included in cash and cash equivalents, amounted to ¥1,689,340 million, ¥1,644,684 million and ¥1,436,232 million, respectively.

6 TRADING ASSETS

Trading assets at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Debt instruments	¥	2,841,148	¥	3,339,928
Equity instruments		327,975		436,743
Total trading assets	¥	3,169,123	¥	3,776,671

Trading debt instruments mainly consist of Japanese government bonds. Trading equity instruments mainly consist of publicly traded Japanese stocks.

7 DERIVATIVE FINANCIAL INSTRUMENTS

Derivative financial instruments include futures, forwards, swaps, options and other types of derivative contracts, which are transactions listed on exchanges or over-the-counter (“OTC”) transactions. In the normal course of business, the SMBC Group enters into a variety of derivatives for trading and risk management purposes. The SMBC Group uses derivatives for trading activities, which include facilitating customer transactions, market-making and arbitrage activities. The SMBC Group also uses derivatives to reduce its exposures to market and credit risks as part of its asset and liability management.

Derivatives are financial instruments that derive their value from the price of underlying items such as interest rates, foreign exchange rates, equities, bonds, commodities, credit spreads and other indices. The SMBC Group’s derivative financial instruments mainly consist of interest rate derivatives and currency derivatives. Interest rate derivatives include interest rate swaps, interest rate futures and interest rate swaptions. Currency derivatives include foreign exchange forward transactions, currency swaps and currency options.

F-39

The tables below represent the derivative financial instruments by type and purpose of derivatives at March 31, 2018 and 2017.

	At March 31, 2018
	Trading						Risk Management(1)
	Notional amounts		Assets		Liabilities		Notional amounts		Assets		Liabilities
	(In millions)
Interest rate derivatives	¥	676,464,541	¥	1,771,745	¥	1,639,850	¥	69,550,646	¥	300,376	¥	333,182
Futures		78,295,049		28,689		28,871		18,269,263		5,534		1,167
Listed Options		66,989,307		4,538		722		—		—		—
Forwards		25,030,851		274		994		—		—		—
Swaps		429,498,805		1,651,945		1,500,361		51,131,039		294,842		329,446
OTC Options		76,650,529		86,299		108,902		150,344		—		2,569
Currency derivatives		120,282,459		1,439,993		1,293,900		7,986,176		283,248		112,322
Futures		689		—		19		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		74,380,475		759,993		708,645		1,866,249		49,440		24,929
Swaps		39,668,889		577,350		490,014		6,119,927		233,808		87,393
OTC Options		6,232,406		102,650		95,222		—		—		—
Equity derivatives		3,354,789		71,344		105,194		2,219		—		155
Futures		829,262		5,946		9,747		—		—		—
Listed Options		1,779,546		42,209		68,341		—		—		—
Forwards		7,564		745		208		—		—		—
Swaps		77,015		186		8,171		2,219		—		155
OTC Options		661,402		22,258		18,727		—		—		—
Commodity derivatives		161,539		6,516		4,948		—		—		—
Futures		20,902		402		464		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		—		—		—		—		—		—
Swaps		128,467		6,052		3,974		—		—		—
OTC Options		12,170		62		510		—		—		—
Credit derivatives		1,320,297		12,049		8,465		—		—		—
Total derivative financial instruments	¥	801,583,625	¥	3,301,647	¥	3,052,357	¥	77,539,041	¥	583,624	¥	445,659

F-40

	At March 31, 2017
	Trading						Risk Management(1)
	Notional amounts		Assets		Liabilities		Notional amounts		Assets		Liabilities
	(In millions)
Interest rate derivatives	¥	591,977,855	¥	1,864,348	¥	1,738,961	¥	60,318,601	¥	450,889	¥	466,643
Futures		78,549,213		20,278		16,579		5,853,880		221		865
Listed Options		35,011,822		6,622		459		—		—		—
Forwards		22,776,789		152		1,986		—		—		—
Swaps		393,798,232		1,723,403		1,584,833		54,335,702		450,665		464,152
OTC Options		61,841,799		113,893		135,104		129,019		3		1,626
Currency derivatives		117,119,766		1,444,103		1,321,157		6,360,374		222,224		266,887
Futures		2,261		—		19		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		74,918,488		778,100		833,024		5,364		106		—
Swaps		36,026,356		561,985		378,036		6,355,010		222,118		266,887
OTC Options		6,172,661		104,018		110,078		—		—		—
Equity derivatives		2,744,981		60,395		77,197		—		—		—
Futures		1,075,040		13,743		3,154		—		—		—
Listed Options		1,012,228		21,657		41,439		—		—		—
Forwards		15,677		410		253		—		—		—
Swaps		106,228		307		8,922		—		—		—
OTC Options		535,808		24,278		23,429		—		—		—
Commodity derivatives		172,973		11,679		10,491		—		—		—
Futures		28,568		489		513		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		—		—		—		—		—		—
Swaps		116,525		11,037		9,230		—		—		—
OTC Options		27,880		153		748		—		—		—
Credit derivatives		1,400,080		10,344		8,358		—		—		—
Total derivative financial instruments	¥	713,415,655	¥	3,390,869	¥	3,156,164	¥	66,678,975	¥	673,113	¥	733,530

(1) Derivative financial instruments categorized as “Risk Management” are used for economic hedging, such as managing the exposure to changes in fair value of the loan portfolio, and are identified as hedging instruments under Japanese GAAP. Under IFRS, the SMBC Group started to apply hedge accounting only for net investments in foreign operations as described below from April 1, 2017, and derivative financial instruments designated as hedging instruments are also categorized as “Risk Management.”

Hedge accounting

On April 1, 2017, the SMBC Group started to apply hedge accounting in order to reflect the effect of risk management activities on its consolidated financial statements to mitigate the foreign currency risk on exchange differences arising from the translation of net investments in foreign operations. The SMBC Group uses currency derivatives and foreign currency denominated financial liabilities as hedging instruments.

The effective portion of the gain or loss on the hedging instruments is recognized in other comprehensive income, whereas the ineffective portion of the gain or loss on the hedging instruments is recognized in net trading income in the consolidated income statement. The cumulative gain or loss recognized in other comprehensive income is recognized in the profit or loss on the disposal or partial disposal of the foreign operation.

At March 31, 2018, the fair values of derivative instruments designated as hedging instruments of net investments in foreign operations were assets of ¥49,440 million and liabilities of ¥24,929 million with notional

F-41

amounts of ¥1,866,249 million. In addition, the carrying amount of foreign currency denominated financial liabilities designated as hedging instruments was ¥208,294 million. There was no hedge ineffectiveness recognized in “Net trading income” for the fiscal year ended March 31, 2018.

Credit derivatives

The SMBC Group enters into credit derivatives to manage the risk of its commercial banking credit portfolio containing loans by hedging, as well as diversifying the credit exposure in the portfolio, and to undertake credit loss protection transactions based on the needs from customers as financial intermediation. The tables below provide the notional amounts and the fair value of credit derivatives by purpose of transactions at March 31, 2018 and 2017.

	At March 31, 2018
	Protection purchased						Protection sold
	Notional amounts		Assets		Liabilities		Notional amounts		Assets		Liabilities
	(In millions)
Managing the SMBC Group’s credit risk portfolio	¥	442,991	¥	220	¥	5,950	¥	684,080	¥	10,615	¥	751
Facilitating client transactions		106,352		87		1,732		86,874		1,127		32
Total	¥	549,343	¥	307	¥	7,682	¥	770,954	¥	11,742	¥	783
	At March 31, 2017
	Protection purchased						Protection sold
	Notional amounts		Assets		Liabilities		Notional amounts		Assets		Liabilities
	(In millions)
Managing the SMBC Group’s credit risk portfolio	¥	471,994	¥	238	¥	5,141	¥	633,094	¥	7,796	¥	556
Facilitating client transactions		139,402		77		2,327		155,590		2,233		334
Total	¥	611,396	¥	315	¥	7,468	¥	788,684	¥	10,029	¥	890

The following table summarizes the notional amounts of the SMBC Group’s credit derivative portfolio by type of counterparty at March 31, 2018 and 2017.

	At March 31, 2018				At March 31, 2017
	Protection purchased		Protection sold		Protection purchased		Protection sold
	(In millions)
Banks and broker-dealers	¥	537,843	¥	770,954	¥	599,896	¥	788,684
Insurance and other financial guaranty firms		11,500		—		11,500		—
Total	¥	549,343	¥	770,954	¥	611,396	¥	788,684

8 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at fair value through profit or loss at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Debt instruments	¥	1,528,921	¥	1,582,957
Equity instruments		18,751		16,136
Total financial assets at fair value through profit or loss	¥	1,547,672	¥	1,599,093

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The SMBC Group classifies the entire hybrid instrument as financial assets at fair value through profit or loss when the SMBC Group is required to separate an embedded derivative from its host contract, but is unable to measure the embedded derivative separately either at acquisition or at the end of a subsequent reporting period.

The SMBC Group also classifies certain financial assets held by a venture capital investment subsidiary as financial assets at fair value through profit or loss. These financial assets are managed and their performance is evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

9 INVESTMENT SECURITIES

Investment securities at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Held-to-maturity investments:
Domestic:
Japanese government bonds	¥	372,459	¥	1,160,751
Japanese municipal bonds		—		7,463
Japanese corporate bonds		—		5,205
Total domestic		372,459		1,173,419
Total held-to-maturity investments	¥	372,459	¥	1,173,419
Available-for-sale financial assets:
Domestic:
Japanese government bonds	¥	7,685,303	¥	5,722,674
Japanese municipal bonds		47,032		82,780
Japanese corporate bonds		296,601		363,550
Total domestic debt instruments		8,028,936		6,169,004
Equity instruments		5,161,734		5,117,629
Total domestic		13,190,670		11,286,633
Foreign:
U.S. Treasury and other U.S. government agency bonds		3,246,646		3,468,263
Bonds issued by other governments and official institutions		2,187,450		1,669,853
Mortgage-backed securities		488,183		633,629
Other debt instruments		331,491		183,021
Total foreign debt instruments		6,253,770		5,954,766
Equity instruments		678,176		659,119
Total foreign		6,931,946		6,613,885
Total available-for-sale financial assets	¥	20,122,616	¥	17,900,518
Total investment securities	¥	20,495,075	¥	19,073,937

F-43

10 LOANS AND ADVANCES

The following table presents loans and advances at March 31, 2018 and 2017 by industry classification.

	At March 31,
	2018			2017
	(In millions)
Domestic:
Manufacturing	¥	7,961,620		¥	9,578,147
Agriculture, forestry, fisheries and mining		145,957			174,021
Construction		947,765			1,151,989
Transportation, communications and public enterprises		5,424,054			5,365,225
Wholesale and retail		5,288,767			5,721,005
Finance and insurance		2,777,862			2,844,546
Real estate and goods rental and leasing		9,017,664			10,101,846
Services		4,255,228			4,885,247
Municipalities		1,000,286			1,216,211
Lease financing		14,629			2,706,641
Consumer(1)		16,363,489			19,096,755
Others		4,633,306			5,178,461
Total domestic		57,830,627			68,020,094
Foreign:
Public sector		372,008			299,746
Financial institutions		4,496,646			4,588,001
Commerce and industry		21,023,885			21,041,905
Lease financing		357,660			404,658
Others		1,779,101			1,836,322
Total foreign		28,029,300			28,170,632
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

(1) The balance in Consumer mainly consists of housing loans. The housing loan balances amounted to ¥11,482,678 million and ¥13,766,771 million at March 31, 2018 and 2017, respectively.

F-44

Reconciliation of allowance for loan losses is as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Allowance for loan losses at beginning of period		¥680,456		¥	722,717		¥	793,552
Provision for loan losses		126,623			141,457			118,750
Charge-offs:
Domestic		161,526			157,373			173,431
Foreign		23,534			33,135			20,218
Total		185,060			190,508			193,649
Recoveries:
Domestic		9,658			9,852			9,477
Foreign		574			445			871
Total		10,232			10,297			10,348
Net charge-offs		174,828			180,211			183,301
Others(1)		(140,575	)		(3,507	)		(6,284	)
Allowance for loan losses at end of period	¥491,676			¥680,456			¥722,717
Allowance for loan losses applicable to foreign activities:
Balance at beginning of period		¥128,347		¥	134,664		¥	100,783
Balance at end of period		¥114,306		¥	128,347		¥	134,664
Provision for loan losses	¥	19,872		¥	29,699		¥	60,002

(1) Others mainly include the exclusion of the allowance for loans and advances made by Kansai Urban Banking Corporation (“KUBC”) and THE MINATO BANK, LTD. (“The Minato Bank”), both of which had been the Company’s subsidiaries but became its equity-method associates, and the exclusion of the allowance for loans and advances made by SMFL which were reclassified as assets held for sale during the fiscal year ended March 31, 2018. The amount for the fiscal years ended March 31, 2017 and 2016 mainly includes foreign exchange transactions.

F-45

11 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The following table presents the SMBC Group’s principal associates and joint venture at March 31, 2018. Investments in associates and joint ventures of the SMBC Group are accounted for using the equity method unless they are held for sale.

Company Name	Country of Incorporation		Proportion of Ownership Interest(1)		Proportion of Voting Rights(1)			Main Business
			(%)		(%)
Principal Associates
THE MINATO BANK, LTD.		Japan		3.9		34.1	(2)	Commercial banking
Kansai Urban Banking Corporation		Japan		47.9		48.1		Commercial banking
The Japan Net Bank, Limited		Japan		41.1		41.1		Internet banking
PT Bank Tabungan Pensiunan Nasional Tbk		Indonesia		40.6		40.6		Commercial banking
The Bank of East Asia, Limited		China		19.4		19.4		Commercial banking
ACLEDA Bank Plc.		Cambodia		18.2		18.2		Commercial banking
Vietnam Export Import Commercial Joint Stock Bank		Vietnam		15.0		15.0		Commercial banking
Sumitomo Mitsui Auto Service Company, Limited		Japan		33.9		33.9		Leasing
NEC Capital Solutions Limited		Japan		25.0		25.0		Leasing
POCKET CARD CO., LTD.		Japan		20.0		20.0		Credit card
JSOL Corporation		Japan		50.0		50.0		System development and data processing
Sakura Information Systems Co., Ltd.		Japan		49.0		49.0		System engineering and data processing
Daiwa SB Investments Ltd.		Japan		43.9		43.9		Investment advisory and investment trust management
China Post & Capital Fund Management Co., Ltd.		China		23.6		23.6		Investment advisory and investment trust management
Principal Joint Venture
Daiwa Securities SMBC Principal Investments Co., Ltd.		Japan		40.0		40.0		Investments, fund management

(1) Percentages of proportion of ownership interest and proportion of voting rights have been truncated.

(2) The SMBC Group has a 3.9% direct holding in THE MINATO BANK, LTD., and can exercise a further 30.2% of the voting rights held by SMBC’s retirement benefit trust under contractual agreements between SMBC and the retirement benefit trust.

The SMBC Group accounts for certain investees, including The Bank of East Asia, Limited, ACLEDA Bank Plc. and Vietnam Export Import Commercial Joint Stock Bank, as associates regardless of its below 20% holdings of the voting rights to these investees, since the SMBC Group has the ability to exercise significant influence over these investees through participation in the policy making process at the meeting of the board of directors, the provision of essential technical information, or other relevant agreements or relationships.

On the other hand, the SMBC Group accounts for certain investees as available-for-sale financial assets regardless of its 20% or more holdings of the voting rights to these investees because the SMBC Group has contracts or arrangements with other investors by which the SMBC Group loses the power to exert significant influence over such investees.

F-46

THE MINATO BANK, LTD. and Kansai Urban Banking Corporation ceased to be consolidated subsidiaries of the SMBC Group and became its associates during the fiscal year ended March 31, 2018. The SMBC group received a cash consideration of ¥88,389 million for losing control of these companies. The total amount of cash and cash equivalents in these companies was ¥940,568 million. Total amounts of assets and liabilities other than cash or cash equivalents in these companies were ¥7,314,397 million and ¥7,883,267 million, respectively. As a result of remeasuring the interests retained in these companies at fair value, the SMBC Group recognized losses of ¥22,037 million, which are included in “Other expenses” in the consolidated income statement. On the other hand, the SMBC Group recognized profit of ¥19,392 million through above-mentioned transition, which are included in “Other income” in the consolidated income statement.

The SMBC Group has interests in a number of associates and joint ventures, none of which are regarded as individually material. The following table summarizes, in aggregate, the financial information of all individually immaterial associates and joint ventures that are accounted for using the equity method:

	At and for the fiscal year ended March 31,
	2018		2017
	(In millions)
Carrying amount of investments in associates and joint ventures	¥	730,414	¥	675,704
Share of:
Profit from continuing operations		49,323		29,318
Other comprehensive income (loss)		7,885		(21,602	)
Total comprehensive income		57,208		7,716

There are no significant restrictions on the ability of associates or joint ventures to transfer funds to the SMBC Group in the form of cash dividends, repayment of loans and advances.

F-47

12 PROPERTY, PLANT AND EQUIPMENT

The table below shows the changes in property, plant and equipment for the fiscal years ended March 31, 2018 and 2017.

	Assets for rent			Land			Buildings			Leased assets			Others			Total
	(In millions)
Cost	¥	1,833,990		¥	518,564		¥	760,244		¥	16,741		¥	431,178		¥	3,560,717
Accumulated depreciation and impairment losses		(288,630	)		(5,745	)		(384,565	)		(9,183	)		(281,643	)		(969,766	)
Net carrying amount at April 1, 2016		1,545,360			512,819			375,679			7,558			149,535			2,590,951
Additions		320,921			1,268			15,117			1,704			41,292			380,302
Acquisition of subsidiaries and businesses		52,636			20			604			4			547			53,811
Disposals		(152,172	)		(3,058	)		(1,089	)		(74	)		(1,771	)		(158,164	)
Depreciation		(88,198	)		—			(24,507	)		(2,102	)		(29,749	)		(144,556	)
Impairment losses		—			(453	)		(5,618	)		—			(325	)		(6,396	)
Exchange differences		(9,670	)		—			(192	)		—			(425	)		(10,287	)
Others		(9,961	)		3,896			10,813			97			(24,451	)		(19,606	)
Net carrying amount		1,658,916			514,492			370,807			7,187			134,653			2,686,055
Cost		2,086,804			520,078			774,233			17,837			425,728			3,824,680
Accumulated depreciation and impairment losses		(427,888	)		(5,586	)		(403,426	)		(10,650	)		(291,075	)		(1,138,625	)
Net carrying amount at March 31, 2017		1,658,916			514,492			370,807			7,187			134,653			2,686,055
Additions		415,397			44			30,144			1,775			54,951			502,311
Acquisition of subsidiaries and businesses		304,233			—			—			—			24			304,257
Disposals(1)		(1,640,222	)		(52,327	)		(33,796	)		(660	)		(10,064	)		(1,737,069	)
Depreciation		(91,906	)		—			(21,344	)		(2,061	)		(30,663	)		(145,974	)
Impairment losses		—			(2,446	)		(25,203	)		(136	)		(31	)		(27,816	)
Exchange differences		(66,033	)		(4	)		(284	)		(3	)		(506	)		(66,830	)
Others		302			(192	)		11,673			47			(16,632	)		(4,802	)
Net carrying amount		580,687			459,567			331,997			6,149			131,732			1,510,132
Cost		607,769			466,046			738,023			17,373			413,945			2,243,156
Accumulated depreciation and impairment losses		(27,082	)		(6,479	)		(406,026	)		(11,224	)		(282,213	)		(733,024	)
Net carrying amount at March 31, 2018	¥	580,687		¥	459,567		¥	331,997		¥	6,149		¥	131,732		¥	1,510,132

(1) Disposals include property, plant and equipment owned by SMFL reclassified as “Assets held for sale” during the fiscal year ended March 31, 2018. In addition, Disposals include property, plant and equipment related to KUBC and The Minato Bank, both of which had been the Company’s subsidiaries but became its equity method associates in March, 2018.

The impairment losses on property, plant and equipment are included in “Other expenses” in the consolidated income statement.

The SMBC Group had ¥2,626 million and ¥2,773,096 million of contractual commitments to acquire property, plant and equipment at March 31, 2018 and 2017, respectively.

The carrying amount of items of property, plant and equipment on which there was a restriction on title was ¥6,149 million and ¥7,187 million at March 31, 2018 and 2017, respectively.

13 LEASES

As Lessee

The SMBC Group leases land and buildings, office equipment, and other tangible and intangible assets from third parties under finance leases or operating leases.

F-48

Carrying amount of assets held under finance leases

The carrying amount of assets held under finance leases at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Tangible assets:
Land and buildings	¥	2,837	¥	3,295
Other tangible assets(1)		3,312		3,892
Total(2)		6,149		7,187
Intangible assets:
Software		144		185
Total	¥	6,293	¥	7,372

(1) Other tangible assets include mainly equipment, machinery and vehicles.

(2) Cross-reference to Leased assets in Note 12 “Property, Plant and Equipment.”

Finance lease commitments

The total of future minimum lease payments and their present value under finance leases at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018			2017
	(In millions)
Not later than one year	¥	2,567		¥	27,901
Later than one year and not later than five years		4,664			78,958
Later than five years		3,086			6,129
Total		10,317			112,988
Less: Future interest charges		(1,151	)		(6,064	)
Present value of finance lease commitments(1)	¥	9,166		¥	106,924

(1) Present value of finance lease commitments is included in “Borrowings” in the consolidated statement of financial position. See Note 18 “Borrowings.”

At March 31, 2018 and 2017, the total amounts of future minimum sublease payments to be received under non-cancellable subleases were nil and ¥108,351 million, respectively.

Operating lease commitments

The total amounts of future minimum lease payments under non-cancellable operating leases at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018		2017
	(In millions)
Not later than one year	¥	42,329	¥	44,746
Later than one year and not later than five years		129,298		124,946
Later than five years		121,419		129,312
Total future minimum lease payments under non-cancellable operating leases	¥	293,046	¥	299,004

F-49

For the fiscal years ended March 31, 2018, 2017 and 2016, ¥50,561 million, ¥49,047 million and ¥50,801 million were recognized as expenses in respect of operating lease and sublease agreements, of which ¥50,058 million, ¥48,527 million and ¥50,278 million related to minimum lease payments, and ¥503 million, ¥520 million and ¥523 million related to sublease payments, respectively. Lease expenses recognized in respect of lease and sublease agreements are included in “General and administrative expenses” in the consolidated income statement.

As Lessor

The SMBC Group leases assets to third parties under finance leases or operating leases, including machinery, equipment, aircraft, vessel and property.

At March 31, 2018, the assets and liabilities of SMFL were reclassified as held for sale due to the reorganization of the joint leasing partnership. As a result, the balances of finance lease receivable and operating lease receivable decreased.

Finance lease receivable

The gross investment in the lease, unearned finance income, present value of the minimum lease payments receivable and unguaranteed residual values under finance leases at March 31, 2018 and 2017 were as follows:

	At March 31, 2018
	Gross investment in the lease		Unearned finance income		Present value of the minimum lease payments receivable(1)		Unguaranteed residual values(1)
	(In millions)
Not later than one year	¥	54,501	¥	13,470	¥	41,031	¥	6,483
Later than one year and not later than five years		227,793		29,746		198,047		43,206
Later than five years		73,979		11,574		62,405		21,117
Total	¥	356,273	¥	54,790	¥	301,483	¥	70,806
	At March 31, 2017
	Gross investment in the lease		Unearned finance income		Present value of the minimum lease payments receivable(1)		Unguaranteed residual values(1)
	(In millions)
Not later than one year	¥	1,023,842	¥	91,070	¥	932,772	¥	16,831
Later than one year and not later than five years		1,841,026		155,534		1,685,492		112,474
Later than five years		343,332		38,960		304,372		59,358
Total	¥	3,208,200	¥	285,564	¥	2,922,636	¥	188,663

(1) Present value of the minimum lease payments receivable and unguaranteed residual values are included in “Loans and advances” in the consolidated statement of financial position.

Accumulated allowance for uncollectible minimum lease payments receivable was ¥1,828 million and ¥10,827 million at March 31, 2018 and 2017, respectively.

F-50

Operating lease receivable

The total amounts of the future minimum lease payments receivable under non-cancellable operating leases at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018		2017
	(In millions)
Not later than one year	¥	38,072	¥	215,329
Later than one year and not later than five years		70,813		790,394
Later than five years		18,857		484,896
Total	¥	127,742	¥	1,490,619

14 INTANGIBLE ASSETS

Goodwill

The table below shows the changes in goodwill by business segment for the fiscal years ended March 31, 2018 and 2017.

	Wholesale Business Unit			Retail Business Unit		International Business Unit			Head office account and others			Total
	(In millions)
Gross amount of goodwill	¥	—		¥	63,418	¥	13,233		¥	397,285		¥	473,936
Accumulated impairment losses		—			—		—			(13,149	)		(13,149	)
Net carrying amount at March 31, 2016		—			63,418		13,233			384,136			460,787
Acquisitions(1)		2,417			—		—			38,053			40,470
Impairment losses		—			—		—			(74,616	)		(74,616	)
Exchange differences		—			—		(186	)		—			(186	)
Net carrying amount		2,417			63,418		13,047			347,573			426,455
Gross amount of goodwill		2,417			63,418		13,047			435,338			514,220
Accumulated impairment losses		—			—		—			(87,765	)		(87,765	)
Net carrying amount at March 31, 2017		2,417			63,418		13,047			347,573			426,455
Disposals(2)		—			—		—			(11,197	)		(11,197	)
Impairment losses		(956	)		—		(4,292	)		(23,359	)		(28,607	)
Reclassification to assets held for sale(3)		(1,461	)		—		(8,166	)		(102,710	)		(112,337	)
Exchange differences		—			—		(589	)		—			(589	)
Net carrying amount		—			63,418		—			210,307			273,725
Gross amount of goodwill		956			63,418		4,292			321,431			390,097
Accumulated impairment losses		(956	)		—		(4,292	)		(111,124	)		(116,372	)
Net carrying amount at March 31, 2018	¥	—		¥	63,418	¥	—		¥	210,307		¥	273,725

(1) The SMBC Group recognized goodwill of ¥2,417 million in Wholesale Business Unit resulting from the acquisition of SMFL Capital Company, Limited, formerly known as GE Japan in April 2016 and ¥38,053 million in Head office account and others resulting from the acquisition of Sumitomo Mitsui Asset Management Company, Limited (“SMAM”) in July 2016. For additional information, refer to Note 49 “Acquisitions.”

(2) “Disposals” in Head office account and others includes amount of goodwill relating to Kansai Urban Banking Corporation (“KUBC”) which ceased to be its consolidated subsidiaries and became its associates during the fiscal year ended March 31, 2018.

(3) The SMBC Group reclassified goodwill of ¥112,337 million allocated to Sumitomo Mitsui Finance and Leasing Company, Limited (“SMFL”) and its subsidiaries to assets held for sale at March 31, 2018. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

F-51

The SMBC Group has four main business segments: the Wholesale Business Unit, the Retail Business Unit, the International Business Unit and the Global Markets Business Unit, with the remaining operations recorded in the Head office account and others. The SMBC Group changed its business segment information for the fiscal year ended March 31, 2018 in connection with the introduction of Group-wide business units, which determine strategies for each customer segment across the SMBC Group companies. The business was previously reported as Commercial Banking, Leasing, Securities and Consumer Finance, with the remaining operations recorded in Others. Comparative information has been restated.

Impairment testing of goodwill

Allocating goodwill to cash-generating units

For the purpose of impairment testing, goodwill is allocated to cash-generating units or group of cash-generating units, which represent the lowest level within the entity at which goodwill is monitored for internal purposes.

At March 31, 2018, the SMBC Group allocated goodwill to the Retail Business Unit of SMBC Consumer Finance Co., Ltd. (“SMBC Consumer Finance”) amounting to ¥56,692 million and to the Head office account and others of SMBC Nikko Securities Inc. (“SMBC Nikko Securities”) and SMAM amounting to ¥172,253 million and ¥38,053 million, respectively.

At March 31, 2017, the SMBC Group allocated goodwill to the Retail Business Unit of SMBC Consumer Finance amounting to ¥56,692 million and to the Head office account and others of SMBC Nikko Securities, SMFL, SMAM, SMBC Trust Bank Ltd. (“SMBC Trust Bank”), and KUBC amounting to ¥172,253 million, ¥102,710 million, ¥38,053 million, ¥23,359 million, and ¥11,197 million, respectively.

The aggregate amounts of other goodwill were ¥6,727 million and ¥22,191 million at March 31, 2018 and 2017, respectively, and they were not considered individually significant.

Timing of impairment tests

The SMBC Group performs impairment tests at least annually and whenever there is an indication that the cash-generating unit may be impaired.

Recoverable amount of cash-generating units

To determine whether an impairment loss shall be recognized, the carrying amount of a cash-generating unit is compared to its recoverable amount. The recoverable amount of a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

Fair value less costs to sell: The fair value less costs to sell is determined using an observable market price in the active market or unobservable inputs for the cash-generating unit at the date of the impairment test. The SMBC Group determined the recoverable amount of SMBC Friend Securities Co., Ltd. (“SMBC Friend Securities”), which was merged with SMBC Nikko Securities on January 1, 2018, for the fiscal year ended March 31, 2017, and SMFL for the fiscal year ended March 31, 2018, based on the fair value less costs to sell.

Value in use: The value in use is determined based on discounted future cash flows, which are based on the financial plans which have been approved by management and which are valid when the impairment test is performed. The financial plans are prepared taking into account the current economic and regulatory environment, direction of the regulation and business forecasts of the individual cash-generating units. The SMBC Group determined the recoverable amounts of the primary cash-generating units based on the value in use other than the recoverable amount of SMBC Friend Securities for the fiscal year ended March 31, 2017, and SMFL for the fiscal year ended March 31, 2018.

F-52

The financial plans, which are used to estimate the cash flow projections of the cash-generating units, cover three to five years. The cash flow projections beyond the period covered by the financial plans are extrapolated by applying the appropriate growth rates in perpetuity.

Key assumptions used in impairment testing

The key assumptions used for the value in use calculations for the fiscal years ended March 31, 2018 and 2017 were as follows:

	SMBC Trust Bank						KUBC			SMFL			SMBC Nikko Securities			SMBC Consumer Finance			SMAM
	Corporate Business			Retail Banking(1)
For the fiscal year ended March 31, 2018:
Pre-tax discount rate		12.61	%		9.91	%		—			—			11.42	%		11.20	%		9.01	%
Growth rate		1.00	%		1.00	%		—			—			1.00	%		1.00	%		1.00	%
For the fiscal year ended March 31, 2017:
Pre-tax discount rate		9.75	%		6.52	%		6.24	%		6.63	%		8.12	%		10.58	%		7.17	%
Growth rate		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%

(1) The business which SMBC Trust Bank acquired from Citibank Japan Ltd., in November 2015 is identified as Retail Banking.

Management considers that the pre-tax discount rates and the growth rates are the most sensitive key assumptions to determine the value in use of the cash-generating units.

Pre-tax discount rate: The pre-tax discount rates used to estimate the discounted cash flow of the primary cash-generating units are determined based on the Capital Asset Pricing Model (“CAPM”). The risk-free interest rate, the market risk premium and the beta factor that are used in the CAPM are determined based on market data and other external sources of information. The beta factor is determined based on a respective group of peer companies of the cash-generating units.

Growth rate: The growth rates used to estimate the cash flow projections beyond the period covered by the financial plans, which shall cover a maximum period of five years, are determined based on the expected long-term inflation rate and long-term average growth rates for the industries. The growth rate does not exceed the long-term growth rate for the industry in which the cash-generating unit operates.

Management believes that there were no reasonably possible changes in any of the key assumptions that would lead to the recoverable amounts of the cash-generating units being below these carrying amounts for the fiscal years ended March 31, 2018 and 2017.

Recognition of Impairment Losses

If the recoverable amount of the cash-generating unit is less than its carrying amount, the carrying amount of the cash-generating unit is reduced to its recoverable amount, and this reduction is recognized as impairment loss of goodwill.

The recoverable amount of SMBC Trust Bank was determined based on the value in use. For the fiscal year ended March 31, 2018, the value in use of SMBC Trust Bank decreased to less than its carrying amount, primarily due to the revision of the business plan and the key assumptions. As a result, the SMBC Group recognized an impairment loss of ¥23,359 million, equal to the total carrying amount of the goodwill relating to the SMBC Trust Bank, for the fiscal year ended March 31, 2018.

The recoverable amount of SMBC Friend Securities for the fiscal year ended March 31, 2016 was determined based on the value in use. However, for the fiscal year ended March 31, 2017, the value in use of

F-53

SMBC Friend Securities decreased to less than fair value less costs to sell, primarily due to the revision of the business plan. Therefore, for the fiscal year ended March 31, 2017, the SMBC Group determined the recoverable amount of SMBC Friend Securities based on the fair value less costs to sell, which was measured based on net asset value and categorized within level 3 in the fair value hierarchy. As a result, the SMBC Group recognized an impairment loss of ¥74,616 million, equal to the total carrying amount of the goodwill relating to SMBC Friend Securities, for the fiscal year ended March 31, 2017.

The impairment losses on goodwill are included in “Other expenses” in the consolidated income statement.

Other intangible assets

The table below shows the changes in other intangible assets for the fiscal years ended March 31, 2018 and 2017.

	Internally generated software			Purchased software			Contractual customer relationships			Trademarks			Other intangibles			Total
	(In millions)
Cost	¥	591,118		¥	346,819		¥	172,950		¥	41,828		¥	58,368		¥	1,211,083
Accumulated amortization and impairment losses		(317,309	)		(212,356	)		(58,321	)		(26,007	)		(9,784	)		(623,777	)
Net carrying amount at April 1, 2016		273,809			134,463			114,629			15,821			48,584			587,306
Additions		102,193			41,080			—			—			2,228			145,501
Acquisition of subsidiaries and businesses		879			851			76,027			4,288			9,623			91,668
Disposals		(1,376	)		(2,379	)		—			—			(1,452	)		(5,207	)
Amortization		(82,158	)		(40,722	)		(20,192	)		(4,256	)		(4,579	)		(151,907	)
Impairment losses		—			(97	)		—			—			(75	)		(172	)
Exchange differences		(32	)		2			—			—			(15	)		(45	)
Others		(1,178	)		6,499			—			—			(2,352	)		2,969
Net carrying amount		292,137			139,697			170,464			15,853			51,962			670,113
Cost		648,463			372,531			248,977			46,116			64,487			1,380,574
Accumulated amortization and impairment losses		(356,326	)		(232,834	)		(78,513	)		(30,263	)		(12,525	)		(710,461	)
Net carrying amount at March 31, 2017		292,137			139,697			170,464			15,853			51,962			670,113
Additions		93,977			40,024			—			—			2,169			136,170
Acquisition of subsidiaries and businesses		—			222			—			—			—			222
Disposals(1)		(8,420	)		(11,928	)		(57,987	)		—			(1,844	)		(80,179	)
Amortization		(84,662	)		(43,818	)		(20,192	)		(4,280	)		(4,473	)		(157,425	)
Impairment losses		—			—			(1,830	)		—			(5,229	)		(7,059	)
Exchange differences		142			(731	)		—			—			(29	)		(618	)
Others		343			2,099			—			—			(1,489	)		953
Net carrying amount		293,517			125,565			90,455			11,573			41,067			562,177
Cost		650,632			340,593			172,950			46,116			54,024			1,264,315
Accumulated amortization and impairment losses		(357,115	)		(215,028	)		(82,495	)		(34,543	)		(12,957	)		(702,138	)
Net carrying amount at March 31, 2018	¥	293,517		¥	125,565		¥	90,455		¥	11,573		¥	41,067		¥	562,177

(1) Disposals include other intangible assets owned by SMFL reclassified as “Assets held for sale” during the fiscal year ended March 31, 2018.

The impairment losses on other intangible assets are included in “Other expenses” and the amortization expenses of other intangible assets are included in “General and administrative expenses” in the consolidated income statement.

F-54

The SMBC Group had ¥383 million and ¥317 million of contractual commitments to acquire intangible assets at March 31, 2018 and 2017, respectively.

The amounts of research and development expenditure recognized as expenses for the fiscal years ended March 31, 2018, 2017 and 2016 were ¥84 million, ¥89 million and ¥207 million, respectively, and they were included in “General and administrative expenses” in the consolidated income statement.

Other intangibles at March 31, 2018 and 2017 include leasehold rights, amounting to ¥5,436 million and ¥6,825 million, respectively, which are rights to use land for the purpose of owning the buildings. Since the SMBC Group has a long history of renewal, these contracts are not expected to be terminated in the foreseeable future. Leasehold rights are expected to generate cash flows for an indefinite period of time. They are not amortized but are tested for impairment annually, irrespective of whether there is any indication of impairment.

15 OTHER ASSETS

Other assets at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Prepaid expenses	¥	49,300	¥	72,594
Accrued income		416,210		380,018
Receivables from brokers, dealers and customers for securities transactions		1,175,495		1,438,977
Cash collateral provided for derivative and other financial transactions		1,560,972		1,089,481
Retirement benefit assets		316,455		257,744
Security deposits		99,247		115,064
Investment properties(1)(2)		13,889		436,985
Others		412,340		530,861
Total other assets	¥	4,043,908	¥	4,321,724

(1) Investment properties are carried at cost less accumulated depreciation and accumulated impairment losses. Rental income from investment properties was ¥29,427 million, ¥25,322 million and ¥20,879 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively.

(2) Investment properties decreased due to the exclusion of those owned by SMFL reclassified as assets held for sale during the fiscal year ended March 31, 2018.

16 DEPOSITS

Deposits at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Non-interest-bearing demand deposits	¥	21,611,514	¥	19,853,552
Interest-bearing demand deposits		52,154,265		51,281,995
Deposits at notice		10,355,664		10,330,269
Time deposits		25,655,132		29,525,875
Negotiable certificates of deposit		11,220,285		11,880,938
Others(1)		7,464,667		7,422,661
Total deposits	¥	128,461,527	¥	130,295,290

(1) Others include, among other items, foreign currency deposits in domestic offices and Japanese yen accounts held by foreign depositors in domestic offices.

F-55

17 TRADING LIABILITIES

Trading liabilities at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Debt instruments “short position”	¥	2,008,711	¥	2,038,330
Equity instruments “short position”		135,188		33,254
Total trading liabilities	¥	2,143,899	¥	2,071,584

Trading liabilities include the instruments classified as held for trading. Trading debt instruments mainly consist of Japanese government bonds. Trading equity instruments mainly consist of publicly traded Japanese stocks.

F-56

18 BORROWINGS

Short-term borrowings and long-term borrowings (with original maturities of more than one year) at March 31, 2018 and 2017 consisted of the following:

			At March 31,
	Interest rate		2018		2017
			(In millions)
SMFG:
Long-term borrowings:
Unsubordinated
Fixed rate borrowing, payable in United States dollars, due 2022-2031		2.89%-3.87%	¥	31,875	¥	33,657
Fixed rate borrowing, payable in Australian dollars, due 2027		3.73%		8,165		—
Floating rate borrowing, payable in United States dollars, due 2026-2028		2.31%-3.76%		110,181		50,149
Subordinated
Fixed rate borrowing, payable in Japanese yen, due 2024-2031		0.56%-1.27%		49,000		49,000
Total SMFG				199,221		132,806
SMBC:
Short-term borrowings		0.00%-2.18%		3,521,478		6,640,069
Long-term borrowings:
Unsubordinated
Fixed rate borrowing, payable in Japanese yen, due 2017-2028		0.00%-6.10%		3,126,970		4,351
Fixed rate borrowing, payable in United States dollars, due 2017-2025		0.00%-4.17%		42,666		45,387
Fixed rate borrowing, payable in euros, due 2017-2045		0.00%-3.50%		122,023		101,492
Floating rate borrowing, payable in Japanese yen, due 2018-2037		(0.18%)-0.02%		59,500		68,000
Floating rate borrowing, payable in United States dollars, due 2017-2033		1.18%-3.45%		894,797		904,263
Floating rate borrowing, payable in euros, due 2021-2022		0.00%-0.06%		32,128		31,769
Subordinated
Fixed rate borrowing, payable in Japanese yen, due 2018-2027		1.28%-2.25%		216,000		226,000
Total SMBC				8,015,562		8,021,331
Other subsidiaries:
Short-term borrowings		0.09%-7.91%		421,662		906,427
Long-term borrowings:
Unsubordinated
Fixed rate borrowing, payable in Japanese yen, due 2017-2042		0.00%-2.67%		227,231		617,358
Fixed rate borrowing, payable in United States dollars, due 2017-2044		0.81%-5.40%		197,806		216,213
Fixed rate borrowing, payable in Chinese yuan, due 2017-2021		2.40%-6.15%		—		24,348
Fixed rate borrowing, payable in Thai baht, due 2018-2021		1.85%-4.03%		—		12,724
Floating rate borrowing, payable in Japanese yen, due 2017-2042		0.04%-1.92%		267,598		431,141
Floating rate borrowing, payable in United States dollars, due 2017-2027		1.00%-3.86%		21,610		498,860
Floating rate borrowing, payable in euros, due 2020		1.00%		52,403		47,952
Floating rate borrowing, payable in Great Britain pound, due 2042-2043		1.51%-8.49%		24,627		20,190
Other fixed or floating rate borrowing, due 2017-2043		0.58%-11.79%		10,873		30,728
Subordinated
Fixed rate borrowing, payable in Japanese yen, due 2021		1.35%		—		5,200
Floating rate borrowing, payable in Japanese yen, due 2025		1.95%		—		4,000
Total other subsidiaries				1,223,810		2,815,141
Liabilities associated with securitization transactions:
Fixed rate borrowing, payable in Japanese yen, due 2021-2049		0.09%-2.70%		1,152,826		1,077,539
Floating rate borrowing, payable in Japanese yen, due 2017-2027		0.16%-1.66%		47,533		85,421
Floating rate borrowing, payable in United States dollars, due 2019-2020		1.86%-3.01%		4,363		6,781
Total liabilities associated with securitization transactions				1,204,722		1,169,741
Lease obligations		—		9,166		106,924
Total borrowings				¥10,652,481	¥	12,245,943

The interest rates shown in the above table are the contractual rates in effect at March 31, 2018 and 2017, and thus do not represent the actual effective interest rates. Maturity information for certain subordinated borrowings is based on the date of callable options.

F-57

19 DEBT SECURITIES IN ISSUE

Debt securities in issue at March 31, 2018 and 2017 consisted of the following:

			At March 31,
	Interest rate		2018		2017
			(In millions)
SMFG:
Bonds:
Bonds, payable in United States dollars, due 2021-2048		1.99%-4.30%	¥	2,583,513	¥	1,639,109
Bonds, payable in euros, due 2022-2033		0.12%-1.72%		509,987		239,081
Bonds, payable in Australian dollars, due 2022-2028		3.07%-4.13%		179,367		93,691
Subordinated bonds:
Subordinated bonds, payable in Japanese yen, due 2024-2030		0.30%-1.33%		757,999		653,778
Subordinated bonds, payable in United States dollars, due 2024		4.44%		185,426		195,697
Total SMFG				4,216,292		2,821,356
SMBC:
Commercial paper		(0.50%)-2.26%		1,521,437		1,389,908
Bonds:
Bonds, payable in Japanese yen, due 2017-2019		0.25%-0.33%		99,000		156,182
Bonds, payable in United States dollars, due 2017-2045		1.21%-4.30%		2,072,295		2,404,015
Bonds, payable in euros, due 2017-2023		0.00%-2.75%		260,236		417,767
Bonds, payable in Australian dollars, due 2017-2025		2.97%-4.13%		63,572		77,270
Bonds, payable in Hong Kong dollars, due 2020-2025		2.09%-2.92%		32,009		34,136
Bonds, payable in Thai baht, due 2019-2020		2.00%-2.09%		25,575		11,410
Subordinated bonds:
Subordinated bonds, payable in Japanese yen, due 2017-2026		0.87%-2.80%		385,522		565,599
Subordinated bonds, payable in United States dollars, due 2022		4.85%		158,912		167,724
Subordinated bonds, payable in euros, due 2020		4.00%		97,648		89,227
Total SMBC				4,716,206		5,313,238
Other subsidiaries:
Commercial paper		0.00%-2.42%		946,208		2,128,438
Bonds:
Bonds, payable in Japanese yen, due 2017-2048		0.01%-21.00%		616,267		788,633
Bonds, payable in United States dollars, due 2017-2037		0.01%-8.00%		24,599		68,616
Bonds, payable in Indonesian rupiah, due 2018		9.85%		19,081		8,688
Bonds, payable in Australian dollars, due 2019-2031		0.01%-3.00%		1,896		1,654
Bonds, payable in Turkish lira, due 2019-2023		0.01%-9.00%		3,568		—
Subordinated bonds:
Subordinated bonds, payable in Japanese yen, due 2019-2028		2.31%-4.15%		25,000		35,000
Total other subsidiaries				1,636,619		3,031,029
Total debt securities in issue			¥	10,569,117	¥	11,165,623

F-58

Interest rates represent the contractual interest rates that were applied at March 31, 2018 and 2017, and thus do not represent the actual effective interest rates.

The following table presents the movement in Subordinated bonds for the fiscal year ended March 31, 2018.

	Subordinated bonds
	(In millions)
Balance at March 31, 2017(1)	¥	1,707,025
Cash flows:
Proceeds from issuance of subordinated bonds		104,866
Redemption of subordinated bonds		(180,034	)
Non-cash changes:
Foreign exchange translations		(11,138	)
Others(2)		(10,212	)
Balance at March 31, 2018(1)	¥	1,610,507

(1) The balances are comprised of subordinated bonds issued by SMFG, SMBC and other subsidiaries.

(2) Others mainly include changes arising from losing control of SMFG’s subsidiaries for the fiscal year ended March 31, 2018.

20 PROVISIONS

The following table presents movements by class of provisions for the fiscal years ended March 31, 2018 and 2017.

	Provision for interest repayment			Other provisions			Total
	(In millions)
Balance at April 1, 2016	¥	229,422		¥	32,979		¥	262,401
Additional provisions		12,000			14,743			26,743
Amounts used		(83,528	)		(10,713	)		(94,241	)
Unused amounts reversed		(439	)		(225	)		(664	)
Amortization of discount and effect of change in discount rate		(122	)		214			92
Acquisition of subsidiaries and businesses		—			381			381
Others		—			(12	)		(12	)
Balance at March 31, 2017		157,333			37,367			194,700
Additional provisions		50,500			28,537			79,037
Amounts used		(61,961	)		(14,902	)		(76,863	)
Unused amounts reversed		(479	)		(3,247	)		(3,726	)
Amortization of discount and effect of change in discount rate		(142	)		209			67
Others		(72	)		(4,876	)		(4,948	)
Balance at March 31, 2018	¥	145,179		¥	43,088		¥	188,267

Provision for Interest Repayment

Japan has two laws restricting interest rates on loans. The Interest Rate Restriction Act sets the maximum interest rates on loans ranging from 15% to 20%. The Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates capped the interest rate on loans at 29.2% up to June 2010. Interest rates on loans greater than the range of 15-20% but below the maximum allowable of 29.2% were called “gray zone interest,” and many consumer lending and credit card companies were charging interest in this zone.

F-59

In January 2006, judicial decisions strictly interpreted the conditions under which consumer finance companies may retain gray zone interest. As a result, claims for refunds of gray zone interest have increased, and consumer lending and credit card companies have recorded a provision for claims for refunds of gray zone interest.

In December 2006, the Government of Japan made amendments to laws regulating money lenders to implement regulatory reforms affecting the consumer finance industry. As a result, in June 2010, the maximum legal interest rates on loans were reduced to the range of 15-20%, and gray zone interest was abolished.

The provision for interest repayment is calculated by estimating the future claims for the refund of gray zone interest, taking into account historical experience such as the number of customer claims for a refund, the amount of repayments and the characteristics of customers, and the length of the period during which claims are expected to be received in the future. Of these historical experiences, the number of customer claims for the refund has a significant effect on the amount of the provision, and the historical number of customer claims to the SMBC Group was 94 thousand, 127 thousand and 137 thousand for the fiscal years ended March 31, 2018, 2017 and 2016, respectively. The timing of the settlement of these claims is uncertain.

The decrease in the provision for interest repayment for the fiscal year ended March 31, 2018 was primarily due to the use of the provision during the year, which was partially offset by additional provisions as a result of the estimation of the future claims for the refund.

Other Provisions

Other provisions include asset retirement obligations and provisions for reimbursement of deposits, loan commitments, product warranties and litigation claims. Most of these provisions occurred in the normal course of business and none of them were individually significant at March 31, 2018 and 2017.

21 OTHER LIABILITIES

Other liabilities at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Accrued expenses	¥	313,226	¥	291,871
Unearned income		133,478		168,952
Financial guarantees and other credit-related contingent liabilities		119,170		119,913
Due to trust account		1,328,271		1,180,976
Payables to brokers, dealers and customers for securities transactions		1,737,919		2,618,322
Payables related to credit card services		640,487		563,268
Obligations from factoring transactions		566,284		487,209
Retirement benefit liabilities		36,888		64,972
Guarantee deposits received		701,177		563,739
Others		1,305,840		1,401,879
Total other liabilities	¥	6,882,740	¥	7,461,101

F-60

22 DEFERRED INCOME TAX

The changes of net deferred tax assets and liabilities for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended March 31,
	2018			2017
	(In millions)
At beginning of period	¥	(238,240	)	¥	(220,574	)
Deferred tax benefit (expense)		(1,036	)		120,468
Deferred tax relating to other comprehensive income:
Remeasurements of defined benefit plans reserve		(22,492	)		(2,315	)
Available-for-sale financial assets reserve		(99,383	)		(82,619	)
Exchange differences on translating foreign operations reserve		3,137			2,545
Acquisition and disposal of subsidiaries and businesses		(17,196	)		(6,259	)
Reclassification to assets held for sale(1)		(5,540	)		—
Exchange differences and others		2,445			(49,486	)
At end of period	¥	(378,305	)	¥	(238,240	)

(1) The SMBC Group reclassified net deferred tax assets of ¥5,540 million allocated to Sumitomo Mitsui Finance and Leasing Company, Limited and its subsidiaries to assets held for sale at March 31, 2018. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

The deferred tax assets and liabilities at March 31, 2018 and 2017 were attributable to the following items:

	At March 31,
	2018			2017
	(In millions)
Deferred tax assets:
Loans and advances		¥206,928		¥	231,971
Derivative financial instruments		59,530			55,989
Provision for interest repayment		36,779			40,638
Tax losses carried forward		24,082			98,788
Retirement benefits		9,204			21,772
Investment securities		1,243			981
Other deductible temporary differences		152,891			161,246
Total deferred tax assets		490,657			611,385
Deferred tax liabilities:
Investment securities		680,425			571,489
Goodwill and intangible assets		81,076			111,145
Property, plant and equipment		28,786			91,703
Retirement benefits		19,484			3,485
Lease transactions		10,866			16,026
Other taxable temporary differences		48,325			55,777
Total deferred tax liabilities		868,962			849,625
Net deferred tax liabilities(1)		¥(378,305	)	¥	(238,240	)

(1) Deferred tax assets and deferred tax liabilities are offset in the consolidated statement of financial position if the entity has a legally enforceable right to set off current tax assets against current tax liabilities, and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.

F-61

On March 31, 2016, the Government of Japan promulgated (i) an amendment to the Corporation Tax Act and (ii) the Local Tax Act. Those laws (i) reduce the Japanese national corporation tax rate by 0.5 percentage points from the fiscal year beginning April 1, 2016 and additionally reduce by 0.2 percentage points from the fiscal year beginning April 1, 2018, and (ii) reduce the enterprise tax rate by 1.2 percentage points from the fiscal year beginning April 1, 2016. As a result, the effective statutory tax rate of the Company was reduced from 32.3% to 30.9% during the two fiscal years beginning April 1, 2016 through March 31, 2018 and from 30.9% to 30.6% for the fiscal years beginning April 1, 2018. The SMBC Group measured deferred tax assets and liabilities at the rates that were expected to apply to the period when the assets are realized or the liabilities are settled.

On December 22, 2016, the Company applied to the Commissioner of the National Tax Agency for permission to adopt the consolidated corporate-tax system in Japan from the fiscal year beginning April 1, 2017. Accordingly, the Company and its wholly owned domestic subsidiaries started to recognize the deferred tax assets based on the consolidated corporate-tax system at March 31, 2017. Under the consolidated corporate-tax system, the taxable profits or losses on a consolidated basis are calculated by aggregating those of the parent company and its wholly owned domestic subsidiaries (a “tax consolidated group”), and any unused tax losses carried forward, except for certain specified consolidated tax losses carried forward, by one company can be used by another company within the tax consolidated group for Japanese national corporation tax purposes. Therefore, the deferred tax assets relating to deductible temporary differences and tax losses carried forward were recognized on a consolidated basis, but only to the extent that it is probable that future consolidated taxable profits will be available against which the deductible temporary differences and tax losses carried forward can be utilized.

The deferred tax assets of the Company and its wholly owned domestic subsidiaries, which adopted the consolidated corporate-tax system, consisted mainly of those for loans and advances. The deferred tax assets for loans and advances were generally related to the accumulated losses from the impairment of these assets which would be deductible for tax purposes in future periods. The Company and its wholly owned domestic subsidiaries consider that most of the deductible temporary differences will be able to be used based mainly on future taxable profits on a consolidated basis. The future taxable profits are estimated based on forecasted results of operations, which reflect historical financial performance and the business plans that management believes to be prudent and feasible. In the Company’s other subsidiaries, deferred tax assets relating to deductible temporary differences are recognized only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized. No deferred tax assets were recognized in certain the Company’s subsidiaries for the deductible temporary differences estimated not to be realized, or for the tax losses carried forward projected to expire due to the uncertainty of sufficient future taxable profit.

The following table shows the amounts of deductible temporary differences and tax losses carried forward by expiration date at March 31, 2018 and 2017 for which no deferred tax assets were recognized.

	At March 31,
	2018		2017
	(In millions)
Deductible temporary differences	¥	445,649	¥	436,481
Tax losses carried forward which will expire in 1 year		224,298		112,010
2 years		209,109		251,300
3 years		252,812		219,834
4 years		70,222		259,636
5 years		140,879		78,055
6 years		59,791		168,288
7 years		44,575		75,171
8 years		16,279		59,230
9 years and thereafter		59,734		19,390
Total deductible temporary differences and tax losses carried forward(1)		¥1,523,348	¥	1,679,395

F-62

(1) Under the consolidated corporate-tax system, the Company and its wholly owned domestic subsidiaries recognized deferred tax assets relating to deductible temporary differences and tax losses carried forward on a consolidated basis for Japanese national corporation tax purposes and on a stand-alone basis for Japanese local corporation tax purposes. There are deductible temporary differences and tax losses carried forward on which deferred tax assets are recognized for Japanese national corporation tax purposes, but on which no deferred tax assets are recognized for Japanese local corporation tax purposes. These deductible temporary differences and tax losses carried forward amounted to ¥421,319 million and ¥503,511 million at March 31, 2018 and 2017, respectively.

In addition to the above table, the SMBC Group does not recognize deferred tax assets for deductible temporary differences related to investments in subsidiaries, associates and joint ventures where the Company has no intention to reverse these differences in the foreseeable future. The amount of those deductible temporary differences was ¥818 billion and ¥810 billion at March 31, 2018 and 2017, respectively.

At March 31, 2018 and 2017, the amount of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures for which deferred tax liabilities had not been recognized was ¥2,041 billion and ¥1,352 billion, respectively. The Company can control the timing of reversal of the temporary differences and it is probable that they will not be reversed in the foreseeable future.

Deferred tax expense for the fiscal years ended March 31, 2018 and 2017 was attributable to the following temporary differences and tax losses carried forward:

	For the fiscal year ended March 31,
	2018			2017
	(In millions)
Investment securities	¥	(34,881	)	¥	26,999
Derivative financial instruments		9,296			39,101
Goodwill and intangible assets		7,809			2,201
Loans and advances		6,092			(10,496	)
Lease transactions		5,223			2,389
Provision for interest repayment		(3,840	)		28,186
Tax losses carried forward		(3,448	)		66,378
Retirement benefits		(2,604	)		3,139
Property, plant and equipment		(1,137	)		(45,285	)
Other temporary differences—net		16,454			7,856
Total deferred tax benefit (expense)	¥	(1,036	)	¥	120,468

23 RETIREMENT BENEFITS

Defined Benefit Plans

SMBC and some of the Company’s other subsidiaries have various defined benefit plans such as defined benefit pension plans and lump-sum severance indemnity plans, which define the amount of benefits that an employee will receive on or after retirement, usually based on one or more factors, such as age, years of service, compensation, classes and earned points based on service.

SMBC’s defined benefit plans account for the vast majority of the defined benefit obligations and plan assets in the SMBC Group. SMBC has a corporate defined benefit pension plan and a lump-sum severance indemnity plan.

Defined benefit pension plans

SMBC’s corporate defined benefit pension plan is a funded defined benefit pension plan, which is regulated by the Corporate Defined Benefit Pension Plan Law, one of the Japanese pension laws. Benefits are paid in exchange for services rendered by employees who worked for more than a specified period considering their years of service and the degree of their contribution to SMBC.

F-63

SMBC’s pension fund is a special entity established in accordance with the pension laws, and SMBC has an obligation to make contributions to it. It has a board of directors which consists of an equal number of members elected from both the management and employees of SMBC. These board members have a fiduciary duty to administer and manage the pension fund.

The objective of SMBC’s pension fund is to earn a return over the long term which is sufficient to pay future benefits to participants of the corporate defined benefit pension plan, including pension benefit plans, lump-sum indemnity plans for bereaved families, and other lump sum indemnity plans. To achieve this, SMBC’s pension fund annually sets investment guidelines including asset allocation composed of equities, bonds and other appropriate financial assets according to the funding status. Investment decisions for its assets are made in accordance with these guidelines.

The Corporate Defined Benefit Pension Plan Law requires a pension fund to review the assumptions and remeasure the required contribution at least every fifth fiscal year, in order to ensure that it maintains sufficient assets for future benefit payments. On the other hand, the present value of the defined benefit obligation is calculated annually based on actuarial valuations that are dependent upon a number of assumptions, including discount rates, mortality rates and future salary (benefit) increases, in accordance with IAS 19 “Employee Benefits.” Other types of defined benefit pension plans operated by the SMBC Group are generally established and operated in the same manner as described above.

Lump-sum severance indemnity plans

SMBC and some of the Company’s other subsidiaries have lump-sum severance indemnity plans under which their employees are provided with lump-sum cash payments upon leaving the company. While funding of these plans is not required under Japanese pension laws, some of these plans are funded with assets held by retirement benefit trusts.

SMBC and a number of the Company’s other subsidiaries in Japan established retirement benefit trusts and contributed some of their marketable securities to these trusts in order to isolate these assets for retirement benefits by entering into contracts with trust banks. Retirement benefit trusts are voluntary funds that are used either to contribute assets to the pension funds or to directly settle retirement benefits. Among the SMBC Group, retirement benefit trusts are set up for the defined benefit pension plans, as well as for the lump-sum severance indemnity plans.

The assets belonging to the retirement benefit trusts are available to be used only to pay or fund retirement benefits, and practically held by an entity that is legally separated from the SMBC Group. Therefore, they are not available to the SMBC Group’s creditors even in bankruptcy and cannot be returned to the SMBC Group, unless either the remaining assets are sufficient to meet all the related obligations or the entities (funds) reimburse to the SMBC Group the retirement benefits which are already paid by the SMBC Group. Therefore, these assets are accounted for as plan assets.

F-64

The following tables provide detailed information for the defined benefit plans.

The amounts of the retirement benefit liabilities and the retirement benefit assets recognized in the consolidated statement of financial position at March 31, 2018 and 2017 were determined as follows:

	At March 31,
	2018			2017
	(In millions)
Present value of unfunded obligations	¥	(30,082	)	¥	(52,494	)
Present value of funded obligations		(1,143,589	)		(1,187,290	)
Fair value of plan assets		1,453,238			1,432,556
Net retirement benefit assets (liabilities)	¥	279,567		¥	192,772
Of which retirement benefit liabilities included in “Other liabilities”	¥	(36,888	)	¥	(64,972	)
Of which retirement benefit assets included in “Other assets”	¥	316,455		¥	257,744

The movements in the defined benefit obligations for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended March 31,
	2018			2017
	(In millions)
At beginning of period	¥	1,239,784		¥	1,177,090
Current service cost		40,387			40,030
Interest cost		8,637			6,970
Actuarial losses—demographic assumptions		15,485			77,112	(1)
Actuarial losses (gains)—financial assumptions		5,896			(17,385	)
Actuarial losses—experience		2,519			3,980
Benefits paid		(44,433	)		(42,387	)
Lump-sum payments		(24,109	)		(11,365	)
Past service cost		(44	)		(3	)
Acquisition of subsidiaries and businesses		—			7,096
Settlements		—			(621	)
Others(2)		(70,451	)		(733	)
At end of period	¥	1,173,671		¥	1,239,784

(1) Includes an increase due to the assumption refinement of estimate on mortality rates.

(2) Others mainly include the exclusion of the defined benefit obligations related to KUBC and The Minato Bank, both of which had been the Company’s subsidiaries but became its equity-method associates, and the exclusion of the defined benefit obligations related to SMFL which were reclassified as assets held for sale during the fiscal year ended March 31, 2018.

F-65

The movements in the fair value of plan assets for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended March 31,
	2018			2017
	(In millions)
At beginning of period	¥	1,432,556		¥	1,354,202
Interest income		10,090			8,123
Return on plan assets excluding interest income		97,433			71,841
Contributions by employer		19,208			44,535
Benefits paid		(44,433	)		(42,387	)
Settlements		—			(696	)
Others(1)		(61,616	)		(3,062	)
At end of period	¥	1,453,238		¥	1,432,556

(1) Others mainly include the exclusion of the fair value of plan assets related to KUBC and The Minato Bank, both of which had been the Company’s subsidiaries but became its equity-method associates, and the exclusion of the fair value of plan assets related to SMFL which were reclassified as assets held for sale during the fiscal year ended March 31, 2018.

The amounts recognized in “General and administrative expenses” in the consolidated income statement for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Current service cost	¥	40,387		¥	40,030		¥	35,032
Net interest cost		(1,453	)		(1,153	)		(3,553	)
Past service cost		(44	)		(3	)		(32	)
Total	¥	38,890		¥	38,874		¥	31,447

The plan assets at March 31, 2018 and 2017 were composed as follows:

	At March 31,
	2018						2017
	Quoted in active markets		Other		Total		Quoted in active markets		Other		Total
	(In millions)
Plan assets retained in the pension funds:
Equity instruments	¥	286,542	¥	148,439	¥	434,981	¥	269,706	¥	135,884	¥	405,590
Debt instruments		36,290		205,320		241,610		107,075		224,509		331,584
General account of life insurance companies		356		45,089		45,445		758		66,892		67,650
Other investments and short-term assets		45,252		170,476		215,728		21,970		105,490		127,460
Plan assets retained in the retirement benefit trusts:
Japanese equity instruments		468,319		1,542		469,861		456,747		1,400		458,147
Other short-term assets		36,340		9,273		45,613		32,276		9,849		42,125
Total	¥	873,099	¥	580,139	¥	1,453,238	¥	888,532	¥	544,024	¥	1,432,556

The assets in the pension funds included common stocks issued by the SMBC Group at March 31, 2018 and 2017. The amounts of these stocks were not significant.

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The assets in retirement benefit trusts were primarily composed of Japanese equity instruments. Most of the plan assets held by the SMBC Group are invested in Japanese equity and debt instruments. Accordingly, the SMBC Group may be exposed to market risk arising from the domestic markets.

The SMBC Group retained the voting rights of some of these equity instruments with fair values of ¥457,217 million and ¥418,221 million (31.5% and 29.2% of the total fair values of plan assets) at March 31, 2018 and 2017, respectively.

The principal actuarial assumptions used at March 31, 2018, 2017 and 2016 were as follows:

	At March 31,
	2018			2017			2016
Discount rates		0.7	%		0.7	%		0.6	%

Discount rates are weighted on the basis of the defined benefit obligations.

The assumptions for future mortality are based on the official mortality table generally used for actuarial assumptions in Japan. Under the mortality table, used at March 31, 2018, 2017 and 2016, the current average remaining life expectancy of an individual retiring at age 60 was 23 years for males and 28 years for females.

The sensitivity analyses of the effect of changes in key assumptions on the defined benefit obligations at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018			2017
	Increase/(decrease)			Increase/(decrease)
	(In millions)
Discount rates:
Increase by 50 bps	¥	(73,146	)	¥	(71,373	)
Decrease by 50 bps		83,014			80,864
Average life expectancy at age 60:
Increase of one year	¥	38,291		¥	37,166

Each increase and decrease in the table above assumes that only one assumption is changed, with all other assumptions remaining unchanged. In practice, however, changes in multiple assumptions may occur in a mutually interrelated manner.

The weighted average durations of defined benefit plans for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	At March 31,
	2018		2017		2016
	(Years)
Lump-sum severance indemnity plans		12.8		12.9		12.8
Defined benefit pension plans		18.9		18.2		17.6

Funding Policy for Plan Assets

The pension funds review the funding status of plan assets every year. If any funding deficit is identified, a measure to cover such deficit will be implemented, for example, by increasing the amount of contributions by the employer.

Expected contribution

Expected contributions to the defined benefit plans for the fiscal year ending March 31, 2019 are ¥21,269 million.

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Defined Contribution Plans

Some of the Company’s subsidiaries provide defined contribution plans. The amounts recognized as expenses for the defined contribution plans were ¥10,769 million, ¥9,621 million and ¥7,258 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively, which were included in “General and administrative expenses” in the consolidated income statement.

Employees’ Pension Insurance Plan

In Japan, the Government of Japan operates the Employees’ Pension Insurance Plan which covers most of the private entities’ employees. The amounts of contributions charged to expense for the Employees’ Pension Insurance Plan were ¥42,694 million, ¥43,650 million and ¥40,173 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively, which were included in “General and administrative expenses” in the consolidated income statement.

24 SHAREHOLDERS’ EQUITY

Common Stock

The changes in the number of issued shares of common stock and common stock held by the Company or its subsidiaries during the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018					2017					2016
	Outstanding		In treasury			Outstanding		In treasury			Outstanding		In treasury
At beginning of period		1,414,055,625		4,028,883			1,414,055,625		46,830,882			1,414,055,625		46,814,201
Net change		387,765		(143,915	)		—		(42,801,999	)(1)		—		16,681
At end of period		1,414,443,390		3,884,968			1,414,055,625		4,028,883			1,414,055,625		46,830,882

(1) Includes a decrease of 42,820,864 shares through the sale of the Company’s shares held by SMBC.

The total number of authorized shares of common stock was 3,000 million at March 31, 2018 and 2017 with no stated value. All issued shares are fully paid. The details of the stock options and the restricted shares outstanding are described in Note 39 “Share-Based Payment.”

On May 14, 2018, the Company’s board of directors resolved to repurchase shares of its common stock and cancel all the repurchased shares. The resolution authorized the repurchase of up to the lesser of (i) an aggregate of 20,000,000 shares of its common stock and (ii) an aggregate of ¥70 billion between May 15, 2018 and July 31, 2018. On June 19, 2018, the Company completed the repurchase, acquiring 15,368,300 shares of its common stock for ¥70 billion in aggregate. The cancellation of all the repurchased shares is scheduled on August 20, 2018.

Preferred Stock

The following table shows the number of shares of preferred stock at March 31, 2018 and 2017.

	At March 31, 2018			At March 31, 2017
	Authorized		Issued	Authorized		Issued
Type 5 preferred stock		167,000	—		167,000	—
Type 7 preferred stock		167,000	—		167,000	—
Type 8 preferred stock		115,000	—		115,000	—
Type 9 preferred stock		115,000	—		115,000	—

All the preferred stocks have no stated value. There was no movement in preferred stock during the fiscal years ended March 31, 2018, 2017 and 2016.

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Capital stock, Capital surplus and Treasury stock

“Capital stock” represents share capital under the Companies Act adjusted by the amount corresponding to the preferred stock which is accounted for as a liability under IFRS. Purchases of treasury stock are recognized at cost in “Treasury stock.” Any additional paid-in capital, net gains or losses on the sale of treasury stock, and other changes in equity resulting from transactions with shareholders except for dividends are included in “Capital surplus.”

Restriction on the Payment of Dividends

The amount of the capital surplus and retained earnings of the Company that can be paid out as dividends is subject to restrictions under the Companies Act. These amounts are calculated based on the Company’s nonconsolidated statement of financial position prepared in accordance with Japanese GAAP. Therefore, the adjustments made to prepare the IFRS consolidated financial statements have no impact on the calculation. The total amount that the Company can pay out as a dividend was ¥1,623 billion at March 31, 2018.

Other than the restriction by the Companies Act, the Company is required to maintain a risk-weighted capital ratio as per the Banking Act of Japan (“Banking Act”). The detail of the restriction is described in Note 45 “Financial Risk Management.” Therefore, the Company would not be able to pay a dividend if the ratio were to fall below the minimum amount as a result of the payment of the dividends.

Since the Company is a holding company, its earnings rely mostly on dividend income from SMBC, and the Company’s other subsidiaries and associates. SMBC is subject to some restrictions on its dividend payment by the Companies Act and the Banking Act, similar to those applied to the Company’s.

Other Reserves

Remeasurements of defined benefit plans reserve

Remeasurements of the defined benefit plans reserve includes the accumulated actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions, and return on plan assets excluding interest income.

The movements of remeasurements of the defined benefit plans reserve for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
At beginning of period	¥	22,774		¥	18,985		¥	120,316
Gains (losses) arising during the period, before tax		73,662			8,134			(154,273	)
Income tax (expense) benefit for changes arising during the period		(22,492	)		(2,315	)		48,550
Amount attributable to non-controlling interests		45			(1,568	)		3,834
Share of other comprehensive income (loss) of associates and joint ventures		58			(462	)		558
Transfer of (gains) losses on remeasurements, net of tax to retained earnings		2,055			—			—
At end of period	¥	76,102		¥	22,774		¥	18,985

Available-for-sale financial assets reserve

The available-for-sale financial assets reserve includes the accumulated gains and losses of available-for-sale financial assets excluding the amount reclassified to profit or loss when the assets are derecognized or impaired.

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The movements of the available-for-sale financial assets reserve for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
At beginning of period	¥	1,929,894		¥	1,756,634		¥	2,234,636
Gains (losses) arising during the period, before tax		582,435			371,438			(551,572	)
Income tax (expense) benefit for changes arising during the period		(184,128	)		(116,277	)		217,723
Reclassification adjustments for (gains) losses included in net profit, before tax		(275,038	)		(109,990	)		(217,529	)
Income tax benefit for reclassification adjustments		84,745			33,658			71,876
Amount attributable to non-controlling interests		(15,653	)		(3,971	)		2,251
Share of other comprehensive income (loss) of associates and joint ventures		5			(1,598	)		(751	)
At end of period	¥	2,122,260		¥	1,929,894		¥	1,756,634

Exchange differences on translating foreign operations reserve

Exchange differences on translating the foreign operations reserve includes foreign exchange differences arising from the translation of the net assets of foreign operations from their functional currencies to the SMBC Group’s presentation currency, Japanese yen.

The movements of exchange differences on translating the foreign operations reserve for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
At beginning of period	¥	181,374		¥	216,336		¥	404,132
Gains (losses) arising during the period, before tax		(75,409	)		(24,063	)		(219,904	)
Income tax (expense) benefit for changes arising during the period		3,152			2,544			19,027
Reclassification adjustments for (gains) losses included in net profit, before tax		49			(4	)		8
Income tax (expense) benefit for reclassification adjustments		(15	)		1			(3	)
Amount attributable to non-controlling interests		9,014			6,102			26,687
Share of other comprehensive income (loss) of associates and joint ventures		7,822			(19,542	)		(13,611	)
At end of period	¥	125,987		¥	181,374		¥	216,336

25 NON-CONTROLLING INTERESTS AND EQUITY ATTRIBUTABLE TO OTHER EQUITY INSTRUMENTS HOLDERS

Non-controlling interests

Non-controlling interests at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Preferred securities issued by subsidiaries	¥	730,153	¥	870,979
Others		502,827		634,022
Total non-controlling interests	¥	1,232,980	¥	1,505,001

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Preferred securities issued by subsidiaries

Preferred securities issued by subsidiaries consisted of the following:

	Redemption at the option of Issuer(1)	At March 31,
		2018		2017
		(In millions)
SMFG Preferred Capital JPY 1 Limited (non-cumulative perpetual preferred securities)	January 2018	¥	—	¥	135,000
SMFG Preferred Capital USD 3 Limited (non-cumulative step-up perpetual preferred securities)	July 2018		143,438		151,456
SMFG Preferred Capital GBP 2 Limited (non-cumulative step-up perpetual preferred securities)	January 2029		37,215		35,023
SMFG Preferred Capital JPY 2 Limited
Series A (non-cumulative step-up perpetual preferred securities)	January 2019		113,000		113,000
Series B (non-cumulative perpetual preferred securities)	July 2019		140,000		140,000
Series E (non-cumulative perpetual preferred securities)	July 2019		33,000		33,000
SMFG Preferred Capital JPY 3 Limited
Series A (non-cumulative step-up perpetual preferred securities)	January 2020		99,000		99,000
Series B (non-cumulative perpetual preferred securities)	January 2020		164,500		164,500
Preferred securities issued by subsidiaries		¥	730,153	¥	870,979

(1) Subject to the prior approval of the Financial Services Agency of Japan (“FSA”), preferred securities are redeemable at any dividend payment date on and after a specific month and the month shown in this column is such a specific month of each preferred security.

Others

Others represent the equity in the SMBC Group’s subsidiaries not attributable, directly or indirectly, to the SMBC Group. They were not considered individually material to the SMBC Group at March 31, 2018 and 2017.

Equity attributable to other equity instruments holders

Equity attributable to other equity instruments holders at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Perpetual subordinated bonds	¥	599,522	¥	449,709
Total equity attributable to other equity instruments holders	¥	599,522	¥	449,709

SMFG issued perpetual subordinated bonds, which are Basel III-compliant Additional Tier 1 capital instruments and are classified as equity under IFRS.

The bonds bear a fixed rate of interest until the first call date. After the first call date, they will bear floating rate of interest unless they are redeemed. SMFG may at any time and in its sole discretion, elect to cancel any interest payment. If cancelled, interest payments are non-cumulative and will not increase to compensate for any short-fall in interest payments in any previous year.

These bonds are undated, have no final maturity date and may be redeemed at SMFG’s option, in whole, but not in part, on the first call date or any interest payment dates thereafter subject to prior confirmation of the FSA.

F-71

The principal amount of the bonds may be written down upon the occurrence of certain trigger events. For example, if the Common Equity Tier 1 capital ratio falls below 5.125% (“Capital Ratio Event”), the principal amount required to fully restore the Common Equity Tier 1 capital ratio above 5.125% will be written down.

The principal amount of the bonds which has been written down due to a Capital Ratio Event may be reinstated at SMFG’s option, subject to prior confirmation of the FSA of Japan that the Common Equity Tier 1 capital ratio remains at a sufficiently high level after giving effect to such reinstatement.

26 NET INTEREST INCOME

Net interest income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Interest income from:
Deposits with banks	¥	78,217	¥	45,770	¥	40,472
Call loans and bills bought		19,362		12,065		21,828
Reverse repurchase agreements and cash collateral on securities borrowed		40,021		29,601		22,011
Investment securities		102,295		87,348		84,912
Loans and advances		1,904,175		1,725,477		1,703,361
Total interest income		2,144,070		1,900,261		1,872,584
Interest expense from:
Deposits		382,753		249,028		202,312
Call money and bills sold		8,763		5,286		5,583
Repurchase agreements and cash collateral on securities lent		61,341		20,623		15,105
Borrowings		89,196		79,835		72,203
Debt securities in issue		190,774		146,937		135,172
Others		1,142		629		726
Total interest expense		733,969		502,338		431,101
Net interest income	¥	1,410,101	¥	1,397,923	¥	1,441,483

Interest income recorded on impaired financial assets was ¥18,886 million, ¥16,892 million and ¥20,545 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively.

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27 NET FEE AND COMMISSION INCOME

Net fee and commission income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Fee and commission income from:
Loans	¥	120,998	¥	128,305	¥	121,934
Credit card business		289,509		261,253		253,136
Guarantees		62,934		58,221		55,618
Securities-related business		147,016		146,655		133,019
Deposits		16,169		15,929		14,882
Remittances and transfers		140,621		138,029		133,110
Safe deposits		5,224		5,414		5,511
Trust fees		3,854		3,607		3,619
Investment trusts		154,419		126,590		116,057
Agency		16,577		16,753		16,432
Others		174,043		165,656		178,362
Total fee and commission income		1,131,364		1,066,412		1,031,680
Fee and commission expense from:
Remittances and transfers		40,214		39,419		38,358
Guarantees		3,750		3,434		3,071
Others		134,903		138,720		89,952
Total fee and commission expense		178,867		181,573		131,381
Net fee and commission income	¥	952,497	¥	884,839	¥	900,299

28 NET TRADING INCOME

Net trading income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Interest rate	¥	128,137	¥	79,650	¥	240,763
Foreign exchange		87,322		51,143		204,349
Equity		48,047		39,478		18,019
Credit		5,735		13,063		(2,641	)
Others		1,223		629		2,192
Total net trading income	¥	270,464	¥	183,963	¥	462,682

Net trading income includes income and losses from trading assets and liabilities, and derivative financial instruments.

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29 NET INCOME (LOSS) FROM FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Net income (loss) from financial assets at fair value through profit or loss for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018			2017		2016
	(In millions)
Net income (loss) from debt instruments	¥	(1,775	)	¥	428	¥	11,311
Net income from equity instruments		1,108			1,590		949
Total net income (loss) from financial assets at fair value through profit or loss	¥	(667	)	¥	2,018	¥	12,260

30 NET INVESTMENT INCOME

Net investment income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Net gain from disposal of debt instruments	¥	4,187	¥	39,484	¥	71,641
Net gain from disposal of equity instruments		281,036		142,016		175,494
Dividend income		138,874		123,827		128,094
Total net investment income	¥	424,097	¥	305,327	¥	375,229

31 OTHER INCOME

Other income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Income from operating leases	¥	276,850	¥	250,460	¥	206,561
Income related to disposal of assets leased		322,673		152,564		155,280
Income related to IT solution services		29,172		37,678		33,991
Gains on disposal of property, plant and equipment, and other intangible assets		852		937		3,714
Reversal of impairment losses of investments in associates and joint ventures		8,123		—		4,847
Gains on step acquisition of subsidiaries		—		20,344		118
Gains on step acquisition of associates and joint ventures		—		—		1,714
Others		118,185		111,842		90,048
Total other income	¥	755,855	¥	573,825	¥	496,273

F-74

32 IMPAIRMENT CHARGES ON FINANCIAL ASSETS

Impairment charges on financial assets for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Loans and advances(1)	¥	126,623	¥	141,457	¥	118,750
Available-for-sale financial assets		10,185		71,510		29,606
Total impairment charges on financial assets	¥	136,808	¥	212,967	¥	148,356

(1) Cross-reference to provision for loan losses in the table of reconciliation of allowance for loan losses in Note 10 “Loans and Advances.”

33 GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Personnel expenses	¥	864,396	¥	833,755	¥	785,547
Depreciation and amortization		171,043		172,496		157,672
Rent and lease expenses		117,400		115,425		117,482
Building and maintenance expenses		11,167		10,657		13,966
Supplies expenses		16,902		16,694		16,628
Communication expenses		38,171		37,250		36,634
Publicity and advertising expenses		80,464		79,570		79,453
Taxes and dues		83,976		85,967		76,695
Outsourcing expenses		96,733		96,063		91,837
Premiums for deposit insurance		37,938		38,180		36,175
Office equipment expenses		54,708		49,127		47,621
Others		240,223		216,951		246,553
Total general and administrative expenses	¥	1,813,121	¥	1,752,135	¥	1,706,263

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34 OTHER EXPENSES

Other expenses for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Cost of operating leases	¥	144,708	¥	126,320	¥	95,440
Cost related to disposal of assets leased		310,460		140,255		140,083
Cost related to IT solution services and IT systems		92,975		92,247		90,563
Provision for interest repayment		49,879		11,439		141,024
Losses on disposal of property, plant and equipment, and other intangible assets		4,913		6,041		4,302
Impairment losses of property, plant and equipment		27,816		6,396		4,237
Impairment losses of intangible assets		35,666		74,788		1,278
Losses on sale of investments in subsidiaries and associates		28,250		—		24
Impairment losses of investments in associates and joint ventures		19,851		14,941		17,306
Others		78,247		59,332		44,706
Total other expenses	¥	792,765	¥	531,759	¥	538,963

35 INCOME TAX EXPENSE

The detail of income tax expense for the fiscal years ended March 31, 2018, 2017 and 2016 was as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Current tax:
Charge for period	¥	228,342		¥	260,234		¥	247,046
Deferred tax:
Origination and reversal of temporary differences		66,875			12,391			130,072
Change in the write-down of deferred tax assets on the current fiscal year income tax expense		(63,194	)		(132,859	)		(34,000	)
Changes in tax rates and others(1)		(2,645	)		—			29,760
Total deferred tax expense (benefit)		1,036			(120,468	)		125,832
Total income tax expense	¥	229,378		¥	139,766		¥	372,878

(1) The amount for the fiscal year ended March 31, 2018 mainly includes the effect of change in U.S. federal income tax rate which was changed from 36% to 21% effective January 1, 2018. The amount for the fiscal year ended March 31, 2016 presents the effect of changes in Japanese corporation tax rates. See Note 22 “Deferred Income Tax” for further information on changes in Japanese corporation tax rates.

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The following table shows the reconciliations of the effective income tax rates for the fiscal years ended March 31, 2018, 2017 and 2016.

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions, except percentages)
Profit before tax	¥	1,118,976		¥	880,352		¥	1,325,700
Income tax expense		229,378			139,766			372,878
Effective income tax rate		20.5	%		15.9	%		28.1	%
Effective statutory tax rate in Japan(1)		30.9	%		30.9	%		33.1	%
Effect of the change in the write-down of deferred tax assets on the current fiscal year income tax expense(2)		(5.7	%)		(15.1	%)		(2.6	%)
Non-Japanese earnings		(3.6	%)		(1.9	%)		(2.7	%)
Tax impact of share of post-tax profit in associates and joint ventures		(1.4	%)		(1.0	%)		(0.8	%)
Tax impact of impairment losses of goodwill		0.8	%		2.6	%		—
Nontaxable dividends received		(0.8	%)		(1.0	%)		(0.5	%)
Tax impact of impairment losses and reversal of impairment losses for investments in associates and joint ventures—net		0.3	%		0.5	%		0.3	%
Gains on step acquisition of subsidiaries and associates and joint ventures which were not taxable		—			(0.7	%)		—
Changes in Japanese corporation tax rates		—			—			2.2	%
Others—net		—			1.6	%		(0.9	%)
Effective income tax rate		20.5	%		15.9	%		28.1	%

(1) The effective statutory tax rate in Japan for the fiscal years ended March 31, 2018 and 2017 is the aggregate of the effective corporation tax rate of 23.4%, the effective local corporation tax rate of 1.0%, the effective inhabitant tax rate of 3.8% and the effective enterprise tax rate of 2.7%, which is payable by corporate entities on taxable profits under the tax laws in Japan. The effective corporation tax rate, the effective inhabitant tax rate and the effective enterprise tax rate were changed from 22.5%, 3.7% and 5.9%, respectively, which were applied to the fiscal year ended March 31, 2016.

(2) The effect for the fiscal year ended March 31, 2017 was primarily due to the reversal of the write-down of deferred tax assets at March 31, 2017 in accordance with the application to the Commissioner of the National Tax Agency for permission to adopt the consolidated corporate-tax system in Japan from the fiscal year beginning April 1, 2017. For further information, see Note 22 “Deferred Income Tax.”

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36 EARNINGS PER SHARE

The following table shows the income and share data used in the basic and diluted earnings per share calculations for the fiscal years ended March 31, 2018, 2017 and 2016.

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions, except number of shares and per share data)
Basic:
Profit attributable to shareholders of the Company	¥	759,998		¥	627,870		¥	843,920
Weighted average number of common stock in issue (in thousands of shares)		1,410,442			1,369,231			1,367,229
Basic earnings per share	¥	538.84		¥	458.56		¥	617.25
Diluted:
Profit attributable to the common shareholders of the Company	¥	759,998		¥	627,870		¥	843,920
Impact of dilutive potential ordinary shares issued by subsidiaries		(10	)		(11	)		(1	)
Net profit used to determine diluted earnings per share	¥	759,988		¥	627,859		¥	843,919
Weighted average number of common stock in issue (in thousands of shares)		1,410,442			1,369,231			1,367,229
Adjustments for stock options (in thousands of shares)		1,052			1,093			928
Weighted average number of common stock for diluted earnings per share (in thousands of shares)		1,411,494			1,370,324			1,368,157
Diluted earnings per share	¥	538.43		¥	458.18		¥	616.83

37 TRANSFERS OF FINANCIAL ASSETS

In the normal course of business, the SMBC Group transfers financial assets mainly through repurchase agreements, securities lending transactions and securitizations. Depending on the nature of the transactions, the transfers may either result in financial assets being derecognized or continuing to be recognized on the consolidated statement of financial position.

Full derecognition occurs when the SMBC Group transfers its contractual rights to receive cash flows from financial assets, or retains the contractual rights to receive the cash flows, but assumes a contractual obligation to pay the cash flows to another party, and transfers substantially all the risks and rewards of ownership, including credit risk, prepayment risk and interest rate risk. Derecognition does not occur when the SMBC Group retains substantially all the risks and rewards of ownership of the financial assets, where the contractual rights to receive cash flows from the financial assets are transferred, or the rights are retained but obligations to pay the cash flows are assumed.

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The following tables show the carrying amounts and fair values of transferred financial assets that did not qualify for derecognition and their associated financial liabilities at March 31, 2018 and 2017:

	At March 31, 2018
	Repurchase agreements and securities lending transactions		Loans and advances
			Residential mortgages		Corporate loans		Others(1)
	(In millions)
Carrying amount of assets	¥	7,730,783	¥	1,432,966	¥	857,690	¥	49,151
Carrying amount of associated liabilities		7,271,817		1,154,831		853,207		40,584
For those liabilities that have recourse only to the transferred assets:
Fair value of assets	¥	—	¥	1,615,329	¥	861,824	¥	48,254
Fair value of associated liabilities		—		1,207,899		853,551		40,870
Net position	¥	—	¥	407,430	¥	8,273	¥	7,384
	At March 31, 2017
	Repurchase agreements and securities lending transactions		Loans and advances
			Residential mortgages		Corporate loans		Others
	(In millions)
Carrying amount of assets	¥	5,169,540	¥	1,353,938	¥	1,063,092	¥	59,562
Carrying amount of associated liabilities		5,116,003		1,079,329		1,060,812		49,804
For those liabilities that have recourse only to the transferred assets:
Fair value of assets	¥	—	¥	1,535,929	¥	1,067,234	¥	59,169
Fair value of associated liabilities		—		1,138,815		1,061,389		50,271
Net position	¥	—	¥	397,114	¥	5,845	¥	8,898

(1) Others include loans and advances reclassified as assets held for sale and liabilities directly associated with the assets held for sale related to SMFL. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

Repurchase Agreements and Securities Lending Transactions

The SMBC Group lends or sells securities under agreements to repurchase them at a predetermined price on a future date. Since substantially all the risks and rewards of the securities are retained by the SMBC Group, the securities remain on the consolidated statement of financial position and their associated financial liabilities are recorded. The recourse of the counterparties to their associated financial liabilities is not limited to the underlying securities.

Loans and Advances

The SMBC Group transfers its loans and advances, including residential mortgages and corporate loans, mainly to bankruptcy-remote structured entities for securitizations whereby the structured entities issue debt securities to the SMBC Group for subordinated tranches and to investors for senior tranches. The investors have only recourse to the underlying financial assets due to their bankruptcy-remoteness. Since the SMBC Group retains substantially all the risks and rewards of ownership, the transferred financial assets do not qualify for derecognition. The SMBC Group therefore continues to recognize these transferred financial assets as loans and advances, and recognizes their associated financial liabilities arising from issuing debt securities to investors on the consolidated statement of financial position.

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38 ASSETS PLEDGED AND RECEIVED AS COLLATERAL

Assets Pledged

The carrying amounts of assets pledged as collateral at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018		2017
	(In millions)
Cash and deposits with banks(1)	¥	32,010	¥	87,670
Trading assets		2,423,002		2,426,665
Financial assets at fair value through profit or loss		1,518,748		1,570,904
Held-to-maturity investments		365,450		1,168,111
Available-for-sale financial assets		10,648,468		8,128,082
Loans and advances(1)		11,019,253		10,058,951
Other assets(1)		1,825,987		1,308,136
Total	¥	27,832,918	¥	24,748,519

(1) Cash and deposits with banks, loans and advances, and other assets include those at SMFL, which are reclassified as assets held for sale. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

The SMBC Group pledges assets as collateral to secure payables under repurchase agreements, securities lending transactions and securitizations, borrowings or for cash settlements, margins on derivative transactions and certain other purposes. These transactions are conducted under terms that are usual and customary to standard contracts.

Loaned securities for which the borrowers have the right to sell or repledge were ¥7,731,243 million and ¥5,201,373 million at March 31, 2018 and 2017, respectively.

For the reserve funds with the Bank of Japan and other reserve deposits for foreign offices maintained by the SMBC Group, refer to Note 5 “Cash and Deposits with Banks.”

Assets Received as Collateral

Under certain transactions, including reverse repurchase agreements, securities borrowing, and discounting of bills, the SMBC Group is permitted to resell or repledge the collateral held in the absence of default by the owner of the collateral. These transactions are conducted under terms that are usual and customary for standard contracts. The fair values of securities and bills accepted as collateral were ¥12,218,264 million and ¥13,673,077 million at March 31, 2018 and 2017, respectively. As to the securities received in the reverse repurchase agreements and securities borrowing transactions, the SMBC Group has the obligation to return equivalent securities upon completion of the transactions. The fair value of securities sold or repledged to others was ¥8,839,133 million and ¥7,787,059 million at March 31, 2018 and 2017, respectively.

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39 SHARE-BASED PAYMENT

Stock Option Plans

SMFG had introduced compensation-type stock options to directors, corporate auditors, and executive officers of SMFG and SMBC (“SMFG Stock Acquisition Rights”), which served as an incentive for them to further contribute to the equity appreciation and achieve better corporate performance through sharing the benefits and risks of the share price performance with the shareholders. The following table provides an overview of the significant terms and conditions of the stock option plan.

	Title of grantees	Exercise period	Requisite service period	Method of settlement
SMFG Stock Acquisition Rights	Directors, corporate auditors and executive officers of SMFG and SMBC	Not exceeding 30 years from the date of allocation of stock acquisition rights(1)	One year from the date of the ordinary general meeting of shareholders of SMFG to the closing of the next ordinary general meeting of shareholders of SMFG	Common stock of SMFG

(1) A stock acquisition rights holder can exercise the rights from the day they are relieved of their positions either as a director, a corporate auditor or an executive officer (“Start of Exercise Date”) to 20 years from the Start of Exercise Date.

The number and the weighted average exercise prices of stock options for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended March 31,
	2018					2017
	Number of options(1)			Weighted average exercise price		Number of options(1)			Weighted average exercise price
Outstanding at beginning of period		1,180,000		¥	1		984,400		¥	1
Granted		—			—		201,200			1
Exercised		(174,700	)		1		(4,400	)		1
Forfeited or expired		(2,300	)		1		(1,200	)		1
Outstanding at end of period		1,003,000		¥	1		1,180,000		¥	1
Exercisable at end of period		463,100		¥	1		421,900		¥	1

(1) Number of options is the number of SMFG’s common stock granted by the exercise of stock options.

The weighted average stock price at the date of exercise was ¥4,245 and ¥4,400 for the fiscal years ended March 31, 2018 and 2017, respectively.

Summarized information about stock options outstanding at March 31, 2018 and 2017 was as follows:

			At March 31,
			2018				2017
	Exercise price		Number of options		Remaining contractual lives in years		Number of options		Remaining contractual lives in years
SMFG Stock Acquisition Rights	¥	1		1,003,000		25.3		1,180,000		26.3

The amounts of stock options recognized as expenses were measured based on the fair value of stock options granted, which were ¥135 million and ¥581million for the fiscal years ended March 31, 2018 and 2017,

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respectively, and included in “General and administrative expenses” in the consolidated income statement. The fair value of stock options was measured using Black-Scholes option-pricing model.

The following table represents the fair value of stock options and the assumptions used to measure the fair value for the fiscal year ended March 31, 2017. During the fiscal year ended March 31, 2018, there were no issuance of new stock options since SMFG and SMBC resolved to discontinue the issuance of new stock options.

	For the fiscal year ended March 31, 2017
Fair value at measurement date	¥	2,811
Stock price	¥	3,362
Exercise price	¥	1
Expected volatility(1)		32.20	%
Expected remaining lives (in years)(2)		4
Expected dividends per share(3)	¥	150
Risk free interest rate(4)		0.17	%

(1) Calculated based on the actual stock prices during the 4 years August 16, 2012 to August 15, 2016 for the fiscal year ended March 31, 2017.

(2) The average expected remaining life could not be estimated rationally due to insufficient amount of data. Therefore, it was estimated based on average remaining service life of directors of SMFG and SMBC.

(3) Expected dividends are based on the estimated dividends to be paid in next twelve months from the date of grant.

(4) Japanese government bond yield corresponding to the average expected remaining life.

Compensation Plans Utilizing Restricted Stock

On July 10, 2017, the SMFG compensation committee resolved to revise the executive compensation policy and to introduce new stock compensation plans that utilize restricted stock.

The plans consist of Stock Compensation Plan I (“Plan I”), which determines remuneration primarily based on the medium-term performance, Stock Compensation Plan II (“Plan II”), which determines remuneration primarily based on the annual performance and Stock Compensation Plan III (“Plan III”), which determines remuneration primarily based on corporate title.

Plan I (medium-term performance share plan) has an evaluation period of three years starting from the fiscal year ended March 31, 2018, corresponding with the medium-term management plan. Executives are initially allotted shares of restricted stock equivalent to the monetary amount determined based on the executive’s corporate title. After the completion of the evaluation period, the compensation committee will review the progress of the medium-term management plan, performance of SMFG’s common stock, and results of customer satisfaction surveys and other factors, to determine the final amount to be released from transfer restrictions. In case the final amount falls below the initial amount, SMFG will retrieve all or part of the allotted shares at no cost.

Under Plan II (annual performance share plan), executives are allotted shares of restricted stock equivalent to a certain portion of the monetary amount determined based on the annual performance of SMFG and SMBC, as well as on the individual performance of the executives reviewed both from short-term and medium-to-long-term perspectives. The remainder will be paid to the executives as a cash bonus. Transfer restrictions on these shares are released evenly over the three-year period following the year of allotment.

Under Plan III (promotion reward plan), executives are allotted shares of restricted stock equivalent to pre-determined compensation amounts per title, reflecting the increased responsibilities derived from promotions. Restrictions shall apply to the shares until the earlier of 30 years from allotment or when the executive retires from office.

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The eligible executives for the plans are directors (excluding outside directors), corporate executive officers and executive officers of SMFG and directors (excluding outside directors), executive officers and corporate auditors (excluding outside corporate auditors), etc. of SMBC, who are designated by the SMFG compensation committee or by SMBC and residing and serving in Japan. However, members of the SMFG audit committee and SMBC corporate auditors will only be eligible for Plan III.

As part of the new policy, SMFG and SMBC introduced provisions for forfeiture and claw-back of vested stock under the plans in order to restrain excessive risk-taking and foster a prudent risk culture expected of a financial institution.

The number of restricted shares for the fiscal year ended March 31, 2018 and the fair value of restricted shares at the measurement date were as follows:

	For the fiscal year ended March 31, 2018
Outstanding at beginning of period		—
Allotted		387,765
Released		—
Forfeited		—
Outstanding at end of period		387,765
Fair value at measurement date	¥	4,372

The fair value of restricted shares is based on the market price of SMFG common stock. If any granted conditions exist, the terms and conditions upon which the shares were granted, are taken into account when estimating both the number of shares expected to vest and the fair value of the shares granted. The amount of restricted shares recognized as expenses was measured based on the fair value of the restricted shares granted, which was ¥803 million for the fiscal year ended March 31, 2018 and included in “General and administrative expenses” in the consolidated income statement.

40 DIVIDENDS PER SHARE

The dividends recognized by the SMBC Group for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	Dividends per share		Aggregate amount
	(In yen)		(In millions)
For the fiscal year ended March 31, 2018:
Common stock	¥	155	¥	218,596
For the fiscal year ended March 31, 2017:
Common stock	¥	150	¥	205,083
For the fiscal year ended March 31, 2016:
Common stock	¥	155	¥	211,922

The Company proposed to the shareholders the distribution of a dividend of ¥90 per share of common stock totaling ¥126,950 million in respect of the fiscal year ended March 31, 2018. The dividend is subject to the approval at the general meeting of shareholders on June 28, 2018. The consolidated financial statements for the fiscal year ended March 31, 2018 do not include this dividend.

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41 CONTINGENCY AND CAPITAL COMMITMENTS

Legal Proceedings

The SMBC Group is engaged in various legal proceedings in Japan and a number of overseas jurisdictions, involving claims by and against it, which arise in the normal course of business. The SMBC Group does not expect that the outcome of these proceedings will have a significant adverse effect on the consolidated financial statements of the SMBC Group. The SMBC Group has recorded adequate provisions with respect to litigation arising out of normal business operations. The SMBC Group has not disclosed any contingent liability associated with these legal actions because it cannot reliably be estimated.

Capital Commitments

At March 31, 2018 and 2017, the SMBC Group had ¥2,626 million and ¥2,773,096 million, respectively, of contractual commitments to acquire property, plant and equipment. In addition, the SMBC Group had ¥383 million and ¥317 million of contractual commitments to acquire intangible assets, such as software at March 31, 2018 and 2017, respectively. The SMBC Group’s management is confident that future net revenues and funding will be sufficient to cover these commitments.

Loan Commitments

Loan commitment contracts on overdrafts and loans are agreements to lend up to a prescribed amount to customers, as long as there is no violation of any condition established in the contracts. Since many of these loan commitments are expected to expire without being drawn down, the total amount of unused commitments does not necessarily represent an actual future cash flow requirement. Many of these loan commitments include clauses under which the SMBC Group can reject an application from customers or reduce the contract amounts in cases where economic conditions change, the SMBC Group needs to secure claims, or some other significant event occurs.

Financial Guarantees and Other Credit-related Contingent Liabilities

Financial guarantees are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of the debt instrument. Other credit-related contingent liabilities include performance bonds, which are contracts that provide compensation if another party fails to perform the contractual obligation.

The table below shows the nominal amounts of undrawn loan commitments, and financial guarantees and other credit-related contingent liabilities at March 31, 2018 and 2017.

	At March 31,
	2018		2017
	(In millions)
Loan commitments	¥	60,107,128	¥	62,357,210
Financial guarantees and other credit-related contingent liabilities		8,426,245		7,924,711
Total	¥	68,533,373	¥	70,281,921

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42 ANALYSIS OF FINANCIAL ASSETS AND LIABILITIES BY MEASUREMENT BASIS

After initial recognition, financial assets and liabilities are measured either at fair value or amortized cost, within the measurement categories as defined in IAS 39. The summary of significant accounting policies in Note 2 describes how these categories of financial assets and liabilities are measured, and how income and expenses are recognized either in profit or loss, or in other comprehensive income. The following tables present the carrying amounts of the financial assets and liabilities, by category and by line item, of the consolidated statement of financial position.

	At March 31, 2018
	Financial assets and liabilities at fair value through profit or loss			Held-to-maturity investments		Loans and receivables		Available-for-sale financial assets		Financial liabilities measured at amortized cost		Total
	(In millions)
Financial assets:
Cash and deposits with banks(1)	¥	4,773		¥	—	¥	54,691,296	¥	—	¥	—	¥	54,696,069
Call loans and bills bought		—			—		1,881,880		—		—		1,881,880
Reverse repurchase agreements and cash collateral on securities borrowed		—			—		8,491,703		—		—		8,491,703
Trading assets		3,169,123			—		—		—		—		3,169,123
Derivative financial instruments		3,885,271			—		—		—		—		3,885,271
Financial assets at fair value through profit or loss		1,547,672			—		—		—		—		1,547,672
Investment securities(1)		2,588			372,459		—		20,120,028		—		20,495,075
Loans and advances(1)		3,169			—		85,125,901		—		—		85,129,070
Other financial assets(2)		—			—		3,598,642		—		—		3,598,642
Financial assets included in assets held for sale		1,693			—		3,098,196		108,882		—		3,208,771
Total	¥	8,614,289		¥	372,459	¥	156,887,618	¥	20,228,910	¥	—	¥	186,103,276
Financial liabilities:
Deposits(1)	¥	13,929		¥	—	¥	—	¥	—	¥	128,447,598	¥	128,461,527
Call money and bills sold		—			—		—		—		1,190,929		1,190,929
Repurchase agreements and cash collateral on securities lent		—			—		—		—		12,022,593		12,022,593
Trading liabilities		2,143,899			—		—		—		—		2,143,899
Derivative financial instruments		3,498,016			—		—		—		—		3,498,016
Borrowings(1)		1,198			—		—		—		10,651,283		10,652,481
Debt securities in issue(1)		(7,635	)		—		—		—		10,576,752		10,569,117
Other financial liabilities(2)		—			—		—		—		6,691,042		6,691,042
Financial liabilities included in liabilities directly associated with the assets held for sale		5,971			—		—		—		3,371,556		3,377,527
Total	¥	5,655,378		¥	—	¥	—	¥	—	¥	172,951,753	¥	178,607,131

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	At March 31, 2017
	Financial assets and liabilities at fair value through profit or loss		Held-to-maturity investments		Loans and receivables		Available-for-sale financial assets		Financial liabilities measured at amortized cost		Total
	(In millions)
Financial assets:
Cash and deposits with banks(1)	¥	5,511	¥	—	¥	47,324,644	¥	—	¥	—	¥	47,330,155
Call loans and bills bought		—		—		1,872,209		—		—		1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed		—		—		8,924,385		—		—		8,924,385
Trading assets		3,776,671		—		—		—		—		3,776,671
Derivative financial instruments		4,063,982		—		—		—		—		4,063,982
Financial assets at fair value through profit or loss		1,599,093		—		—		—		—		1,599,093
Investment securities(1)		1,251		1,173,419		—		17,899,267		—		19,073,937
Loans and advances(1)		3,474		—		95,270,371		—		—		95,273,845
Other financial assets(2)		—		—		3,424,591		—		—		3,424,591
Total	¥	9,449,982	¥	1,173,419	¥	156,816,200	¥	17,899,267	¥	—	¥	185,338,868
Financial liabilities:
Deposits(1)	¥	20,365	¥	—	¥	—	¥	—	¥	130,274,925	¥	130,295,290
Call money and bills sold		—		—		—		—		2,088,020		2,088,020
Repurchase agreements and cash collateral on securities lent		—		—		—		—		9,424,506		9,424,506
Trading liabilities		2,071,584		—		—		—		—		2,071,584
Derivative financial instruments		3,889,694		—		—		—		—		3,889,694
Borrowings(1)		654		—		—		—		12,245,289		12,245,943
Debt securities in issue(1)		2,232		—		—		—		11,163,391		11,165,623
Other financial liabilities(2)		—		—		—		—		7,201,137		7,201,137
Total	¥	5,984,529	¥	—	¥	—	¥	—	¥	172,397,268	¥	178,381,797

(1) Embedded derivatives, which are separately accounted for, but presented together with the host contract in the consolidated statement of financial position, are disclosed in this table within the category of “Financial assets and liabilities at fair value through profit or loss.” Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the line of the host contract.

(2) Other financial assets and liabilities comprise of those included in other assets and liabilities, which meet the definition of a financial asset and liability.

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43 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values stated below represent the best estimates based on a range of methods and assumptions. In determining the fair value of financial assets and liabilities, the SMBC Group gives the highest priority to a quoted market price in an active market. If such prices are not available, it establishes fair value using valuation techniques. The valuation techniques, if used, make maximum use of observable inputs, and rely as little as possible on unobservable inputs.

Financial Assets and Liabilities Carried at Fair Value

Valuation Process

The SMBC Group undertakes a valuation process based on its valuation control framework, which governs internal control standards, methodologies and procedures to ensure that the fair values are determined or validated independently of the front office.

The SMBC Group uses valuation techniques commonly used by market participants to price the financial instruments and they have been demonstrated to provide reliable estimates of prices obtained in actual market transactions. The valuation techniques include the DCF method, option pricing models and reference to the current fair value of another instrument that is substantially the same. Key adjustments, such as liquidity risk and credit risk adjustments are also taken into account to derive fair values.

Where valuation techniques are used to determine fair values, they are validated and reviewed. In principal subsidiaries, their risk management departments, which are independent from the business units, review significant valuation methodologies at least once a year, and recalibrate model parameters and inputs by comparing fair values derived from the valuation techniques to the external market data such as broker quotes. Where the data obtained from third-party sources such as brokers and pricing service providers are utilized in determining fair values, those departments also examine those data, taking into account the consistency among the different sources, the aging of the data and other factors. In addition, accounting departments in those principal subsidiaries are responsible for ensuring that the accounting policies and procedures to determine fair values are in compliance with relevant accounting standards.

Fair Value Hierarchy

Financial assets and liabilities measured at fair value are classified into one of three levels within a fair value hierarchy based on the inputs used in the fair value measurement. The three levels of the fair value hierarchy are as follows:

• quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date (Level 1);

• inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (Level 2); and

• significant unobservable inputs for the asset or liability (Level 3).

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The following tables present the carrying amounts of financial assets and liabilities carried at fair value based on the three levels of the fair value hierarchy at March 31, 2018 and 2017.

	At March 31, 2018
	Level 1(1)		Level 2(1)		Level 3		Total
	(In millions)
Financial assets:
Trading assets:
Debt instruments	¥	2,424,460	¥	416,688	¥	—	¥	2,841,148
Equity instruments		307,942		20,033		—		327,975
Total trading assets		2,732,402		436,721		—		3,169,123
Derivative financial instruments:
Interest rate derivatives(2)		38,760		2,033,894		—		2,072,654
Currency derivatives(2)		—		1,724,387		14		1,724,401
Equity derivatives		48,154		21,310		1,880		71,344
Commodity derivatives		402		6,114		—		6,516
Credit derivatives		—		7,382		4,667		12,049
Total derivative financial instruments		87,316		3,793,087		6,561		3,886,964
Financial assets at fair value through profit or loss:
Debt instruments		—		1,518,778		10,143		1,528,921
Equity instruments		541		153		18,057		18,751
Total financial assets at fair value through profit or loss		541		1,518,931		28,200		1,547,672
Available-for-sale financial assets:
Japanese government bonds		7,685,303		—		—		7,685,303
U.S. Treasury and other U.S. government agency bonds		3,246,646		—		—		3,246,646
Other debt instruments		700,500		2,650,103		154		3,350,757
Equity instruments(2)		4,307,274		797,166		844,352		5,948,792
Total available-for-sale financial assets		15,939,723		3,447,269		844,506		20,231,498
Others(3)		—		7,942		—		7,942
Total	¥	18,759,982	¥	9,203,950	¥	879,267	¥	28,843,199
Financial liabilities:
Trading liabilities:
Debt instruments	¥	1,948,602	¥	60,109	¥	—	¥	2,008,711
Equity instruments		33,174		102,014		—		135,188
Total trading liabilities		1,981,776		162,123		—		2,143,899
Derivative financial instruments:
Interest rate derivatives(2)		30,760		1,947,673		—		1,978,433
Currency derivatives(2)		19		1,406,759		14		1,406,792
Equity derivatives		78,088		27,261		—		105,349
Commodity derivatives		464		4,484		—		4,948
Credit derivatives		—		8,043		422		8,465
Total derivative financial instruments		109,331		3,394,220		436		3,503,987
Others(3)		—		6,659		833		7,492
Total	¥	2,091,107	¥	3,563,002	¥	1,269	¥	5,655,378

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	At March 31, 2017
	Level 1(1)		Level 2(1)		Level 3			Total
	(In millions)
Financial assets:
Trading assets:
Debt instruments	¥	2,734,340	¥	605,588	¥	—		¥	3,339,928
Equity instruments		421,477		15,266		—			436,743
Total trading assets		3,155,817		620,854		—			3,776,671
Derivative financial instruments:
Interest rate derivatives		27,121		2,288,114		2			2,315,237
Currency derivatives		—		1,666,305		22			1,666,327
Equity derivatives		35,400		23,668		1,327			60,395
Commodity derivatives		489		11,190		—			11,679
Credit derivatives		—		7,613		2,731			10,344
Total derivative financial instruments		63,010		3,996,890		4,082			4,063,982
Financial assets at fair value through profit or loss:
Debt instruments		—		1,570,904		12,053			1,582,957
Equity instruments		1,667		183		14,286			16,136
Total financial assets at fair value through profit or loss		1,667		1,571,087		26,339			1,599,093
Available-for-sale financial assets:
Japanese government bonds		5,722,674		—		—			5,722,674
U.S. Treasury and other U.S. government agency bonds		3,468,263		—		—			3,468,263
Other debt instruments		466,901		2,465,406		526			2,932,833
Equity instruments		4,075,944		864,552		836,252			5,776,748
Total available-for-sale financial assets		13,733,782		3,329,958		836,778			17,900,518
Others(3)		—		8,985		—			8,985
Total	¥	16,954,276	¥	9,527,774	¥	867,199		¥	27,349,249
Financial liabilities:
Trading liabilities:
Debt instruments	¥	1,979,564	¥	58,766	¥	—		¥	2,038,330
Equity instruments		18,848		14,406		—			33,254
Total trading liabilities		1,998,412		73,172		—			2,071,584
Derivative financial instruments:
Interest rate derivatives		17,903		2,187,701		—			2,205,604
Currency derivatives		19		1,588,004		21			1,588,044
Equity derivatives		44,593		32,604		—			77,197
Commodity derivatives		513		9,978		—			10,491
Credit derivatives		—		8,358		—			8,358
Total derivative financial instruments		63,028		3,826,645		21			3,889,694
Others(3)		—		23,554		(303	)		23,251
Total	¥	2,061,440	¥	3,923,371	¥	(282	)	¥	5,984,529

(1) Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the period. There were no significant transfers between Level 1 and Level 2 for the fiscal years ended March 31, 2018 and 2017.

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(2) Interest rate derivatives and currency derivatives classified as derivative financial instruments (financial assets) include those at SMFL, which are reclassified as assets held for sale, of ¥533 million and ¥1,160 million, respectively. These derivative financial instruments are categorized within Level 2. Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale, of which ¥56,447 million, ¥5,225 million and ¥47,210 million are categorized within Level 1, Level 2 and Level 3, respectively. Interest rate derivatives and currency derivatives classified as derivative financial instruments (financial liabilities) include those at SMFL, which are reclassified as liabilities directly associated with the assets held for sale, of ¥5,401 million and ¥570 million, respectively. These derivative financial instruments are categorized within Level 2. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

(3) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others, while the remaining are presented within the same category as the host contract. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract. The separated embedded derivatives are measured at fair value using the valuation techniques described in “Derivative financial instruments” below.

The following tables present reconciliations from the beginning to the ending balances for financial assets and liabilities carried at fair value and categorized within Level 3 of the fair value hierarchy for the fiscal years ended March 31, 2018 and 2017.

	At April 1, 2017		Total gains (losses)						Purchases		Sales			Settlement(1)			Transfers into Level 3(2)			Transfers out of Level 3(2)			At March 31, 2018			Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at March 31, 2018
			Included in profit or loss			Included in other comprehensive income
	(In millions)
Derivative financial instruments—net:
Interest rate derivatives—net	¥	2	¥	(45	)	¥	—		¥	43	¥	—		¥	—		¥	—		¥	—		¥	—		¥	—
Currency derivatives—net		1		(1	)		—			—		—			—			—			—			—			(1	)
Equity derivatives—net		1,327		1,106			—			474		(1,027	)		—			—			—			1,880			1,499
Credit derivatives—net		2,731		8,103			(158	)		—		—			(6,456	)		25			—			4,245			8,103
Total derivative financial instruments—net		4,061		9,163			(158	)		517		(1,027	)		(6,456	)		25			—			6,125			9,601
Financial assets at fair value through profit or loss:
Debt instruments		12,053		(1,731	)		—			—		—			(149	)		—			(30	)		10,143			(1,731	)
Equity instruments		14,286		378			—			4,915		(648	)		(102	)		—			(772	)		18,057			109
Total financial assets at fair value through profit or loss		26,339		(1,353	)		—			4,915		(648	)		(251	)		—			(802	)		28,200			(1,622	)
Available-for-sale financial assets:
Debt instruments		526		1,600			(13	)		—		(1,613	)		(346	)		—			—			154			(13	)
Equity instruments(3)		836,252		(3,612	)		46,367			68,241		(8,480	)		(73,897	)		624			(21,143	)		844,352			(6,380	)
Total available-for-sale financial assets		836,778		(2,012	)		46,354			68,241		(10,093	)		(74,243	)		624			(21,143	)		844,506			(6,393	)
Others(4)—liabilities:		303		(812	)		—			—		—			—			(324	)		—			(833	)		(856	)
Total	¥	867,481	¥	4,986		¥	46,196		¥	73,673	¥	(11,768	)	¥	(80,950	)	¥	325		¥	(21,945	)	¥	877,998		¥	730

F-90

	At April 1, 2016			Total gains (losses)						Purchases		Sales			Settlement(1)			Transfers into Level 3(2)		Transfers out of Level 3(2)			At March 31, 2017		Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at March 31, 2017
				Included in profit or loss			Included in other comprehensive income
	(In millions)
Derivative financial instruments—net:
Interest rate derivatives—net	¥	—		¥	(163	)	¥	—		¥	165	¥	—		¥	—		¥	—	¥	—		¥	2	¥	(5	)
Currency derivatives—net		5			(21	)		—			—		—			—			—		17			1		(3	)
Equity derivatives—net		(13	)		931			—			356		—			—			—		53			1,327		973
Credit derivatives—net		(3,134	)		12,821			221			—		—			(7,177	)		—		—			2,731		12,820
Total derivative financial instruments—net		(3,142	)		13,568			221			521		—			(7,177	)		—		70			4,061		13,785
Financial assets at fair value through profit or loss:
Debt instruments		11,667			401			—			180		—			(195	)		—		—			12,053		401
Equity instruments		27,594			174			—			4,531		(1,430	)		(16,000	)		—		(583	)		14,286		(404	)
Total financial assets at fair value through profit or loss		39,261			575			—			4,711		(1,430	)		(16,195	)		—		(583	)		26,339		(3	)
Available-for-sale financial assets:
Debt instruments		2,022			(1,258	)		(30	)		269		—			(477	)		—		—			526		(1,181	)
Equity instruments		789,326			(20,578	)		51,027			88,686		(8,488	)		(63,768	)		306		(259	)		836,252		(25,746	)
Total available-for-sale financial assets		791,348			(21,836	)		50,997			88,955		(8,488	)		(64,245	)		306		(259	)		836,778		(26,927	)
Others(4)—liabilities:		(1,240	)		1,543			—			—		—			—			—		—			303		(202	)
Total	¥	826,227		¥	(6,150	)	¥	51,218		¥	94,187	¥	(9,918	)	¥	(87,617	)	¥	306	¥	(772	)	¥	867,481	¥	(13,347	)

(1) Settlements for equity instruments include redemption of preferred stocks, receipt of cash distributions which represent a return of investment, and reclassification from available-for-sale equity instruments to investments in associates and joint ventures as a result of applying the equity method.

(2) Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the period. For the fiscal year ended March 31, 2018, transfers out of Level 3 amounted to ¥21,945 million, primarily due to an increase in observability of certain private equity investments.

(3) Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale.

(4) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract.

The following table presents total gains or losses included in profit or loss for the Level 3 financial assets and liabilities, and changes in unrealized gains or losses included in profit or loss related to those financial assets and liabilities held at March 31, 2018 and 2017 by line item of the consolidated income statement.

	Total gains (losses) included in profit or loss for the fiscal year ended March 31,						Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at March 31,
	2018			2017			2018			2017
	(In millions)
Net interest income	¥	1,273		¥	524		¥	762		¥	322
Net trading income		7,064			14,474			7,970			13,148
Net income (loss) from financial assets at fair value through profit or loss		(1,353	)		575			(1,622	)		(3	)
Net investment income		4,399			7,394			—			—
Impairment charges on financial assets		(6,397	)		(29,117	)		(6,380	)		(26,814	)
Total	¥	4,986		¥	(6,150	)	¥	730		¥	(13,347	)

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Valuation Techniques

Financial instruments which are classified as trading assets and liabilities, derivative financial instruments, financial assets at fair value through profit or loss, and available-for-sale financial assets are measured at fair value in the consolidated statement of financial position. These instruments are measured at fair value using a quoted market price, if they are traded in an active market, or, for others, using the fair value measurement techniques as discussed below.

Trading assets and trading liabilities

Debt and equity instruments traded in an active market are measured at fair value using a quoted market price in such a market and they are categorized within Level 1. If a quoted market price is not available, they are measured by using a price quoted by a third party, such as a pricing service or broker, or by reference to the current fair value of another instrument that is substantially the same, based on inputs such as prices obtained from brokers, observable interest rates and spreads. These financial instruments are categorized within Level 2. Debt instruments measured at fair value using the DCF method, where primary inputs are observable interest rates and credit spreads, inferred from the prevailing market rates, are also categorized within Level 2.

Derivative financial instruments (including embedded derivatives)

Listed derivatives (including interest rates, bonds, currencies, stocks and commodities) are measured at fair value using the settlement price announced by the major exchange on which transactions are traded because the settlement price in the exchange reflects the most current transaction price, and is readily and regularly available from the exchange. Listed derivatives are categorized within Level 1.

OTC derivatives (non-exchange-traded derivatives), including embedded derivatives that are separately accounted for from the host contracts, are measured at fair value using valuation techniques such as the present value of estimated future cash flows and option pricing models, generally based on observable interest rates, foreign exchange, commodities, stock prices and other factors as inputs. The valuation models for some transactions, such as yield curve spread options and equity options, use inputs which are not directly observable in the market, including historical correlation coefficients and historical volatilities. However, as the impact of these unobservable inputs is insignificant to the fair value for most of the transactions, the SMBC Group categorizes the majority of those transactions within Level 2.

The credit loss protection scheme which the SMBC Group offers to Goldman Sachs (“GS”) is considered to be a credit derivative, where the underlying reference entities are the American and European corporate entities covered in the commitment line portfolio of the GS group. The fair value of this derivative is determined using an ordinary collateralized debt obligation (“CDO”) pricing model, commonly used in the financial markets. The SMBC Group takes some portions of the positions in subordinated and mezzanine tranches, which covers the first and second credit losses from the portfolio. The major inputs for this derivative are credit default swap (“CDS”) spread rates, correlation ratios of CDS indices for similar portfolios, and the expected additional commitment withdrawal ratio. Although CDS spread rates and correlation ratios are observable in an active market or available from brokers, this whole scheme is categorized within Level 3 as the expected additional withdrawal ratio, which is considered to be a significant input, is not observable in the market.

In addition, the fair value of OTC derivatives incorporates both counterparty credit risk in relation to OTC derivative assets and own credit risk in relation to OTC derivative liabilities. The SMBC Group calculates the credit risk adjustments by applying the probability of default that reflects the counterparty’s or its own credit risk to the OTC derivative exposures and multiplying the result by the loss expected in the event of default. For the probability of default, the SMBC Group uses observable market data, where possible. The OTC derivative exposures used are determined taking into consideration the effect of master netting agreements and collateral. As the SMBC Group manages the OTC derivatives on the basis of its net credit risk exposure, the credit risk adjustments of those OTC derivatives are measured on a portfolio basis in accordance with the exception set forth in IFRS 13.

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Financial assets at fair value through profit or loss

The majority of instruments in this category are debt instruments measured at fair value, using a valuation technique based on the observable prices in the market and they are categorized within Level 2.

Some equity and debt instruments in this category are hybrid instruments which have both equity and debt features. These include preferred stocks which are measured at fair value using the Monte Carlo Simulation valuation model, if they are indexed to the market prices in a stock exchange. The valuation model uses the historical volatility of the listed stocks as an input, which are not observable in the market, resulting in these instruments being categorized within Level 3. Other types of preferred stocks and other non-hybrid equity instruments are evaluated using valuation techniques for unlisted stocks, which are normally used for private equity investments. The SMBC Group calculates the fair values of these instruments based on the market approach using market multiples or others in which significant unobservable inputs are used. These instruments are categorized within Level 3.

Available-for-sale financial assets

Debt instruments are measured at fair value using a quoted market price and categorized within Level 1 if they are traded in an active market. Debt instruments are categorized within Level 2 if they are measured at fair value using a price quoted by a third party, such as a pricing service or broker, or by reference to the current fair value of another bond that is substantially the same based on inputs such as prices obtained from brokers, observable interest rates and spreads. Some debt instruments are measured at fair value using the DCF method in which significant unobservable inputs are used, and categorized within Level 3.

As for equity instruments, listed stocks are measured at fair value based on the market price at a stock exchange and categorized within Level 1 if they are traded in an active market. Unlisted common and preferred stocks in this category are measured at fair value using valuation techniques, similar to those described in “Financial assets at fair value through profit or loss” above. Publicly traded investment trusts and funds are measured at fair value using the market price and are categorized within Level 1 if they are traded in an active market. Instruments whose prices are not available in the market, such as privately offered investment trusts, are measured at fair value based on the unit price, which is usually regarded as an exit price, obtained from the fund administrator or investment management firm. In such a case, these investment trusts and funds are categorized within Level 2. Other investment funds, such as private equity and real estate investment funds, are generally measured at fair value based on net asset value, which includes significant unobservable inputs. These funds are categorized within Level 3.

F-93

Significant Unobservable Inputs

The following tables present quantitative information about significant unobservable inputs used in fair value measurement for Level 3 financial assets and liabilities at March 31, 2018 and 2017.

	At March 31, 2018
	Fair value		Valuation technique(s)(1)	Significant unobservable inputs(1)	Range of inputs(1)
	(In millions)
Financial assets:
Derivative financial instruments:
Currency derivatives	¥	14	Option model	Foreign exchange volatility	10%-14%
Equity derivatives		1,880	Option model	Equity volatility	11%-52%
				Equity to equity correlation	45%-94%
Credit derivatives		4,667	CDO pricing model	Additional withdrawal ratio	48%
			Credit Default model	Quanto correlation	15%-90%
Financial assets at fair value through profit or loss:
Debt instruments		10,143	Monte Carlo Simulation	Equity volatility	12%-25%
Equity instruments		18,057	Market multiples	Price/Earnings multiple	8.3x-19.5x
				EV/EBITDA multiple	8.7x
				Liquidity discount	0%-20%
			See note (2) below	—	—
Available-for-sale financial assets:
Debt instruments		154	DCF method	Discount margin	8%
Equity instruments(3)		844,352	Market multiples	Price/Book value multiple	0.3x-2.4x
				Price/Earnings multiple	11.7x-31.4x
				EV/EBITDA multiple	5.4x-16.8x
				Liquidity discount	20%
			Monte Carlo Simulation	Equity volatility	42%-51%
			Net asset value(4)	—	—
			See note (2) below	—	—
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	14	Option model	Foreign exchange volatility	10%-14%
Credit derivatives		422	Credit Default model	Quanto correlation	20%-30%
Others(5)		833	Option model	Equity volatility	23%-38%
				Equity to equity correlation	45%-94%
				Interest rate to interest rate correlation	31%-100%
			Credit Default model	Quanto correlation	15%-90%

F-94

	At March 31, 2017
	Fair value			Valuation technique(s)(1)	Significant unobservable inputs(1)	Range of inputs(1)
	(In millions)
Financial assets:
Derivative financial instruments:
Interest rate derivatives	¥	2		Option model	Interest rate volatility	4%
Currency derivatives		22		Option model	Foreign exchange volatility	9%-17%
Equity derivatives		1,327		Option model	Equity volatility	20%-49%
					Equity to equity correlation	44%-93%
Credit derivatives		2,731		CDO pricing model	Additional withdrawal ratio	49%
Financial assets at fair value through profit or loss:
Debt instruments		12,053		Monte Carlo Simulation	Equity volatility	16%-26%
Equity instruments		14,286		Market multiples	Price/Earnings multiple	10.3x-30.2x
					EV/EBITDA multiple	8.1x
					Liquidity discount	0%-20%
				See note (2) below	—	—
Available-for-sale financial assets:
Debt instruments		526		DCF method	Discount margin	9%
Equity instruments		836,252		Market multiples	Price/Book value multiple	0.3x-2.0x
					Price/Earnings multiple	8.7x-42.6x
					EV/EBITDA multiple	5.0x-14.8x
					Liquidity discount	20%
				Monte Carlo Simulation	Equity volatility	20%-51%
				Net asset value(4)	—	—
				See note (2) below	—	—
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	21		Option model	Foreign exchange volatility	9%-17%
Others(5)		(303	)	Option model	Equity volatility	24%-64%
					Equity to equity correlation	44%-93%
					Interest rate to interest rate correlation	14%-100%

(1) Valuation techniques and unobservable inputs for insignificant Level 3 financial assets and liabilities are excluded.

(2) Fair values of certain equity instruments such as unlisted stocks are estimated on the basis of an analysis of the investee’s financial position and results, risk profile, prospects and other factors. A range of key inputs is not provided in the table as it is not practical to do so given the nature of such valuation techniques.

(3) Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale.

(4) The SMBC Group has determined that the net asset value represents fair values of certain investment funds.

(5) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract.

Volatility

Volatility represents a measure of how much a particular instrument, parameter or index is expected to change in value over time. The volatilities used in the valuation of some type of derivative instruments with optionality refer to the potential change in price or level of the underlying interest rates, foreign exchange rates or equity instruments. The volatilities of underlying listed stocks are used in the valuation of preferred stocks containing optionality. These volatilities are estimated based on historical data or information provided by third-party sources, together with other analytical techniques. In general, a significant increase in the volatility in isolation would result in a significantly higher fair value measurement.

Correlation

Correlation represents a measure of the relationship between the movements of two variables, which is expressed as a number between plus and minus one. A positive correlation indicates that two variables move in the same direction while a negative correlation indicates that they move in opposite directions. Correlations could

F-95

be any combination of variables such as interest rates, foreign exchange rates, CDS spread and stock price movements. Thus, both same-asset correlation and cross-asset correlation are used. Interest rate correlation between two different tenors is an example of same-asset correlations while quanto correlation which is the correlation between foreign exchange rates and another variable is an example of cross-asset correlation. These correlations are used in the valuation techniques of complex derivatives and estimated based on historical data. In general, a significant increase in the correlation in isolation would result in either a significantly higher or lower fair value measurement, depending on the terms of the instruments.

Additional withdrawal ratio

Additional withdrawal ratio represents the expected additional withdrawal ratio of unfunded commitment lines in the reference portfolio (mainly revolving credit facilities for commercial paper backup) concerning the credit loss protection scheme offered to GS. The expected additional withdrawal ratio is estimated based on historical data of actual funded amounts at default for similar portfolios. In general, a significant increase in the additional withdrawal ratio in isolation would have a significant unfavorable impact (i.e., an increase in derivative liabilities or a decrease in derivative assets) on the fair value measurement.

Price/Earnings, price/book value multiples

Price/Earnings (“P/E”) multiple represents the ratio of the equity value to the net income, while price/book value (“P/B”) multiple represents the ratio of the equity value to the book value. These multiples are estimated based on comparable listed companies. In general, a significant increase in the P/E multiple or P/B multiple in isolation would result in a significantly higher fair value measurement.

EV/EBITDA multiple

EV/EBITDA multiple represents the ratio of the enterprise value (“EV”) to earnings before interest, taxes, depreciation and amortization (“EBITDA”), where the EV is the aggregate value of equity and debt minus cash and cash equivalents. The multiple is estimated based on comparable listed companies. In general, a significant increase in the EV/EBITDA multiple in isolation would result in a significantly higher fair value measurement.

Liquidity discount

A liquidity discount is primarily applied in the valuation techniques for unlisted stocks to reflect the fact that these stocks are not actively traded. In general, a significant increase in the liquidity discount in isolation would result in a significantly lower fair value measurement.

Discount margin

Discount margin represents a spread used in estimating future cash flows in a DCF method to reflect the uncertainty of the cash flows that market participants would consider. In general, a significant increase in the discount margin in isolation would result in a significantly lower fair value measurement.

F-96

Sensitivity Analysis

The fair value of certain financial assets and liabilities are measured using valuation techniques based on inputs such as prices and rates that are not observable in the market. The following tables present the impact of the valuation sensitivity, if these inputs fluctuate to the extent deemed reasonable and the volatility of such inputs has a significant impact on the fair value.

	At March 31, 2018
	Total fair value measured using valuation techniques		Effect recorded in profit or loss				Effect recorded directly in equity
			Favorable changes		Unfavorable changes		Favorable changes		Unfavorable changes
	(In millions)
Financial assets:
Derivative financial instruments:
Currency derivatives	¥	14	¥	80	¥	1	¥	—	¥	—
Equity derivatives		1,880		271		310		—		—
Credit derivatives		4,667		4,515		11,765		—		—
Financial assets at fair value through profit or loss:
Debt instruments		10,143		278		—		—		—
Equity instruments		18,057		361		336		—		—
Available-for-sale financial assets:
Debt instruments		154		—		—		4		2
Equity instruments(1)		844,352		—		—		26,835		25,290
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	14	¥	2	¥	80	¥	—	¥	—
Credit derivatives		422		35		35		—		—
Others(2)		833		1,375		3,090		—		—

	At March 31, 2017
	Total fair value measured using valuation techniques			Effect recorded in profit or loss				Effect recorded directly in equity
				Favorable changes		Unfavorable changes		Favorable changes		Unfavorable changes
	(In millions)
Financial assets:
Derivative financial instruments:
Interest rate derivatives	¥	2		¥	7	¥	2	¥	—	¥	—
Currency derivatives		22			93		1		—		—
Equity derivatives		1,327			199		254		—		—
Credit derivatives		2,731			6,706		15,730		—		—
Financial assets at fair value through profit or loss:
Debt instruments		12,053			244		26		—		—
Equity instruments		14,286			99		99		—		—
Available-for-sale financial assets:
Debt instruments		526			—		—		13		13
Equity instruments		836,252			—		—		24,785		24,137
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	21		¥	2	¥	92	¥	—	¥	—
Others(2)		(303	)		1,121		1,716		—		—

(1) Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale.

(2) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract.

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Derivative financial instruments (including embedded derivatives)

With respect to the credit loss protection scheme offered to GS, the anticipated losses will vary significantly depending on the expected additional withdrawal ratio of unfunded commitment lines in the reference portfolio. The tables above present the estimates of the impact of changing the expected additional withdrawal ratio from an optimistic (favorable) scenario to a pessimistic (unfavorable) scenario. For the other derivative instruments, including embedded derivatives that are separately accounted for from host contracts, that use correlation or volatility in the valuation techniques, the impact resulting from using a reasonable range of those inputs is estimated where it is expected to be significant.

Financial assets at fair value through profit or loss / Available-for-sale financial assets

With respect to preferred stocks convertible into listed stocks, for which historical volatilities of related listed stocks are used in the valuation techniques, the impact resulting from using a reasonable range for the volatility is statistically estimated where it is expected to be significant. With respect to unlisted stocks which are measured at fair value based on a market approach, the impact of changing the market multiples within a reasonable range (±10%) is estimated. Certain investment funds classified as available-for-sale equity instruments are measured at fair value determined based on net asset value per share, which includes significant unobservable inputs. Since those funds are managed by value at risk (“VaR”) based on historical gain or loss data, the impact of the valuation sensitivity is estimated using a one-day VaR of the portfolio.

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Financial Assets and Liabilities Not Carried at Fair Value

The tables below present the carrying amounts and fair values by level within the fair value hierarchy, as described in “Financial Assets and Liabilities Carried at Fair Value—Fair Value Hierarchy,” of financial assets and liabilities not carried at fair value on the SMBC Group’s consolidated statement of financial position at March 31, 2018 and 2017.

			At March 31, 2018
			Carrying amount		Fair value
	Notes				Total		Level 1		Level 2		Level 3
	(In millions)
Financial assets:
Cash and deposits with banks		a	¥	54,696,069	¥	54,708,231	¥	53,401,133	¥	1,307,098	¥	—
Call loans and bills bought:
Call loans		a		1,858,802		1,859,176		—		1,859,176		—
Bills bought		a		23,078		23,051		—		23,051		—
Reverse repurchase agreements and cash collateral on securities borrowed		a		8,491,703		8,491,858		—		8,491,858		—
Investment securities:
Held-to-maturity  investments		b		372,459		374,597		374,597		—		—
Loans and advances		a		85,129,070		87,538,646		—		258,673		87,279,973
Other financial assets		a		3,598,642		3,595,216		—		3,429,143		166,073
Financial assets included in assets held for sale		a		3,098,196		3,224,902		3,824		84,058		3,137,020
Financial liabilities:
Deposits:
Non-interest-bearing deposits, demand deposits and deposits at notice		c	¥	84,121,443	¥	84,121,124	¥	—	¥	84,121,124	¥	—
Other deposits		c		44,340,084		44,339,583		—		44,339,583		—
Call money and bills sold:
Call money		c		1,190,929		1,190,936		—		1,190,936		—
Bills sold		c		—		—		—		—		—
Repurchase agreements and cash collateral on securities lent		c		12,022,593		12,022,593		—		12,022,593		—
Borrowings		c		10,652,481		10,761,610		—		10,739,893		21,717
Debt securities in issue		c		10,569,117		10,767,745		—		10,587,917		179,828
Other financial liabilities		c		6,691,042		6,691,016		—		6,571,846		119,170
Financial liabilities included in liabilities directly associated with the assets held for sale		c		3,371,556		3,380,139		—		3,380,139		—

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			At March 31, 2017
			Carrying amount		Fair value
	Notes				Total		Level 1		Level 2		Level 3
			(In millions)
Financial assets:
Cash and deposits with banks		a	¥	47,330,155	¥	47,330,763	¥	46,244,819	¥	1,085,944	¥	—
Call loans and bills bought:
Call loans		a		1,860,620		1,860,539		—		1,860,539		—
Bills bought		a		11,589		11,567		—		11,567		—
Reverse repurchase agreements and cash collateral on securities borrowed		a		8,924,385		8,926,312		—		8,926,312		—
Investment securities:
Held-to-maturity investments		b		1,173,419		1,180,319		1,180,319		—		—
Loans and advances		a		95,273,845		98,053,056		—		348,691		97,704,365
Other financial assets		a		3,424,591		3,421,172		—		3,255,765		165,407
Financial liabilities:
Deposits:
Non-interest-bearing deposits, demand deposits and deposits at notice		c	¥	81,465,816	¥	81,466,078	¥	—	¥	81,466,078	¥	—
Other deposits		c		48,829,474		48,831,229		—		48,831,229		—
Call money and bills sold:
Call money		c		2,088,020		2,088,067		—		2,088,067		—
Bills sold		c		—		—		—		—		—
Repurchase agreements and cash collateral on securities lent		c		9,424,506		9,424,506		—		9,424,506		—
Borrowings		c		12,245,943		12,318,246		—		12,306,066		12,180
Debt securities in issue		c		11,165,623		11,329,967		—		11,257,502		72,465
Other financial liabilities		c		7,201,137		7,200,488		—		7,080,575		119,913

Notes:

a.	(i)	The carrying amounts of deposits with banks without maturity and loans with no specified repayment dates represent a reasonable estimate of fair value, considering the nature of these financial instruments.
	(ii)	Financial assets with a remaining maturity of six months or less: The carrying amounts represent a reasonable estimate of fair value.
	(iii)	Financial assets with a remaining maturity of more than six months: Except for impaired loans and advances, the fair values are mostly determined using discounted cash flow models taking into account certain factors including counterparties’ credit ratings, pledged collateral, and market interest rates. The fair values of impaired loans and advances are generally determined by discounting the estimated future cash flows over the time period they are expected to be recovered, and may be based on the appraisal value of underlying collateral as appropriate.
	Note that some of the financial assets in this category include embedded derivatives, which are separately accounted for, but presented together with the host contract.
b.	The fair values for held-to-maturity investments are determined using quoted prices in active markets.
c.	(i)	The carrying amounts of demand deposits and deposits without maturity represent a reasonable estimate of fair value, considering the nature of these financial instruments.
	(ii)	Financial liabilities with a remaining maturity of six months or less: The carrying amounts represent a reasonable estimate of fair value.
	(iii)	Financial liabilities with a remaining maturity of more than six months: The fair values are, in principle, based on the present values of future cash flows calculated using the refinancing rate applied to the same type of instruments for similar remaining maturities. The fair values of debt securities in issue are based on the present values of future cash flows calculated using the rate derived from yields of bonds issued by SMBC and publicly offered subordinated bonds published by securities firms.
	Note that some of the financial liabilities in this category include embedded derivatives, which are separately accounted for, but presented together with the host contract.

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44 OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES

The following tables present the information about the impact of offsetting of financial assets and liabilities in the consolidated statement of financial position in accordance with the criteria described in Note 2 “Summary of Significant Accounting Policies,” as well as the impact of netting of financial instruments that are subject to enforceable master netting arrangements or similar agreements but do not qualify for the offsetting criteria at March 31, 2018 and 2017.

	At March 31, 2018
	Gross amounts of recognized financial assets and liabilities		Gross amounts offset in statement of financial position(1)			Net amounts presented in statement of financial position		Related amounts not offset in statement of financial  position(2)						Net amounts
								Financial instruments(3)			Cash collateral
	(In millions)
Financial assets(4):
Reverse repurchase agreements and cash collateral on securities borrowed	¥	9,346,594	¥	(854,891	)	¥	8,491,703	¥	(8,458,707	)	¥	—		¥	32,996
Derivative financial instruments		4,729,842		(844,571	)		3,885,271		(1,999,343	)		(479,814	)		1,406,114
Total	¥	14,076,436	¥	(1,699,462	)	¥	12,376,974	¥	(10,458,050	)	¥	(479,814	)	¥	1,439,110
Financial liabilities(4):
Repurchase agreements and cash collateral on securities lent	¥	12,877,484	¥	(854,891	)	¥	12,022,593	¥	(12,019,290	)	¥	—		¥	3,303
Derivative financial instruments		4,526,765		(1,028,749	)		3,498,016		(2,009,835	)		(587,693	)		900,488
Total	¥	17,404,249	¥	(1,883,640	)	¥	15,520,609	¥	(14,029,125	)	¥	(587,693	)	¥	903,791

	At March 31, 2017
	Gross amounts of recognized financial assets and liabilities		Gross amounts offset in statement of financial position(1)			Net amounts presented in statement of financial position		Related amounts not offset in statement of financial position(2)						Net amounts
								Financial instruments(3)			Cash collateral
	(In millions)
Financial assets(4):
Reverse repurchase agreements and cash collateral on securities borrowed	¥	9,660,288	¥	(735,903	)	¥	8,924,385	¥	(8,889,400	)	¥	—		¥	34,985
Derivative financial instruments		5,178,409		(1,114,427	)		4,063,982		(2,227,109	)		(318,106	)		1,518,767
Total	¥	14,838,697	¥	(1,850,330	)	¥	12,988,367	¥	(11,116,509	)	¥	(318,106	)	¥	1,553,752
Financial liabilities(4):
Repurchase agreements and cash collateral on securities lent	¥	10,160,409	¥	(735,903	)	¥	9,424,506	¥	(9,410,305	)	¥	—		¥	14,201
Derivative financial instruments		5,178,911		(1,289,217	)		3,889,694		(2,208,039	)		(719,483	)		962,172
Total	¥	15,339,320	¥	(2,025,120	)	¥	13,314,200	¥	(11,618,344	)	¥	(719,483	)	¥	976,373

(1) Amounts offset for derivative financial instruments include cash collateral.

(2) The amounts of financial instruments and cash collateral have been limited to the net amounts presented in the consolidated statement of financial position so as not to include any over-collateralization.

(3) Financial instruments include non-cash collateral at fair value.

(4) Financial assets and liabilities include amounts that are both subject to and not subject to enforceable master netting arrangements or similar agreements.

The “Gross amounts offset in statement of financial position” column in the above tables represents the impact of offsetting of financial assets and liabilities in the consolidated statement of financial position in accordance with the offsetting criteria. The SMBC Group presents financial assets and liabilities on a net basis in the consolidated statement of financial position only if it currently has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis or realize the asset and settle the liability simultaneously.

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The “Related amounts not offset in statement of financial position” column comprises (1) financial assets and liabilities subject to netting arrangements, such as the International Swaps and Derivatives Association’s (“ISDA”) Master Agreement, master repurchase agreements and master securities lending agreements, which allow all the outstanding transactions with a particular counterparty to be set off only if the event of default or other predetermined events occur, and (2) cash and non-cash collateral related to those transactions.

45 FINANCIAL RISK MANAGEMENT

The SMBC Group classifies risks into the following categories: credit risk, market risk, liquidity risk and operational risk. This note presents information about the SMBC Group’s exposure to credit risk, market risk, and liquidity risk, and its policies and processes for measuring and managing these risks.

On April 1, 2017, the SMBC Group introduced SMBC Group-wide business units and a Group Chief Officers system (“CxO system”). In addition, the SMBC Group transitioned to a company with three statutory committees: a nominating committee, an audit committee and a compensation committee from a board of corporate auditors governance system, following approval at its ordinary general meeting of shareholders held on June 29, 2017. In connection with the foregoing, the SMBC Group changed its risk management system, including by introducing a Group Chief Risk Officer (“CRO”) who reports to the board of directors and its internal committees and conducting various meetings for business executions to centrally identify and manage risks.

Risk Management System

Top management plays an active role in the risk management process out of recognition for the importance of risk management. The SMBC Group-wide basic policies for risk management are determined by the Management Committee before being authorized by the board of directors.

In line with these basic policies for risk management, the functions for managing major risks are consolidated within the Risk Management Unit, which is independent from business units, and the SMBC Group seeks to refine its risk management system through such means as enhancing comprehensive reviews of each risk category. In addition, the Internal Audit Unit conducts internal audits on the status of risk management to verify that risk is appropriately managed.

Risk management systems are in place at individual SMBC Group companies that have been established based on the characteristics of their particular businesses and in accordance with the basic policies. Furthermore, the SMBC Group is sharing information on SMBC Group-wide risk management and strengthening related systems through the Group CRO Committee, which consists of the Group CRO and risk management representatives from strategically important SMBC Group companies.

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The diagram below represents the risk management system of the SMBC Group.

Risk Capital Management

In managing credit risk, market risk, and operational risk affecting the entire SMBC Group, the SMBC Group applies a uniform standard, risk capital based on value at risk (“VaR”), for use in monitoring and managing risks. This standard is applied while taking into account the characteristics of each risk and of the businesses of SMBC Group companies. Specific risk capital measures include setting upper limits for risk exposure based on SMBC Group-wide and business unit risk appetite and SMBC Group-wide management constitution. Each business unit operates business operation within that limit. Through these precautions, the SMBC Group practices management that maintains an appropriate balance between risks and returns based on a comprehensive perspective and secures sufficient financial soundness.

Credit Risk

Credit risk is the risk of incurring losses from decline or loss of the value of an asset (including off-balance sheet items) that is caused by a credit event including but not limited to the deterioration of financial condition of a borrower. Overseas credits transactions also entail country risk, which is closely related to credit risk. Country risk is the risk of incurring losses caused by changes in political or economic conditions. Credit exposures arise primarily from lending activities such as loans and advances, acquiring investment securities, derivative transactions, and off-balance sheet transactions such as unused portion of loan commitments.

Credit risk management system

Credit risk is the most significant risk to which the SMBC Group is exposed. The purpose of credit risk management is to keep the credit risk exposure to a permissible level relative to capital, to maintain the quality of assets and to ensure returns commensurate with risk.

At the SMBC Group, the Group CRO formulates credit risk management policies each year on the basis of Group-wide basic policies for risk management. The Credit & Investment Planning Department, responsible for

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the comprehensive management of credit risk, drafts and administers credit risk regulations including the Group credit policies, manages non-performing loans (“NPLs”), and performs other aspects of credit portfolio management. Also, the Credit Risk Committee deliberates on matters related to Group-wide credit portfolios. The SMBC Group companies follow the fundamental principles established by the SMBC Group to assess and manage credit risk. Each of SMBC Group companies manages credit risk according to the nature of its business, and assesses and manages the credit risks of individual loans and credit portfolios quantitatively, using consistent standards.

The following chart shows the credit risk management system of SMBC, the SMBC Group’s significant banking subsidiary.

At SMBC, the Credit & Investment Planning Department within the Risk Management Unit is responsible for the comprehensive management of credit risk. This department drafts and administers credit policies, the internal rating system, credit authority guidelines, and credit application guidelines, and manages NPLs, including impaired loans, and other aspects of credit portfolio management. The department also cooperates with the Corporate Risk Management Department in quantifying credit risk (risk capital and risk-weighted assets) and controls SMBC’s entire credit risk. Further, the Credit Portfolio Management Department within the Credit & Investment Planning Department strives to stabilize the credit portfolio and manage the risk through credit derivatives, loan asset sales and other instruments.

The credit departments of SMBC within each business unit conduct credit risk management for loans handled by its unit and manage portfolios of its unit. The credit limits they use are based on the baseline amounts that the Credit & Investment Planning Department establishes for each grading category, with particular attention

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paid to evaluating and managing customers or loans perceived to have particularly high credit risk. The Corporate Research Department engages in research on industries and analyzes the business and financial conditions of borrower enterprises to detect early signs of problems or growth potential. The Credit Administration Department is responsible for handling NPLs of borrowers classified as potentially bankrupt or lower, and formulates plans for workouts, including write-offs, and corporate rehabilitation. The department closely liaises with SMBC Servicer Co., Ltd., an SMBC Group company, which engages in related services to efficiently reduce the amount of NPLs, including through the sale of loans.

The Internal Audit Unit of SMBC, operating independently of the business units, audits asset quality, accuracy of grading and state of credit risk management, and reports the results directly to the board of directors and the Management Committee.

SMBC has established the Credit Risk Committee to undertake control of credit risk and to ensure the overall soundness of the loan operations.

Credit risk management methods

To effectively manage the risk involved in individual loans as well as the credit portfolio as a whole, the SMBC Group first acknowledges that every loan entails credit risk, assesses the credit risk posed by each borrower and loan using an internal rating system, and quantifies that risk for control purposes.

Credit risk evaluation

At SMBC, the Credit & Investment Planning Department manages an internal rating system for each asset control category set according to portfolio characteristics. For example, credits to commercial and industrial (“C&I”) companies, individuals for business purposes (domestic only), sovereigns, public sector entities, and financial institutions are assigned an “obligor grade,” which indicates the borrower’s creditworthiness, and/or “facility grade,” which indicates the collectability of assets taking into account the transaction conditions such as guarantee/collateral, and tenor. The business units determine an obligor grade by first assigning a financial grade using a financial strength grading model and data obtained from the obligor’s financial statements, including net worth and cash flows. The financial grade is then adjusted taking into account the actual state of the obligor’s financial position and qualitative factors to derive the obligor grade. The qualitative factors mainly include the expected future cash flows taking into account factors such as historical loss information, the appropriateness of the borrower’s business plan or operational improvement plan, the status of progress of its plan, and the overall support from financial institutions. In the event that the borrower is domiciled overseas, internal ratings for credit are made after taking into consideration the country rank, which represents an assessment of the credit quality of each country based on its political and economic situation, as well as its current account balance and external debt. Obligor grades and facility grades are reviewed once a year and as otherwise necessary, such as when there are changes in the credit situation. The SMBC Group’s subsidiaries carry out credit risk evaluations in line with SMBC.

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The table below shows the corporate obligor grading system of SMBC.

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	Obligors with loans that are more than three months past due or with restructured loans within the “Borrowers Requiring Caution” category	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

There are also grading systems for loans to individuals such as housing loans and structured finance including project finance, where the repayment source is limited to the cash flows generated by a particular business or asset. For example, the obligor grade of housing loans is determined taking into account various relevant factors such as proportion of the repayment to revenue, proportion of down payment to the value and past due information.

The Credit & Investment Planning Department of SMBC centrally manages the internal rating systems, and designs, operates, supervises and validates the grading models. It validates the grading models (including statistical validation) of main assets following the procedure manual once a year to ensure their effectiveness and suitability.

Quantification of credit risk

At SMBC, credit risk quantification refers to the process of estimating the degree of credit risk of a portfolio or individual loan taking into account not just the obligor’s probability of default (“PD”), but also the concentration of risk in a specific customer or industry and the loss impact of fluctuations in the value of collateral, such as real estate and securities.

Specifically, the PD by grade, loss given default (“LGD”), credit quality correlation among obligors, and other parameter values are estimated using the historical data of obligors and facilities stored in a database to

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calculate the credit risk. Then, based on these parameters, SMBC runs a simulation of simultaneous default using the Monte Carlo Simulation to calculate SMBC’s maximum loss exposure to the estimated amount of the maximum losses that may be incurred. Based on these quantitative results, SMBC allocates risk capital.

Risk quantification is also executed for purposes such as to determine the portfolio’s risk concentration or to simulate economic movements (stress tests), and the results are used for making optimal decisions across the whole range of business operations, including formulating business plans and providing a standard against which individual credit applications are assessed.

Credit assessment

At SMBC, the credit assessment of corporate loans involves a variety of financial analyses, including cash flows, to predict an enterprise’s capability of loan repayment and its growth prospects. These quantitative measures, when combined with qualitative analyses of industrial trends, the enterprise’s research and development capabilities, the competitiveness of its products or services, and its management caliber, result in a comprehensive credit assessment. The loan application is analyzed in terms of the intended utilization of the funds and the repayment schedule. In the assessment of housing loans for individuals, SMBC employs a credit assessment model based on credit data amassed and analyzed by SMBC over many years, taking into account various relevant factors including proportion of the repayment to revenue, proportion of down payment to the value and past due information.

Credit monitoring

At SMBC, in addition to analyzing loans at the application stage, the Credit Monitoring System is utilized to reassess obligor grades, and review credit policies for each obligor so that problems can be detected at an early stage, and quick and effective action can be taken. The system includes annual monitoring that is carried out each time the financial results of the obligor enterprise are obtained, as well as ad-hoc monitoring that is performed each time credit conditions change.

Credit portfolio management

Risk-taking within the scope of capital

To keep the credit risk exposure to a permissible level relative to capital, the Corporate Risk Management Department of the Company sets a credit risk capital limit for internal control purposes. Under this limit, sub-limits are set for each business unit. The Corporate Risk Management Department conducts monthly monitoring to make sure that these limits are being followed.

Controlling concentration risk

As the SMBC Group’s equity capital may be materially impaired in the event that the credit concentration risk becomes apparent, the Credit & Investment Planning Department of the Company therefore takes measures to manage concentration risks, such as introducing large exposure limits and conducting intensive loan reviews for obligors with large exposures, with an increased focus on industrial sectors with an excessive concentration of credit risk. Further, to manage country risk, SMBC’s Credit Department of the International Banking Unit has credit limit guidelines based on each country’s creditworthiness.

Toward active portfolio management

SMBC’s Credit Portfolio Management Department makes use of credit derivatives, loan asset sales, and other instruments to proactively and flexibly manage its portfolio to stabilize credit risk.

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Maximum exposure to credit risk before collateral held or other credit enhancements

The following table shows the maximum exposure to credit risk before taking into account any collateral held or other credit enhancements at March 31, 2018 and 2017.

	At March 31,
	2018		2017
	(In millions)
Credit risk exposures relating to assets on the consolidated statement of financial position:
Deposits with banks	¥	53,992,931	¥	46,207,027
Call loans and bills bought		1,881,880		1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed		8,491,703		8,924,385
Trading assets		2,841,148		3,339,928
Derivative financial instruments		3,885,271		4,063,982
Financial assets at fair value through profit or loss		1,528,921		1,582,957
Investment securities:
Held-to-maturity investments		372,459		1,173,419
Available-for-sale financial assets		14,282,706		12,123,770
Loans and advances		85,129,070		95,273,845
Other financial assets		3,598,642		3,424,591
Financial assets included in assets held for sale		3,099,888		—
Credit risk exposures relating to off-balance sheet items(1):
Loan commitments		60,107,128		62,357,210
Financial guarantees and other credit-related contingent liabilities		8,426,245		7,924,711
Total	¥	247,637,992	¥	248,268,034

(1) The off-balance sheet items represent the nominal amounts of undrawn loan commitments, financial guarantees and other credit-related contingent liabilities.

Based on the table above, excluding loan commitments (refer to Note 41 “Contingency and Capital Commitments”), the majority of the total exposure to credit risk is derived from “Loans and advances” and “Available-for-sale financial assets.”

Collateral and other credit enhancements

The SMBC Group considers the acquisition of collateral and guarantees as a secondary repayment source to further enhance loan recovery and minimize credit risk. Based on the assessment of a borrower’s real financial condition and potential future cash flows, the SMBC Group shall analyze the borrower’s repayment ability and require sufficient collateral in the form of an asset or third-party obligation. This serves to mitigate the inherent credit risk in the exposure, by either improving recoveries in the event of a default or transferring the borrower’s obligation to guarantors. Collateral received is mainly segregated into (1) financial collateral such as cash, deposits and securities, (2) real estate collateral such as land and buildings, and (3) guarantees received from sovereigns, municipal corporations, credit guarantee corporations and other public entities, financial institutions, and other companies.

The SMBC Group’s credit risk management is mainly based on an analysis of the repayment ability from the cash flows of the borrower’s business performance, and the collateral and other credit enhancements are considered as secondary repayment sources in the SMBC Group’s business practice. At the time of the primary lending decision, the SMBC Group evaluates the collateral on an individual borrower basis to consider its financial effect for mitigating credit risk. The re-evaluation of the collateral and other credit enhancements will be performed regularly, depending on the borrower’s creditworthiness. In case there is a significant change in the

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borrower’s repayment ability due to a deterioration in its creditworthiness and/or its cash flows, the SMBC Group may utilize the collateral and other credit enhancements as a source of repayment.

The following table shows the financial effect of collateral and other credit enhancements on loans and advances for borrowers requiring caution and impaired loans and advances at March 31, 2018 and 2017. The maximum collateral amounts included in the disclosure are limited to the carrying value of loans and advances where the credit exposure is over-collateralized.

	At March 31,
	2018		2017
	(In millions)
Loans and advances for borrowers requiring caution and impaired loans and advances	¥	1,965,681	¥	3,212,447
Financial effect of collateral and other credit enhancements		959,015		1,422,996

Concentration of risks of loans and advances with credit risk exposure

An analysis of concentrations of credit risk from loans and advances by geographical sector and industry sector at March 31, 2018 and 2017 is shown below. The concentration by geographical sector is measured based on the domicile of the borrower.

Geographical sector

	At March 31,
	2018			2017
	(In millions)
Domestic	¥	57,830,627		¥	68,020,094
Foreign:
Americas		11,221,244			11,417,162
Europe		4,949,471			5,031,197
Asia		8,423,747			8,412,109
Others		3,434,838			3,310,164
Total foreign		28,029,300			28,170,632
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

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Industry sector

	At March 31,
	2018			2017
	(In millions)
Domestic:
Manufacturing	¥	7,961,620		¥	9,578,147
Agriculture, forestry, fisheries and mining		145,957			174,021
Construction		947,765			1,151,989
Transportation, communications and public enterprises		5,424,054			5,365,225
Wholesale and retail		5,288,767			5,721,005
Finance and insurance		2,777,862			2,844,546
Real estate and goods rental and leasing		9,017,664			10,101,846
Services		4,255,228			4,885,247
Municipalities		1,000,286			1,216,211
Lease financing		14,629			2,706,641
Consumer(1)		16,363,489			19,096,755
Others		4,633,306			5,178,461
Total domestic		57,830,627			68,020,094
Foreign:
Public sector		372,008			299,746
Financial institutions		4,496,646			4,588,001
Commerce and industry		21,023,885			21,041,905
Lease financing		357,660			404,658
Others		1,779,101			1,836,322
Total foreign		28,029,300			28,170,632
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

(1) The balance in Consumer mainly consists of housing loans. The housing loan balances amounted to ¥11,482,678 million and ¥13,766,771 million at March 31, 2018 and 2017, respectively.

The following tables show a disaggregation of the structured finance loans and advances balances, where the repayment source is limited to the cash flows generated by a particular business or asset, and the balances of secured or unsecured consumer loans at March 31, 2018 and 2017. These loans and advances are included in the preceding tables.

Structured finance:

	At March 31,
	2018		2017
	(In millions)
Real estate finance	¥	2,421,408	¥	2,222,530
Project finance		3,976,222		3,859,424
Other structured finance		374,430		370,160
Total structured finance	¥	6,772,060	¥	6,452,114

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Consumer:

	At March 31,
	2018		2017
	(In millions)
Secured loans(1)	¥	12,255,845	¥	14,994,042
Unsecured loans		4,107,644		4,102,713
Total consumer	¥	16,363,489	¥	19,096,755

(1) The secured loans and advances mainly represent housing loans. The housing loan balances amounted to ¥11,482,678 million and ¥13,766,771 million at March 31, 2018 and 2017, respectively.

Loans and advances by credit quality category

Loans and advances are summarized as follows:

	At March 31,
	2018			2017
	(In millions)
Neither past due nor impaired	¥	84,856,335		¥	94,825,134
Past due but not impaired		124,724			136,904
Impaired(1)		878,868			1,228,688
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

(1) Loans and advances to borrowers who are classified in the borrower categories of substandard borrowers, potentially bankrupt borrowers, effectively bankrupt borrowers, and bankrupt borrowers described in the obligor grading system represent impaired loans and advances.

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Loans and advances neither past due nor impaired

The following tables show the credit quality of the portfolio of loans and advances that were neither past due nor impaired, by geography and by industry based on the corporate obligor grading system of SMBC at March 31, 2018 and 2017. Since the internal rating system of SMBC’s consumer portfolio differs from the corporate obligor grading system, the balances of loans and advances to consumers are included in the grade category of “Other.” Additionally, as the SMBC Group’s subsidiaries are adopting various internal rating systems which differ from SMBC, the grade category of “Other” also includes some balances of loans and advances held by those subsidiaries.

	At March 31, 2018
	Normal								Requiring Caution
	J 1-3		J 4-6		Japanese government and local municipal corporations		Other		J 7		Other		Total
	(In millions)
Domestic:
Manufacturing	¥	4,275,861	¥	2,190,117	¥	—	¥	1,196,566	¥	199,616	¥	22,681	¥	7,884,841
Agriculture, forestry, fisheries and mining		81,900		42,892		13,973		207		599		—		139,571
Construction		319,394		468,222		—		119,439		26,779		459		934,293
Transportation, communications and public enterprises		4,069,995		1,066,246		86,932		133,132		46,657		148		5,403,110
Wholesale and retail		2,333,434		2,399,747		—		297,583		155,584		1,421		5,187,769
Finance and insurance		1,801,410		349,934		2,785		618,935		1,630		5		2,774,699
Real estate and goods rental and leasing		5,696,289		3,082,764		13,696		95,634		87,218		7		8,975,608
Services		1,599,011		2,355,545		37,693		94,218		96,498		115		4,183,080
Municipalities		—		—		1,000,286		—		—		—		1,000,286
Lease financing		—		—		—		14,629		—		—		14,629
Consumer(1)		—		234		—		15,900,425		1,669		73,180		15,975,508
Others		53,633		2,057,571		1,685,694		728,206		69,005		680		4,594,789
Total domestic		20,230,927		14,013,272		2,841,059		19,198,974		685,255		98,696		57,068,183
	G 1-3		G 4-6		—		Other		G 7		Other		Total
Foreign:
Public sector		191,678		81,448		—		97,890		30		941		371,987
Financial institutions		2,381,927		338,659		—		1,752,693		—		7,891		4,481,170
Commerce and industry		14,009,273		2,425,819		—		4,114,066		222,395		53,793		20,825,346
Lease financing		23,290		—		—		330,406		—		3,964		357,660
Others		1,194,334		161,795		—		383,463		9,964		2,433		1,751,989
Total foreign		17,800,502		3,007,721		—		6,678,518		232,389		69,022		27,788,152
Total	¥	38,031,429	¥	17,020,993	¥	2,841,059	¥	25,877,492	¥	917,644	¥	167,718	¥	84,856,335

(1) The balance in the grade category of “Other” in Consumer includes housing loans, which amounted to ¥11,302,350 million and ¥51,189 million for the borrower category of Normal and Requiring Caution, respectively.

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	At March 31, 2017
	Normal								Requiring Caution
	J 1-3		J 4-6		Japanese government and local municipal corporations		Other		J 7		Other		Total
	(In millions)
Domestic:
Manufacturing	¥	5,220,451	¥	2,294,471	¥	—	¥	1,528,465	¥	371,365	¥	34,956	¥	9,449,708
Agriculture, forestry, fisheries and mining		111,241		45,573		500		5,955		7,905		588		171,762
Construction		271,321		479,408		—		323,281		33,050		16,279		1,123,339
Transportation, communications and public enterprises		3,000,896		1,805,631		129,708		317,943		58,684		18,869		5,331,731
Wholesale and retail		2,182,359		2,483,635		—		733,264		155,778		36,234		5,591,270
Finance and insurance		1,897,381		346,939		3,243		575,688		1,344		15,702		2,840,297
Real estate and goods rental and leasing		5,188,687		3,028,913		35,078		1,496,839		99,237		104,524		9,953,278
Services		1,552,427		2,350,110		34,826		690,201		97,651		45,520		4,770,735
Municipalities		—		—		1,042,346		157,144		—		16,721		1,216,211
Lease financing		—		—		—		2,610,519		—		87,533		2,698,052
Consumer(1)		—		146		—		18,470,768		3,012		183,247		18,657,173
Others		53,091		2,090,278		2,298,829		590,353		94,415		6,101		5,133,067
Total domestic		19,477,854		14,925,104		3,544,530		27,500,420		922,441		566,274		66,936,623
	G 1-3		G 4-6		—		Other		G 7		Other		Total
Foreign:
Public sector		220,796		72,198		—		6,516		—		211		299,721
Financial institutions		2,586,295		431,372		—		1,538,913		—		24,481		4,581,061
Commerce and industry		14,068,055		2,546,812		—		3,778,524		306,315		106,831		20,806,537
Lease financing		24,592		—		—		355,141		—		12,763		392,496
Others		1,219,303		181,808		—		386,418		10,914		10,253		1,808,696
Total foreign		18,119,041		3,232,190		—		6,065,512		317,229		154,539		27,888,511
Total	¥	37,596,895	¥	18,157,294	¥	3,544,530	¥	33,565,932	¥	1,239,670	¥	720,813	¥	94,825,134

(1) The balance in the grade category of “Other” in Consumer includes housing loans, which amounted to ¥13,519,680 million and ¥70,963 million for the borrower category of Normal and Requiring Caution, respectively.

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Loans and advances past due but not impaired

The SMBC Group assesses the credit quality of loans and advances taking into account past due information on a borrower basis, and does not comprehensively collate the data related to the age analysis of loans and advances that were past due but not impaired on an individual basis. The aggregate balances of loans and advances of borrowers with one or more facilities, where any of the facilities are past due for less than three months but not impaired as at March 31, 2018 and 2017 were ¥163,902 million and ¥167,159 million, respectively. Those aggregate balances therefore include individual loans and advances which are not past due. Thus, in the tables below, the SMBC Group provides the amount of loans and advances where the final payment at contractual maturity is past due, by geography and by industry, at March 31, 2018 and 2017. For reference, since all the loans and advances that are past due over three months are treated as impaired, those loans and advances are not included in the tables below.

	At March 31, 2018
	Past due up to 1 month		Past due 1-2 months		Past due 2-3 months		Total
	(In millions)
Domestic:
Manufacturing	¥	476	¥	50	¥	—	¥	526
Agriculture, forestry, fisheries and mining		—		—		—		—
Construction		1		10		51		62
Transportation, communications and public enterprises		45		—		—		45
Wholesale and retail		2,240		318		21		2,579
Finance and insurance		65		76		—		141
Real estate and goods rental and leasing		73		44		—		117
Services		245		—		—		245
Lease financing		—		—		—		—
Consumer		55,020		10,298		3,378		68,696
Others		2,791		44		21		2,856
Total domestic		60,956		10,840		3,471		75,267
Foreign:
Financial institutions		11,934		165		1,548		13,647
Commerce and industry		14,822		2,705		13,554		31,081
Others		2,402		1,676		651		4,729
Total foreign		29,158		4,546		15,753		49,457
Total	¥	90,114	¥	15,386	¥	19,224	¥	124,724

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	At March 31, 2017
	Past due up to 1 month		Past due 1-2 months		Past due 2-3 months		Total
	(In millions)
Domestic:
Manufacturing	¥	701	¥	153	¥	4	¥	858
Agriculture, forestry, fisheries and mining		8		—		—		8
Construction		423		118		27		568
Transportation, communications and public enterprises		612		2		—		614
Wholesale and retail		5,436		1,345		235		7,016
Finance and insurance		59		55		—		114
Real estate and goods rental and leasing		832		164		56		1,052
Services		1,421		306		212		1,939
Lease financing		523		51		46		620
Consumer		41,103		12,508		22,666		76,277
Others		3,617		—		531		4,148
Total domestic		54,735		14,702		23,777		93,214
Foreign:
Financial institutions		2,313		234		2,022		4,569
Commerce and industry		17,326		8,418		9,641		35,385
Others		1,822		1,293		621		3,736
Total foreign		21,461		9,945		12,284		43,690
Total	¥	76,196	¥	24,647	¥	36,061	¥	136,904

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Impaired loans and advances

The following table shows the impaired loans and advances, by geography and by industry, at March 31, 2018 and 2017.

	At March 31,
	2018			2017
	(In millions)
Domestic:
Manufacturing	¥	76,253		¥	127,581
Agriculture, forestry, fisheries and mining		6,386			2,251
Construction		13,410			28,082
Transportation, communications and public enterprises		20,899			32,880
Wholesale and retail		98,419			122,719
Finance and insurance		3,022			4,135
Real estate and goods rental and leasing		41,939			147,516
Services		71,903			112,573
Lease financing		—			7,969
Consumer		319,285			363,305
Others		35,661			41,246
Total domestic		687,177			990,257
Foreign:
Public sector		21			25
Financial institutions		1,829			2,371
Commerce and industry		167,458			199,983
Lease financing		—			12,162
Others		22,383			23,890
Total foreign		191,691			238,431
Total impaired loans and advances before allowance for loan losses		878,868			1,228,688
Less: Allowance for loan losses for impaired loans and advances		(369,386	)		(532,451	)
Net impaired loans and advances	¥	509,482		¥	696,237

Renegotiated loans and advances

The following table shows loans and advances at March 31, 2018 and 2017 that would otherwise be past due or impaired, but whose terms have been renegotiated without providing any financial concessions. These loans and advances are mainly classified as requiring caution in the table of “Loans and advances neither past due nor impaired” in the section “Loans and advances by credit quality category.”

The SMBC Group continually assesses the creditworthiness of a borrower for whom terms of the loans and advances have been renegotiated, taking into account the actual state of the borrower’s financial position and qualitative factors. Further details are described in “Credit risk evaluation” in the section “Credit risk management methods.” Loans and advances whose terms have been renegotiated and financial concessions have been provided are reported as impaired and included in the table of “Impaired loans and advances” in the section “Loans and advances by credit quality category.”

	At March 31,
	2018	2017
	(In millions)
Renegotiated loans and advances	¥292,466	¥463,092

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Trading assets and investment securities

The following table shows an analysis of trading assets, financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets based on the external rating system at March 31, 2018 and 2017, excluding equity instruments. Collateral is generally not obtained directly from the issuers.

	At March 31, 2018
	Trading assets		Financial assets at fair value through profit or loss		Held-to-maturity investments		Available-for-sale financial assets		Total
	(In millions)
AAA	¥	190,650	¥	—	¥	—	¥	4,865,723	¥	5,056,373
AA- to AA+		2,399,644		1,518,748		372,459		8,538,879		12,829,730
A- to A+		192,943		—		—		276,042		468,985
Lower than A-		56,458		—		—		532,626		589,084
Unrated		1,453		10,173		—		69,436		81,062
Total	¥	2,841,148	¥	1,528,921	¥	372,459	¥	14,282,706	¥	19,025,234

Impaired available-for-sale financial assets with a carrying amount of ¥154 million at March 31, 2018 are included in the table above.

	At March 31, 2017
	Trading assets		Financial assets at fair value through profit or loss		Held-to-maturity investments		Available-for-sale financial assets		Total
	(In millions)
AAA	¥	242,240	¥	—	¥	—	¥	4,666,664	¥	4,908,904
AA- to AA+		2,803,467		1,570,904		1,173,419		6,822,953		12,370,743
A- to A+		236,348		—		—		132,943		369,291
Lower than A-		39,380		—		—		482,097		521,477
Unrated		18,493		12,053		—		19,113		49,659
Total	¥	3,339,928	¥	1,582,957	¥	1,173,419	¥	12,123,770	¥	18,220,074

Impaired available-for-sale financial assets with a carrying amount of ¥526 million at March 31, 2017 are included in the table above.

Credit risk from derivative financial instruments

The SMBC Group maintains control limits on derivative positions, by both amount and term. At any one time, the amount subject to credit risk is limited to the fair value of derivative financial instruments that are favorable to the SMBC Group (i.e., assets where their fair value is positive).

The SMBC Group’s credit risk from derivatives is mitigated where possible through netting agreements whereby derivative assets and liabilities with the same counterparty can be offset. Netting agreements, such as the ISDA master agreement, allow the netting of obligations arising under all of the derivative transactions that the agreement covers upon the counterparty’s default, regardless of maturity and currency, resulting in a single net claim against the counterparty. The SMBC Group’s credit risk is also mitigated by collateral arrangements through the credit support annex, resulting in collateral delivered or received regularly based on the replacement costs of derivatives.

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Market Risk and Liquidity Risk

Market risk is the possibility that fluctuations in interest rates, foreign exchange rates, stock prices or other market prices will change the market value of financial products, leading to a loss. The purpose of market risk management is to keep the market risk exposure to a permissible level relative to capital.

Liquidity risk is defined as the uncertainty around the ability to meet debt obligations without incurring unacceptably large losses. An example of such risk is the possible inability to meet current and future cash flow/ collateral needs, both expected and unexpected. In such cases, the SMBC Group may be required to raise funds at less than favorable rates or be unable to raise sufficient funds for settlement. The purpose of liquidity risk management is to ensure that the SMBC Group is in a position to address its liquidity obligations through monitoring the liquidity gap between assets and liabilities, and by maintaining highly liquid supplementary funding resources.

On the basis of the SMBC Group-wide basic policies for risk management, the SMBC Group has a quantitative management process to control market and liquidity risks on an SMBC Group-wide basis by setting allowable risk limits by company. The SMBC Group at least annually reviews and identifies which companies primarily carry the market and liquidity risks within the SMBC Group. The SMBC Group sets permissible levels and upper limits of risk for each identified company in consideration of those companies’ business plans. The SMBC Group ensures that each identified company establishes a risk management system that is appropriate to the risks it faces, and has built-in transparent risk management processes which clearly separating front, middle and back office operations, and establishes a control system of mutual checks and balances.

Framework for market and liquidity risk management

The board of directors authorizes important matters relating to the management of market and liquidity risks, such as the basic policies and risk limits, which are decided by the Management Committee. The Corporate Risk Management Department, which is independent of the business units that directly handle market transactions, manages market and liquidity risks in an integrated manner. The Corporate Risk Management Department not only monitors the current risk situations but also reports regularly to the Management Committee and the board of directors.

Additionally, the Asset Liability Management (“ALM”) Committee meets on a quarterly basis to examine reports on the state of market risk management and to discuss the Group’s ALM operation policies. Furthermore, SMBC’s ALM Committee meets on a monthly basis to examine reports on the state of observance of SMBC’s limits on market and liquidity risks, and to discuss SMBC’s ALM operations.

The Internal Audit Unit of SMBC also periodically performs internal audits to verify that the risk management framework is functioning properly.

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The following chart shows the market and liquidity risk management system of SMBC.

Market risk management methods

The SMBC Group manages market risk derived from trading activities and non-trading activities, including strategic equity investment and other transactions within the risk capital limit which is determined by taking into account SMFG’s shareholders’ equity and other principal indicators of the financial position. The SMBC Group also establishes an upper limit on VaR and losses within the risk capital limits.

The SMBC Group’s market risk can be divided into various factors: interest rates, foreign exchange rates, equity prices and option risks. The SMBC Group manages each of these risks by employing the VaR method as well as supplemental indicators suitable for managing each risk, such as the basis point value (“BPV”).

VaR is the largest predicted loss that is possible given a fixed confidence interval. For example, the SMBC Group’s VaR indicates the largest loss that is possible for a holding period of one day and a confidence interval of 99.0%. BPV is the amount of change in assessed value as a result of a one-basis-point (0.01%) movement in interest rates.

Value at risk

The principal SMBC Group companies’ internal VaR model makes use of historical data to prepare scenarios for market fluctuations and, by conducting simulations of gains and losses on a net position basis, the model estimates the maximum losses that may occur. The VaR calculation method the SMBC Group employs for both trading and non-trading activities is based mainly on the following:

• the historical simulation method;

• a one-sided confidence interval of 99.0%;

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• a one-day holding period (a one-year holding period for the strategic equity investment portfolio); and

• an observation period of four years (ten years for the strategic equity investment portfolio).

This method is reviewed periodically and refined, if necessary.

The relationship between the VaR calculated by the model and the actual profit and loss data is back-tested periodically. There were no significant excess losses in the back-testing results including the trading accounts. The back-testing results are reviewed by management, which also monitors the ongoing suitability of the VaR model.

The following tables show the SMBC Group’s VaR by risk category and these figures are prepared based on the internal reporting provided to management. The SMBC Group’s material market risk exposure categories consist of interest rate risk, foreign exchange risk, equities and commodities risk and others. The section headed “VaR for Trading Activity” shows VaR for instruments entered into for trading purposes and the VaR model for the trading book includes principal consolidated subsidiaries. The section headed “VaR for Non-Trading Activity” shows VaR for instruments entered into for purposes other than trading purposes. “Strategic Equity Investment” in the “VaR for Non-Trading Activity” section is a portfolio that consists principally of publicly traded Japanese equities. This portfolio, like that of other financial institutions in Japan, has historically included shares of the SMBC Group’s customers.

(a) VaR for Trading Activity

	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	3.2	¥	4.3	¥	3.9	¥	3.6	¥	11.2
Minimum		1.3		1.2		0.0		1.4		3.5
Daily average		2.1		2.4		1.5		2.3		7.2
At March 31, 2018		2.6		3.6		0.0		3.2		8.1
SMFG Consolidated
Maximum	¥	30.9	¥	5.0	¥	11.4	¥	3.6	¥	39.5
Minimum		6.7		1.5		4.3		1.4		14.5
Daily average		12.3		3.0		6.3		2.3		22.1
At March 31, 2018		11.3		4.3		4.3		3.2		21.5
	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	19.2	¥	3.1	¥	5.3	¥	2.5	¥	22.6
Minimum		1.5		1.0		0.3		1.2		3.9
Daily average		8.1		1.7		1.8		1.7		11.8
At March 31, 2017		1.9		1.2		0.4		1.7		3.9
SMFG Consolidated
Maximum	¥	27.9	¥	3.9	¥	5.8	¥	2.5	¥	34.0
Minimum		10.3		1.2		1.1		1.2		13.1
Daily average		16.1		1.9		3.1		1.7		21.4
At March 31, 2017		16.7		1.6		4.2		1.7		23.6

(1) Total for “Maximum,” “Minimum,” and “Daily average” represent the maximum, minimum and daily average of the total of the trading book. For certain subsidiaries, the SMBC Group employs the standardized method and/or the historical simulation method for the VaR calculation method.

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(b) VaR for Non-Trading Activity

(i) Banking

	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	31.5	¥	0.0	¥	39.9	¥	0.0	¥	54.5
Minimum		25.2		0.0		21.5		0.0		38.0
Daily average		27.4		0.0		30.4		0.0		44.4
At March 31, 2018		31.3		0.0		28.1		0.0		45.7
SMFG Consolidated
Maximum	¥	34.0	¥	0.0	¥	39.9	¥	0.0	¥	57.0
Minimum		27.8		0.0		21.6		0.0		40.8
Daily average		30.2		0.0		30.5		0.0		47.2
At March 31, 2018		33.7		0.0		28.1		0.0		48.2

	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	34.2	¥	0.0	¥	38.9	¥	0.0	¥	49.9
Minimum		23.2		0.0		24.7		0.0		37.8
Daily average		27.0		0.0		32.1		0.0		43.0
At March 31, 2017		27.4		0.0		34.2		0.0		44.1
SMFG Consolidated
Maximum	¥	37.3	¥	0.0	¥	38.9	¥	0.0	¥	53.2
Minimum		26.4		0.0		24.8		0.0		40.2
Daily average		30.0		0.0		32.2		0.0		46.1
At March 31, 2017		30.6		0.0		34.3		0.0		47.4

(1) Total for “Maximum,” “Minimum,” and “Daily average” represent the maximum, minimum and daily average of the total of the banking book.

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(ii) Strategic Equity Investment

	Equities risk
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	1,622.9
Minimum		1,309.8
Daily average		1,456.6
At March 31, 2018		1,389.4
SMFG Consolidated
Maximum	¥	1,855.9
Minimum		1,488.1
Daily average		1,664.2
At March 31, 2018		1,603.6

	Equities risk
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	1,421.0
Minimum		1,146.2
Daily average		1,303.7
At March 31, 2017		1,361.8
SMFG Consolidated
Maximum	¥	1,603.9
Minimum		1,272.8
Daily average		1,460.5
At March 31, 2017		1,544.5

Stress tests

The market occasionally undergoes extreme fluctuations that exceed projections. Therefore, to manage market risk, it is important to run simulations of situations that may occur only once in many years, or so-called stress tests. To prepare for unexpected market swings, the SMBC Group performs stress tests on a monthly basis based on various scenarios.

The limitations of the VaR methodology include the following:

• The use of historical data as a proxy for estimating future events may underestimate the probability of extreme market movements. Past market movement is not necessarily a good indicator of future events;

• The use of a holding period assumes that all positions can be liquidated or hedged in that period of time. This assumption does not fully capture the market risk arising during periods of illiquidity, when liquidation or hedging in that period of time may not be possible;

• The use of a confidence level neither takes account of, nor makes any statement about, any losses that might occur beyond this level of confidence; and

• VaR does not capture all of the complex effects of the risk factors on the value of positions and portfolios and could underestimate potential losses.

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Additional information for the certain risks

(a) Interest rate risk

To supplement the above limitations of VaR methodologies, the SMBC Group adopts various indices to measure and monitor the sensitivity of interest rates, including delta, gamma and vega risks. The SMBC Group considers BPV as one of the most significant indices to manage interest rate risk. BPV is the amount of change in the value to the banking and trading book as a result of a one-basis-point (0.01%) movement in interest rates. The principal SMBC Group companies use BPV to monitor interest rate risk, not only on a net basis, but also by term to prevent the concentration of interest rate risk in a specific period. In addition, as previously addressed, the SMBC Group enhances the risk management methods of VaR and BPV by using them in combination with back-testing and stress tests.

Interest rate risk substantially changes depending on the method used for recognizing the expected maturity dates of demand deposits that can be withdrawn at any time, or the method used for estimating the timing of cancellation prior to maturity of time deposits and consumer housing loans. At SMBC, the maturity of demand deposits that are expected to be left with the bank for a prolonged period is regarded to be, at the longest, five years (2.5 years on average), and the cancellation prior to maturity of time deposits and consumer housing loans is estimated based on historical data.

Based on the new standards for interest rate risk in the banking book issued by the Basel Committee on Banking Supervision (“BCBS”) in April 2016, the FSA revised the related regulatory guidelines pertaining to monitoring of interest rate risks in the banking book in December 2017. The revised disclosure requirements with respect to the changes in economic value of equity (“DEVE”) in the banking book as a result of interest rate shocks have been applied from March 31, 2018. DEVE is defined as a decline in economic value as a result of an interest rate shock. It is calculated by multiplying the interest rate sensitivity (excluding credit spread) and interest rate change. The FSA implements a “materiality test” to identify banks taking excessive interest rate risks. Under the materiality test, the FSA monitors the ratio of DEVE to Tier 1 capital based on a set of prescribed interest rate shock scenarios. The threshold applied by the FSA is 15% and the ratios for SMBC and SMFG on a consolidated basis at March 31, 2018 were 4.8% and 4.2%, respectively.

Under the related regulatory guidelines prior to the revisions pertaining to monitoring of interest rate risks in the banking book published by FSA in December 2017, a bank would fall into the category of “outlier bank,” as stipulated under Pillar 2 of the Basel Capital Accord, in the event the economic value of that bank declines by more than 20% of total capital as a result of interest rate shocks. This ratio, known as the outlier ratio, was 1.5% for SMBC on a consolidated basis at March 31, 2017, substantially below the 20% criterion. The decline in economic value based on the outlier framework of SMBC on a consolidated basis is shown in the following table.

	At March 31, 2017
	(In billions, except percentages)
SMBC Consolidated
Total	¥	150.5
Impact of yen interest rates		77.2
Impact of U.S. dollar interest rates		50.8
Impact of euro interest rates		8.8
Percentage of total capital		1.5	%

Note: Decline in economic value is the decline of the present value of a banking portfolio after interest rate shocks (1st and 99th percentile of observed interest rate changes using a one-year holding period and an observation period of five years).

(b) Foreign exchange risk

The principal SMBC Group companies set risk limits for each currency to manage the concentration of the foreign currency position. The foreign exchange risk is immaterial as shown above in VaR by risk category.

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(c) Strategic equity investment risk

The SMBC Group establishes limits on allowable risk for strategic equity investments and monitors the observance of those limits to keep stock price fluctuation risk within acceptable parameters. The SMBC Group has been reducing its strategic equity investments, and the balance is within a permitted level, which is less than 100% of the SMBC Group’s Tier 1 Capital.

Liquidity risk management methods

The SMBC Group regards liquidity risk as one of the major risks. The SMBC Group manages liquidity risk based on a framework consisting of setting upper limits for “funding gaps,” maintaining high-quality liquid assets in line with the SMBC Group’s risk appetite and establishing contingency plans.

A funding gap is defined as a maturity mismatch between a source of funds and the use of funds. The SMBC Group actively manages this funding gap by setting limits on the size of gaps over a given time horizon and limiting reliance on short-term funding. These limits are established on both an SMBC Group company basis and individual branch basis, taking into account cash management planning, systemic factors, and funding status, among other factors. Additionally, funding gap limits are set for individual currencies if necessary. The SMBC Group actively monitors funding gaps on a daily basis. Further, stress tests are regularly carried out by simulating the impact triggered, for example, by the outflow of deposits or having difficulties in funding from money markets, in order to thoroughly comprehend the amount required to fund when the liquidity risk is realized. The SMBC Group also monitors quantitative indicators of the levels of risk exposure to be assumed, such as Liquidity Coverage Ratio. In addition, SMBC, the SMBC Group’s major banking subsidiary, establishes quantitative alert system based on early warning indicators to detect liquidity risks promptly and systematically. Additionally, funding liquidity is maintained by holding assets, such as central bank reserves and government bonds which can be immediately converted to cash, in line with the SMBC Group’s risk appetite, in order to smoothly raise the required funds even during market disruption.

Furthermore, contingency plans are developed at each SMBC Group company to respond to the liquidity risk when being realized, by creating detailed action plans such as lowering the upper limit for the funding gap, depending on the existing situation (i.e. normal, concerned, or critical) and the respective circumstances.

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Maturity analysis of financial liabilities at March 31, 2018 and 2017

The following tables show a maturity analysis of the contractual undiscounted cash flows for financial liabilities at March 31, 2018 and 2017. The amount of interest on debt instruments is not included in the maturity tables below due to its insignificance.

	At March 31, 2018
	On demand		Not later than three months		Later than three months and not later than one year		Later than one year and not later than three years		Later than three years and not later than five years		Later than five years		Total
		(In millions)
Non-derivative financial instruments:
Deposits	¥	79,239,076	¥	31,907,636	¥	12,755,005	¥	3,189,790	¥	701,374	¥	654,717	¥	128,447,598
Call money and bills sold		47,942		1,141,653		1,334		—		—		—		1,190,929
Repurchase agreements and cash collateral on securities lent		20,833		12,001,760		—		—		—		—		12,022,593
Trading liabilities		2,143,899		—		—		—		—		—		2,143,899
Borrowings		61,205		435,708		6,765,228		601,326		652,481		2,126,169		10,642,117
Debt securities in issue		—		2,407,601		950,334		1,818,271		2,185,578		3,227,737		10,589,521
Lease payable		—		683		1,884		2,999		1,665		3,086		10,317
Other financial liabilities		2,554,069		4,129,478		4,342		139		—		3,014		6,691,042
Off balance sheet items:
Loan commitments		60,107,128		—		—		—		—		—		60,107,128
Financial guarantee contracts		8,426,245		—		—		—		—		—		8,426,245
Total non-derivative financial instruments	¥	152,600,397	¥	52,024,519	¥	20,478,127	¥	5,612,525	¥	3,541,098	¥	6,014,723	¥	240,271,389
Derivative financial instruments	¥	3,498,016	¥	—	¥	—	¥	—	¥	—	¥	—	¥	3,498,016

	At March 31, 2017
	On demand		Not later than three months		Later than three months and not later than one year		Later than one year and not later than three years		Later than three years and not later than five years		Later than five years		Total
	(In millions)
Non-derivative financial instruments:
Deposits	¥	76,476,402	¥	32,358,045	¥	16,420,032	¥	3,303,700	¥	961,405	¥	755,341	¥	130,274,925
Call money and bills sold		30,563		2,052,776		362		4,319		—		—		2,088,020
Repurchase agreements and cash collateral on securities lent		1,902		9,414,026		8,578		—		—		—		9,424,506
Trading liabilities		2,071,584		—		—		—		—		—		2,071,584
Borrowings		69,370		926,538		6,960,401		868,247		949,406		2,364,402		12,138,364
Debt securities in issue		—		3,205,952		1,422,649		1,527,880		2,213,439		2,806,492		11,176,412
Lease payable		—		7,042		20,859		48,550		30,408		6,129		112,988
Other financial liabilities		2,223,233		4,863,181		11,397		14,966		12,458		75,902		7,201,137
Off balance sheet items:
Loan commitments		62,357,210		—		—		—		—		—		62,357,210
Financial guarantee contracts		7,924,711		—		—		—		—		—		7,924,711
Total non-derivative financial instruments	¥	151,154,975	¥	52,827,560	¥	24,844,278	¥	5,767,662	¥	4,167,116	¥	6,008,266	¥	244,769,857
Derivative financial instruments	¥	3,889,694	¥	—	¥	—	¥	—	¥	—	¥	—	¥	3,889,694

Notes:

1. Embedded derivatives which are separately accounted for, but presented together with the host contract in the consolidated statement of financial position are not included in the contractual tables above as they relate to the interest cash flow of the host contract, which are also not included in the tables above.

2. Derivative financial instruments are recorded at fair value and included in the column “On demand.” These instruments are not used for hedging under IAS 39 and the fair value represents the cash flow on demand.

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Balance of loans and advances, and deposits at March 31, 2018 and 2017

The following table presents the balance of loans and advances, and deposits at March 31, 2018 and 2017. The balance of deposits, which was mainly composed of individual customer deposits at March 31, 2018 and 2017, exceeded the balance of loans and advances at the same time due to the stable deposit base in Japan.

	At March 31,
	2018		2017
	(In millions)
Loans and advances	¥	85,129,070	¥	95,273,845
Deposits		128,461,527		130,295,290

The following table presents a breakdown of deposits by domestic and foreign offices. Domestic inter-bank money was classified as “Call money and bills sold” and not included in “Deposits” in the consolidated statement of financial position. Over half of domestic deposits was composed of individual customer deposits.

	At March 31,
	2018		2017
	(In millions)
Domestic offices:
Non-interest-bearing demand deposits		¥  20,370,064		¥  18,737,973
Interest-bearing demand deposits		49,580,166		48,879,089
Deposits at notice		855,978		1,066,201
Time deposits		18,185,591		22,269,409
Negotiable certificates of deposit		5,408,021		6,021,236
Others		7,338,619		7,290,869
Total domestic offices		101,738,439		104,264,777
Foreign offices:
Non-interest-bearing demand deposits		1,241,450		1,115,579
Interest-bearing demand deposits		2,574,099		2,402,906
Deposits at notice		9,499,686		9,264,068
Time deposits		7,469,541		7,256,466
Negotiable certificates of deposit		5,812,264		5,859,702
Others		126,048		131,792
Total foreign offices		26,723,088		26,030,513
Total deposits		¥128,461,527		¥130,295,290

Capital Management

The SMBC Group manages its capital by taking into consideration regulatory compliance and business development.

The SMBC Group’s capital management objectives are to maintain sufficient capital resources to meet the capital adequacy requirements and to maintain a strong capital base to support the development of its business.

External regulatory capital requirement

The SMBC Group, the Company and its principal banking subsidiaries in Japan rigidly abide by the capital adequacy guidelines set by the FSA in managing its capital. Japan’s capital adequacy guidelines are based on the Basel Capital Accord, which was proposed by the BCBS for uniform application to all banks which have international operations in industrialized countries. Japan’s capital adequacy guidelines may be different from

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those of central banks or supervisory bodies of other countries because the FSA designed them to suit the Japanese banking environment. The SMBC Group’s banking subsidiaries outside of Japan are also subject to the local capital ratio requirements.

In December 2010, the BCBS published the new Basel III rules text to implement the Basel III framework, which sets out higher and better-quality capital, better risk coverage, the introduction of a leverage ratio as a backstop to the risk-based requirement, measures to promote the build-up of capital that can be drawn down in periods of stress, and the introduction of two global liquidity standards. The main measures of the minimum capital requirements in the Basel III framework began on January 1, 2013 and will be fully applied from January 1, 2019.

These capital reforms increase the minimum common equity requirement from 2% to 4.5% and require banks to hold a capital conservation buffer, which started to be phased in from January 2016 with the initial ratio of 0.625% and will reach 2.5% by January 2019, to withstand future periods of stress, bringing the total common equity requirement to 7%. The Tier 1 capital requirement was also increased from 4% to 6%, resulting in a total requirement of 8.5% when combined with the above-mentioned conservation buffer. The total capital requirement remains at the existing level of 8% but will increase to 10.5% by January 2019 due to the capital conservation buffer. Furthermore, a countercyclical buffer within a range of 0% to 2.5% of common equity or other fully loss-absorbing capital has been implemented according to national circumstances. The Group of Central Bank Governors and Heads of Supervision (the “GHOS”) also agreed on transitional arrangements for implementing the new requirements.

In addition to the above-mentioned minimum capital requirements and capital buffer requirements under Basel III, organizations identified by the Financial Stability Board (“FSB”) as Global Systemically Important Banks (“G-SIBs”), which includes the SMBC Group, are required to maintain an additional 1% to 2.5% of Common Equity Tier 1 capital as a percentage of risk-weighted assets, which is commonly referred to as the G-SIB capital surcharge, based on the organization’s size, interconnectedness, substitutability, complexity and cross-jurisdictional activity as determined by the FSB. The amount of G-SIB capital surcharge that applies to the SMBC Group based on the FSB’s determination will be 1% of risk-weighted assets when the requirements are fully applied from 2019. Under the phase-in arrangement for the G-SIB capital surcharge, the SMBC Group is currently required to maintain 0.75% of Common Equity Tier 1 capital as a percentage of risk-weighted assets.

To reflect the Basel III framework, the FSA changed its capital adequacy guidelines. Under the FSA capital adequacy guidelines, the new capital requirements are being phased in from March 31, 2013 through March 31, 2019. The minimum Common Equity Tier 1 capital requirement and Tier 1 capital requirement have been 4.5% and 6%, respectively since March, 2015. The capital conservation buffer, countercyclical buffer and the G-SIB capital surcharge started to be phased in from March 31, 2016 under the FSA capital adequacy guidelines.

In accordance with the changes of the FSA capital adequacy guidelines, the SMBC Group changed its classification of capital into three tiers, referred to as Common Equity Tier 1 capital, Additional Tier 1 capital and Tier 2 capital as follows:

Common Equity Tier 1 capital consists primarily of capital stock, capital surplus and retained earnings relating to common shares, and non-controlling interests that meet the criteria for inclusion in Common Equity Tier 1 capital.

Additional Tier 1 capital consists primarily of preferred securities and perpetual subordinated bonds.

Tier 2 capital consists primarily of subordinated debt securities.

The capital adequacy guidelines permit Japanese banks to choose from the standardized approach (“SA”), the foundation Internal Ratings-Based (“IRB”) approach and the advanced IRB approach for credit risk, and the

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basic indicator approach (“BIA”), the standardized approach (“TSA”) and the Advanced Measurement Approach (“AMA”) for operational risk. To be eligible to adopt the foundation IRB approach or the advanced IRB approach for credit risk, and TSA or AMA for operational risk, a Japanese bank must establish advanced risk management systems and receive prior approval from the FSA.

Adopting these approved approaches, the SMBC Group sets a target minimum total capital ratio of 8.0% on the SMBC Group’s consolidated basis, and both SMBC consolidated and nonconsolidated basis, and has complied with all externally imposed capital requirements throughout the period.

Failure of a Japanese bank, bank holding company or other financial institution to maintain the required risk-weighted capital ratios, may result in administrative actions or sanctions imposed by the FSA.

Regulatory capital

The table below presents the SMBC Group’s total capital ratio, total capital and risk-weighted assets under Japanese GAAP at March 31, 2018 and 2017 based on the Basel III rules.

	At March 31,
	2018			2017
	(In billions, except percentages)
SMFG Consolidated:
Total risk-weighted capital ratio		19.36	%		16.93	%
Tier 1 risk-weighted capital ratio		16.69	%		14.07	%
Common Equity Tier 1 risk-weighted capital ratio		14.50	%		12.17	%
Total capital (Common Equity Tier 1 capital + Additional Tier 1 capital + Tier 2 capital)	¥	12,304.1		¥	11,973.7
Tier 1 capital (Common Equity Tier 1 capital + Additional Tier 1 capital)		10,610.2			9,946.2
Common Equity Tier 1 capital		9,217.4			8,608.5
Risk-weighted assets		63,540.3			70,683.5
The amount of minimum total capital requirements(1)		5,083.2			5,654.7

(1) The amount of minimum total capital requirements is calculated by multiplying risk-weighted assets by 8%.

46 RELATED-PARTY TRANSACTIONS

Transactions with Related Parties

The SMBC Group considers that its related parties include subsidiaries, associates, joint ventures, key management personnel and close family members of key management personnel. Any transactions between the SMBC Group and its subsidiaries meet the definition of related-party transactions. However, because these transactions are eliminated on consolidation, they are not disclosed as related-party transactions. Transactions between the SMBC Group and its related parties are conducted on substantially the same terms as third-party transactions.

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The transaction amounts included in the accounts, in aggregate, by category of related party were as follows:

Transactions with associates, joint ventures and other entities

	At March 31,
	2018		2017
	(In millions)
Assets:
Loans and advances	¥	222,890	¥	219,680
Others		39,254		13,807
Liabilities:
Deposits	¥	267,289	¥	143,801
Others		29,049		46,486

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Income statement:
Income (interest income, fee and commission income, and others)	¥	15,665	¥	17,433	¥	34,135
Expense (interest expense and others)		15,601		17,411		19,169

Financial guarantees issued by the SMBC Group for its associates at March 31, 2018 and 2017 were ¥99,673 million and ¥63,597 million, respectively.

Loan commitments to associates and joint ventures at March 31, 2018 and 2017 were ¥125,015 million and ¥173,492 million, respectively.

Transactions with key management personnel and their close family members

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the SMBC Group, directly or indirectly. The SMBC Group considers the members of the board of directors and corporate executive officers of SMFG to constitute key management personnel for the purpose of this disclosure required under IAS 24 “Related Party Disclosures.” Before SMFG transitioned to a company with three statutory committees on June 29, 2017, the SMBC Group considered the members of the board of directors of SMFG and SMBC to constitute the key management personnel.

	At March 31,
	2018		2017
	(In millions)
Assets:
Loans and advances	¥	2	¥	29
Liabilities:
Deposits	¥	1,612	¥	2,878
Others		94		110

Compensation of Key Management Personnel

The following table presents the compensation expenses of key management personnel.

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Short-term employee benefits	¥	1,135	¥	1,157	¥	1,161
Share-based compensation		295		204		214

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The details of the share-based compensation plan are described in Note 39 “Share-Based Payment.”

There were no post-employment benefits, other long-term benefits and termination benefits for the fiscal years ended March 31, 2018, 2017 and 2016.

47 PRINCIPAL SUBSIDIARIES

Principal Subsidiaries

The SMBC Group’s principal subsidiaries at March 31, 2018 are shown in the list below. The SMBC Group consolidates all entities that the SMBC Group controls. The SMBC Group controls an entity when the SMBC Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Principal domestic subsidiaries

Company Name	Proportion of Ownership Interest(1)		Proportion of Voting Rights(1)		Main Business
	(%)		(%)
Sumitomo Mitsui Banking Corporation		100.0		100.0	Commercial banking
SMBC Trust Bank Ltd.		100.0		100.0	Trust banking
SMBC Guarantee Co., Ltd.		100.0		100.0	Credit guarantee
Sumitomo Mitsui Finance and Leasing Company, Limited		60.0		60.0	Leasing
SMFL Capital Company, Limited		100.0		100.0	Leasing
SMBC Nikko Securities Inc.		100.0		100.0	Securities
Sumitomo Mitsui Card Company, Limited		65.9		65.9	Credit card
Cedyna Financial Corporation		100.0		100.0	Credit card and consumer credit
SMBC Consumer Finance Co., Ltd.		100.0		100.0	Consumer lending
SMBC Mobit Co., Ltd.		100.0		100.0	Consumer lending
SMM Auto Finance, Inc.		51.0		51.0	Automobile sales financing
SMBC Finance Service Co., Ltd.		100.0		100.0	Collecting agent and factoring
The Japan Research Institute, Limited		100.0		100.0	System development, data processing, management consulting and economic research
Sumitomo Mitsui Asset Management Company, Limited		60.0		60.0	Investment advisory and investment trust management
SAKURA KCS Corporation		47.4		47.4	System engineering and data processing
NCore Co., Ltd.		51.0		51.0	Data processing service and consulting
SMBC Venture Capital Co., Ltd.		40.0		40.0	Venture capital
SMBC Consulting Co., Ltd.		100.0		100.0	Management consulting and information services
Japan Pension Navigator Co., Ltd.		69.7		69.7	Operational management of defined contribution pension plans

(1) Percentages of proportion of ownership interest and proportion of voting rights have been truncated.

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Principal foreign subsidiaries

Company Name	Country of Incorporation	Proportion of Ownership Interest(1)		Proposition of Voting Rights(1)		Main Business
		(%)		(%)
Sumitomo Mitsui Banking Corporation Europe Limited	U.K.		100.0		100.0	Commercial banking
Sumitomo Mitsui Banking Corporation (China) Limited	China		100.0		100.0	Commercial banking
Manufacturers Bank	U.S.A.		100.0		100.0	Commercial banking
Banco Sumitomo Mitsui Brasileiro S.A	Brazil		100.0		100.0	Commercial banking
JSC Sumitomo Mitsui Rus Bank	Russia		100.0		100.0	Commercial banking
PT Bank Sumitomo Mitsui Indonesia	Indonesia		98.4		98.4	Commercial banking
Sumitomo Mitsui Banking Corporation Malaysia Berhad	Malaysia		100.0		100.0	Commercial banking
SMBC Leasing and Finance, Inc.	U.S.A.		100.0		100.0	Leasing
SMBC Aviation Capital Limited	Ireland		90.0		90.0	Leasing
SMBC Nikko Securities America, Inc.	U.S.A.		100.0		100.0	Securities
SMBC Nikko Capital Markets Limited	U.K.		100.0		100.0	Securities
SMBC Capital Markets, Inc.	U.S.A.		100.0		100.0	Derivatives

(1) Percentages of proportion of ownership interest and proportion of voting rights have been truncated.

SAKURA KCS Corporation and SMBC Venture Capital Co., Ltd. are accounted for as subsidiaries, despite the SMBC Group’s holdings of less than 50% of the voting rights, because the SMBC Group is able to govern the financial and operating policies of these companies under a statute or an agreement, or by delegating the majority of the members of the board of directors.

The SMBC Group does not control some entities despite the fact that the SMBC Group holds more than 50% of their share capital, because the SMBC Group has entered into agreements with other investors to share or give those investors the power to govern the entities’ financial and operating policies over these investees.

Some of the SMBC Group’s subsidiaries may be subject to restrictions on the ability to transfer funds to the Company in the form of cash dividends or to repay loans or advances, which include capital adequacy requirements imposed by the governments and central banks, and the Companies Act restrictions relating to dividends. In addition, the SMBC Group pledges assets as collateral to secure payables under repurchase agreements, securities lending transactions and securitizations, borrowings or for cash settlements, margins on derivative transactions and certain other purposes. The details of assets pledged are described in Note 38 “Assets Pledged and Received as Collateral.”

48 STRUCTURED ENTITIES

A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity. It often has some or all of the following features or attributes:

• restricted activities;

• a narrow and well-defined objective;

• insufficient equity to permit the structured entity to finance its activities without subordinated financial support; or

• financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks (tranches).

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During the normal course of business, the SMBC Group engages in numerous transactions involving structured entities. These structured entities are primarily used to provide the SMBC Group and its clients with efficient access to funds or investment opportunities, mainly through securitizations, investment funds and structured finance.

Consolidated Structured Entities

Structured entities are consolidated if they are controlled by the SMBC Group in accordance with the accounting policy as described in Note 2 “Summary of Significant Accounting Policies.”

The consolidated structured entities include asset backed commercial paper (“ABCP”) conduits which purchase financial assets such as trade accounts receivable and lease receivables by issuing commercial paper to third-party investors. The SMBC Group has contractual agreements to provide liquidity and credit enhancement facilities which can be utilized by those structured entities upon their request.

At March 31, 2018 and 2017, the consolidated ABCP conduits had total assets of ¥807,780 million and ¥1,017,221 million, respectively. The total notional amounts of the liquidity and credit enhancement facilities provided by the SMBC Group to the consolidated ABCP conduits at March 31, 2018 and 2017 were ¥1,129,257 million and ¥1,345,987 million, respectively, all of which were undrawn.

The SMBC Group did not provide any financial or other support, without having a contractual obligation to do so, to consolidated structured entities during the fiscal years ended March 31, 2018 and 2017.

Unconsolidated Structured Entities

The following tables represent the carrying amounts of the SMBC Group’s interests in unconsolidated structured entities recognized in its consolidated statement of financial position by line item and the maximum exposure to loss from its interests at March 31, 2018 and 2017.

	At March 31, 2018
	Securitizations		Investment funds		Structured finance		Others		Total
	(In millions)
Interests in unconsolidated structured entities recognized in:
Trading assets	¥	10,157	¥	68,639	¥	—	¥	—	¥	78,796
Investment securities		64,113		1,055,971		51,018		479		1,171,581
Loans and advances		1,921,725		—		5,202,253		400,549		7,524,527
Assets held for sale		32,755		—		81,494		—		114,249
Total	¥	2,028,750	¥	1,124,610	¥	5,334,765	¥	401,028	¥	8,889,153
Maximum exposure to loss from interests in unconsolidated structured entities	¥	2,925,137	¥	1,126,551	¥	6,296,368	¥	538,660	¥	10,886,716

F-132

	At March 31, 2017
	Securitizations		Investment funds		Structured finance		Others		Total
	(In millions)
Interests in unconsolidated structured entities recognized in:
Trading assets	¥	—	¥	87,639	¥	—	¥	—	¥	87,639
Investment securities		6,716		1,162,195		69,705		551		1,239,167
Loans and advances		1,919,703		—		5,092,321		501,180		7,513,204
Total	¥	1,926,419	¥	1,249,834	¥	5,162,026	¥	501,731	¥	8,840,010
Maximum exposure to loss from interests in unconsolidated structured entities	¥	2,495,428	¥	1,251,497	¥	6,232,900	¥	702,236	¥	10,682,061

An interest in a structured entity refers to contractual and non-contractual involvement that exposes the SMBC Group to variability of returns from the performance of the structured entity. Such interests include the holding of equity or debt instruments as well as the provision of loans, loan commitments and guarantees. Interest rate and currency derivatives that expose the SMBC Group mainly to market risk, or CDS that are designed to transfer risk from the SMBC Group to a structured entity are not regarded as an interest in a structured entity since they do not expose the SMBC Group to variability of returns from the performance of the structured entity. These derivatives are therefore not included in the tables above.

The maximum exposure to loss from the SMBC Group’s interests in unconsolidated structured entities represents the maximum amount of potential loss to which the SMBC Group is exposed through its involvement with unconsolidated structured entities. It is determined by the SMBC Group’s carrying amounts and the notional amounts of loan commitments and guarantees, without considering the probability of loss being incurred, or effects of collateral or other credit protection.

The SMBC Group did not provide any financial or other support, without having a contractual obligation to do so, to unconsolidated structured entities during the fiscal years ended March 31, 2018 and 2017.

Securitizations

Structured entities for this product are established to securitize third-parties’ assets which mainly consist of auto loan receivables, residential and commercial mortgage loans and trade accounts receivables. These entities purchase those assets through loans or notes issued with multiple tranches. The SMBC Group provides loans and loan commitments to these entities or holds notes issued by them, in some cases with credit loss protection through guarantees or other credit enhancements provided by the sellers.

Investment Funds

These funds are established for providing investment opportunities to investors by pooling money from them and investing mainly in equity and debt instruments based on a predetermined investment policy. The SMBC Group has invested in a number of these funds.

Structured Finance

Structured entities for this product are typically established to raise funds for the development of infrastructure, the production of natural resources, the development or acquisition of real estate properties, and the purchase of certain equipment such as vessels or aircrafts for lease transactions. The SMBC Group provides financing to these entities mainly in the form of loans, loan commitments, or notes, which are typically secured by entities’ assets or cash flows generated primarily by entities’ projects.

F-133

Others

The SMBC Group provides financing to other types of structured entities such as third-party structured entities and repackaging vehicles to facilitate its clients’ funding requirements. The SMBC Group provides loans and loan commitments to these entities.

Sponsored Unconsolidated Structured Entities with No Interest Held by the SMBC Group

The SMBC Group sponsors certain structured entities in which it has no interest. The SMBC Group is deemed to be a sponsor of a structured entity when the SMBC Group takes a leading role in determining its purpose and design, while providing operational support to ensure its continued operation.

The income received from such sponsored unconsolidated structured entities was ¥23,901 million and ¥16,085 million for the fiscal years ended March 31, 2018 and 2017, respectively. The majority of the income was management fees included in “Fee and commission income” and was from investment funds managed by SMAM, the SMBC Group’s asset management subsidiary. The carrying amount of assets transferred to these entities, which mainly consisted of investment funds, was ¥1,640,396 million and ¥1,479,572 million for the fiscal years ended March 31, 2018 and 2017, respectively.

49 ACQUISITIONS

Fiscal Year Ended March 31, 2018

American Railcar Leasing LLC

On June 1, 2017, the SMBC Group, through SMBC Rail Services LLC, the Company’s railcar operating leasing subsidiary, acquired all membership interests of American Railcar Leasing LLC (“ARL”), one of the leading railcar leasing companies in the United States. The SMBC Group pursued this acquisition based on its expectation that the railcar leasing business in the United States will experience further growth and high profitability due to stable demand for rail freight transportation, which is the core infrastructure for inland logistics. Through this acquisition, the SMBC Group aims to expand its railcar leasing business and services by further enhancing its fleet portfolio to appropriately meet diverse needs of clients in a wide range of industries.

The fair values of assets and liabilities of ARL at the date of acquisition and the consideration paid were as follows:

	At June 1, 2017
	(In millions)
Assets:
Property, plant and equipment	¥	304,257
All other assets		15,719
Total assets	¥	319,976
Liabilities:
Borrowings	¥	147,523
All other liabilities		1,947
Total liabilities	¥	149,470
Net assets acquired		170,506
Goodwill		—
Consideration	¥	170,506
Consideration:
Cash	¥	170,506
Total	¥	170,506
Acquisition related costs recognized as an expense in “General and administrative expenses” in the consolidated income statement	¥	1,264

F-134

The revenue and profit or loss since the acquisition date to March 31, 2018 and pro forma financial information relating to ARL are immaterial to the consolidated financial statements.

The amount of cash consideration paid relating to ARL, net of cash and cash equivalents acquired amounting to ¥9,644 million, was ¥160,862 million.

Fiscal Year Ended March 31, 2017

GE Japan GK (currently SMFL Capital Company, Limited)

On April 1, 2016, SMFL acquired General Electric Company (“GE”) group’s leasing business in Japan by acquiring a 100% equity interest in GE Japan GK (“GE Japan”). The acquired leasing business is comprised mainly of equipment/asset leasing, small-ticket leasing, and automotive leasing. This acquisition was made for the purpose of upgrading the SMBC Group’s marketing strategies and sales capabilities by leveraging GE Japan’s know-how developed under GE, and offering a wide range of financial solutions by enhancing the combined client base of SMFL and GE Japan.

The fair values of assets and liabilities of GE Japan at the date of acquisition and the consideration paid were as follows:

	At April 1, 2016
	(In millions)
Assets:
Loans and advances	¥	470,538
All other assets		203,069
Total assets	¥	673,607
Liabilities:
Borrowings	¥	436,537
All other liabilities		58,134
Total liabilities	¥	494,671
Net assets	¥	178,936
Non-controlling interests measured at their proportionate share of the identifiable net assets		(394	)
Net assets acquired		178,542
Goodwill		2,417
Consideration	¥	180,959
Consideration:
Cash	¥	180,959
Total	¥	180,959
Acquisition related costs recognized as an expense in “General and administrative expenses” in the consolidated income statement	¥	752

The fair value of the financial assets acquired included ¥470,668 million of loans and receivables to customers. The gross contractual amounts receivable were ¥488,335 million, of which ¥21,692 million were expected to be uncollectible.

The goodwill was attributable to the profitability of the acquired business and the synergies expected to arise after the acquisition. None of the goodwill recognized is expected to be deductible for income tax purposes.

GE Japan’s net profit since the acquisition date to March 31, 2017 was ¥8,041 million.

F-135

Sumitomo Mitsui Asset Management Company, Limited

On July 29, 2016, the SMBC Group acquired an additional 20% of the outstanding shares of Sumitomo Mitsui Asset Management Company, Limited (“SMAM”) and increased its equity interest in SMAM to 60%. As a result, the SMBC Group obtained control of SMAM. This acquisition was made for the purpose of enhancing the SMBC Group’s services to comprehensively meet its clients’ needs for asset management.

The fair values of assets and liabilities of SMAM at the date of acquisition and the consideration paid were as follows:

	At July 29, 2016
	(In millions)
Assets:
Cash and deposits with banks	¥	15,411
Trading assets		12,030
Intangible assets		14,555
All other assets		11,007
Total assets	¥	53,003
Liabilities	¥	14,995
Net assets	¥	38,008
Non-controlling interests measured at their proportionate share of the identifiable net assets		(15,203	)
Net assets acquired		22,805
Goodwill		38,053
Consideration	¥	60,858
Consideration:
Cash	¥	20,286
Fair value of the equity interest in SMAM held before the acquisition		40,572
Total	¥	60,858
Acquisition related costs recognized as an expense in “General and administrative expenses” in the consolidated income statement	¥	8

The goodwill was attributable to the profitability of the acquired business and the synergies expected to arise after the acquisition. None of the goodwill recognized is expected to be deductible for income tax purposes.

As a result of remeasuring the previously held interest to fair value, the SMBC Group recognized a gain of ¥20,344 million, which was included in “Other income” in the consolidated income statement.

The revenue and profit or loss since the acquisition date to March 31, 2017 is immaterial to the consolidated financial statements.

Pro forma financial information

It is estimated that the SMBC Group would have reported a total operating income of ¥3,358,377 million and a net profit of ¥741,214 million for the fiscal year ended March 31, 2017 if all acquisitions had occurred on April 1, 2016.

F-136

Cash consideration paid and cash acquired by obtaining control of the subsidiaries

The total amount of cash consideration paid and cash acquired by obtaining control of subsidiaries during the fiscal year ended March 31, 2017 were as follows:

	For the fiscal year ended March 31, 2017
	(In millions)
Cash consideration paid	¥	(201,245	)
Cash and cash equivalents transferred as a result of the acquisitions		1,889
Cash consideration paid, net of cash and cash equivalents acquired by obtaining control of the subsidiaries	¥	(199,356	)

The amounts of assets and liabilities other than cash or cash equivalents in these subsidiaries were ¥724,721 million and ¥509,666 million, respectively.

Fiscal Year Ended March 31, 2016

Retail banking business of Citibank Japan Ltd.

On November 1, 2015, SMBC Trust Bank, the SMBC Group’s wholly owned subsidiary, acquired the retail banking business of Citibank Japan Ltd. (“Citibank Japan”), a wholly owned subsidiary of Citigroup Inc. SMBC Trust Bank allocated its non-voting stocks to Citibank Japan as consideration, and SMBC, the Company’s wholly owned subsidiary, acquired them in cash. Through this acquisition, SMBC Trust Bank is expanding its business model to offer additional products and services, including foreign currency investment products and global services. This acquisition is expected to enable the SMBC Group to expand its customer base, enhance its foreign currency funding source and improve the service capability of the Group as a whole.

The fair values of assets and liabilities of the retail banking business of Citibank Japan at the date of acquisition and the consideration paid were as follows:

	At November 1, 2015
	(In millions)
Assets:
Cash and deposits with banks	¥	2,296,107
All other assets		110,978
Total assets	¥	2,407,085
Liabilities:
Deposits	¥	2,361,908
All other liabilities		8,620
Total liabilities	¥	2,370,528
Net assets acquired		36,557
Goodwill		8,443
Consideration	¥	45,000
Consideration:
Fair value of consideration transferred	¥	45,000
Total	¥	45,000
Acquisition related costs recognized as an expense in “General and administrative expenses” in the consolidated income statement	¥	286

F-137

The goodwill was attributable to the profitability of the acquired business and the synergies expected to arise after the acquisition. The goodwill and other intangible assets of ¥40,683 million are deductible for income tax purposes.

The revenue and profit or loss since the acquisition date to March 31, 2016 and pro forma financial information relating to the retail banking business of Citibank Japan are immaterial to the consolidated financial statements.

Cash consideration paid and cash acquired by obtaining control of the subsidiaries and businesses

The total amount of cash consideration paid and cash acquired by obtaining control of subsidiaries and businesses during the fiscal year ended March 31, 2016 were as follows:

	For the fiscal year ended March 31, 2016
	(In millions)
Cash consideration paid	¥	(46,923	)
Cash and cash equivalents transferred as a result of the acquisitions		2,296,517
Cash consideration paid, net of cash and cash equivalents \acquired by obtaining control of the subsidiaries and businesses	¥	2,249,594

The amounts of assets and liabilities other than cash or cash equivalents in these subsidiaries and businesses were ¥175,263 million and ¥2,430,332 million, respectively.

50 ASSETS AND DISPOSAL GROUPS HELD FOR SALE

The table below shows non-current assets and disposal groups held for sale at March 31, 2018 and 2017.

	At March 31,
	2018			2017
	(In millions)
Assets held for sale:
Loans and advances(1)	¥	3,010,314		¥	—
Property, plant and equipment		1,435,637			300
Intangible assets		179,358			—
All other assets		1,026,641			134,007
Total		5,651,950	(2)		134,307	(3)
Liabilities directly associated with the assets held for sale:
Borrowings		1,631,681			—
Debt securities in issue		1,422,402			—
All other liabilities		562,858			27,665
Total	¥	3,616,941	(2)	¥	27,665	(3)

(1) The balance in Loans and advances mainly consists of lease financing.

(2) The assets and liabilities of SMFL were classified as held for sale during the fiscal year ended March 31, 2018.

(3) The comparative amounts of “Assets held for sale” and “Liabilities directly associated with the assets held for sale” have been reclassified from “Other assets” and “Other liabilities”, respectively, to conform to the current presentation.

Other reserves relating to non-current assets and disposal groups held for sale at March 31, 2018 and 2017 were ¥52,146 million and nil, respectively.

F-138

Reorganization of joint leasing partnership

On November 6, 2017, the SMBC Group announced that it had entered into a basic agreement with Sumitomo Corporation (“Sumitomo Corp”) concerning the reorganization of its joint leasing partnership, subject to the approval of foreign and domestic regulatory authorities. The final agreement regarding the reorganization was concluded on March 30, 2018 and in this reorganization, the Company will reduce its equity interest in SMFL from 60% to 50% and Sumitomo Corp will increase its equity interest in SMFL from 40% to 50%. As a result, SMFL will cease to be the Company’s consolidated subsidiary and will become its joint venture.

Based on the facts and circumstances, the SMBC Group determined that the reorganization within one year is considered highly probable and therefore the assets and liabilities of SMFL were classified as held for sale during the fiscal year ended March 31, 2018.

F-139

51 CURRENT AND NON-CURRENT DISTINCTION

The following tables present an analysis of financial assets and liabilities, excluding cash and deposits with banks, trading assets and liabilities, derivative financial instruments, financial assets included in assets held for sale and financial liabilities included in liabilities directly associated with the assets held for sale, by amounts recovered or settled, not more than twelve months or more than twelve months, at March 31, 2018 and 2017.

	At March 31, 2018
	Amounts recovered or settled
	Not more than twelve months		More than twelve months		Total
	(In millions)
Assets:
Call loans and bills bought	¥	1,802,317	¥	79,563	¥	1,881,880
Reverse repurchase agreements and cash collateral on securities borrowed		8,418,341		73,362		8,491,703
Financial assets at fair value through profit or loss		205,525		1,342,147		1,547,672
Investment securities:
Held-to-maturity investments		92,033		280,426		372,459
Available-for-sale financial assets		5,034,184		15,088,432		20,122,616
Loans and advances		29,469,067		55,660,003		85,129,070
Other financial assets		3,490,685		107,957		3,598,642
Liabilities:
Deposits	¥	123,901,761	¥	4,559,766	¥	128,461,527
Call money and bills sold		1,190,929		—		1,190,929
Repurchase agreements and cash collateral on securities lent		12,022,593		—		12,022,593
Borrowings		7,264,455		3,388,026		10,652,481
Debt securities in issue		3,356,401		7,212,716		10,569,117
Other financial liabilities		6,687,889		3,153		6,691,042

	At March 31, 2017
	Amounts recovered or settled
	Not more than twelve months		More than twelve months		Total
	(In millions)
Assets:
Call loans and bills bought	¥	1,824,730	¥	47,479	¥	1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed		8,851,521		72,864		8,924,385
Financial assets at fair value through profit or loss		—		1,599,093		1,599,093
Investment securities:
Held-to-maturity investments		792,357		381,062		1,173,419
Available-for-sale financial assets		2,042,240		15,858,278		17,900,518
Loans and advances		32,655,787		62,618,058		95,273,845
Other financial assets		3,307,191		117,400		3,424,591
Liabilities:
Deposits	¥	125,254,104	¥	5,041,186	¥	130,295,290
Call money and bills sold		2,083,701		4,319		2,088,020
Repurchase agreements and cash collateral on securities lent		9,424,506		—		9,424,506
Borrowings		7,982,814		4,263,129		12,245,943
Debt securities in issue		4,628,884		6,536,739		11,165,623
Other financial liabilities		7,097,811		103,326		7,201,137

F-140

52 CONDENSED FINANCIAL INFORMATION OF REGISTRANT (SMFG)

Condensed Statement of Financial Position

	At March 31,
	2018		2017
	(In millions)
Assets:
Deposits with SMBC	¥	251,681	¥	728,445
Investments in SMBC		4,613,844		4,613,844
Loans to SMBC		5,537,801		3,424,217
Investments in other subsidiaries and associates		1,548,012		1,547,319
Other assets		90,605		58,670
Current tax assets		67,414		87,571
Total assets	¥	12,109,357	¥	10,460,066
Liabilities and equity:
Short-term borrowings from SMBC	¥	1,228,030	¥	1,228,030
Long-term borrowings		199,221		132,806
Debt securities in issue due to other subsidiaries		280,880		280,784
Debt securities in issue		4,216,292		2,821,356
Other liabilities		47,001		22,612
Total liabilities		5,971,424		4,485,588
Shareholders’ equity		5,541,687		5,527,691
Other equity instruments holders’ equity		596,246		446,787
Total equity		6,137,933		5,974,478
Total equity and liabilities	¥	12,109,357	¥	10,460,066

F-141

Condensed Income Statement

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Income:
Interest income from SMBC	¥	99,100		¥	52,938		¥	18,313
Dividends from SMBC		223,334			408,419			522,636
Dividends from other subsidiaries and associates		33,668			20,428			20,508
Fees and commission income from subsidiaries		10,226			20,706			16,622
Other income		217			178			234
Total income		366,545			502,669			578,313
Expense:
Interest expense to SMBC		4,298			4,474			5,753
Interest expense to other subsidiaries		16,309			13,039			12,780
Interest expense		89,699			45,223			12,814
Operating and other expense		21,525			12,165			9,868
Total expense		131,831			74,901			41,215
Profit before tax		234,714			427,768			537,098
Income tax expense		(7,085	)		(33,344	)		4
Net profit	¥	241,799		¥	461,112		¥	537,094
Profit attributable to:
Shareholders		232,077			453,183			534,321
Other equity instruments holders		9,722			7,929			2,773

F-142

Condensed Statement of Cash Flows

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Operating Activities:
Profit before tax	¥	234,714		¥	427,768		¥	537,098
Income taxes paid—net		35,010			23,427			(7,980	)
Other operating activities—net		(3,736	)		(4,580	)		(3,019	)
Net cash and cash equivalents provided by operating activities		265,988			446,615			526,099
Investing Activities:
Loans provided to SMBC		(2,241,774	)		(1,972,253	)		(1,073,640	)
Other investing activities—net		(13,833	)		(5	)		(76	)
Net cash and cash equivalents used in investing activities		(2,255,607	)		(1,972,258	)		(1,073,716	)
Financing Activities:
Proceeds from issuance of long-term borrowings		66,415			83,806			18,000
Proceeds from issuance of debt securities		1,525,271			1,738,267			754,274
Proceeds from issuance of other equity instruments		149,080			149,081			297,431
Dividends paid to shareholders		(218,569	)		(211,501	)		(218,589	)
Coupons paid to other equity instruments holders		(9,722	)		(7,929	)		(2,773	)
Purchases of treasury stock and proceeds from sale of treasury stock—net		380			(86	)		(138	)
Net cash and cash equivalents provided by financing activities		1,512,855			1,751,638			848,205
Net increase of cash and cash equivalents		(476,764	)		225,995			300,588
Cash and cash equivalents at beginning of period		728,445			502,450			201,862
Cash and cash equivalents at end of period	¥	251,681		¥	728,445		¥	502,450

Investments in subsidiaries and associates

Investments in subsidiaries and associates are stated at cost. The Company recognizes dividend income from subsidiaries and associates when its right to receive payment is established.

Investments in other subsidiaries and associates include equity investments in Sumitomo Mitsui Finance and Leasing Company, Limited, SMBC Nikko Securities Inc., SMFG Card & Credit, Inc., SMBC Consumer Finance Co., Ltd., Sumitomo Mitsui Asset Management Company, Limited and others at March 31, 2018, and Sumitomo Mitsui Finance and Leasing Company, Limited, SMBC Nikko Securities Inc., SMBC Friend Securities Co. Ltd., SMFG Card & Credit, Inc., SMBC Consumer Finance Co., Ltd., Sumitomo Mitsui Asset Management Company, Limited and others at March 31, 2017. These companies are incorporated in Japan, and the proportion of ownership interest of the Company in these companies was the same as described in Note 11 “Investments in Associates and Joint Ventures,” and Note 47 “Principal Subsidiaries.”

Long-term obligations

The Company had perpetual subordinated bonds of ¥267 billion and ¥267 billion outstanding to its subsidiary, SMFG Preferred Capital JPY 3 Limited, at March 31, 2018 and 2017, respectively. The interest rates of these bonds are fixed until January 2020, which range from 4.0% to 4.5% per annum, and will be floating thereafter. SMFG Preferred Capital JPY 3 Limited issued preferred securities to purchase these bonds.

F-143

The Company had subordinated long-term borrowings amounting to ¥49 billion and ¥49 billion at March 31, 2018 and 2017, respectively, and had unsubordinated long-term borrowings amounting to ¥150 billion and to ¥84 billion at March 31, 2018 and 2017, respectively. The Company also had subordinated bonds amounting to ¥945 billion and ¥856 billion, including ¥2 billion and ¥7 billion outstanding to its subsidiary, at March 31, 2018 and 2017, respectively, and had senior bonds amounting to ¥3,285 billion and ¥1,979 billion, including ¥12 billion and ¥7 billion outstanding to its subsidiary, at March 31, 2018 and 2017, respectively. For additional information, refer to Note 18 “Borrowings” and Note 19 “Debt Securities in Issue.”

Guarantees

The Company provided guarantee of ¥298 billion and ¥516 billion at March 31, 2018 and 2017, respectively, to the Deposit Protection Fund of the Association of German Banks with regard to the deposits of the SMBC Dusseldorf branch.

F-144

EX-8

Exhibit 8

LIST OF SUBSIDIARIES OF SUMITOMO MITSUI FINANCIAL GROUP, INC.

List of Subsidiaries at March 31, 2018

Company Name	Jurisdiction
Sumitomo Mitsui Banking Corporation	Japan
Banco Sumitomo Mitsui Brasileiro S.A.	Brazil
Cedyna Financial Corporation	Japan
Japan Pension Navigator Co., Ltd.	Japan
JSC Sumitomo Mitsui Rus Bank	Russia
Manufacturers Bank	U.S.A.
NCore Co., Ltd.	Japan
Polarify, Inc.	Japan
PT Bank Sumitomo Mitsui Indonesia	Indonesia
Sakura Finance Asia Limited	Hong Kong
SAKURA KCS Corporation	Japan
SFVI Limited	British Virgin Islands
SMBC Advisory Services Saudi Arabia LLC	Saudi Arabia
SMBC Aviation Capital Limited	Ireland
SMBC Capital Markets, Inc.	U.S.A.
SMBC Cayman LC Limited	Cayman Islands
SMBC Consulting Co., Ltd.	Japan
SMBC Consumer Finance Co., Ltd.	Japan
SMBC DIP Limited	Cayman Islands
SMBC Electronic Monetary Claims Recording Co., Ltd.	Japan
SMBC Finance Service Co., Ltd.	Japan
SMBC Financial Services, Inc.	U.S.A.
SMBC GMO PAYMENT, Inc.	Japan
SMBC Guarantee Co., Ltd.	Japan
SMBC International Finance N.V.	Netherlands Antilles
SMBC Leasing and Finance, Inc.	U.S.A.
SMBC Loan Business Planning Co., Ltd.	Japan
SMBC Mobit Co., Ltd.	Japan
SMBC MVI SPC	Cayman Islands
SMBC Nikko Capital Markets Limited	U.K.
SMBC Nikko Securities America, Inc.	U.S.A.
SMBC Nikko Securities Inc.	Japan
SMBC Preferred Capital GBP 2 Limited	Cayman Islands
SMBC Preferred Capital JPY 1 Limited	Cayman Islands
SMBC Preferred Capital JPY 2 Limited	Cayman Islands
SMBC Preferred Capital USD 3 Limited	Cayman Islands
SMBC Servicer Co., Ltd.	Japan
SMBC Trust Bank Ltd.	Japan
SMBC Venture Capital Co., Ltd.	Japan
SMFG Card & Credit, Inc.	Japan
SMFG Preferred Capital GBP 2 Limited	Cayman Islands
SMFG Preferred Capital JPY 1 Limited	Cayman Islands
SMFG Preferred Capital JPY 2 Limited	Cayman Islands
SMFG Preferred Capital JPY 3 Limited	Cayman Islands
SMFG Preferred Capital USD 3 Limited	Cayman Islands
SMFL Capital Company, Limited	Japan
SMM Auto Finance, Inc.	Japan

Company Name	Jurisdiction
Sumitomo Mitsui Asset Management Company, Limited	Japan
Sumitomo Mitsui Banking Corporation Europe Limited	U.K.
Sumitomo Mitsui Banking Corporation Malaysia Berhad	Malaysia
Sumitomo Mitsui Banking Corporation (China) Limited	China
Sumitomo Mitsui Card Company, Limited	Japan
Sumitomo Mitsui Finance and Leasing Company, Limited	Japan
Sumitomo Mitsui Finance Dublin Limited	Ireland
The Japan Research Institute, Limited	Japan

EX-11

Exhibit 11

CODE OF ETHICS

Code of Ethics of Sumitomo Mitsui Financial Group, Inc.

(English Translation)

Excerpts from Principles of Action on Compliance and Risk—5. 20 Guiding Principles and 60 Principles of Action—(3) Maintenance of Sound Management—Fifth Guiding Principle

(i) We will protect the Group’s assets and reputation by coping with situations where interests of the Group and of the directors, officers or other employees of the Group are in conflict (or situations that is seriously concerned to be in conflict of interest), with a manner of integrity and justice.

Excerpts from Principles of Action on Compliance and Risk—5. 20 Guiding Principles and 60 Principles of Action—(3) Maintenance of Sound Management—Third Guiding Principle

(i) We will implement timely and reasonable disclosure of accurate information pursuant to laws and regulations. We will disclose fair, accurate, necessary and sufficient information, through reporting documents submitted to supervisory authority, in a timely and an easy to understand manner.

Excerpts from Principles of Action on Compliance and Risk—3. Code of Conduct

(1) Code of Conduct is designed to be a guideline for conduct of the directors, officers and other employees in the realization of the business mission in all areas.

(2) Code of Conduct is as follows:

- To strive to increase shareholder value whilst also maintaining healthy relationships with customers, employees and other stakeholders. To give utmost consideration to the trust which people have in the firm, to abide by all laws and regulations, to maintain a high ethical standard, and to act fairly and sincerely;

Excerpts from Policies on Compliance Management—6. Control Process—(8) Handling and Responsibility on Occurrence of Problems

(ii) When officers and employees find any violation or possible violation of laws, regulations, social rules, and SMBC Group’s internal rules, they shall promptly report to Compliance Officers, General Managers, or the General Affairs Department, or promptly call the “SMBC Group Alarm Line.”

Excerpts from Policies on Compliance Management—6. Control Process—(8) Handling and Responsibility on Occurrence of Problems

(iv) A Compliance Officer may be censured if he or she is considered to be negligent in performing his or her duties as Compliance Officer. An officer or other employee shall also be censured if he or she is aware of a violation of laws, regulations, social rules, and SMBC Group’s internal rule and does not report such violation.

EX-12.1

Exhibit 12.1

CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Takeshi Kunibe, certify that:

1. I have reviewed this annual report on Form 20-F of Sumitomo Mitsui Financial Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: June 28, 2018

/s/ Takeshi Kunibe
Name:	Takeshi Kunibe
Title:	President and Group Chief Executive Officer

EX-12.2

Exhibit 12.2

CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jun Ohta, certify that:

1. I have reviewed this annual report on Form 20-F of Sumitomo Mitsui Financial Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: June 28, 2018

/s/ Jun Ohta
Name:	Jun Ohta
Title:	Deputy President and Executive Officer Group Chief Financial Officer

EX-13.1

Exhibit 13.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The certification set forth below is being submitted in connection with the annual report of Sumitomo Mitsui Financial Group, Inc. on Form 20-F for the year ended March 31, 2018 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

I, Takeshi Kunibe, President and Group Chief Executive Officer of Sumitomo Mitsui Financial Group, Inc., certify that, to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Sumitomo Mitsui Financial Group, Inc. and its subsidiaries.

Date: June 28, 2018

/s/ Takeshi Kunibe
Name:	Takeshi Kunibe
Title:	President and Group Chief Executive Officer

EX-13.2

Exhibit 13.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The certification set forth below is being submitted in connection with the annual report of Sumitomo Mitsui Financial Group, Inc. on Form 20-F for the year ended March 31, 2018 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

I, Jun Ohta, Deputy President and Executive Officer Group Chief Financial Officer of Sumitomo Mitsui Financial Group, Inc., certify that, to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Sumitomo Mitsui Financial Group, Inc. and its subsidiaries.

Date: June 28, 2018

/s/ Jun Ohta
Name:	Jun Ohta
Title:	Deputy President and Executive Officer Group Chief Financial Officer

EX-15.1

Exhibit 15.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Sumitomo Mitsui Financial Group, Inc.:

We consent to the incorporation by reference in the registration statement (No. 333-209069) on Form F-3 of Sumitomo Mitsui Financial Group, Inc. of our reports dated June 22, 2018, with respect to the consolidated statement of financial position of Sumitomo Mitsui Financial Group, Inc. and subsidiaries as of March 31, 2018 and 2017, and the related consolidated income statement and consolidated statements of comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended March 31, 2018 and the related notes (collectively, the “consolidated financial statements”), and the effectiveness of Sumitomo Mitsui Financial Group, Inc.’s internal control over financial reporting as of March 31, 2018, which reports appear in the March 31, 2018 annual report on Form 20-F of Sumitomo Mitsui Financial Group, Inc.

/s/ KPMG AZSA LLC

Tokyo, Japan

June 28, 2018

XML

Document and Entity Information	12 Months Ended
	Mar. 31, 2018 shares
Document - Document and Entity Information [Abstract]
Document Type	20-F
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	SMFG
Entity Registrant Name	SUMITOMO MITSUI FINANCIAL GROUP, INC.
Entity Central Index Key	0001022837
Current Fiscal Year End Date	--03-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	1,414,443,390

XML

Consolidated Statement of Financial Position - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Assets:
Cash and deposits with banks	¥ 54,696,069	¥ 47,330,155
Call loans and bills bought	1,881,880	1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed	8,491,703	8,924,385
Trading assets	3,169,123	3,776,671
Derivative financial instruments	3,885,271	4,063,982
Financial assets at fair value through profit or loss	1,547,672	1,599,093
Investment securities	20,495,075	19,073,937
Loans and advances	85,129,070	95,273,845
Investments in associates and joint ventures	730,414	675,704
Property, plant and equipment	1,510,132	2,686,055
Intangible assets	835,902	1,096,568
Other assets	4,043,908	4,321,724
Current tax assets	87,961	240,385
Deferred tax assets	19,436	81,961
Assets held for sale	5,651,950	134,307
Total assets	192,175,566	191,150,981
Liabilities:
Deposits	128,461,527	130,295,290
Call money and bills sold	1,190,929	2,088,020
Repurchase agreements and cash collateral on securities lent	12,022,593	9,424,506
Trading liabilities	2,143,899	2,071,584
Derivative financial instruments	3,498,016	3,889,694
Borrowings	10,652,481	12,245,943
Debt securities in issue	10,569,117	11,165,623
Provisions	188,267	194,700
Other liabilities	6,882,740	7,461,101
Current tax liabilities	55,516	79,371
Deferred tax liabilities	397,741	320,201
Liabilities directly associated with the assets held for sale	3,616,941	27,665
Total liabilities	179,679,767	179,263,698
Equity:
Capital stock	2,338,743	2,337,896
Capital surplus	863,505	864,052
Retained earnings	5,149,193	4,609,496
Other reserves	2,324,349	2,134,042
Treasury stock	(12,493)	(12,913)
Equity attributable to shareholders of Sumitomo Mitsui Financial Group, Inc.	10,663,297	9,932,573
Non-controlling interests	1,232,980	1,505,001
Equity attributable to other equity instruments holders	599,522	449,709
Total equity	12,495,799	11,887,283
Total equity and liabilities	¥ 192,175,566	¥ 191,150,981

XML

Consolidated Income Statement - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Profit or loss [abstract]
Interest income	¥ 2,144,070	¥ 1,900,261	¥ 1,872,584
Interest expense	733,969	502,338	431,101
Net interest income	1,410,101	1,397,923	1,441,483
Fee and commission income	1,131,364	1,066,412	1,031,680
Fee and commission expense	178,867	181,573	131,381
Net fee and commission income	952,497	884,839	900,299
Net trading income	270,464	183,963	462,682
Net income (loss) from financial assets at fair value through profit or loss	(667)	2,018	12,260
Net investment income	424,097	305,327	375,229
Other income	755,855	573,825	496,273
Total operating income	3,812,347	3,347,895	3,688,226
Impairment charges on financial assets	136,808	212,967	148,356
Net operating income	3,675,539	3,134,928	3,539,870
General and administrative expenses	1,813,121	1,752,135	1,706,263
Other expenses	792,765	531,759	538,963
Operating expenses	2,605,886	2,283,894	2,245,226
Share of post-tax profit of associates and joint ventures	49,323	29,318	31,056
Profit before tax	1,118,976	880,352	1,325,700
Income tax expense	229,378	139,766	372,878
Net profit	889,598	740,586	952,822
Profit attributable to:
Shareholders of Sumitomo Mitsui Financial Group, Inc.	759,998	627,870	843,920
Non-controlling interests	119,878	104,787	106,129
Other equity instruments holders	¥ 9,722	¥ 7,929	¥ 2,773
Earnings per share:
Basic	¥ 538.84	¥ 458.56	¥ 617.25
Diluted	¥ 538.43	¥ 458.18	¥ 616.83

XML

Consolidated Statement of Comprehensive Income - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Statement of comprehensive income [abstract]
Net profit	¥ 889,598	¥ 740,586	¥ 952,822
Remeasurements of defined benefit plans:
Gains (losses) arising during the period, before tax	73,662	8,134	(154,273)
Share of other comprehensive income (loss) of associates and joint ventures	58	(462)	558
Income tax relating to items that will not be reclassified	(22,492)	(2,315)	48,550
Total items that will not be reclassified to profit or loss, net of tax	51,228	5,357	(105,165)
Available-for-sale financial assets:
Gains (losses) arising during the period, before tax	582,435	371,438	(551,572)
Reclassification adjustments for (gains) losses included in net profit, before tax	(275,038)	(109,990)	(217,529)
Exchange differences on translating foreign operations:
Gains (losses) arising during the period, before tax	(75,409)	(24,063)	(219,904)
Reclassification adjustments for (gains) losses included in net profit, before tax	49	(4)	8
Share of other comprehensive income (loss) of associates and joint ventures	7,827	(21,140)	(14,362)
Income tax relating to items that may be reclassified	(96,246)	(80,074)	308,623
Total items that may be reclassified subsequently to profit or loss, net of tax	143,618	136,167	(694,736)
Other comprehensive income (loss), net of tax	194,846	141,524	(799,901)
Total comprehensive income	1,084,444	882,110	152,921
Total comprehensive income attributable to:
Shareholders of Sumitomo Mitsui Financial Group, Inc.	948,250	769,957	76,791
Non-controlling interests	126,472	104,224	73,357
Other equity instruments holders	¥ 9,722	¥ 7,929	¥ 2,773

XML

Consolidated Statement of Changes in Equity - JPY (¥) ¥ in Millions	Total	Capital stock [member]	Capital surplus [member]	Retained earnings [member]	Remeasurements of defined benefit plans [member]	Available-for-sale financial assets [member]	Exchange differences on translating foreign operations [member]	Treasury stock [member]	Equity attributable to SMFG's shareholders [member]	Non-controlling interests [member]	Equity attributable to other equity instruments holders [member]
At beginning of period at Mar. 31, 2015	¥ 11,020,850	¥ 2,337,896	¥ 862,971	¥ 3,554,688	¥ 120,316	¥ 2,234,636	¥ 404,132	¥ (175,261)	¥ 9,339,378	¥ 1,681,472
Comprehensive income:
Net profit	952,822			843,920					843,920	106,129	¥ 2,773
Other comprehensive income	(799,901)				(101,331)	(478,002)	(187,796)		(767,129)	(32,772)
Total comprehensive income	152,921			843,920	(101,331)	(478,002)	(187,796)		76,791	73,357	2,773
Issuance of other equity instruments	299,895										299,895
Acquisition and disposal of subsidiaries and businesses-net	1,371									1,371
Transaction with non-controlling interest shareholders	55			(3)					(3)	58
Dividends to shareholders	(288,632)			(211,922)					(211,922)	(76,710)
Coupons on other equity instruments	(2,773)										(2,773)
Redemption of preferred securities	(142,000)									(142,000)
Purchase of treasury stock	(192)							(192)	(192)
Sale of treasury stock	72							72	72
Loss on sale of treasury stock	(18)		(18)						(18)
Others	550		550						550
At end of period at Mar. 31, 2016	11,042,099	2,337,896	863,503	4,186,683	18,985	1,756,634	216,336	(175,381)	9,204,656	1,537,548	299,895
Comprehensive income:
Net profit	740,586			627,870					627,870	104,787	7,929
Other comprehensive income	141,524				3,789	173,260	(34,962)		142,087	(563)
Total comprehensive income	882,110			627,870	3,789	173,260	(34,962)		769,957	104,224	7,929
Issuance of other equity instruments	149,916										149,916
Acquisition and disposal of subsidiaries and businesses-net	14,888									14,888
Transaction with non-controlling interest shareholders	463			26					26	437
Dividends to shareholders	(271,039)			(205,083)					(205,083)	(65,956)
Coupons on other equity instruments	(7,929)										(7,929)
Redemption of preferred securities	(86,140)									(86,140)
Purchase of treasury stock	(100)							(100)	(100)
Sale of treasury stock	162,568							162,568	162,568
Loss on sale of treasury stock	(2)		(2)						(2)
Others	449		551						551		(102)
At end of period at Mar. 31, 2017	11,887,283	2,337,896	864,052	4,609,496	22,774	1,929,894	181,374	(12,913)	9,932,573	1,505,001	449,709
Comprehensive income:
Net profit	889,598			759,998					759,998	119,878	9,722
Other comprehensive income	194,846				51,273	192,366	(55,387)		188,252	6,594
Total comprehensive income	1,084,444			759,998	51,273	192,366	(55,387)		948,250	126,472	9,722
Issuance of shares under share-based payment transactions	1,695	847	848						1,695
Issuance of other equity instruments	149,916										149,916
Acquisition and disposal of subsidiaries and businesses-net	(204,257)			(1,190)	1,190					(204,257)
Transaction with non-controlling interest shareholders	2,502			62					62	2,440
Dividends to shareholders	(280,272)			(218,596)					(218,596)	(61,676)
Coupons on other equity instruments	(9,722)										(9,722)
Redemption of preferred securities	(135,000)									(135,000)
Purchase of treasury stock	(142)							(142)	(142)
Sale of treasury stock	562							562	562
Loss on sale of treasury stock	(41)		(41)						(41)
Share-based payment transactions	(1,354)		(1,354)						(1,354)
Others	185			(577)	865				288		(103)
At end of period at Mar. 31, 2018	¥ 12,495,799	¥ 2,338,743	¥ 863,505	¥ 5,149,193	¥ 76,102	¥ 2,122,260	¥ 125,987	¥ (12,493)	¥ 10,663,297	¥ 1,232,980	¥ 599,522

XML

Consolidated Statement of Cash Flows - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Operating Activities:
Profit before tax	¥ 1,118,976	¥ 880,352	¥ 1,325,700
Adjustments for:
Gains on financial assets at fair value through profit or loss and investment securities	(274,371)	(112,008)	(235,415)
Foreign exchange losses	16,612	241,570	556,073
Provision for loan losses	126,623	141,457	118,750
Depreciation and amortization	310,179	301,638	255,971
Share of post-tax profit of associates and joint ventures	(49,323)	(29,318)	(31,056)
Net changes in assets and liabilities:
Net increase of term deposits with original maturities over three months	(210,821)	(57,503)	(11,071)
Net (increase) decrease of call loans and bills bought	4,436	(640,331)	(18,233)
Net (increase) decrease of reverse repurchase agreements and cash collateral on securities borrowed	372,563	(698,940)	(1,040,858)
Net (increase) decrease of loans and advances	354,622	(6,267,726)	(2,258,824)
Net change of trading assets and liabilities and derivative financial instruments	283,731	(250,579)	(837,291)
Net increase of deposits	5,881,032	4,505,200	8,230,157
Net increase (decrease) of call money and bills sold	(778,412)	911,525	(4,615,144)
Net increase (decrease) of repurchase agreements and cash collateral on securities lent	2,735,586	2,610,655	(1,974,347)
Net increase (decrease) of other unsubordinated borrowings and debt securities in issue	991,110	2,437,331	(1,499,201)
Income taxes paid-net	(105,880)	(337,299)	(297,767)
Other operating activities-net	395,318	104,575	420,231
Net cash and cash equivalents provided by (used in) operating activities	11,171,981	3,740,599	(1,912,325)
Investing Activities:
Purchases of financial assets at fair value through profit or loss and available-for-sale financial assets	(22,488,127)	(19,640,194)	(25,968,442)
Proceeds from sale of financial assets at fair value through profit or loss and available-for-sale financial assets	13,384,847	13,460,988	22,597,455
Proceeds from maturities of financial assets at fair value through profit or loss and available-for-sale financial assets	6,265,527	6,604,279	6,072,497
Purchases of held-to-maturity investments	(2,001)		(266,243)
Proceeds from maturities of held-to-maturity investments	792,358	1,093,887	1,394,921
Acquisitions of subsidiaries and businesses, net of cash and cash equivalents acquired	(160,862)	(199,356)	2,249,594
Investments in associates and joint ventures	(7,744)	(16,494)	(62,334)
Disposal of subsidiaries and businesses, net of cash and cash equivalents disposed	(852,179)
Proceeds from sale of investments in associates and joint ventures	19,415	14,696	762
Purchases of property, plant and equipment, and investment properties	(710,838)	(491,444)	(529,151)
Purchases of intangible assets	(136,100)	(145,001)	(158,888)
Proceeds from sale of property, plant and equipment, investment properties and intangible assets	302,027	169,027	148,650
Other investing activities-net		1,192	6,697
Net cash and cash equivalents provided by (used in) investing activities	(3,593,677)	851,580	5,485,518
Financing Activities:
Proceeds from issuance of subordinated borrowings			18,000
Redemption of subordinated borrowings	(10,000)	(11,000)	(40,262)
Proceeds from issuance of subordinated bonds	104,866	244,315	276,949
Redemption of subordinated bonds	(180,034)	(371,640)	(186,785)
Redemption of preferred securities	(135,000)	(86,887)	(142,000)
Proceeds from issuance of other equity instruments	149,916	149,887	299,895
Dividends paid to shareholders of Sumitomo Mitsui Financial Group, Inc.	(218,569)	(205,078)	(211,952)
Dividends paid to non-controlling interest shareholders	(62,529)	(65,860)	(76,744)
Coupons paid to other equity instruments holders	(9,722)	(7,929)	(2,773)
Purchase of treasury stock and proceeds from sale of treasury stock-net	379	179,657	(137)
Purchase of other equity instruments and proceeds from sale of other equity instruments-net	(103)	(102)
Transactions with non-controlling interest shareholders-net	(6)	386	156
Net cash and cash equivalents provided by financing activities	(360,802)	(174,251)	(65,653)
Effect of exchange rate changes on cash and cash equivalents	(45,865)	(300,075)	(489,331)
Net increase of cash and cash equivalents	7,171,637	4,117,853	3,018,209
Cash and cash equivalents at beginning of period	46,244,819	42,126,966	39,108,757
Cash and cash equivalents at end of period	53,416,456	46,244,819	42,126,966
Net cash and cash equivalents provided by (used in) operating activities includes:
Interest and dividends received	2,249,000	2,025,371	1,996,686
Interest paid	¥ 711,432	¥ 484,362	¥ 421,765

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General Information

12 Months Ended

Mar. 31, 2018

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General Information

1 GENERAL INFORMATION

Sumitomo Mitsui Financial Group, Inc. (“SMFG” or the “Company”) was established on December 2, 2002, as a holding company for Sumitomo Mitsui Banking Corporation (“SMBC”) and its subsidiaries through a statutory share transfer (kabushiki-iten) of all of the outstanding equity securities of SMBC in exchange for the Company’s newly issued securities. The Company is a joint stock corporation with limited liability (Kabushiki Kaisha) incorporated under the Companies Act of Japan (“Companies Act”). Upon the formation of the Company and the completion of the statutory share transfer, SMBC became a direct, wholly owned subsidiary of the Company. The Company has a primary listing on the Tokyo Stock Exchange (First Section), with further listing on the Nagoya Stock Exchange (First Section). The Company’s American Depositary Shares are listed on the New York Stock Exchange.

The Company and its subsidiaries (the “SMBC Group”) offer a diverse range of financial services, including commercial banking, leasing, securities, consumer finance and other services.

The accompanying consolidated financial statements have been authorized for issue by the Management Committee on June 22, 2018.

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Summary of Significant Accounting Policies

12 Months Ended

Mar. 31, 2018

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Summary of Significant Accounting Policies

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all the fiscal years presented, unless otherwise stated.

Basis of Preparation

Compliance with International Financial Reporting Standards

The consolidated financial statements of the SMBC Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Basis of measurement

The consolidated financial statements have been prepared under the historical cost basis except for the following:

• trading assets and liabilities are measured at fair value;

• derivative financial instruments are measured at fair value;

• financial assets at fair value through profit or loss are measured at fair value;

• available-for-sale financial assets are measured at fair value; and

• liabilities and the assets recognized in consolidated statement of financial position in respect of defined benefit plans are the present value of the defined benefit obligation less the fair value of plan assets.

Functional and presentation currency

The consolidated financial statements are presented in Japanese yen, which is also the Company’s functional currency. All financial information presented in Japanese yen has been rounded to the nearest million, except as otherwise indicated.

Critical accounting estimates and judgments

The preparation of the consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the accounting policies. Actual results may differ from these estimates. The notes to the consolidated financial statements set out areas involving a higher degree of judgment or complexity, or areas where assumptions are significant to the consolidated financial statements, such as allowance for loan losses (Notes 10, 32), fair value of financial instruments (Note 43), impairment of available-for-sale financial assets (Notes 9, 32), impairment of goodwill (Note 14), provision for interest repayment (Note 20), retirement benefits (Note 23) and deferred tax assets (Note 22).

Refer to Note 3 “Critical Accounting Estimates and Judgments” for further information.

New and Amended Accounting Standards Adopted by the SMBC Group

During the fiscal year ended March 31, 2018, a number of amendments to standards have become effective; however, they have not resulted in any material changes to the SMBC Group’s accounting policies.

Consolidation

Subsidiaries

Subsidiaries are all entities controlled by the SMBC Group. The SMBC Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The SMBC Group considers all facts and circumstances whether it controls an entity.

Where the relevant activities are directed through voting or similar rights, the SMBC Group considers that it controls an entity if it has the existing rights that give it the current ability to direct the operating and financing policies of the entity, in general by having a shareholding of more than 50% of the voting rights. The existence and effect of potential voting rights that are deemed to be substantive are taken into account when assessing whether the SMBC Group controls another entity.

Where the voting rights are not the dominant factor in deciding who controls the entity, the assessment of control is more complex and requires greater use of judgment. The SMBC Group assesses whether it controls an entity considering all facts and circumstances, such as the purpose and design of the entity, the relevant activities and how to make decisions about those activities.

The SMBC Group also determines whether it is acting as an agent or a principal in assessing whether it has control of another entity. An agent is a party primarily engaged to act on behalf and for the benefit of another party or parties and therefore does not control the entity. To make such judgments, the SMBC Group considers the overall relationship, especially all of the following factors: the scope of its decision-making authority over the entity, the rights held by other parties, the remuneration to which it is entitled in accordance with the remuneration agreement, and its exposure to variability of returns from other interests that it holds in the entity.

The SMBC Group reassesses whether it controls an entity if facts and circumstances indicate that there are changes to one or more of the elements of control.

Subsidiaries are fully consolidated from the date on which the SMBC Group obtains control. They are deconsolidated from the date on which the SMBC Group loses control.

The acquisition method is used to account for the business combinations including the acquisition of subsidiaries by the SMBC Group. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred, the liabilities incurred and the equity interests issued. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The SMBC Group’s previously held equity interest in the acquiree is remeasured at fair value at the acquisition date and any gain or loss is recognized in profit or loss. For each business combination, the SMBC Group measures any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. The excess of the aggregate of the consideration transferred, the amount of any non-controlling interest and the acquisition-date fair value of the SMBC Group’s previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed is recorded as goodwill in the consolidated statement of financial position. If the aggregate of the consideration transferred, the amount of any non-controlling interest and the acquisition-date fair value of the SMBC Group’s previously held equity interest in the acquiree is less than the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, the difference is recognized immediately in the consolidated income statement.

Inter-company transactions, balances and unrealized gains on transactions between the SMBC Group companies are eliminated on consolidation. Unrealized losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred. The accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the SMBC Group.

Non-controlling interests

Changes in the SMBC Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Interests in the equity of subsidiaries not attributable to the SMBC Group are reported in the consolidated statement of financial position as a separate component of equity as non-controlling interests. Profits or losses attributable to non-controlling interests are separately reported in the consolidated income statement.

Associates and joint ventures

An associate is an entity over which the SMBC Group has significant influence, but does not control the financial and operating policy decisions of the entity. Significant influence is generally presumed to exist when the SMBC Group holds 20% or more, but less than 50%, of the voting rights.

Entities that are jointly controlled by more than one party, including the SMBC Group, may be determined to be a joint venture.

The SMBC Group accounts for investments in associates and joint ventures using the equity method from the date on which they become associates or joint ventures. The SMBC Group discontinues the use of the equity method from the date on which the SMBC Group ceases to have significant influence or joint control over the investees.

Under the equity method, the SMBC Group’s investments in associates and joint ventures are initially recognized at cost. The carrying amount of the investments are subsequently increased or decreased to recognize the SMBC Group’s share of the post-acquisition profit or loss of the associate or joint venture and other movements included directly in the equity of the associate or joint venture. The SMBC Group’s share of the results of associates and joint ventures is based on the financial statements of its associates and joint ventures, adjusted to conform with the accounting policies of the SMBC Group. Profits on transactions between the SMBC Group and its associates and joint ventures are eliminated to the extent of the SMBC Group’s interest in the associates or joint ventures. Losses are also eliminated to the extent of the SMBC Group’s interest in the associates or joint ventures unless the transaction provides evidence of impairment in the asset transferred.

The carrying amounts of the investments in associates and joint ventures include goodwill (net of any accumulated impairment loss) arising on the acquisition of the interests in the entities. Because goodwill arising on the acquisition of the interest in an associate or joint venture is not separately recognized, it is not tested for impairment separately. Instead, the entire carrying amount of the investment in an associate or joint venture is tested for impairment as a single asset by comparing its recoverable amount, which is the higher of value in use and fair value less costs to sell, with its carrying amount, whenever there is any objective evidence that the investment is impaired. An impairment loss recognized in prior periods for the investment is reversed only if there has been a change in the estimates used to determine the recoverable amount of the investment since the last impairment loss was recognized. If this is the case, the carrying amount of the investment is increased to its recoverable amount. That increase is a reversal of an impairment loss.

When the SMBC Group’s share of losses in an associate or joint venture exceeds the SMBC Group’s carrying amount of the investment, the SMBC Group does not recognize further losses, unless it has a binding obligation or has made payments on behalf of the entity.

Segment Reporting

The SMBC Group determines its operating segments based on the management approach, which requires operating segments to be identified on the basis of internal reports about components of the entity that are regularly reviewed by management, in order to allocate resources to a segment and to assess its performance.

Foreign Currency Translation

Items included in the financial statements of each of the SMBC Group companies are measured using the currency of the primary economic environment in which the company operates (“the functional currency”). The consolidated financial statements are presented in Japanese yen, which is also the Company’s functional currency.

Transactions and balances

Foreign currency transactions that are denominated or settled in a foreign currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary items denominated in foreign currencies are translated using the exchange rate at the end of the reporting period. Foreign exchange gains and losses resulting from the retranslation and settlement of monetary items are recognized in the consolidated income statement. Non-monetary items that are measured at fair value in a foreign currency are translated into the functional currency using the exchange rate at the date the fair value is determined. Translation differences on certain of these items, such as equity instruments classified as available-for-sale financial assets, are not included in the consolidated income statement but are recognized directly in equity. Non-monetary items that are measured at historical cost in a foreign currency are translated into the functional currency using the exchange rate at the date of the initial transaction.

Foreign operations

The assets and liabilities of foreign operations are translated into the presentation currency of the SMBC Group using the exchange rate at the end of the reporting period, and their income statements are translated using the exchange rates at the dates of the transactions or average exchange rates where these approximate to actual rates.

The exchange differences arising on the translation of a foreign operation are included in other comprehensive income within equity and subsequently included in profit or loss on full or partial disposal of the operation.

Financial Assets

At initial recognition, the financial assets of the SMBC Group are classified into one of the following categories: trading assets, derivative financial instruments, financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.

Regular way purchases and sales of trading assets, derivative financial instruments, financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets are recognized on the trade date—the date on which the SMBC Group commits to purchase or sell the assets.

Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or where the SMBC Group has transferred substantially all the risks and rewards of ownership at a consolidated level. The SMBC Group consolidates all subsidiaries in accordance with IFRS 10 “Consolidated Financial Statements” before determining derecognition of financial assets under IAS 39 “Financial Instruments: Recognition and Measurement.”

Trading assets

Financial assets are classified as held for trading and included in “Trading assets” in the consolidated statement of financial position, if they are acquired principally for the purpose of selling in the near term or if they are part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. Trading assets are initially recognized at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair values of trading assets are included in “Net trading income” in the consolidated income statement.

Derivative financial instruments

Derivatives are classified as held for trading unless they are designated as hedging instruments, and included in “Derivative financial instruments” in the consolidated statement of financial position. All derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. Derivatives are initially recognized at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair values of derivatives held for trading are included in “Net trading income” in the consolidated income statement.

The derivative component of a hybrid instrument containing both a derivative and non-derivative component (“host contract”) is referred to as an embedded derivative. Certain embedded derivatives are accounted for as separate derivatives, when their economic characteristics and risks are not closely related to those of the host contract and the hybrid instrument is not carried at fair value through profit or loss. These embedded derivatives are measured at fair value and are presented in the consolidated statement of financial position together with the host contract.

Financial assets at fair value through profit or loss

Financial assets, other than those held for trading, are classified as financial assets at fair value through profit or loss and are included in “Financial assets at fair value through profit or loss” in the consolidated statement of financial position, if they meet one of the following criteria, and are so designated by management:

• the designation eliminates or significantly reduces a measurement or recognition inconsistency;

• a group of financial assets is managed and its performance is evaluated on a fair value basis in accordance with a documented risk management or investment strategy; or

• the instrument contains one or more embedded derivatives unless (a) the embedded derivative does not significantly modify the cash flows that otherwise would be required by the contract or (b) it is clear with little or no analysis that separation is prohibited.

In addition, the SMBC Group classifies the entire hybrid instrument at fair value through profit or loss when the SMBC Group is required to separate an embedded derivative from its host contract, but is unable to measure the embedded derivative separately either at acquisition or at the end of a subsequent reporting period. Financial assets at fair value through profit or loss are initially recognized at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair value of such financial assets are included in “Net income (loss) from financial assets at fair value through profit or loss” in the consolidated income statement.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than:

• those that the SMBC Group intends to sell immediately or in the near term, which are classified as held for trading, and those that the SMBC Group upon initial recognition designates as at fair value through profit or loss;

• those that the SMBC Group upon initial recognition classifies as available-for-sale; or

• those for which the SMBC Group may not recover substantially all of its initial investment, other than because of credit deterioration.

The financial assets classified as loans and receivables are mainly included in “Loans and advances” in the consolidated statement of financial position. Loans and receivables are initially recognized at fair value plus directly attributable transaction costs, and are subsequently measured at amortized cost using the effective interest method.

When the SMBC Group is the lessor in a lease agreement that transfers substantially all of the risks and rewards incidental to ownership of the asset to the lessee, the arrangement is classified as a finance lease and a receivable equal to the net investment in the lease is recognized and presented within “Loans and advances” in the consolidated statement of financial position.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets quoted in an active market with fixed or determinable payments and fixed maturities that the SMBC Group has the positive intention and ability to hold to maturity. If the SMBC Group were to sell other than an insignificant amount of held-to-maturity investments, the remaining investments in this category would be reclassified as available-for-sale financial assets. Held-to-maturity investments are initially recognized at fair value plus directly attributable transaction costs, and are subsequently measured at amortized cost using the effective interest method.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are classified as available-for-sale at initial recognition or are not classified into any of the other categories described above. Available-for-sale financial assets are initially recognized at fair value plus directly attributable transaction costs, and are subsequently measured at fair value.

Gains and losses arising from changes in the fair value of available-for-sale financial assets are recognized in other comprehensive income, until they are derecognized or impaired. At that time, the cumulative gain or loss previously recognized in other comprehensive income is recognized in the consolidated income statement. However, interest income calculated using the effective interest method and foreign currency gains and losses on monetary assets classified as available-for-sale are recognized in the consolidated income statement. Dividends on available-for-sale equity instruments are recognized in the consolidated income statement when the entity’s right to receive payment is established.

Financial Liabilities

Financial liabilities, except for held for trading and derivatives, are initially recognized at fair value net of transaction costs incurred, including premiums, discounts and issuance costs, and subsequently measured at amortized cost based on the effective interest method. Financial liabilities carried at amortized cost are mainly “Deposits,” “Borrowings,” and “Debt securities in issue” included in the consolidated statement of financial position.

Financial liabilities are classified as held for trading if they are incurred principally for the purpose of repurchasing in the near term or if they are part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. Financial liabilities held for trading and derivatives are mainly included in “Trading liabilities” and “Derivative financial instruments,” respectively, in the consolidated statement of financial position. Trading liabilities and derivatives are initially measured at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair values of such trading liabilities and derivatives are included in “Net trading income” in the consolidated income statement.

Financial liabilities are derecognized when they have been redeemed or otherwise extinguished.

Hedge Accounting

On April 1, 2017, the SMBC Group started to apply hedge accounting in order to reflect the effect of risk management activities on its consolidated financial statements to mitigate the foreign currency risk on exchange differences arising from the translation of net investments in foreign operations. The SMBC Group uses currency derivatives and foreign currency denominated financial liabilities as hedging instruments. The effective portion of the gain or loss on the hedging instruments is recognized in other comprehensive income, whereas the ineffective portion of the gain or loss on the hedging instruments is recognized in net trading income in the consolidated income statement. The cumulative gain or loss recognized in other comprehensive income is recognized in the profit or loss on the disposal or partial disposal of the foreign operation. For further information about hedge accounting, see Note 7 “Derivative Financial Instruments—Hedge accounting.”

Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is reported in the consolidated statement of financial position, only if the SMBC Group currently has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis or to realize the asset and settle the liability simultaneously. In all other situations, they are presented on a gross basis.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining the fair value, the SMBC Group gives the highest priority to a quoted price in an active market for identical assets or liabilities. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. If there is no active market for the asset or liability, the SMBC Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure the fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. In cases where the SMBC Group manages a group of financial assets and financial liabilities on the basis of its net credit exposure, the fair value of the group of financial assets and financial liabilities is measured on the basis of the price that would be received to sell a net long position (i.e., an asset) or paid to transfer a net short position (i.e., a liability) for the credit risk exposure provided that certain criteria set forth in IFRS 13 “Fair Value Measurement” are met. Details of fair value measurement are described in Note 43 “Fair Value of Financial Assets and Liabilities.”

Recognition of Deferred Day One Profit and Loss

The best evidence of the fair value of a financial instrument at initial recognition is normally the transaction price (i.e., the fair value of the consideration given or received). However, if the fair value at initial recognition is not evidenced by a quoted price in an active market for an identical asset or liability nor based on a valuation technique that uses only data from observable markets, the difference between the fair value at initial recognition and the transaction price, commonly referred to as “day one profit and loss,” is not recognized as a gain or loss but adjusted to be deferred. The SMBC Group did not have any significant deferred day one profit and loss for the fiscal years ended March 31, 2018 and 2017.

Repurchase and Reverse Repurchase Agreements, and Securities Borrowing and Lending Agreements

In the ordinary course of business, the SMBC Group lends or sells securities under agreements to repurchase them at a predetermined price on a future date (“repos”). Since substantially all the risks and rewards are retained by the SMBC Group, the securities remain on the consolidated statement of financial position and a liability is recorded in respect of the consideration received. On the other hand, the SMBC Group borrows or purchases securities under agreements to resell them at a predetermined price on a future date (“reverse repos”). Since the SMBC Group does not retain the risks and rewards of ownership, these transactions are treated as collateralized loans and the securities are not included in the consolidated statement of financial position.

The difference between the sale and purchase price is accrued over the life of the transactions. Securities lent to counterparties remain on the consolidated statement of financial position. Securities borrowed are not recognized in the consolidated statement of financial position, unless these are sold to third parties, at which point the obligation to repurchase the securities is recorded as a trading liability at fair value and any subsequent gain or loss is included in “Net trading income” in the consolidated income statement.

For the fiscal years ended March 31, 2018 and 2017, there were no transactions pursuant to repurchase agreements, securities lending transactions or other transactions involving the transfer of financial assets with an obligation to repurchase such transferred assets that were treated as sales and hence derecognized for accounting purposes.

Impairment of Financial Assets

Loans and advances and held-to-maturity investments

At the end of each reporting period, the SMBC Group assesses whether there is any objective evidence that a financial asset or a group of financial assets is impaired.

A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The criteria that the SMBC Group uses to determine that there is objective evidence of an impairment loss include:

• significant financial difficulty of an issuer or an obligor;

• a default or delinquency in interest or principal payments;

• restructuring of a financial asset by the SMBC Group due to the borrower’s financial difficulties on terms that the SMBC Group would not otherwise consider;

• indications that a borrower or issuer will enter bankruptcy;

• disappearance of an active market for a security because of the borrower’s financial difficulties; and

• other observable data relating to a group of assets, such as adverse changes in the payment status of borrowers or issuers in the group, or national or local economic conditions that correlate with defaults in the group.

The SMBC Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If the SMBC Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized are not included in the collective assessment of impairment.

The allowance for individually significant impaired financial assets is measured by the discounted cash flow (“DCF”) method, which is used to calculate the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. If financial assets have a variable interest rate, the discount rate for measuring any impairment loss is the effective interest rate determined under the contract, for the current period. The estimated future cash flows are individually calculated taking into account factors including historical loss information, the appropriateness of the borrower’s business plan or operational improvement plan, the status of progress of its plan, the overall support from financial institutions, and the realizable value of any collateral held.

The collective allowance for financial assets is classified into two types: (1) the allowance for impaired financial assets that are not individually significant, and (2) the allowance for non-impaired financial assets, which reflects incurred but not yet identified (“IBNI”) losses for the period between the impairment occurring and the loss being identified. The collective allowance is estimated by applying historical loss experience to groups of homogenous loans. The historical loss experience data includes the number of borrowers for whom objective evidence of impairment has been identified for the most recent rolling one-year period, and the amount ultimately recovered from impaired financial assets. The SMBC Group has collected and accumulated historical data on amounts ultimately recovered from impaired financial assets. The homogeneous groups are determined on the basis of similar credit risk characteristics. For every group, the SMBC Group’s grading processes are established considering asset type, industry, geographical location, collateral type, past-due status and other relevant characteristics (see Note 45 “Financial Risk Management”). These characteristics are relevant to the estimation of future cash flows for groups of such assets as being indicative of the debtors’ ability to pay all amounts due according to the contractual terms of the assets being evaluated. Historical loss experience is adjusted on the basis of current observable data, including bankruptcy trends after the occurrence of significant events which had a negative effect on the global economy and the economies in which a large portion of the SMBC Group’s assets are located, to reflect the effects of current conditions that did not affect the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not currently exist.

The carrying amount of the asset is reduced by the impairment loss either directly or through the use of an allowance account. Changes in the carrying amount of the allowance account are recognized in the consolidated income statement. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor’s credit rating), the previously recognized impairment loss is reversed by adjusting the allowance account. The amount of the reversal is recognized in “Impairment charges on financial assets” in the consolidated income statement.

If a financial asset is determined to be uncollectible, it is written off against the related allowance account. Uncollectible financial assets are normally written off when there is no expectation of further recovery after any collateral is foreclosed and the amount of the loss has been determined. Those assets primarily include loans for borrowers that have been legally or formally declared bankrupt and borrowers that may not have been legally or formally declared bankrupt but are essentially bankrupt.

Loans and advances that would otherwise be past due or impaired, but whose terms have been renegotiated without providing any financial concessions, are not classified as impaired loans and advances as the terms of the renegotiated loans and advances do not result in a decrease in the net present value of the loan discounted at its original effective interest rate. The collective allowance is estimated for these loans and advances by including them in homogenous groups on the basis of applying the SMBC Group’s grading process, taking into account the renegotiation and their consequent higher risk status. These loans and advances are continually assessed for impairment until maturity or derecognition.

In addition, provisions for loan commitments are calculated where it is probable that the SMBC Group will incur a loss and recognized in other provisions (see Note 20 “Provisions”).

Available-for-sale financial assets

At the end of each reporting period, the SMBC Group assesses whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity instruments classified as available-for-sale, a significant or prolonged decline in the fair value of the instruments below cost is also considered in determining whether the assets are impaired. In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as for loans and advances and held-to-maturity investments. If any objective evidence of impairment exists for available-for-sale financial assets, the cumulative loss—measured as the difference between the cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss—is removed from equity and recognized in the consolidated income statement.

Impairment losses recognized in the consolidated income statement on equity instruments classified as available-for-sale are not reversed through the consolidated income statement. For debt instruments classified as available-for-sale, if the fair value recovers in a subsequent period and it can be objectively associated with an event occurring after the impairment loss was recognized in the consolidated income statement, the impairment loss is reversed through the consolidated income statement.

Property, Plant and Equipment

All property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Additions and subsequent expenditures are capitalized only to the extent that they enhance the future economic benefits expected to be derived from the assets. Repairs and maintenance costs are expensed as incurred.

Land is not depreciated. Depreciation of other assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

• Buildings: 7–50 years;

• Leased assets: the shorter of the lease term and the estimated useful life, which is generally 5–20 years; and

• Assets for rent (including assets for aircraft leasing business) and others: 2–40 years.

The residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount. These are included in “Other income” and “Other expenses” in the consolidated income statement.

Intangible Assets

Goodwill

Goodwill represents the excess of the aggregate of the consideration transferred, the amount of any non-controlling interest and the acquisition-date fair value of the SMBC Group’s previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, and is initially recognized at the date of acquisition. Goodwill is allocated to cash-generating units for the purpose of impairment testing. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of cash inflows from other assets or groups of assets. Impairment testing is performed at least annually and whenever there is an indication that the cash-generating unit may be impaired. When the SMBC Group disposes of all or part of a cash-generating unit to which goodwill is allocated, the goodwill associated with the cash-generating unit is included in the carrying amount of the cash-generating unit when determining the gain or loss on disposal.

Software

Purchased software is carried at cost less accumulated amortization and accumulated impairment losses, if any.

Expenditure on internally generated software is recognized as an asset if the SMBC Group can demonstrate its intention and ability to complete the development and use the software in a manner that will generate future economic benefits and it can reliably measure the costs to complete the development. Internally generated software is carried at capitalized cost less accumulated amortization and accumulated impairment losses, if any. Costs associated with maintaining software are expensed as incurred.

Software is amortized using the straight-line method over the estimated useful life, which is generally 5 to 10 years.

Contractual customer relationships and trademarks

Contractual customer relationships and trademarks acquired in a business combination are recognized at fair value at the acquisition date. Contractual customer relationships and trademarks are carried at cost less accumulated amortization or impairment losses, if any. Contractual customer relationships and trademarks are amortized using the straight-line method over their estimated useful lives, which are generally 10 to 20 years.

Other intangible assets

Other intangible assets primarily consist of leasehold rights. They are recognized only when the SMBC Group legally obtains the rights and can reliably measure the fair value. Leasehold rights have an indefinite useful life and they are not amortized but are tested for impairment annually.

Impairment of Non-Financial Assets

Non-financial assets are reviewed for impairment at the end of each reporting period and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognized in the consolidated income statement if the asset’s carrying amount is greater than its estimated recoverable amount. The recoverable amount is estimated as the higher of the asset’s fair value less costs to sell and value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. In addition, irrespective of whether there is any indication of impairment, intangible assets that have an indefinite useful life are tested for impairment annually.

For the purposes of conducting impairment reviews, assets are grouped into cash-generating units to which the assets belong. Non-financial assets other than impaired goodwill are reviewed for possible reversal of the impairment loss at the end of each reporting period. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Assets Held for Sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if their carrying amount will be recovered principally through sale rather than through continuing use. In order to be classified as held for sale, the assets or disposal groups must be available for immediate sale in their present condition and their sale must be highly probable. Such assets or disposal groups are generally measured at the lower of their carrying amount and fair value less costs to sell.

Leases

As lessee

A lease agreement in which the lessor does not transfer to the lessee substantially all the risks and rewards of ownership of assets is classified as an operating lease. The leases entered into by the SMBC Group as a lessee are primarily operating leases. Operating lease payments, net of lease incentives received from the lessor, are recognized in the consolidated income statement on a straight-line basis over the lease term.

A lease agreement in which the lessor transfers to the lessee substantially all the risks and rewards of ownership of assets, with or without ultimate legal title, is classified as a finance lease. For finance leases, the SMBC Group initially recognizes the leased asset at the lower of the fair value of the asset or the present value of the minimum lease payments. Subsequent to initial recognition, assets are accounted for in accordance with the accounting policy applicable to those assets. The corresponding liability to the lessor is recognized as a lease obligation within “Borrowings” in the consolidated statement of financial position. Interest expense is recognized over the term of the lease based on the interest rate implicit in the lease so as to give a constant rate of interest on the remaining balance of the liability.

As lessor

When the SMBC Group acts as a lessor in an operating lease, the assets for rent are included in “Property, plant and equipment” in the consolidated statement of financial position and are depreciated over their expected useful lives on a basis consistent with similar assets in property, plant and equipment. Income from operating leases (net of any incentives given to the lessee) is recognized on a straight-line basis over the lease term and included in “Other income” in the consolidated income statement. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased assets and recognized as an expense on a straight-line basis over the lease term.

When the SMBC Group is a lessor in a finance lease, the leased assets are derecognized and the present value of the future lease payments is recognized as a lease receivable within “Loans and advances” in the consolidated statement of financial position. The difference between the gross receivables, i.e., undiscounted future cash flows, and the present value of the receivables is recognized as unearned finance income. Finance income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the finance lease.

Sale and leaseback

For sale and leaseback transactions leading to an operating lease, and the transaction took place at fair value, any profit or loss is recognized immediately. If the sale price is at or below fair value, any profit or loss is recognized immediately. However, if the loss is compensated for by future rentals at a below market price, the loss is deferred and amortized over the period that the asset is expected to be used. If the sale price is above fair value, any profit is deferred and amortized over the useful life of the asset. If the fair value of the asset is less than the carrying value of the asset at the date of transaction, that difference is recognized immediately as a loss on the sale.

Cash and Cash Equivalents

For the purposes of the consolidated statement of cash flows, cash and cash equivalents include cash on hand, demand deposits, and other short-term highly liquid financial assets with original maturities of three months or less, which are subject to insignificant risk of changes in their fair value.

Provisions

A provision is recognized if, as a result of a past event, the SMBC Group has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Financial Guarantee Contracts

Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Such financial guarantees are given to banks, financial institutions and other bodies on behalf of customers to secure loans, overdrafts and other banking facilities. Financial guarantees are initially recognized at fair value on the date the guarantee is given.

Subsequent to initial recognition, the SMBC Group’s liabilities under such guarantees are measured at the higher of the initial measurement, less amortization calculated to recognize in the consolidated income statement the fee income earned over the guarantee period, and the best estimate of the expenditure required to settle any financial obligation arising at the end of the reporting period. These estimates are determined based on experience of similar transactions and history of past losses, supplemented by the judgment of management.

Any increase in the liability relating to financial guarantee contracts is included in “Other expenses” in the consolidated income statement.

Employee Benefits

The SMBC Group operates various retirement benefit plans and other employee benefit plans.

Retirement benefits

The SMBC Group has defined benefit plans, such as defined benefit pension plans and lump-sum severance indemnity plans, and defined contribution plans.

Defined benefit plans

The liabilities and the assets recognized in the consolidated statement of financial position in respect of defined benefit plans are the present value of the defined benefit obligation less the fair value of plan assets.

The present value of the defined benefit obligation is calculated annually by qualified actuaries. In calculating the present value of the defined benefit obligations, the related current service cost, and past service cost, the SMBC Group attributes the retirement benefits to years of service under the benefit formula. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using market yields of AA credit-rated corporate bonds that have terms to maturity approximating those of the related obligations. In cases where there is no deep market in corporate bonds with a sufficiently long maturity to match the estimated maturity of the benefit payments, the SMBC Group uses current market rates of the appropriate term to discount shorter term payments and estimates the discount rates for longer maturities by extrapolating current market rates along the yield curve.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in the year, and return on plan assets excluding interest income are recognized in other comprehensive income and are never reclassified to profit or loss.

Past service costs are recognized immediately in the consolidated income statement.

When the calculations above result in a benefit to the SMBC Group, the recognized asset is limited to the present value of any economic benefits available in the form of any refunds from the plan or reductions in future contributions to the plan. An economic benefit is available to the SMBC Group if it is realizable during the life of the plan or on settlement of the plan obligations.

Defined contribution plans

Contributions to defined contribution plans are recognized as an expense in the consolidated income statement when they are due.

Other long-term employee benefits

The SMBC Group’s net obligation with respect to long-term employee benefits other than retirement benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value and the fair value of any related assets is deducted. The discount rates are market yields of AA credit-rated corporate bonds that have terms to maturity approximating those of the related obligations. The calculation of obligations is performed using the projected unit credit method. Any actuarial gains or losses and past service costs are recognized in the consolidated income statement in the period in which they arise.

Short-term employee benefits

Short-term employee benefits, such as salaries, paid absences and other benefits are accounted for on an accrual basis over the period in which employees have provided services. Bonuses are recognized to the extent that the SMBC Group has a present obligation to its employees that can be measured reliably.

Income Tax

Income tax expense comprises current and deferred taxes. Income tax expense is recognized in the consolidated income statement except for that related to items recognized directly in equity. In such case, the income tax expense is recognized in equity.

Current tax is the expected tax payable or receivable on the taxable profit or loss for the fiscal year.

Deferred taxes are recognized, using the balance sheet liability method, for temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred taxes are determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred tax assets are realized or the deferred tax liabilities are settled.

Deferred tax assets principally arise from tax losses carried forward, impairment of investment securities and loans, and the allowance for loan losses.

Deferred taxes are not recognized for the following temporary differences: (a) the initial recognition of goodwill; (b) the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; and (c) the temporary differences associated with investments in subsidiaries, associates, and joint ventures, when the parent investor is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets relating to tax losses carried forward and deductible temporary differences are recognized, only to the extent that it is probable that future taxable profit will be available against which the tax losses carried forward and the deductible temporary differences can be utilized.

Debt and equity securities in issue

On initial recognition, financial instruments issued by the SMBC Group are classified in accordance with the substance of the contractual agreement as financial liabilities where the contractual arrangement results in the SMBC Group having an obligation to either deliver cash or another financial asset to the holder, or to satisfy the obligation other than by delivering a fixed number of equity shares in exchange for a fixed amount of cash or another financial asset. The instruments or their components are classified as equity where they do not meet the definition of a liability and show evidence of a residual interest in the entity’s assets after deducting all of its liabilities. Compound financial instruments that contain both liability and equity elements are accounted for separately with the equity component being assigned the residual amount after deducting from the entire value of the compound financial instrument the fair value of the liability component which has been determined separately.

Shareholders’ Equity

Stock issuance costs

Incremental costs directly attributable to the issuance of new shares or options including those issued as a result of a business combination transaction are deducted from the proceeds and shown in equity, net of tax.

Dividends on common stock and preferred stock

Dividends on common stock and preferred stock are recognized in equity in the period in which they are approved by the shareholders. Dividends for the fiscal year that are declared after the reporting period are described in Note 40 “Dividends Per Share.”

Treasury stock

Where the Company or any other member of the SMBC Group companies purchase the Company’s common or preferred stock, the consideration paid is deducted from equity as treasury stock until they are cancelled or sold. No gain or loss is recognized on the purchase, sale, or cancellation of the Company’s own equity instruments and the consideration paid or received is recognized in equity.

Interest Income and Expense

Interest income and expense for all financial instruments, except for those classified as held for trading and financial assets at fair value through profit or loss, are recognized in “Interest income” and “Interest expense” in the consolidated income statement using the effective interest method.

The effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period.

The effective interest rate is the rate that discounts the estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the SMBC Group estimates cash flows, considering the contractual terms of the financial instrument but not including future credit losses. The calculation includes fees and points paid or received between parties to the contract that are an integral part of the effective interest rate of the financial instrument, transaction costs and other premiums or discounts.

Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is thereafter recognized using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. For financial assets measured at amortized cost, the interest rate is the original effective interest rate.

Fee and Commission Income

Fee and commission income includes fee and commission income arising from a diverse range of services that the SMBC Group provides to its customers. Fee and commission income can be divided into two categories: fee and commission income from providing transaction services, and fee and commission income earned from services that are provided over a certain period of time. Fee and commission income earned from providing transaction services is recognized when the service has been completed or the event has occurred. This fee and commission income includes fees on funds transfer and collection services, service charges from deposit accounts, fees and commissions on the securities business, underwriting fees, brokerage fees, and fee and commission income from other services. Fee and commission income earned from services over a period of time is recognized over that service period. This fee and commission income includes fees on credit-related businesses, investment fund businesses, and fee and commission income from other services. Loan commitment fees, together with the related direct cost, for loans that are likely to be drawn down are deferred and recognized as an adjustment to the effective interest rate on the loan. Loan commitment fees are recognized over the term of the commitment period when it is unlikely that a loan will be drawn down.

Net Trading Income

Net trading income consists of margins made on market-making and customer business, as well as changes in fair value of trading assets and liabilities and derivative financial instruments, caused by movements in interest rates, exchange rates, equity prices and other market variables. It also includes net interest and dividend income on trading assets and liabilities.

Net Income (Loss) from Financial Assets at Fair Value through Profit or Loss

Net income (loss) from financial assets at fair value through profit or loss includes all gains and losses arising from changes in the fair value of these financial assets and sales of such assets, and interest and dividend income on these financial assets.

Net Investment Income

Net investment income includes gains and losses on the disposal of available-for-sale financial assets, and dividends from available-for-sale equity instruments.

Earnings Per Share

The SMBC Group presents basic and diluted earnings per share (“EPS”) data for its common stock. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the SMBC Group by the weighted average number of common stock outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common stock outstanding for the effects of all dilutive potential common stock including share options and other convertible instruments.

Recent Accounting Pronouncements

The SMBC Group is currently assessing the impact of the following standards, amendments to standards, and interpretations that are not yet effective and have not been early adopted:

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)

In September 2014, the IASB issued the narrow-scope amendments to IFRS 10 and IAS 28 “Investments in Associates and Joint Ventures” to address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The effective date of applying the amendments was January 1, 2016 when they were originally issued, however, in December 2015, the IASB issued Effective Date of Amendments to IFRS 10 and IAS 28 to remove the effective date and indicated that a new effective date will be determined at a future date when it has finalized revisions, if any, that result from its research project on the equity accounting. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

IFRS 15 “Revenue from Contracts with Customers”

In May 2014, the IASB published IFRS 15 “Revenue from Contracts with Customers” to establish principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contract with customers. IFRS 15 replaces IAS 18 “Revenue,” IAS 11 “Construction Contracts,” IFRIC 13 “Customer Loyalty Programmes” and other related interpretations. The core principle of IFRS 15 is to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the entity expects to be entitled in exchange for those goods or services. IFRS 15 also requires enhanced disclosures about revenue, provides guidance for transactions that were not previously addressed comprehensively and improves guidance for multiple-element arrangements. The SMBC Group expects the primary impacts of the standard to be the capitalization of the incremental costs of obtaining a contract and costs incurred in fulfilling a contract in the credit card business, and the classification if certain incentives related to point programmes are performance obligations. The SMBC Group initially applies the standard on April 1, 2018. The SMBC Group will apply the standard retrospectively by adjusting the consolidated statement of financial position at the date of initial application, without any requirements to restate previous periods. The SMBC Group’s opening shareholders’ equity is expected to increase by approximately ¥15 billion post-tax, due to the capitalization of contract costs.

IFRS 9 “Financial Instruments”

In July 2014, the IASB published IFRS 9 “Financial Instruments,” which is the comprehensive standard to replace IAS 39. The standard contains the following new requirements for classification and measurement of financial assets and liabilities, impairment of financial assets and hedge accounting.

Classification and measurement

The standard requires all financial assets to be classified into three categories, namely, amortized cost, fair value through other comprehensive income (“FVOCI”) and fair value through profit or loss (“FVPL”), based on the business model within which they are held and their contractual cash flow characteristics. A financial asset is measured at amortized cost if the asset is held within a business model whose objective is to hold the asset in order to collect contractual cash flows, and the asset’s contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Financial assets are measured at FVOCI if they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and SPPI requirements are met. Any financial assets that do not meet the criteria of amortized cost or FVOCI should be classified as FVPL, unless an entity makes an irrevocable election for non-trading equity instruments to be measured at FVOCI. Financial assets that would be otherwise measured at amortized cost or FVOCI can be designated at recognition to be measured at FVPL in order to eliminate or significantly reduce an accounting mismatch.

The standard maintains most of the requirements in IAS 39 regarding the classification and measurement of financial liabilities. However, with the new requirements, if an entity chooses to measure a financial liability at fair value, the amount of change in its fair value that is attributable to changes in the credit risk of that liability will be presented in other comprehensive income, rather than in profit or loss.

The SMBC Group has conducted assessments of business model and SPPI requirements to identify classification and measurement of financial assets under the standard. At initial application, the SMBC Group anticipates, with limited exceptions, that:

• Trading assets, derivative financial instruments and financial assets at fair value through profit or loss will be measured at FVPL;

• Available-for-sale debt instruments will be measured at FVOCI;

• Available-for-sale equity instruments will be measured at FVPL or designated as FVOCI; and

• Held-to-maturity investments and loans and advances will be measured at amortized cost.

Impairment

The standard introduces the expected credit loss (“ECL”) model, which is a new model for the recognition of impairment losses, to replace the incurred loss model in IAS 39. The impairment requirements apply to financial assets measured at amortized cost and FVOCI, lease receivables, certain loan commitments and financial guarantee contracts. Under the ECL model, an entity is required to account for expected credit losses from initial recognition of financial instruments and to recognize full lifetime expected losses on a timely basis. The ECL model will result in the recognition of impairment losses earlier than the incurred loss model.

At each reporting date, credit risk on a financial instrument should be assessed and a loss allowance should be measured for expected credit losses resulting from default events that are possible within the next 12 months, if the credit risk has not increased significantly since initial recognition (“Stage 1”). A loss allowance should be recognized at an amount equal to expected credit losses resulting from all possible default events over the expected life of the financial instrument for the financial assets which are assessed to have experienced a significant increase in credit risk (“Stage 2”) or for the credit-impaired financial assets (“Stage 3”). A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. These indicators are similar to those under IAS 39 including significant financial difficulty and default.

Quantitative and qualitative assessments are used to determine whether there has been a significant increase in credit risk on financial instruments. These assessments include comparing the risk of a default occurring on the financial instrument at the reporting date and that at the date of initial recognition. Financial instruments with risk of a default increasing more than the quantitative threshold defined by the SMBC Group are deemed to have experienced a significant increase in credit risk. In addition, financial instruments assessed to have high credit risk from the credit risk management practices of the SMBC Group are transferred to Stage 2. Furthermore, a significant increase in credit risk is presumed if principal and/or interest payments are more than 30 days past due.

The standard requires that expected credit losses should be measured to reflect an unbiased and probability-weighted amount, the time value of money, and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. To meet these requirements, the SMBC Group has built ECL models by leveraging the probability of default (“PD”), loss given default (“LGD”) and exposure at default (“EAD”) used in the Basel III regulatory framework, for instance by adjusting certain conservative factors in those PDs and LGDs. For financial assets at Stage 2, the SMBC Group will use the lifetime PDs developed to measure lifetime ECL and consider forward-looking macro-economic information. On the other hand, the discounted cash flow method will be continued to be applied for the measurement of the ECL for individually significant impaired financial assets. The allowance for financial assets in IFRS 9 will increase compared to that in IAS 39, as a result of an increase in the overall level of allowance for non-impaired financial assets. This is primarily due to the requirements under IFRS 9 to measure an allowance equal to 12 months ECL for those financial assets at Stage 1 and lifetime ECL for those at Stage 2, whereas the allowance for those financial assets is calculated for incurred losses with a relatively short loss identification period not longer than 12 months under IAS 39.

Hedge Accounting

The standard introduces a new hedge accounting model, together with corresponding disclosures about risk management activity for those applying hedge accounting. The standard aligns hedge accounting more closely with risk management and adopts a more principle-based approach than that under IAS 39. The standard includes an accounting policy choice to defer the adoption of hedge accounting under the standard and to continue with IAS 39.

Transition impact

The SMBC Group initially applies the standard on April 1, 2018. The SMBC Group will apply the classification and measurement and impairment requirements retrospectively by adjusting the consolidated statement of financial position at the date of initial application, without any requirements to restate previous periods. As for hedge accounting, the SMBC Group started to apply hedge accounting to a part of the hedge transactions whose hedged items were net investments in foreign operations under IAS 39, and has decided to apply the accounting policy to continue with IAS 39 hedge accounting for those hedge transactions. As the amended IFRS 7 “Financial Instruments: Disclosures” will be effective at the time of application of the standard, the SMBC Group will revise the related disclosures for hedge accounting from then.

The SMBC Group’s opening shareholders’ equity is expected to decrease by approximately ¥150 billion post-tax, primarily due to the new requirements for impairment. This estimate is based on accounting policies, assumptions, judgments and estimation techniques that remain subject to change until the SMBC Group finalizes its financial statements for the fiscal year ending March 31, 2019. The adoption of IFRS 9 has no impact on the SMBC Group’s Common Equity Tier 1 capital, as it is calculated under Japanese GAAP.

Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)

In June 2016, the IASB issued narrow-scope amendments to IFRS 2 “Share-based Payment” to clarify how to account for certain types of share-based payment transactions. The amendments are effective for annual periods beginning on or after January 1, 2018 and are not expected to have a material impact on the SMBC Group’s consolidated financial statements.

Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4)

In September 2016, the IASB issued amendments to IFRS 4 “Insurance Contracts” to address concerns arising from implementing the new financial instruments standard, IFRS 9, before implementing the replacement standard that the IASB is developing for IFRS 4. These concerns include temporary volatility in reported results. The amendments introduce two approaches. One is an approach for entities that issue insurance contracts. This is applicable only when an entity first applies IFRS 9. The other is an approach for entities whose activities are predominantly connected with insurance. This is effective for annual periods beginning on or after January 1, 2018 and is not expected to have a material impact on the SMBC Group’s consolidated financial statements.

Annual Improvements to IFRSs 2014-2016 Cycle

In December 2016, the IASB issued Annual Improvements to IFRSs 2014-2016 Cycle, which is a collection of amendments to three IFRSs. These are minor amendments that clarify, correct or remove redundant wordings in the standards. These improvements include the amendments effective for annual periods beginning on or after January 1, 2018 and are not expected to have a material impact on the SMBC Group’s consolidated financial statements.

IFRIC Interpretation 22 “Foreign Currency Transactions and Advance Consideration”

In December 2016, the IASB issued IFRIC Interpretation 22 “Foreign Currency Transactions and Advance Consideration” to clarify the date of the transaction for the purpose of determining the exchange rate to use in transactions that involve advance consideration paid or received in a foreign currency in accordance with IAS 21 “The Effects of Changes in Foreign Exchange Rates.” The interpretation is effective for annual periods beginning on or after January 1, 2018 and is not expected to have a material impact on the SMBC Group’s consolidated financial statements.

Transfers of Investment Property (Amendments to IAS 40)

In December 2016, the IASB issued amendments to IAS 40 “Investment Property” to clarify the requirements on transfers to, or from, investment property when, and only when, there is a change in use. The amendments are effective for annual periods beginning on or after January 1, 2018 and are not expected to have a material impact on the SMBC Group’s consolidated financial statements.

IFRS 16 “Leases”

In January 2016, the IASB published IFRS 16 “Leases,” which sets out the principles for the recognition, measurement, presentation and disclosure of leases, replacing IAS 17 “Leases.” The standard introduces a single lessee accounting model and eliminates the classification of leases as either operating leases or finance leases, requiring a lessee to recognize assets and liabilities. A lessor continues to classify its leases as operating leases or finance leases, and to account for them differently. The standard is effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the standard will have on its consolidated financial statements.

IFRIC 23 “Uncertainty over Income Tax Treatments”

In June 2017, the IASB published IFRIC 23 “Uncertainty over Income Tax Treatments,” which clarifies how to apply the recognition and measurement requirements in IAS 12 “Income Taxes” when there is uncertainty over income tax treatments. IAS 12 specifies how to account for current and deferred tax, but not how to reflect the effects of uncertainty. This interpretation adds to the requirements in IAS 12 by specifying how to reflect the effects of uncertainty in accounting for income taxes. The interpretation is effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the interpretation will have on its consolidated financial statements.

Prepayment Features with Negative Compensation (Amendments to IFRS 9)

In October 2017, the IASB issued amendments to IFRS 9 to allow entities to measure particular prepayable financial assets with negative compensation at amortized cost or at fair value through other comprehensive income instead of at fair value through profit or loss, if a specified condition is met. The amendments are effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)

In October 2017, the IASB issued amendments to IAS 28 to clarify that entities account for long-term interests in an associate or joint venture, to which the equity method is not applied, using IFRS 9. The amendments are effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

Annual Improvements to IFRSs 2015-2017 Cycle

In December 2017, the IASB issued Annual Improvements to IFRSs 2015-2017 Cycle, which is a collection of amendments to four IFRSs. These are amendments that either clarify the wording in the standard or correct relatively minor oversights or conflicts between existing requirements of the standards. These improvements include the amendments effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

Plan Amendment, Curtailment or Settlement (Amendments to IAS 19)

In February 2018, the IASB issued amendments to IAS 19 “Employee Benefits” to clarify how to determine current service cost and net interest for the period after a change to a defined benefit plan. When a change to a plan such as an amendment, curtailment or settlement takes place, IAS 19 requires an entity to remeasure its net defined benefit liability or asset. The amendments require an entity to use the updated assumptions from this remeasurement to determine current service cost and net interest for the remainder of the reporting period after the change to the plan. The amendments are effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

IFRS 17 “Insurance Contracts”

In May 2017, the IASB published IFRS 17 “Insurance Contracts,” which establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts, replacing IFRS 4. IFRS 4 provided entities dispensation to carry on accounting for insurance contracts using national accounting standards, resulting in a multitude of different approaches. IFRS 17 requires all insurance contracts to be accounted for in a consistent manner. Insurance obligations will be accounted for by using present values instead of historical cost. The standard is effective for annual periods beginning on or after January 1, 2021. The SMBC Group is currently evaluating the potential impact that the adoption of the standard will have on its consolidated financial statements.

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Critical Accounting Estimates and Judgments

12 Months Ended

Mar. 31, 2018

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Critical Accounting Estimates and Judgments

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The consolidated financial statements are influenced by estimates and management judgment, which necessarily have to be made in the course of preparation of the consolidated financial statements. Estimates and judgments are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and which are continually evaluated.

Allowance for Loan Losses

Allowance for loan losses represents management’s estimate of the losses incurred in the loan portfolios at the end of each reporting period. Management exercises judgment in making assumptions and estimations when calculating the allowance for loan losses on both individually and collectively assessed loans.

The allowance for loan losses for individually significant impaired loans is estimated by management based on the expected future cash flows, taking into account factors such as historical loss information, the appropriateness of the borrower’s business plan or operational improvement plan, the status of progress of its plan, the overall support from financial institutions, and the realizable value of any collateral held. The allowance for loan losses for the remaining loans is collectively estimated by grouping financial assets into portfolios on the basis of similar credit risk characteristics and using the historical loss experience for these portfolios adjusted for the effect of the current economic environment. To assess the losses on the loan portfolios where loss events have occurred but not yet been identified, management develops assumptions and methodologies to estimate the loss identification period.

Management estimates and judgments may change from time to time as the economic environment changes or new information becomes available. Changes in these estimates and judgments will result in a different allowance for loan losses and may have a direct impact on impairment charges. Impairment charges on loans and advances amounting to ¥126,623 million, ¥141,457 million and ¥118,750 million were recognized for the fiscal years ended March 31, 2018, 2017 and 2016, respectively. For additional information, refer to Note 10 “Loans and Advances” and Note 32 “Impairment Charges on Financial Assets.”

Fair Value of Financial Instruments

The fair values of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. In these cases, inputs to valuation techniques are based on observable data with respect to similar financial instruments or by using models. Where observable inputs are not available, the fair value is estimated based on appropriate assumptions that a market participant would take into account. Where valuation techniques (for example, models) are used to determine fair values, they are validated and periodically reviewed. The SMBC Group certifies significant valuation models before they are used, and calibrates them to ensure that outputs reflect actual data and comparative market prices. To the extent practical, models use only observable data; however, inputs such as credit risk (both own and counterparty), volatilities and correlations require management to make estimates. Changes in assumptions about these factors could affect the fair values of these financial instruments. More details about the SMBC Group’s valuation techniques, significant unobservable inputs used in determining fair values and sensitivity analyses are given in Note 43 “Fair Value of Financial Assets and Liabilities.”

Impairment of Available-for-sale Financial Assets

Available-for-sale financial assets are impaired if there is objective evidence of impairment as a result of loss events. The SMBC Group exercises judgment in determining whether there is objective evidence of occurrence of loss events, which result in a decrease in estimated future cash flows of the financial assets. The estimation of future cash flows also requires judgment. In the assessment of impairment of available-for-sale equity instruments, the SMBC Group also considers whether there has been a significant or prolonged decline in fair value below their cost. The determination of what is a significant or prolonged decline requires management judgment.

Impairment may occur when there is objective evidence of deterioration in the financial conditions of the investee, industry and sector performance, or changes in operating and financing cash flows. The determination of impairment in this respect also includes significant management judgment.

Management estimates and judgments may change from time to time based upon future events that may or may not occur and changes in these estimates and judgments could adversely affect the carrying amounts of available-for-sale financial assets. Impairment charges on available-for-sale financial assets totaled ¥10,185 million, ¥71,510 million and ¥29,606 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively. For additional information, refer to Note 9 “Investment Securities” and Note 32 “Impairment Charges on Financial Assets.”

Impairment of Goodwill

Goodwill is tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that it may not be recoverable. If any such indication exists, then its recoverable amount is estimated. The process to determine the recoverable amount is inherently uncertain because such recoverable amount is determined based on a number of management estimates and judgments. The SMBC Group determines the recoverable amount using the estimated future cash flows, pre-tax discount rates, growth rates, and other factors. The estimation of future cash flows inherently reflects management judgments, even though such forecasts are prepared taking into account actual performance and external economic data. The pre-tax discount rates and growth rates may be significantly affected by market interest rates or other market conditions, which are beyond management’s control, and therefore significant management judgments are made to determine these assumptions. These management judgments are made based on the facts and circumstances at the time of the impairment test, and may vary depending on the situation and the time. Changes in management judgments may result in different impairment test results and different impairment amounts recognized. For the fiscal years ended March 31, 2018, 2017 and 2016, impairment losses on goodwill were ¥28,607 million, ¥74,616 million and ¥1,124 million, respectively. For additional information, refer to Note 14 “Intangible Assets.”

Provision for Interest Repayment

Provision for interest repayment represents management’s estimate of future claims for the refund of so-called “gray zone interest” (interest on loans in excess of the maximum rate prescribed by the Interest Rate Restriction Act (ranging from 15% to 20%) up to the 29.2% maximum rate permitted under the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates), taking into account historical experience such as the number of customer claims for a refund, the amount of repayments and the characteristics of customers, and the length of the period during which claims are expected to be received in the future.

Management estimates and judgments may change from time to time as the legal environment and market conditions change or new information becomes available. Changes in these estimates and judgments could affect the balance of provision for interest repayment. Provision for interest repayment is recorded in provisions as a liability, and it totaled ¥145,179 million and ¥157,333 million at March 31, 2018 and 2017, respectively. For additional information, refer to Note 20 “Provisions.”

Retirement Benefits

The SMBC Group has defined benefit plans such as defined benefit pension plans and lump-sum severance indemnity plans. The present value of the defined benefit obligation is calculated based on actuarial valuations that are dependent upon a number of assumptions, including discount rates, mortality rates and future salary (benefit) increases. The discount rates are equivalent to market yields of AA credit-rated corporate bonds that have terms to maturity approximating those of the related obligations. Future mortality rates are based on the official mortality table generally used for actuarial assumptions in Japan. Other assumptions used for the calculation of the defined benefit obligation are based on historical records. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty. Any change in these assumptions will impact actuarial gains and losses, as well as the present value of the defined benefit obligations and the net retirement benefit expense for each period. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in the year, and return on plan assets excluding interest income are recognized in other comprehensive income and are never reclassified to profit or loss.

The difference between the fair value of the plan assets and the present value of the defined benefit obligation at the end of the reporting period is recognized as assets and liabilities in the consolidated statement of financial position. When this calculation for each plan results in a benefit to the SMBC Group, the recognized asset is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. An economic benefit is available to the SMBC Group, if it is realizable during the life of the plan or on settlement of the plan obligation. The net total of assets and liabilities in the consolidated statement of financial position amounted to net assets of ¥279,567 million and ¥192,772 million at March 31, 2018 and 2017, respectively. For additional information, refer to Note 23 “Retirement Benefits.”

Deferred Tax Assets

Deferred tax assets relating to tax losses carried forward and deductible temporary differences are recognized, only to the extent that it is probable that future taxable profit will be available against which the tax losses carried forward and the deductible temporary differences can be utilized. This assessment requires significant management estimates and judgments. Future taxable profit is estimated based on, among other relevant factors, forecasted results of operations, which are based on historical financial performance and the business plans that management believes to be prudent and feasible. While the SMBC Group carefully assesses the realization of tax losses carried forward and deductible temporary differences, the actual taxable profit in the future may be less than the forecast. The deferred tax assets amounted to ¥19,436 million and ¥81,961 million in the consolidated statement of financial position at March 31, 2018 and 2017, respectively, while the net total of deferred tax assets and liabilities amounted to net liabilities of ¥378,305 million and ¥238,240 million at March 31, 2018 and 2017, respectively. For additional information, refer to Note 22 “Deferred Income Tax.”

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Segment Analysis

12 Months Ended

Mar. 31, 2018

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Segment Analysis

4 SEGMENT ANALYSIS

Business Segments

The SMBC Group’s business segment information is prepared based on the internal reporting system utilized by management to assess the performance of its business segments.

The SMBC Group has four main business segments: the Wholesale Business Unit, the Retail Business Unit, the International Business Unit and the Global Markets Business Unit, with the remaining operations recorded in Head office account and others. The SMBC Group changed its business segment information for the fiscal year ended March 31, 2018 in connection with the introduction of Group-wide business units, which determine strategies for each customer segment across the SMBC Group companies. The business segment was previously reported as Commercial Banking, Leasing, Securities and Consumer Finance, with the remaining operations recorded in Others. Comparative information has been restated.

Wholesale Business Unit

The Wholesale Business Unit provides financing, investment management, risk hedging, and settlement services as well as financial solutions that respond to wide-ranging client needs in relation to M&A and other advisory services and leasing, primarily for large-and mid-sized corporate clients in Japan. This business unit mainly consists of the wholesale businesses of SMBC, SMBC Nikko Securities Inc. (“SMBC Nikko Securities”), SMBC Trust Bank Ltd. (“SMBC Trust Bank”) and Sumitomo Mitsui Finance and Leasing Company, Limited (“SMFL”).

Retail Business Unit

The Retail Business Unit provides financial services to both consumers residing in Japan and domestic small-sized companies, and mainly consists of the retail business of SMBC, SMBC Nikko Securities and SMBC Trust Bank together with three consumer finance companies, Sumitomo Mitsui Card Company, Limited, Cedyna Financial Corporation and SMBC Consumer Finance Co., Ltd. This business unit offers a wide range of products and services for consumers, including wealth management, settlement services, consumer finance and housing loans, in order to address the financial needs of all individual customers. For small-sized companies, this business unit provides a wide array of financial products and services to comprehensively address business owners’ needs as both corporate managers and individuals such as business and asset succession.

International Business Unit

The International Business Unit supports the global businesses of a diverse range of clients, such as Japanese companies operating overseas, non-Japanese companies, financial institutions, and government agencies and public corporations of various countries. This business unit provides a variety of tailored products and services to meet customer and market requirements, including loans, deposits, clearing services, trade finance, project finance, loan syndication, derivatives and global cash management services. This business unit mainly consists of the international businesses of SMBC, SMBC Nikko Securities, SMBC Trust Bank, SMFL and their foreign subsidiaries.

Global Markets Business Unit

The Global Markets Business Unit offers solutions through foreign exchange products, derivatives, bonds, stocks, and other marketable financial products and also undertakes asset liability management operations, which help comprehensively control balance sheet liquidity risks and interest rate risks. This business unit consists of the Treasury Unit of SMBC and the Product Unit of SMBC Nikko Securities.

Head office account and others

The Head office account and others represent the difference between the aggregate of the Wholesale Business Unit, the Retail Business Unit, the International Business Unit and the Global Markets Business Unit, and the SMBC Group as a whole. It mainly consists of administrative expenses related to headquarters operations and other subsidiaries and equity-method associates, including The Japan Research Institute, Limited and Sumitomo Mitsui Asset Management Company, Limited. It also includes internal transactions between the SMBC Group companies, which are eliminated in the consolidated financial statements.

Measurement of Segment Profit or Loss

The business segment information is prepared under the management approach. Consolidated net business profit is used as a profit indicator of banks in Japan. Consolidated net business profit of each segment is calculated by deducting general and administrative expenses (i.e., the total of personnel expense, non-personnel expense and tax), and by adding or deducting others (i.e., share of profit or loss of equity-method associates, cooperated profit and loss based on internal managerial accounting) to or from consolidated gross profits (i.e., the total of net interest income, trust fees, net fee and commission income, net trading income and net other operating income). While the SMBC Group’s disclosure complies with the requirements on segment information in accordance with IFRS, the figures reported to management and disclosed herein are prepared under accounting principles generally accepted in Japan (“Japanese GAAP”). Consequently, the business segment information does not agree with the figures in the consolidated financial statements under IFRS. These differences are addressed in the “Reconciliation of Segmental Results of Operations to Consolidated Income Statement.”

Information regarding the total assets of each segment is not used by management in deciding how to allocate resources and assess performance. Accordingly, total assets are not included in the business segment information.

Segmental Results of Operations

For the fiscal year ended March 31, 2018:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	772.9		¥	1,311.7		¥	632.0		¥	356.2		¥	(91.7	)	¥	2,981.1
General and administrative expenses		(347.9	)		(1,027.7	)		(280.7	)		(53.9	)		(106.0	)		(1,816.2	)
Others(2)		53.7			15.6			46.9			17.5			(94.8	)		38.9
Consolidated net business profit	¥	478.7		¥	299.6		¥	398.2		¥	319.8		¥	(292.5	)	¥	1,203.8

For the fiscal year ended March 31, 2017:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	776.4		¥	1,313.9		¥	566.1		¥	346.8		¥	(82.5	)	¥	2,920.7
General and administrative expenses		(344.8	)		(1,041.1	)		(241.2	)		(50.2	)		(135.1	)		(1,812.4	)
Others(2)		45.6			12.1			38.5			8.2			(79.8	)		24.6
Consolidated net business profit	¥	477.2		¥	284.9		¥	363.4		¥	304.8		¥	(297.4	)	¥	1,132.9

For the fiscal year ended March 31, 2016:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	749.2		¥	1,272.7		¥	588.8		¥	354.1		¥	(60.8	)	¥	2,904.0
General and administrative expenses		(325.3	)		(1,000.6	)		(236.5	)		(49.2	)		(113.2	)		(1,724.8	)
Others(2)		48.0			10.0			(23.9	)		8.8			(79.2	)		(36.3	)
Consolidated net business profit	¥	471.9		¥	282.1		¥	328.4		¥	313.7		¥	(253.2	)	¥	1,142.9

(1) Consolidated gross profit = (Interest income – Interest expenses) + Trust fees + (Fee and commission income – Fee and commission expenses) + (Trading income – Trading losses) + (Other operating income – Other operating expenses).

(2) “Others” includes share of profit or loss of equity-method associates and cooperated profit and loss, that is, profit and loss double-accounted for in the managerial accounting.

Reconciliation of Segmental Results of Operations to Consolidated Income Statement

The figures provided in the tables above are calculated by aggregating the figures used for management reporting under Japanese GAAP for each segment. The total amount of consolidated net business profit that is calculated by each segment based on the internal managerial data is reconciled to profit before tax reported in the consolidated financial statements under IFRS as shown in the following table:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In billions)
Consolidated net business profit	¥	1,203.8		¥	1,132.9		¥	1,142.9
Differences between management reporting and Japanese GAAP:
Total credit costs		(94.2	)		(164.4	)		(102.8	)
Gains on equity instruments		118.9			55.0			69.0
Extraordinary gains or losses and others		(119.6	)		(44.2	)		(128.9	)
Profit before tax under Japanese GAAP		1,108.9			979.3			980.2
Differences between IFRS and Japanese GAAP:
Scope of consolidation		(1.6	)		(12.0	)		(3.1	)
Derivative financial instruments		(20.7	)		(110.9	)		173.1
Investment securities		68.8			(8.8	)		56.6
Loans and advances		(33.5	)		(0.7	)		(35.2	)
Investments in associates and joint ventures		(1.6	)		(15.9	)		53.4
Property, plant and equipment		1.0			1.3			1.3
Lease accounting		(0.5	)		(3.7	)		(1.5	)
Defined benefit plans		(13.2	)		22.9			6.6
Foreign currency translation		12.7			3.6			61.7
Classification of equity and liability		14.1			8.4			5.4
Others		(15.4	)		16.9			27.2
Profit before tax under IFRS	¥	1,119.0		¥	880.4		¥	1,325.7

Information about Geographical Areas

The following table shows the total operating income in accordance with IFRS by the main geographical areas. The SMBC Group’s services are provided to domestic and foreign clients on a worldwide basis. These include transactions where SMBC’s branches in Japan may deal with customers located in foreign countries and where SMBC’s overseas branches may provide services to Japanese companies.

To identify income attributed to each geographical area for the purposes of this disclosure, they are aggregated based on the geographical location of the booking entity, with the assumption that transactions booked in booking entities are deemed to have occurred in their respective geographical areas.

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Domestic(1):
Japan		¥2,670,858	¥	2,356,627	¥	2,840,058
Total domestic		2,670,858		2,356,627		2,840,058
Foreign(1)(2):
Americas		350,118		313,742		196,399
Europe and Middle East		484,807		401,320		352,232
Asia and Oceania		306,564		276,206		299,537
Total foreign		1,141,489		991,268		848,168
Total operating income(3)		¥3,812,347	¥	3,347,895	¥	3,688,226

(1) The geographical segmentation is determined based on the degrees of the following factors: geographic proximity, similarity of economic activities and relationship of business activities among regions.

(2) Americas includes the United States, Brazil, Canada and others; Europe and Middle East include the United Kingdom, Germany, France and others; Asia and Oceania include China, Singapore, Australia and others except Japan.

(3) Total operating income comprises net interest income, net fee and commission income, net trading income, net income (loss) from financial assets at fair value through profit or loss, net investment income and other income.

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Cash and Deposits with Banks

12 Months Ended

Mar. 31, 2018

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Cash and Deposits with Banks

5 CASH AND DEPOSITS WITH BANKS

Cash and deposits with banks at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Cash	¥	703,138	¥	1,123,128
Deposits with banks		53,992,931		46,207,027
Total cash and deposits with banks	¥	54,696,069	¥	47,330,155

The reconciliation of cash and cash equivalents used for the purposes of the consolidated statement of cash flows at March 31, 2018, 2017 and 2016 is shown as follows:

	At March 31,
	2018			2017			2016
	(In millions)
Cash and deposits with banks		¥54,696,069		¥	47,330,155		¥	43,144,654
Less: term deposits with original maturities over three months		(627,837	)		(606,795	)		(597,960	)
Less: cash segregated as deposits and others		(667,099	)		(478,541	)		(419,728	)
Add: cash and cash equivalents included in assets held for sale		15,323			—			—
Cash and cash equivalents		¥53,416,456		¥	46,244,819		¥	42,126,966

Private depository institutions in Japan are required to maintain certain minimum reserve funds with the Bank of Japan, based on average deposit balances and certain other factors. There are similar reserve deposit requirements for the SMBC Group’s foreign offices engaged in banking businesses in foreign countries. At March 31, 2018, 2017 and 2016, the reserve funds required to be maintained by the SMBC Group, which were included in cash and cash equivalents, amounted to ¥1,689,340 million, ¥1,644,684 million and ¥1,436,232 million, respectively.

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Trading Assets

12 Months Ended

Mar. 31, 2018

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Trading Assets

6 TRADING ASSETS

Trading assets at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Debt instruments	¥	2,841,148	¥	3,339,928
Equity instruments		327,975		436,743
Total trading assets	¥	3,169,123	¥	3,776,671

Trading debt instruments mainly consist of Japanese government bonds. Trading equity instruments mainly consist of publicly traded Japanese stocks.

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Derivative Financial Instruments

12 Months Ended

Mar. 31, 2018

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Derivative Financial Instruments

7 DERIVATIVE FINANCIAL INSTRUMENTS

Derivative financial instruments include futures, forwards, swaps, options and other types of derivative contracts, which are transactions listed on exchanges or over-the-counter (“OTC”) transactions. In the normal course of business, the SMBC Group enters into a variety of derivatives for trading and risk management purposes. The SMBC Group uses derivatives for trading activities, which include facilitating customer transactions, market-making and arbitrage activities. The SMBC Group also uses derivatives to reduce its exposures to market and credit risks as part of its asset and liability management.

Derivatives are financial instruments that derive their value from the price of underlying items such as interest rates, foreign exchange rates, equities, bonds, commodities, credit spreads and other indices. The SMBC Group’s derivative financial instruments mainly consist of interest rate derivatives and currency derivatives. Interest rate derivatives include interest rate swaps, interest rate futures and interest rate swaptions. Currency derivatives include foreign exchange forward transactions, currency swaps and currency options.

The tables below represent the derivative financial instruments by type and purpose of derivatives at March 31, 2018 and 2017.

	At March 31, 2018
	Trading						Risk Management(1)
	Notional  amounts		Assets		Liabilities		Notional  amounts		Assets		Liabilities
	(In millions)
Interest rate derivatives	¥	676,464,541	¥	1,771,745	¥	1,639,850	¥	69,550,646	¥	300,376	¥	333,182
Futures		78,295,049		28,689		28,871		18,269,263		5,534		1,167
Listed Options		66,989,307		4,538		722		—		—		—
Forwards		25,030,851		274		994		—		—		—
Swaps		429,498,805		1,651,945		1,500,361		51,131,039		294,842		329,446
OTC Options		76,650,529		86,299		108,902		150,344		—		2,569
Currency derivatives		120,282,459		1,439,993		1,293,900		7,986,176		283,248		112,322
Futures		689		—		19		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		74,380,475		759,993		708,645		1,866,249		49,440		24,929
Swaps		39,668,889		577,350		490,014		6,119,927		233,808		87,393
OTC Options		6,232,406		102,650		95,222		—		—		—
Equity derivatives		3,354,789		71,344		105,194		2,219		—		155
Futures		829,262		5,946		9,747		—		—		—
Listed Options		1,779,546		42,209		68,341		—		—		—
Forwards		7,564		745		208		—		—		—
Swaps		77,015		186		8,171		2,219		—		155
OTC Options		661,402		22,258		18,727		—		—		—
Commodity derivatives		161,539		6,516		4,948		—		—		—
Futures		20,902		402		464		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		—		—		—		—		—		—
Swaps		128,467		6,052		3,974		—		—		—
OTC Options		12,170		62		510		—		—		—
Credit derivatives		1,320,297		12,049		8,465		—		—		—
Total derivative financial instruments	¥	801,583,625	¥	3,301,647	¥	3,052,357	¥	77,539,041	¥	583,624	¥	445,659

	At March 31, 2017
	Trading						Risk Management(1)
	Notional  amounts		Assets		Liabilities		Notional  amounts		Assets		Liabilities
	(In millions)
Interest rate derivatives	¥	591,977,855	¥	1,864,348	¥	1,738,961	¥	60,318,601	¥	450,889	¥	466,643
Futures		78,549,213		20,278		16,579		5,853,880		221		865
Listed Options		35,011,822		6,622		459		—		—		—
Forwards		22,776,789		152		1,986		—		—		—
Swaps		393,798,232		1,723,403		1,584,833		54,335,702		450,665		464,152
OTC Options		61,841,799		113,893		135,104		129,019		3		1,626
Currency derivatives		117,119,766		1,444,103		1,321,157		6,360,374		222,224		266,887
Futures		2,261		—		19		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		74,918,488		778,100		833,024		5,364		106		—
Swaps		36,026,356		561,985		378,036		6,355,010		222,118		266,887
OTC Options		6,172,661		104,018		110,078		—		—		—
Equity derivatives		2,744,981		60,395		77,197		—		—		—
Futures		1,075,040		13,743		3,154		—		—		—
Listed Options		1,012,228		21,657		41,439		—		—		—
Forwards		15,677		410		253		—		—		—
Swaps		106,228		307		8,922		—		—		—
OTC Options		535,808		24,278		23,429		—		—		—
Commodity derivatives		172,973		11,679		10,491		—		—		—
Futures		28,568		489		513		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		—		—		—		—		—		—
Swaps		116,525		11,037		9,230		—		—		—
OTC Options		27,880		153		748		—		—		—
Credit derivatives		1,400,080		10,344		8,358		—		—		—
Total derivative financial instruments	¥	713,415,655	¥	3,390,869	¥	3,156,164	¥	66,678,975	¥	673,113	¥	733,530

(1) Derivative financial instruments categorized as “Risk Management” are used for economic hedging, such as managing the exposure to changes in fair value of the loan portfolio, and are identified as hedging instruments under Japanese GAAP. Under IFRS, the SMBC Group started to apply hedge accounting only for net investments in foreign operations as described below from April 1, 2017, and derivative financial instruments designated as hedging instruments are also categorized as “Risk Management.”

Hedge accounting

On April 1, 2017, the SMBC Group started to apply hedge accounting in order to reflect the effect of risk management activities on its consolidated financial statements to mitigate the foreign currency risk on exchange differences arising from the translation of net investments in foreign operations. The SMBC Group uses currency derivatives and foreign currency denominated financial liabilities as hedging instruments.

The effective portion of the gain or loss on the hedging instruments is recognized in other comprehensive income, whereas the ineffective portion of the gain or loss on the hedging instruments is recognized in net trading income in the consolidated income statement. The cumulative gain or loss recognized in other comprehensive income is recognized in the profit or loss on the disposal or partial disposal of the foreign operation.

At March 31, 2018, the fair values of derivative instruments designated as hedging instruments of net investments in foreign operations were assets of ¥49,440 million and liabilities of ¥24,929 million with notional amounts of ¥1,866,249 million. In addition, the carrying amount of foreign currency denominated financial liabilities designated as hedging instruments was ¥208,294 million. There was no hedge ineffectiveness recognized in “Net trading income” for the fiscal year ended March 31, 2018.

Credit derivatives

The SMBC Group enters into credit derivatives to manage the risk of its commercial banking credit portfolio containing loans by hedging, as well as diversifying the credit exposure in the portfolio, and to undertake credit loss protection transactions based on the needs from customers as financial intermediation. The tables below provide the notional amounts and the fair value of credit derivatives by purpose of transactions at March 31, 2018 and 2017.

	At March 31, 2018
	Protection purchased						Protection sold
	Notional  amounts		Assets		Liabilities		Notional amounts		Assets		Liabilities
	(In millions)
Managing the SMBC Group’s credit risk portfolio	¥	442,991	¥	220	¥	5,950	¥	684,080	¥	10,615	¥	751
Facilitating client transactions		106,352		87		1,732		86,874		1,127		32
Total	¥	549,343	¥	307	¥	7,682	¥	770,954	¥	11,742	¥	783
	At March 31, 2017
	Protection purchased						Protection sold
	Notional  amounts		Assets		Liabilities		Notional amounts		Assets		Liabilities
	(In millions)
Managing the SMBC Group’s credit risk portfolio	¥	471,994	¥	238	¥	5,141	¥	633,094	¥	7,796	¥	556
Facilitating client transactions		139,402		77		2,327		155,590		2,233		334
Total	¥	611,396	¥	315	¥	7,468	¥	788,684	¥	10,029	¥	890

The following table summarizes the notional amounts of the SMBC Group’s credit derivative portfolio by type of counterparty at March 31, 2018 and 2017.

	At March 31, 2018				At March 31, 2017
	Protection purchased		Protection sold		Protection purchased		Protection sold
	(In millions)
Banks and broker-dealers	¥	537,843	¥	770,954	¥	599,896	¥	788,684
Insurance and other financial guaranty firms		11,500		—		11,500		—
Total	¥	549,343	¥	770,954	¥	611,396	¥	788,684

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Financial Assets at Fair Value through Profit or Loss

12 Months Ended

Mar. 31, 2018

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Financial Assets at Fair Value through Profit or Loss

8 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at fair value through profit or loss at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Debt instruments	¥	1,528,921	¥	1,582,957
Equity instruments		18,751		16,136
Total financial assets at fair value through profit or loss	¥	1,547,672	¥	1,599,093

The SMBC Group classifies the entire hybrid instrument as financial assets at fair value through profit or loss when the SMBC Group is required to separate an embedded derivative from its host contract, but is unable to measure the embedded derivative separately either at acquisition or at the end of a subsequent reporting period.

The SMBC Group also classifies certain financial assets held by a venture capital investment subsidiary as financial assets at fair value through profit or loss. These financial assets are managed and their performance is evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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Investment Securities

12 Months Ended

Mar. 31, 2018

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Investment Securities

9 INVESTMENT SECURITIES

Investment securities at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Held-to-maturity investments:
Domestic:
Japanese government bonds	¥	372,459	¥	1,160,751
Japanese municipal bonds		—		7,463
Japanese corporate bonds		—		5,205
Total domestic		372,459		1,173,419
Total held-to-maturity investments	¥	372,459	¥	1,173,419
Available-for-sale financial assets:
Domestic:
Japanese government bonds	¥	7,685,303	¥	5,722,674
Japanese municipal bonds		47,032		82,780
Japanese corporate bonds		296,601		363,550
Total domestic debt instruments		8,028,936		6,169,004
Equity instruments		5,161,734		5,117,629
Total domestic		13,190,670		11,286,633
Foreign:
U.S. Treasury and other U.S. government agency bonds		3,246,646		3,468,263
Bonds issued by other governments and official institutions		2,187,450		1,669,853
Mortgage-backed securities		488,183		633,629
Other debt instruments		331,491		183,021
Total foreign debt instruments		6,253,770		5,954,766
Equity instruments		678,176		659,119
Total foreign		6,931,946		6,613,885
Total available-for-sale financial assets	¥	20,122,616	¥	17,900,518
Total investment securities	¥	20,495,075	¥	19,073,937

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Loans and Advances

12 Months Ended

Mar. 31, 2018

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Loans and Advances

10 LOANS AND ADVANCES

The following table presents loans and advances at March 31, 2018 and 2017 by industry classification.

	At March 31,
	2018			2017
	(In millions)
Domestic:
Manufacturing	¥	7,961,620		¥	9,578,147
Agriculture, forestry, fisheries and mining		145,957			174,021
Construction		947,765			1,151,989
Transportation, communications and public enterprises		5,424,054			5,365,225
Wholesale and retail		5,288,767			5,721,005
Finance and insurance		2,777,862			2,844,546
Real estate and goods rental and leasing		9,017,664			10,101,846
Services		4,255,228			4,885,247
Municipalities		1,000,286			1,216,211
Lease financing		14,629			2,706,641
Consumer(1)		16,363,489			19,096,755
Others		4,633,306			5,178,461
Total domestic		57,830,627			68,020,094
Foreign:
Public sector		372,008			299,746
Financial institutions		4,496,646			4,588,001
Commerce and industry		21,023,885			21,041,905
Lease financing		357,660			404,658
Others		1,779,101			1,836,322
Total foreign		28,029,300			28,170,632
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan  fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

(1) The balance in Consumer mainly consists of housing loans. The housing loan balances amounted to ¥11,482,678 million and ¥13,766,771 million at March 31, 2018 and 2017, respectively.

Reconciliation of allowance for loan losses is as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Allowance for loan losses at beginning of period		¥680,456		¥	722,717		¥	793,552
Provision for loan losses		126,623			141,457			118,750
Charge-offs:
Domestic		161,526			157,373			173,431
Foreign		23,534			33,135			20,218
Total		185,060			190,508			193,649
Recoveries:
Domestic		9,658			9,852			9,477
Foreign		574			445			871
Total		10,232			10,297			10,348
Net charge-offs		174,828			180,211			183,301
Others(1)		(140,575	)		(3,507	)		(6,284	)
Allowance for loan losses at end of period	¥491,676			¥680,456			¥722,717
Allowance for loan losses applicable to foreign activities:
Balance at beginning of period		¥128,347		¥	134,664		¥	100,783
Balance at end of period		¥114,306		¥	128,347		¥	134,664
Provision for loan losses	¥	19,872		¥	29,699		¥	60,002

(1) Others mainly include the exclusion of the allowance for loans and advances made by Kansai Urban Banking Corporation (“KUBC”) and THE MINATO BANK, LTD. (“The Minato Bank”), both of which had been the Company’s subsidiaries but became its equity-method associates, and the exclusion of the allowance for loans and advances made by SMFL which were reclassified as assets held for sale during the fiscal year ended March 31, 2018. The amount for the fiscal years ended March 31, 2017 and 2016 mainly includes foreign exchange transactions.

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Investments in Associates and Joint Ventures

12 Months Ended

Mar. 31, 2018

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Investments in Associates and Joint Ventures

11 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The following table presents the SMBC Group’s principal associates and joint venture at March 31, 2018. Investments in associates and joint ventures of the SMBC Group are accounted for using the equity method unless they are held for sale.

Company Name	Country of Incorporation		Proportion of Ownership Interest(1)		Proportion of Voting Rights(1)			Main Business
			(%)		(%)
Principal Associates
THE MINATO BANK, LTD.		Japan		3.9		34.1	(2)	Commercial banking
Kansai Urban Banking Corporation		Japan		47.9		48.1		Commercial banking
The Japan Net Bank, Limited		Japan		41.1		41.1		Internet banking
PT Bank Tabungan Pensiunan Nasional Tbk		Indonesia		40.6		40.6		Commercial banking
The Bank of East Asia, Limited		China		19.4		19.4		Commercial banking
ACLEDA Bank Plc.		Cambodia		18.2		18.2		Commercial banking
Vietnam Export Import Commercial Joint Stock Bank		Vietnam		15.0		15.0		Commercial banking
Sumitomo Mitsui Auto Service Company, Limited		Japan		33.9		33.9		Leasing
NEC Capital Solutions Limited		Japan		25.0		25.0		Leasing
POCKET CARD CO., LTD.		Japan		20.0		20.0		Credit card
JSOL Corporation		Japan		50.0		50.0		System development and data processing
Sakura Information Systems Co., Ltd.		Japan		49.0		49.0		System engineering and data processing
Daiwa SB Investments Ltd.		Japan		43.9		43.9		Investment advisory and investment trust management
China Post & Capital Fund Management Co., Ltd.		China		23.6		23.6		Investment advisory and investment trust management
Principal Joint Venture
Daiwa Securities SMBC Principal Investments Co., Ltd.		Japan		40.0		40.0		Investments, fund management

(1) Percentages of proportion of ownership interest and proportion of voting rights have been truncated.

(2) The SMBC Group has a 3.9% direct holding in THE MINATO BANK, LTD., and can exercise a further 30.2% of the voting rights held by SMBC’s retirement benefit trust under contractual agreements between SMBC and the retirement benefit trust.

The SMBC Group accounts for certain investees, including The Bank of East Asia, Limited, ACLEDA Bank Plc. and Vietnam Export Import Commercial Joint Stock Bank, as associates regardless of its below 20% holdings of the voting rights to these investees, since the SMBC Group has the ability to exercise significant influence over these investees through participation in the policy making process at the meeting of the board of directors, the provision of essential technical information, or other relevant agreements or relationships.

On the other hand, the SMBC Group accounts for certain investees as available-for-sale financial assets regardless of its 20% or more holdings of the voting rights to these investees because the SMBC Group has contracts or arrangements with other investors by which the SMBC Group loses the power to exert significant influence over such investees.

THE MINATO BANK, LTD. and Kansai Urban Banking Corporation ceased to be consolidated subsidiaries of the SMBC Group and became its associates during the fiscal year ended March 31, 2018. The SMBC group received a cash consideration of ¥88,389 million for losing control of these companies. The total amount of cash and cash equivalents in these companies was ¥940,568 million. Total amounts of assets and liabilities other than cash or cash equivalents in these companies were ¥7,314,397 million and ¥7,883,267 million, respectively. As a result of remeasuring the interests retained in these companies at fair value, the SMBC Group recognized losses of ¥22,037 million, which are included in “Other expenses” in the consolidated income statement. On the other hand, the SMBC Group recognized profit of ¥19,392 million through above-mentioned transition, which are included in “Other income” in the consolidated income statement.

The SMBC Group has interests in a number of associates and joint ventures, none of which are regarded as individually material. The following table summarizes, in aggregate, the financial information of all individually immaterial associates and joint ventures that are accounted for using the equity method:

	At and for the fiscal year ended March 31,
	2018		2017
	(In millions)
Carrying amount of investments in associates and joint ventures	¥	730,414	¥	675,704
Share of:
Profit from continuing operations		49,323		29,318
Other comprehensive income (loss)		7,885		(21,602	)
Total comprehensive income		57,208		7,716

There are no significant restrictions on the ability of associates or joint ventures to transfer funds to the SMBC Group in the form of cash dividends, repayment of loans and advances.

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Property, Plant and Equipment

12 Months Ended

Mar. 31, 2018

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Property, Plant and Equipment

12 PROPERTY, PLANT AND EQUIPMENT

The table below shows the changes in property, plant and equipment for the fiscal years ended March 31, 2018 and 2017.

	Assets for rent			Land			Buildings			Leased assets			Others			Total
	(In millions)
Cost	¥	1,833,990		¥	518,564		¥	760,244		¥	16,741		¥	431,178		¥	3,560,717
Accumulated depreciation and impairment losses		(288,630	)		(5,745	)		(384,565	)		(9,183	)		(281,643	)		(969,766	)
Net carrying amount at April 1, 2016		1,545,360			512,819			375,679			7,558			149,535			2,590,951
Additions		320,921			1,268			15,117			1,704			41,292			380,302
Acquisition of subsidiaries and businesses		52,636			20			604			4			547			53,811
Disposals		(152,172	)		(3,058	)		(1,089	)		(74	)		(1,771	)		(158,164	)
Depreciation		(88,198	)		—			(24,507	)		(2,102	)		(29,749	)		(144,556	)
Impairment losses		—			(453	)		(5,618	)		—			(325	)		(6,396	)
Exchange differences		(9,670	)		—			(192	)		—			(425	)		(10,287	)
Others		(9,961	)		3,896			10,813			97			(24,451	)		(19,606	)
Net carrying amount		1,658,916			514,492			370,807			7,187			134,653			2,686,055
Cost		2,086,804			520,078			774,233			17,837			425,728			3,824,680
Accumulated depreciation and impairment losses		(427,888	)		(5,586	)		(403,426	)		(10,650	)		(291,075	)		(1,138,625	)
Net carrying amount at March 31, 2017		1,658,916			514,492			370,807			7,187			134,653			2,686,055
Additions		415,397			44			30,144			1,775			54,951			502,311
Acquisition of subsidiaries and businesses		304,233			—			—			—			24			304,257
Disposals(1)		(1,640,222	)		(52,327	)		(33,796	)		(660	)		(10,064	)		(1,737,069	)
Depreciation		(91,906	)		—			(21,344	)		(2,061	)		(30,663	)		(145,974	)
Impairment losses		—			(2,446	)		(25,203	)		(136	)		(31	)		(27,816	)
Exchange differences		(66,033	)		(4	)		(284	)		(3	)		(506	)		(66,830	)
Others		302			(192	)		11,673			47			(16,632	)		(4,802	)
Net carrying amount		580,687			459,567			331,997			6,149			131,732			1,510,132
Cost		607,769			466,046			738,023			17,373			413,945			2,243,156
Accumulated depreciation and impairment losses		(27,082	)		(6,479	)		(406,026	)		(11,224	)		(282,213	)		(733,024	)
Net carrying amount at March 31, 2018	¥	580,687		¥	459,567		¥	331,997		¥	6,149		¥	131,732		¥	1,510,132

(1) Disposals include property, plant and equipment owned by SMFL reclassified as “Assets held for sale” during the fiscal year ended March 31, 2018. In addition, Disposals include property, plant and equipment related to KUBC and The Minato Bank, both of which had been the Company’s subsidiaries but became its equity method associates in March, 2018.

The impairment losses on property, plant and equipment are included in “Other expenses” in the consolidated income statement.

The SMBC Group had ¥2,626 million and ¥2,773,096 million of contractual commitments to acquire property, plant and equipment at March 31, 2018 and 2017, respectively.

The carrying amount of items of property, plant and equipment on which there was a restriction on title was ¥6,149 million and ¥7,187 million at March 31, 2018 and 2017, respectively.

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Leases

12 Months Ended

Mar. 31, 2018

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Leases

13 LEASES

As Lessee

The SMBC Group leases land and buildings, office equipment, and other tangible and intangible assets from third parties under finance leases or operating leases.

Carrying amount of assets held under finance leases

The carrying amount of assets held under finance leases at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Tangible assets:
Land and buildings	¥	2,837	¥	3,295
Other tangible assets(1)		3,312		3,892
Total(2)		6,149		7,187
Intangible assets:
Software		144		185
Total	¥	6,293	¥	7,372

(1) Other tangible assets include mainly equipment, machinery and vehicles.

(2) Cross-reference to Leased assets in Note 12 “Property, Plant and Equipment.”

Finance lease commitments

The total of future minimum lease payments and their present value under finance leases at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018			2017
	(In millions)
Not later than one year	¥	2,567		¥	27,901
Later than one year and not later than five years		4,664			78,958
Later than five years		3,086			6,129
Total		10,317			112,988
Less: Future interest charges		(1,151	)		(6,064	)
Present value of finance lease commitments(1)	¥	9,166		¥	106,924

(1) Present value of finance lease commitments is included in “Borrowings” in the consolidated statement of financial position. See Note 18 “Borrowings.”

At March 31, 2018 and 2017, the total amounts of future minimum sublease payments to be received under non-cancellable subleases were nil and ¥108,351 million, respectively.

Operating lease commitments

The total amounts of future minimum lease payments under non-cancellable operating leases at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018		2017
	(In millions)
Not later than one year	¥	42,329	¥	44,746
Later than one year and not later than five years		129,298		124,946
Later than five years		121,419		129,312
Total future minimum lease payments under non-cancellable operating leases	¥	293,046	¥	299,004

For the fiscal years ended March 31, 2018, 2017 and 2016, ¥50,561 million, ¥49,047 million and ¥50,801 million were recognized as expenses in respect of operating lease and sublease agreements, of which ¥50,058 million, ¥48,527 million and ¥50,278 million related to minimum lease payments, and ¥503 million, ¥520 million and ¥523 million related to sublease payments, respectively. Lease expenses recognized in respect of lease and sublease agreements are included in “General and administrative expenses” in the consolidated income statement.

As Lessor

The SMBC Group leases assets to third parties under finance leases or operating leases, including machinery, equipment, aircraft, vessel and property.

At March 31, 2018, the assets and liabilities of SMFL were reclassified as held for sale due to the reorganization of the joint leasing partnership. As a result, the balances of finance lease receivable and operating lease receivable decreased.

Finance lease receivable

The gross investment in the lease, unearned finance income, present value of the minimum lease payments receivable and unguaranteed residual values under finance leases at March 31, 2018 and 2017 were as follows:

	At March 31, 2018
	Gross investment in the lease		Unearned finance income		Present value of the minimum lease payments receivable(1)		Unguaranteed residual values(1)
	(In millions)
Not later than one year	¥	54,501	¥	13,470	¥	41,031	¥	6,483
Later than one year and not later than five years		227,793		29,746		198,047		43,206
Later than five years		73,979		11,574		62,405		21,117
Total	¥	356,273	¥	54,790	¥	301,483	¥	70,806
	At March 31, 2017
	Gross investment in the lease		Unearned finance income		Present value of the minimum lease payments receivable(1)		Unguaranteed residual values(1)
	(In millions)
Not later than one year	¥	1,023,842	¥	91,070	¥	932,772	¥	16,831
Later than one year and not later than five years		1,841,026		155,534		1,685,492		112,474
Later than five years		343,332		38,960		304,372		59,358
Total	¥	3,208,200	¥	285,564	¥	2,922,636	¥	188,663

(1) Present value of the minimum lease payments receivable and unguaranteed residual values are included in “Loans and advances” in the consolidated statement of financial position.

Accumulated allowance for uncollectible minimum lease payments receivable was ¥1,828 million and ¥10,827 million at March 31, 2018 and 2017, respectively.

Operating lease receivable

The total amounts of the future minimum lease payments receivable under non-cancellable operating leases at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018		2017
	(In millions)
Not later than one year	¥	38,072	¥	215,329
Later than one year and not later than five years		70,813		790,394
Later than five years		18,857		484,896
Total	¥	127,742	¥	1,490,619

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Intangible Assets

12 Months Ended

Mar. 31, 2018

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Intangible Assets

14 INTANGIBLE ASSETS

Goodwill

The table below shows the changes in goodwill by business segment for the fiscal years ended March 31, 2018 and 2017.

	Wholesale Business Unit			Retail Business Unit		International Business Unit			Head office account and others			Total
	(In millions)
Gross amount of goodwill	¥	—		¥	63,418	¥	13,233		¥	397,285		¥	473,936
Accumulated impairment losses		—			—		—			(13,149	)		(13,149	)
Net carrying amount at March 31, 2016		—			63,418		13,233			384,136			460,787
Acquisitions(1)		2,417			—		—			38,053			40,470
Impairment losses		—			—		—			(74,616	)		(74,616	)
Exchange differences		—			—		(186	)		—			(186	)
Net carrying amount		2,417			63,418		13,047			347,573			426,455
Gross amount of goodwill		2,417			63,418		13,047			435,338			514,220
Accumulated impairment losses		—			—		—			(87,765	)		(87,765	)
Net carrying amount at March 31, 2017		2,417			63,418		13,047			347,573			426,455
Disposals(2)		—			—		—			(11,197	)		(11,197	)
Impairment losses		(956	)		—		(4,292	)		(23,359	)		(28,607	)
Reclassification to assets held for sale(3)		(1,461	)		—		(8,166	)		(102,710	)		(112,337	)
Exchange differences		—			—		(589	)		—			(589	)
Net carrying amount		—			63,418		—			210,307			273,725
Gross amount of goodwill		956			63,418		4,292			321,431			390,097
Accumulated impairment losses		(956	)		—		(4,292	)		(111,124	)		(116,372	)
Net carrying amount at March 31, 2018	¥	—		¥	63,418	¥	—		¥	210,307		¥	273,725

(1) The SMBC Group recognized goodwill of ¥2,417 million in Wholesale Business Unit resulting from the acquisition of SMFL Capital Company, Limited, formerly known as GE Japan in April 2016 and ¥38,053 million in Head office account and others resulting from the acquisition of Sumitomo Mitsui Asset Management Company, Limited (“SMAM”) in July 2016. For additional information, refer to Note 49 “Acquisitions.”

(2) “Disposals” in Head office account and others includes amount of goodwill relating to Kansai Urban Banking Corporation (“KUBC”) which ceased to be its consolidated subsidiaries and became its associates during the fiscal year ended March 31, 2018.

(3) The SMBC Group reclassified goodwill of ¥112,337 million allocated to Sumitomo Mitsui Finance and Leasing Company, Limited (“SMFL”) and its subsidiaries to assets held for sale at March 31, 2018. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

The SMBC Group has four main business segments: the Wholesale Business Unit, the Retail Business Unit, the International Business Unit and the Global Markets Business Unit, with the remaining operations recorded in the Head office account and others. The SMBC Group changed its business segment information for the fiscal year ended March 31, 2018 in connection with the introduction of Group-wide business units, which determine strategies for each customer segment across the SMBC Group companies. The business was previously reported as Commercial Banking, Leasing, Securities and Consumer Finance, with the remaining operations recorded in Others. Comparative information has been restated.

Impairment testing of goodwill

Allocating goodwill to cash-generating units

For the purpose of impairment testing, goodwill is allocated to cash-generating units or group of cash-generating units, which represent the lowest level within the entity at which goodwill is monitored for internal purposes.

At March 31, 2018, the SMBC Group allocated goodwill to the Retail Business Unit of SMBC Consumer Finance Co., Ltd. (“SMBC Consumer Finance”) amounting to ¥56,692 million and to the Head office account and others of SMBC Nikko Securities Inc. (“SMBC Nikko Securities”) and SMAM amounting to ¥172,253 million and ¥38,053 million, respectively.

At March 31, 2017, the SMBC Group allocated goodwill to the Retail Business Unit of SMBC Consumer Finance amounting to ¥56,692 million and to the Head office account and others of SMBC Nikko Securities, SMFL, SMAM, SMBC Trust Bank Ltd. (“SMBC Trust Bank”), and KUBC amounting to ¥172,253 million, ¥102,710 million, ¥38,053 million, ¥23,359 million, and ¥11,197 million, respectively.

The aggregate amounts of other goodwill were ¥6,727 million and ¥22,191 million at March 31, 2018 and 2017, respectively, and they were not considered individually significant.

Timing of impairment tests

The SMBC Group performs impairment tests at least annually and whenever there is an indication that the cash-generating unit may be impaired.

Recoverable amount of cash-generating units

To determine whether an impairment loss shall be recognized, the carrying amount of a cash-generating unit is compared to its recoverable amount. The recoverable amount of a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

Fair value less costs to sell: The fair value less costs to sell is determined using an observable market price in the active market or unobservable inputs for the cash-generating unit at the date of the impairment test. The SMBC Group determined the recoverable amount of SMBC Friend Securities Co., Ltd. (“SMBC Friend Securities”), which was merged with SMBC Nikko Securities on January 1, 2018, for the fiscal year ended March 31, 2017, and SMFL for the fiscal year ended March 31, 2018, based on the fair value less costs to sell.

Value in use: The value in use is determined based on discounted future cash flows, which are based on the financial plans which have been approved by management and which are valid when the impairment test is performed. The financial plans are prepared taking into account the current economic and regulatory environment, direction of the regulation and business forecasts of the individual cash-generating units. The SMBC Group determined the recoverable amounts of the primary cash-generating units based on the value in use other than the recoverable amount of SMBC Friend Securities for the fiscal year ended March 31, 2017, and SMFL for the fiscal year ended March 31, 2018.

The financial plans, which are used to estimate the cash flow projections of the cash-generating units, cover three to five years. The cash flow projections beyond the period covered by the financial plans are extrapolated by applying the appropriate growth rates in perpetuity.

Key assumptions used in impairment testing

The key assumptions used for the value in use calculations for the fiscal years ended March 31, 2018 and 2017 were as follows:

	SMBC Trust Bank						KUBC			SMFL			SMBC Nikko Securities			SMBC Consumer Finance			SMAM
	Corporate Business			Retail Banking(1)
For the fiscal year ended March 31, 2018:
Pre-tax discount rate		12.61	%		9.91	%		—			—			11.42	%		11.20	%		9.01	%
Growth rate		1.00	%		1.00	%		—			—			1.00	%		1.00	%		1.00	%
For the fiscal year ended March 31, 2017:
Pre-tax discount rate		9.75	%		6.52	%		6.24	%		6.63	%		8.12	%		10.58	%		7.17	%
Growth rate		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%

(1) The business which SMBC Trust Bank acquired from Citibank Japan Ltd., in November 2015 is identified as Retail Banking.

Management considers that the pre-tax discount rates and the growth rates are the most sensitive key assumptions to determine the value in use of the cash-generating units.

Pre-tax discount rate: The pre-tax discount rates used to estimate the discounted cash flow of the primary cash-generating units are determined based on the Capital Asset Pricing Model (“CAPM”). The risk-free interest rate, the market risk premium and the beta factor that are used in the CAPM are determined based on market data and other external sources of information. The beta factor is determined based on a respective group of peer companies of the cash-generating units.

Growth rate: The growth rates used to estimate the cash flow projections beyond the period covered by the financial plans, which shall cover a maximum period of five years, are determined based on the expected long-term inflation rate and long-term average growth rates for the industries. The growth rate does not exceed the long-term growth rate for the industry in which the cash-generating unit operates.

Management believes that there were no reasonably possible changes in any of the key assumptions that would lead to the recoverable amounts of the cash-generating units being below these carrying amounts for the fiscal years ended March 31, 2018 and 2017.

Recognition of Impairment Losses

If the recoverable amount of the cash-generating unit is less than its carrying amount, the carrying amount of the cash-generating unit is reduced to its recoverable amount, and this reduction is recognized as impairment loss of goodwill.

The recoverable amount of SMBC Trust Bank was determined based on the value in use. For the fiscal year ended March 31, 2018, the value in use of SMBC Trust Bank decreased to less than its carrying amount, primarily due to the revision of the business plan and the key assumptions. As a result, the SMBC Group recognized an impairment loss of ¥23,359 million, equal to the total carrying amount of the goodwill relating to the SMBC Trust Bank, for the fiscal year ended March 31, 2018.

The recoverable amount of SMBC Friend Securities for the fiscal year ended March 31, 2016 was determined based on the value in use. However, for the fiscal year ended March 31, 2017, the value in use of SMBC Friend Securities decreased to less than fair value less costs to sell, primarily due to the revision of the business plan. Therefore, for the fiscal year ended March 31, 2017, the SMBC Group determined the recoverable amount of SMBC Friend Securities based on the fair value less costs to sell, which was measured based on net asset value and categorized within level 3 in the fair value hierarchy. As a result, the SMBC Group recognized an impairment loss of ¥74,616 million, equal to the total carrying amount of the goodwill relating to SMBC Friend Securities, for the fiscal year ended March 31, 2017.

The impairment losses on goodwill are included in “Other expenses” in the consolidated income statement.

Other intangible assets

The table below shows the changes in other intangible assets for the fiscal years ended March 31, 2018 and 2017.

	Internally generated software			Purchased software			Contractual customer relationships			Trademarks			Other intangibles			Total
	(In millions)
Cost	¥	591,118		¥	346,819		¥	172,950		¥	41,828		¥	58,368		¥	1,211,083
Accumulated amortization and impairment losses		(317,309	)		(212,356	)		(58,321	)		(26,007	)		(9,784	)		(623,777	)
Net carrying amount at April 1, 2016		273,809			134,463			114,629			15,821			48,584			587,306
Additions		102,193			41,080			—			—			2,228			145,501
Acquisition of subsidiaries and businesses		879			851			76,027			4,288			9,623			91,668
Disposals		(1,376	)		(2,379	)		—			—			(1,452	)		(5,207	)
Amortization		(82,158	)		(40,722	)		(20,192	)		(4,256	)		(4,579	)		(151,907	)
Impairment losses		—			(97	)		—			—			(75	)		(172	)
Exchange differences		(32	)		2			—			—			(15	)		(45	)
Others		(1,178	)		6,499			—			—			(2,352	)		2,969
Net carrying amount		292,137			139,697			170,464			15,853			51,962			670,113
Cost		648,463			372,531			248,977			46,116			64,487			1,380,574
Accumulated amortization and impairment losses		(356,326	)		(232,834	)		(78,513	)		(30,263	)		(12,525	)		(710,461	)
Net carrying amount at March 31, 2017		292,137			139,697			170,464			15,853			51,962			670,113
Additions		93,977			40,024			—			—			2,169			136,170
Acquisition of subsidiaries and businesses		—			222			—			—			—			222
Disposals(1)		(8,420	)		(11,928	)		(57,987	)		—			(1,844	)		(80,179	)
Amortization		(84,662	)		(43,818	)		(20,192	)		(4,280	)		(4,473	)		(157,425	)
Impairment losses		—			—			(1,830	)		—			(5,229	)		(7,059	)
Exchange differences		142			(731	)		—			—			(29	)		(618	)
Others		343			2,099			—			—			(1,489	)		953
Net carrying amount		293,517			125,565			90,455			11,573			41,067			562,177
Cost		650,632			340,593			172,950			46,116			54,024			1,264,315
Accumulated amortization and impairment losses		(357,115	)		(215,028	)		(82,495	)		(34,543	)		(12,957	)		(702,138	)
Net carrying amount at March 31, 2018	¥	293,517		¥	125,565		¥	90,455		¥	11,573		¥	41,067		¥	562,177

(1) Disposals include other intangible assets owned by SMFL reclassified as “Assets held for sale” during the fiscal year ended March 31, 2018.

The impairment losses on other intangible assets are included in “Other expenses” and the amortization expenses of other intangible assets are included in “General and administrative expenses” in the consolidated income statement.

The SMBC Group had ¥383 million and ¥317 million of contractual commitments to acquire intangible assets at March 31, 2018 and 2017, respectively.

The amounts of research and development expenditure recognized as expenses for the fiscal years ended March 31, 2018, 2017 and 2016 were ¥84 million, ¥89 million and ¥207 million, respectively, and they were included in “General and administrative expenses” in the consolidated income statement.

Other intangibles at March 31, 2018 and 2017 include leasehold rights, amounting to ¥5,436 million and ¥6,825 million, respectively, which are rights to use land for the purpose of owning the buildings. Since the SMBC Group has a long history of renewal, these contracts are not expected to be terminated in the foreseeable future. Leasehold rights are expected to generate cash flows for an indefinite period of time. They are not amortized but are tested for impairment annually, irrespective of whether there is any indication of impairment.

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Other Assets

12 Months Ended

Mar. 31, 2018

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Other Assets

15 OTHER ASSETS

Other assets at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Prepaid expenses	¥	49,300	¥	72,594
Accrued income		416,210		380,018
Receivables from brokers, dealers and customers for securities transactions		1,175,495		1,438,977
Cash collateral provided for derivative and other financial transactions		1,560,972		1,089,481
Retirement benefit assets		316,455		257,744
Security deposits		99,247		115,064
Investment properties(1)(2)		13,889		436,985
Others		412,340		530,861
Total other assets	¥	4,043,908	¥	4,321,724

(1) Investment properties are carried at cost less accumulated depreciation and accumulated impairment losses. Rental income from investment properties was ¥29,427 million, ¥25,322 million and ¥20,879 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively.

(2) Investment properties decreased due to the exclusion of those owned by SMFL reclassified as assets held for sale during the fiscal year ended March 31, 2018.

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Deposits

12 Months Ended

Mar. 31, 2018

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Deposits

16 DEPOSITS

Deposits at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Non-interest-bearing demand deposits	¥	21,611,514	¥	19,853,552
Interest-bearing demand deposits		52,154,265		51,281,995
Deposits at notice		10,355,664		10,330,269
Time deposits		25,655,132		29,525,875
Negotiable certificates of deposit		11,220,285		11,880,938
Others(1)		7,464,667		7,422,661
Total deposits	¥	128,461,527	¥	130,295,290

(1) Others include, among other items, foreign currency deposits in domestic offices and Japanese yen accounts held by foreign depositors in domestic offices.

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Trading Liabilities

12 Months Ended

Mar. 31, 2018

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Trading Liabilities

17 TRADING LIABILITIES

Trading liabilities at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Debt instruments “short position”	¥	2,008,711	¥	2,038,330
Equity instruments “short position”		135,188		33,254
Total trading liabilities	¥	2,143,899	¥	2,071,584

Trading liabilities include the instruments classified as held for trading. Trading debt instruments mainly consist of Japanese government bonds. Trading equity instruments mainly consist of publicly traded Japanese stocks.

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Borrowings

12 Months Ended

Mar. 31, 2018

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Borrowings

18 BORROWINGS

Short-term borrowings and long-term borrowings (with original maturities of more than one year) at March 31, 2018 and 2017 consisted of the following:

			At March 31,
	Interest rate		2018		2017
			(In millions)
SMFG:
Long-term borrowings:
Unsubordinated
Fixed rate borrowing, payable in United States dollars, due 2022-2031		2.89%-3.87%	¥	31,875	¥	33,657
Fixed rate borrowing, payable in Australian dollars, due 2027		3.73%		8,165		—
Floating rate borrowing, payable in United States dollars, due 2026-2028		2.31%-3.76%		110,181		50,149
Subordinated
Fixed rate borrowing, payable in Japanese yen, due 2024-2031		0.56%-1.27%		49,000		49,000
Total SMFG				199,221		132,806
SMBC:
Short-term borrowings		0.00%-2.18%		3,521,478		6,640,069
Long-term borrowings:
Unsubordinated
Fixed rate borrowing, payable in Japanese yen, due 2017-2028		0.00%-6.10%		3,126,970		4,351
Fixed rate borrowing, payable in United States dollars, due 2017-2025		0.00%-4.17%		42,666		45,387
Fixed rate borrowing, payable in euros, due 2017-2045		0.00%-3.50%		122,023		101,492
Floating rate borrowing, payable in Japanese yen, due 2018-2037		(0.18%)-0.02%		59,500		68,000
Floating rate borrowing, payable in United States dollars, due 2017-2033		1.18%-3.45%		894,797		904,263
Floating rate borrowing, payable in euros, due 2021-2022		0.00%-0.06%		32,128		31,769
Subordinated
Fixed rate borrowing, payable in Japanese yen, due 2018-2027		1.28%-2.25%		216,000		226,000
Total SMBC				8,015,562		8,021,331
Other subsidiaries:
Short-term borrowings		0.09%-7.91%		421,662		906,427
Long-term borrowings:
Unsubordinated
Fixed rate borrowing, payable in Japanese yen, due 2017-2042		0.00%-2.67%		227,231		617,358
Fixed rate borrowing, payable in United States dollars, due 2017-2044		0.81%-5.40%		197,806		216,213
Fixed rate borrowing, payable in Chinese yuan, due 2017-2021		2.40%-6.15%		—		24,348
Fixed rate borrowing, payable in Thai baht, due 2018-2021		1.85%-4.03%		—		12,724
Floating rate borrowing, payable in Japanese yen, due 2017-2042		0.04%-1.92%		267,598		431,141
Floating rate borrowing, payable in United States dollars, due 2017-2027		1.00%-3.86%		21,610		498,860
Floating rate borrowing, payable in euros, due 2020		1.00%		52,403		47,952
Floating rate borrowing, payable in Great Britain pound, due 2042-2043		1.51%-8.49%		24,627		20,190
Other fixed or floating rate borrowing, due 2017-2043		0.58%-11.79%		10,873		30,728
Subordinated
Fixed rate borrowing, payable in Japanese yen, due 2021		1.35%		—		5,200
Floating rate borrowing, payable in Japanese yen, due 2025		1.95%		—		4,000
Total other subsidiaries				1,223,810		2,815,141
Liabilities associated with securitization transactions:
Fixed rate borrowing, payable in Japanese yen, due 2021-2049		0.09%-2.70%		1,152,826		1,077,539
Floating rate borrowing, payable in Japanese yen, due 2017-2027		0.16%-1.66%		47,533		85,421
Floating rate borrowing, payable in United States dollars, due 2019-2020		1.86%-3.01%		4,363		6,781
Total liabilities associated with securitization transactions				1,204,722		1,169,741
Lease obligations		—		9,166		106,924
Total borrowings				¥10,652,481	¥	12,245,943

The interest rates shown in the above table are the contractual rates in effect at March 31, 2018 and 2017, and thus do not represent the actual effective interest rates. Maturity information for certain subordinated borrowings is based on the date of callable options.

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Debt Securities in Issue

12 Months Ended

Mar. 31, 2018

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Debt Securities in Issue

19 DEBT SECURITIES IN ISSUE

Debt securities in issue at March 31, 2018 and 2017 consisted of the following:

			At March 31,
	Interest rate		2018		2017
			(In millions)
SMFG:
Bonds:
Bonds, payable in United States dollars, due 2021-2048		1.99%-4.30%	¥	2,583,513	¥	1,639,109
Bonds, payable in euros, due 2022-2033		0.12%-1.72%		509,987		239,081
Bonds, payable in Australian dollars, due 2022-2028		3.07%-4.13%		179,367		93,691
Subordinated bonds:
Subordinated bonds, payable in Japanese yen, due 2024-2030		0.30%-1.33%		757,999		653,778
Subordinated bonds, payable in United States dollars, due 2024		4.44%		185,426		195,697
Total SMFG				4,216,292		2,821,356
SMBC:
Commercial paper		(0.50%)-2.26%		1,521,437		1,389,908
Bonds:
Bonds, payable in Japanese yen, due 2017-2019		0.25%-0.33%		99,000		156,182
Bonds, payable in United States dollars, due 2017-2045		1.21%-4.30%		2,072,295		2,404,015
Bonds, payable in euros, due 2017-2023		0.00%-2.75%		260,236		417,767
Bonds, payable in Australian dollars, due 2017-2025		2.97%-4.13%		63,572		77,270
Bonds, payable in Hong Kong dollars, due 2020-2025		2.09%-2.92%		32,009		34,136
Bonds, payable in Thai baht, due 2019-2020		2.00%-2.09%		25,575		11,410
Subordinated bonds:
Subordinated bonds, payable in Japanese yen, due 2017-2026		0.87%-2.80%		385,522		565,599
Subordinated bonds, payable in United States dollars, due 2022		4.85%		158,912		167,724
Subordinated bonds, payable in euros, due 2020		4.00%		97,648		89,227
Total SMBC				4,716,206		5,313,238
Other subsidiaries:
Commercial paper		0.00%-2.42%		946,208		2,128,438
Bonds:
Bonds, payable in Japanese yen, due 2017-2048		0.01%-21.00%		616,267		788,633
Bonds, payable in United States dollars, due 2017-2037		0.01%-8.00%		24,599		68,616
Bonds, payable in Indonesian rupiah, due 2018		9.85%		19,081		8,688
Bonds, payable in Australian dollars, due 2019-2031		0.01%-3.00%		1,896		1,654
Bonds, payable in Turkish lira, due 2019-2023		0.01%-9.00%		3,568		—
Subordinated bonds:
Subordinated bonds, payable in Japanese yen, due 2019-2028		2.31%-4.15%		25,000		35,000
Total other subsidiaries				1,636,619		3,031,029
Total debt securities in issue			¥	10,569,117	¥	11,165,623

Interest rates represent the contractual interest rates that were applied at March 31, 2018 and 2017, and thus do not represent the actual effective interest rates.

The following table presents the movement in Subordinated bonds for the fiscal year ended March 31, 2018.

	Subordinated bonds
	(In millions)
Balance at March 31, 2017(1)	¥	1,707,025
Cash flows:
Proceeds from issuance of subordinated bonds		104,866
Redemption of subordinated bonds		(180,034	)
Non-cash changes:
Foreign exchange translations		(11,138	)
Others(2)		(10,212	)
Balance at March 31, 2018(1)	¥	1,610,507

(1) The balances are comprised of subordinated bonds issued by SMFG, SMBC and other subsidiaries.

(2) Others mainly include changes arising from losing control of SMFG’s subsidiaries for the fiscal year ended March 31, 2018.

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Provisions

12 Months Ended

Mar. 31, 2018

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Provisions

20 PROVISIONS

The following table presents movements by class of provisions for the fiscal years ended March 31, 2018 and 2017.

	Provision for interest repayment			Other provisions			Total
	(In millions)
Balance at April 1, 2016	¥	229,422		¥	32,979		¥	262,401
Additional provisions		12,000			14,743			26,743
Amounts used		(83,528	)		(10,713	)		(94,241	)
Unused amounts reversed		(439	)		(225	)		(664	)
Amortization of discount and effect of change in discount rate		(122	)		214			92
Acquisition of subsidiaries and businesses		—			381			381
Others		—			(12	)		(12	)
Balance at March 31, 2017		157,333			37,367			194,700
Additional provisions		50,500			28,537			79,037
Amounts used		(61,961	)		(14,902	)		(76,863	)
Unused amounts reversed		(479	)		(3,247	)		(3,726	)
Amortization of discount and effect of change in discount rate		(142	)		209			67
Others		(72	)		(4,876	)		(4,948	)
Balance at March 31, 2018	¥	145,179		¥	43,088		¥	188,267

Provision for Interest Repayment

Japan has two laws restricting interest rates on loans. The Interest Rate Restriction Act sets the maximum interest rates on loans ranging from 15% to 20%. The Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates capped the interest rate on loans at 29.2% up to June 2010. Interest rates on loans greater than the range of 15-20% but below the maximum allowable of 29.2% were called “gray zone interest,” and many consumer lending and credit card companies were charging interest in this zone.

In January 2006, judicial decisions strictly interpreted the conditions under which consumer finance companies may retain gray zone interest. As a result, claims for refunds of gray zone interest have increased, and consumer lending and credit card companies have recorded a provision for claims for refunds of gray zone interest.

In December 2006, the Government of Japan made amendments to laws regulating money lenders to implement regulatory reforms affecting the consumer finance industry. As a result, in June 2010, the maximum legal interest rates on loans were reduced to the range of 15-20%, and gray zone interest was abolished.

The provision for interest repayment is calculated by estimating the future claims for the refund of gray zone interest, taking into account historical experience such as the number of customer claims for a refund, the amount of repayments and the characteristics of customers, and the length of the period during which claims are expected to be received in the future. Of these historical experiences, the number of customer claims for the refund has a significant effect on the amount of the provision, and the historical number of customer claims to the SMBC Group was 94 thousand, 127 thousand and 137 thousand for the fiscal years ended March 31, 2018, 2017 and 2016, respectively. The timing of the settlement of these claims is uncertain.

The decrease in the provision for interest repayment for the fiscal year ended March 31, 2018 was primarily due to the use of the provision during the year, which was partially offset by additional provisions as a result of the estimation of the future claims for the refund.

Other Provisions

Other provisions include asset retirement obligations and provisions for reimbursement of deposits, loan commitments, product warranties and litigation claims. Most of these provisions occurred in the normal course of business and none of them were individually significant at March 31, 2018 and 2017.

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Other Liabilities

12 Months Ended

Mar. 31, 2018

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Other Liabilities

21 OTHER LIABILITIES

Other liabilities at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Accrued expenses	¥	313,226	¥	291,871
Unearned income		133,478		168,952
Financial guarantees and other credit-related contingent liabilities		119,170		119,913
Due to trust account		1,328,271		1,180,976
Payables to brokers, dealers and customers for securities transactions		1,737,919		2,618,322
Payables related to credit card services		640,487		563,268
Obligations from factoring transactions		566,284		487,209
Retirement benefit liabilities		36,888		64,972
Guarantee deposits received		701,177		563,739
Others		1,305,840		1,401,879
Total other liabilities	¥	6,882,740	¥	7,461,101

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Deferred Income Tax

12 Months Ended

Mar. 31, 2018

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Deferred Income Tax

22 DEFERRED INCOME TAX

The changes of net deferred tax assets and liabilities for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended March 31,
	2018			2017
	(In millions)
At beginning of period	¥	(238,240	)	¥	(220,574	)
Deferred tax benefit (expense)		(1,036	)		120,468
Deferred tax relating to other comprehensive income:
Remeasurements of defined benefit plans reserve		(22,492	)		(2,315	)
Available-for-sale financial assets reserve		(99,383	)		(82,619	)
Exchange differences on translating foreign operations reserve		3,137			2,545
Acquisition and disposal of subsidiaries and businesses		(17,196	)		(6,259	)
Reclassification to assets held for sale(1)		(5,540	)		—
Exchange differences and others		2,445			(49,486	)
At end of period	¥	(378,305	)	¥	(238,240	)

(1) The SMBC Group reclassified net deferred tax assets of ¥5,540 million allocated to Sumitomo Mitsui Finance and Leasing Company, Limited and its subsidiaries to assets held for sale at March 31, 2018. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

The deferred tax assets and liabilities at March 31, 2018 and 2017 were attributable to the following items:

	At March 31,
	2018			2017
	(In millions)
Deferred tax assets:
Loans and advances		¥206,928		¥	231,971
Derivative financial instruments		59,530			55,989
Provision for interest repayment		36,779			40,638
Tax losses carried forward		24,082			98,788
Retirement benefits		9,204			21,772
Investment securities		1,243			981
Other deductible temporary differences		152,891			161,246
Total deferred tax assets		490,657			611,385
Deferred tax liabilities:
Investment securities		680,425			571,489
Goodwill and intangible assets		81,076			111,145
Property, plant and equipment		28,786			91,703
Retirement benefits		19,484			3,485
Lease transactions		10,866			16,026
Other taxable temporary differences		48,325			55,777
Total deferred tax liabilities		868,962			849,625
Net deferred tax liabilities(1)		¥(378,305	)	¥	(238,240	)

(1) Deferred tax assets and deferred tax liabilities are offset in the consolidated statement of financial position if the entity has a legally enforceable right to set off current tax assets against current tax liabilities, and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.

On March 31, 2016, the Government of Japan promulgated (i) an amendment to the Corporation Tax Act and (ii) the Local Tax Act. Those laws (i) reduce the Japanese national corporation tax rate by 0.5 percentage points from the fiscal year beginning April 1, 2016 and additionally reduce by 0.2 percentage points from the fiscal year beginning April 1, 2018, and (ii) reduce the enterprise tax rate by 1.2 percentage points from the fiscal year beginning April 1, 2016. As a result, the effective statutory tax rate of the Company was reduced from 32.3% to 30.9% during the two fiscal years beginning April 1, 2016 through March 31, 2018 and from 30.9% to 30.6% for the fiscal years beginning April 1, 2018. The SMBC Group measured deferred tax assets and liabilities at the rates that were expected to apply to the period when the assets are realized or the liabilities are settled.

On December 22, 2016, the Company applied to the Commissioner of the National Tax Agency for permission to adopt the consolidated corporate-tax system in Japan from the fiscal year beginning April 1, 2017. Accordingly, the Company and its wholly owned domestic subsidiaries started to recognize the deferred tax assets based on the consolidated corporate-tax system at March 31, 2017. Under the consolidated corporate-tax system, the taxable profits or losses on a consolidated basis are calculated by aggregating those of the parent company and its wholly owned domestic subsidiaries (a “tax consolidated group”), and any unused tax losses carried forward, except for certain specified consolidated tax losses carried forward, by one company can be used by another company within the tax consolidated group for Japanese national corporation tax purposes. Therefore, the deferred tax assets relating to deductible temporary differences and tax losses carried forward were recognized on a consolidated basis, but only to the extent that it is probable that future consolidated taxable profits will be available against which the deductible temporary differences and tax losses carried forward can be utilized.

The deferred tax assets of the Company and its wholly owned domestic subsidiaries, which adopted the consolidated corporate-tax system, consisted mainly of those for loans and advances. The deferred tax assets for loans and advances were generally related to the accumulated losses from the impairment of these assets which would be deductible for tax purposes in future periods. The Company and its wholly owned domestic subsidiaries consider that most of the deductible temporary differences will be able to be used based mainly on future taxable profits on a consolidated basis. The future taxable profits are estimated based on forecasted results of operations, which reflect historical financial performance and the business plans that management believes to be prudent and feasible. In the Company’s other subsidiaries, deferred tax assets relating to deductible temporary differences are recognized only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized. No deferred tax assets were recognized in certain the Company’s subsidiaries for the deductible temporary differences estimated not to be realized, or for the tax losses carried forward projected to expire due to the uncertainty of sufficient future taxable profit.

The following table shows the amounts of deductible temporary differences and tax losses carried forward by expiration date at March 31, 2018 and 2017 for which no deferred tax assets were recognized.

	At March 31,
	2018		2017
	(In millions)
Deductible temporary differences	¥	445,649	¥	436,481
Tax losses carried forward which will expire in 1 year		224,298		112,010
2 years		209,109		251,300
3 years		252,812		219,834
4 years		70,222		259,636
5 years		140,879		78,055
6 years		59,791		168,288
7 years		44,575		75,171
8 years		16,279		59,230
9 years and thereafter		59,734		19,390
Total deductible temporary differences and tax losses carried forward(1)		¥1,523,348	¥	1,679,395

(1) Under the consolidated corporate-tax system, the Company and its wholly owned domestic subsidiaries recognized deferred tax assets relating to deductible temporary differences and tax losses carried forward on a consolidated basis for Japanese national corporation tax purposes and on a stand-alone basis for Japanese local corporation tax purposes. There are deductible temporary differences and tax losses carried forward on which deferred tax assets are recognized for Japanese national corporation tax purposes, but on which no deferred tax assets are recognized for Japanese local corporation tax purposes. These deductible temporary differences and tax losses carried forward amounted to ¥421,319 million and ¥503,511 million at March 31, 2018 and 2017, respectively.

In addition to the above table, the SMBC Group does not recognize deferred tax assets for deductible temporary differences related to investments in subsidiaries, associates and joint ventures where the Company has no intention to reverse these differences in the foreseeable future. The amount of those deductible temporary differences was ¥818 billion and ¥810 billion at March 31, 2018 and 2017, respectively.

At March 31, 2018 and 2017, the amount of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures for which deferred tax liabilities had not been recognized was ¥2,041 billion and ¥1,352 billion, respectively. The Company can control the timing of reversal of the temporary differences and it is probable that they will not be reversed in the foreseeable future.

Deferred tax expense for the fiscal years ended March 31, 2018 and 2017 was attributable to the following temporary differences and tax losses carried forward:

	For the fiscal year ended March 31,
	2018			2017
	(In millions)
Investment securities	¥	(34,881	)	¥	26,999
Derivative financial instruments		9,296			39,101
Goodwill and intangible assets		7,809			2,201
Loans and advances		6,092			(10,496	)
Lease transactions		5,223			2,389
Provision for interest repayment		(3,840	)		28,186
Tax losses carried forward		(3,448	)		66,378
Retirement benefits		(2,604	)		3,139
Property, plant and equipment		(1,137	)		(45,285	)
Other temporary differences—net		16,454			7,856
Total deferred tax benefit (expense)	¥	(1,036	)	¥	120,468

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Retirement Benefits

12 Months Ended

Mar. 31, 2018

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Retirement Benefits

23 RETIREMENT BENEFITS

Defined Benefit Plans

SMBC and some of the Company’s other subsidiaries have various defined benefit plans such as defined benefit pension plans and lump-sum severance indemnity plans, which define the amount of benefits that an employee will receive on or after retirement, usually based on one or more factors, such as age, years of service, compensation, classes and earned points based on service.

SMBC’s defined benefit plans account for the vast majority of the defined benefit obligations and plan assets in the SMBC Group. SMBC has a corporate defined benefit pension plan and a lump-sum severance indemnity plan.

Defined benefit pension plans

SMBC’s corporate defined benefit pension plan is a funded defined benefit pension plan, which is regulated by the Corporate Defined Benefit Pension Plan Law, one of the Japanese pension laws. Benefits are paid in exchange for services rendered by employees who worked for more than a specified period considering their years of service and the degree of their contribution to SMBC.

SMBC’s pension fund is a special entity established in accordance with the pension laws, and SMBC has an obligation to make contributions to it. It has a board of directors which consists of an equal number of members elected from both the management and employees of SMBC. These board members have a fiduciary duty to administer and manage the pension fund.

The objective of SMBC’s pension fund is to earn a return over the long term which is sufficient to pay future benefits to participants of the corporate defined benefit pension plan, including pension benefit plans, lump-sum indemnity plans for bereaved families, and other lump sum indemnity plans. To achieve this, SMBC’s pension fund annually sets investment guidelines including asset allocation composed of equities, bonds and other appropriate financial assets according to the funding status. Investment decisions for its assets are made in accordance with these guidelines.

The Corporate Defined Benefit Pension Plan Law requires a pension fund to review the assumptions and remeasure the required contribution at least every fifth fiscal year, in order to ensure that it maintains sufficient assets for future benefit payments. On the other hand, the present value of the defined benefit obligation is calculated annually based on actuarial valuations that are dependent upon a number of assumptions, including discount rates, mortality rates and future salary (benefit) increases, in accordance with IAS 19 “Employee Benefits.” Other types of defined benefit pension plans operated by the SMBC Group are generally established and operated in the same manner as described above.

Lump-sum severance indemnity plans

SMBC and some of the Company’s other subsidiaries have lump-sum severance indemnity plans under which their employees are provided with lump-sum cash payments upon leaving the company. While funding of these plans is not required under Japanese pension laws, some of these plans are funded with assets held by retirement benefit trusts.

SMBC and a number of the Company’s other subsidiaries in Japan established retirement benefit trusts and contributed some of their marketable securities to these trusts in order to isolate these assets for retirement benefits by entering into contracts with trust banks. Retirement benefit trusts are voluntary funds that are used either to contribute assets to the pension funds or to directly settle retirement benefits. Among the SMBC Group, retirement benefit trusts are set up for the defined benefit pension plans, as well as for the lump-sum severance indemnity plans.

The assets belonging to the retirement benefit trusts are available to be used only to pay or fund retirement benefits, and practically held by an entity that is legally separated from the SMBC Group. Therefore, they are not available to the SMBC Group’s creditors even in bankruptcy and cannot be returned to the SMBC Group, unless either the remaining assets are sufficient to meet all the related obligations or the entities (funds) reimburse to the SMBC Group the retirement benefits which are already paid by the SMBC Group. Therefore, these assets are accounted for as plan assets.

The following tables provide detailed information for the defined benefit plans.

The amounts of the retirement benefit liabilities and the retirement benefit assets recognized in the consolidated statement of financial position at March 31, 2018 and 2017 were determined as follows:

	At March 31,
	2018			2017
	(In millions)
Present value of unfunded obligations	¥	(30,082	)	¥	(52,494	)
Present value of funded obligations		(1,143,589	)		(1,187,290	)
Fair value of plan assets		1,453,238			1,432,556
Net retirement benefit assets (liabilities)	¥	279,567		¥	192,772
Of which retirement benefit liabilities included in “Other liabilities”	¥	(36,888	)	¥	(64,972	)
Of which retirement benefit assets included in “Other assets”	¥	316,455		¥	257,744

The movements in the defined benefit obligations for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended  March 31,
	2018			2017
	(In millions)
At beginning of period	¥	1,239,784		¥	1,177,090
Current service cost		40,387			40,030
Interest cost		8,637			6,970
Actuarial losses—demographic assumptions		15,485			77,112	(1)
Actuarial losses (gains)—financial assumptions		5,896			(17,385	)
Actuarial losses—experience		2,519			3,980
Benefits paid		(44,433	)		(42,387	)
Lump-sum payments		(24,109	)		(11,365	)
Past service cost		(44	)		(3	)
Acquisition of subsidiaries and businesses		—			7,096
Settlements		—			(621	)
Others(2)		(70,451	)		(733	)
At end of period	¥	1,173,671		¥	1,239,784

(1) Includes an increase due to the assumption refinement of estimate on mortality rates.

(2) Others mainly include the exclusion of the defined benefit obligations related to KUBC and The Minato Bank, both of which had been the Company’s subsidiaries but became its equity-method associates, and the exclusion of the defined benefit obligations related to SMFL which were reclassified as assets held for sale during the fiscal year ended March 31, 2018.

The movements in the fair value of plan assets for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended  March 31,
	2018			2017
	(In millions)
At beginning of period	¥	1,432,556		¥	1,354,202
Interest income		10,090			8,123
Return on plan assets excluding interest income		97,433			71,841
Contributions by employer		19,208			44,535
Benefits paid		(44,433	)		(42,387	)
Settlements		—			(696	)
Others(1)		(61,616	)		(3,062	)
At end of period	¥	1,453,238		¥	1,432,556

(1) Others mainly include the exclusion of the fair value of plan assets related to KUBC and The Minato Bank, both of which had been the Company’s subsidiaries but became its equity-method associates, and the exclusion of the fair value of plan assets related to SMFL which were reclassified as assets held for sale during the fiscal year ended March 31, 2018.

The amounts recognized in “General and administrative expenses” in the consolidated income statement for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Current service cost	¥	40,387		¥	40,030		¥	35,032
Net interest cost		(1,453	)		(1,153	)		(3,553	)
Past service cost		(44	)		(3	)		(32	)
Total	¥	38,890		¥	38,874		¥	31,447

The plan assets at March 31, 2018 and 2017 were composed as follows:

	At March 31,
	2018						2017
	Quoted in active markets		Other		Total		Quoted in active markets		Other		Total
	(In millions)
Plan assets retained in the pension funds:
Equity instruments	¥	286,542	¥	148,439	¥	434,981	¥	269,706	¥	135,884	¥	405,590
Debt instruments		36,290		205,320		241,610		107,075		224,509		331,584
General account of life insurance companies		356		45,089		45,445		758		66,892		67,650
Other investments and short-term assets		45,252		170,476		215,728		21,970		105,490		127,460
Plan assets retained in the retirement benefit trusts:
Japanese equity instruments		468,319		1,542		469,861		456,747		1,400		458,147
Other short-term assets		36,340		9,273		45,613		32,276		9,849		42,125
Total	¥	873,099	¥	580,139	¥	1,453,238	¥	888,532	¥	544,024	¥	1,432,556

The assets in the pension funds included common stocks issued by the SMBC Group at March 31, 2018 and 2017. The amounts of these stocks were not significant.

The assets in retirement benefit trusts were primarily composed of Japanese equity instruments. Most of the plan assets held by the SMBC Group are invested in Japanese equity and debt instruments. Accordingly, the SMBC Group may be exposed to market risk arising from the domestic markets.

The SMBC Group retained the voting rights of some of these equity instruments with fair values of ¥457,217 million and ¥418,221 million (31.5% and 29.2% of the total fair values of plan assets) at March 31, 2018 and 2017, respectively.

The principal actuarial assumptions used at March 31, 2018, 2017 and 2016 were as follows:

	At March 31,
	2018			2017			2016
Discount rates		0.7	%		0.7	%		0.6	%

Discount rates are weighted on the basis of the defined benefit obligations.

The assumptions for future mortality are based on the official mortality table generally used for actuarial assumptions in Japan. Under the mortality table, used at March 31, 2018, 2017 and 2016, the current average remaining life expectancy of an individual retiring at age 60 was 23 years for males and 28 years for females.

The sensitivity analyses of the effect of changes in key assumptions on the defined benefit obligations at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018			2017
	Increase/(decrease)			Increase/(decrease)
	(In millions)
Discount rates:
Increase by 50 bps	¥	(73,146	)	¥	(71,373	)
Decrease by 50 bps		83,014			80,864
Average life expectancy at age 60:
Increase of one year	¥	38,291		¥	37,166

Each increase and decrease in the table above assumes that only one assumption is changed, with all other assumptions remaining unchanged. In practice, however, changes in multiple assumptions may occur in a mutually interrelated manner.

The weighted average durations of defined benefit plans for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	At March 31,
	2018		2017		2016
	(Years)
Lump-sum severance indemnity plans		12.8		12.9		12.8
Defined benefit pension plans		18.9		18.2		17.6

Funding Policy for Plan Assets

The pension funds review the funding status of plan assets every year. If any funding deficit is identified, a measure to cover such deficit will be implemented, for example, by increasing the amount of contributions by the employer.

Expected contribution

Expected contributions to the defined benefit plans for the fiscal year ending March 31, 2019 are ¥21,269 million.

Defined Contribution Plans

Some of the Company’s subsidiaries provide defined contribution plans. The amounts recognized as expenses for the defined contribution plans were ¥10,769 million, ¥9,621 million and ¥7,258 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively, which were included in “General and administrative expenses” in the consolidated income statement.

Employees’ Pension Insurance Plan

In Japan, the Government of Japan operates the Employees’ Pension Insurance Plan which covers most of the private entities’ employees. The amounts of contributions charged to expense for the Employees’ Pension Insurance Plan were ¥42,694 million, ¥43,650 million and ¥40,173 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively, which were included in “General and administrative expenses” in the consolidated income statement.

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Shareholders' Equity

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Shareholders' Equity

24 SHAREHOLDERS’ EQUITY

Common Stock

The changes in the number of issued shares of common stock and common stock held by the Company or its subsidiaries during the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018					2017					2016
	Outstanding		In treasury			Outstanding		In treasury			Outstanding		In treasury
At beginning of period		1,414,055,625		4,028,883			1,414,055,625		46,830,882			1,414,055,625		46,814,201
Net change		387,765		(143,915	)		—		(42,801,999	)(1)		—		16,681
At end of period		1,414,443,390		3,884,968			1,414,055,625		4,028,883			1,414,055,625		46,830,882

(1) Includes a decrease of 42,820,864 shares through the sale of the Company’s shares held by SMBC.

The total number of authorized shares of common stock was 3,000 million at March 31, 2018 and 2017 with no stated value. All issued shares are fully paid. The details of the stock options and the restricted shares outstanding are described in Note 39 “Share-Based Payment.”

On May 14, 2018, the Company’s board of directors resolved to repurchase shares of its common stock and cancel all the repurchased shares. The resolution authorized the repurchase of up to the lesser of (i) an aggregate of 20,000,000 shares of its common stock and (ii) an aggregate of ¥70 billion between May 15, 2018 and July 31, 2018. On June 19, 2018, the Company completed the repurchase, acquiring 15,368,300 shares of its common stock for ¥70 billion in aggregate. The cancellation of all the repurchased shares is scheduled on August 20, 2018.

Preferred Stock

The following table shows the number of shares of preferred stock at March 31, 2018 and 2017.

	At March 31, 2018			At March 31, 2017
	Authorized		Issued	Authorized		Issued
Type 5 preferred stock		167,000	—		167,000	—
Type 7 preferred stock		167,000	—		167,000	—
Type 8 preferred stock		115,000	—		115,000	—
Type 9 preferred stock		115,000	—		115,000	—

All the preferred stocks have no stated value. There was no movement in preferred stock during the fiscal years ended March 31, 2018, 2017 and 2016.

Capital stock, Capital surplus and Treasury stock

“Capital stock” represents share capital under the Companies Act adjusted by the amount corresponding to the preferred stock which is accounted for as a liability under IFRS. Purchases of treasury stock are recognized at cost in “Treasury stock.” Any additional paid-in capital, net gains or losses on the sale of treasury stock, and other changes in equity resulting from transactions with shareholders except for dividends are included in “Capital surplus.”

Restriction on the Payment of Dividends

The amount of the capital surplus and retained earnings of the Company that can be paid out as dividends is subject to restrictions under the Companies Act. These amounts are calculated based on the Company’s nonconsolidated statement of financial position prepared in accordance with Japanese GAAP. Therefore, the adjustments made to prepare the IFRS consolidated financial statements have no impact on the calculation. The total amount that the Company can pay out as a dividend was ¥1,623 billion at March 31, 2018.

Other than the restriction by the Companies Act, the Company is required to maintain a risk-weighted capital ratio as per the Banking Act of Japan (“Banking Act”). The detail of the restriction is described in Note 45 “Financial Risk Management.” Therefore, the Company would not be able to pay a dividend if the ratio were to fall below the minimum amount as a result of the payment of the dividends.

Since the Company is a holding company, its earnings rely mostly on dividend income from SMBC, and the Company’s other subsidiaries and associates. SMBC is subject to some restrictions on its dividend payment by the Companies Act and the Banking Act, similar to those applied to the Company’s.

Other Reserves

Remeasurements of defined benefit plans reserve

Remeasurements of the defined benefit plans reserve includes the accumulated actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions, and return on plan assets excluding interest income.

The movements of remeasurements of the defined benefit plans reserve for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
At beginning of period	¥	22,774		¥	18,985		¥	120,316
Gains (losses) arising during the period, before tax		73,662			8,134			(154,273	)
Income tax (expense) benefit for changes arising during the period		(22,492	)		(2,315	)		48,550
Amount attributable to non-controlling interests		45			(1,568	)		3,834
Share of other comprehensive income (loss) of associates and joint ventures		58			(462	)		558
Transfer of (gains) losses on remeasurements, net of tax to retained earnings		2,055			—			—
At end of period	¥	76,102		¥	22,774		¥	18,985

Available-for-sale financial assets reserve

The available-for-sale financial assets reserve includes the accumulated gains and losses of available-for-sale financial assets excluding the amount reclassified to profit or loss when the assets are derecognized or impaired.

The movements of the available-for-sale financial assets reserve for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
At beginning of period	¥	1,929,894		¥	1,756,634		¥	2,234,636
Gains (losses) arising during the period, before tax		582,435			371,438			(551,572	)
Income tax (expense) benefit for changes arising during the period		(184,128	)		(116,277	)		217,723
Reclassification adjustments for (gains) losses included in net profit, before tax		(275,038	)		(109,990	)		(217,529	)
Income tax benefit for reclassification adjustments		84,745			33,658			71,876
Amount attributable to non-controlling interests		(15,653	)		(3,971	)		2,251
Share of other comprehensive income (loss) of associates and joint ventures		5			(1,598	)		(751	)
At end of period	¥	2,122,260		¥	1,929,894		¥	1,756,634

Exchange differences on translating foreign operations reserve

Exchange differences on translating the foreign operations reserve includes foreign exchange differences arising from the translation of the net assets of foreign operations from their functional currencies to the SMBC Group’s presentation currency, Japanese yen.

The movements of exchange differences on translating the foreign operations reserve for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
At beginning of period	¥	181,374		¥	216,336		¥	404,132
Gains (losses) arising during the period, before tax		(75,409	)		(24,063	)		(219,904	)
Income tax (expense) benefit for changes arising during the period		3,152			2,544			19,027
Reclassification adjustments for (gains) losses included in net profit, before tax		49			(4	)		8
Income tax (expense) benefit for reclassification adjustments		(15	)		1			(3	)
Amount attributable to non-controlling interests		9,014			6,102			26,687
Share of other comprehensive income (loss) of associates and joint ventures		7,822			(19,542	)		(13,611	)
At end of period	¥	125,987		¥	181,374		¥	216,336

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Non-controlling Interests and Equity Attributable to Other Equity Instruments Holders

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Non-controlling Interests and Equity Attributable to Other Equity Instruments Holders

25 NON-CONTROLLING INTERESTS AND EQUITY ATTRIBUTABLE TO OTHER EQUITY INSTRUMENTS HOLDERS

Non-controlling interests

Non-controlling interests at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Preferred securities issued by subsidiaries	¥	730,153	¥	870,979
Others		502,827		634,022
Total non-controlling interests	¥	1,232,980	¥	1,505,001

Preferred securities issued by subsidiaries

Preferred securities issued by subsidiaries consisted of the following:

	Redemption at the option of Issuer(1)	At March 31,
		2018		2017
		(In millions)
SMFG Preferred Capital JPY 1 Limited (non-cumulative perpetual preferred securities)	January 2018	¥	—	¥	135,000
SMFG Preferred Capital USD 3 Limited (non-cumulative step-up perpetual preferred securities)	July 2018		143,438		151,456
SMFG Preferred Capital GBP 2 Limited (non-cumulative step-up perpetual preferred securities)	January 2029		37,215		35,023
SMFG Preferred Capital JPY 2 Limited
Series A (non-cumulative step-up perpetual preferred securities)	January 2019		113,000		113,000
Series B (non-cumulative perpetual preferred securities)	July 2019		140,000		140,000
Series E (non-cumulative perpetual preferred securities)	July 2019		33,000		33,000
SMFG Preferred Capital JPY 3 Limited
Series A (non-cumulative step-up perpetual preferred securities)	January 2020		99,000		99,000
Series B (non-cumulative perpetual preferred securities)	January 2020		164,500		164,500
Preferred securities issued by subsidiaries		¥	730,153	¥	870,979

(1) Subject to the prior approval of the Financial Services Agency of Japan (“FSA”), preferred securities are redeemable at any dividend payment date on and after a specific month and the month shown in this column is such a specific month of each preferred security.

Others

Others represent the equity in the SMBC Group’s subsidiaries not attributable, directly or indirectly, to the SMBC Group. They were not considered individually material to the SMBC Group at March 31, 2018 and 2017.

Equity attributable to other equity instruments holders

Equity attributable to other equity instruments holders at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Perpetual subordinated bonds	¥	599,522	¥	449,709
Total equity attributable to other equity instruments holders	¥	599,522	¥	449,709

SMFG issued perpetual subordinated bonds, which are Basel III-compliant Additional Tier 1 capital instruments and are classified as equity under IFRS.

The bonds bear a fixed rate of interest until the first call date. After the first call date, they will bear floating rate of interest unless they are redeemed. SMFG may at any time and in its sole discretion, elect to cancel any interest payment. If cancelled, interest payments are non-cumulative and will not increase to compensate for any short-fall in interest payments in any previous year.

These bonds are undated, have no final maturity date and may be redeemed at SMFG’s option, in whole, but not in part, on the first call date or any interest payment dates thereafter subject to prior confirmation of the FSA.

The principal amount of the bonds may be written down upon the occurrence of certain trigger events. For example, if the Common Equity Tier 1 capital ratio falls below 5.125% (“Capital Ratio Event”), the principal amount required to fully restore the Common Equity Tier 1 capital ratio above 5.125% will be written down.

The principal amount of the bonds which has been written down due to a Capital Ratio Event may be reinstated at SMFG’s option, subject to prior confirmation of the FSA of Japan that the Common Equity Tier 1 capital ratio remains at a sufficiently high level after giving effect to such reinstatement.

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Net Interest Income

12 Months Ended

Mar. 31, 2018

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Net Interest Income

26 NET INTEREST INCOME

Net interest income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Interest income from:
Deposits with banks	¥	78,217	¥	45,770	¥	40,472
Call loans and bills bought		19,362		12,065		21,828
Reverse repurchase agreements and cash collateral on securities borrowed		40,021		29,601		22,011
Investment securities		102,295		87,348		84,912
Loans and advances		1,904,175		1,725,477		1,703,361
Total interest income		2,144,070		1,900,261		1,872,584
Interest expense from:
Deposits		382,753		249,028		202,312
Call money and bills sold		8,763		5,286		5,583
Repurchase agreements and cash collateral on securities lent		61,341		20,623		15,105
Borrowings		89,196		79,835		72,203
Debt securities in issue		190,774		146,937		135,172
Others		1,142		629		726
Total interest expense		733,969		502,338		431,101
Net interest income	¥	1,410,101	¥	1,397,923	¥	1,441,483

Interest income recorded on impaired financial assets was ¥18,886 million, ¥16,892 million and ¥20,545 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively.

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Net Fee and Commission Income

12 Months Ended

Mar. 31, 2018

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Net Fee and Commission Income

27 NET FEE AND COMMISSION INCOME

Net fee and commission income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Fee and commission income from:
Loans	¥	120,998	¥	128,305	¥	121,934
Credit card business		289,509		261,253		253,136
Guarantees		62,934		58,221		55,618
Securities-related business		147,016		146,655		133,019
Deposits		16,169		15,929		14,882
Remittances and transfers		140,621		138,029		133,110
Safe deposits		5,224		5,414		5,511
Trust fees		3,854		3,607		3,619
Investment trusts		154,419		126,590		116,057
Agency		16,577		16,753		16,432
Others		174,043		165,656		178,362
Total fee and commission income		1,131,364		1,066,412		1,031,680
Fee and commission expense from:
Remittances and transfers		40,214		39,419		38,358
Guarantees		3,750		3,434		3,071
Others		134,903		138,720		89,952
Total fee and commission expense		178,867		181,573		131,381
Net fee and commission income	¥	952,497	¥	884,839	¥	900,299

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Net Trading Income

12 Months Ended

Mar. 31, 2018

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Net Trading Income

28 NET TRADING INCOME

Net trading income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Interest rate	¥	128,137	¥	79,650	¥	240,763
Foreign exchange		87,322		51,143		204,349
Equity		48,047		39,478		18,019
Credit		5,735		13,063		(2,641	)
Others		1,223		629		2,192
Total net trading income	¥	270,464	¥	183,963	¥	462,682

Net trading income includes income and losses from trading assets and liabilities, and derivative financial instruments.

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Net Income (Loss) from Financial Assets at Fair Value through Profit or Loss

12 Months Ended

Mar. 31, 2018

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Net Income (Loss) from Financial Assets at Fair Value through Profit or Loss

29 NET INCOME (LOSS) FROM FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Net income (loss) from financial assets at fair value through profit or loss for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018			2017		2016
	(In millions)
Net income (loss) from debt instruments	¥	(1,775	)	¥	428	¥	11,311
Net income from equity instruments		1,108			1,590		949
Total net income (loss) from financial assets at fair value through profit or loss	¥	(667	)	¥	2,018	¥	12,260

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Net Investment Income

12 Months Ended

Mar. 31, 2018

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Net Investment Income

30 NET INVESTMENT INCOME

Net investment income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Net gain from disposal of debt instruments	¥	4,187	¥	39,484	¥	71,641
Net gain from disposal of equity instruments		281,036		142,016		175,494
Dividend income		138,874		123,827		128,094
Total net investment income	¥	424,097	¥	305,327	¥	375,229

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Other Income

12 Months Ended

Mar. 31, 2018

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Other Income

31 OTHER INCOME

Other income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Income from operating leases	¥	276,850	¥	250,460	¥	206,561
Income related to disposal of assets leased		322,673		152,564		155,280
Income related to IT solution services		29,172		37,678		33,991
Gains on disposal of property, plant and equipment, and other intangible assets		852		937		3,714
Reversal of impairment losses of investments in associates and joint ventures		8,123		—		4,847
Gains on step acquisition of subsidiaries		—		20,344		118
Gains on step acquisition of associates and joint ventures		—		—		1,714
Others		118,185		111,842		90,048
Total other income	¥	755,855	¥	573,825	¥	496,273

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Impairment Charges on Financial Assets

12 Months Ended

Mar. 31, 2018

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Impairment Charges on Financial Assets

32 IMPAIRMENT CHARGES ON FINANCIAL ASSETS

Impairment charges on financial assets for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Loans and advances(1)	¥	126,623	¥	141,457	¥	118,750
Available-for-sale financial assets		10,185		71,510		29,606
Total impairment charges on financial assets	¥	136,808	¥	212,967	¥	148,356

(1) Cross-reference to provision for loan losses in the table of reconciliation of allowance for loan losses in Note 10 “Loans and Advances.”

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General and Administrative Expenses

12 Months Ended

Mar. 31, 2018

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General and Administrative Expenses

33 GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Personnel expenses	¥	864,396	¥	833,755	¥	785,547
Depreciation and amortization		171,043		172,496		157,672
Rent and lease expenses		117,400		115,425		117,482
Building and maintenance expenses		11,167		10,657		13,966
Supplies expenses		16,902		16,694		16,628
Communication expenses		38,171		37,250		36,634
Publicity and advertising expenses		80,464		79,570		79,453
Taxes and dues		83,976		85,967		76,695
Outsourcing expenses		96,733		96,063		91,837
Premiums for deposit insurance		37,938		38,180		36,175
Office equipment expenses		54,708		49,127		47,621
Others		240,223		216,951		246,553
Total general and administrative expenses	¥	1,813,121	¥	1,752,135	¥	1,706,263

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Other Expenses

12 Months Ended

Mar. 31, 2018

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Other Expenses

34 OTHER EXPENSES

Other expenses for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Cost of operating leases	¥	144,708	¥	126,320	¥	95,440
Cost related to disposal of assets leased		310,460		140,255		140,083
Cost related to IT solution services and IT systems		92,975		92,247		90,563
Provision for interest repayment		49,879		11,439		141,024
Losses on disposal of property, plant and equipment, and other intangible assets		4,913		6,041		4,302
Impairment losses of property, plant and equipment		27,816		6,396		4,237
Impairment losses of intangible assets		35,666		74,788		1,278
Losses on sale of investments in subsidiaries and associates		28,250		—		24
Impairment losses of investments in associates and joint ventures		19,851		14,941		17,306
Others		78,247		59,332		44,706
Total other expenses	¥	792,765	¥	531,759	¥	538,963

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Income Tax Expense

12 Months Ended

Mar. 31, 2018

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Income Tax Expense

35 INCOME TAX EXPENSE

The detail of income tax expense for the fiscal years ended March 31, 2018, 2017 and 2016 was as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Current tax:
Charge for period	¥	228,342		¥	260,234		¥	247,046
Deferred tax:
Origination and reversal of temporary differences		66,875			12,391			130,072
Change in the write-down of deferred tax assets on the current fiscal year income tax expense		(63,194	)		(132,859	)		(34,000	)
Changes in tax rates and others(1)		(2,645	)		—			29,760
Total deferred tax expense (benefit)		1,036			(120,468	)		125,832
Total income tax expense	¥	229,378		¥	139,766		¥	372,878

(1) The amount for the fiscal year ended March 31, 2018 mainly includes the effect of change in U.S. federal income tax rate which was changed from 36% to 21% effective January 1, 2018. The amount for the fiscal year ended March 31, 2016 presents the effect of changes in Japanese corporation tax rates. See Note 22 “Deferred Income Tax” for further information on changes in Japanese corporation tax rates.

The following table shows the reconciliations of the effective income tax rates for the fiscal years ended March 31, 2018, 2017 and 2016.

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions, except percentages)
Profit before tax	¥	1,118,976		¥	880,352		¥	1,325,700
Income tax expense		229,378			139,766			372,878
Effective income tax rate		20.5	%		15.9	%		28.1	%
Effective statutory tax rate in Japan(1)		30.9	%		30.9	%		33.1	%
Effect of the change in the write-down of deferred tax assets on the current fiscal year income tax expense(2)		(5.7	%)		(15.1	%)		(2.6	%)
Non-Japanese earnings		(3.6	%)		(1.9	%)		(2.7	%)
Tax impact of share of post-tax profit in associates and joint ventures		(1.4	%)		(1.0	%)		(0.8	%)
Tax impact of impairment losses of goodwill		0.8	%		2.6	%		—
Nontaxable dividends received		(0.8	%)		(1.0	%)		(0.5	%)
Tax impact of impairment losses and reversal of impairment losses for investments in associates and joint ventures—net		0.3	%		0.5	%		0.3	%
Gains on step acquisition of subsidiaries and associates and joint ventures which were not taxable		—			(0.7	%)		—
Changes in Japanese corporation tax rates		—			—			2.2	%
Others—net		—			1.6	%		(0.9	%)
Effective income tax rate		20.5	%		15.9	%		28.1	%

(1) The effective statutory tax rate in Japan for the fiscal years ended March 31, 2018 and 2017 is the aggregate of the effective corporation tax rate of 23.4%, the effective local corporation tax rate of 1.0%, the effective inhabitant tax rate of 3.8% and the effective enterprise tax rate of 2.7%, which is payable by corporate entities on taxable profits under the tax laws in Japan. The effective corporation tax rate, the effective inhabitant tax rate and the effective enterprise tax rate were changed from 22.5%, 3.7% and 5.9%, respectively, which were applied to the fiscal year ended March 31, 2016.

(2) The effect for the fiscal year ended March 31, 2017 was primarily due to the reversal of the write-down of deferred tax assets at March 31, 2017 in accordance with the application to the Commissioner of the National Tax Agency for permission to adopt the consolidated corporate-tax system in Japan from the fiscal year beginning April 1, 2017. For further information, see Note 22 “Deferred Income Tax.”

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Earnings Per Share

12 Months Ended

Mar. 31, 2018

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Earnings Per Share

36 EARNINGS PER SHARE

The following table shows the income and share data used in the basic and diluted earnings per share calculations for the fiscal years ended March 31, 2018, 2017 and 2016.

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions, except number of shares and per share data)
Basic:
Profit attributable to shareholders of the Company	¥	759,998		¥	627,870		¥	843,920
Weighted average number of common stock in issue (in thousands of shares)		1,410,442			1,369,231			1,367,229
Basic earnings per share	¥	538.84		¥	458.56		¥	617.25
Diluted:
Profit attributable to the common shareholders of the Company	¥	759,998		¥	627,870		¥	843,920
Impact of dilutive potential ordinary shares issued by subsidiaries		(10	)		(11	)		(1	)
Net profit used to determine diluted earnings per share	¥	759,988		¥	627,859		¥	843,919
Weighted average number of common stock in issue (in thousands of shares)		1,410,442			1,369,231			1,367,229
Adjustments for stock options (in thousands of shares)		1,052			1,093			928
Weighted average number of common stock for diluted earnings per share (in thousands of shares)		1,411,494			1,370,324			1,368,157
Diluted earnings per share	¥	538.43		¥	458.18		¥	616.83

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Transfers of Financial Assets

12 Months Ended

Mar. 31, 2018

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Transfers of Financial Assets

37 TRANSFERS OF FINANCIAL ASSETS

In the normal course of business, the SMBC Group transfers financial assets mainly through repurchase agreements, securities lending transactions and securitizations. Depending on the nature of the transactions, the transfers may either result in financial assets being derecognized or continuing to be recognized on the consolidated statement of financial position.

Full derecognition occurs when the SMBC Group transfers its contractual rights to receive cash flows from financial assets, or retains the contractual rights to receive the cash flows, but assumes a contractual obligation to pay the cash flows to another party, and transfers substantially all the risks and rewards of ownership, including credit risk, prepayment risk and interest rate risk. Derecognition does not occur when the SMBC Group retains substantially all the risks and rewards of ownership of the financial assets, where the contractual rights to receive cash flows from the financial assets are transferred, or the rights are retained but obligations to pay the cash flows are assumed.

The following tables show the carrying amounts and fair values of transferred financial assets that did not qualify for derecognition and their associated financial liabilities at March 31, 2018 and 2017:

	At March 31, 2018
	Repurchase agreements and securities lending transactions		Loans and advances
			Residential mortgages		Corporate loans		Others(1)
	(In millions)
Carrying amount of assets	¥	7,730,783	¥	1,432,966	¥	857,690	¥	49,151
Carrying amount of associated liabilities		7,271,817		1,154,831		853,207		40,584
For those liabilities that have recourse only to the transferred assets:
Fair value of assets	¥	—	¥	1,615,329	¥	861,824	¥	48,254
Fair value of associated liabilities		—		1,207,899		853,551		40,870
Net position	¥	—	¥	407,430	¥	8,273	¥	7,384
	At March 31, 2017
	Repurchase agreements and securities lending transactions		Loans and advances
			Residential mortgages		Corporate loans		Others
	(In millions)
Carrying amount of assets	¥	5,169,540	¥	1,353,938	¥	1,063,092	¥	59,562
Carrying amount of associated liabilities		5,116,003		1,079,329		1,060,812		49,804
For those liabilities that have recourse only to the transferred assets:
Fair value of assets	¥	—	¥	1,535,929	¥	1,067,234	¥	59,169
Fair value of associated liabilities		—		1,138,815		1,061,389		50,271
Net position	¥	—	¥	397,114	¥	5,845	¥	8,898

(1) Others include loans and advances reclassified as assets held for sale and liabilities directly associated with the assets held for sale related to SMFL. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

Repurchase Agreements and Securities Lending Transactions

The SMBC Group lends or sells securities under agreements to repurchase them at a predetermined price on a future date. Since substantially all the risks and rewards of the securities are retained by the SMBC Group, the securities remain on the consolidated statement of financial position and their associated financial liabilities are recorded. The recourse of the counterparties to their associated financial liabilities is not limited to the underlying securities.

Loans and Advances

The SMBC Group transfers its loans and advances, including residential mortgages and corporate loans, mainly to bankruptcy-remote structured entities for securitizations whereby the structured entities issue debt securities to the SMBC Group for subordinated tranches and to investors for senior tranches. The investors have only recourse to the underlying financial assets due to their bankruptcy-remoteness. Since the SMBC Group retains substantially all the risks and rewards of ownership, the transferred financial assets do not qualify for derecognition. The SMBC Group therefore continues to recognize these transferred financial assets as loans and advances, and recognizes their associated financial liabilities arising from issuing debt securities to investors on the consolidated statement of financial position.

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Assets Pledged and Received as Collateral

12 Months Ended

Mar. 31, 2018

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Assets Pledged and Received as Collateral

38 ASSETS PLEDGED AND RECEIVED AS COLLATERAL

Assets Pledged

The carrying amounts of assets pledged as collateral at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018		2017
	(In millions)
Cash and deposits with banks(1)	¥	32,010	¥	87,670
Trading assets		2,423,002		2,426,665
Financial assets at fair value through profit or loss		1,518,748		1,570,904
Held-to-maturity investments		365,450		1,168,111
Available-for-sale financial assets		10,648,468		8,128,082
Loans and advances(1)		11,019,253		10,058,951
Other assets(1)		1,825,987		1,308,136
Total	¥	27,832,918	¥	24,748,519

(1) Cash and deposits with banks, loans and advances, and other assets include those at SMFL, which are reclassified as assets held for sale. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

The SMBC Group pledges assets as collateral to secure payables under repurchase agreements, securities lending transactions and securitizations, borrowings or for cash settlements, margins on derivative transactions and certain other purposes. These transactions are conducted under terms that are usual and customary to standard contracts.

Loaned securities for which the borrowers have the right to sell or repledge were ¥7,731,243 million and ¥5,201,373 million at March 31, 2018 and 2017, respectively.

For the reserve funds with the Bank of Japan and other reserve deposits for foreign offices maintained by the SMBC Group, refer to Note 5 “Cash and Deposits with Banks.”

Assets Received as Collateral

Under certain transactions, including reverse repurchase agreements, securities borrowing, and discounting of bills, the SMBC Group is permitted to resell or repledge the collateral held in the absence of default by the owner of the collateral. These transactions are conducted under terms that are usual and customary for standard contracts. The fair values of securities and bills accepted as collateral were ¥12,218,264 million and ¥13,673,077 million at March 31, 2018 and 2017, respectively. As to the securities received in the reverse repurchase agreements and securities borrowing transactions, the SMBC Group has the obligation to return equivalent securities upon completion of the transactions. The fair value of securities sold or repledged to others was ¥8,839,133 million and ¥7,787,059 million at March 31, 2018 and 2017, respectively.

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Share-based Payment

12 Months Ended

Mar. 31, 2018

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Share-based Payment

39 SHARE-BASED PAYMENT

Stock Option Plans

SMFG had introduced compensation-type stock options to directors, corporate auditors, and executive officers of SMFG and SMBC (“SMFG Stock Acquisition Rights”), which served as an incentive for them to further contribute to the equity appreciation and achieve better corporate performance through sharing the benefits and risks of the share price performance with the shareholders. The following table provides an overview of the significant terms and conditions of the stock option plan.

	Title of grantees	Exercise period	Requisite service period	Method of settlement
SMFG Stock Acquisition Rights	Directors, corporate auditors and executive officers of SMFG and SMBC	Not exceeding 30 years from the date of allocation of stock acquisition rights(1)	One year from the date of the ordinary general meeting of shareholders of SMFG to the closing of the next ordinary general meeting of shareholders of SMFG	Common stock of SMFG

(1) A stock acquisition rights holder can exercise the rights from the day they are relieved of their positions either as a director, a corporate auditor or an executive officer (“Start of Exercise Date”) to 20 years from the Start of Exercise Date.

The number and the weighted average exercise prices of stock options for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended March 31,
	2018					2017
	Number of options(1)			Weighted average  exercise price		Number of options(1)			Weighted average  exercise price
Outstanding at beginning of period		1,180,000		¥	1		984,400		¥	1
Granted		—			—		201,200			1
Exercised		(174,700	)		1		(4,400	)		1
Forfeited or expired		(2,300	)		1		(1,200	)		1
Outstanding at end of period		1,003,000		¥	1		1,180,000		¥	1
Exercisable at end of period		463,100		¥	1		421,900		¥	1

(1) Number of options is the number of SMFG’s common stock granted by the exercise of stock options.

The weighted average stock price at the date of exercise was ¥4,245 and ¥4,400 for the fiscal years ended March 31, 2018 and 2017, respectively.

Summarized information about stock options outstanding at March 31, 2018 and 2017 was as follows:

			At March 31,
			2018				2017
	Exercise price		Number of options		Remaining contractual lives in years		Number of options		Remaining contractual lives in years
SMFG Stock Acquisition Rights	¥	1		1,003,000		25.3		1,180,000		26.3

The amounts of stock options recognized as expenses were measured based on the fair value of stock options granted, which were ¥135 million and ¥581million for the fiscal years ended March 31, 2018 and 2017, respectively, and included in “General and administrative expenses” in the consolidated income statement. The fair value of stock options was measured using Black-Scholes option-pricing model.

The following table represents the fair value of stock options and the assumptions used to measure the fair value for the fiscal year ended March 31, 2017. During the fiscal year ended March 31, 2018, there were no issuance of new stock options since SMFG and SMBC resolved to discontinue the issuance of new stock options.

	For the fiscal year ended March 31, 2017
Fair value at measurement date	¥	2,811
Stock price	¥	3,362
Exercise price	¥	1
Expected volatility(1)		32.20	%
Expected remaining lives (in years)(2)		4
Expected dividends per share(3)	¥	150
Risk free interest rate(4)		0.17	%

(1) Calculated based on the actual stock prices during the 4 years August 16, 2012 to August 15, 2016 for the fiscal year ended March 31, 2017.

(2) The average expected remaining life could not be estimated rationally due to insufficient amount of data. Therefore, it was estimated based on average remaining service life of directors of SMFG and SMBC.

(3) Expected dividends are based on the estimated dividends to be paid in next twelve months from the date of grant.

(4) Japanese government bond yield corresponding to the average expected remaining life.

Compensation Plans Utilizing Restricted Stock

On July 10, 2017, the SMFG compensation committee resolved to revise the executive compensation policy and to introduce new stock compensation plans that utilize restricted stock.

The plans consist of Stock Compensation Plan I (“Plan I”), which determines remuneration primarily based on the medium-term performance, Stock Compensation Plan II (“Plan II”), which determines remuneration primarily based on the annual performance and Stock Compensation Plan III (“Plan III”), which determines remuneration primarily based on corporate title.

Plan I (medium-term performance share plan) has an evaluation period of three years starting from the fiscal year ended March 31, 2018, corresponding with the medium-term management plan. Executives are initially allotted shares of restricted stock equivalent to the monetary amount determined based on the executive’s corporate title. After the completion of the evaluation period, the compensation committee will review the progress of the medium-term management plan, performance of SMFG’s common stock, and results of customer satisfaction surveys and other factors, to determine the final amount to be released from transfer restrictions. In case the final amount falls below the initial amount, SMFG will retrieve all or part of the allotted shares at no cost.

Under Plan II (annual performance share plan), executives are allotted shares of restricted stock equivalent to a certain portion of the monetary amount determined based on the annual performance of SMFG and SMBC, as well as on the individual performance of the executives reviewed both from short-term and medium-to-long-termperspectives. The remainder will be paid to the executives as a cash bonus. Transfer restrictions on these shares are released evenly over the three-year period following the year of allotment.

Under Plan III (promotion reward plan), executives are allotted shares of restricted stock equivalent to pre-determined compensation amounts per title, reflecting the increased responsibilities derived from promotions. Restrictions shall apply to the shares until the earlier of 30 years from allotment or when the executive retires from office.

The eligible executives for the plans are directors (excluding outside directors), corporate executive officers and executive officers of SMFG and directors (excluding outside directors), executive officers and corporate auditors (excluding outside corporate auditors), etc. of SMBC, who are designated by the SMFG compensation committee or by SMBC and residing and serving in Japan. However, members of the SMFG audit committee and SMBC corporate auditors will only be eligible for Plan III.

As part of the new policy, SMFG and SMBC introduced provisions for forfeiture and claw-back of vested stock under the plans in order to restrain excessive risk-taking and foster a prudent risk culture expected of a financial institution.

The number of restricted shares for the fiscal year ended March 31, 2018 and the fair value of restricted shares at the measurement date were as follows:

	For the fiscal year ended March 31, 2018
Outstanding at beginning of period		—
Allotted		387,765
Released		—
Forfeited		—
Outstanding at end of period		387,765
Fair value at measurement date	¥	4,372

The fair value of restricted shares is based on the market price of SMFG common stock. If any granted conditions exist, the terms and conditions upon which the shares were granted, are taken into account when estimating both the number of shares expected to vest and the fair value of the shares granted. The amount of restricted shares recognized as expenses was measured based on the fair value of the restricted shares granted, which was ¥803 million for the fiscal year ended March 31, 2018 and included in “General and administrative expenses” in the consolidated income statement.

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Dividends Per Share

12 Months Ended

Mar. 31, 2018

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Dividends Per Share

40 DIVIDENDS PER SHARE

The dividends recognized by the SMBC Group for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	Dividends per share		Aggregate amount
	(In yen)		(In millions)
For the fiscal year ended March 31, 2018:
Common stock	¥	155	¥	218,596
For the fiscal year ended March 31, 2017:
Common stock	¥	150	¥	205,083
For the fiscal year ended March 31, 2016:
Common stock	¥	155	¥	211,922

The Company proposed to the shareholders the distribution of a dividend of ¥90 per share of common stock totaling ¥126,950 million in respect of the fiscal year ended March 31, 2018. The dividend is subject to the approval at the general meeting of shareholders on June 28, 2018. The consolidated financial statements for the fiscal year ended March 31, 2018 do not include this dividend.

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Contingency and Capital Commitments

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Contingency and Capital Commitments

41 CONTINGENCY AND CAPITAL COMMITMENTS

Legal Proceedings

The SMBC Group is engaged in various legal proceedings in Japan and a number of overseas jurisdictions, involving claims by and against it, which arise in the normal course of business. The SMBC Group does not expect that the outcome of these proceedings will have a significant adverse effect on the consolidated financial statements of the SMBC Group. The SMBC Group has recorded adequate provisions with respect to litigation arising out of normal business operations. The SMBC Group has not disclosed any contingent liability associated with these legal actions because it cannot reliably be estimated.

Capital Commitments

At March 31, 2018 and 2017, the SMBC Group had ¥2,626 million and ¥2,773,096 million, respectively, of contractual commitments to acquire property, plant and equipment. In addition, the SMBC Group had ¥383 million and ¥317 million of contractual commitments to acquire intangible assets, such as software at March 31, 2018 and 2017, respectively. The SMBC Group’s management is confident that future net revenues and funding will be sufficient to cover these commitments.

Loan Commitments

Loan commitment contracts on overdrafts and loans are agreements to lend up to a prescribed amount to customers, as long as there is no violation of any condition established in the contracts. Since many of these loan commitments are expected to expire without being drawn down, the total amount of unused commitments does not necessarily represent an actual future cash flow requirement. Many of these loan commitments include clauses under which the SMBC Group can reject an application from customers or reduce the contract amounts in cases where economic conditions change, the SMBC Group needs to secure claims, or some other significant event occurs.

Financial Guarantees and Other Credit-related Contingent Liabilities

Financial guarantees are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of the debt instrument. Other credit-related contingent liabilities include performance bonds, which are contracts that provide compensation if another party fails to perform the contractual obligation.

The table below shows the nominal amounts of undrawn loan commitments, and financial guarantees and other credit-related contingent liabilities at March 31, 2018 and 2017.

	At March 31,
	2018		2017
	(In millions)
Loan commitments	¥	60,107,128	¥	62,357,210
Financial guarantees and other credit-related contingent liabilities		8,426,245		7,924,711
Total	¥	68,533,373	¥	70,281,921

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Analysis of Financial Assets and Liabilities by Measurement Basis

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Analysis of Financial Assets and Liabilities by Measurement Basis

42 ANALYSIS OF FINANCIAL ASSETS AND LIABILITIES BY MEASUREMENT BASIS

After initial recognition, financial assets and liabilities are measured either at fair value or amortized cost, within the measurement categories as defined in IAS 39. The summary of significant accounting policies in Note 2 describes how these categories of financial assets and liabilities are measured, and how income and expenses are recognized either in profit or loss, or in other comprehensive income. The following tables present the carrying amounts of the financial assets and liabilities, by category and by line item, of the consolidated statement of financial position.

	At March 31, 2018
	Financial assets and liabilities at fair value through profit or loss			Held-to-maturity investments		Loans and receivables		Available-for-sale financial assets		Financial liabilities measured at amortized cost		Total
	(In millions)
Financial assets:
Cash and deposits with banks(1)	¥	4,773		¥	—	¥	54,691,296	¥	—	¥	—	¥	54,696,069
Call loans and bills bought		—			—		1,881,880		—		—		1,881,880
Reverse repurchase agreements and cash collateral on securities borrowed		—			—		8,491,703		—		—		8,491,703
Trading assets		3,169,123			—		—		—		—		3,169,123
Derivative financial instruments		3,885,271			—		—		—		—		3,885,271
Financial assets at fair value through profit or loss		1,547,672			—		—		—		—		1,547,672
Investment securities(1)		2,588			372,459		—		20,120,028		—		20,495,075
Loans and advances(1)		3,169			—		85,125,901		—		—		85,129,070
Other financial assets(2)		—			—		3,598,642		—		—		3,598,642
Financial assets included in assets held for sale		1,693			—		3,098,196		108,882		—		3,208,771
Total	¥	8,614,289		¥	372,459	¥	156,887,618	¥	20,228,910	¥	—	¥	186,103,276
Financial liabilities:
Deposits(1)	¥	13,929		¥	—	¥	—	¥	—	¥	128,447,598	¥	128,461,527
Call money and bills sold		—			—		—		—		1,190,929		1,190,929
Repurchase agreements and cash collateral on securities lent		—			—		—		—		12,022,593		12,022,593
Trading liabilities		2,143,899			—		—		—		—		2,143,899
Derivative financial instruments		3,498,016			—		—		—		—		3,498,016
Borrowings(1)		1,198			—		—		—		10,651,283		10,652,481
Debt securities in issue(1)		(7,635	)		—		—		—		10,576,752		10,569,117
Other financial liabilities(2)		—			—		—		—		6,691,042		6,691,042
Financial liabilities included in liabilities directly associated with the assets held for sale		5,971			—		—		—		3,371,556		3,377,527
Total	¥	5,655,378		¥	—	¥	—	¥	—	¥	172,951,753	¥	178,607,131

	At March 31, 2017
	Financial assets and liabilities at fair value through profit or loss		Held-to-maturity investments		Loans and receivables		Available-for-sale financial assets		Financial liabilities measured at amortized cost		Total
	(In millions)
Financial assets:
Cash and deposits with banks(1)	¥	5,511	¥	—	¥	47,324,644	¥	—	¥	—	¥	47,330,155
Call loans and bills bought		—		—		1,872,209		—		—		1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed		—		—		8,924,385		—		—		8,924,385
Trading assets		3,776,671		—		—		—		—		3,776,671
Derivative financial instruments		4,063,982		—		—		—		—		4,063,982
Financial assets at fair value through profit or loss		1,599,093		—		—		—		—		1,599,093
Investment securities(1)		1,251		1,173,419		—		17,899,267		—		19,073,937
Loans and advances(1)		3,474		—		95,270,371		—		—		95,273,845
Other financial assets(2)		—		—		3,424,591		—		—		3,424,591
Total	¥	9,449,982	¥	1,173,419	¥	156,816,200	¥	17,899,267	¥	—	¥	185,338,868
Financial liabilities:
Deposits(1)	¥	20,365	¥	—	¥	—	¥	—	¥	130,274,925	¥	130,295,290
Call money and bills sold		—		—		—		—		2,088,020		2,088,020
Repurchase agreements and cash collateral on securities lent		—		—		—		—		9,424,506		9,424,506
Trading liabilities		2,071,584		—		—		—		—		2,071,584
Derivative financial instruments		3,889,694		—		—		—		—		3,889,694
Borrowings(1)		654		—		—		—		12,245,289		12,245,943
Debt securities in issue(1)		2,232		—		—		—		11,163,391		11,165,623
Other financial liabilities(2)		—		—		—		—		7,201,137		7,201,137
Total	¥	5,984,529	¥	—	¥	—	¥	—	¥	172,397,268	¥	178,381,797

(1) Embedded derivatives, which are separately accounted for, but presented together with the host contract in the consolidated statement of financial position, are disclosed in this table within the category of “Financial assets and liabilities at fair value through profit or loss.” Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the line of the host contract.

(2) Other financial assets and liabilities comprise of those included in other assets and liabilities, which meet the definition of a financial asset and liability.

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Fair Value of Financial Assets and Liabilities

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Fair Value of Financial Assets and Liabilities

43 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values stated below represent the best estimates based on a range of methods and assumptions. In determining the fair value of financial assets and liabilities, the SMBC Group gives the highest priority to a quoted market price in an active market. If such prices are not available, it establishes fair value using valuation techniques. The valuation techniques, if used, make maximum use of observable inputs, and rely as little as possible on unobservable inputs.

Financial Assets and Liabilities Carried at Fair Value

Valuation Process

The SMBC Group undertakes a valuation process based on its valuation control framework, which governs internal control standards, methodologies and procedures to ensure that the fair values are determined or validated independently of the front office.

The SMBC Group uses valuation techniques commonly used by market participants to price the financial instruments and they have been demonstrated to provide reliable estimates of prices obtained in actual market transactions. The valuation techniques include the DCF method, option pricing models and reference to the current fair value of another instrument that is substantially the same. Key adjustments, such as liquidity risk and credit risk adjustments are also taken into account to derive fair values.

Where valuation techniques are used to determine fair values, they are validated and reviewed. In principal subsidiaries, their risk management departments, which are independent from the business units, review significant valuation methodologies at least once a year, and recalibrate model parameters and inputs by comparing fair values derived from the valuation techniques to the external market data such as broker quotes. Where the data obtained from third-party sources such as brokers and pricing service providers are utilized in determining fair values, those departments also examine those data, taking into account the consistency among the different sources, the aging of the data and other factors. In addition, accounting departments in those principal subsidiaries are responsible for ensuring that the accounting policies and procedures to determine fair values are in compliance with relevant accounting standards.

Fair Value Hierarchy

Financial assets and liabilities measured at fair value are classified into one of three levels within a fair value hierarchy based on the inputs used in the fair value measurement. The three levels of the fair value hierarchy are as follows:

• quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date (Level 1);

• inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (Level 2); and

• significant unobservable inputs for the asset or liability (Level 3).

The following tables present the carrying amounts of financial assets and liabilities carried at fair value based on the three levels of the fair value hierarchy at March 31, 2018 and 2017.

	At March 31, 2018
	Level 1(1)		Level 2(1)		Level 3		Total
	(In millions)
Financial assets:
Trading assets:
Debt instruments	¥	2,424,460	¥	416,688	¥	—	¥	2,841,148
Equity instruments		307,942		20,033		—		327,975
Total trading assets		2,732,402		436,721		—		3,169,123
Derivative financial instruments:
Interest rate derivatives(2)		38,760		2,033,894		—		2,072,654
Currency derivatives(2)		—		1,724,387		14		1,724,401
Equity derivatives		48,154		21,310		1,880		71,344
Commodity derivatives		402		6,114		—		6,516
Credit derivatives		—		7,382		4,667		12,049
Total derivative financial instruments		87,316		3,793,087		6,561		3,886,964
Financial assets at fair value through profit or loss:
Debt instruments		—		1,518,778		10,143		1,528,921
Equity instruments		541		153		18,057		18,751
Total financial assets at fair value through  profit or loss		541		1,518,931		28,200		1,547,672
Available-for-sale financial assets:
Japanese government bonds		7,685,303		—		—		7,685,303
U.S. Treasury and other U.S. government agency bonds		3,246,646		—		—		3,246,646
Other debt instruments		700,500		2,650,103		154		3,350,757
Equity instruments(2)		4,307,274		797,166		844,352		5,948,792
Total available-for-sale financial assets		15,939,723		3,447,269		844,506		20,231,498
Others(3)		—		7,942		—		7,942
Total	¥	18,759,982	¥	9,203,950	¥	879,267	¥	28,843,199
Financial liabilities:
Trading liabilities:
Debt instruments	¥	1,948,602	¥	60,109	¥	—	¥	2,008,711
Equity instruments		33,174		102,014		—		135,188
Total trading liabilities		1,981,776		162,123		—		2,143,899
Derivative financial instruments:
Interest rate derivatives(2)		30,760		1,947,673		—		1,978,433
Currency derivatives(2)		19		1,406,759		14		1,406,792
Equity derivatives		78,088		27,261		—		105,349
Commodity derivatives		464		4,484		—		4,948
Credit derivatives		—		8,043		422		8,465
Total derivative financial instruments		109,331		3,394,220		436		3,503,987
Others(3)		—		6,659		833		7,492
Total	¥	2,091,107	¥	3,563,002	¥	1,269	¥	5,655,378

	At March 31, 2017
	Level 1(1)		Level 2(1)		Level 3			Total
	(In millions)
Financial assets:
Trading assets:
Debt instruments	¥	2,734,340	¥	605,588	¥	—		¥	3,339,928
Equity instruments		421,477		15,266		—			436,743
Total trading assets		3,155,817		620,854		—			3,776,671
Derivative financial instruments:
Interest rate derivatives		27,121		2,288,114		2			2,315,237
Currency derivatives		—		1,666,305		22			1,666,327
Equity derivatives		35,400		23,668		1,327			60,395
Commodity derivatives		489		11,190		—			11,679
Credit derivatives		—		7,613		2,731			10,344
Total derivative financial instruments		63,010		3,996,890		4,082			4,063,982
Financial assets at fair value through profit or loss:
Debt instruments		—		1,570,904		12,053			1,582,957
Equity instruments		1,667		183		14,286			16,136
Total financial assets at fair value through  profit or loss		1,667		1,571,087		26,339			1,599,093
Available-for-sale financial assets:
Japanese government bonds		5,722,674		—		—			5,722,674
U.S. Treasury and other U.S. government agency bonds		3,468,263		—		—			3,468,263
Other debt instruments		466,901		2,465,406		526			2,932,833
Equity instruments		4,075,944		864,552		836,252			5,776,748
Total available-for-sale financial assets		13,733,782		3,329,958		836,778			17,900,518
Others(3)		—		8,985		—			8,985
Total	¥	16,954,276	¥	9,527,774	¥	867,199		¥	27,349,249
Financial liabilities:
Trading liabilities:
Debt instruments	¥	1,979,564	¥	58,766	¥	—		¥	2,038,330
Equity instruments		18,848		14,406		—			33,254
Total trading liabilities		1,998,412		73,172		—			2,071,584
Derivative financial instruments:
Interest rate derivatives		17,903		2,187,701		—			2,205,604
Currency derivatives		19		1,588,004		21			1,588,044
Equity derivatives		44,593		32,604		—			77,197
Commodity derivatives		513		9,978		—			10,491
Credit derivatives		—		8,358		—			8,358
Total derivative financial instruments		63,028		3,826,645		21			3,889,694
Others(3)		—		23,554		(303	)		23,251
Total	¥	2,061,440	¥	3,923,371	¥	(282	)	¥	5,984,529

(1) Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the period. There were no significant transfers between Level 1 and Level 2 for the fiscal years ended March 31, 2018 and 2017.

(2) Interest rate derivatives and currency derivatives classified as derivative financial instruments (financial assets) include those at SMFL, which are reclassified as assets held for sale, of ¥533 million and ¥1,160 million, respectively. These derivative financial instruments are categorized within Level 2. Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale, of which ¥56,447 million, ¥5,225 million and ¥47,210 million are categorized within Level 1, Level 2 and Level 3, respectively. Interest rate derivatives and currency derivatives classified as derivative financial instruments (financial liabilities) include those at SMFL, which are reclassified as liabilities directly associated with the assets held for sale, of ¥5,401 million and ¥570 million, respectively. These derivative financial instruments are categorized within Level 2. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

(3) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others, while the remaining are presented within the same category as the host contract. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract. The separated embedded derivatives are measured at fair value using the valuation techniques described in “Derivative financial instruments” below.

The following tables present reconciliations from the beginning to the ending balances for financial assets and liabilities carried at fair value and categorized within Level 3 of the fair value hierarchy for the fiscal years ended March 31, 2018 and 2017.

	At April 1, 2017		Total gains (losses)						Purchases		Sales			Settlement(1)			Transfers into Level 3(2)			Transfers out of Level 3(2)			At March 31, 2018			Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at March 31, 2018
			Included in profit or loss			Included in other comprehensive income
	(In millions)
Derivative financial instruments—net:
Interest rate derivatives—net	¥	2	¥	(45	)	¥	—		¥	43	¥	—		¥	—		¥	—		¥	—		¥	—		¥	—
Currency derivatives—net		1		(1	)		—			—		—			—			—			—			—			(1	)
Equity derivatives—net		1,327		1,106			—			474		(1,027	)		—			—			—			1,880			1,499
Credit derivatives—net		2,731		8,103			(158	)		—		—			(6,456	)		25			—			4,245			8,103
Total derivative financial instruments—net		4,061		9,163			(158	)		517		(1,027	)		(6,456	)		25			—			6,125			9,601
Financial assets at fair value through profit or loss:
Debt instruments		12,053		(1,731	)		—			—		—			(149	)		—			(30	)		10,143			(1,731	)
Equity instruments		14,286		378			—			4,915		(648	)		(102	)		—			(772	)		18,057			109
Total financial assets at fair value through profit or loss		26,339		(1,353	)		—			4,915		(648	)		(251	)		—			(802	)		28,200			(1,622	)
Available-for-sale financial assets:
Debt instruments		526		1,600			(13	)		—		(1,613	)		(346	)		—			—			154			(13	)
Equity instruments(3)		836,252		(3,612	)		46,367			68,241		(8,480	)		(73,897	)		624			(21,143	)		844,352			(6,380	)
Total available-for-sale financial assets		836,778		(2,012	)		46,354			68,241		(10,093	)		(74,243	)		624			(21,143	)		844,506			(6,393	)
Others(4)—liabilities:		303		(812	)		—			—		—			—			(324	)		—			(833	)		(856	)
Total	¥	867,481	¥	4,986		¥	46,196		¥	73,673	¥	(11,768	)	¥	(80,950	)	¥	325		¥	(21,945	)	¥	877,998		¥	730

	At April 1, 2016			Total gains (losses)						Purchases		Sales			Settlement(1)			Transfers into Level 3(2)		Transfers out of Level 3(2)			At March 31, 2017		Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at March 31, 2017
				Included in profit or loss			Included in other comprehensive income
	(In millions)
Derivative financial instruments—net:
Interest rate derivatives—net	¥	—		¥	(163	)	¥	—		¥	165	¥	—		¥	—		¥	—	¥	—		¥	2	¥	(5	)
Currency derivatives—net		5			(21	)		—			—		—			—			—		17			1		(3	)
Equity derivatives—net		(13	)		931			—			356		—			—			—		53			1,327		973
Credit derivatives—net		(3,134	)		12,821			221			—		—			(7,177	)		—		—			2,731		12,820
Total derivative financial instruments—net		(3,142	)		13,568			221			521		—			(7,177	)		—		70			4,061		13,785
Financial assets at fair value through profit or loss:
Debt instruments		11,667			401			—			180		—			(195	)		—		—			12,053		401
Equity instruments		27,594			174			—			4,531		(1,430	)		(16,000	)		—		(583	)		14,286		(404	)
Total financial assets at fair value through profit or loss		39,261			575			—			4,711		(1,430	)		(16,195	)		—		(583	)		26,339		(3	)
Available-for-sale financial assets:
Debt instruments		2,022			(1,258	)		(30	)		269		—			(477	)		—		—			526		(1,181	)
Equity instruments		789,326			(20,578	)		51,027			88,686		(8,488	)		(63,768	)		306		(259	)		836,252		(25,746	)
Total available-for-sale financial assets		791,348			(21,836	)		50,997			88,955		(8,488	)		(64,245	)		306		(259	)		836,778		(26,927	)
Others(4)—liabilities:		(1,240	)		1,543			—			—		—			—			—		—			303		(202	)
Total	¥	826,227		¥	(6,150	)	¥	51,218		¥	94,187	¥	(9,918	)	¥	(87,617	)	¥	306	¥	(772	)	¥	867,481	¥	(13,347	)

(1) Settlements for equity instruments include redemption of preferred stocks, receipt of cash distributions which represent a return of investment, and reclassification from available-for-sale equity instruments to investments in associates and joint ventures as a result of applying the equity method.

(2) Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the period. For the fiscal year ended March 31, 2018, transfers out of Level 3 amounted to ¥21,945 million, primarily due to an increase in observability of certain private equity investments.

(3) Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale.

(4) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract.

The following table presents total gains or losses included in profit or loss for the Level 3 financial assets and liabilities, and changes in unrealized gains or losses included in profit or loss related to those financial assets and liabilities held at March 31, 2018 and 2017 by line item of the consolidated income statement.

	Total gains (losses) included in profit or loss for the fiscal year ended March 31,						Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at March 31,
	2018			2017			2018			2017
	(In millions)
Net interest income	¥	1,273		¥	524		¥	762		¥	322
Net trading income		7,064			14,474			7,970			13,148
Net income (loss) from financial assets at fair value through profit or loss		(1,353	)		575			(1,622	)		(3	)
Net investment income		4,399			7,394			—			—
Impairment charges on financial assets		(6,397	)		(29,117	)		(6,380	)		(26,814	)
Total	¥	4,986		¥	(6,150	)	¥	730		¥	(13,347	)

Valuation Techniques

Financial instruments which are classified as trading assets and liabilities, derivative financial instruments, financial assets at fair value through profit or loss, and available-for-sale financial assets are measured at fair value in the consolidated statement of financial position. These instruments are measured at fair value using a quoted market price, if they are traded in an active market, or, for others, using the fair value measurement techniques as discussed below.

Trading assets and trading liabilities

Debt and equity instruments traded in an active market are measured at fair value using a quoted market price in such a market and they are categorized within Level 1. If a quoted market price is not available, they are measured by using a price quoted by a third party, such as a pricing service or broker, or by reference to the current fair value of another instrument that is substantially the same, based on inputs such as prices obtained from brokers, observable interest rates and spreads. These financial instruments are categorized within Level 2. Debt instruments measured at fair value using the DCF method, where primary inputs are observable interest rates and credit spreads, inferred from the prevailing market rates, are also categorized within Level 2.

Derivative financial instruments (including embedded derivatives)

Listed derivatives (including interest rates, bonds, currencies, stocks and commodities) are measured at fair value using the settlement price announced by the major exchange on which transactions are traded because the settlement price in the exchange reflects the most current transaction price, and is readily and regularly available from the exchange. Listed derivatives are categorized within Level 1.

OTC derivatives (non-exchange-traded derivatives), including embedded derivatives that are separately accounted for from the host contracts, are measured at fair value using valuation techniques such as the present value of estimated future cash flows and option pricing models, generally based on observable interest rates, foreign exchange, commodities, stock prices and other factors as inputs. The valuation models for some transactions, such as yield curve spread options and equity options, use inputs which are not directly observable in the market, including historical correlation coefficients and historical volatilities. However, as the impact of these unobservable inputs is insignificant to the fair value for most of the transactions, the SMBC Group categorizes the majority of those transactions within Level 2.

The credit loss protection scheme which the SMBC Group offers to Goldman Sachs (“GS”) is considered to be a credit derivative, where the underlying reference entities are the American and European corporate entities covered in the commitment line portfolio of the GS group. The fair value of this derivative is determined using an ordinary collateralized debt obligation (“CDO”) pricing model, commonly used in the financial markets. The SMBC Group takes some portions of the positions in subordinated and mezzanine tranches, which covers the first and second credit losses from the portfolio. The major inputs for this derivative are credit default swap (“CDS”) spread rates, correlation ratios of CDS indices for similar portfolios, and the expected additional commitment withdrawal ratio. Although CDS spread rates and correlation ratios are observable in an active market or available from brokers, this whole scheme is categorized within Level 3 as the expected additional withdrawal ratio, which is considered to be a significant input, is not observable in the market.

In addition, the fair value of OTC derivatives incorporates both counterparty credit risk in relation to OTC derivative assets and own credit risk in relation to OTC derivative liabilities. The SMBC Group calculates the credit risk adjustments by applying the probability of default that reflects the counterparty’s or its own credit risk to the OTC derivative exposures and multiplying the result by the loss expected in the event of default. For the probability of default, the SMBC Group uses observable market data, where possible. The OTC derivative exposures used are determined taking into consideration the effect of master netting agreements and collateral. As the SMBC Group manages the OTC derivatives on the basis of its net credit risk exposure, the credit risk adjustments of those OTC derivatives are measured on a portfolio basis in accordance with the exception set forth in IFRS 13.

Financial assets at fair value through profit or loss

The majority of instruments in this category are debt instruments measured at fair value, using a valuation technique based on the observable prices in the market and they are categorized within Level 2.

Some equity and debt instruments in this category are hybrid instruments which have both equity and debt features. These include preferred stocks which are measured at fair value using the Monte Carlo Simulation valuation model, if they are indexed to the market prices in a stock exchange. The valuation model uses the historical volatility of the listed stocks as an input, which are not observable in the market, resulting in these instruments being categorized within Level 3. Other types of preferred stocks and other non-hybrid equity instruments are evaluated using valuation techniques for unlisted stocks, which are normally used for private equity investments. The SMBC Group calculates the fair values of these instruments based on the market approach using market multiples or others in which significant unobservable inputs are used. These instruments are categorized within Level 3.

Available-for-sale financial assets

Debt instruments are measured at fair value using a quoted market price and categorized within Level 1 if they are traded in an active market. Debt instruments are categorized within Level 2 if they are measured at fair value using a price quoted by a third party, such as a pricing service or broker, or by reference to the current fair value of another bond that is substantially the same based on inputs such as prices obtained from brokers, observable interest rates and spreads. Some debt instruments are measured at fair value using the DCF method in which significant unobservable inputs are used, and categorized within Level 3.

As for equity instruments, listed stocks are measured at fair value based on the market price at a stock exchange and categorized within Level 1 if they are traded in an active market. Unlisted common and preferred stocks in this category are measured at fair value using valuation techniques, similar to those described in “Financial assets at fair value through profit or loss” above. Publicly traded investment trusts and funds are measured at fair value using the market price and are categorized within Level 1 if they are traded in an active market. Instruments whose prices are not available in the market, such as privately offered investment trusts, are measured at fair value based on the unit price, which is usually regarded as an exit price, obtained from the fund administrator or investment management firm. In such a case, these investment trusts and funds are categorized within Level 2. Other investment funds, such as private equity and real estate investment funds, are generally measured at fair value based on net asset value, which includes significant unobservable inputs. These funds are categorized within Level 3.

Significant Unobservable Inputs

The following tables present quantitative information about significant unobservable inputs used in fair value measurement for Level 3 financial assets and liabilities at March 31, 2018 and 2017.

	At March 31, 2018
	Fair value		Valuation technique(s)(1)	Significant unobservable inputs(1)	Range of inputs(1)
	(In millions)
Financial assets:
Derivative financial instruments:
Currency derivatives	¥	14	Option model	Foreign exchange volatility	10%-14%
Equity derivatives		1,880	Option model	Equity volatility	11%-52%
				Equity to equity correlation	45%-94%
Credit derivatives		4,667	CDO pricing model	Additional withdrawal ratio	48%
			Credit Default model	Quanto correlation	15%-90%
Financial assets at fair value  through profit or loss:
Debt instruments		10,143	Monte Carlo Simulation	Equity volatility	12%-25%
Equity instruments		18,057	Market multiples	Price/Earnings multiple	8.3x-19.5x
				EV/EBITDA multiple	8.7x
				Liquidity discount	0%-20%
			See note (2) below	—	—
Available-for-sale financial assets:
Debt instruments		154	DCF method	Discount margin	8%
Equity instruments(3)		844,352	Market multiples	Price/Book value multiple	0.3x-2.4x
				Price/Earnings multiple	11.7x-31.4x
				EV/EBITDA multiple	5.4x-16.8x
				Liquidity discount	20%
			Monte Carlo Simulation	Equity volatility	42%-51%
			Net asset value(4)	—	—
			See note (2) below	—	—
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	14	Option model	Foreign exchange volatility	10%-14%
Credit derivatives		422	Credit Default model	Quanto correlation	20%-30%
Others(5)		833	Option model	Equity volatility	23%-38%
				Equity to equity correlation	45%-94%
				Interest rate to interest rate correlation	31%-100%
			Credit Default model	Quanto correlation	15%-90%

	At March 31, 2017
	Fair value			Valuation technique(s)(1)	Significant unobservable inputs(1)	Range of inputs(1)
	(In millions)
Financial assets:
Derivative financial instruments:
Interest rate derivatives	¥	2		Option model	Interest rate volatility	4%
Currency derivatives		22		Option model	Foreign exchange volatility	9%-17%
Equity derivatives		1,327		Option model	Equity volatility	20%-49%
					Equity to equity correlation	44%-93%
Credit derivatives		2,731		CDO pricing model	Additional withdrawal ratio	49%
Financial assets at fair value through profit or loss:
Debt instruments		12,053		Monte Carlo Simulation	Equity volatility	16%-26%
Equity instruments		14,286		Market multiples	Price/Earnings multiple	10.3x-30.2x
					EV/EBITDA multiple	8.1x
					Liquidity discount	0%-20%
				See note (2) below	—	—
Available-for-sale financial assets:
Debt instruments		526		DCF method	Discount margin	9%
Equity instruments		836,252		Market multiples	Price/Book value multiple	0.3x-2.0x
					Price/Earnings multiple	8.7x-42.6x
					EV/EBITDA multiple	5.0x-14.8x
					Liquidity discount	20%
				Monte Carlo Simulation	Equity volatility	20%-51%
				Net asset value(4)	—	—
				See note (2) below	—	—
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	21		Option model	Foreign exchange volatility	9%-17%
Others(5)		(303	)	Option model	Equity volatility	24%-64%
					Equity to equity correlation	44%-93%
					Interest rate to interest rate correlation	14%-100%

(1) Valuation techniques and unobservable inputs for insignificant Level 3 financial assets and liabilities are excluded.

(2) Fair values of certain equity instruments such as unlisted stocks are estimated on the basis of an analysis of the investee’s financial position and results, risk profile, prospects and other factors. A range of key inputs is not provided in the table as it is not practical to do so given the nature of such valuation techniques.

(3) Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale.

(4) The SMBC Group has determined that the net asset value represents fair values of certain investment funds.

(5) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract.

Volatility

Volatility represents a measure of how much a particular instrument, parameter or index is expected to change in value over time. The volatilities used in the valuation of some type of derivative instruments with optionality refer to the potential change in price or level of the underlying interest rates, foreign exchange rates or equity instruments. The volatilities of underlying listed stocks are used in the valuation of preferred stocks containing optionality. These volatilities are estimated based on historical data or information provided by third-party sources, together with other analytical techniques. In general, a significant increase in the volatility in isolation would result in a significantly higher fair value measurement.

Correlation

Correlation represents a measure of the relationship between the movements of two variables, which is expressed as a number between plus and minus one. A positive correlation indicates that two variables move in the same direction while a negative correlation indicates that they move in opposite directions. Correlations could be any combination of variables such as interest rates, foreign exchange rates, CDS spread and stock price movements. Thus, both same-asset correlation and cross-asset correlation are used. Interest rate correlation between two different tenors is an example of same-asset correlations while quanto correlation which is the correlation between foreign exchange rates and another variable is an example of cross-asset correlation. These correlations are used in the valuation techniques of complex derivatives and estimated based on historical data. In general, a significant increase in the correlation in isolation would result in either a significantly higher or lower fair value measurement, depending on the terms of the instruments.

Additional withdrawal ratio

Additional withdrawal ratio represents the expected additional withdrawal ratio of unfunded commitment lines in the reference portfolio (mainly revolving credit facilities for commercial paper backup) concerning the credit loss protection scheme offered to GS. The expected additional withdrawal ratio is estimated based on historical data of actual funded amounts at default for similar portfolios. In general, a significant increase in the additional withdrawal ratio in isolation would have a significant unfavorable impact (i.e., an increase in derivative liabilities or a decrease in derivative assets) on the fair value measurement.

Price/Earnings, price/book value multiples

Price/Earnings (“P/E”) multiple represents the ratio of the equity value to the net income, while price/book value (“P/B”) multiple represents the ratio of the equity value to the book value. These multiples are estimated based on comparable listed companies. In general, a significant increase in the P/E multiple or P/B multiple in isolation would result in a significantly higher fair value measurement.

EV/EBITDA multiple

EV/EBITDA multiple represents the ratio of the enterprise value (“EV”) to earnings before interest, taxes, depreciation and amortization (“EBITDA”), where the EV is the aggregate value of equity and debt minus cash and cash equivalents. The multiple is estimated based on comparable listed companies. In general, a significant increase in the EV/EBITDA multiple in isolation would result in a significantly higher fair value measurement.

Liquidity discount

A liquidity discount is primarily applied in the valuation techniques for unlisted stocks to reflect the fact that these stocks are not actively traded. In general, a significant increase in the liquidity discount in isolation would result in a significantly lower fair value measurement.

Discount margin

Discount margin represents a spread used in estimating future cash flows in a DCF method to reflect the uncertainty of the cash flows that market participants would consider. In general, a significant increase in the discount margin in isolation would result in a significantly lower fair value measurement.

Sensitivity Analysis

The fair value of certain financial assets and liabilities are measured using valuation techniques based on inputs such as prices and rates that are not observable in the market. The following tables present the impact of the valuation sensitivity, if these inputs fluctuate to the extent deemed reasonable and the volatility of such inputs has a significant impact on the fair value.

	At March 31, 2018
	Total fair value measured using valuation techniques		Effect recorded in  profit or loss				Effect recorded  directly in equity
			Favorable changes		Unfavorable changes		Favorable changes		Unfavorable changes
	(In millions)
Financial assets:
Derivative financial instruments:
Currency derivatives	¥	14	¥	80	¥	1	¥	—	¥	—
Equity derivatives		1,880		271		310		—		—
Credit derivatives		4,667		4,515		11,765		—		—
Financial assets at fair value through profit or loss:
Debt instruments		10,143		278		—		—		—
Equity instruments		18,057		361		336		—		—
Available-for-sale financial assets:
Debt instruments		154		—		—		4		2
Equity instruments(1)		844,352		—		—		26,835		25,290
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	14	¥	2	¥	80	¥	—	¥	—
Credit derivatives		422		35		35		—		—
Others(2)		833		1,375		3,090		—		—

	At March 31, 2017
	Total fair value measured using valuation techniques			Effect recorded in  profit or loss				Effect recorded  directly in equity
				Favorable changes		Unfavorable changes		Favorable changes		Unfavorable changes
	(In millions)
Financial assets:
Derivative financial instruments:
Interest rate derivatives	¥	2		¥	7	¥	2	¥	—	¥	—
Currency derivatives		22			93		1		—		—
Equity derivatives		1,327			199		254		—		—
Credit derivatives		2,731			6,706		15,730		—		—
Financial assets at fair value through profit or loss:
Debt instruments		12,053			244		26		—		—
Equity instruments		14,286			99		99		—		—
Available-for-sale financial assets:
Debt instruments		526			—		—		13		13
Equity instruments		836,252			—		—		24,785		24,137
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	21		¥	2	¥	92	¥	—	¥	—
Others(2)		(303	)		1,121		1,716		—		—

(1) Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale.

(2) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract.

Derivative financial instruments (including embedded derivatives)

With respect to the credit loss protection scheme offered to GS, the anticipated losses will vary significantly depending on the expected additional withdrawal ratio of unfunded commitment lines in the reference portfolio. The tables above present the estimates of the impact of changing the expected additional withdrawal ratio from an optimistic (favorable) scenario to a pessimistic (unfavorable) scenario. For the other derivative instruments, including embedded derivatives that are separately accounted for from host contracts, that use correlation or volatility in the valuation techniques, the impact resulting from using a reasonable range of those inputs is estimated where it is expected to be significant.

Financial assets at fair value through profit or loss / Available-for-sale financial assets

With respect to preferred stocks convertible into listed stocks, for which historical volatilities of related listed stocks are used in the valuation techniques, the impact resulting from using a reasonable range for the volatility is statistically estimated where it is expected to be significant. With respect to unlisted stocks which are measured at fair value based on a market approach, the impact of changing the market multiples within a reasonable range (±10%) is estimated. Certain investment funds classified as available-for-sale equity instruments are measured at fair value determined based on net asset value per share, which includes significant unobservable inputs. Since those funds are managed by value at risk (“VaR”) based on historical gain or loss data, the impact of the valuation sensitivity is estimated using a one-day VaR of the portfolio.

Financial Assets and Liabilities Not Carried at Fair Value

The tables below present the carrying amounts and fair values by level within the fair value hierarchy, as described in “Financial Assets and Liabilities Carried at Fair Value—Fair Value Hierarchy,” of financial assets and liabilities not carried at fair value on the SMBC Group’s consolidated statement of financial position at March 31, 2018 and 2017.

			At March 31, 2018
			Carrying amount		Fair value
	Notes				Total		Level 1		Level 2		Level 3
	(In millions)
Financial assets:
Cash and deposits with banks		a	¥	54,696,069	¥	54,708,231	¥	53,401,133	¥	1,307,098	¥	—
Call loans and bills bought:
Call loans		a		1,858,802		1,859,176		—		1,859,176		—
Bills bought		a		23,078		23,051		—		23,051		—
Reverse repurchase agreements and cash collateral on securities borrowed		a		8,491,703		8,491,858		—		8,491,858		—
Investment securities:
Held-to-maturity  investments		b		372,459		374,597		374,597		—		—
Loans and advances		a		85,129,070		87,538,646		—		258,673		87,279,973
Other financial assets		a		3,598,642		3,595,216		—		3,429,143		166,073
Financial assets included in assets held for sale		a		3,098,196		3,224,902		3,824		84,058		3,137,020
Financial liabilities:
Deposits:
Non-interest-bearing deposits, demand deposits and deposits at notice		c	¥	84,121,443	¥	84,121,124	¥	—	¥	84,121,124	¥	—
Other deposits		c		44,340,084		44,339,583		—		44,339,583		—
Call money and bills sold:
Call money		c		1,190,929		1,190,936		—		1,190,936		—
Bills sold		c		—		—		—		—		—
Repurchase agreements and cash collateral on securities lent		c		12,022,593		12,022,593		—		12,022,593		—
Borrowings		c		10,652,481		10,761,610		—		10,739,893		21,717
Debt securities in issue		c		10,569,117		10,767,745		—		10,587,917		179,828
Other financial liabilities		c		6,691,042		6,691,016		—		6,571,846		119,170
Financial liabilities included in liabilities directly associated with the assets held for sale		c		3,371,556		3,380,139		—		3,380,139		—

			At March 31, 2017
			Carrying amount		Fair value
	Notes				Total		Level 1		Level 2		Level 3
			(In millions)
Financial assets:
Cash and deposits with banks		a	¥	47,330,155	¥	47,330,763	¥	46,244,819	¥	1,085,944	¥	—
Call loans and bills bought:
Call loans		a		1,860,620		1,860,539		—		1,860,539		—
Bills bought		a		11,589		11,567		—		11,567		—
Reverse repurchase agreements and cash collateral on securities borrowed		a		8,924,385		8,926,312		—		8,926,312		—
Investment securities:
Held-to-maturity investments		b		1,173,419		1,180,319		1,180,319		—		—
Loans and advances		a		95,273,845		98,053,056		—		348,691		97,704,365
Other financial assets		a		3,424,591		3,421,172		—		3,255,765		165,407
Financial liabilities:
Deposits:
Non-interest-bearing deposits, demand deposits and deposits at notice		c	¥	81,465,816	¥	81,466,078	¥	—	¥	81,466,078	¥	—
Other deposits		c		48,829,474		48,831,229		—		48,831,229		—
Call money and bills sold:
Call money		c		2,088,020		2,088,067		—		2,088,067		—
Bills sold		c		—		—		—		—		—
Repurchase agreements and cash collateral on securities lent		c		9,424,506		9,424,506		—		9,424,506		—
Borrowings		c		12,245,943		12,318,246		—		12,306,066		12,180
Debt securities in issue		c		11,165,623		11,329,967		—		11,257,502		72,465
Other financial liabilities		c		7,201,137		7,200,488		—		7,080,575		119,913

Notes:

a.	(i)	The carrying amounts of deposits with banks without maturity and loans with no specified repayment dates represent a reasonable estimate of fair value, considering the nature of these financial instruments.
	(ii)	Financial assets with a remaining maturity of six months or less: The carrying amounts represent a reasonable estimate of fair value.
	(iii)	Financial assets with a remaining maturity of more than six months: Except for impaired loans and advances, the fair values are mostly determined using discounted cash flow models taking into account certain factors including counterparties’ credit ratings, pledged collateral, and market interest rates. The fair values of impaired loans and advances are generally determined by discounting the estimated future cash flows over the time period they are expected to be recovered, and may be based on the appraisal value of underlying collateral as appropriate.
	Note that some of the financial assets in this category include embedded derivatives, which are separately accounted for, but presented together with the host contract.
b.	The fair values for held-to-maturity investments are determined using quoted prices in active markets.
c.	(i)	The carrying amounts of demand deposits and deposits without maturity represent a reasonable estimate of fair value, considering the nature of these financial instruments.
	(ii)	Financial liabilities with a remaining maturity of six months or less: The carrying amounts represent a reasonable estimate of fair value.
	(iii)	Financial liabilities with a remaining maturity of more than six months: The fair values are, in principle, based on the present values of future cash flows calculated using the refinancing rate applied to the same type of instruments for similar remaining maturities. The fair values of debt securities in issue are based on the present values of future cash flows calculated using the rate derived from yields of bonds issued by SMBC and publicly offered subordinated bonds published by securities firms.
	Note that some of the financial liabilities in this category include embedded derivatives, which are separately accounted for, but presented together with the host contract.

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Offsetting of Financial Assets and Liabilities

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Offsetting of Financial Assets and Liabilities

44 OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES

The following tables present the information about the impact of offsetting of financial assets and liabilities in the consolidated statement of financial position in accordance with the criteria described in Note 2 “Summary of Significant Accounting Policies,” as well as the impact of netting of financial instruments that are subject to enforceable master netting arrangements or similar agreements but do not qualify for the offsetting criteria at March 31, 2018 and 2017.

	At March 31, 2018
	Gross amounts of recognized financial assets and liabilities		Gross amounts offset in statement of financial position(1)			Net amounts presented in statement of financial position		Related amounts not offset in statement of financial  position(2)						Net amounts
								Financial instruments(3)			Cash collateral
	(In millions)
Financial assets(4):
Reverse repurchase agreements and cash collateral on securities borrowed	¥	9,346,594	¥	(854,891	)	¥	8,491,703	¥	(8,458,707	)	¥	—		¥	32,996
Derivative financial instruments		4,729,842		(844,571	)		3,885,271		(1,999,343	)		(479,814	)		1,406,114
Total	¥	14,076,436	¥	(1,699,462	)	¥	12,376,974	¥	(10,458,050	)	¥	(479,814	)	¥	1,439,110
Financial liabilities(4):
Repurchase agreements and cash collateral on securities lent	¥	12,877,484	¥	(854,891	)	¥	12,022,593	¥	(12,019,290	)	¥	—		¥	3,303
Derivative financial instruments		4,526,765		(1,028,749	)		3,498,016		(2,009,835	)		(587,693	)		900,488
Total	¥	17,404,249	¥	(1,883,640	)	¥	15,520,609	¥	(14,029,125	)	¥	(587,693	)	¥	903,791

	At March 31, 2017
	Gross amounts of recognized financial assets and liabilities		Gross amounts offset in statement of financial position(1)			Net amounts presented in statement of financial position		Related amounts not offset in statement of financial position(2)						Net amounts
								Financial instruments(3)			Cash collateral
	(In millions)
Financial assets(4):
Reverse repurchase agreements and cash collateral on securities borrowed	¥	9,660,288	¥	(735,903	)	¥	8,924,385	¥	(8,889,400	)	¥	—		¥	34,985
Derivative financial instruments		5,178,409		(1,114,427	)		4,063,982		(2,227,109	)		(318,106	)		1,518,767
Total	¥	14,838,697	¥	(1,850,330	)	¥	12,988,367	¥	(11,116,509	)	¥	(318,106	)	¥	1,553,752
Financial liabilities(4):
Repurchase agreements and cash collateral on securities lent	¥	10,160,409	¥	(735,903	)	¥	9,424,506	¥	(9,410,305	)	¥	—		¥	14,201
Derivative financial instruments		5,178,911		(1,289,217	)		3,889,694		(2,208,039	)		(719,483	)		962,172
Total	¥	15,339,320	¥	(2,025,120	)	¥	13,314,200	¥	(11,618,344	)	¥	(719,483	)	¥	976,373

(1) Amounts offset for derivative financial instruments include cash collateral.

(2) The amounts of financial instruments and cash collateral have been limited to the net amounts presented in the consolidated statement of financial position so as not to include any over-collateralization.

(3) Financial instruments include non-cash collateral at fair value.

(4) Financial assets and liabilities include amounts that are both subject to and not subject to enforceable master netting arrangements or similar agreements.

The “Gross amounts offset in statement of financial position” column in the above tables represents the impact of offsetting of financial assets and liabilities in the consolidated statement of financial position in accordance with the offsetting criteria. The SMBC Group presents financial assets and liabilities on a net basis in the consolidated statement of financial position only if it currently has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis or realize the asset and settle the liability simultaneously.

The “Related amounts not offset in statement of financial position” column comprises (1) financial assets and liabilities subject to netting arrangements, such as the International Swaps and Derivatives Association’s (“ISDA”) Master Agreement, master repurchase agreements and master securities lending agreements, which allow all the outstanding transactions with a particular counterparty to be set off only if the event of default or other predetermined events occur, and (2) cash and non-cash collateral related to those transactions.

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Financial Risk Management

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Financial Risk Management

45 FINANCIAL RISK MANAGEMENT

The SMBC Group classifies risks into the following categories: credit risk, market risk, liquidity risk and operational risk. This note presents information about the SMBC Group’s exposure to credit risk, market risk, and liquidity risk, and its policies and processes for measuring and managing these risks.

On April 1, 2017, the SMBC Group introduced SMBC Group-wide business units and a Group Chief Officers system (“CxO system”). In addition, the SMBC Group transitioned to a company with three statutory committees: a nominating committee, an audit committee and a compensation committee from a board of corporate auditors governance system, following approval at its ordinary general meeting of shareholders held on June 29, 2017. In connection with the foregoing, the SMBC Group changed its risk management system, including by introducing a Group Chief Risk Officer (“CRO”) who reports to the board of directors and its internal committees and conducting various meetings for business executions to centrally identify and manage risks.

Risk Management System

Top management plays an active role in the risk management process out of recognition for the importance of risk management. The SMBC Group-wide basic policies for risk management are determined by the Management Committee before being authorized by the board of directors.

In line with these basic policies for risk management, the functions for managing major risks are consolidated within the Risk Management Unit, which is independent from business units, and the SMBC Group seeks to refine its risk management system through such means as enhancing comprehensive reviews of each risk category. In addition, the Internal Audit Unit conducts internal audits on the status of risk management to verify that risk is appropriately managed.

Risk management systems are in place at individual SMBC Group companies that have been established based on the characteristics of their particular businesses and in accordance with the basic policies. Furthermore, the SMBC Group is sharing information on SMBC Group-wide risk management and strengthening related systems through the Group CRO Committee, which consists of the Group CRO and risk management representatives from strategically important SMBC Group companies.

The diagram below represents the risk management system of the SMBC Group.

Risk Capital Management

In managing credit risk, market risk, and operational risk affecting the entire SMBC Group, the SMBC Group applies a uniform standard, risk capital based on value at risk (“VaR”), for use in monitoring and managing risks. This standard is applied while taking into account the characteristics of each risk and of the businesses of SMBC Group companies. Specific risk capital measures include setting upper limits for risk exposure based on SMBC Group-wide and business unit risk appetite and SMBC Group-wide management constitution. Each business unit operates business operation within that limit. Through these precautions, the SMBC Group practices management that maintains an appropriate balance between risks and returns based on a comprehensive perspective and secures sufficient financial soundness.

Credit Risk

Credit risk is the risk of incurring losses from decline or loss of the value of an asset (including off-balance sheet items) that is caused by a credit event including but not limited to the deterioration of financial condition of a borrower. Overseas credits transactions also entail country risk, which is closely related to credit risk. Country risk is the risk of incurring losses caused by changes in political or economic conditions. Credit exposures arise primarily from lending activities such as loans and advances, acquiring investment securities, derivative transactions, and off-balance sheet transactions such as unused portion of loan commitments.

Credit risk management system

Credit risk is the most significant risk to which the SMBC Group is exposed. The purpose of credit risk management is to keep the credit risk exposure to a permissible level relative to capital, to maintain the quality of assets and to ensure returns commensurate with risk.

At the SMBC Group, the Group CRO formulates credit risk management policies each year on the basis of Group-wide basic policies for risk management. The Credit & Investment Planning Department, responsible for the comprehensive management of credit risk, drafts and administers credit risk regulations including the Group credit policies, manages non-performing loans (“NPLs”), and performs other aspects of credit portfolio management. Also, the Credit Risk Committee deliberates on matters related to Group-wide credit portfolios. The SMBC Group companies follow the fundamental principles established by the SMBC Group to assess and manage credit risk. Each of SMBC Group companies manages credit risk according to the nature of its business, and assesses and manages the credit risks of individual loans and credit portfolios quantitatively, using consistent standards.

The following chart shows the credit risk management system of SMBC, the SMBC Group’s significant banking subsidiary.

At SMBC, the Credit & Investment Planning Department within the Risk Management Unit is responsible for the comprehensive management of credit risk. This department drafts and administers credit policies, the internal rating system, credit authority guidelines, and credit application guidelines, and manages NPLs, including impaired loans, and other aspects of credit portfolio management. The department also cooperates with the Corporate Risk Management Department in quantifying credit risk (risk capital and risk-weighted assets) and controls SMBC’s entire credit risk. Further, the Credit Portfolio Management Department within the Credit & Investment Planning Department strives to stabilize the credit portfolio and manage the risk through credit derivatives, loan asset sales and other instruments.

The credit departments of SMBC within each business unit conduct credit risk management for loans handled by its unit and manage portfolios of its unit. The credit limits they use are based on the baseline amounts that the Credit & Investment Planning Department establishes for each grading category, with particular attention paid to evaluating and managing customers or loans perceived to have particularly high credit risk. The Corporate Research Department engages in research on industries and analyzes the business and financial conditions of borrower enterprises to detect early signs of problems or growth potential. The Credit Administration Department is responsible for handling NPLs of borrowers classified as potentially bankrupt or lower, and formulates plans for workouts, including write-offs, and corporate rehabilitation. The department closely liaises with SMBC Servicer Co., Ltd., an SMBC Group company, which engages in related services to efficiently reduce the amount of NPLs, including through the sale of loans.

The Internal Audit Unit of SMBC, operating independently of the business units, audits asset quality, accuracy of grading and state of credit risk management, and reports the results directly to the board of directors and the Management Committee.

SMBC has established the Credit Risk Committee to undertake control of credit risk and to ensure the overall soundness of the loan operations.

Credit risk management methods

To effectively manage the risk involved in individual loans as well as the credit portfolio as a whole, the SMBC Group first acknowledges that every loan entails credit risk, assesses the credit risk posed by each borrower and loan using an internal rating system, and quantifies that risk for control purposes.

Credit risk evaluation

At SMBC, the Credit & Investment Planning Department manages an internal rating system for each asset control category set according to portfolio characteristics. For example, credits to commercial and industrial (“C&I”) companies, individuals for business purposes (domestic only), sovereigns, public sector entities, and financial institutions are assigned an “obligor grade,” which indicates the borrower’s creditworthiness, and/or “facility grade,” which indicates the collectability of assets taking into account the transaction conditions such as guarantee/collateral, and tenor. The business units determine an obligor grade by first assigning a financial grade using a financial strength grading model and data obtained from the obligor’s financial statements, including net worth and cash flows. The financial grade is then adjusted taking into account the actual state of the obligor’s financial position and qualitative factors to derive the obligor grade. The qualitative factors mainly include the expected future cash flows taking into account factors such as historical loss information, the appropriateness of the borrower’s business plan or operational improvement plan, the status of progress of its plan, and the overall support from financial institutions. In the event that the borrower is domiciled overseas, internal ratings for credit are made after taking into consideration the country rank, which represents an assessment of the credit quality of each country based on its political and economic situation, as well as its current account balance and external debt. Obligor grades and facility grades are reviewed once a year and as otherwise necessary, such as when there are changes in the credit situation. The SMBC Group’s subsidiaries carry out credit risk evaluations in line with SMBC.

The table below shows the corporate obligor grading system of SMBC.

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	Obligors with loans that are more than three months past due or with restructured loans within the “Borrowers Requiring Caution” category	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

There are also grading systems for loans to individuals such as housing loans and structured finance including project finance, where the repayment source is limited to the cash flows generated by a particular business or asset. For example, the obligor grade of housing loans is determined taking into account various relevant factors such as proportion of the repayment to revenue, proportion of down payment to the value and past due information.

The Credit & Investment Planning Department of SMBC centrally manages the internal rating systems, and designs, operates, supervises and validates the grading models. It validates the grading models (including statistical validation) of main assets following the procedure manual once a year to ensure their effectiveness and suitability.

Quantification of credit risk

At SMBC, credit risk quantification refers to the process of estimating the degree of credit risk of a portfolio or individual loan taking into account not just the obligor’s probability of default (“PD”), but also the concentration of risk in a specific customer or industry and the loss impact of fluctuations in the value of collateral, such as real estate and securities.

Specifically, the PD by grade, loss given default (“LGD”), credit quality correlation among obligors, and other parameter values are estimated using the historical data of obligors and facilities stored in a database to calculate the credit risk. Then, based on these parameters, SMBC runs a simulation of simultaneous default using the Monte Carlo Simulation to calculate SMBC’s maximum loss exposure to the estimated amount of the maximum losses that may be incurred. Based on these quantitative results, SMBC allocates risk capital.

Risk quantification is also executed for purposes such as to determine the portfolio’s risk concentration or to simulate economic movements (stress tests), and the results are used for making optimal decisions across the whole range of business operations, including formulating business plans and providing a standard against which individual credit applications are assessed.

Credit assessment

At SMBC, the credit assessment of corporate loans involves a variety of financial analyses, including cash flows, to predict an enterprise’s capability of loan repayment and its growth prospects. These quantitative measures, when combined with qualitative analyses of industrial trends, the enterprise’s research and development capabilities, the competitiveness of its products or services, and its management caliber, result in a comprehensive credit assessment. The loan application is analyzed in terms of the intended utilization of the funds and the repayment schedule. In the assessment of housing loans for individuals, SMBC employs a credit assessment model based on credit data amassed and analyzed by SMBC over many years, taking into account various relevant factors including proportion of the repayment to revenue, proportion of down payment to the value and past due information.

Credit monitoring

At SMBC, in addition to analyzing loans at the application stage, the Credit Monitoring System is utilized to reassess obligor grades, and review credit policies for each obligor so that problems can be detected at an early stage, and quick and effective action can be taken. The system includes annual monitoring that is carried out each time the financial results of the obligor enterprise are obtained, as well as ad-hoc monitoring that is performed each time credit conditions change.

Credit portfolio management

Risk-taking within the scope of capital

To keep the credit risk exposure to a permissible level relative to capital, the Corporate Risk Management Department of the Company sets a credit risk capital limit for internal control purposes. Under this limit, sub-limits are set for each business unit. The Corporate Risk Management Department conducts monthly monitoring to make sure that these limits are being followed.

Controlling concentration risk

As the SMBC Group’s equity capital may be materially impaired in the event that the credit concentration risk becomes apparent, the Credit & Investment Planning Department of the Company therefore takes measures to manage concentration risks, such as introducing large exposure limits and conducting intensive loan reviews for obligors with large exposures, with an increased focus on industrial sectors with an excessive concentration of credit risk. Further, to manage country risk, SMBC’s Credit Department of the International Banking Unit has credit limit guidelines based on each country’s creditworthiness.

Toward active portfolio management

SMBC’s Credit Portfolio Management Department makes use of credit derivatives, loan asset sales, and other instruments to proactively and flexibly manage its portfolio to stabilize credit risk.

Maximum exposure to credit risk before collateral held or other credit enhancements

The following table shows the maximum exposure to credit risk before taking into account any collateral held or other credit enhancements at March 31, 2018 and 2017.

	At March 31,
	2018		2017
	(In millions)
Credit risk exposures relating to assets on the consolidated statement of financial position:
Deposits with banks	¥	53,992,931	¥	46,207,027
Call loans and bills bought		1,881,880		1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed		8,491,703		8,924,385
Trading assets		2,841,148		3,339,928
Derivative financial instruments		3,885,271		4,063,982
Financial assets at fair value through profit or loss		1,528,921		1,582,957
Investment securities:
Held-to-maturity investments		372,459		1,173,419
Available-for-sale financial assets		14,282,706		12,123,770
Loans and advances		85,129,070		95,273,845
Other financial assets		3,598,642		3,424,591
Financial assets included in assets held for sale		3,099,888		—
Credit risk exposures relating to off-balance sheet items(1):
Loan commitments		60,107,128		62,357,210
Financial guarantees and other credit-related contingent liabilities		8,426,245		7,924,711
Total	¥	247,637,992	¥	248,268,034

(1) The off-balance sheet items represent the nominal amounts of undrawn loan commitments, financial guarantees and other credit-related contingent liabilities.

Based on the table above, excluding loan commitments (refer to Note 41 “Contingency and Capital Commitments”), the majority of the total exposure to credit risk is derived from “Loans and advances” and “Available-for-sale financial assets.”

Collateral and other credit enhancements

The SMBC Group considers the acquisition of collateral and guarantees as a secondary repayment source to further enhance loan recovery and minimize credit risk. Based on the assessment of a borrower’s real financial condition and potential future cash flows, the SMBC Group shall analyze the borrower’s repayment ability and require sufficient collateral in the form of an asset or third-party obligation. This serves to mitigate the inherent credit risk in the exposure, by either improving recoveries in the event of a default or transferring the borrower’s obligation to guarantors. Collateral received is mainly segregated into (1) financial collateral such as cash, deposits and securities, (2) real estate collateral such as land and buildings, and (3) guarantees received from sovereigns, municipal corporations, credit guarantee corporations and other public entities, financial institutions, and other companies.

The SMBC Group’s credit risk management is mainly based on an analysis of the repayment ability from the cash flows of the borrower’s business performance, and the collateral and other credit enhancements are considered as secondary repayment sources in the SMBC Group’s business practice. At the time of the primary lending decision, the SMBC Group evaluates the collateral on an individual borrower basis to consider its financial effect for mitigating credit risk. The re-evaluation of the collateral and other credit enhancements will be performed regularly, depending on the borrower’s creditworthiness. In case there is a significant change in the borrower’s repayment ability due to a deterioration in its creditworthiness and/or its cash flows, the SMBC Group may utilize the collateral and other credit enhancements as a source of repayment.

The following table shows the financial effect of collateral and other credit enhancements on loans and advances for borrowers requiring caution and impaired loans and advances at March 31, 2018 and 2017. The maximum collateral amounts included in the disclosure are limited to the carrying value of loans and advances where the credit exposure is over-collateralized.

	At March 31,
	2018		2017
	(In millions)
Loans and advances for borrowers requiring caution and impaired loans and advances	¥	1,965,681	¥	3,212,447
Financial effect of collateral and other credit enhancements		959,015		1,422,996

Concentration of risks of loans and advances with credit risk exposure

An analysis of concentrations of credit risk from loans and advances by geographical sector and industry sector at March 31, 2018 and 2017 is shown below. The concentration by geographical sector is measured based on the domicile of the borrower.

Geographical sector

	At March 31,
	2018			2017
	(In millions)
Domestic	¥	57,830,627		¥	68,020,094
Foreign:
Americas		11,221,244			11,417,162
Europe		4,949,471			5,031,197
Asia		8,423,747			8,412,109
Others		3,434,838			3,310,164
Total foreign		28,029,300			28,170,632
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan  fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

Industry sector

	At March 31,
	2018			2017
	(In millions)
Domestic:
Manufacturing	¥	7,961,620		¥	9,578,147
Agriculture, forestry, fisheries and mining		145,957			174,021
Construction		947,765			1,151,989
Transportation, communications and public enterprises		5,424,054			5,365,225
Wholesale and retail		5,288,767			5,721,005
Finance and insurance		2,777,862			2,844,546
Real estate and goods rental and leasing		9,017,664			10,101,846
Services		4,255,228			4,885,247
Municipalities		1,000,286			1,216,211
Lease financing		14,629			2,706,641
Consumer(1)		16,363,489			19,096,755
Others		4,633,306			5,178,461
Total domestic		57,830,627			68,020,094
Foreign:
Public sector		372,008			299,746
Financial institutions		4,496,646			4,588,001
Commerce and industry		21,023,885			21,041,905
Lease financing		357,660			404,658
Others		1,779,101			1,836,322
Total foreign		28,029,300			28,170,632
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

(1) The balance in Consumer mainly consists of housing loans. The housing loan balances amounted to ¥11,482,678 million and ¥13,766,771 million at March 31, 2018 and 2017, respectively.

The following tables show a disaggregation of the structured finance loans and advances balances, where the repayment source is limited to the cash flows generated by a particular business or asset, and the balances of secured or unsecured consumer loans at March 31, 2018 and 2017. These loans and advances are included in the preceding tables.

Structured finance:

	At March 31,
	2018		2017
	(In millions)
Real estate finance	¥	2,421,408	¥	2,222,530
Project finance		3,976,222		3,859,424
Other structured finance		374,430		370,160
Total structured finance	¥	6,772,060	¥	6,452,114

Consumer:

	At March 31,
	2018		2017
	(In millions)
Secured loans(1)	¥	12,255,845	¥	14,994,042
Unsecured loans		4,107,644		4,102,713
Total consumer	¥	16,363,489	¥	19,096,755

(1) The secured loans and advances mainly represent housing loans. The housing loan balances amounted to ¥11,482,678 million and ¥13,766,771 million at March 31, 2018 and 2017, respectively.

Loans and advances by credit quality category

Loans and advances are summarized as follows:

	At March 31,
	2018			2017
	(In millions)
Neither past due nor impaired	¥	84,856,335		¥	94,825,134
Past due but not impaired		124,724			136,904
Impaired(1)		878,868			1,228,688
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

(1) Loans and advances to borrowers who are classified in the borrower categories of substandard borrowers, potentially bankrupt borrowers, effectively bankrupt borrowers, and bankrupt borrowers described in the obligor grading system represent impaired loans and advances.

Loans and advances neither past due nor impaired

The following tables show the credit quality of the portfolio of loans and advances that were neither past due nor impaired, by geography and by industry based on the corporate obligor grading system of SMBC at March 31, 2018 and 2017. Since the internal rating system of SMBC’s consumer portfolio differs from the corporate obligor grading system, the balances of loans and advances to consumers are included in the grade category of “Other.” Additionally, as the SMBC Group’s subsidiaries are adopting various internal rating systems which differ from SMBC, the grade category of “Other” also includes some balances of loans and advances held by those subsidiaries.

	At March 31, 2018
	Normal								Requiring Caution
	J 1-3		J 4-6		Japanese government and local municipal corporations		Other		J 7		Other		Total
	(In millions)
Domestic:
Manufacturing	¥	4,275,861	¥	2,190,117	¥	—	¥	1,196,566	¥	199,616	¥	22,681	¥	7,884,841
Agriculture, forestry, fisheries and mining		81,900		42,892		13,973		207		599		—		139,571
Construction		319,394		468,222		—		119,439		26,779		459		934,293
Transportation, communications and public enterprises		4,069,995		1,066,246		86,932		133,132		46,657		148		5,403,110
Wholesale and retail		2,333,434		2,399,747		—		297,583		155,584		1,421		5,187,769
Finance and insurance		1,801,410		349,934		2,785		618,935		1,630		5		2,774,699
Real estate and goods rental and leasing		5,696,289		3,082,764		13,696		95,634		87,218		7		8,975,608
Services		1,599,011		2,355,545		37,693		94,218		96,498		115		4,183,080
Municipalities		—		—		1,000,286		—		—		—		1,000,286
Lease financing		—		—		—		14,629		—		—		14,629
Consumer(1)		—		234		—		15,900,425		1,669		73,180		15,975,508
Others		53,633		2,057,571		1,685,694		728,206		69,005		680		4,594,789
Total domestic		20,230,927		14,013,272		2,841,059		19,198,974		685,255		98,696		57,068,183
	G 1-3		G 4-6		—		Other		G 7		Other		Total
Foreign:
Public sector		191,678		81,448		—		97,890		30		941		371,987
Financial institutions		2,381,927		338,659		—		1,752,693		—		7,891		4,481,170
Commerce and industry		14,009,273		2,425,819		—		4,114,066		222,395		53,793		20,825,346
Lease financing		23,290		—		—		330,406		—		3,964		357,660
Others		1,194,334		161,795		—		383,463		9,964		2,433		1,751,989
Total foreign		17,800,502		3,007,721		—		6,678,518		232,389		69,022		27,788,152
Total	¥	38,031,429	¥	17,020,993	¥	2,841,059	¥	25,877,492	¥	917,644	¥	167,718	¥	84,856,335

(1) The balance in the grade category of “Other” in Consumer includes housing loans, which amounted to ¥11,302,350 million and ¥51,189 million for the borrower category of Normal and Requiring Caution, respectively.

	At March 31, 2017
	Normal								Requiring Caution
	J 1-3		J 4-6		Japanese government and local municipal corporations		Other		J 7		Other		Total
	(In millions)
Domestic:
Manufacturing	¥	5,220,451	¥	2,294,471	¥	—	¥	1,528,465	¥	371,365	¥	34,956	¥	9,449,708
Agriculture, forestry, fisheries and mining		111,241		45,573		500		5,955		7,905		588		171,762
Construction		271,321		479,408		—		323,281		33,050		16,279		1,123,339
Transportation, communications and public enterprises		3,000,896		1,805,631		129,708		317,943		58,684		18,869		5,331,731
Wholesale and retail		2,182,359		2,483,635		—		733,264		155,778		36,234		5,591,270
Finance and insurance		1,897,381		346,939		3,243		575,688		1,344		15,702		2,840,297
Real estate and goods rental and leasing		5,188,687		3,028,913		35,078		1,496,839		99,237		104,524		9,953,278
Services		1,552,427		2,350,110		34,826		690,201		97,651		45,520		4,770,735
Municipalities		—		—		1,042,346		157,144		—		16,721		1,216,211
Lease financing		—		—		—		2,610,519		—		87,533		2,698,052
Consumer(1)		—		146		—		18,470,768		3,012		183,247		18,657,173
Others		53,091		2,090,278		2,298,829		590,353		94,415		6,101		5,133,067
Total domestic		19,477,854		14,925,104		3,544,530		27,500,420		922,441		566,274		66,936,623
	G 1-3		G 4-6		—		Other		G 7		Other		Total
Foreign:
Public sector		220,796		72,198		—		6,516		—		211		299,721
Financial institutions		2,586,295		431,372		—		1,538,913		—		24,481		4,581,061
Commerce and industry		14,068,055		2,546,812		—		3,778,524		306,315		106,831		20,806,537
Lease financing		24,592		—		—		355,141		—		12,763		392,496
Others		1,219,303		181,808		—		386,418		10,914		10,253		1,808,696
Total foreign		18,119,041		3,232,190		—		6,065,512		317,229		154,539		27,888,511
Total	¥	37,596,895	¥	18,157,294	¥	3,544,530	¥	33,565,932	¥	1,239,670	¥	720,813	¥	94,825,134

(1) The balance in the grade category of “Other” in Consumer includes housing loans, which amounted to ¥13,519,680 million and ¥70,963 million for the borrower category of Normal and Requiring Caution, respectively.

Loans and advances past due but not impaired

The SMBC Group assesses the credit quality of loans and advances taking into account past due information on a borrower basis, and does not comprehensively collate the data related to the age analysis of loans and advances that were past due but not impaired on an individual basis. The aggregate balances of loans and advances of borrowers with one or more facilities, where any of the facilities are past due for less than three months but not impaired as at March 31, 2018 and 2017 were ¥163,902 million and ¥167,159 million, respectively. Those aggregate balances therefore include individual loans and advances which are not past due. Thus, in the tables below, the SMBC Group provides the amount of loans and advances where the final payment at contractual maturity is past due, by geography and by industry, at March 31, 2018 and 2017. For reference, since all the loans and advances that are past due over three months are treated as impaired, those loans and advances are not included in the tables below.

	At March 31, 2018
	Past due up to 1 month		Past due 1-2 months		Past due 2-3 months		Total
	(In millions)
Domestic:
Manufacturing	¥	476	¥	50	¥	—	¥	526
Agriculture, forestry, fisheries and mining		—		—		—		—
Construction		1		10		51		62
Transportation, communications and public enterprises		45		—		—		45
Wholesale and retail		2,240		318		21		2,579
Finance and insurance		65		76		—		141
Real estate and goods rental and leasing		73		44		—		117
Services		245		—		—		245
Lease financing		—		—		—		—
Consumer		55,020		10,298		3,378		68,696
Others		2,791		44		21		2,856
Total domestic		60,956		10,840		3,471		75,267
Foreign:
Financial institutions		11,934		165		1,548		13,647
Commerce and industry		14,822		2,705		13,554		31,081
Others		2,402		1,676		651		4,729
Total foreign		29,158		4,546		15,753		49,457
Total	¥	90,114	¥	15,386	¥	19,224	¥	124,724

	At March 31, 2017
	Past due up to 1 month		Past due 1-2 months		Past due 2-3 months		Total
	(In millions)
Domestic:
Manufacturing	¥	701	¥	153	¥	4	¥	858
Agriculture, forestry, fisheries and mining		8		—		—		8
Construction		423		118		27		568
Transportation, communications and public enterprises		612		2		—		614
Wholesale and retail		5,436		1,345		235		7,016
Finance and insurance		59		55		—		114
Real estate and goods rental and leasing		832		164		56		1,052
Services		1,421		306		212		1,939
Lease financing		523		51		46		620
Consumer		41,103		12,508		22,666		76,277
Others		3,617		—		531		4,148
Total domestic		54,735		14,702		23,777		93,214
Foreign:
Financial institutions		2,313		234		2,022		4,569
Commerce and industry		17,326		8,418		9,641		35,385
Others		1,822		1,293		621		3,736
Total foreign		21,461		9,945		12,284		43,690
Total	¥	76,196	¥	24,647	¥	36,061	¥	136,904

Impaired loans and advances

The following table shows the impaired loans and advances, by geography and by industry, at March 31, 2018 and 2017.

	At March 31,
	2018			2017
	(In millions)
Domestic:
Manufacturing	¥	76,253		¥	127,581
Agriculture, forestry, fisheries and mining		6,386			2,251
Construction		13,410			28,082
Transportation, communications and public enterprises		20,899			32,880
Wholesale and retail		98,419			122,719
Finance and insurance		3,022			4,135
Real estate and goods rental and leasing		41,939			147,516
Services		71,903			112,573
Lease financing		—			7,969
Consumer		319,285			363,305
Others		35,661			41,246
Total domestic		687,177			990,257
Foreign:
Public sector		21			25
Financial institutions		1,829			2,371
Commerce and industry		167,458			199,983
Lease financing		—			12,162
Others		22,383			23,890
Total foreign		191,691			238,431
Total impaired loans and advances before allowance for loan losses		878,868			1,228,688
Less: Allowance for loan losses for impaired loans and advances		(369,386	)		(532,451	)
Net impaired loans and advances	¥	509,482		¥	696,237

Renegotiated loans and advances

The following table shows loans and advances at March 31, 2018 and 2017 that would otherwise be past due or impaired, but whose terms have been renegotiated without providing any financial concessions. These loans and advances are mainly classified as requiring caution in the table of “Loans and advances neither past due nor impaired” in the section “Loans and advances by credit quality category.”

The SMBC Group continually assesses the creditworthiness of a borrower for whom terms of the loans and advances have been renegotiated, taking into account the actual state of the borrower’s financial position and qualitative factors. Further details are described in “Credit risk evaluation” in the section “Credit risk management methods.” Loans and advances whose terms have been renegotiated and financial concessions have been provided are reported as impaired and included in the table of “Impaired loans and advances” in the section “Loans and advances by credit quality category.”

	At March 31,
	2018	2017
	(In millions)
Renegotiated loans and advances	¥292,466	¥463,092

Trading assets and investment securities

The following table shows an analysis of trading assets, financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets based on the external rating system at March 31, 2018 and 2017, excluding equity instruments. Collateral is generally not obtained directly from the issuers.

	At March 31, 2018
	Trading assets		Financial assets at fair value through profit or loss		Held-to-maturity investments		Available-for-sale financial assets		Total
	(In millions)
AAA	¥	190,650	¥	—	¥	—	¥	4,865,723	¥	5,056,373
AA- to AA+		2,399,644		1,518,748		372,459		8,538,879		12,829,730
A- to A+		192,943		—		—		276,042		468,985
Lower than A-		56,458		—		—		532,626		589,084
Unrated		1,453		10,173		—		69,436		81,062
Total	¥	2,841,148	¥	1,528,921	¥	372,459	¥	14,282,706	¥	19,025,234

Impaired available-for-sale financial assets with a carrying amount of ¥154 million at March 31, 2018 are included in the table above.

	At March 31, 2017
	Trading assets		Financial assets at fair value through profit or loss		Held-to-maturity investments		Available-for-sale financial assets		Total
	(In millions)
AAA	¥	242,240	¥	—	¥	—	¥	4,666,664	¥	4,908,904
AA- to AA+		2,803,467		1,570,904		1,173,419		6,822,953		12,370,743
A- to A+		236,348		—		—		132,943		369,291
Lower than A-		39,380		—		—		482,097		521,477
Unrated		18,493		12,053		—		19,113		49,659
Total	¥	3,339,928	¥	1,582,957	¥	1,173,419	¥	12,123,770	¥	18,220,074

Impaired available-for-sale financial assets with a carrying amount of ¥526 million at March 31, 2017 are included in the table above.

Credit risk from derivative financial instruments

The SMBC Group maintains control limits on derivative positions, by both amount and term. At any one time, the amount subject to credit risk is limited to the fair value of derivative financial instruments that are favorable to the SMBC Group (i.e., assets where their fair value is positive).

The SMBC Group’s credit risk from derivatives is mitigated where possible through netting agreements whereby derivative assets and liabilities with the same counterparty can be offset. Netting agreements, such as the ISDA master agreement, allow the netting of obligations arising under all of the derivative transactions that the agreement covers upon the counterparty’s default, regardless of maturity and currency, resulting in a single net claim against the counterparty. The SMBC Group’s credit risk is also mitigated by collateral arrangements through the credit support annex, resulting in collateral delivered or received regularly based on the replacement costs of derivatives.

Market Risk and Liquidity Risk

Market risk is the possibility that fluctuations in interest rates, foreign exchange rates, stock prices or other market prices will change the market value of financial products, leading to a loss. The purpose of market risk management is to keep the market risk exposure to a permissible level relative to capital.

Liquidity risk is defined as the uncertainty around the ability to meet debt obligations without incurring unacceptably large losses. An example of such risk is the possible inability to meet current and future cash flow/ collateral needs, both expected and unexpected. In such cases, the SMBC Group may be required to raise funds at less than favorable rates or be unable to raise sufficient funds for settlement. The purpose of liquidity risk management is to ensure that the SMBC Group is in a position to address its liquidity obligations through monitoring the liquidity gap between assets and liabilities, and by maintaining highly liquid supplementary funding resources.

On the basis of the SMBC Group-wide basic policies for risk management, the SMBC Group has a quantitative management process to control market and liquidity risks on an SMBC Group-wide basis by setting allowable risk limits by company. The SMBC Group at least annually reviews and identifies which companies primarily carry the market and liquidity risks within the SMBC Group. The SMBC Group sets permissible levels and upper limits of risk for each identified company in consideration of those companies’ business plans. The SMBC Group ensures that each identified company establishes a risk management system that is appropriate to the risks it faces, and has built-in transparent risk management processes which clearly separating front, middle and back office operations, and establishes a control system of mutual checks and balances.

Framework for market and liquidity risk management

The board of directors authorizes important matters relating to the management of market and liquidity risks, such as the basic policies and risk limits, which are decided by the Management Committee. The Corporate Risk Management Department, which is independent of the business units that directly handle market transactions, manages market and liquidity risks in an integrated manner. The Corporate Risk Management Department not only monitors the current risk situations but also reports regularly to the Management Committee and the board of directors.

Additionally, the Asset Liability Management (“ALM”) Committee meets on a quarterly basis to examine reports on the state of market risk management and to discuss the Group’s ALM operation policies. Furthermore, SMBC’s ALM Committee meets on a monthly basis to examine reports on the state of observance of SMBC’s limits on market and liquidity risks, and to discuss SMBC’s ALM operations.

The Internal Audit Unit of SMBC also periodically performs internal audits to verify that the risk management framework is functioning properly.

The following chart shows the market and liquidity risk management system of SMBC.

Market risk management methods

The SMBC Group manages market risk derived from trading activities and non-trading activities, including strategic equity investment and other transactions within the risk capital limit which is determined by taking into account SMFG’s shareholders’ equity and other principal indicators of the financial position. The SMBC Group also establishes an upper limit on VaR and losses within the risk capital limits.

The SMBC Group’s market risk can be divided into various factors: interest rates, foreign exchange rates, equity prices and option risks. The SMBC Group manages each of these risks by employing the VaR method as well as supplemental indicators suitable for managing each risk, such as the basis point value (“BPV”).

VaR is the largest predicted loss that is possible given a fixed confidence interval. For example, the SMBC Group’s VaR indicates the largest loss that is possible for a holding period of one day and a confidence interval of 99.0%. BPV is the amount of change in assessed value as a result of aone-basis-point (0.01%) movement in interest rates.

Value at risk

The principal SMBC Group companies’ internal VaR model makes use of historical data to prepare scenarios for market fluctuations and, by conducting simulations of gains and losses on a net position basis, the model estimates the maximum losses that may occur. The VaR calculation method the SMBC Group employs for both trading and non-trading activities is based mainly on the following:

• the historical simulation method;

• a one-sided confidence interval of 99.0%;

• a one-day holding period (a one-year holding period for the strategic equity investment portfolio); and

• an observation period of four years (ten years for the strategic equity investment portfolio).

This method is reviewed periodically and refined, if necessary.

The relationship between the VaR calculated by the model and the actual profit and loss data is back-tested periodically. There were no significant excess losses in the back-testing results including the trading accounts. The back-testing results are reviewed by management, which also monitors the ongoing suitability of the VaR model.

The following tables show the SMBC Group’s VaR by risk category and these figures are prepared based on the internal reporting provided to management. The SMBC Group’s material market risk exposure categories consist of interest rate risk, foreign exchange risk, equities and commodities risk and others. The section headed “VaR for Trading Activity” shows VaR for instruments entered into for trading purposes and the VaR model for the trading book includes principal consolidated subsidiaries. The section headed “VaR for Non-Trading Activity” shows VaR for instruments entered into for purposes other than trading purposes. “Strategic Equity Investment” in the “VaR for Non-Trading Activity” section is a portfolio that consists principally of publicly traded Japanese equities. This portfolio, like that of other financial institutions in Japan, has historically included shares of the SMBC Group’s customers.

(a) VaR for Trading Activity

	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	3.2	¥	4.3	¥	3.9	¥	3.6	¥	11.2
Minimum		1.3		1.2		0.0		1.4		3.5
Daily average		2.1		2.4		1.5		2.3		7.2
At March 31, 2018		2.6		3.6		0.0		3.2		8.1
SMFG Consolidated
Maximum	¥	30.9	¥	5.0	¥	11.4	¥	3.6	¥	39.5
Minimum		6.7		1.5		4.3		1.4		14.5
Daily average		12.3		3.0		6.3		2.3		22.1
At March 31, 2018		11.3		4.3		4.3		3.2		21.5
	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	19.2	¥	3.1	¥	5.3	¥	2.5	¥	22.6
Minimum		1.5		1.0		0.3		1.2		3.9
Daily average		8.1		1.7		1.8		1.7		11.8
At March 31, 2017		1.9		1.2		0.4		1.7		3.9
SMFG Consolidated
Maximum	¥	27.9	¥	3.9	¥	5.8	¥	2.5	¥	34.0
Minimum		10.3		1.2		1.1		1.2		13.1
Daily average		16.1		1.9		3.1		1.7		21.4
At March 31, 2017		16.7		1.6		4.2		1.7		23.6

(1) Total for “Maximum,” “Minimum,” and “Daily average” represent the maximum, minimum and daily average of the total of the trading book. For certain subsidiaries, the SMBC Group employs the standardized method and/or the historical simulation method for the VaR calculation method.

(b) VaR for Non-Trading Activity

(i) Banking

	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	31.5	¥	0.0	¥	39.9	¥	0.0	¥	54.5
Minimum		25.2		0.0		21.5		0.0		38.0
Daily average		27.4		0.0		30.4		0.0		44.4
At March 31, 2018		31.3		0.0		28.1		0.0		45.7
SMFG Consolidated
Maximum	¥	34.0	¥	0.0	¥	39.9	¥	0.0	¥	57.0
Minimum		27.8		0.0		21.6		0.0		40.8
Daily average		30.2		0.0		30.5		0.0		47.2
At March 31, 2018		33.7		0.0		28.1		0.0		48.2

	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	34.2	¥	0.0	¥	38.9	¥	0.0	¥	49.9
Minimum		23.2		0.0		24.7		0.0		37.8
Daily average		27.0		0.0		32.1		0.0		43.0
At March 31, 2017		27.4		0.0		34.2		0.0		44.1
SMFG Consolidated
Maximum	¥	37.3	¥	0.0	¥	38.9	¥	0.0	¥	53.2
Minimum		26.4		0.0		24.8		0.0		40.2
Daily average		30.0		0.0		32.2		0.0		46.1
At March 31, 2017		30.6		0.0		34.3		0.0		47.4

(1) Total for “Maximum,” “Minimum,” and “Daily average” represent the maximum, minimum and daily average of the total of the banking book.

(ii) Strategic Equity Investment

	Equities risk
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	1,622.9
Minimum		1,309.8
Daily average		1,456.6
At March 31, 2018		1,389.4
SMFG Consolidated
Maximum	¥	1,855.9
Minimum		1,488.1
Daily average		1,664.2
At March 31, 2018		1,603.6

	Equities risk
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	1,421.0
Minimum		1,146.2
Daily average		1,303.7
At March 31, 2017		1,361.8
SMFG Consolidated
Maximum	¥	1,603.9
Minimum		1,272.8
Daily average		1,460.5
At March 31, 2017		1,544.5

Stress tests

The market occasionally undergoes extreme fluctuations that exceed projections. Therefore, to manage market risk, it is important to run simulations of situations that may occur only once in many years, or so-called stress tests. To prepare for unexpected market swings, the SMBC Group performs stress tests on a monthly basis based on various scenarios.

The limitations of the VaR methodology include the following:

• The use of historical data as a proxy for estimating future events may underestimate the probability of extreme market movements. Past market movement is not necessarily a good indicator of future events;

• The use of a holding period assumes that all positions can be liquidated or hedged in that period of time. This assumption does not fully capture the market risk arising during periods of illiquidity, when liquidation or hedging in that period of time may not be possible;

• The use of a confidence level neither takes account of, nor makes any statement about, any losses that might occur beyond this level of confidence; and

• VaR does not capture all of the complex effects of the risk factors on the value of positions and portfolios and could underestimate potential losses.

Additional information for the certain risks

(a) Interest rate risk

To supplement the above limitations of VaR methodologies, the SMBC Group adopts various indices to measure and monitor the sensitivity of interest rates, including delta, gamma and vega risks. The SMBC Group considers BPV as one of the most significant indices to manage interest rate risk. BPV is the amount of change in the value to the banking and trading book as a result of a one-basis-point (0.01%) movement in interest rates. The principal SMBC Group companies use BPV to monitor interest rate risk, not only on a net basis, but also by term to prevent the concentration of interest rate risk in a specific period. In addition, as previously addressed, the SMBC Group enhances the risk management methods of VaR and BPV by using them in combination with back-testing and stress tests.

Interest rate risk substantially changes depending on the method used for recognizing the expected maturity dates of demand deposits that can be withdrawn at any time, or the method used for estimating the timing of cancellation prior to maturity of time deposits and consumer housing loans. At SMBC, the maturity of demand deposits that are expected to be left with the bank for a prolonged period is regarded to be, at the longest, five years (2.5 years on average), and the cancellation prior to maturity of time deposits and consumer housing loans is estimated based on historical data.

Based on the new standards for interest rate risk in the banking book issued by the Basel Committee on Banking Supervision (“BCBS”) in April 2016, the FSA revised the related regulatory guidelines pertaining to monitoring of interest rate risks in the banking book in December 2017. The revised disclosure requirements with respect to the changes in economic value of equity (“DEVE”) in the banking book as a result of interest rate shocks have been applied from March 31, 2018. DEVE is defined as a decline in economic value as a result of an interest rate shock. It is calculated by multiplying the interest rate sensitivity (excluding credit spread) and interest rate change. The FSA implements a “materiality test” to identify banks taking excessive interest rate risks. Under the materiality test, the FSA monitors the ratio of DEVE to Tier 1 capital based on a set of prescribed interest rate shock scenarios. The threshold applied by the FSA is 15% and the ratios for SMBC and SMFG on a consolidated basis at March 31, 2018 were 4.8% and 4.2%, respectively.

Under the related regulatory guidelines prior to the revisions pertaining to monitoring of interest rate risks in the banking book published by FSA in December 2017, a bank would fall into the category of “outlier bank,” as stipulated under Pillar 2 of the Basel Capital Accord, in the event the economic value of that bank declines by more than 20% of total capital as a result of interest rate shocks. This ratio, known as the outlier ratio, was 1.5% for SMBC on a consolidated basis at March 31, 2017, substantially below the 20% criterion. The decline in economic value based on the outlier framework of SMBC on a consolidated basis is shown in the following table.

	At March 31, 2017
	(In billions, except percentages)
SMBC Consolidated
Total	¥	150.5
Impact of yen interest rates		77.2
Impact of U.S. dollar interest rates		50.8
Impact of euro interest rates		8.8
Percentage of total capital		1.5	%

Note: Decline in economic value is the decline of the present value of a banking portfolio after interest rate shocks (1st and 99th percentile of observed interest rate changes using aone-year holding period and an observation period of five years).

(b) Foreign exchange risk

The principal SMBC Group companies set risk limits for each currency to manage the concentration of the foreign currency position. The foreign exchange risk is immaterial as shown above in VaR by risk category.

(c) Strategic equity investment risk

The SMBC Group establishes limits on allowable risk for strategic equity investments and monitors the observance of those limits to keep stock price fluctuation risk within acceptable parameters. The SMBC Group has been reducing its strategic equity investments, and the balance is within a permitted level, which is less than 100% of the SMBC Group’s Tier 1 Capital.

Liquidity risk management methods

The SMBC Group regards liquidity risk as one of the major risks. The SMBC Group manages liquidity risk based on a framework consisting of setting upper limits for “funding gaps,” maintaining high-quality liquid assets in line with the SMBC Group’s risk appetite and establishing contingency plans.

A funding gap is defined as a maturity mismatch between a source of funds and the use of funds. The SMBC Group actively manages this funding gap by setting limits on the size of gaps over a given time horizon and limiting reliance on short-term funding. These limits are established on both an SMBC Group company basis and individual branch basis, taking into account cash management planning, systemic factors, and funding status, among other factors. Additionally, funding gap limits are set for individual currencies if necessary. The SMBC Group actively monitors funding gaps on a daily basis. Further, stress tests are regularly carried out by simulating the impact triggered, for example, by the outflow of deposits or having difficulties in funding from money markets, in order to thoroughly comprehend the amount required to fund when the liquidity risk is realized. The SMBC Group also monitors quantitative indicators of the levels of risk exposure to be assumed, such as Liquidity Coverage Ratio. In addition, SMBC, the SMBC Group’s major banking subsidiary, establishes quantitative alert system based on early warning indicators to detect liquidity risks promptly and systematically. Additionally, funding liquidity is maintained by holding assets, such as central bank reserves and government bonds which can be immediately converted to cash, in line with the SMBC Group’s risk appetite, in order to smoothly raise the required funds even during market disruption.

Furthermore, contingency plans are developed at each SMBC Group company to respond to the liquidity risk when being realized, by creating detailed action plans such as lowering the upper limit for the funding gap, depending on the existing situation (i.e. normal, concerned, or critical) and the respective circumstances.

Maturity analysis of financial liabilities at March 31, 2018 and 2017

The following tables show a maturity analysis of the contractual undiscounted cash flows for financial liabilities at March 31, 2018 and 2017. The amount of interest on debt instruments is not included in the maturity tables below due to its insignificance.

	At March 31, 2018
	On demand		Not later than three months		Later than three months and not later than one year		Later than one year and not later than three years		Later than three years and not later than five years		Later than five years		Total
		(In millions)
Non-derivative financial instruments:
Deposits	¥	79,239,076	¥	31,907,636	¥	12,755,005	¥	3,189,790	¥	701,374	¥	654,717	¥	128,447,598
Call money and bills sold		47,942		1,141,653		1,334		—		—		—		1,190,929
Repurchase agreements and cash collateral on securities lent		20,833		12,001,760		—		—		—		—		12,022,593
Trading liabilities		2,143,899		—		—		—		—		—		2,143,899
Borrowings		61,205		435,708		6,765,228		601,326		652,481		2,126,169		10,642,117
Debt securities in issue		—		2,407,601		950,334		1,818,271		2,185,578		3,227,737		10,589,521
Lease payable		—		683		1,884		2,999		1,665		3,086		10,317
Other financial liabilities		2,554,069		4,129,478		4,342		139		—		3,014		6,691,042
Off balance sheet items:
Loan commitments		60,107,128		—		—		—		—		—		60,107,128
Financial guarantee contracts		8,426,245		—		—		—		—		—		8,426,245
Total non-derivative financial instruments	¥	152,600,397	¥	52,024,519	¥	20,478,127	¥	5,612,525	¥	3,541,098	¥	6,014,723	¥	240,271,389
Derivative financial instruments	¥	3,498,016	¥	—	¥	—	¥	—	¥	—	¥	—	¥	3,498,016

	At March 31, 2017
	On demand		Not later than three months		Later than three months and not later than one year		Later than one year and not later than three years		Later than three years and not later than five years		Later than five years		Total
	(In millions)
Non-derivative financial instruments:
Deposits	¥	76,476,402	¥	32,358,045	¥	16,420,032	¥	3,303,700	¥	961,405	¥	755,341	¥	130,274,925
Call money and bills sold		30,563		2,052,776		362		4,319		—		—		2,088,020
Repurchase agreements and cash collateral on securities lent		1,902		9,414,026		8,578		—		—		—		9,424,506
Trading liabilities		2,071,584		—		—		—		—		—		2,071,584
Borrowings		69,370		926,538		6,960,401		868,247		949,406		2,364,402		12,138,364
Debt securities in issue		—		3,205,952		1,422,649		1,527,880		2,213,439		2,806,492		11,176,412
Lease payable		—		7,042		20,859		48,550		30,408		6,129		112,988
Other financial liabilities		2,223,233		4,863,181		11,397		14,966		12,458		75,902		7,201,137
Off balance sheet items:
Loan commitments		62,357,210		—		—		—		—		—		62,357,210
Financial guarantee contracts		7,924,711		—		—		—		—		—		7,924,711
Total non-derivative financial instruments	¥	151,154,975	¥	52,827,560	¥	24,844,278	¥	5,767,662	¥	4,167,116	¥	6,008,266	¥	244,769,857
Derivative financial instruments	¥	3,889,694	¥	—	¥	—	¥	—	¥	—	¥	—	¥	3,889,694

Notes:

1. Embedded derivatives which are separately accounted for, but presented together with the host contract in the consolidated statement of financial position are not included in the contractual tables above as they relate to the interest cash flow of the host contract, which are also not included in the tables above.

2. Derivative financial instruments are recorded at fair value and included in the column “On demand.” These instruments are not used for hedging under IAS 39 and the fair value represents the cash flow on demand.

Balance of loans and advances, and deposits at March 31, 2018 and 2017

The following table presents the balance of loans and advances, and deposits at March 31, 2018 and 2017. The balance of deposits, which was mainly composed of individual customer deposits at March 31, 2018 and 2017, exceeded the balance of loans and advances at the same time due to the stable deposit base in Japan.

	At March 31,
	2018		2017
	(In millions)
Loans and advances	¥	85,129,070	¥	95,273,845
Deposits		128,461,527		130,295,290

The following table presents a breakdown of deposits by domestic and foreign offices. Domestic inter-bank money was classified as “Call money and bills sold” and not included in “Deposits” in the consolidated statement of financial position. Over half of domestic deposits was composed of individual customer deposits.

	At March 31,
	2018		2017
	(In millions)
Domestic offices:
Non-interest-bearing demand deposits		¥  20,370,064		¥  18,737,973
Interest-bearing demand deposits		49,580,166		48,879,089
Deposits at notice		855,978		1,066,201
Time deposits		18,185,591		22,269,409
Negotiable certificates of deposit		5,408,021		6,021,236
Others		7,338,619		7,290,869
Total domestic offices		101,738,439		104,264,777
Foreign offices:
Non-interest-bearing demand deposits		1,241,450		1,115,579
Interest-bearing demand deposits		2,574,099		2,402,906
Deposits at notice		9,499,686		9,264,068
Time deposits		7,469,541		7,256,466
Negotiable certificates of deposit		5,812,264		5,859,702
Others		126,048		131,792
Total foreign offices		26,723,088		26,030,513
Total deposits		¥128,461,527		¥130,295,290

Capital Management

The SMBC Group manages its capital by taking into consideration regulatory compliance and business development.

The SMBC Group’s capital management objectives are to maintain sufficient capital resources to meet the capital adequacy requirements and to maintain a strong capital base to support the development of its business.

External regulatory capital requirement

The SMBC Group, the Company and its principal banking subsidiaries in Japan rigidly abide by the capital adequacy guidelines set by the FSA in managing its capital. Japan’s capital adequacy guidelines are based on the Basel Capital Accord, which was proposed by the BCBS for uniform application to all banks which have international operations in industrialized countries. Japan’s capital adequacy guidelines may be different from those of central banks or supervisory bodies of other countries because the FSA designed them to suit the Japanese banking environment. The SMBC Group’s banking subsidiaries outside of Japan are also subject to the local capital ratio requirements.

In December 2010, the BCBS published the new Basel III rules text to implement the Basel III framework, which sets out higher and better-quality capital, better risk coverage, the introduction of a leverage ratio as a backstop to the risk-based requirement, measures to promote the build-up of capital that can be drawn down in periods of stress, and the introduction of two global liquidity standards. The main measures of the minimum capital requirements in the Basel III framework began on January 1, 2013 and will be fully applied from January 1, 2019.

These capital reforms increase the minimum common equity requirement from 2% to 4.5% and require banks to hold a capital conservation buffer, which started to be phased in from January 2016 with the initial ratio of 0.625% and will reach 2.5% by January 2019, to withstand future periods of stress, bringing the total common equity requirement to 7%. The Tier 1 capital requirement was also increased from 4% to 6%, resulting in a total requirement of 8.5% when combined with the above-mentioned conservation buffer. The total capital requirement remains at the existing level of 8% but will increase to 10.5% by January 2019 due to the capital conservation buffer. Furthermore, a countercyclical buffer within a range of 0% to 2.5% of common equity or other fully loss-absorbing capital has been implemented according to national circumstances. The Group of Central Bank Governors and Heads of Supervision (the “GHOS”) also agreed on transitional arrangements for implementing the new requirements.

In addition to the above-mentioned minimum capital requirements and capital buffer requirements under Basel III, organizations identified by the Financial Stability Board (“FSB”) as Global Systemically Important Banks (“G-SIBs”), which includes the SMBC Group, are required to maintain an additional 1% to 2.5% of Common Equity Tier 1 capital as a percentage of risk-weighted assets, which is commonly referred to as the G-SIB capital surcharge, based on the organization’s size, interconnectedness, substitutability, complexity and cross-jurisdictional activity as determined by the FSB. The amount of G-SIB capital surcharge that applies to the SMBC Group based on the FSB’s determination will be 1% of risk-weighted assets when the requirements are fully applied from 2019. Under the phase-in arrangement for the G-SIB capital surcharge, the SMBC Group is currently required to maintain 0.75% of Common Equity Tier 1 capital as a percentage of risk-weighted assets.

To reflect the Basel III framework, the FSA changed its capital adequacy guidelines. Under the FSA capital adequacy guidelines, the new capital requirements are being phased in from March 31, 2013 through March 31, 2019. The minimum Common Equity Tier 1 capital requirement and Tier 1 capital requirement have been 4.5% and 6%, respectively since March, 2015. The capital conservation buffer, countercyclical buffer and the G-SIBcapital surcharge started to be phased in from March 31, 2016 under the FSA capital adequacy guidelines.

In accordance with the changes of the FSA capital adequacy guidelines, the SMBC Group changed its classification of capital into three tiers, referred to as Common Equity Tier 1 capital, Additional Tier 1 capital and Tier 2 capital as follows:

Common Equity Tier 1 capital consists primarily of capital stock, capital surplus and retained earnings relating to common shares, and non-controlling interests that meet the criteria for inclusion in Common Equity Tier 1 capital.

Additional Tier 1 capital consists primarily of preferred securities and perpetual subordinated bonds.

Tier 2 capital consists primarily of subordinated debt securities.

The capital adequacy guidelines permit Japanese banks to choose from the standardized approach (“SA”), the foundation Internal Ratings-Based (“IRB”) approach and the advanced IRB approach for credit risk, and the basic indicator approach (“BIA”), the standardized approach (“TSA”) and the Advanced Measurement Approach (“AMA”) for operational risk. To be eligible to adopt the foundation IRB approach or the advanced IRB approach for credit risk, and TSA or AMA for operational risk, a Japanese bank must establish advanced risk management systems and receive prior approval from the FSA.

Adopting these approved approaches, the SMBC Group sets a target minimum total capital ratio of 8.0% on the SMBC Group’s consolidated basis, and both SMBC consolidated and nonconsolidated basis, and has complied with all externally imposed capital requirements throughout the period.

Failure of a Japanese bank, bank holding company or other financial institution to maintain the required risk-weighted capital ratios, may result in administrative actions or sanctions imposed by the FSA.

Regulatory capital

The table below presents the SMBC Group’s total capital ratio, total capital and risk-weighted assets under Japanese GAAP at March 31, 2018 and 2017 based on the Basel III rules.

	At March 31,
	2018			2017
	(In billions, except percentages)
SMFG Consolidated:
Total risk-weighted capital ratio		19.36	%		16.93	%
Tier 1 risk-weighted capital ratio		16.69	%		14.07	%
Common Equity Tier 1 risk-weighted capital ratio		14.50	%		12.17	%
Total capital (Common Equity Tier 1 capital + Additional Tier 1 capital + Tier 2 capital)	¥	12,304.1		¥	11,973.7
Tier 1 capital (Common Equity Tier 1 capital + Additional Tier 1 capital)		10,610.2			9,946.2
Common Equity Tier 1 capital		9,217.4			8,608.5
Risk-weighted assets		63,540.3			70,683.5
The amount of minimum total capital requirements(1)		5,083.2			5,654.7

(1) The amount of minimum total capital requirements is calculated by multiplying risk-weighted assets by 8%.

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Related-Party Transactions

12 Months Ended

Mar. 31, 2018

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Related-Party Transactions

46 RELATED-PARTY TRANSACTIONS

Transactions with Related Parties

The SMBC Group considers that its related parties include subsidiaries, associates, joint ventures, key management personnel and close family members of key management personnel. Any transactions between the SMBC Group and its subsidiaries meet the definition of related-party transactions. However, because these transactions are eliminated on consolidation, they are not disclosed as related-party transactions. Transactions between the SMBC Group and its related parties are conducted on substantially the same terms as third-party transactions.

The transaction amounts included in the accounts, in aggregate, by category of related party were as follows:

Transactions with associates, joint ventures and other entities

	At March 31,
	2018		2017
	(In millions)
Assets:
Loans and advances	¥	222,890	¥	219,680
Others		39,254		13,807
Liabilities:
Deposits	¥	267,289	¥	143,801
Others		29,049		46,486

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Income statement:
Income (interest income, fee and commission income, and others)	¥	15,665	¥	17,433	¥	34,135
Expense (interest expense and others)		15,601		17,411		19,169

Financial guarantees issued by the SMBC Group for its associates at March 31, 2018 and 2017 were ¥99,673 million and ¥63,597 million, respectively.

Loan commitments to associates and joint ventures at March 31, 2018 and 2017 were ¥125,015 million and ¥173,492 million, respectively.

Transactions with key management personnel and their close family members

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the SMBC Group, directly or indirectly. The SMBC Group considers the members of the board of directors and corporate executive officers of SMFG to constitute key management personnel for the purpose of this disclosure required under IAS 24 “Related Party Disclosures.” Before SMFG transitioned to a company with three statutory committees on June 29, 2017, the SMBC Group considered the members of the board of directors of SMFG and SMBC to constitute the key management personnel.

	At March 31,
	2018		2017
	(In millions)
Assets:
Loans and advances	¥	2	¥	29
Liabilities:
Deposits	¥	1,612	¥	2,878
Others		94		110

Compensation of Key Management Personnel

The following table presents the compensation expenses of key management personnel.

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Short-term employee benefits	¥	1,135	¥	1,157	¥	1,161
Share-based compensation		295		204		214

The details of the share-based compensation plan are described in Note 39 “Share-Based Payment.”

There were no post-employment benefits, other long-term benefits and termination benefits for the fiscal years ended March 31, 2018, 2017 and 2016.

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Principal Subsidiaries

12 Months Ended

Mar. 31, 2018

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Principal Subsidiaries

47 PRINCIPAL SUBSIDIARIES

Principal Subsidiaries

The SMBC Group’s principal subsidiaries at March 31, 2018 are shown in the list below. The SMBC Group consolidates all entities that the SMBC Group controls. The SMBC Group controls an entity when the SMBC Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Principal domestic subsidiaries

Company Name	Proportion of Ownership Interest(1)		Proportion of Voting Rights(1)		Main Business
	(%)		(%)
Sumitomo Mitsui Banking Corporation		100.0		100.0	Commercial banking
SMBC Trust Bank Ltd.		100.0		100.0	Trust banking
SMBC Guarantee Co., Ltd.		100.0		100.0	Credit guarantee
Sumitomo Mitsui Finance and Leasing Company, Limited		60.0		60.0	Leasing
SMFL Capital Company, Limited		100.0		100.0	Leasing
SMBC Nikko Securities Inc.		100.0		100.0	Securities
Sumitomo Mitsui Card Company, Limited		65.9		65.9	Credit card
Cedyna Financial Corporation		100.0		100.0	Credit card and consumer credit
SMBC Consumer Finance Co., Ltd.		100.0		100.0	Consumer lending
SMBC Mobit Co., Ltd.		100.0		100.0	Consumer lending
SMM Auto Finance, Inc.		51.0		51.0	Automobile sales financing
SMBC Finance Service Co., Ltd.		100.0		100.0	Collecting agent and factoring
The Japan Research Institute, Limited		100.0		100.0	System development, data processing, management consulting and economic research
Sumitomo Mitsui Asset Management Company, Limited		60.0		60.0	Investment advisory and investment trust management
SAKURA KCS Corporation		47.4		47.4	System engineering and data processing
NCore Co., Ltd.		51.0		51.0	Data processing service and consulting
SMBC Venture Capital Co., Ltd.		40.0		40.0	Venture capital
SMBC Consulting Co., Ltd.		100.0		100.0	Management consulting and information services
Japan Pension Navigator Co., Ltd.		69.7		69.7	Operational management of defined contribution pension plans

(1) Percentages of proportion of ownership interest and proportion of voting rights have been truncated.

Principal foreign subsidiaries

Company Name	Country of Incorporation	Proportion of Ownership Interest(1)		Proposition of Voting Rights(1)		Main Business
		(%)		(%)
Sumitomo Mitsui Banking Corporation Europe Limited	U.K.		100.0		100.0	Commercial banking
Sumitomo Mitsui Banking Corporation (China) Limited	China		100.0		100.0	Commercial banking
Manufacturers Bank	U.S.A.		100.0		100.0	Commercial banking
Banco Sumitomo Mitsui Brasileiro S.A	Brazil		100.0		100.0	Commercial banking
JSC Sumitomo Mitsui Rus Bank	Russia		100.0		100.0	Commercial banking
PT Bank Sumitomo Mitsui Indonesia	Indonesia		98.4		98.4	Commercial banking
Sumitomo Mitsui Banking Corporation Malaysia Berhad	Malaysia		100.0		100.0	Commercial banking
SMBC Leasing and Finance, Inc.	U.S.A.		100.0		100.0	Leasing
SMBC Aviation Capital Limited	Ireland		90.0		90.0	Leasing
SMBC Nikko Securities America, Inc.	U.S.A.		100.0		100.0	Securities
SMBC Nikko Capital Markets Limited	U.K.		100.0		100.0	Securities
SMBC Capital Markets, Inc.	U.S.A.		100.0		100.0	Derivatives

(1) Percentages of proportion of ownership interest and proportion of voting rights have been truncated.

SAKURA KCS Corporation and SMBC Venture Capital Co., Ltd. are accounted for as subsidiaries, despite the SMBC Group’s holdings of less than 50% of the voting rights, because the SMBC Group is able to govern the financial and operating policies of these companies under a statute or an agreement, or by delegating the majority of the members of the board of directors.

The SMBC Group does not control some entities despite the fact that the SMBC Group holds more than 50% of their share capital, because the SMBC Group has entered into agreements with other investors to share or give those investors the power to govern the entities’ financial and operating policies over these investees.

Some of the SMBC Group’s subsidiaries may be subject to restrictions on the ability to transfer funds to the Company in the form of cash dividends or to repay loans or advances, which include capital adequacy requirements imposed by the governments and central banks, and the Companies Act restrictions relating to dividends. In addition, the SMBC Group pledges assets as collateral to secure payables under repurchase agreements, securities lending transactions and securitizations, borrowings or for cash settlements, margins on derivative transactions and certain other purposes. The details of assets pledged are described in Note 38 “Assets Pledged and Received as Collateral.”

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Structured Entities

12 Months Ended

Mar. 31, 2018

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Structured Entities

48 STRUCTURED ENTITIES

A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity. It often has some or all of the following features or attributes:

• restricted activities;

• a narrow and well-defined objective;

• insufficient equity to permit the structured entity to finance its activities without subordinated financial support; or

• financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks (tranches).

During the normal course of business, the SMBC Group engages in numerous transactions involving structured entities. These structured entities are primarily used to provide the SMBC Group and its clients with efficient access to funds or investment opportunities, mainly through securitizations, investment funds and structured finance.

Consolidated Structured Entities

Structured entities are consolidated if they are controlled by the SMBC Group in accordance with the accounting policy as described in Note 2 “Summary of Significant Accounting Policies.”

The consolidated structured entities include asset backed commercial paper (“ABCP”) conduits which purchase financial assets such as trade accounts receivable and lease receivables by issuing commercial paper to third-party investors. The SMBC Group has contractual agreements to provide liquidity and credit enhancement facilities which can be utilized by those structured entities upon their request.

At March 31, 2018 and 2017, the consolidated ABCP conduits had total assets of ¥807,780 million and ¥1,017,221 million, respectively. The total notional amounts of the liquidity and credit enhancement facilities provided by the SMBC Group to the consolidated ABCP conduits at March 31, 2018 and 2017 were ¥1,129,257 million and ¥1,345,987 million, respectively, all of which were undrawn.

The SMBC Group did not provide any financial or other support, without having a contractual obligation to do so, to consolidated structured entities during the fiscal years ended March 31, 2018 and 2017.

Unconsolidated Structured Entities

The following tables represent the carrying amounts of the SMBC Group’s interests in unconsolidated structured entities recognized in its consolidated statement of financial position by line item and the maximum exposure to loss from its interests at March 31, 2018 and 2017.

	At March 31, 2018
	Securitizations		Investment funds		Structured finance		Others		Total
	(In millions)
Interests in unconsolidated structured entities recognized in:
Trading assets	¥	10,157	¥	68,639	¥	—	¥	—	¥	78,796
Investment securities		64,113		1,055,971		51,018		479		1,171,581
Loans and advances		1,921,725		—		5,202,253		400,549		7,524,527
Assets held for sale		32,755		—		81,494		—		114,249
Total	¥	2,028,750	¥	1,124,610	¥	5,334,765	¥	401,028	¥	8,889,153
Maximum exposure to loss from interests in unconsolidated structured entities	¥	2,925,137	¥	1,126,551	¥	6,296,368	¥	538,660	¥	10,886,716

	At March 31, 2017
	Securitizations		Investment funds		Structured finance		Others		Total
	(In millions)
Interests in unconsolidated structured entities recognized in:
Trading assets	¥	—	¥	87,639	¥	—	¥	—	¥	87,639
Investment securities		6,716		1,162,195		69,705		551		1,239,167
Loans and advances		1,919,703		—		5,092,321		501,180		7,513,204
Total	¥	1,926,419	¥	1,249,834	¥	5,162,026	¥	501,731	¥	8,840,010
Maximum exposure to loss from interests in unconsolidated structured entities	¥	2,495,428	¥	1,251,497	¥	6,232,900	¥	702,236	¥	10,682,061

An interest in a structured entity refers to contractual and non-contractual involvement that exposes the SMBC Group to variability of returns from the performance of the structured entity. Such interests include the holding of equity or debt instruments as well as the provision of loans, loan commitments and guarantees. Interest rate and currency derivatives that expose the SMBC Group mainly to market risk, or CDS that are designed to transfer risk from the SMBC Group to a structured entity are not regarded as an interest in a structured entity since they do not expose the SMBC Group to variability of returns from the performance of the structured entity. These derivatives are therefore not included in the tables above.

The maximum exposure to loss from the SMBC Group’s interests in unconsolidated structured entities represents the maximum amount of potential loss to which the SMBC Group is exposed through its involvement with unconsolidated structured entities. It is determined by the SMBC Group’s carrying amounts and the notional amounts of loan commitments and guarantees, without considering the probability of loss being incurred, or effects of collateral or other credit protection.

The SMBC Group did not provide any financial or other support, without having a contractual obligation to do so, to unconsolidated structured entities during the fiscal years ended March 31, 2018 and 2017.

Securitizations

Structured entities for this product are established to securitize third-parties’ assets which mainly consist of auto loan receivables, residential and commercial mortgage loans and trade accounts receivables. These entities purchase those assets through loans or notes issued with multiple tranches. The SMBC Group provides loans and loan commitments to these entities or holds notes issued by them, in some cases with credit loss protection through guarantees or other credit enhancements provided by the sellers.

Investment Funds

These funds are established for providing investment opportunities to investors by pooling money from them and investing mainly in equity and debt instruments based on a predetermined investment policy. The SMBC Group has invested in a number of these funds.

Structured Finance

Structured entities for this product are typically established to raise funds for the development of infrastructure, the production of natural resources, the development or acquisition of real estate properties, and the purchase of certain equipment such as vessels or aircrafts for lease transactions. The SMBC Group provides financing to these entities mainly in the form of loans, loan commitments, or notes, which are typically secured by entities’ assets or cash flows generated primarily by entities’ projects.

Others

The SMBC Group provides financing to other types of structured entities such as third-party structured entities and repackaging vehicles to facilitate its clients’ funding requirements. The SMBC Group provides loans and loan commitments to these entities.

Sponsored Unconsolidated Structured Entities with No Interest Held by the SMBC Group

The SMBC Group sponsors certain structured entities in which it has no interest. The SMBC Group is deemed to be a sponsor of a structured entity when the SMBC Group takes a leading role in determining its purpose and design, while providing operational support to ensure its continued operation.

The income received from such sponsored unconsolidated structured entities was ¥23,901 million and ¥16,085 million for the fiscal years ended March 31, 2018 and 2017, respectively. The majority of the income was management fees included in “Fee and commission income” and was from investment funds managed by SMAM, the SMBC Group’s asset management subsidiary. The carrying amount of assets transferred to these entities, which mainly consisted of investment funds, was ¥1,640,396 million and ¥1,479,572 million for the fiscal years ended March 31, 2018 and 2017, respectively.

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Acquisitions

12 Months Ended

Mar. 31, 2018

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Acquisitions

49 ACQUISITIONS

Fiscal Year Ended March 31, 2018

American Railcar Leasing LLC

On June 1, 2017, the SMBC Group, through SMBC Rail Services LLC, the Company’s railcar operating leasing subsidiary, acquired all membership interests of American Railcar Leasing LLC (“ARL”), one of the leading railcar leasing companies in the United States. The SMBC Group pursued this acquisition based on its expectation that the railcar leasing business in the United States will experience further growth and high profitability due to stable demand for rail freight transportation, which is the core infrastructure for inland logistics. Through this acquisition, the SMBC Group aims to expand its railcar leasing business and services by further enhancing its fleet portfolio to appropriately meet diverse needs of clients in a wide range of industries.

The fair values of assets and liabilities of ARL at the date of acquisition and the consideration paid were as follows:

	At June 1, 2017
	(In millions)
Assets:
Property, plant and equipment	¥	304,257
All other assets		15,719
Total assets	¥	319,976
Liabilities:
Borrowings	¥	147,523
All other liabilities		1,947
Total liabilities	¥	149,470
Net assets acquired		170,506
Goodwill		—
Consideration	¥	170,506
Consideration:
Cash	¥	170,506
Total	¥	170,506
Acquisition related costs recognized as an expense in “General and administrative expenses” in the consolidated income statement	¥	1,264

The revenue and profit or loss since the acquisition date to March 31, 2018 and pro forma financial information relating to ARL are immaterial to the consolidated financial statements.

The amount of cash consideration paid relating to ARL, net of cash and cash equivalents acquired amounting to ¥9,644 million, was ¥160,862 million.

Fiscal Year Ended March 31, 2017

GE Japan GK (currently SMFL Capital Company, Limited)

On April 1, 2016, SMFL acquired General Electric Company (“GE”) group’s leasing business in Japan by acquiring a 100% equity interest in GE Japan GK (“GE Japan”). The acquired leasing business is comprised mainly of equipment/asset leasing, small-ticket leasing, and automotive leasing. This acquisition was made for the purpose of upgrading the SMBC Group’s marketing strategies and sales capabilities by leveraging GE Japan’s know-how developed under GE, and offering a wide range of financial solutions by enhancing the combined client base of SMFL and GE Japan.

The fair values of assets and liabilities of GE Japan at the date of acquisition and the consideration paid were as follows:

	At April 1, 2016
	(In millions)
Assets:
Loans and advances	¥	470,538
All other assets		203,069
Total assets	¥	673,607
Liabilities:
Borrowings	¥	436,537
All other liabilities		58,134
Total liabilities	¥	494,671
Net assets	¥	178,936
Non-controlling interests measured at their proportionate share of the identifiable net assets		(394	)
Net assets acquired		178,542
Goodwill		2,417
Consideration	¥	180,959
Consideration:
Cash	¥	180,959
Total	¥	180,959
Acquisition related costs recognized as an expense in “General and administrative expenses” in the consolidated income statement	¥	752

The fair value of the financial assets acquired included ¥470,668 million of loans and receivables to customers. The gross contractual amounts receivable were ¥488,335 million, of which ¥21,692 million were expected to be uncollectible.

The goodwill was attributable to the profitability of the acquired business and the synergies expected to arise after the acquisition. None of the goodwill recognized is expected to be deductible for income tax purposes.

GE Japan’s net profit since the acquisition date to March 31, 2017 was ¥8,041 million.

Sumitomo Mitsui Asset Management Company, Limited

On July 29, 2016, the SMBC Group acquired an additional 20% of the outstanding shares of Sumitomo Mitsui Asset Management Company, Limited (“SMAM”) and increased its equity interest in SMAM to 60%. As a result, the SMBC Group obtained control of SMAM. This acquisition was made for the purpose of enhancing the SMBC Group’s services to comprehensively meet its clients’ needs for asset management.

The fair values of assets and liabilities of SMAM at the date of acquisition and the consideration paid were as follows:

	At July 29, 2016
	(In millions)
Assets:
Cash and deposits with banks	¥	15,411
Trading assets		12,030
Intangible assets		14,555
All other assets		11,007
Total assets	¥	53,003
Liabilities	¥	14,995
Net assets	¥	38,008
Non-controlling interests measured at their proportionate share of the identifiable net assets		(15,203	)
Net assets acquired		22,805
Goodwill		38,053
Consideration	¥	60,858
Consideration:
Cash	¥	20,286
Fair value of the equity interest in SMAM held before the acquisition		40,572
Total	¥	60,858
Acquisition related costs recognized as an expense in “General and administrative expenses”  in the consolidated income statement	¥	8

The goodwill was attributable to the profitability of the acquired business and the synergies expected to arise after the acquisition. None of the goodwill recognized is expected to be deductible for income tax purposes.

As a result of remeasuring the previously held interest to fair value, the SMBC Group recognized a gain of ¥20,344 million, which was included in “Other income” in the consolidated income statement.

The revenue and profit or loss since the acquisition date to March 31, 2017 is immaterial to the consolidated financial statements.

Pro forma financial information

It is estimated that the SMBC Group would have reported a total operating income of ¥3,358,377 million and a net profit of ¥741,214 million for the fiscal year ended March 31, 2017 if all acquisitions had occurred on April 1, 2016.

Cash consideration paid and cash acquired by obtaining control of the subsidiaries

The total amount of cash consideration paid and cash acquired by obtaining control of subsidiaries during the fiscal year ended March 31, 2017 were as follows:

	For the fiscal year ended March 31, 2017
	(In millions)
Cash consideration paid	¥	(201,245	)
Cash and cash equivalents transferred as a result of the acquisitions		1,889
Cash consideration paid, net of cash and cash equivalents acquired by obtaining control of the subsidiaries	¥	(199,356	)

The amounts of assets and liabilities other than cash or cash equivalents in these subsidiaries were ¥724,721 million and ¥509,666 million, respectively.

Fiscal Year Ended March 31, 2016

Retail banking business of Citibank Japan Ltd.

On November 1, 2015, SMBC Trust Bank, the SMBC Group’s wholly owned subsidiary, acquired the retail banking business of Citibank Japan Ltd. (“Citibank Japan”), a wholly owned subsidiary of Citigroup Inc. SMBC Trust Bank allocated its non-voting stocks to Citibank Japan as consideration, and SMBC, the Company’s wholly owned subsidiary, acquired them in cash. Through this acquisition, SMBC Trust Bank is expanding its business model to offer additional products and services, including foreign currency investment products and global services. This acquisition is expected to enable the SMBC Group to expand its customer base, enhance its foreign currency funding source and improve the service capability of the Group as a whole.

The fair values of assets and liabilities of the retail banking business of Citibank Japan at the date of acquisition and the consideration paid were as follows:

	At November 1, 2015
	(In millions)
Assets:
Cash and deposits with banks	¥	2,296,107
All other assets		110,978
Total assets	¥	2,407,085
Liabilities:
Deposits	¥	2,361,908
All other liabilities		8,620
Total liabilities	¥	2,370,528
Net assets acquired		36,557
Goodwill		8,443
Consideration	¥	45,000
Consideration:
Fair value of consideration transferred	¥	45,000
Total	¥	45,000
Acquisition related costs recognized as an expense in “General and administrative expenses” in the consolidated income statement	¥	286

The goodwill was attributable to the profitability of the acquired business and the synergies expected to arise after the acquisition. The goodwill and other intangible assets of ¥40,683 million are deductible for income tax purposes.

The revenue and profit or loss since the acquisition date to March 31, 2016 and pro forma financial information relating to the retail banking business of Citibank Japan are immaterial to the consolidated financial statements.

Cash consideration paid and cash acquired by obtaining control of the subsidiaries and businesses

The total amount of cash consideration paid and cash acquired by obtaining control of subsidiaries and businesses during the fiscal year ended March 31, 2016 were as follows:

	For the fiscal year ended March 31, 2016
	(In millions)
Cash consideration paid	¥	(46,923	)
Cash and cash equivalents transferred as a result of the acquisitions		2,296,517
Cash consideration paid, net of cash and cash equivalents \acquired by obtaining control of the subsidiaries and businesses	¥	2,249,594

The amounts of assets and liabilities other than cash or cash equivalents in these subsidiaries and businesses were ¥175,263 million and ¥2,430,332 million, respectively.

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Assets and Disposal Groups Held For Sale

12 Months Ended

Mar. 31, 2018

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Assets and Disposal Groups Held For Sale

50 ASSETS AND DISPOSAL GROUPS HELD FOR SALE

The table below shows non-current assets and disposal groups held for sale at March 31, 2018 and 2017.

	At March 31,
	2018			2017
	(In millions)
Assets held for sale:
Loans and advances(1)	¥	3,010,314		¥	—
Property, plant and equipment		1,435,637			300
Intangible assets		179,358			—
All other assets		1,026,641			134,007
Total		5,651,950	(2)		134,307	(3)
Liabilities directly associated with the assets held for sale:
Borrowings		1,631,681			—
Debt securities in issue		1,422,402			—
All other liabilities		562,858			27,665
Total	¥	3,616,941	(2)	¥	27,665	(3)

(1) The balance in Loans and advances mainly consists of lease financing.

(2) The assets and liabilities of SMFL were classified as held for sale during the fiscal year ended March 31, 2018.

(3) The comparative amounts of “Assets held for sale” and “Liabilities directly associated with the assets held for sale” have been reclassified from “Other assets” and “Other liabilities”, respectively, to conform to the current presentation.

Other reserves relating to non-current assets and disposal groups held for sale at March 31, 2018 and 2017 were ¥52,146 million and nil, respectively.

Reorganization of joint leasing partnership

On November 6, 2017, the SMBC Group announced that it had entered into a basic agreement with Sumitomo Corporation (“Sumitomo Corp”) concerning the reorganization of its joint leasing partnership, subject to the approval of foreign and domestic regulatory authorities. The final agreement regarding the reorganization was concluded on March 30, 2018 and in this reorganization, the Company will reduce its equity interest in SMFL from 60% to 50% and Sumitomo Corp will increase its equity interest in SMFL from 40% to 50%. As a result, SMFL will cease to be the Company’s consolidated subsidiary and will become its joint venture.

Based on the facts and circumstances, the SMBC Group determined that the reorganization within one year is considered highly probable and therefore the assets and liabilities of SMFL were classified as held for sale during the fiscal year ended March 31, 2018.

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Current and Non-current Distinction

12 Months Ended

Mar. 31, 2018

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Current and Non-current Distinction

51 CURRENT AND NON-CURRENT DISTINCTION

The following tables present an analysis of financial assets and liabilities, excluding cash and deposits with banks, trading assets and liabilities, derivative financial instruments, financial assets included in assets held for sale and financial liabilities included in liabilities directly associated with the assets held for sale, by amounts recovered or settled, not more than twelve months or more than twelve months, at March 31, 2018 and 2017.

	At March 31, 2018
	Amounts recovered or settled
	Not more than twelve months		More than twelve months		Total
	(In millions)
Assets:
Call loans and bills bought	¥	1,802,317	¥	79,563	¥	1,881,880
Reverse repurchase agreements and cash collateral on securities borrowed		8,418,341		73,362		8,491,703
Financial assets at fair value through profit or loss		205,525		1,342,147		1,547,672
Investment securities:
Held-to-maturity investments		92,033		280,426		372,459
Available-for-sale financial assets		5,034,184		15,088,432		20,122,616
Loans and advances		29,469,067		55,660,003		85,129,070
Other financial assets		3,490,685		107,957		3,598,642
Liabilities:
Deposits	¥	123,901,761	¥	4,559,766	¥	128,461,527
Call money and bills sold		1,190,929		—		1,190,929
Repurchase agreements and cash collateral on securities lent		12,022,593		—		12,022,593
Borrowings		7,264,455		3,388,026		10,652,481
Debt securities in issue		3,356,401		7,212,716		10,569,117
Other financial liabilities		6,687,889		3,153		6,691,042

	At March 31, 2017
	Amounts recovered or settled
	Not more than twelve months		More than twelve months		Total
	(In millions)
Assets:
Call loans and bills bought	¥	1,824,730	¥	47,479	¥	1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed		8,851,521		72,864		8,924,385
Financial assets at fair value through profit or loss		—		1,599,093		1,599,093
Investment securities:
Held-to-maturity investments		792,357		381,062		1,173,419
Available-for-sale financial assets		2,042,240		15,858,278		17,900,518
Loans and advances		32,655,787		62,618,058		95,273,845
Other financial assets		3,307,191		117,400		3,424,591
Liabilities:
Deposits	¥	125,254,104	¥	5,041,186	¥	130,295,290
Call money and bills sold		2,083,701		4,319		2,088,020
Repurchase agreements and cash collateral on securities lent		9,424,506		—		9,424,506
Borrowings		7,982,814		4,263,129		12,245,943
Debt securities in issue		4,628,884		6,536,739		11,165,623
Other financial liabilities		7,097,811		103,326		7,201,137

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Condensed Financial Information of Registrant (SMFG)

12 Months Ended

Mar. 31, 2018

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Condensed Financial Information of Registrant (SMFG)

52 CONDENSED FINANCIAL INFORMATION OF REGISTRANT (SMFG)

Condensed Statement of Financial Position

	At March 31,
	2018		2017
	(In millions)
Assets:
Deposits with SMBC	¥	251,681	¥	728,445
Investments in SMBC		4,613,844		4,613,844
Loans to SMBC		5,537,801		3,424,217
Investments in other subsidiaries and associates		1,548,012		1,547,319
Other assets		90,605		58,670
Current tax assets		67,414		87,571
Total assets	¥	12,109,357	¥	10,460,066
Liabilities and equity:
Short-term borrowings from SMBC	¥	1,228,030	¥	1,228,030
Long-term borrowings		199,221		132,806
Debt securities in issue due to other subsidiaries		280,880		280,784
Debt securities in issue		4,216,292		2,821,356
Other liabilities		47,001		22,612
Total liabilities		5,971,424		4,485,588
Shareholders’ equity		5,541,687		5,527,691
Other equity instruments holders’ equity		596,246		446,787
Total equity		6,137,933		5,974,478
Total equity and liabilities	¥	12,109,357	¥	10,460,066

Condensed Income Statement

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Income:
Interest income from SMBC	¥	99,100		¥	52,938		¥	18,313
Dividends from SMBC		223,334			408,419			522,636
Dividends from other subsidiaries and associates		33,668			20,428			20,508
Fees and commission income from subsidiaries		10,226			20,706			16,622
Other income		217			178			234
Total income		366,545			502,669			578,313
Expense:
Interest expense to SMBC		4,298			4,474			5,753
Interest expense to other subsidiaries		16,309			13,039			12,780
Interest expense		89,699			45,223			12,814
Operating and other expense		21,525			12,165			9,868
Total expense		131,831			74,901			41,215
Profit before tax		234,714			427,768			537,098
Income tax expense		(7,085	)		(33,344	)		4
Net profit	¥	241,799		¥	461,112		¥	537,094
Profit attributable to:
Shareholders		232,077			453,183			534,321
Other equity instruments holders		9,722			7,929			2,773

Condensed Statement of Cash Flows

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Operating Activities:
Profit before tax	¥	234,714		¥	427,768		¥	537,098
Income taxes paid—net		35,010			23,427			(7,980	)
Other operating activities—net		(3,736	)		(4,580	)		(3,019	)
Net cash and cash equivalents provided by operating activities		265,988			446,615			526,099
Investing Activities:
Loans provided to SMBC		(2,241,774	)		(1,972,253	)		(1,073,640	)
Other investing activities—net		(13,833	)		(5	)		(76	)
Net cash and cash equivalents used in investing activities		(2,255,607	)		(1,972,258	)		(1,073,716	)
Financing Activities:
Proceeds from issuance of long-term borrowings		66,415			83,806			18,000
Proceeds from issuance of debt securities		1,525,271			1,738,267			754,274
Proceeds from issuance of other equity instruments		149,080			149,081			297,431
Dividends paid to shareholders		(218,569	)		(211,501	)		(218,589	)
Coupons paid to other equity instruments holders		(9,722	)		(7,929	)		(2,773	)
Purchases of treasury stock and proceeds from sale of treasury stock—net		380			(86	)		(138	)
Net cash and cash equivalents provided by financing activities		1,512,855			1,751,638			848,205
Net increase of cash and cash equivalents		(476,764	)		225,995			300,588
Cash and cash equivalents at beginning of period		728,445			502,450			201,862
Cash and cash equivalents at end of period	¥	251,681		¥	728,445		¥	502,450

Investments in subsidiaries and associates

Investments in subsidiaries and associates are stated at cost. The Company recognizes dividend income from subsidiaries and associates when its right to receive payment is established.

Investments in other subsidiaries and associates include equity investments in Sumitomo Mitsui Finance and Leasing Company, Limited, SMBC Nikko Securities Inc., SMFG Card & Credit, Inc., SMBC Consumer Finance Co., Ltd., Sumitomo Mitsui Asset Management Company, Limited and others at March 31, 2018, and Sumitomo Mitsui Finance and Leasing Company, Limited, SMBC Nikko Securities Inc., SMBC Friend Securities Co. Ltd., SMFG Card & Credit, Inc., SMBC Consumer Finance Co., Ltd., Sumitomo Mitsui Asset Management Company, Limited and others at March 31, 2017. These companies are incorporated in Japan, and the proportion of ownership interest of the Company in these companies was the same as described in Note 11 “Investments in Associates and Joint Ventures,” and Note 47 “Principal Subsidiaries.”

Long-term obligations

The Company had perpetual subordinated bonds of ¥267 billion and ¥267 billion outstanding to its subsidiary, SMFG Preferred Capital JPY 3 Limited, at March 31, 2018 and 2017, respectively. The interest rates of these bonds are fixed until January 2020, which range from 4.0% to 4.5% per annum, and will be floating thereafter. SMFG Preferred Capital JPY 3 Limited issued preferred securities to purchase these bonds.

The Company had subordinated long-term borrowings amounting to ¥49 billion and ¥49 billion at March 31, 2018 and 2017, respectively, and had unsubordinated long-term borrowings amounting to ¥150 billion and to ¥84 billion at March 31, 2018 and 2017, respectively. The Company also had subordinated bonds amounting to ¥945 billion and ¥856 billion, including ¥2 billion and ¥7 billion outstanding to its subsidiary, at March 31, 2018 and 2017, respectively, and had senior bonds amounting to ¥3,285 billion and ¥1,979 billion, including ¥12 billion and ¥7 billion outstanding to its subsidiary, at March 31, 2018 and 2017, respectively. For additional information, refer to Note 18 “Borrowings” and Note 19 “Debt Securities in Issue.”

Guarantees

The Company provided guarantee of ¥298 billion and ¥516 billion at March 31, 2018 and 2017, respectively, to the Deposit Protection Fund of the Association of German Banks with regard to the deposits of the SMBC Dusseldorf branch.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Mar. 31, 2018

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Basis of Preparation

Basis of Preparation

Compliance with International Financial Reporting Standards

The consolidated financial statements of the SMBC Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Basis of measurement

The consolidated financial statements have been prepared under the historical cost basis except for the following:

• trading assets and liabilities are measured at fair value;

• derivative financial instruments are measured at fair value;

• financial assets at fair value through profit or loss are measured at fair value;

• available-for-sale financial assets are measured at fair value; and

• liabilities and the assets recognized in consolidated statement of financial position in respect of defined benefit plans are the present value of the defined benefit obligation less the fair value of plan assets.

Functional and presentation currency

The consolidated financial statements are presented in Japanese yen, which is also the Company’s functional currency. All financial information presented in Japanese yen has been rounded to the nearest million, except as otherwise indicated.

Critical accounting estimates and judgments

The preparation of the consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the accounting policies. Actual results may differ from these estimates. The notes to the consolidated financial statements set out areas involving a higher degree of judgment or complexity, or areas where assumptions are significant to the consolidated financial statements, such as allowance for loan losses (Notes 10, 32), fair value of financial instruments (Note 43), impairment of available-for-sale financial assets (Notes 9, 32), impairment of goodwill (Note 14), provision for interest repayment (Note 20), retirement benefits (Note 23) and deferred tax assets (Note 22).

Refer to Note 3 “Critical Accounting Estimates and Judgments” for further information.

New and Amended Accounting Standards Adopted by the SMBC Group

New and Amended Accounting Standards Adopted by the SMBC Group

During the fiscal year ended March 31, 2018, a number of amendments to standards have become effective; however, they have not resulted in any material changes to the SMBC Group’s accounting policies.

Consolidation

Consolidation

Subsidiaries

Subsidiaries are all entities controlled by the SMBC Group. The SMBC Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The SMBC Group considers all facts and circumstances whether it controls an entity.

Where the relevant activities are directed through voting or similar rights, the SMBC Group considers that it controls an entity if it has the existing rights that give it the current ability to direct the operating and financing policies of the entity, in general by having a shareholding of more than 50% of the voting rights. The existence and effect of potential voting rights that are deemed to be substantive are taken into account when assessing whether the SMBC Group controls another entity.

Where the voting rights are not the dominant factor in deciding who controls the entity, the assessment of control is more complex and requires greater use of judgment. The SMBC Group assesses whether it controls an entity considering all facts and circumstances, such as the purpose and design of the entity, the relevant activities and how to make decisions about those activities.

The SMBC Group also determines whether it is acting as an agent or a principal in assessing whether it has control of another entity. An agent is a party primarily engaged to act on behalf and for the benefit of another party or parties and therefore does not control the entity. To make such judgments, the SMBC Group considers the overall relationship, especially all of the following factors: the scope of its decision-making authority over the entity, the rights held by other parties, the remuneration to which it is entitled in accordance with the remuneration agreement, and its exposure to variability of returns from other interests that it holds in the entity.

The SMBC Group reassesses whether it controls an entity if facts and circumstances indicate that there are changes to one or more of the elements of control.

Subsidiaries are fully consolidated from the date on which the SMBC Group obtains control. They are deconsolidated from the date on which the SMBC Group loses control.

The acquisition method is used to account for the business combinations including the acquisition of subsidiaries by the SMBC Group. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred, the liabilities incurred and the equity interests issued. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The SMBC Group’s previously held equity interest in the acquiree is remeasured at fair value at the acquisition date and any gain or loss is recognized in profit or loss. For each business combination, the SMBC Group measures any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. The excess of the aggregate of the consideration transferred, the amount of any non-controlling interest and the acquisition-date fair value of the SMBC Group’s previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed is recorded as goodwill in the consolidated statement of financial position. If the aggregate of the consideration transferred, the amount of any non-controlling interest and the acquisition-date fair value of the SMBC Group’s previously held equity interest in the acquiree is less than the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, the difference is recognized immediately in the consolidated income statement.

Inter-company transactions, balances and unrealized gains on transactions between the SMBC Group companies are eliminated on consolidation. Unrealized losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred. The accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the SMBC Group.

Non-controlling interests

Changes in the SMBC Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Interests in the equity of subsidiaries not attributable to the SMBC Group are reported in the consolidated statement of financial position as a separate component of equity as non-controlling interests. Profits or losses attributable to non-controlling interests are separately reported in the consolidated income statement.

Associates and joint ventures

An associate is an entity over which the SMBC Group has significant influence, but does not control the financial and operating policy decisions of the entity. Significant influence is generally presumed to exist when the SMBC Group holds 20% or more, but less than 50%, of the voting rights.

Entities that are jointly controlled by more than one party, including the SMBC Group, may be determined to be a joint venture.

The SMBC Group accounts for investments in associates and joint ventures using the equity method from the date on which they become associates or joint ventures. The SMBC Group discontinues the use of the equity method from the date on which the SMBC Group ceases to have significant influence or joint control over the investees.

Under the equity method, the SMBC Group’s investments in associates and joint ventures are initially recognized at cost. The carrying amount of the investments are subsequently increased or decreased to recognize the SMBC Group’s share of the post-acquisition profit or loss of the associate or joint venture and other movements included directly in the equity of the associate or joint venture. The SMBC Group’s share of the results of associates and joint ventures is based on the financial statements of its associates and joint ventures, adjusted to conform with the accounting policies of the SMBC Group. Profits on transactions between the SMBC Group and its associates and joint ventures are eliminated to the extent of the SMBC Group’s interest in the associates or joint ventures. Losses are also eliminated to the extent of the SMBC Group’s interest in the associates or joint ventures unless the transaction provides evidence of impairment in the asset transferred.

The carrying amounts of the investments in associates and joint ventures include goodwill (net of any accumulated impairment loss) arising on the acquisition of the interests in the entities. Because goodwill arising on the acquisition of the interest in an associate or joint venture is not separately recognized, it is not tested for impairment separately. Instead, the entire carrying amount of the investment in an associate or joint venture is tested for impairment as a single asset by comparing its recoverable amount, which is the higher of value in use and fair value less costs to sell, with its carrying amount, whenever there is any objective evidence that the investment is impaired. An impairment loss recognized in prior periods for the investment is reversed only if there has been a change in the estimates used to determine the recoverable amount of the investment since the last impairment loss was recognized. If this is the case, the carrying amount of the investment is increased to its recoverable amount. That increase is a reversal of an impairment loss.

When the SMBC Group’s share of losses in an associate or joint venture exceeds the SMBC Group’s carrying amount of the investment, the SMBC Group does not recognize further losses, unless it has a binding obligation or has made payments on behalf of the entity.

Segment Reporting

Segment Reporting

The SMBC Group determines its operating segments based on the management approach, which requires operating segments to be identified on the basis of internal reports about components of the entity that are regularly reviewed by management, in order to allocate resources to a segment and to assess its performance.

Foreign Currency Translation

Foreign Currency Translation

Items included in the financial statements of each of the SMBC Group companies are measured using the currency of the primary economic environment in which the company operates (“the functional currency”). The consolidated financial statements are presented in Japanese yen, which is also the Company’s functional currency.

Transactions and balances

Foreign currency transactions that are denominated or settled in a foreign currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary items denominated in foreign currencies are translated using the exchange rate at the end of the reporting period. Foreign exchange gains and losses resulting from the retranslation and settlement of monetary items are recognized in the consolidated income statement. Non-monetary items that are measured at fair value in a foreign currency are translated into the functional currency using the exchange rate at the date the fair value is determined. Translation differences on certain of these items, such as equity instruments classified as available-for-sale financial assets, are not included in the consolidated income statement but are recognized directly in equity. Non-monetary items that are measured at historical cost in a foreign currency are translated into the functional currency using the exchange rate at the date of the initial transaction.

Foreign operations

The assets and liabilities of foreign operations are translated into the presentation currency of the SMBC Group using the exchange rate at the end of the reporting period, and their income statements are translated using the exchange rates at the dates of the transactions or average exchange rates where these approximate to actual rates.

The exchange differences arising on the translation of a foreign operation are included in other comprehensive income within equity and subsequently included in profit or loss on full or partial disposal of the operation.

Financial Assets

Financial Assets

At initial recognition, the financial assets of the SMBC Group are classified into one of the following categories: trading assets, derivative financial instruments, financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.

Regular way purchases and sales of trading assets, derivative financial instruments, financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets are recognized on the trade date—the date on which the SMBC Group commits to purchase or sell the assets.

Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or where the SMBC Group has transferred substantially all the risks and rewards of ownership at a consolidated level. The SMBC Group consolidates all subsidiaries in accordance with IFRS 10 “Consolidated Financial Statements” before determining derecognition of financial assets under IAS 39 “Financial Instruments: Recognition and Measurement.”

Trading assets

Financial assets are classified as held for trading and included in “Trading assets” in the consolidated statement of financial position, if they are acquired principally for the purpose of selling in the near term or if they are part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. Trading assets are initially recognized at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair values of trading assets are included in “Net trading income” in the consolidated income statement.

Derivative financial instruments

Derivatives are classified as held for trading unless they are designated as hedging instruments, and included in “Derivative financial instruments” in the consolidated statement of financial position. All derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. Derivatives are initially recognized at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair values of derivatives held for trading are included in “Net trading income” in the consolidated income statement.

The derivative component of a hybrid instrument containing both a derivative and non-derivative component (“host contract”) is referred to as an embedded derivative. Certain embedded derivatives are accounted for as separate derivatives, when their economic characteristics and risks are not closely related to those of the host contract and the hybrid instrument is not carried at fair value through profit or loss. These embedded derivatives are measured at fair value and are presented in the consolidated statement of financial position together with the host contract.

Financial assets at fair value through profit or loss

Financial assets, other than those held for trading, are classified as financial assets at fair value through profit or loss and are included in “Financial assets at fair value through profit or loss” in the consolidated statement of financial position, if they meet one of the following criteria, and are so designated by management:

• the designation eliminates or significantly reduces a measurement or recognition inconsistency;

• a group of financial assets is managed and its performance is evaluated on a fair value basis in accordance with a documented risk management or investment strategy; or

• the instrument contains one or more embedded derivatives unless (a) the embedded derivative does not significantly modify the cash flows that otherwise would be required by the contract or (b) it is clear with little or no analysis that separation is prohibited.

In addition, the SMBC Group classifies the entire hybrid instrument at fair value through profit or loss when the SMBC Group is required to separate an embedded derivative from its host contract, but is unable to measure the embedded derivative separately either at acquisition or at the end of a subsequent reporting period. Financial assets at fair value through profit or loss are initially recognized at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair value of such financial assets are included in “Net income (loss) from financial assets at fair value through profit or loss” in the consolidated income statement.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than:

• those that the SMBC Group intends to sell immediately or in the near term, which are classified as held for trading, and those that the SMBC Group upon initial recognition designates as at fair value through profit or loss;

• those that the SMBC Group upon initial recognition classifies as available-for-sale; or

• those for which the SMBC Group may not recover substantially all of its initial investment, other than because of credit deterioration.

The financial assets classified as loans and receivables are mainly included in “Loans and advances” in the consolidated statement of financial position. Loans and receivables are initially recognized at fair value plus directly attributable transaction costs, and are subsequently measured at amortized cost using the effective interest method.

When the SMBC Group is the lessor in a lease agreement that transfers substantially all of the risks and rewards incidental to ownership of the asset to the lessee, the arrangement is classified as a finance lease and a receivable equal to the net investment in the lease is recognized and presented within “Loans and advances” in the consolidated statement of financial position.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets quoted in an active market with fixed or determinable payments and fixed maturities that the SMBC Group has the positive intention and ability to hold to maturity. If the SMBC Group were to sell other than an insignificant amount of held-to-maturity investments, the remaining investments in this category would be reclassified as available-for-sale financial assets. Held-to-maturity investments are initially recognized at fair value plus directly attributable transaction costs, and are subsequently measured at amortized cost using the effective interest method.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are classified as available-for-sale at initial recognition or are not classified into any of the other categories described above. Available-for-sale financial assets are initially recognized at fair value plus directly attributable transaction costs, and are subsequently measured at fair value.

Gains and losses arising from changes in the fair value of available-for-sale financial assets are recognized in other comprehensive income, until they are derecognized or impaired. At that time, the cumulative gain or loss previously recognized in other comprehensive income is recognized in the consolidated income statement. However, interest income calculated using the effective interest method and foreign currency gains and losses on monetary assets classified as available-for-sale are recognized in the consolidated income statement. Dividends on available-for-sale equity instruments are recognized in the consolidated income statement when the entity’s right to receive payment is established.

Financial Liabilities

Financial Liabilities

Financial liabilities, except for held for trading and derivatives, are initially recognized at fair value net of transaction costs incurred, including premiums, discounts and issuance costs, and subsequently measured at amortized cost based on the effective interest method. Financial liabilities carried at amortized cost are mainly “Deposits,” “Borrowings,” and “Debt securities in issue” included in the consolidated statement of financial position.

Financial liabilities are classified as held for trading if they are incurred principally for the purpose of repurchasing in the near term or if they are part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. Financial liabilities held for trading and derivatives are mainly included in “Trading liabilities” and “Derivative financial instruments,” respectively, in the consolidated statement of financial position. Trading liabilities and derivatives are initially measured at fair value with transaction costs being recognized in the consolidated income statement, and subsequently measured at fair value. Gains and losses arising from changes in the fair values of such trading liabilities and derivatives are included in “Net trading income” in the consolidated income statement.

Financial liabilities are derecognized when they have been redeemed or otherwise extinguished.

Hedge Accounting

Hedge Accounting

On April 1, 2017, the SMBC Group started to apply hedge accounting in order to reflect the effect of risk management activities on its consolidated financial statements to mitigate the foreign currency risk on exchange differences arising from the translation of net investments in foreign operations. The SMBC Group uses currency derivatives and foreign currency denominated financial liabilities as hedging instruments. The effective portion of the gain or loss on the hedging instruments is recognized in other comprehensive income, whereas the ineffective portion of the gain or loss on the hedging instruments is recognized in net trading income in the consolidated income statement. The cumulative gain or loss recognized in other comprehensive income is recognized in the profit or loss on the disposal or partial disposal of the foreign operation. For further information about hedge accounting, see Note 7 “Derivative Financial Instruments—Hedge accounting.”

Offsetting Financial Instruments

Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is reported in the consolidated statement of financial position, only if the SMBC Group currently has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis or to realize the asset and settle the liability simultaneously. In all other situations, they are presented on a gross basis.

Fair Value Measurement

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining the fair value, the SMBC Group gives the highest priority to a quoted price in an active market for identical assets or liabilities. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. If there is no active market for the asset or liability, the SMBC Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure the fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. In cases where the SMBC Group manages a group of financial assets and financial liabilities on the basis of its net credit exposure, the fair value of the group of financial assets and financial liabilities is measured on the basis of the price that would be received to sell a net long position (i.e., an asset) or paid to transfer a net short position (i.e., a liability) for the credit risk exposure provided that certain criteria set forth in IFRS 13 “Fair Value Measurement” are met. Details of fair value measurement are described in Note 43 “Fair Value of Financial Assets and Liabilities.”

Recognition of Deferred Day One Profit and Loss

Recognition of Deferred Day One Profit and Loss

The best evidence of the fair value of a financial instrument at initial recognition is normally the transaction price (i.e., the fair value of the consideration given or received). However, if the fair value at initial recognition is not evidenced by a quoted price in an active market for an identical asset or liability nor based on a valuation technique that uses only data from observable markets, the difference between the fair value at initial recognition and the transaction price, commonly referred to as “day one profit and loss,” is not recognized as a gain or loss but adjusted to be deferred. The SMBC Group did not have any significant deferred day one profit and loss for the fiscal years ended March 31, 2018 and 2017.

Repurchase and Reverse Repurchase Agreements, and Securities Borrowing and Lending Agreements

Repurchase and Reverse Repurchase Agreements, and Securities Borrowing and Lending Agreements

In the ordinary course of business, the SMBC Group lends or sells securities under agreements to repurchase them at a predetermined price on a future date (“repos”). Since substantially all the risks and rewards are retained by the SMBC Group, the securities remain on the consolidated statement of financial position and a liability is recorded in respect of the consideration received. On the other hand, the SMBC Group borrows or purchases securities under agreements to resell them at a predetermined price on a future date (“reverse repos”). Since the SMBC Group does not retain the risks and rewards of ownership, these transactions are treated as collateralized loans and the securities are not included in the consolidated statement of financial position.

The difference between the sale and purchase price is accrued over the life of the transactions. Securities lent to counterparties remain on the consolidated statement of financial position. Securities borrowed are not recognized in the consolidated statement of financial position, unless these are sold to third parties, at which point the obligation to repurchase the securities is recorded as a trading liability at fair value and any subsequent gain or loss is included in “Net trading income” in the consolidated income statement.

For the fiscal years ended March 31, 2018 and 2017, there were no transactions pursuant to repurchase agreements, securities lending transactions or other transactions involving the transfer of financial assets with an obligation to repurchase such transferred assets that were treated as sales and hence derecognized for accounting purposes.

Impairment of Financial Assets

Impairment of Financial Assets

Loans and advances and held-to-maturity investments

At the end of each reporting period, the SMBC Group assesses whether there is any objective evidence that a financial asset or a group of financial assets is impaired.

A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The criteria that the SMBC Group uses to determine that there is objective evidence of an impairment loss include:

• significant financial difficulty of an issuer or an obligor;

• a default or delinquency in interest or principal payments;

• restructuring of a financial asset by the SMBC Group due to the borrower’s financial difficulties on terms that the SMBC Group would not otherwise consider;

• indications that a borrower or issuer will enter bankruptcy;

• disappearance of an active market for a security because of the borrower’s financial difficulties; and

• other observable data relating to a group of assets, such as adverse changes in the payment status of borrowers or issuers in the group, or national or local economic conditions that correlate with defaults in the group.

The SMBC Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If the SMBC Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized are not included in the collective assessment of impairment.

The allowance for individually significant impaired financial assets is measured by the discounted cash flow (“DCF”) method, which is used to calculate the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. If financial assets have a variable interest rate, the discount rate for measuring any impairment loss is the effective interest rate determined under the contract, for the current period. The estimated future cash flows are individually calculated taking into account factors including historical loss information, the appropriateness of the borrower’s business plan or operational improvement plan, the status of progress of its plan, the overall support from financial institutions, and the realizable value of any collateral held.

The collective allowance for financial assets is classified into two types: (1) the allowance for impaired financial assets that are not individually significant, and (2) the allowance for non-impaired financial assets, which reflects incurred but not yet identified (“IBNI”) losses for the period between the impairment occurring and the loss being identified. The collective allowance is estimated by applying historical loss experience to groups of homogenous loans. The historical loss experience data includes the number of borrowers for whom objective evidence of impairment has been identified for the most recent rolling one-year period, and the amount ultimately recovered from impaired financial assets. The SMBC Group has collected and accumulated historical data on amounts ultimately recovered from impaired financial assets. The homogeneous groups are determined on the basis of similar credit risk characteristics. For every group, the SMBC Group’s grading processes are established considering asset type, industry, geographical location, collateral type, past-due status and other relevant characteristics (see Note 45 “Financial Risk Management”). These characteristics are relevant to the estimation of future cash flows for groups of such assets as being indicative of the debtors’ ability to pay all amounts due according to the contractual terms of the assets being evaluated. Historical loss experience is adjusted on the basis of current observable data, including bankruptcy trends after the occurrence of significant events which had a negative effect on the global economy and the economies in which a large portion of the SMBC Group’s assets are located, to reflect the effects of current conditions that did not affect the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not currently exist.

The carrying amount of the asset is reduced by the impairment loss either directly or through the use of an allowance account. Changes in the carrying amount of the allowance account are recognized in the consolidated income statement. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor’s credit rating), the previously recognized impairment loss is reversed by adjusting the allowance account. The amount of the reversal is recognized in “Impairment charges on financial assets” in the consolidated income statement.

If a financial asset is determined to be uncollectible, it is written off against the related allowance account. Uncollectible financial assets are normally written off when there is no expectation of further recovery after any collateral is foreclosed and the amount of the loss has been determined. Those assets primarily include loans for borrowers that have been legally or formally declared bankrupt and borrowers that may not have been legally or formally declared bankrupt but are essentially bankrupt.

Loans and advances that would otherwise be past due or impaired, but whose terms have been renegotiated without providing any financial concessions, are not classified as impaired loans and advances as the terms of the renegotiated loans and advances do not result in a decrease in the net present value of the loan discounted at its original effective interest rate. The collective allowance is estimated for these loans and advances by including them in homogenous groups on the basis of applying the SMBC Group’s grading process, taking into account the renegotiation and their consequent higher risk status. These loans and advances are continually assessed for impairment until maturity or derecognition.

In addition, provisions for loan commitments are calculated where it is probable that the SMBC Group will incur a loss and recognized in other provisions (see Note 20 “Provisions”).

Available-for-sale financial assets

At the end of each reporting period, the SMBC Group assesses whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity instruments classified as available-for-sale, a significant or prolonged decline in the fair value of the instruments below cost is also considered in determining whether the assets are impaired. In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as for loans and advances and held-to-maturity investments. If any objective evidence of impairment exists for available-for-sale financial assets, the cumulative loss—measured as the difference between the cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss—is removed from equity and recognized in the consolidated income statement.

Impairment losses recognized in the consolidated income statement on equity instruments classified as available-for-sale are not reversed through the consolidated income statement. For debt instruments classified as available-for-sale, if the fair value recovers in a subsequent period and it can be objectively associated with an event occurring after the impairment loss was recognized in the consolidated income statement, the impairment loss is reversed through the consolidated income statement.

Property, Plant and Equipment

Property, Plant and Equipment

All property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Additions and subsequent expenditures are capitalized only to the extent that they enhance the future economic benefits expected to be derived from the assets. Repairs and maintenance costs are expensed as incurred.

Land is not depreciated. Depreciation of other assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

• Buildings: 7–50 years;

• Leased assets: the shorter of the lease term and the estimated useful life, which is generally 5–20 years; and

• Assets for rent (including assets for aircraft leasing business) and others: 2–40 years.

The residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount. These are included in “Other income” and “Other expenses” in the consolidated income statement.

Intangible Assets

Intangible Assets

Goodwill

Goodwill represents the excess of the aggregate of the consideration transferred, the amount of any non-controlling interest and the acquisition-date fair value of the SMBC Group’s previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, and is initially recognized at the date of acquisition. Goodwill is allocated to cash-generating units for the purpose of impairment testing. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of cash inflows from other assets or groups of assets. Impairment testing is performed at least annually and whenever there is an indication that the cash-generating unit may be impaired. When the SMBC Group disposes of all or part of a cash-generating unit to which goodwill is allocated, the goodwill associated with the cash-generating unit is included in the carrying amount of the cash-generating unit when determining the gain or loss on disposal.

Software

Purchased software is carried at cost less accumulated amortization and accumulated impairment losses, if any.

Expenditure on internally generated software is recognized as an asset if the SMBC Group can demonstrate its intention and ability to complete the development and use the software in a manner that will generate future economic benefits and it can reliably measure the costs to complete the development. Internally generated software is carried at capitalized cost less accumulated amortization and accumulated impairment losses, if any. Costs associated with maintaining software are expensed as incurred.

Software is amortized using the straight-line method over the estimated useful life, which is generally 5 to 10 years.

Contractual customer relationships and trademarks

Contractual customer relationships and trademarks acquired in a business combination are recognized at fair value at the acquisition date. Contractual customer relationships and trademarks are carried at cost less accumulated amortization or impairment losses, if any. Contractual customer relationships and trademarks are amortized using the straight-line method over their estimated useful lives, which are generally 10 to 20 years.

Other intangible assets

Other intangible assets primarily consist of leasehold rights. They are recognized only when the SMBC Group legally obtains the rights and can reliably measure the fair value. Leasehold rights have an indefinite useful life and they are not amortized but are tested for impairment annually.

Impairment of Non-Financial Assets

Impairment of Non-Financial Assets

Non-financial assets are reviewed for impairment at the end of each reporting period and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognized in the consolidated income statement if the asset’s carrying amount is greater than its estimated recoverable amount. The recoverable amount is estimated as the higher of the asset’s fair value less costs to sell and value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. In addition, irrespective of whether there is any indication of impairment, intangible assets that have an indefinite useful life are tested for impairment annually.

For the purposes of conducting impairment reviews, assets are grouped into cash-generating units to which the assets belong. Non-financial assets other than impaired goodwill are reviewed for possible reversal of the impairment loss at the end of each reporting period. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Assets Held for Sale

Assets Held for Sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if their carrying amount will be recovered principally through sale rather than through continuing use. In order to be classified as held for sale, the assets or disposal groups must be available for immediate sale in their present condition and their sale must be highly probable. Such assets or disposal groups are generally measured at the lower of their carrying amount and fair value less costs to sell.

Leases

Leases

As lessee

A lease agreement in which the lessor does not transfer to the lessee substantially all the risks and rewards of ownership of assets is classified as an operating lease. The leases entered into by the SMBC Group as a lessee are primarily operating leases. Operating lease payments, net of lease incentives received from the lessor, are recognized in the consolidated income statement on a straight-line basis over the lease term.

A lease agreement in which the lessor transfers to the lessee substantially all the risks and rewards of ownership of assets, with or without ultimate legal title, is classified as a finance lease. For finance leases, the SMBC Group initially recognizes the leased asset at the lower of the fair value of the asset or the present value of the minimum lease payments. Subsequent to initial recognition, assets are accounted for in accordance with the accounting policy applicable to those assets. The corresponding liability to the lessor is recognized as a lease obligation within “Borrowings” in the consolidated statement of financial position. Interest expense is recognized over the term of the lease based on the interest rate implicit in the lease so as to give a constant rate of interest on the remaining balance of the liability.

As lessor

When the SMBC Group acts as a lessor in an operating lease, the assets for rent are included in “Property, plant and equipment” in the consolidated statement of financial position and are depreciated over their expected useful lives on a basis consistent with similar assets in property, plant and equipment. Income from operating leases (net of any incentives given to the lessee) is recognized on a straight-line basis over the lease term and included in “Other income” in the consolidated income statement. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased assets and recognized as an expense on a straight-line basis over the lease term.

When the SMBC Group is a lessor in a finance lease, the leased assets are derecognized and the present value of the future lease payments is recognized as a lease receivable within “Loans and advances” in the consolidated statement of financial position. The difference between the gross receivables, i.e., undiscounted future cash flows, and the present value of the receivables is recognized as unearned finance income. Finance income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the finance lease.

Sale and leaseback

For sale and leaseback transactions leading to an operating lease, and the transaction took place at fair value, any profit or loss is recognized immediately. If the sale price is at or below fair value, any profit or loss is recognized immediately. However, if the loss is compensated for by future rentals at a below market price, the loss is deferred and amortized over the period that the asset is expected to be used. If the sale price is above fair value, any profit is deferred and amortized over the useful life of the asset. If the fair value of the asset is less than the carrying value of the asset at the date of transaction, that difference is recognized immediately as a loss on the sale.

Cash and Cash Equivalents

Cash and Cash Equivalents

For the purposes of the consolidated statement of cash flows, cash and cash equivalents include cash on hand, demand deposits, and other short-term highly liquid financial assets with original maturities of three months or less, which are subject to insignificant risk of changes in their fair value.

Provisions

Provisions

A provision is recognized if, as a result of a past event, the SMBC Group has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Financial Guarantee Contracts

Financial Guarantee Contracts

Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Such financial guarantees are given to banks, financial institutions and other bodies on behalf of customers to secure loans, overdrafts and other banking facilities. Financial guarantees are initially recognized at fair value on the date the guarantee is given.

Subsequent to initial recognition, the SMBC Group’s liabilities under such guarantees are measured at the higher of the initial measurement, less amortization calculated to recognize in the consolidated income statement the fee income earned over the guarantee period, and the best estimate of the expenditure required to settle any financial obligation arising at the end of the reporting period. These estimates are determined based on experience of similar transactions and history of past losses, supplemented by the judgment of management.

Any increase in the liability relating to financial guarantee contracts is included in “Other expenses” in the consolidated income statement.

Employee Benefits

Employee Benefits

The SMBC Group operates various retirement benefit plans and other employee benefit plans.

Retirement benefits

The SMBC Group has defined benefit plans, such as defined benefit pension plans and lump-sum severance indemnity plans, and defined contribution plans.

Defined benefit plans

The liabilities and the assets recognized in the consolidated statement of financial position in respect of defined benefit plans are the present value of the defined benefit obligation less the fair value of plan assets.

The present value of the defined benefit obligation is calculated annually by qualified actuaries. In calculating the present value of the defined benefit obligations, the related current service cost, and past service cost, the SMBC Group attributes the retirement benefits to years of service under the benefit formula. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using market yields of AA credit-rated corporate bonds that have terms to maturity approximating those of the related obligations. In cases where there is no deep market in corporate bonds with a sufficiently long maturity to match the estimated maturity of the benefit payments, the SMBC Group uses current market rates of the appropriate term to discount shorter term payments and estimates the discount rates for longer maturities by extrapolating current market rates along the yield curve.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in the year, and return on plan assets excluding interest income are recognized in other comprehensive income and are never reclassified to profit or loss.

Past service costs are recognized immediately in the consolidated income statement.

When the calculations above result in a benefit to the SMBC Group, the recognized asset is limited to the present value of any economic benefits available in the form of any refunds from the plan or reductions in future contributions to the plan. An economic benefit is available to the SMBC Group if it is realizable during the life of the plan or on settlement of the plan obligations.

Defined contribution plans

Contributions to defined contribution plans are recognized as an expense in the consolidated income statement when they are due.

Other long-term employee benefits

The SMBC Group’s net obligation with respect to long-term employee benefits other than retirement benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value and the fair value of any related assets is deducted. The discount rates are market yields of AA credit-rated corporate bonds that have terms to maturity approximating those of the related obligations. The calculation of obligations is performed using the projected unit credit method. Any actuarial gains or losses and past service costs are recognized in the consolidated income statement in the period in which they arise.

Short-term employee benefits

Short-term employee benefits, such as salaries, paid absences and other benefits are accounted for on an accrual basis over the period in which employees have provided services. Bonuses are recognized to the extent that the SMBC Group has a present obligation to its employees that can be measured reliably.

Income Tax

Income Tax

Income tax expense comprises current and deferred taxes. Income tax expense is recognized in the consolidated income statement except for that related to items recognized directly in equity. In such case, the income tax expense is recognized in equity.

Current tax is the expected tax payable or receivable on the taxable profit or loss for the fiscal year.

Deferred taxes are recognized, using the balance sheet liability method, for temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred taxes are determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred tax assets are realized or the deferred tax liabilities are settled.

Deferred tax assets principally arise from tax losses carried forward, impairment of investment securities and loans, and the allowance for loan losses.

Deferred taxes are not recognized for the following temporary differences: (a) the initial recognition of goodwill; (b) the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; and (c) the temporary differences associated with investments in subsidiaries, associates, and joint ventures, when the parent investor is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets relating to tax losses carried forward and deductible temporary differences are recognized, only to the extent that it is probable that future taxable profit will be available against which the tax losses carried forward and the deductible temporary differences can be utilized.

Debt and equity securities in issue

Debt and equity securities in issue

On initial recognition, financial instruments issued by the SMBC Group are classified in accordance with the substance of the contractual agreement as financial liabilities where the contractual arrangement results in the SMBC Group having an obligation to either deliver cash or another financial asset to the holder, or to satisfy the obligation other than by delivering a fixed number of equity shares in exchange for a fixed amount of cash or another financial asset. The instruments or their components are classified as equity where they do not meet the definition of a liability and show evidence of a residual interest in the entity’s assets after deducting all of its liabilities. Compound financial instruments that contain both liability and equity elements are accounted for separately with the equity component being assigned the residual amount after deducting from the entire value of the compound financial instrument the fair value of the liability component which has been determined separately.

Shareholders' Equity

Shareholders’ Equity

Stock issuance costs

Incremental costs directly attributable to the issuance of new shares or options including those issued as a result of a business combination transaction are deducted from the proceeds and shown in equity, net of tax.

Dividends on common stock and preferred stock

Dividends on common stock and preferred stock are recognized in equity in the period in which they are approved by the shareholders. Dividends for the fiscal year that are declared after the reporting period are described in Note 40 “Dividends Per Share.”

Treasury stock

Where the Company or any other member of the SMBC Group companies purchase the Company’s common or preferred stock, the consideration paid is deducted from equity as treasury stock until they are cancelled or sold. No gain or loss is recognized on the purchase, sale, or cancellation of the Company’s own equity instruments and the consideration paid or received is recognized in equity.

Interest Income and Expense

Interest Income and Expense

Interest income and expense for all financial instruments, except for those classified as held for trading and financial assets at fair value through profit or loss, are recognized in “Interest income” and “Interest expense” in the consolidated income statement using the effective interest method.

The effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period.

The effective interest rate is the rate that discounts the estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the SMBC Group estimates cash flows, considering the contractual terms of the financial instrument but not including future credit losses. The calculation includes fees and points paid or received between parties to the contract that are an integral part of the effective interest rate of the financial instrument, transaction costs and other premiums or discounts.

Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is thereafter recognized using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. For financial assets measured at amortized cost, the interest rate is the original effective interest rate.

Fee and Commission Income

Fee and Commission Income

Fee and commission income includes fee and commission income arising from a diverse range of services that the SMBC Group provides to its customers. Fee and commission income can be divided into two categories: fee and commission income from providing transaction services, and fee and commission income earned from services that are provided over a certain period of time. Fee and commission income earned from providing transaction services is recognized when the service has been completed or the event has occurred. This fee and commission income includes fees on funds transfer and collection services, service charges from deposit accounts, fees and commissions on the securities business, underwriting fees, brokerage fees, and fee and commission income from other services. Fee and commission income earned from services over a period of time is recognized over that service period. This fee and commission income includes fees on credit-related businesses, investment fund businesses, and fee and commission income from other services. Loan commitment fees, together with the related direct cost, for loans that are likely to be drawn down are deferred and recognized as an adjustment to the effective interest rate on the loan. Loan commitment fees are recognized over the term of the commitment period when it is unlikely that a loan will be drawn down

Net Trading Income

Net Trading Income

Net trading income consists of margins made on market-making and customer business, as well as changes in fair value of trading assets and liabilities and derivative financial instruments, caused by movements in interest rates, exchange rates, equity prices and other market variables. It also includes net interest and dividend income on trading assets and liabilities.

Net Income (Loss) from Financial Assets at Fair Value through Profit or Loss

Net Income (Loss) from Financial Assets at Fair Value through Profit or Loss

Net income (loss) from financial assets at fair value through profit or loss includes all gains and losses arising from changes in the fair value of these financial assets and sales of such assets, and interest and dividend income on these financial assets.

Net Investment Income

Net Investment Income

Net investment income includes gains and losses on the disposal of available-for-sale financial assets, and dividends from available-for-sale equity instruments.

Earnings Per Share

Earnings Per Share

The SMBC Group presents basic and diluted earnings per share (“EPS”) data for its common stock. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the SMBC Group by the weighted average number of common stock outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common stock outstanding for the effects of all dilutive potential common stock including share options and other convertible instruments.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

The SMBC Group is currently assessing the impact of the following standards, amendments to standards, and interpretations that are not yet effective and have not been early adopted:

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)

In September 2014, the IASB issued the narrow-scope amendments to IFRS 10 and IAS 28 “Investments in Associates and Joint Ventures” to address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The effective date of applying the amendments was January 1, 2016 when they were originally issued, however, in December 2015, the IASB issued Effective Date of Amendments to IFRS 10 and IAS 28 to remove the effective date and indicated that a new effective date will be determined at a future date when it has finalized revisions, if any, that result from its research project on the equity accounting. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

IFRS 15 “Revenue from Contracts with Customers”

In May 2014, the IASB published IFRS 15 “Revenue from Contracts with Customers” to establish principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contract with customers. IFRS 15 replaces IAS 18 “Revenue,” IAS 11 “Construction Contracts,” IFRIC 13 “Customer Loyalty Programmes” and other related interpretations. The core principle of IFRS 15 is to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the entity expects to be entitled in exchange for those goods or services. IFRS 15 also requires enhanced disclosures about revenue, provides guidance for transactions that were not previously addressed comprehensively and improves guidance for multiple-element arrangements. The SMBC Group expects the primary impacts of the standard to be the capitalization of the incremental costs of obtaining a contract and costs incurred in fulfilling a contract in the credit card business, and the classification if certain incentives related to point programmes are performance obligations. The SMBC Group initially applies the standard on April 1, 2018. The SMBC Group will apply the standard retrospectively by adjusting the consolidated statement of financial position at the date of initial application, without any requirements to restate previous periods. The SMBC Group’s opening shareholders’ equity is expected to increase by approximately ¥15 billion post-tax, due to the capitalization of contract costs.

IFRS 9 “Financial Instruments”

In July 2014, the IASB published IFRS 9 “Financial Instruments,” which is the comprehensive standard to replace IAS 39. The standard contains the following new requirements for classification and measurement of financial assets and liabilities, impairment of financial assets and hedge accounting.

Classification and measurement

The standard requires all financial assets to be classified into three categories, namely, amortized cost, fair value through other comprehensive income (“FVOCI”) and fair value through profit or loss (“FVPL”), based on the business model within which they are held and their contractual cash flow characteristics. A financial asset is measured at amortized cost if the asset is held within a business model whose objective is to hold the asset in order to collect contractual cash flows, and the asset’s contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Financial assets are measured at FVOCI if they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and SPPI requirements are met. Any financial assets that do not meet the criteria of amortized cost or FVOCI should be classified as FVPL, unless an entity makes an irrevocable election for non-trading equity instruments to be measured at FVOCI. Financial assets that would be otherwise measured at amortized cost or FVOCI can be designated at recognition to be measured at FVPL in order to eliminate or significantly reduce an accounting mismatch.

The standard maintains most of the requirements in IAS 39 regarding the classification and measurement of financial liabilities. However, with the new requirements, if an entity chooses to measure a financial liability at fair value, the amount of change in its fair value that is attributable to changes in the credit risk of that liability will be presented in other comprehensive income, rather than in profit or loss.

The SMBC Group has conducted assessments of business model and SPPI requirements to identify classification and measurement of financial assets under the standard. At initial application, the SMBC Group anticipates, with limited exceptions, that:

• Trading assets, derivative financial instruments and financial assets at fair value through profit or loss will be measured at FVPL;

• Available-for-sale debt instruments will be measured at FVOCI;

• Available-for-sale equity instruments will be measured at FVPL or designated as FVOCI; and

• Held-to-maturity investments and loans and advances will be measured at amortized cost.

Impairment

The standard introduces the expected credit loss (“ECL”) model, which is a new model for the recognition of impairment losses, to replace the incurred loss model in IAS 39. The impairment requirements apply to financial assets measured at amortized cost and FVOCI, lease receivables, certain loan commitments and financial guarantee contracts. Under the ECL model, an entity is required to account for expected credit losses from initial recognition of financial instruments and to recognize full lifetime expected losses on a timely basis. The ECL model will result in the recognition of impairment losses earlier than the incurred loss model.

At each reporting date, credit risk on a financial instrument should be assessed and a loss allowance should be measured for expected credit losses resulting from default events that are possible within the next 12 months, if the credit risk has not increased significantly since initial recognition (“Stage 1”). A loss allowance should be recognized at an amount equal to expected credit losses resulting from all possible default events over the expected life of the financial instrument for the financial assets which are assessed to have experienced a significant increase in credit risk (“Stage 2”) or for the credit-impaired financial assets (“Stage 3”). A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. These indicators are similar to those under IAS 39 including significant financial difficulty and default.

Quantitative and qualitative assessments are used to determine whether there has been a significant increase in credit risk on financial instruments. These assessments include comparing the risk of a default occurring on the financial instrument at the reporting date and that at the date of initial recognition. Financial instruments with risk of a default increasing more than the quantitative threshold defined by the SMBC Group are deemed to have experienced a significant increase in credit risk. In addition, financial instruments assessed to have high credit risk from the credit risk management practices of the SMBC Group are transferred to Stage 2. Furthermore, a significant increase in credit risk is presumed if principal and/or interest payments are more than 30 days past due.

The standard requires that expected credit losses should be measured to reflect an unbiased and probability-weighted amount, the time value of money, and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. To meet these requirements, the SMBC Group has built ECL models by leveraging the probability of default (“PD”), loss given default (“LGD”) and exposure at default (“EAD”) used in the Basel III regulatory framework, for instance by adjusting certain conservative factors in those PDs and LGDs. For financial assets at Stage 2, the SMBC Group will use the lifetime PDs developed to measure lifetime ECL and consider forward-looking macro-economic information. On the other hand, the discounted cash flow method will be continued to be applied for the measurement of the ECL for individually significant impaired financial assets. The allowance for financial assets in IFRS 9 will increase compared to that in IAS 39, as a result of an increase in the overall level of allowance for non-impaired financial assets. This is primarily due to the requirements under IFRS 9 to measure an allowance equal to 12 months ECL for those financial assets at Stage 1 and lifetime ECL for those at Stage 2, whereas the allowance for those financial assets is calculated for incurred losses with a relatively short loss identification period not longer than 12 months under IAS 39.

Hedge Accounting

The standard introduces a new hedge accounting model, together with corresponding disclosures about risk management activity for those applying hedge accounting. The standard aligns hedge accounting more closely with risk management and adopts a more principle-based approach than that under IAS 39. The standard includes an accounting policy choice to defer the adoption of hedge accounting under the standard and to continue with IAS 39.

Transition impact

The SMBC Group initially applies the standard on April 1, 2018. The SMBC Group will apply the classification and measurement and impairment requirements retrospectively by adjusting the consolidated statement of financial position at the date of initial application, without any requirements to restate previous periods. As for hedge accounting, the SMBC Group started to apply hedge accounting to a part of the hedge transactions whose hedged items were net investments in foreign operations under IAS 39, and has decided to apply the accounting policy to continue with IAS 39 hedge accounting for those hedge transactions. As the amended IFRS 7 “Financial Instruments: Disclosures” will be effective at the time of application of the standard, the SMBC Group will revise the related disclosures for hedge accounting from then.

The SMBC Group’s opening shareholders’ equity is expected to decrease by approximately ¥150 billion post-tax, primarily due to the new requirements for impairment. This estimate is based on accounting policies, assumptions, judgments and estimation techniques that remain subject to change until the SMBC Group finalizes its financial statements for the fiscal year ending March 31, 2019. The adoption of IFRS 9 has no impact on the SMBC Group’s Common Equity Tier 1 capital, as it is calculated under Japanese GAAP.

Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)

In June 2016, the IASB issued narrow-scope amendments to IFRS 2 “Share-based Payment” to clarify how to account for certain types of share-based payment transactions. The amendments are effective for annual periods beginning on or after January 1, 2018 and are not expected to have a material impact on the SMBC Group’s consolidated financial statements.

Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4)

In September 2016, the IASB issued amendments to IFRS 4 “Insurance Contracts” to address concerns arising from implementing the new financial instruments standard, IFRS 9, before implementing the replacement standard that the IASB is developing for IFRS 4. These concerns include temporary volatility in reported results. The amendments introduce two approaches. One is an approach for entities that issue insurance contracts. This is applicable only when an entity first applies IFRS 9. The other is an approach for entities whose activities are predominantly connected with insurance. This is effective for annual periods beginning on or after January 1, 2018 and is not expected to have a material impact on the SMBC Group’s consolidated financial statements.

Annual Improvements to IFRSs 2014-2016 Cycle

In December 2016, the IASB issued Annual Improvements to IFRSs 2014-2016 Cycle, which is a collection of amendments to three IFRSs. These are minor amendments that clarify, correct or remove redundant wordings in the standards. These improvements include the amendments effective for annual periods beginning on or after January 1, 2018 and are not expected to have a material impact on the SMBC Group’s consolidated financial statements.

IFRIC Interpretation 22 “Foreign Currency Transactions and Advance Consideration”

In December 2016, the IASB issued IFRIC Interpretation 22 “Foreign Currency Transactions and Advance Consideration” to clarify the date of the transaction for the purpose of determining the exchange rate to use in transactions that involve advance consideration paid or received in a foreign currency in accordance with IAS 21 “The Effects of Changes in Foreign Exchange Rates.” The interpretation is effective for annual periods beginning on or after January 1, 2018 and is not expected to have a material impact on the SMBC Group’s consolidated financial statements.

Transfers of Investment Property (Amendments to IAS 40)

In December 2016, the IASB issued amendments to IAS 40 “Investment Property” to clarify the requirements on transfers to, or from, investment property when, and only when, there is a change in use. The amendments are effective for annual periods beginning on or after January 1, 2018 and are not expected to have a material impact on the SMBC Group’s consolidated financial statements.

IFRS 16 “Leases”

In January 2016, the IASB published IFRS 16 “Leases,” which sets out the principles for the recognition, measurement, presentation and disclosure of leases, replacing IAS 17 “Leases.” The standard introduces a single lessee accounting model and eliminates the classification of leases as either operating leases or finance leases, requiring a lessee to recognize assets and liabilities. A lessor continues to classify its leases as operating leases or finance leases, and to account for them differently. The standard is effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the standard will have on its consolidated financial statements.

IFRIC 23 “Uncertainty over Income Tax Treatments”

In June 2017, the IASB published IFRIC 23 “Uncertainty over Income Tax Treatments,” which clarifies how to apply the recognition and measurement requirements in IAS 12 “Income Taxes” when there is uncertainty over income tax treatments. IAS 12 specifies how to account for current and deferred tax, but not how to reflect the effects of uncertainty. This interpretation adds to the requirements in IAS 12 by specifying how to reflect the effects of uncertainty in accounting for income taxes. The interpretation is effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the interpretation will have on its consolidated financial statements.

Prepayment Features with Negative Compensation (Amendments to IFRS 9)

In October 2017, the IASB issued amendments to IFRS 9 to allow entities to measure particular prepayable financial assets with negative compensation at amortized cost or at fair value through other comprehensive income instead of at fair value through profit or loss, if a specified condition is met. The amendments are effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)

In October 2017, the IASB issued amendments to IAS 28 to clarify that entities account for long-term interests in an associate or joint venture, to which the equity method is not applied, using IFRS 9. The amendments are effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

Annual Improvements to IFRSs 2015-2017 Cycle

In December 2017, the IASB issued Annual Improvements to IFRSs 2015-2017 Cycle, which is a collection of amendments to four IFRSs. These are amendments that either clarify the wording in the standard or correct relatively minor oversights or conflicts between existing requirements of the standards. These improvements include the amendments effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

Plan Amendment, Curtailment or Settlement (Amendments to IAS 19)

In February 2018, the IASB issued amendments to IAS 19 “Employee Benefits” to clarify how to determine current service cost and net interest for the period after a change to a defined benefit plan. When a change to a plan such as an amendment, curtailment or settlement takes place, IAS 19 requires an entity to remeasure its net defined benefit liability or asset. The amendments require an entity to use the updated assumptions from this remeasurement to determine current service cost and net interest for the remainder of the reporting period after the change to the plan. The amendments are effective for annual periods beginning on or after January 1, 2019. The SMBC Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements.

IFRS 17 “Insurance Contracts”

In May 2017, the IASB published IFRS 17 “Insurance Contracts,” which establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts, replacing IFRS 4. IFRS 4 provided entities dispensation to carry on accounting for insurance contracts using national accounting standards, resulting in a multitude of different approaches. IFRS 17 requires all insurance contracts to be accounted for in a consistent manner. Insurance obligations will be accounted for by using present values instead of historical cost. The standard is effective for annual periods beginning on or after January 1, 2021. The SMBC Group is currently evaluating the potential impact that the adoption of the standard will have on its consolidated financial statements.

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Segment Analysis (Tables)

12 Months Ended

Mar. 31, 2018

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Segmental Results of Operations

Segmental Results of Operations

For the fiscal year ended March 31, 2018:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	772.9		¥	1,311.7		¥	632.0		¥	356.2		¥	(91.7	)	¥	2,981.1
General and administrative expenses		(347.9	)		(1,027.7	)		(280.7	)		(53.9	)		(106.0	)		(1,816.2	)
Others(2)		53.7			15.6			46.9			17.5			(94.8	)		38.9
Consolidated net business profit	¥	478.7		¥	299.6		¥	398.2		¥	319.8		¥	(292.5	)	¥	1,203.8

For the fiscal year ended March 31, 2017:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	776.4		¥	1,313.9		¥	566.1		¥	346.8		¥	(82.5	)	¥	2,920.7
General and administrative expenses		(344.8	)		(1,041.1	)		(241.2	)		(50.2	)		(135.1	)		(1,812.4	)
Others(2)		45.6			12.1			38.5			8.2			(79.8	)		24.6
Consolidated net business profit	¥	477.2		¥	284.9		¥	363.4		¥	304.8		¥	(297.4	)	¥	1,132.9

For the fiscal year ended March 31, 2016:

	Wholesale Business Unit			Retail Business Unit			International Business Unit			Global Markets Business Unit			Head office account and others			Total
	(In billions)
Consolidated gross profit(1)	¥	749.2		¥	1,272.7		¥	588.8		¥	354.1		¥	(60.8	)	¥	2,904.0
General and administrative expenses		(325.3	)		(1,000.6	)		(236.5	)		(49.2	)		(113.2	)		(1,724.8	)
Others(2)		48.0			10.0			(23.9	)		8.8			(79.2	)		(36.3	)
Consolidated net business profit	¥	471.9		¥	282.1		¥	328.4		¥	313.7		¥	(253.2	)	¥	1,142.9

(1) Consolidated gross profit = (Interest income – Interest expenses) + Trust fees + (Fee and commission income – Fee and commission expenses) + (Trading income – Trading losses) + (Other operating income – Other operating expenses).

(2) “Others” includes share of profit or loss of equity-method associates and cooperated profit and loss, that is, profit and loss double-accounted for in the managerial accounting.

Reconciliation of Segmental Results of Operations to Consolidated Income Statement

The figures provided in the tables above are calculated by aggregating the figures used for management reporting under Japanese GAAP for each segment. The total amount of consolidated net business profit that is calculated by each segment based on the internal managerial data is reconciled to profit before tax reported in the consolidated financial statements under IFRS as shown in the following table:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In billions)
Consolidated net business profit	¥	1,203.8		¥	1,132.9		¥	1,142.9
Differences between management reporting and Japanese GAAP:
Total credit costs		(94.2	)		(164.4	)		(102.8	)
Gains on equity instruments		118.9			55.0			69.0
Extraordinary gains or losses and others		(119.6	)		(44.2	)		(128.9	)
Profit before tax under Japanese GAAP		1,108.9			979.3			980.2
Differences between IFRS and Japanese GAAP:
Scope of consolidation		(1.6	)		(12.0	)		(3.1	)
Derivative financial instruments		(20.7	)		(110.9	)		173.1
Investment securities		68.8			(8.8	)		56.6
Loans and advances		(33.5	)		(0.7	)		(35.2	)
Investments in associates and joint ventures		(1.6	)		(15.9	)		53.4
Property, plant and equipment		1.0			1.3			1.3
Lease accounting		(0.5	)		(3.7	)		(1.5	)
Defined benefit plans		(13.2	)		22.9			6.6
Foreign currency translation		12.7			3.6			61.7
Classification of equity and liability		14.1			8.4			5.4
Others		(15.4	)		16.9			27.2
Profit before tax under IFRS	¥	1,119.0		¥	880.4		¥	1,325.7

Operating Income by Geographical Area

To identify income attributed to each geographical area for the purposes of this disclosure, they are aggregated based on the geographical location of the booking entity, with the assumption that transactions booked in booking entities are deemed to have occurred in their respective geographical areas.

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Domestic(1):
Japan		¥2,670,858	¥	2,356,627	¥	2,840,058
Total domestic		2,670,858		2,356,627		2,840,058
Foreign(1)(2):
Americas		350,118		313,742		196,399
Europe and Middle East		484,807		401,320		352,232
Asia and Oceania		306,564		276,206		299,537
Total foreign		1,141,489		991,268		848,168
Total operating income(3)		¥3,812,347	¥	3,347,895	¥	3,688,226

(1) The geographical segmentation is determined based on the degrees of the following factors: geographic proximity, similarity of economic activities and relationship of business activities among regions.

(2) Americas includes the United States, Brazil, Canada and others; Europe and Middle East include the United Kingdom, Germany, France and others; Asia and Oceania include China, Singapore, Australia and others except Japan.

(3) Total operating income comprises net interest income, net fee and commission income, net trading income, net income (loss) from financial assets at fair value through profit or loss, net investment income and other income.

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Cash and Deposits with Banks (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Cash and Deposits with Banks

	At March 31,
	2018		2017
	(In millions)
Cash	¥	703,138	¥	1,123,128
Deposits with banks		53,992,931		46,207,027
Total cash and deposits with banks	¥	54,696,069	¥	47,330,155

Reconciliation of Cash and Cash Equivalents Used for the Purposes of the Consolidated Statement of Cash Flows

The reconciliation of cash and cash equivalents used for the purposes of the consolidated statement of cash flows at March 31, 2018, 2017 and 2016 is shown as follows:

	At March 31,
	2018			2017			2016
	(In millions)
Cash and deposits with banks		¥54,696,069		¥	47,330,155		¥	43,144,654
Less: term deposits with original maturities over three months		(627,837	)		(606,795	)		(597,960	)
Less: cash segregated as deposits and others		(667,099	)		(478,541	)		(419,728	)
Add: cash and cash equivalents included in assets held for sale		15,323			—			—
Cash and cash equivalents		¥53,416,456		¥	46,244,819		¥	42,126,966

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Trading Assets (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Trading Assets

Trading assets at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Debt instruments	¥	2,841,148	¥	3,339,928
Equity instruments		327,975		436,743
Total trading assets	¥	3,169,123	¥	3,776,671

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Derivative Financial Instruments (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Derivative Financial Instruments by Type and Purpose of Derivatives

The tables below represent the derivative financial instruments by type and purpose of derivatives at March 31, 2018 and 2017.

	At March 31, 2018
	Trading						Risk Management(1)
	Notional amounts		Assets		Liabilities		Notional amounts		Assets		Liabilities
	(In millions)
Interest rate derivatives	¥	676,464,541	¥	1,771,745	¥	1,639,850	¥	69,550,646	¥	300,376	¥	333,182
Futures		78,295,049		28,689		28,871		18,269,263		5,534		1,167
Listed Options		66,989,307		4,538		722		—		—		—
Forwards		25,030,851		274		994		—		—		—
Swaps		429,498,805		1,651,945		1,500,361		51,131,039		294,842		329,446
OTC Options		76,650,529		86,299		108,902		150,344		—		2,569
Currency derivatives		120,282,459		1,439,993		1,293,900		7,986,176		283,248		112,322
Futures		689		—		19		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		74,380,475		759,993		708,645		1,866,249		49,440		24,929
Swaps		39,668,889		577,350		490,014		6,119,927		233,808		87,393
OTC Options		6,232,406		102,650		95,222		—		—		—
Equity derivatives		3,354,789		71,344		105,194		2,219		—		155
Futures		829,262		5,946		9,747		—		—		—
Listed Options		1,779,546		42,209		68,341		—		—		—
Forwards		7,564		745		208		—		—		—
Swaps		77,015		186		8,171		2,219		—		155
OTC Options		661,402		22,258		18,727		—		—		—
Commodity derivatives		161,539		6,516		4,948		—		—		—
Futures		20,902		402		464		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		—		—		—		—		—		—
Swaps		128,467		6,052		3,974		—		—		—
OTC Options		12,170		62		510		—		—		—
Credit derivatives		1,320,297		12,049		8,465		—		—		—
Total derivative financial instruments	¥	801,583,625	¥	3,301,647	¥	3,052,357	¥	77,539,041	¥	583,624	¥	445,659

	At March 31, 2017
	Trading						Risk Management(1)
	Notional amounts		Assets		Liabilities		Notional amounts		Assets		Liabilities
	(In millions)
Interest rate derivatives	¥	591,977,855	¥	1,864,348	¥	1,738,961	¥	60,318,601	¥	450,889	¥	466,643
Futures		78,549,213		20,278		16,579		5,853,880		221		865
Listed Options		35,011,822		6,622		459		—		—		—
Forwards		22,776,789		152		1,986		—		—		—
Swaps		393,798,232		1,723,403		1,584,833		54,335,702		450,665		464,152
OTC Options		61,841,799		113,893		135,104		129,019		3		1,626
Currency derivatives		117,119,766		1,444,103		1,321,157		6,360,374		222,224		266,887
Futures		2,261		—		19		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		74,918,488		778,100		833,024		5,364		106		—
Swaps		36,026,356		561,985		378,036		6,355,010		222,118		266,887
OTC Options		6,172,661		104,018		110,078		—		—		—
Equity derivatives		2,744,981		60,395		77,197		—		—		—
Futures		1,075,040		13,743		3,154		—		—		—
Listed Options		1,012,228		21,657		41,439		—		—		—
Forwards		15,677		410		253		—		—		—
Swaps		106,228		307		8,922		—		—		—
OTC Options		535,808		24,278		23,429		—		—		—
Commodity derivatives		172,973		11,679		10,491		—		—		—
Futures		28,568		489		513		—		—		—
Listed Options		—		—		—		—		—		—
Forwards		—		—		—		—		—		—
Swaps		116,525		11,037		9,230		—		—		—
OTC Options		27,880		153		748		—		—		—
Credit derivatives		1,400,080		10,344		8,358		—		—		—
Total derivative financial instruments	¥	713,415,655	¥	3,390,869	¥	3,156,164	¥	66,678,975	¥	673,113	¥	733,530

(1) Derivative financial instruments categorized as “Risk Management” are used for economic hedging, such as managing the exposure to changes in fair value of the loan portfolio, and are identified as hedging instruments under Japanese GAAP. Under IFRS, the SMBC Group started to apply hedge accounting only for net investments in foreign operations as described below from April 1, 2017, and derivative financial instruments designated as hedging instruments are also categorized as “Risk Management.”

Notional Amounts and Fair Value of Credit Derivatives by Purpose of Transactions

The tables below provide the notional amounts and the fair value of credit derivatives by purpose of transactions at March 31, 2018 and 2017.

	At March 31, 2018
	Protection purchased						Protection sold
	Notional  amounts		Assets		Liabilities		Notional amounts		Assets		Liabilities
	(In millions)
Managing the SMBC Group’s credit risk portfolio	¥	442,991	¥	220	¥	5,950	¥	684,080	¥	10,615	¥	751
Facilitating client transactions		106,352		87		1,732		86,874		1,127		32
Total	¥	549,343	¥	307	¥	7,682	¥	770,954	¥	11,742	¥	783
	At March 31, 2017
	Protection purchased						Protection sold
	Notional  amounts		Assets		Liabilities		Notional amounts		Assets		Liabilities
	(In millions)
Managing the SMBC Group’s credit risk portfolio	¥	471,994	¥	238	¥	5,141	¥	633,094	¥	7,796	¥	556
Facilitating client transactions		139,402		77		2,327		155,590		2,233		334
Total	¥	611,396	¥	315	¥	7,468	¥	788,684	¥	10,029	¥	890

Notional Amounts and Fair Value of Credit Derivative Portfolio by Type of Counterparty

The following table summarizes the notional amounts of the SMBC Group’s credit derivative portfolio by type of counterparty at March 31, 2018 and 2017.

	At March 31, 2018				At March 31, 2017
	Protection purchased		Protection sold		Protection purchased		Protection sold
	(In millions)
Banks and broker-dealers	¥	537,843	¥	770,954	¥	599,896	¥	788,684
Insurance and other financial guaranty firms		11,500		—		11,500		—
Total	¥	549,343	¥	770,954	¥	611,396	¥	788,684

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Financial Assets at Fair Value through Profit or Loss (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Financial Assets at Fair Value through Profit or Loss

Financial assets at fair value through profit or loss at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Debt instruments	¥	1,528,921	¥	1,582,957
Equity instruments		18,751		16,136
Total financial assets at fair value through profit or loss	¥	1,547,672	¥	1,599,093

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Investment Securities (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Investment Securities

Investment securities at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Held-to-maturity investments:
Domestic:
Japanese government bonds	¥	372,459	¥	1,160,751
Japanese municipal bonds		—		7,463
Japanese corporate bonds		—		5,205
Total domestic		372,459		1,173,419
Total held-to-maturity investments	¥	372,459	¥	1,173,419
Available-for-sale financial assets:
Domestic:
Japanese government bonds	¥	7,685,303	¥	5,722,674
Japanese municipal bonds		47,032		82,780
Japanese corporate bonds		296,601		363,550
Total domestic debt instruments		8,028,936		6,169,004
Equity instruments		5,161,734		5,117,629
Total domestic		13,190,670		11,286,633
Foreign:
U.S. Treasury and other U.S. government agency bonds		3,246,646		3,468,263
Bonds issued by other governments and official institutions		2,187,450		1,669,853
Mortgage-backed securities		488,183		633,629
Other debt instruments		331,491		183,021
Total foreign debt instruments		6,253,770		5,954,766
Equity instruments		678,176		659,119
Total foreign		6,931,946		6,613,885
Total available-for-sale financial assets	¥	20,122,616	¥	17,900,518
Total investment securities	¥	20,495,075	¥	19,073,937

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Loans and Advances (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Loans and Advances by Industry Classification

The following table presents loans and advances at March 31, 2018 and 2017 by industry classification.

	At March 31,
	2018			2017
	(In millions)
Domestic:
Manufacturing	¥	7,961,620		¥	9,578,147
Agriculture, forestry, fisheries and mining		145,957			174,021
Construction		947,765			1,151,989
Transportation, communications and public enterprises		5,424,054			5,365,225
Wholesale and retail		5,288,767			5,721,005
Finance and insurance		2,777,862			2,844,546
Real estate and goods rental and leasing		9,017,664			10,101,846
Services		4,255,228			4,885,247
Municipalities		1,000,286			1,216,211
Lease financing		14,629			2,706,641
Consumer(1)		16,363,489			19,096,755
Others		4,633,306			5,178,461
Total domestic		57,830,627			68,020,094
Foreign:
Public sector		372,008			299,746
Financial institutions		4,496,646			4,588,001
Commerce and industry		21,023,885			21,041,905
Lease financing		357,660			404,658
Others		1,779,101			1,836,322
Total foreign		28,029,300			28,170,632
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

(1) The balance in Consumer mainly consists of housing loans. The housing loan balances amounted to ¥11,482,678 million and ¥13,766,771 million at March 31, 2018 and 2017, respectively.

Reconciliation of Allowance for Loan Losses

Reconciliation of allowance for loan losses is as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Allowance for loan losses at beginning of period		¥680,456		¥	722,717		¥	793,552
Provision for loan losses		126,623			141,457			118,750
Charge-offs:
Domestic		161,526			157,373			173,431
Foreign		23,534			33,135			20,218
Total		185,060			190,508			193,649
Recoveries:
Domestic		9,658			9,852			9,477
Foreign		574			445			871
Total		10,232			10,297			10,348
Net charge-offs		174,828			180,211			183,301
Others(1)		(140,575	)		(3,507	)		(6,284	)
Allowance for loan losses at end of period	¥491,676			¥680,456			¥722,717
Allowance for loan losses applicable to foreign activities:
Balance at beginning of period		¥128,347		¥	134,664		¥	100,783
Balance at end of period		¥114,306		¥	128,347		¥	134,664
Provision for loan losses	¥	19,872		¥	29,699		¥	60,002

(1) Others mainly include the exclusion of the allowance for loans and advances made by Kansai Urban Banking Corporation (“KUBC”) and THE MINATO BANK, LTD. (“The Minato Bank”), both of which had been the Company’s subsidiaries but became its equity-method associates, and the exclusion of the allowance for loans and advances made by SMFL which were reclassified as assets held for sale during the fiscal year ended March 31, 2018. The amount for the fiscal years ended March 31, 2017 and 2016 mainly includes foreign exchange transactions.

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Investments in Associates and Joint Ventures (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Investments in Associates and Joint Ventures

The following table presents the SMBC Group’s principal associates and joint venture at March 31, 2018. Investments in associates and joint ventures of the SMBC Group are accounted for using the equity method unless they are held for sale.

Company Name	Country of Incorporation		Proportion of Ownership Interest(1)		Proportion of Voting Rights(1)			Main Business
			(%)		(%)
Principal Associates
THE MINATO BANK, LTD.		Japan		3.9		34.1	(2)	Commercial banking
Kansai Urban Banking Corporation		Japan		47.9		48.1		Commercial banking
The Japan Net Bank, Limited		Japan		41.1		41.1		Internet banking
PT Bank Tabungan Pensiunan Nasional Tbk		Indonesia		40.6		40.6		Commercial banking
The Bank of East Asia, Limited		China		19.4		19.4		Commercial banking
ACLEDA Bank Plc.		Cambodia		18.2		18.2		Commercial banking
Vietnam Export Import Commercial Joint Stock Bank		Vietnam		15.0		15.0		Commercial banking
Sumitomo Mitsui Auto Service Company, Limited		Japan		33.9		33.9		Leasing
NEC Capital Solutions Limited		Japan		25.0		25.0		Leasing
POCKET CARD CO., LTD.		Japan		20.0		20.0		Credit card
JSOL Corporation		Japan		50.0		50.0		System development and data processing
Sakura Information Systems Co., Ltd.		Japan		49.0		49.0		System engineering and data processing
Daiwa SB Investments Ltd.		Japan		43.9		43.9		Investment advisory and investment trust management
China Post & Capital Fund Management Co., Ltd.		China		23.6		23.6		Investment advisory and investment trust management
Principal Joint Venture
Daiwa Securities SMBC Principal Investments Co., Ltd.		Japan		40.0		40.0		Investments, fund management

(1) Percentages of proportion of ownership interest and proportion of voting rights have been truncated.

(2) The SMBC Group has a 3.9% direct holding in THE MINATO BANK, LTD., and can exercise a further 30.2% of the voting rights held by SMBC’s retirement benefit trust under contractual agreements between SMBC and the retirement benefit trust.

Financial Information of all Individually Immaterial Associates and Joint Ventures

The following table summarizes, in aggregate, the financial information of all individually immaterial associates and joint ventures that are accounted for using the equity method:

	At and for the fiscal year ended March 31,
	2018		2017
	(In millions)
Carrying amount of investments in associates and joint ventures	¥	730,414	¥	675,704
Share of:
Profit from continuing operations		49,323		29,318
Other comprehensive income (loss)		7,885		(21,602	)
Total comprehensive income		57,208		7,716

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Property, Plant and Equipment (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Changes in Property, Plant and Equipment

The table below shows the changes in property, plant and equipment for the fiscal years ended March 31, 2018 and 2017.

	Assets for rent			Land			Buildings			Leased assets			Others			Total
	(In millions)
Cost	¥	1,833,990		¥	518,564		¥	760,244		¥	16,741		¥	431,178		¥	3,560,717
Accumulated depreciation and impairment losses		(288,630	)		(5,745	)		(384,565	)		(9,183	)		(281,643	)		(969,766	)
Net carrying amount at April 1, 2016		1,545,360			512,819			375,679			7,558			149,535			2,590,951
Additions		320,921			1,268			15,117			1,704			41,292			380,302
Acquisition of subsidiaries and businesses		52,636			20			604			4			547			53,811
Disposals		(152,172	)		(3,058	)		(1,089	)		(74	)		(1,771	)		(158,164	)
Depreciation		(88,198	)		—			(24,507	)		(2,102	)		(29,749	)		(144,556	)
Impairment losses		—			(453	)		(5,618	)		—			(325	)		(6,396	)
Exchange differences		(9,670	)		—			(192	)		—			(425	)		(10,287	)
Others		(9,961	)		3,896			10,813			97			(24,451	)		(19,606	)
Net carrying amount		1,658,916			514,492			370,807			7,187			134,653			2,686,055
Cost		2,086,804			520,078			774,233			17,837			425,728			3,824,680
Accumulated depreciation and impairment losses		(427,888	)		(5,586	)		(403,426	)		(10,650	)		(291,075	)		(1,138,625	)
Net carrying amount at March 31, 2017		1,658,916			514,492			370,807			7,187			134,653			2,686,055
Additions		415,397			44			30,144			1,775			54,951			502,311
Acquisition of subsidiaries and businesses		304,233			—			—			—			24			304,257
Disposals(1)		(1,640,222	)		(52,327	)		(33,796	)		(660	)		(10,064	)		(1,737,069	)
Depreciation		(91,906	)		—			(21,344	)		(2,061	)		(30,663	)		(145,974	)
Impairment losses		—			(2,446	)		(25,203	)		(136	)		(31	)		(27,816	)
Exchange differences		(66,033	)		(4	)		(284	)		(3	)		(506	)		(66,830	)
Others		302			(192	)		11,673			47			(16,632	)		(4,802	)
Net carrying amount		580,687			459,567			331,997			6,149			131,732			1,510,132
Cost		607,769			466,046			738,023			17,373			413,945			2,243,156
Accumulated depreciation and impairment losses		(27,082	)		(6,479	)		(406,026	)		(11,224	)		(282,213	)		(733,024	)
Net carrying amount at March 31, 2018	¥	580,687		¥	459,567		¥	331,997		¥	6,149		¥	131,732		¥	1,510,132

(1) Disposals include property, plant and equipment owned by SMFL reclassified as “Assets held for sale” during the fiscal year ended March 31, 2018. In addition, Disposals include property, plant and equipment related to KUBC and The Minato Bank, both of which had been the Company’s subsidiaries but became its equity method associates in March, 2018.

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Leases (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Carrying Amount of Assets Held under Finance Leases

The carrying amount of assets held under finance leases at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Tangible assets:
Land and buildings	¥	2,837	¥	3,295
Other tangible assets(1)		3,312		3,892
Total(2)		6,149		7,187
Intangible assets:
Software		144		185
Total	¥	6,293	¥	7,372

(1) Other tangible assets include mainly equipment, machinery and vehicles.

(2) Cross-reference to Leased assets in Note 12 “Property, Plant and Equipment.”

Total of Future Minimum Lease Payments and Their Present Value Under Finance Leases

The total of future minimum lease payments and their present value under finance leases at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018			2017
	(In millions)
Not later than one year	¥	2,567		¥	27,901
Later than one year and not later than five years		4,664			78,958
Later than five years		3,086			6,129
Total		10,317			112,988
Less: Future interest charges		(1,151	)		(6,064	)
Present value of finance lease commitments(1)	¥	9,166		¥	106,924

(1) Present value of finance lease commitments is included in “Borrowings” in the consolidated statement of financial position. See Note 18 “Borrowings.”

Total Amounts of Future Minimum Lease Payments Under Non-cancellable Operating Leases

The total amounts of future minimum lease payments under non-cancellable operating leases at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018		2017
	(In millions)
Not later than one year	¥	42,329	¥	44,746
Later than one year and not later than five years		129,298		124,946
Later than five years		121,419		129,312
Total future minimum lease payments under non-cancellable operating leases	¥	293,046	¥	299,004

Gross Investment in Lease, Unearned Finance Income, Present Value of Minimum Lease Payments Receivable and Unguaranteed Residual Values Under Finance Leases

The gross investment in the lease, unearned finance income, present value of the minimum lease payments receivable and unguaranteed residual values under finance leases at March 31, 2018 and 2017 were as follows:

	At March 31, 2018
	Gross investment in the lease		Unearned finance income		Present value of the minimum lease payments receivable(1)		Unguaranteed residual values(1)
	(In millions)
Not later than one year	¥	54,501	¥	13,470	¥	41,031	¥	6,483
Later than one year and not later than five years		227,793		29,746		198,047		43,206
Later than five years		73,979		11,574		62,405		21,117
Total	¥	356,273	¥	54,790	¥	301,483	¥	70,806
	At March 31, 2017
	Gross investment in the lease		Unearned finance income		Present value of the minimum lease payments receivable(1)		Unguaranteed residual values(1)
	(In millions)
Not later than one year	¥	1,023,842	¥	91,070	¥	932,772	¥	16,831
Later than one year and not later than five years		1,841,026		155,534		1,685,492		112,474
Later than five years		343,332		38,960		304,372		59,358
Total	¥	3,208,200	¥	285,564	¥	2,922,636	¥	188,663

(1) Present value of the minimum lease payments receivable and unguaranteed residual values are included in “Loans and advances” in the consolidated statement of financial position.

Total Amounts of Future Minimum Lease Payments Receivable Under Non-cancellable Operating Leases

The total amounts of the future minimum lease payments receivable under non-cancellable operating leases at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018		2017
	(In millions)
Not later than one year	¥	38,072	¥	215,329
Later than one year and not later than five years		70,813		790,394
Later than five years		18,857		484,896
Total	¥	127,742	¥	1,490,619

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Intangible Assets (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Changes in Goodwill by Business Segment

The table below shows the changes in goodwill by business segment for the fiscal years ended March 31, 2018 and 2017.

	Wholesale Business Unit			Retail Business Unit		International Business Unit			Head office account and others			Total
	(In millions)
Gross amount of goodwill	¥	—		¥	63,418	¥	13,233		¥	397,285		¥	473,936
Accumulated impairment losses		—			—		—			(13,149	)		(13,149	)
Net carrying amount at March 31, 2016		—			63,418		13,233			384,136			460,787
Acquisitions(1)		2,417			—		—			38,053			40,470
Impairment losses		—			—		—			(74,616	)		(74,616	)
Exchange differences		—			—		(186	)		—			(186	)
Net carrying amount		2,417			63,418		13,047			347,573			426,455
Gross amount of goodwill		2,417			63,418		13,047			435,338			514,220
Accumulated impairment losses		—			—		—			(87,765	)		(87,765	)
Net carrying amount at March 31, 2017		2,417			63,418		13,047			347,573			426,455
Disposals(2)		—			—		—			(11,197	)		(11,197	)
Impairment losses		(956	)		—		(4,292	)		(23,359	)		(28,607	)
Reclassification to assets held for sale(3)		(1,461	)		—		(8,166	)		(102,710	)		(112,337	)
Exchange differences		—			—		(589	)		—			(589	)
Net carrying amount		—			63,418		—			210,307			273,725
Gross amount of goodwill		956			63,418		4,292			321,431			390,097
Accumulated impairment losses		(956	)		—		(4,292	)		(111,124	)		(116,372	)
Net carrying amount at March 31, 2018	¥	—		¥	63,418	¥	—		¥	210,307		¥	273,725

(1) The SMBC Group recognized goodwill of ¥2,417 million in Wholesale Business Unit resulting from the acquisition of SMFL Capital Company, Limited, formerly known as GE Japan in April 2016 and ¥38,053 million in Head office account and others resulting from the acquisition of Sumitomo Mitsui Asset Management Company, Limited (“SMAM”) in July 2016. For additional information, refer to Note 49 “Acquisitions.”

(2) “Disposals” in Head office account and others includes amount of goodwill relating to Kansai Urban Banking Corporation (“KUBC”) which ceased to be its consolidated subsidiaries and became its associates during the fiscal year ended March 31, 2018.

(3) The SMBC Group reclassified goodwill of ¥112,337 million allocated to Sumitomo Mitsui Finance and Leasing Company, Limited (“SMFL”) and its subsidiaries to assets held for sale at March 31, 2018. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

Key Assumptions Used in Impairment Testing

The key assumptions used for the value in use calculations for the fiscal years ended March 31, 2018 and 2017 were as follows:

	SMBC Trust Bank						KUBC			SMFL			SMBC Nikko Securities			SMBC Consumer Finance			SMAM
	Corporate Business			Retail Banking(1)
For the fiscal year ended March 31, 2018:
Pre-tax discount rate		12.61	%		9.91	%		—			—			11.42	%		11.20	%		9.01	%
Growth rate		1.00	%		1.00	%		—			—			1.00	%		1.00	%		1.00	%
For the fiscal year ended March 31, 2017:
Pre-tax discount rate		9.75	%		6.52	%		6.24	%		6.63	%		8.12	%		10.58	%		7.17	%
Growth rate		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%

(1) The business which SMBC Trust Bank acquired from Citibank Japan Ltd., in November 2015 is identified as Retail Banking.

Changes in Other Intangible Assets

The table below shows the changes in other intangible assets for the fiscal years ended March 31, 2018 and 2017.

	Internally generated software			Purchased software			Contractual customer relationships			Trademarks			Other intangibles			Total
	(In millions)
Cost	¥	591,118		¥	346,819		¥	172,950		¥	41,828		¥	58,368		¥	1,211,083
Accumulated amortization and impairment losses		(317,309	)		(212,356	)		(58,321	)		(26,007	)		(9,784	)		(623,777	)
Net carrying amount at April 1, 2016		273,809			134,463			114,629			15,821			48,584			587,306
Additions		102,193			41,080			—			—			2,228			145,501
Acquisition of subsidiaries and businesses		879			851			76,027			4,288			9,623			91,668
Disposals		(1,376	)		(2,379	)		—			—			(1,452	)		(5,207	)
Amortization		(82,158	)		(40,722	)		(20,192	)		(4,256	)		(4,579	)		(151,907	)
Impairment losses		—			(97	)		—			—			(75	)		(172	)
Exchange differences		(32	)		2			—			—			(15	)		(45	)
Others		(1,178	)		6,499			—			—			(2,352	)		2,969
Net carrying amount		292,137			139,697			170,464			15,853			51,962			670,113
Cost		648,463			372,531			248,977			46,116			64,487			1,380,574
Accumulated amortization and impairment losses		(356,326	)		(232,834	)		(78,513	)		(30,263	)		(12,525	)		(710,461	)
Net carrying amount at March 31, 2017		292,137			139,697			170,464			15,853			51,962			670,113
Additions		93,977			40,024			—			—			2,169			136,170
Acquisition of subsidiaries and businesses		—			222			—			—			—			222
Disposals(1)		(8,420	)		(11,928	)		(57,987	)		—			(1,844	)		(80,179	)
Amortization		(84,662	)		(43,818	)		(20,192	)		(4,280	)		(4,473	)		(157,425	)
Impairment losses		—			—			(1,830	)		—			(5,229	)		(7,059	)
Exchange differences		142			(731	)		—			—			(29	)		(618	)
Others		343			2,099			—			—			(1,489	)		953
Net carrying amount		293,517			125,565			90,455			11,573			41,067			562,177
Cost		650,632			340,593			172,950			46,116			54,024			1,264,315
Accumulated amortization and impairment losses		(357,115	)		(215,028	)		(82,495	)		(34,543	)		(12,957	)		(702,138	)
Net carrying amount at March 31, 2018	¥	293,517		¥	125,565		¥	90,455		¥	11,573		¥	41,067		¥	562,177

(1) Disposals include other intangible assets owned by SMFL reclassified as “Assets held for sale” during the fiscal year ended March 31, 2018.

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Other Assets (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Other Assets

Other assets at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Prepaid expenses	¥	49,300	¥	72,594
Accrued income		416,210		380,018
Receivables from brokers, dealers and customers for securities transactions		1,175,495		1,438,977
Cash collateral provided for derivative and other financial transactions		1,560,972		1,089,481
Retirement benefit assets		316,455		257,744
Security deposits		99,247		115,064
Investment properties(1)(2)		13,889		436,985
Others		412,340		530,861
Total other assets	¥	4,043,908	¥	4,321,724

(1) Investment properties are carried at cost less accumulated depreciation and accumulated impairment losses. Rental income from investment properties was ¥29,427 million, ¥25,322 million and ¥20,879 million for the fiscal years ended March 31, 2018, 2017 and 2016, respectively.

(2) Investment properties decreased due to the exclusion of those owned by SMFL reclassified as assets held for sale during the fiscal year ended March 31, 2018.

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Deposits (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Deposits

Deposits at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Non-interest-bearing demand deposits	¥	21,611,514	¥	19,853,552
Interest-bearing demand deposits		52,154,265		51,281,995
Deposits at notice		10,355,664		10,330,269
Time deposits		25,655,132		29,525,875
Negotiable certificates of deposit		11,220,285		11,880,938
Others(1)		7,464,667		7,422,661
Total deposits	¥	128,461,527	¥	130,295,290

(1) Others include, among other items, foreign currency deposits in domestic offices and Japanese yen accounts held by foreign depositors in domestic offices.

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Trading Liabilities (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Trading Liabilities

Trading liabilities at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Debt instruments “short position”	¥	2,008,711	¥	2,038,330
Equity instruments “short position”		135,188		33,254
Total trading liabilities	¥	2,143,899	¥	2,071,584

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Borrowings (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Short-term Borrowings and Long-term Borrowings (with Original Maturities of More Than One Year)

Short-term borrowings and long-term borrowings (with original maturities of more than one year) at March 31, 2018 and 2017 consisted of the following:

			At March 31,
	Interest rate		2018		2017
			(In millions)
SMFG:
Long-term borrowings:
Unsubordinated
Fixed rate borrowing, payable in United States dollars, due 2022-2031		2.89%-3.87%	¥	31,875	¥	33,657
Fixed rate borrowing, payable in Australian dollars, due 2027		3.73%		8,165		—
Floating rate borrowing, payable in United States dollars, due 2026-2028		2.31%-3.76%		110,181		50,149
Subordinated
Fixed rate borrowing, payable in Japanese yen, due 2024-2031		0.56%-1.27%		49,000		49,000
Total SMFG				199,221		132,806
SMBC:
Short-term borrowings		0.00%-2.18%		3,521,478		6,640,069
Long-term borrowings:
Unsubordinated
Fixed rate borrowing, payable in Japanese yen, due 2017-2028		0.00%-6.10%		3,126,970		4,351
Fixed rate borrowing, payable in United States dollars, due 2017-2025		0.00%-4.17%		42,666		45,387
Fixed rate borrowing, payable in euros, due 2017-2045		0.00%-3.50%		122,023		101,492
Floating rate borrowing, payable in Japanese yen, due 2018-2037		(0.18%)-0.02%		59,500		68,000
Floating rate borrowing, payable in United States dollars, due 2017-2033		1.18%-3.45%		894,797		904,263
Floating rate borrowing, payable in euros, due 2021-2022		0.00%-0.06%		32,128		31,769
Subordinated
Fixed rate borrowing, payable in Japanese yen, due 2018-2027		1.28%-2.25%		216,000		226,000
Total SMBC				8,015,562		8,021,331
Other subsidiaries:
Short-term borrowings		0.09%-7.91%		421,662		906,427
Long-term borrowings:
Unsubordinated
Fixed rate borrowing, payable in Japanese yen, due 2017-2042		0.00%-2.67%		227,231		617,358
Fixed rate borrowing, payable in United States dollars, due 2017-2044		0.81%-5.40%		197,806		216,213
Fixed rate borrowing, payable in Chinese yuan, due 2017-2021		2.40%-6.15%		—		24,348
Fixed rate borrowing, payable in Thai baht, due 2018-2021		1.85%-4.03%		—		12,724
Floating rate borrowing, payable in Japanese yen, due 2017-2042		0.04%-1.92%		267,598		431,141
Floating rate borrowing, payable in United States dollars, due 2017-2027		1.00%-3.86%		21,610		498,860
Floating rate borrowing, payable in euros, due 2020		1.00%		52,403		47,952
Floating rate borrowing, payable in Great Britain pound, due 2042-2043		1.51%-8.49%		24,627		20,190
Other fixed or floating rate borrowing, due 2017-2043		0.58%-11.79%		10,873		30,728
Subordinated
Fixed rate borrowing, payable in Japanese yen, due 2021		1.35%		—		5,200
Floating rate borrowing, payable in Japanese yen, due 2025		1.95%		—		4,000
Total other subsidiaries				1,223,810		2,815,141
Liabilities associated with securitization transactions:
Fixed rate borrowing, payable in Japanese yen, due 2021-2049		0.09%-2.70%		1,152,826		1,077,539
Floating rate borrowing, payable in Japanese yen, due 2017-2027		0.16%-1.66%		47,533		85,421
Floating rate borrowing, payable in United States dollars, due 2019-2020		1.86%-3.01%		4,363		6,781
Total liabilities associated with securitization transactions				1,204,722		1,169,741
Lease obligations		—		9,166		106,924
Total borrowings				¥10,652,481	¥	12,245,943

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Debt Securities in Issue (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Debt Securities in Issue

Debt securities in issue at March 31, 2018 and 2017 consisted of the following:

			At March 31,
	Interest rate		2018		2017
			(In millions)
SMFG:
Bonds:
Bonds, payable in United States dollars, due 2021-2048		1.99%-4.30%	¥	2,583,513	¥	1,639,109
Bonds, payable in euros, due 2022-2033		0.12%-1.72%		509,987		239,081
Bonds, payable in Australian dollars, due 2022-2028		3.07%-4.13%		179,367		93,691
Subordinated bonds:
Subordinated bonds, payable in Japanese yen, due 2024-2030		0.30%-1.33%		757,999		653,778
Subordinated bonds, payable in United States dollars, due 2024		4.44%		185,426		195,697
Total SMFG				4,216,292		2,821,356
SMBC:
Commercial paper		(0.50%)-2.26%		1,521,437		1,389,908
Bonds:
Bonds, payable in Japanese yen, due 2017-2019		0.25%-0.33%		99,000		156,182
Bonds, payable in United States dollars, due 2017-2045		1.21%-4.30%		2,072,295		2,404,015
Bonds, payable in euros, due 2017-2023		0.00%-2.75%		260,236		417,767
Bonds, payable in Australian dollars, due 2017-2025		2.97%-4.13%		63,572		77,270
Bonds, payable in Hong Kong dollars, due 2020-2025		2.09%-2.92%		32,009		34,136
Bonds, payable in Thai baht, due 2019-2020		2.00%-2.09%		25,575		11,410
Subordinated bonds:
Subordinated bonds, payable in Japanese yen, due 2017-2026		0.87%-2.80%		385,522		565,599
Subordinated bonds, payable in United States dollars, due 2022		4.85%		158,912		167,724
Subordinated bonds, payable in euros, due 2020		4.00%		97,648		89,227
Total SMBC				4,716,206		5,313,238
Other subsidiaries:
Commercial paper		0.00%-2.42%		946,208		2,128,438
Bonds:
Bonds, payable in Japanese yen, due 2017-2048		0.01%-21.00%		616,267		788,633
Bonds, payable in United States dollars, due 2017-2037		0.01%-8.00%		24,599		68,616
Bonds, payable in Indonesian rupiah, due 2018		9.85%		19,081		8,688
Bonds, payable in Australian dollars, due 2019-2031		0.01%-3.00%		1,896		1,654
Bonds, payable in Turkish lira, due 2019-2023		0.01%-9.00%		3,568		—
Subordinated bonds:
Subordinated bonds, payable in Japanese yen, due 2019-2028		2.31%-4.15%		25,000		35,000
Total other subsidiaries				1,636,619		3,031,029
Total debt securities in issue			¥	10,569,117	¥	11,165,623

Summary of Movement in Subordinated Bonds

The following table presents the movement in Subordinated bonds for the fiscal year ended March 31, 2018.

	Subordinated bonds
	(In millions)
Balance at March 31, 2017(1)	¥	1,707,025
Cash flows:
Proceeds from issuance of subordinated bonds		104,866
Redemption of subordinated bonds		(180,034	)
Non-cash changes:
Foreign exchange translations		(11,138	)
Others(2)		(10,212	)
Balance at March 31, 2018(1)	¥	1,610,507

(1) The balances are comprised of subordinated bonds issued by SMFG, SMBC and other subsidiaries.

(2) Others mainly include changes arising from losing control of SMFG’s subsidiaries for the fiscal year ended March 31, 2018.

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Provisions (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Movements by Class of Provisions

The following table presents movements by class of provisions for the fiscal years ended March 31, 2018 and 2017.

	Provision for interest repayment			Other provisions			Total
	(In millions)
Balance at April 1, 2016	¥	229,422		¥	32,979		¥	262,401
Additional provisions		12,000			14,743			26,743
Amounts used		(83,528	)		(10,713	)		(94,241	)
Unused amounts reversed		(439	)		(225	)		(664	)
Amortization of discount and effect of change in discount rate		(122	)		214			92
Acquisition of subsidiaries and businesses		—			381			381
Others		—			(12	)		(12	)
Balance at March 31, 2017		157,333			37,367			194,700
Additional provisions		50,500			28,537			79,037
Amounts used		(61,961	)		(14,902	)		(76,863	)
Unused amounts reversed		(479	)		(3,247	)		(3,726	)
Amortization of discount and effect of change in discount rate		(142	)		209			67
Others		(72	)		(4,876	)		(4,948	)
Balance at March 31, 2018	¥	145,179		¥	43,088		¥	188,267

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Other Liabilities (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Other Liabilities

Other liabilities at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Accrued expenses	¥	313,226	¥	291,871
Unearned income		133,478		168,952
Financial guarantees and other credit-related contingent liabilities		119,170		119,913
Due to trust account		1,328,271		1,180,976
Payables to brokers, dealers and customers for securities transactions		1,737,919		2,618,322
Payables related to credit card services		640,487		563,268
Obligations from factoring transactions		566,284		487,209
Retirement benefit liabilities		36,888		64,972
Guarantee deposits received		701,177		563,739
Others		1,305,840		1,401,879
Total other liabilities	¥	6,882,740	¥	7,461,101

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Deferred Income Tax (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Changes of Net Deferred Tax Assets and Liabilities

The changes of net deferred tax assets and liabilities for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended March 31,
	2018			2017
	(In millions)
At beginning of period	¥	(238,240	)	¥	(220,574	)
Deferred tax benefit (expense)		(1,036	)		120,468
Deferred tax relating to other comprehensive income:
Remeasurements of defined benefit plans reserve		(22,492	)		(2,315	)
Available-for-sale financial assets reserve		(99,383	)		(82,619	)
Exchange differences on translating foreign operations reserve		3,137			2,545
Acquisition and disposal of subsidiaries and businesses		(17,196	)		(6,259	)
Reclassification to assets held for sale(1)		(5,540	)		—
Exchange differences and others		2,445			(49,486	)
At end of period	¥	(378,305	)	¥	(238,240	)

(1) The SMBC Group reclassified net deferred tax assets of ¥5,540 million allocated to Sumitomo Mitsui Finance and Leasing Company, Limited and its subsidiaries to assets held for sale at March 31, 2018. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

Deferred Tax Assets and Liabilities

The deferred tax assets and liabilities at March 31, 2018 and 2017 were attributable to the following items:

	At March 31,
	2018			2017
	(In millions)
Deferred tax assets:
Loans and advances		¥206,928		¥	231,971
Derivative financial instruments		59,530			55,989
Provision for interest repayment		36,779			40,638
Tax losses carried forward		24,082			98,788
Retirement benefits		9,204			21,772
Investment securities		1,243			981
Other deductible temporary differences		152,891			161,246
Total deferred tax assets		490,657			611,385
Deferred tax liabilities:
Investment securities		680,425			571,489
Goodwill and intangible assets		81,076			111,145
Property, plant and equipment		28,786			91,703
Retirement benefits		19,484			3,485
Lease transactions		10,866			16,026
Other taxable temporary differences		48,325			55,777
Total deferred tax liabilities		868,962			849,625
Net deferred tax liabilities(1)		¥(378,305	)	¥	(238,240	)

(1) Deferred tax assets and deferred tax liabilities are offset in the consolidated statement of financial position if the entity has a legally enforceable right to set off current tax assets against current tax liabilities, and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.

Amounts of Deductible Temporary Differences and Tax Losses Carried Forward by Expiration Date

The following table shows the amounts of deductible temporary differences and tax losses carried forward by expiration date at March 31, 2018 and 2017 for which no deferred tax assets were recognized.

	At March 31,
	2018		2017
	(In millions)
Deductible temporary differences	¥	445,649	¥	436,481
Tax losses carried forward which will expire in 1 year		224,298		112,010
2 years		209,109		251,300
3 years		252,812		219,834
4 years		70,222		259,636
5 years		140,879		78,055
6 years		59,791		168,288
7 years		44,575		75,171
8 years		16,279		59,230
9 years and thereafter		59,734		19,390
Total deductible temporary differences and tax losses carried forward(1)		¥1,523,348	¥	1,679,395

(1) Under the consolidated corporate-tax system, the Company and its wholly owned domestic subsidiaries recognized deferred tax assets relating to deductible temporary differences and tax losses carried forward on a consolidated basis for Japanese national corporation tax purposes and on a stand-alone basis for Japanese local corporation tax purposes. There are deductible temporary differences and tax losses carried forward on which deferred tax assets are recognized for Japanese national corporation tax purposes, but on which no deferred tax assets are recognized for Japanese local corporation tax purposes. These deductible temporary differences and tax losses carried forward amounted to ¥421,319 million and ¥503,511 million at March 31, 2018 and 2017, respectively.

Deferred Tax Expense

Deferred tax expense for the fiscal years ended March 31, 2018 and 2017 was attributable to the following temporary differences and tax losses carried forward:

	For the fiscal year ended March 31,
	2018			2017
	(In millions)
Investment securities	¥	(34,881	)	¥	26,999
Derivative financial instruments		9,296			39,101
Goodwill and intangible assets		7,809			2,201
Loans and advances		6,092			(10,496	)
Lease transactions		5,223			2,389
Provision for interest repayment		(3,840	)		28,186
Tax losses carried forward		(3,448	)		66,378
Retirement benefits		(2,604	)		3,139
Property, plant and equipment		(1,137	)		(45,285	)
Other temporary differences—net		16,454			7,856
Total deferred tax benefit (expense)	¥	(1,036	)	¥	120,468

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Retirement Benefits (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Detailed Information for the Defined Benefit Plans

The following tables provide detailed information for the defined benefit plans.

The amounts of the retirement benefit liabilities and the retirement benefit assets recognized in the consolidated statement of financial position at March 31, 2018 and 2017 were determined as follows:

	At March 31,
	2018			2017
	(In millions)
Present value of unfunded obligations	¥	(30,082	)	¥	(52,494	)
Present value of funded obligations		(1,143,589	)		(1,187,290	)
Fair value of plan assets		1,453,238			1,432,556
Net retirement benefit assets (liabilities)	¥	279,567		¥	192,772
Of which retirement benefit liabilities included in “Other liabilities”	¥	(36,888	)	¥	(64,972	)
Of which retirement benefit assets included in “Other assets”	¥	316,455		¥	257,744

Movements in Defined Benefit Obligation

The movements in the defined benefit obligations for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended  March 31,
	2018			2017
	(In millions)
At beginning of period	¥	1,239,784		¥	1,177,090
Current service cost		40,387			40,030
Interest cost		8,637			6,970
Actuarial losses—demographic assumptions		15,485			77,112	(1)
Actuarial losses (gains)—financial assumptions		5,896			(17,385	)
Actuarial losses—experience		2,519			3,980
Benefits paid		(44,433	)		(42,387	)
Lump-sum payments		(24,109	)		(11,365	)
Past service cost		(44	)		(3	)
Acquisition of subsidiaries and businesses		—			7,096
Settlements		—			(621	)
Others(2)		(70,451	)		(733	)
At end of period	¥	1,173,671		¥	1,239,784

(1) Includes an increase due to the assumption refinement of estimate on mortality rates.

(2) Others mainly include the exclusion of the defined benefit obligations related to KUBC and The Minato Bank, both of which had been the Company’s subsidiaries but became its equity-method associates, and the exclusion of the defined benefit obligations related to SMFL which were reclassified as assets held for sale during the fiscal year ended March 31, 2018.

Movements in Fair Value of the Plan Assets

The movements in the fair value of plan assets for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended March 31,
	2018			2017
	(In millions)
At beginning of period	¥	1,432,556		¥	1,354,202
Interest income		10,090			8,123
Return on plan assets excluding interest income		97,433			71,841
Contributions by employer		19,208			44,535
Benefits paid		(44,433	)		(42,387	)
Settlements		—			(696	)
Others(1)		(61,616	)		(3,062	)
At end of period	¥	1,453,238		¥	1,432,556

(1) Others mainly include the exclusion of the fair value of plan assets related to KUBC and The Minato Bank, both of which had been the Company’s subsidiaries but became its equity-method associates, and the exclusion of the fair value of plan assets related to SMFL which were reclassified as assets held for sale during the fiscal year ended March 31, 2018.

Amounts Recognized in Consolidated Income Statement

The amounts recognized in “General and administrative expenses” in the consolidated income statement for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Current service cost	¥	40,387		¥	40,030		¥	35,032
Net interest cost		(1,453	)		(1,153	)		(3,553	)
Past service cost		(44	)		(3	)		(32	)
Total	¥	38,890		¥	38,874		¥	31,447

Plan Assets

The plan assets at March 31, 2018 and 2017 were composed as follows:

	At March 31,
	2018						2017
	Quoted in active markets		Other		Total		Quoted in active markets		Other		Total
	(In millions)
Plan assets retained in the pension funds:
Equity instruments	¥	286,542	¥	148,439	¥	434,981	¥	269,706	¥	135,884	¥	405,590
Debt instruments		36,290		205,320		241,610		107,075		224,509		331,584
General account of life insurance companies		356		45,089		45,445		758		66,892		67,650
Other investments and short-term assets		45,252		170,476		215,728		21,970		105,490		127,460
Plan assets retained in the retirement benefit trusts:
Japanese equity instruments		468,319		1,542		469,861		456,747		1,400		458,147
Other short-term assets		36,340		9,273		45,613		32,276		9,849		42,125
Total	¥	873,099	¥	580,139	¥	1,453,238	¥	888,532	¥	544,024	¥	1,432,556

Principal Actuarial Assumptions

The principal actuarial assumptions used at March 31, 2018, 2017 and 2016 were as follows:

	At March 31,
	2018			2017			2016
Discount rates		0.7	%		0.7	%		0.6	%

Sensitivity Analyses of Effect of Changes in Key Assumptions on Defined Benefit Obligations

The sensitivity analyses of the effect of changes in key assumptions on the defined benefit obligations at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018			2017
	Increase/(decrease)			Increase/(decrease)
	(In millions)
Discount rates:
Increase by 50 bps	¥	(73,146	)	¥	(71,373	)
Decrease by 50 bps		83,014			80,864
Average life expectancy at age 60:
Increase of one year	¥	38,291		¥	37,166

Weighted Average Durations of Defined Benefit Plans

The weighted average durations of defined benefit plans for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	At March 31,
	2018		2017		2016
	(Years)
Lump-sum severance indemnity plans		12.8		12.9		12.8
Defined benefit pension plans		18.9		18.2		17.6

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Shareholders' Equity (Tables)

12 Months Ended

Mar. 31, 2018

Remeasurements of defined benefit plans [member]

Movement of Reserves

The movements of remeasurements of the defined benefit plans reserve for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
At beginning of period	¥	22,774		¥	18,985		¥	120,316
Gains (losses) arising during the period, before tax		73,662			8,134			(154,273	)
Income tax (expense) benefit for changes arising during the period		(22,492	)		(2,315	)		48,550
Amount attributable to non-controlling interests		45			(1,568	)		3,834
Share of other comprehensive income (loss) of associates and joint ventures		58			(462	)		558
Transfer of (gains) losses on remeasurements, net of tax to retained earnings		2,055			—			—
At end of period	¥	76,102		¥	22,774		¥	18,985

Available-for-sale financial assets [member]

Movement of Reserves

The movements of the available-for-sale financial assets reserve for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
At beginning of period	¥	1,929,894		¥	1,756,634		¥	2,234,636
Gains (losses) arising during the period, before tax		582,435			371,438			(551,572	)
Income tax (expense) benefit for changes arising during the period		(184,128	)		(116,277	)		217,723
Reclassification adjustments for (gains) losses included in net profit, before tax		(275,038	)		(109,990	)		(217,529	)
Income tax benefit for reclassification adjustments		84,745			33,658			71,876
Amount attributable to non-controlling interests		(15,653	)		(3,971	)		2,251
Share of other comprehensive income (loss) of associates and joint ventures		5			(1,598	)		(751	)
At end of period	¥	2,122,260		¥	1,929,894		¥	1,756,634

Exchange differences on translating foreign operations [member]

Movement of Reserves

The movements of exchange differences on translating the foreign operations reserve for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
At beginning of period	¥	181,374		¥	216,336		¥	404,132
Gains (losses) arising during the period, before tax		(75,409	)		(24,063	)		(219,904	)
Income tax (expense) benefit for changes arising during the period		3,152			2,544			19,027
Reclassification adjustments for (gains) losses included in net profit, before tax		49			(4	)		8
Income tax (expense) benefit for reclassification adjustments		(15	)		1			(3	)
Amount attributable to non-controlling interests		9,014			6,102			26,687
Share of other comprehensive income (loss) of associates and joint ventures		7,822			(19,542	)		(13,611	)
At end of period	¥	125,987		¥	181,374		¥	216,336

Common stock [Member]

Number of Shares

The changes in the number of issued shares of common stock and common stock held by the Company or its subsidiaries during the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	For the fiscal year ended March 31,
	2018					2017					2016
	Outstanding		In treasury			Outstanding		In treasury			Outstanding		In treasury
At beginning of period		1,414,055,625		4,028,883			1,414,055,625		46,830,882			1,414,055,625		46,814,201
Net change		387,765		(143,915	)		—		(42,801,999	)(1)		—		16,681
At end of period		1,414,443,390		3,884,968			1,414,055,625		4,028,883			1,414,055,625		46,830,882

(1) Includes a decrease of 42,820,864 shares through the sale of the Company’s shares held by SMBC.

Preferred stock [Member]

Number of Shares

The following table shows the number of shares of preferred stock at March 31, 2018 and 2017.

	At March 31, 2018			At March 31, 2017
	Authorized		Issued	Authorized		Issued
Type 5 preferred stock		167,000	—		167,000	—
Type 7 preferred stock		167,000	—		167,000	—
Type 8 preferred stock		115,000	—		115,000	—
Type 9 preferred stock		115,000	—		115,000	—

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Non-controlling Interests and Equity Attributable to Other Equity Instruments Holders (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Non-controlling Interests

Non-controlling interests at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Preferred securities issued by subsidiaries	¥	730,153	¥	870,979
Others		502,827		634,022
Total non-controlling interests	¥	1,232,980	¥	1,505,001

Preferred Securities Issued by Subsidiaries

Preferred securities issued by subsidiaries consisted of the following:

	Redemption at the option of Issuer(1)	At March 31,
		2018		2017
		(In millions)
SMFG Preferred Capital JPY 1 Limited (non-cumulative perpetual preferred securities)	January 2018	¥	—	¥	135,000
SMFG Preferred Capital USD 3 Limited (non-cumulative step-up perpetual preferred securities)	July 2018		143,438		151,456
SMFG Preferred Capital GBP 2 Limited (non-cumulative step-up perpetual preferred securities)	January 2029		37,215		35,023
SMFG Preferred Capital JPY 2 Limited
Series A (non-cumulative step-up perpetual preferred securities)	January 2019		113,000		113,000
Series B (non-cumulative perpetual preferred securities)	July 2019		140,000		140,000
Series E (non-cumulative perpetual preferred securities)	July 2019		33,000		33,000
SMFG Preferred Capital JPY 3 Limited
Series A (non-cumulative step-up perpetual preferred securities)	January 2020		99,000		99,000
Series B (non-cumulative perpetual preferred securities)	January 2020		164,500		164,500
Preferred securities issued by subsidiaries		¥	730,153	¥	870,979

(1) Subject to the prior approval of the Financial Services Agency of Japan (“FSA”), preferred securities are redeemable at any dividend payment date on and after a specific month and the month shown in this column is such a specific month of each preferred security.

Equity Attributable to Other Equity Instruments Holders

Equity attributable to other equity instruments holders at March 31, 2018 and 2017 consisted of the following:

	At March 31,
	2018		2017
	(In millions)
Perpetual subordinated bonds	¥	599,522	¥	449,709
Total equity attributable to other equity instruments holders	¥	599,522	¥	449,709

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Net Interest Income (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Net Interest Income

Net interest income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Interest income from:
Deposits with banks	¥	78,217	¥	45,770	¥	40,472
Call loans and bills bought		19,362		12,065		21,828
Reverse repurchase agreements and cash collateral on securities borrowed		40,021		29,601		22,011
Investment securities		102,295		87,348		84,912
Loans and advances		1,904,175		1,725,477		1,703,361
Total interest income		2,144,070		1,900,261		1,872,584
Interest expense from:
Deposits		382,753		249,028		202,312
Call money and bills sold		8,763		5,286		5,583
Repurchase agreements and cash collateral on securities lent		61,341		20,623		15,105
Borrowings		89,196		79,835		72,203
Debt securities in issue		190,774		146,937		135,172
Others		1,142		629		726
Total interest expense		733,969		502,338		431,101
Net interest income	¥	1,410,101	¥	1,397,923	¥	1,441,483

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Net Fee and Commission Income (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Net Fee and Commission Income

Net fee and commission income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Fee and commission income from:
Loans	¥	120,998	¥	128,305	¥	121,934
Credit card business		289,509		261,253		253,136
Guarantees		62,934		58,221		55,618
Securities-related business		147,016		146,655		133,019
Deposits		16,169		15,929		14,882
Remittances and transfers		140,621		138,029		133,110
Safe deposits		5,224		5,414		5,511
Trust fees		3,854		3,607		3,619
Investment trusts		154,419		126,590		116,057
Agency		16,577		16,753		16,432
Others		174,043		165,656		178,362
Total fee and commission income		1,131,364		1,066,412		1,031,680
Fee and commission expense from:
Remittances and transfers		40,214		39,419		38,358
Guarantees		3,750		3,434		3,071
Others		134,903		138,720		89,952
Total fee and commission expense		178,867		181,573		131,381
Net fee and commission income	¥	952,497	¥	884,839	¥	900,299

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Net Trading Income (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Net Trading Income

Net trading income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Interest rate	¥	128,137	¥	79,650	¥	240,763
Foreign exchange		87,322		51,143		204,349
Equity		48,047		39,478		18,019
Credit		5,735		13,063		(2,641	)
Others		1,223		629		2,192
Total net trading income	¥	270,464	¥	183,963	¥	462,682

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Net Income (Loss) from Financial Assets at Fair Value through Profit or Loss (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Net Income (Loss) from Financial Assets at Fair Value through Profit or Loss

Net income (loss) from financial assets at fair value through profit or loss for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018			2017		2016
	(In millions)
Net income (loss) from debt instruments	¥	(1,775	)	¥	428	¥	11,311
Net income from equity instruments		1,108			1,590		949
Total net income (loss) from financial assets at fair value through profit or loss	¥	(667	)	¥	2,018	¥	12,260

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Net Investment Income (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Net Investment Income

Net investment income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Net gain from disposal of debt instruments	¥	4,187	¥	39,484	¥	71,641
Net gain from disposal of equity instruments		281,036		142,016		175,494
Dividend income		138,874		123,827		128,094
Total net investment income	¥	424,097	¥	305,327	¥	375,229

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Other Income (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Other Income

Other income for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Income from operating leases	¥	276,850	¥	250,460	¥	206,561
Income related to disposal of assets leased		322,673		152,564		155,280
Income related to IT solution services		29,172		37,678		33,991
Gains on disposal of property, plant and equipment, and other intangible assets		852		937		3,714
Reversal of impairment losses of investments in associates and joint ventures		8,123		—		4,847
Gains on step acquisition of subsidiaries		—		20,344		118
Gains on step acquisition of associates and joint ventures		—		—		1,714
Others		118,185		111,842		90,048
Total other income	¥	755,855	¥	573,825	¥	496,273

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Impairment Charges on Financial Assets (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Impairment Charges on Financial Assets

Impairment charges on financial assets for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Loans and advances(1)	¥	126,623	¥	141,457	¥	118,750
Available-for-sale financial assets		10,185		71,510		29,606
Total impairment charges on financial assets	¥	136,808	¥	212,967	¥	148,356

(1) Cross-reference to provision for loan losses in the table of reconciliation of allowance for loan losses in Note 10 “Loans and Advances.”

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General and Administrative Expenses (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of General and Administrative Expenses

General and administrative expenses for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Personnel expenses	¥	864,396	¥	833,755	¥	785,547
Depreciation and amortization		171,043		172,496		157,672
Rent and lease expenses		117,400		115,425		117,482
Building and maintenance expenses		11,167		10,657		13,966
Supplies expenses		16,902		16,694		16,628
Communication expenses		38,171		37,250		36,634
Publicity and advertising expenses		80,464		79,570		79,453
Taxes and dues		83,976		85,967		76,695
Outsourcing expenses		96,733		96,063		91,837
Premiums for deposit insurance		37,938		38,180		36,175
Office equipment expenses		54,708		49,127		47,621
Others		240,223		216,951		246,553
Total general and administrative expenses	¥	1,813,121	¥	1,752,135	¥	1,706,263

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Other Expenses (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Other Expenses

Other expenses for the fiscal years ended March 31, 2018, 2017 and 2016 consisted of the following:

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Cost of operating leases	¥	144,708	¥	126,320	¥	95,440
Cost related to disposal of assets leased		310,460		140,255		140,083
Cost related to IT solution services and IT systems		92,975		92,247		90,563
Provision for interest repayment		49,879		11,439		141,024
Losses on disposal of property, plant and equipment, and other intangible assets		4,913		6,041		4,302
Impairment losses of property, plant and equipment		27,816		6,396		4,237
Impairment losses of intangible assets		35,666		74,788		1,278
Losses on sale of investments in subsidiaries and associates		28,250		—		24
Impairment losses of investments in associates and joint ventures		19,851		14,941		17,306
Others		78,247		59,332		44,706
Total other expenses	¥	792,765	¥	531,759	¥	538,963

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Income Tax Expense (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Detail of Income Tax Expense

The detail of income tax expense for the fiscal years ended March 31, 2018, 2017 and 2016 was as follows:

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Current tax:
Charge for period	¥	228,342		¥	260,234		¥	247,046
Deferred tax:
Origination and reversal of temporary differences		66,875			12,391			130,072
Change in the write-down of deferred tax assets on the current fiscal year income tax expense		(63,194	)		(132,859	)		(34,000	)
Changes in tax rates and others(1)		(2,645	)		—			29,760
Total deferred tax expense (benefit)		1,036			(120,468	)		125,832
Total income tax expense	¥	229,378		¥	139,766		¥	372,878

(1) The amount for the fiscal year ended March 31, 2018 mainly includes the effect of change in U.S. federal income tax rate which was changed from 36% to 21% effective January 1, 2018. The amount for the fiscal year ended March 31, 2016 presents the effect of changes in Japanese corporation tax rates. See Note 22 “Deferred Income Tax” for further information on changes in Japanese corporation tax rates.

Reconciliations of Effective Income Tax Rates

The following table shows the reconciliations of the effective income tax rates for the fiscal years ended March 31, 2018, 2017 and 2016.

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions, except percentages)
Profit before tax	¥	1,118,976		¥	880,352		¥	1,325,700
Income tax expense		229,378			139,766			372,878
Effective income tax rate		20.5	%		15.9	%		28.1	%
Effective statutory tax rate in Japan(1)		30.9	%		30.9	%		33.1	%
Effect of the change in the write-down of deferred tax assets on the current fiscal year income tax expense(2)		(5.7	%)		(15.1	%)		(2.6	%)
Non-Japanese earnings		(3.6	%)		(1.9	%)		(2.7	%)
Tax impact of share of post-tax profit in associates and joint ventures		(1.4	%)		(1.0	%)		(0.8	%)
Tax impact of impairment losses of goodwill		0.8	%		2.6	%		—
Nontaxable dividends received		(0.8	%)		(1.0	%)		(0.5	%)
Tax impact of impairment losses and reversal of impairment losses for investments in associates and joint ventures—net		0.3	%		0.5	%		0.3	%
Gains on step acquisition of subsidiaries and associates and joint ventures which were not taxable		—			(0.7	%)		—
Changes in Japanese corporation tax rates		—			—			2.2	%
Others—net		—			1.6	%		(0.9	%)
Effective income tax rate		20.5	%		15.9	%		28.1	%

(1) The effective statutory tax rate in Japan for the fiscal years ended March 31, 2018 and 2017 is the aggregate of the effective corporation tax rate of 23.4%, the effective local corporation tax rate of 1.0%, the effective inhabitant tax rate of 3.8% and the effective enterprise tax rate of 2.7%, which is payable by corporate entities on taxable profits under the tax laws in Japan. The effective corporation tax rate, the effective inhabitant tax rate and the effective enterprise tax rate were changed from 22.5%, 3.7% and 5.9%, respectively, which were applied to the fiscal year ended March 31, 2016.

(2) The effect for the fiscal year ended March 31, 2017 was primarily due to the reversal of the write-down of deferred tax assets at March 31, 2017 in accordance with the application to the Commissioner of the National Tax Agency for permission to adopt the consolidated corporate-tax system in Japan from the fiscal year beginning April 1, 2017. For further information, see Note 22 “Deferred Income Tax.”

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Earnings Per Share (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Earnings Per Share

The following table shows the income and share data used in the basic and diluted earnings per share calculations for the fiscal years ended March 31, 2018, 2017 and 2016.

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions, except number of shares and per share data)
Basic:
Profit attributable to shareholders of the Company	¥	759,998		¥	627,870		¥	843,920
Weighted average number of common stock in issue (in thousands of shares)		1,410,442			1,369,231			1,367,229
Basic earnings per share	¥	538.84		¥	458.56		¥	617.25
Diluted:
Profit attributable to the common shareholders of the Company	¥	759,998		¥	627,870		¥	843,920
Impact of dilutive potential ordinary shares issued by subsidiaries		(10	)		(11	)		(1	)
Net profit used to determine diluted earnings per share	¥	759,988		¥	627,859		¥	843,919
Weighted average number of common stock in issue (in thousands of shares)		1,410,442			1,369,231			1,367,229
Adjustments for stock options (in thousands of shares)		1,052			1,093			928
Weighted average number of common stock for diluted earnings per share (in thousands of shares)		1,411,494			1,370,324			1,368,157
Diluted earnings per share	¥	538.43		¥	458.18		¥	616.83

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Transfers of Financial Assets (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Carrying Amounts and Fair Values of Transferred Financial Assets that did not Qualify for Derecognition and Associated Financial Liabilities

The following tables show the carrying amounts and fair values of transferred financial assets that did not qualify for derecognition and their associated financial liabilities at March 31, 2018 and 2017:

	At March 31, 2018
	Repurchase agreements and securities lending transactions		Loans and advances
			Residential mortgages		Corporate loans		Others(1)
	(In millions)
Carrying amount of assets	¥	7,730,783	¥	1,432,966	¥	857,690	¥	49,151
Carrying amount of associated liabilities		7,271,817		1,154,831		853,207		40,584
For those liabilities that have recourse only to the transferred assets:
Fair value of assets	¥	—	¥	1,615,329	¥	861,824	¥	48,254
Fair value of associated liabilities		—		1,207,899		853,551		40,870
Net position	¥	—	¥	407,430	¥	8,273	¥	7,384
	At March 31, 2017
	Repurchase agreements and securities lending transactions		Loans and advances
			Residential mortgages		Corporate loans		Others
	(In millions)
Carrying amount of assets	¥	5,169,540	¥	1,353,938	¥	1,063,092	¥	59,562
Carrying amount of associated liabilities		5,116,003		1,079,329		1,060,812		49,804
For those liabilities that have recourse only to the transferred assets:
Fair value of assets	¥	—	¥	1,535,929	¥	1,067,234	¥	59,169
Fair value of associated liabilities		—		1,138,815		1,061,389		50,271
Net position	¥	—	¥	397,114	¥	5,845	¥	8,898

(1) Others include loans and advances reclassified as assets held for sale and liabilities directly associated with the assets held for sale related to SMFL. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

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Assets Pledged and Received as Collateral (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Carrying Amounts of Assets Pledged as Collateral

The carrying amounts of assets pledged as collateral at March 31, 2018 and 2017 were as follows:

	At March 31,
	2018		2017
	(In millions)
Cash and deposits with banks(1)	¥	32,010	¥	87,670
Trading assets		2,423,002		2,426,665
Financial assets at fair value through profit or loss		1,518,748		1,570,904
Held-to-maturity investments		365,450		1,168,111
Available-for-sale financial assets		10,648,468		8,128,082
Loans and advances(1)		11,019,253		10,058,951
Other assets(1)		1,825,987		1,308,136
Total	¥	27,832,918	¥	24,748,519

(1) Cash and deposits with banks, loans and advances, and other assets include those at SMFL, which are reclassified as assets held for sale. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

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Share-based Payment (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Significant Terms and Conditions of Stock Option Plan

The following table provides an overview of the significant terms and conditions of the stock option plan.

	Title of grantees	Exercise period	Requisite service period	Method of settlement
SMFG Stock Acquisition Rights	Directors, corporate auditors and executive officers of SMFG and SMBC	Not exceeding 30 years from the date of allocation of stock acquisition rights(1)	One year from the date of the ordinary general meeting of shareholders of SMFG to the closing of the next ordinary general meeting of shareholders of SMFG	Common stock of SMFG

(1) A stock acquisition rights holder can exercise the rights from the day they are relieved of their positions either as a director, a corporate auditor or an executive officer (“Start of Exercise Date”) to 20 years from the Start of Exercise Date.

Number and Weighted Average Exercise Prices of Stock Options

The number and the weighted average exercise prices of stock options for the fiscal years ended March 31, 2018 and 2017 were as follows:

	For the fiscal year ended March 31,
	2018					2017
	Number of options(1)			Weighted average exercise price		Number of options(1)			Weighted average exercise price
Outstanding at beginning of period		1,180,000		¥	1		984,400		¥	1
Granted		—			—		201,200			1
Exercised		(174,700	)		1		(4,400	)		1
Forfeited or expired		(2,300	)		1		(1,200	)		1
Outstanding at end of period		1,003,000		¥	1		1,180,000		¥	1
Exercisable at end of period		463,100		¥	1		421,900		¥	1

(1) Number of options is the number of SMFG’s common stock granted by the exercise of stock options.

Summarized Information about Stock Options Outstanding

Summarized information about stock options outstanding at March 31, 2018 and 2017 was as follows:

			At March 31,
			2018				2017
	Exercise price		Number of options		Remaining contractual lives in years		Number of options		Remaining contractual lives in years
SMFG Stock Acquisition Rights	¥	1		1,003,000		25.3		1,180,000		26.3

Fair Value of Stock Options and Assumptions Used to Measure Fair Value

The following table represents the fair value of stock options and the assumptions used to measure the fair value for the fiscal year ended March 31, 2017. During the fiscal year ended March 31, 2018, there were no issuance of new stock options since SMFG and SMBC resolved to discontinue the issuance of new stock options.

	For the fiscal year ended March 31, 2017
Fair value at measurement date	¥	2,811
Stock price	¥	3,362
Exercise price	¥	1
Expected volatility(1)		32.20	%
Expected remaining lives (in years)(2)		4
Expected dividends per share(3)	¥	150
Risk free interest rate(4)		0.17	%

(1) Calculated based on the actual stock prices during the 4 years August 16, 2012 to August 15, 2016 for the fiscal year ended March 31, 2017.

(2) The average expected remaining life could not be estimated rationally due to insufficient amount of data. Therefore, it was estimated based on average remaining service life of directors of SMFG and SMBC.

(3) Expected dividends are based on the estimated dividends to be paid in next twelve months from the date of grant.

(4) Japanese government bond yield corresponding to the average expected remaining life.

Summary of Restricted Shares

The number of restricted shares for the fiscal year ended March 31, 2018 and the fair value of restricted shares at the measurement date were as follows:

	For the fiscal year ended March 31, 2018
Outstanding at beginning of period		—
Allotted		387,765
Released		—
Forfeited		—
Outstanding at end of period		387,765
Fair value at measurement date	¥	4,372

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Dividends Per Share (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Dividends Per Share

The dividends recognized by the SMBC Group for the fiscal years ended March 31, 2018, 2017 and 2016 were as follows:

	Dividends per share		Aggregate amount
	(In yen)		(In millions)
For the fiscal year ended March 31, 2018:
Common stock	¥	155	¥	218,596
For the fiscal year ended March 31, 2017:
Common stock	¥	150	¥	205,083
For the fiscal year ended March 31, 2016:
Common stock	¥	155	¥	211,922

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Contingency and Capital Commitments (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Nominal Amounts of Undrawn Loan Commitments and Financial Guarantees and Other Credit-Related Contingent Liabilities

The table below shows the nominal amounts of undrawn loan commitments, and financial guarantees and other credit-related contingent liabilities at March 31, 2018 and 2017.

	At March 31,
	2018		2017
	(In millions)
Loan commitments	¥	60,107,128	¥	62,357,210
Financial guarantees and other credit-related contingent liabilities		8,426,245		7,924,711
Total	¥	68,533,373	¥	70,281,921

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Analysis of Financial Assets and Liabilities by Measurement Basis (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Carrying Amounts of Financial Assets and Liabilities by Category and Line Item

The following tables present the carrying amounts of the financial assets and liabilities, by category and by line item, of the consolidated statement of financial position.

	At March 31, 2018
	Financial assets and liabilities at fair value through profit or loss			Held-to-maturity investments		Loans and receivables		Available-for-sale financial assets		Financial liabilities measured at amortized cost		Total
	(In millions)
Financial assets:
Cash and deposits with banks(1)	¥	4,773		¥	—	¥	54,691,296	¥	—	¥	—	¥	54,696,069
Call loans and bills bought		—			—		1,881,880		—		—		1,881,880
Reverse repurchase agreements and cash collateral on securities borrowed		—			—		8,491,703		—		—		8,491,703
Trading assets		3,169,123			—		—		—		—		3,169,123
Derivative financial instruments		3,885,271			—		—		—		—		3,885,271
Financial assets at fair value through profit or loss		1,547,672			—		—		—		—		1,547,672
Investment securities(1)		2,588			372,459		—		20,120,028		—		20,495,075
Loans and advances(1)		3,169			—		85,125,901		—		—		85,129,070
Other financial assets(2)		—			—		3,598,642		—		—		3,598,642
Financial assets included in assets held for sale		1,693			—		3,098,196		108,882		—		3,208,771
Total	¥	8,614,289		¥	372,459	¥	156,887,618	¥	20,228,910	¥	—	¥	186,103,276
Financial liabilities:
Deposits(1)	¥	13,929		¥	—	¥	—	¥	—	¥	128,447,598	¥	128,461,527
Call money and bills sold		—			—		—		—		1,190,929		1,190,929
Repurchase agreements and cash collateral on securities lent		—			—		—		—		12,022,593		12,022,593
Trading liabilities		2,143,899			—		—		—		—		2,143,899
Derivative financial instruments		3,498,016			—		—		—		—		3,498,016
Borrowings(1)		1,198			—		—		—		10,651,283		10,652,481
Debt securities in issue(1)		(7,635	)		—		—		—		10,576,752		10,569,117
Other financial liabilities(2)		—			—		—		—		6,691,042		6,691,042
Financial liabilities included in liabilities directly associated with the assets held for sale		5,971			—		—		—		3,371,556		3,377,527
Total	¥	5,655,378		¥	—	¥	—	¥	—	¥	172,951,753	¥	178,607,131

	At March 31, 2017
	Financial assets and liabilities at fair value through profit or loss		Held-to-maturity investments		Loans and receivables		Available-for-sale financial assets		Financial liabilities measured at amortized cost		Total
	(In millions)
Financial assets:
Cash and deposits with banks(1)	¥	5,511	¥	—	¥	47,324,644	¥	—	¥	—	¥	47,330,155
Call loans and bills bought		—		—		1,872,209		—		—		1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed		—		—		8,924,385		—		—		8,924,385
Trading assets		3,776,671		—		—		—		—		3,776,671
Derivative financial instruments		4,063,982		—		—		—		—		4,063,982
Financial assets at fair value through profit or loss		1,599,093		—		—		—		—		1,599,093
Investment securities(1)		1,251		1,173,419		—		17,899,267		—		19,073,937
Loans and advances(1)		3,474		—		95,270,371		—		—		95,273,845
Other financial assets(2)		—		—		3,424,591		—		—		3,424,591
Total	¥	9,449,982	¥	1,173,419	¥	156,816,200	¥	17,899,267	¥	—	¥	185,338,868
Financial liabilities:
Deposits(1)	¥	20,365	¥	—	¥	—	¥	—	¥	130,274,925	¥	130,295,290
Call money and bills sold		—		—		—		—		2,088,020		2,088,020
Repurchase agreements and cash collateral on securities lent		—		—		—		—		9,424,506		9,424,506
Trading liabilities		2,071,584		—		—		—		—		2,071,584
Derivative financial instruments		3,889,694		—		—		—		—		3,889,694
Borrowings(1)		654		—		—		—		12,245,289		12,245,943
Debt securities in issue(1)		2,232		—		—		—		11,163,391		11,165,623
Other financial liabilities(2)		—		—		—		—		7,201,137		7,201,137
Total	¥	5,984,529	¥	—	¥	—	¥	—	¥	172,397,268	¥	178,381,797

(1) Embedded derivatives, which are separately accounted for, but presented together with the host contract in the consolidated statement of financial position, are disclosed in this table within the category of “Financial assets and liabilities at fair value through profit or loss.” Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the line of the host contract.

(2) Other financial assets and liabilities comprise of those included in other assets and liabilities, which meet the definition of a financial asset and liability.

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Fair Value of Financial Assets and Liabilities (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Carrying Amounts of Financial Assets and Liabilities Carried at Fair Value

The following tables present the carrying amounts of financial assets and liabilities carried at fair value based on the three levels of the fair value hierarchy at March 31, 2018 and 2017.

	At March 31, 2018
	Level 1(1)		Level 2(1)		Level 3		Total
	(In millions)
Financial assets:
Trading assets:
Debt instruments	¥	2,424,460	¥	416,688	¥	—	¥	2,841,148
Equity instruments		307,942		20,033		—		327,975
Total trading assets		2,732,402		436,721		—		3,169,123
Derivative financial instruments:
Interest rate derivatives(2)		38,760		2,033,894		—		2,072,654
Currency derivatives(2)		—		1,724,387		14		1,724,401
Equity derivatives		48,154		21,310		1,880		71,344
Commodity derivatives		402		6,114		—		6,516
Credit derivatives		—		7,382		4,667		12,049
Total derivative financial instruments		87,316		3,793,087		6,561		3,886,964
Financial assets at fair value through profit or loss:
Debt instruments		—		1,518,778		10,143		1,528,921
Equity instruments		541		153		18,057		18,751
Total financial assets at fair value through  profit or loss		541		1,518,931		28,200		1,547,672
Available-for-sale financial assets:
Japanese government bonds		7,685,303		—		—		7,685,303
U.S. Treasury and other U.S. government agency bonds		3,246,646		—		—		3,246,646
Other debt instruments		700,500		2,650,103		154		3,350,757
Equity instruments(2)		4,307,274		797,166		844,352		5,948,792
Total available-for-sale financial assets		15,939,723		3,447,269		844,506		20,231,498
Others(3)		—		7,942		—		7,942
Total	¥	18,759,982	¥	9,203,950	¥	879,267	¥	28,843,199
Financial liabilities:
Trading liabilities:
Debt instruments	¥	1,948,602	¥	60,109	¥	—	¥	2,008,711
Equity instruments		33,174		102,014		—		135,188
Total trading liabilities		1,981,776		162,123		—		2,143,899
Derivative financial instruments:
Interest rate derivatives(2)		30,760		1,947,673		—		1,978,433
Currency derivatives(2)		19		1,406,759		14		1,406,792
Equity derivatives		78,088		27,261		—		105,349
Commodity derivatives		464		4,484		—		4,948
Credit derivatives		—		8,043		422		8,465
Total derivative financial instruments		109,331		3,394,220		436		3,503,987
Others(3)		—		6,659		833		7,492
Total	¥	2,091,107	¥	3,563,002	¥	1,269	¥	5,655,378

	At March 31, 2017
	Level 1(1)		Level 2(1)		Level 3			Total
	(In millions)
Financial assets:
Trading assets:
Debt instruments	¥	2,734,340	¥	605,588	¥	—		¥	3,339,928
Equity instruments		421,477		15,266		—			436,743
Total trading assets		3,155,817		620,854		—			3,776,671
Derivative financial instruments:
Interest rate derivatives		27,121		2,288,114		2			2,315,237
Currency derivatives		—		1,666,305		22			1,666,327
Equity derivatives		35,400		23,668		1,327			60,395
Commodity derivatives		489		11,190		—			11,679
Credit derivatives		—		7,613		2,731			10,344
Total derivative financial instruments		63,010		3,996,890		4,082			4,063,982
Financial assets at fair value through profit or loss:
Debt instruments		—		1,570,904		12,053			1,582,957
Equity instruments		1,667		183		14,286			16,136
Total financial assets at fair value through  profit or loss		1,667		1,571,087		26,339			1,599,093
Available-for-sale financial assets:
Japanese government bonds		5,722,674		—		—			5,722,674
U.S. Treasury and other U.S. government agency bonds		3,468,263		—		—			3,468,263
Other debt instruments		466,901		2,465,406		526			2,932,833
Equity instruments		4,075,944		864,552		836,252			5,776,748
Total available-for-sale financial assets		13,733,782		3,329,958		836,778			17,900,518
Others(3)		—		8,985		—			8,985
Total	¥	16,954,276	¥	9,527,774	¥	867,199		¥	27,349,249
Financial liabilities:
Trading liabilities:
Debt instruments	¥	1,979,564	¥	58,766	¥	—		¥	2,038,330
Equity instruments		18,848		14,406		—			33,254
Total trading liabilities		1,998,412		73,172		—			2,071,584
Derivative financial instruments:
Interest rate derivatives		17,903		2,187,701		—			2,205,604
Currency derivatives		19		1,588,004		21			1,588,044
Equity derivatives		44,593		32,604		—			77,197
Commodity derivatives		513		9,978		—			10,491
Credit derivatives		—		8,358		—			8,358
Total derivative financial instruments		63,028		3,826,645		21			3,889,694
Others(3)		—		23,554		(303	)		23,251
Total	¥	2,061,440	¥	3,923,371	¥	(282	)	¥	5,984,529

(1) Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the period. There were no significant transfers between Level 1 and Level 2 for the fiscal years ended March 31, 2018 and 2017.

(2) Interest rate derivatives and currency derivatives classified as derivative financial instruments (financial assets) include those at SMFL, which are reclassified as assets held for sale, of ¥533 million and ¥1,160 million, respectively. These derivative financial instruments are categorized within Level 2. Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale, of which ¥56,447 million, ¥5,225 million and ¥47,210 million are categorized within Level 1, Level 2 and Level 3, respectively. Interest rate derivatives and currency derivatives classified as derivative financial instruments (financial liabilities) include those at SMFL, which are reclassified as liabilities directly associated with the assets held for sale, of ¥5,401 million and ¥570 million, respectively. These derivative financial instruments are categorized within Level 2. For additional information, refer to Note 50 “Assets and Disposal Groups Held for Sale.”

(3) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others, while the remaining are presented within the same category as the host contract. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract. The separated embedded derivatives are measured at fair value using the valuation techniques described in “Derivative financial instruments” below.

Reconciliations for Financial Assets and Liabilities Carried at Fair Value

The following tables present reconciliations from the beginning to the ending balances for financial assets and liabilities carried at fair value and categorized within Level 3 of the fair value hierarchy for the fiscal years ended March 31, 2018 and 2017.

	At April 1, 2017		Total gains (losses)						Purchases		Sales			Settlement(1)			Transfers into Level 3(2)			Transfers out of Level 3(2)			At March 31, 2018			Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at March 31, 2018
			Included in profit or loss			Included in other comprehensive income
	(In millions)
Derivative financial instruments—net:
Interest rate derivatives—net	¥	2	¥	(45	)	¥	—		¥	43	¥	—		¥	—		¥	—		¥	—		¥	—		¥	—
Currency derivatives—net		1		(1	)		—			—		—			—			—			—			—			(1	)
Equity derivatives—net		1,327		1,106			—			474		(1,027	)		—			—			—			1,880			1,499
Credit derivatives—net		2,731		8,103			(158	)		—		—			(6,456	)		25			—			4,245			8,103
Total derivative financial instruments—net		4,061		9,163			(158	)		517		(1,027	)		(6,456	)		25			—			6,125			9,601
Financial assets at fair value through profit or loss:
Debt instruments		12,053		(1,731	)		—			—		—			(149	)		—			(30	)		10,143			(1,731	)
Equity instruments		14,286		378			—			4,915		(648	)		(102	)		—			(772	)		18,057			109
Total financial assets at fair value through profit or loss		26,339		(1,353	)		—			4,915		(648	)		(251	)		—			(802	)		28,200			(1,622	)
Available-for-sale financial assets:
Debt instruments		526		1,600			(13	)		—		(1,613	)		(346	)		—			—			154			(13	)
Equity instruments(3)		836,252		(3,612	)		46,367			68,241		(8,480	)		(73,897	)		624			(21,143	)		844,352			(6,380	)
Total available-for-sale financial assets		836,778		(2,012	)		46,354			68,241		(10,093	)		(74,243	)		624			(21,143	)		844,506			(6,393	)
Others(4)—liabilities:		303		(812	)		—			—		—			—			(324	)		—			(833	)		(856	)
Total	¥	867,481	¥	4,986		¥	46,196		¥	73,673	¥	(11,768	)	¥	(80,950	)	¥	325		¥	(21,945	)	¥	877,998		¥	730

	At April 1, 2016			Total gains (losses)						Purchases		Sales			Settlement(1)			Transfers into Level 3(2)		Transfers out of Level 3(2)			At March 31, 2017		Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at March 31, 2017
				Included in profit or loss			Included in other comprehensive income
	(In millions)
Derivative financial instruments—net:
Interest rate derivatives—net	¥	—		¥	(163	)	¥	—		¥	165	¥	—		¥	—		¥	—	¥	—		¥	2	¥	(5	)
Currency derivatives—net		5			(21	)		—			—		—			—			—		17			1		(3	)
Equity derivatives—net		(13	)		931			—			356		—			—			—		53			1,327		973
Credit derivatives—net		(3,134	)		12,821			221			—		—			(7,177	)		—		—			2,731		12,820
Total derivative financial instruments—net		(3,142	)		13,568			221			521		—			(7,177	)		—		70			4,061		13,785
Financial assets at fair value through profit or loss:
Debt instruments		11,667			401			—			180		—			(195	)		—		—			12,053		401
Equity instruments		27,594			174			—			4,531		(1,430	)		(16,000	)		—		(583	)		14,286		(404	)
Total financial assets at fair value through profit or loss		39,261			575			—			4,711		(1,430	)		(16,195	)		—		(583	)		26,339		(3	)
Available-for-sale financial assets:
Debt instruments		2,022			(1,258	)		(30	)		269		—			(477	)		—		—			526		(1,181	)
Equity instruments		789,326			(20,578	)		51,027			88,686		(8,488	)		(63,768	)		306		(259	)		836,252		(25,746	)
Total available-for-sale financial assets		791,348			(21,836	)		50,997			88,955		(8,488	)		(64,245	)		306		(259	)		836,778		(26,927	)
Others(4)—liabilities:		(1,240	)		1,543			—			—		—			—			—		—			303		(202	)
Total	¥	826,227		¥	(6,150	)	¥	51,218		¥	94,187	¥	(9,918	)	¥	(87,617	)	¥	306	¥	(772	)	¥	867,481	¥	(13,347	)

(1) Settlements for equity instruments include redemption of preferred stocks, receipt of cash distributions which represent a return of investment, and reclassification from available-for-sale equity instruments to investments in associates and joint ventures as a result of applying the equity method.

(2) Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the period. For the fiscal year ended March 31, 2018, transfers out of Level 3 amounted to ¥21,945 million, primarily due to an increase in observability of certain private equity investments.

(3) Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale.

(4) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract.

Total and Changes in Unrealized Gains or Losses Included in Profit or Loss for Level 3 Financial Assets and Liabilities

The following table presents total gains or losses included in profit or loss for the Level 3 financial assets and liabilities, and changes in unrealized gains or losses included in profit or loss related to those financial assets and liabilities held at March 31, 2018 and 2017 by line item of the consolidated income statement.

	Total gains (losses) included in profit or loss for the fiscal year ended March 31,						Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at March 31,
	2018			2017			2018			2017
	(In millions)
Net interest income	¥	1,273		¥	524		¥	762		¥	322
Net trading income		7,064			14,474			7,970			13,148
Net income (loss) from financial assets at fair value through profit or loss		(1,353	)		575			(1,622	)		(3	)
Net investment income		4,399			7,394			—			—
Impairment charges on financial assets		(6,397	)		(29,117	)		(6,380	)		(26,814	)
Total	¥	4,986		¥	(6,150	)	¥	730		¥	(13,347	)

Quantitative Information about Significant Unobservable Inputs Used in Fair Value Measurement for Level 3 Financial Assets and Liabilities

The following tables present quantitative information about significant unobservable inputs used in fair value measurement for Level 3 financial assets and liabilities at March 31, 2018 and 2017.

	At March 31, 2018
	Fair value		Valuation technique(s)(1)	Significant unobservable inputs(1)	Range of inputs(1)
	(In millions)
Financial assets:
Derivative financial instruments:
Currency derivatives	¥	14	Option model	Foreign exchange volatility	10%-14%
Equity derivatives		1,880	Option model	Equity volatility	11%-52%
				Equity to equity correlation	45%-94%
Credit derivatives		4,667	CDO pricing model	Additional withdrawal ratio	48%
			Credit Default model	Quanto correlation	15%-90%
Financial assets at fair value  through profit or loss:
Debt instruments		10,143	Monte Carlo Simulation	Equity volatility	12%-25%
Equity instruments		18,057	Market multiples	Price/Earnings multiple	8.3x-19.5x
				EV/EBITDA multiple	8.7x
				Liquidity discount	0%-20%
			See note (2) below	—	—
Available-for-sale financial assets:
Debt instruments		154	DCF method	Discount margin	8%
Equity instruments(3)		844,352	Market multiples	Price/Book value multiple	0.3x-2.4x
				Price/Earnings multiple	11.7x-31.4x
				EV/EBITDA multiple	5.4x-16.8x
				Liquidity discount	20%
			Monte Carlo Simulation	Equity volatility	42%-51%
			Net asset value(4)	—	—
			See note (2) below	—	—
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	14	Option model	Foreign exchange volatility	10%-14%
Credit derivatives		422	Credit Default model	Quanto correlation	20%-30%
Others(5)		833	Option model	Equity volatility	23%-38%
				Equity to equity correlation	45%-94%
				Interest rate to interest rate correlation	31%-100%
			Credit Default model	Quanto correlation	15%-90%

	At March 31, 2017
	Fair value			Valuation technique(s)(1)	Significant unobservable inputs(1)	Range of inputs(1)
	(In millions)
Financial assets:
Derivative financial instruments:
Interest rate derivatives	¥	2		Option model	Interest rate volatility	4%
Currency derivatives		22		Option model	Foreign exchange volatility	9%-17%
Equity derivatives		1,327		Option model	Equity volatility	20%-49%
					Equity to equity correlation	44%-93%
Credit derivatives		2,731		CDO pricing model	Additional withdrawal ratio	49%
Financial assets at fair value through profit or loss:
Debt instruments		12,053		Monte Carlo Simulation	Equity volatility	16%-26%
Equity instruments		14,286		Market multiples	Price/Earnings multiple	10.3x-30.2x
					EV/EBITDA multiple	8.1x
					Liquidity discount	0%-20%
				See note (2) below	—	—
Available-for-sale financial assets:
Debt instruments		526		DCF method	Discount margin	9%
Equity instruments		836,252		Market multiples	Price/Book value multiple	0.3x-2.0x
					Price/Earnings multiple	8.7x-42.6x
					EV/EBITDA multiple	5.0x-14.8x
					Liquidity discount	20%
				Monte Carlo Simulation	Equity volatility	20%-51%
				Net asset value(4)	—	—
				See note (2) below	—	—
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	21		Option model	Foreign exchange volatility	9%-17%
Others(5)		(303	)	Option model	Equity volatility	24%-64%
					Equity to equity correlation	44%-93%
					Interest rate to interest rate correlation	14%-100%

(1) Valuation techniques and unobservable inputs for insignificant Level 3 financial assets and liabilities are excluded.

(2) Fair values of certain equity instruments such as unlisted stocks are estimated on the basis of an analysis of the investee’s financial position and results, risk profile, prospects and other factors. A range of key inputs is not provided in the table as it is not practical to do so given the nature of such valuation techniques.

(3) Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale.

(4) The SMBC Group has determined that the net asset value represents fair values of certain investment funds.

(5) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract.

Impact of Valuation Sensitivity

The fair value of certain financial assets and liabilities are measured using valuation techniques based on inputs such as prices and rates that are not observable in the market. The following tables present the impact of the valuation sensitivity, if these inputs fluctuate to the extent deemed reasonable and the volatility of such inputs has a significant impact on the fair value.

	At March 31, 2018
	Total fair value measured using valuation techniques		Effect recorded in  profit or loss				Effect recorded  directly in equity
			Favorable changes		Unfavorable changes		Favorable changes		Unfavorable changes
	(In millions)
Financial assets:
Derivative financial instruments:
Currency derivatives	¥	14	¥	80	¥	1	¥	—	¥	—
Equity derivatives		1,880		271		310		—		—
Credit derivatives		4,667		4,515		11,765		—		—
Financial assets at fair value through profit or loss:
Debt instruments		10,143		278		—		—		—
Equity instruments		18,057		361		336		—		—
Available-for-sale financial assets:
Debt instruments		154		—		—		4		2
Equity instruments(1)		844,352		—		—		26,835		25,290
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	14	¥	2	¥	80	¥	—	¥	—
Credit derivatives		422		35		35		—		—
Others(2)		833		1,375		3,090		—		—

	At March 31, 2017
	Total fair value measured using valuation techniques			Effect recorded in  profit or loss				Effect recorded  directly in equity
				Favorable changes		Unfavorable changes		Favorable changes		Unfavorable changes
	(In millions)
Financial assets:
Derivative financial instruments:
Interest rate derivatives	¥	2		¥	7	¥	2	¥	—	¥	—
Currency derivatives		22			93		1		—		—
Equity derivatives		1,327			199		254		—		—
Credit derivatives		2,731			6,706		15,730		—		—
Financial assets at fair value through profit or loss:
Debt instruments		12,053			244		26		—		—
Equity instruments		14,286			99		99		—		—
Available-for-sale financial assets:
Debt instruments		526			—		—		13		13
Equity instruments		836,252			—		—		24,785		24,137
Financial liabilities:
Derivative financial instruments:
Currency derivatives	¥	21		¥	2	¥	92	¥	—	¥	—
Others(2)		(303	)		1,121		1,716		—		—

(1) Equity instruments which are classified as available-for-sale financial assets include those at SMFL, which are reclassified as assets held for sale.

(2) Embedded derivatives are separately accounted for, but presented together with the host contract in the consolidated statement of financial position. In this table, the embedded derivatives whose host contracts are carried at amortized cost are presented within Others. Although the separated embedded derivatives may have a positive or a negative fair value, they have been presented in this table as assets or liabilities to be consistent with the host contract.

Financial Assets and Liabilities Not Carried at Fair Value

The tables below present the carrying amounts and fair values by level within the fair value hierarchy, as described in “Financial Assets and Liabilities Carried at Fair Value—Fair Value Hierarchy,” of financial assets and liabilities not carried at fair value on the SMBC Group’s consolidated statement of financial position at March 31, 2018 and 2017.

			At March 31, 2018
			Carrying amount		Fair value
	Notes				Total		Level 1		Level 2		Level 3
	(In millions)
Financial assets:
Cash and deposits with banks		a	¥	54,696,069	¥	54,708,231	¥	53,401,133	¥	1,307,098	¥	—
Call loans and bills bought:
Call loans		a		1,858,802		1,859,176		—		1,859,176		—
Bills bought		a		23,078		23,051		—		23,051		—
Reverse repurchase agreements and cash collateral on securities borrowed		a		8,491,703		8,491,858		—		8,491,858		—
Investment securities:
Held-to-maturity  investments		b		372,459		374,597		374,597		—		—
Loans and advances		a		85,129,070		87,538,646		—		258,673		87,279,973
Other financial assets		a		3,598,642		3,595,216		—		3,429,143		166,073
Financial assets included in assets held for sale		a		3,098,196		3,224,902		3,824		84,058		3,137,020
Financial liabilities:
Deposits:
Non-interest-bearing deposits, demand deposits and deposits at notice		c	¥	84,121,443	¥	84,121,124	¥	—	¥	84,121,124	¥	—
Other deposits		c		44,340,084		44,339,583		—		44,339,583		—
Call money and bills sold:
Call money		c		1,190,929		1,190,936		—		1,190,936		—
Bills sold		c		—		—		—		—		—
Repurchase agreements and cash collateral on securities lent		c		12,022,593		12,022,593		—		12,022,593		—
Borrowings		c		10,652,481		10,761,610		—		10,739,893		21,717
Debt securities in issue		c		10,569,117		10,767,745		—		10,587,917		179,828
Other financial liabilities		c		6,691,042		6,691,016		—		6,571,846		119,170
Financial liabilities included in liabilities directly associated with the assets held for sale		c		3,371,556		3,380,139		—		3,380,139		—

			At March 31, 2017
			Carrying amount		Fair value
	Notes				Total		Level 1		Level 2		Level 3
			(In millions)
Financial assets:
Cash and deposits with banks		a	¥	47,330,155	¥	47,330,763	¥	46,244,819	¥	1,085,944	¥	—
Call loans and bills bought:
Call loans		a		1,860,620		1,860,539		—		1,860,539		—
Bills bought		a		11,589		11,567		—		11,567		—
Reverse repurchase agreements and cash collateral on securities borrowed		a		8,924,385		8,926,312		—		8,926,312		—
Investment securities:
Held-to-maturity investments		b		1,173,419		1,180,319		1,180,319		—		—
Loans and advances		a		95,273,845		98,053,056		—		348,691		97,704,365
Other financial assets		a		3,424,591		3,421,172		—		3,255,765		165,407
Financial liabilities:
Deposits:
Non-interest-bearing deposits, demand deposits and deposits at notice		c	¥	81,465,816	¥	81,466,078	¥	—	¥	81,466,078	¥	—
Other deposits		c		48,829,474		48,831,229		—		48,831,229		—
Call money and bills sold:
Call money		c		2,088,020		2,088,067		—		2,088,067		—
Bills sold		c		—		—		—		—		—
Repurchase agreements and cash collateral on securities lent		c		9,424,506		9,424,506		—		9,424,506		—
Borrowings		c		12,245,943		12,318,246		—		12,306,066		12,180
Debt securities in issue		c		11,165,623		11,329,967		—		11,257,502		72,465
Other financial liabilities		c		7,201,137		7,200,488		—		7,080,575		119,913

Notes:

a.	(i)	The carrying amounts of deposits with banks without maturity and loans with no specified repayment dates represent a reasonable estimate of fair value, considering the nature of these financial instruments.
	(ii)	Financial assets with a remaining maturity of six months or less: The carrying amounts represent a reasonable estimate of fair value.
	(iii)	Financial assets with a remaining maturity of more than six months: Except for impaired loans and advances, the fair values are mostly determined using discounted cash flow models taking into account certain factors including counterparties’ credit ratings, pledged collateral, and market interest rates. The fair values of impaired loans and advances are generally determined by discounting the estimated future cash flows over the time period they are expected to be recovered, and may be based on the appraisal value of underlying collateral as appropriate.
	Note that some of the financial assets in this category include embedded derivatives, which are separately accounted for, but presented together with the host contract.
b.	The fair values for held-to-maturity investments are determined using quoted prices in active markets.
c.	(i)	The carrying amounts of demand deposits and deposits without maturity represent a reasonable estimate of fair value, considering the nature of these financial instruments.
	(ii)	Financial liabilities with a remaining maturity of six months or less: The carrying amounts represent a reasonable estimate of fair value.
	(iii)	Financial liabilities with a remaining maturity of more than six months: The fair values are, in principle, based on the present values of future cash flows calculated using the refinancing rate applied to the same type of instruments for similar remaining maturities. The fair values of debt securities in issue are based on the present values of future cash flows calculated using the rate derived from yields of bonds issued by SMBC and publicly offered subordinated bonds published by securities firms.
	Note that some of the financial liabilities in this category include embedded derivatives, which are separately accounted for, but presented together with the host contract.

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Offsetting of Financial Assets and Liabilities (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Offsetting of Financial Assets and Liabilities

The following tables present the information about the impact of offsetting of financial assets and liabilities in the consolidated statement of financial position in accordance with the criteria described in Note 2 “Summary of Significant Accounting Policies,” as well as the impact of netting of financial instruments that are subject to enforceable master netting arrangements or similar agreements but do not qualify for the offsetting criteria at March 31, 2018 and 2017.

	At March 31, 2018
	Gross amounts of recognized financial assets and liabilities		Gross amounts offset in statement of financial position(1)			Net amounts presented in statement of financial position		Related amounts not offset in statement of financial  position(2)						Net amounts
								Financial instruments(3)			Cash collateral
	(In millions)
Financial assets(4):
Reverse repurchase agreements and cash collateral on securities borrowed	¥	9,346,594	¥	(854,891	)	¥	8,491,703	¥	(8,458,707	)	¥	—		¥	32,996
Derivative financial instruments		4,729,842		(844,571	)		3,885,271		(1,999,343	)		(479,814	)		1,406,114
Total	¥	14,076,436	¥	(1,699,462	)	¥	12,376,974	¥	(10,458,050	)	¥	(479,814	)	¥	1,439,110
Financial liabilities(4):
Repurchase agreements and cash collateral on securities lent	¥	12,877,484	¥	(854,891	)	¥	12,022,593	¥	(12,019,290	)	¥	—		¥	3,303
Derivative financial instruments		4,526,765		(1,028,749	)		3,498,016		(2,009,835	)		(587,693	)		900,488
Total	¥	17,404,249	¥	(1,883,640	)	¥	15,520,609	¥	(14,029,125	)	¥	(587,693	)	¥	903,791

	At March 31, 2017
	Gross amounts of recognized financial assets and liabilities		Gross amounts offset in statement of financial position(1)			Net amounts presented in statement of financial position		Related amounts not offset in statement of financial position(2)						Net amounts
								Financial instruments(3)			Cash collateral
	(In millions)
Financial assets(4):
Reverse repurchase agreements and cash collateral on securities borrowed	¥	9,660,288	¥	(735,903	)	¥	8,924,385	¥	(8,889,400	)	¥	—		¥	34,985
Derivative financial instruments		5,178,409		(1,114,427	)		4,063,982		(2,227,109	)		(318,106	)		1,518,767
Total	¥	14,838,697	¥	(1,850,330	)	¥	12,988,367	¥	(11,116,509	)	¥	(318,106	)	¥	1,553,752
Financial liabilities(4):
Repurchase agreements and cash collateral on securities lent	¥	10,160,409	¥	(735,903	)	¥	9,424,506	¥	(9,410,305	)	¥	—		¥	14,201
Derivative financial instruments		5,178,911		(1,289,217	)		3,889,694		(2,208,039	)		(719,483	)		962,172
Total	¥	15,339,320	¥	(2,025,120	)	¥	13,314,200	¥	(11,618,344	)	¥	(719,483	)	¥	976,373

(1) Amounts offset for derivative financial instruments include cash collateral.

(2) The amounts of financial instruments and cash collateral have been limited to the net amounts presented in the consolidated statement of financial position so as not to include any over-collateralization.

(3) Financial instruments include non-cash collateral at fair value.

(4) Financial assets and liabilities include amounts that are both subject to and not subject to enforceable master netting arrangements or similar agreements.

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Financial Risk Management (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Maximum Exposure to Credit Risk before Collateral Held or Other Credit Enhancements

The following table shows the maximum exposure to credit risk before taking into account any collateral held or other credit enhancements at March 31, 2018 and 2017.

	At March 31,
	2018		2017
	(In millions)
Credit risk exposures relating to assets on the consolidated statement of financial position:
Deposits with banks	¥	53,992,931	¥	46,207,027
Call loans and bills bought		1,881,880		1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed		8,491,703		8,924,385
Trading assets		2,841,148		3,339,928
Derivative financial instruments		3,885,271		4,063,982
Financial assets at fair value through profit or loss		1,528,921		1,582,957
Investment securities:
Held-to-maturity investments		372,459		1,173,419
Available-for-sale financial assets		14,282,706		12,123,770
Loans and advances		85,129,070		95,273,845
Other financial assets		3,598,642		3,424,591
Financial assets included in assets held for sale		3,099,888		—
Credit risk exposures relating to off-balance sheet items(1):
Loan commitments		60,107,128		62,357,210
Financial guarantees and other credit-related contingent liabilities		8,426,245		7,924,711
Total	¥	247,637,992	¥	248,268,034

(1) The off-balance sheet items represent the nominal amounts of undrawn loan commitments, financial guarantees and other credit-related contingent liabilities.

Financial Effect of Collateral and Other Credit Enhancements on Loans and Advances for Borrowers Requiring Caution and Impaired Loans and Advances

The following table shows the financial effect of collateral and other credit enhancements on loans and advances for borrowers requiring caution and impaired loans and advances at March 31, 2018 and 2017. The maximum collateral amounts included in the disclosure are limited to the carrying value of loans and advances where the credit exposure is over-collateralized.

	At March 31,
	2018		2017
	(In millions)
Loans and advances for borrowers requiring caution and impaired loans and advances	¥	1,965,681	¥	3,212,447
Financial effect of collateral and other credit enhancements		959,015		1,422,996

Loans and Advances by Geographical Sector

Geographical sector

	At March 31,
	2018			2017
	(In millions)
Domestic	¥	57,830,627		¥	68,020,094
Foreign:
Americas		11,221,244			11,417,162
Europe		4,949,471			5,031,197
Asia		8,423,747			8,412,109
Others		3,434,838			3,310,164
Total foreign		28,029,300			28,170,632
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

Loans and Advances by Industry Sector

Industry sector

	At March 31,
	2018			2017
	(In millions)
Domestic:
Manufacturing	¥	7,961,620		¥	9,578,147
Agriculture, forestry, fisheries and mining		145,957			174,021
Construction		947,765			1,151,989
Transportation, communications and public enterprises		5,424,054			5,365,225
Wholesale and retail		5,288,767			5,721,005
Finance and insurance		2,777,862			2,844,546
Real estate and goods rental and leasing		9,017,664			10,101,846
Services		4,255,228			4,885,247
Municipalities		1,000,286			1,216,211
Lease financing		14,629			2,706,641
Consumer(1)		16,363,489			19,096,755
Others		4,633,306			5,178,461
Total domestic		57,830,627			68,020,094
Foreign:
Public sector		372,008			299,746
Financial institutions		4,496,646			4,588,001
Commerce and industry		21,023,885			21,041,905
Lease financing		357,660			404,658
Others		1,779,101			1,836,322
Total foreign		28,029,300			28,170,632
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

(1) The balance in Consumer mainly consists of housing loans. The housing loan balances amounted to ¥11,482,678 million and ¥13,766,771 million at March 31, 2018 and 2017, respectively.

Disaggregation of Structured Finance Loans and Advances

Structured finance:

	At March 31,
	2018		2017
	(In millions)
Real estate finance	¥	2,421,408	¥	2,222,530
Project finance		3,976,222		3,859,424
Other structured finance		374,430		370,160
Total structured finance	¥	6,772,060	¥	6,452,114

Secured and Unsecured Consumer Loans

Consumer:

	At March 31,
	2018		2017
	(In millions)
Secured loans(1)	¥	12,255,845	¥	14,994,042
Unsecured loans		4,107,644		4,102,713
Total consumer	¥	16,363,489	¥	19,096,755

(1) The secured loans and advances mainly represent housing loans. The housing loan balances amounted to ¥11,482,678 million and ¥13,766,771 million at March 31, 2018 and 2017, respectively.

Summary of Loans and Advances

Loans and advances are summarized as follows:

	At March 31,
	2018			2017
	(In millions)
Neither past due nor impaired	¥	84,856,335		¥	94,825,134
Past due but not impaired		124,724			136,904
Impaired(1)		878,868			1,228,688
Gross loans and advances		85,859,927			96,190,726
Adjust: Unearned income, unamortized premiums—net and deferred loan fees—net		(239,181	)		(236,425	)
Less: Allowance for loan losses		(491,676	)		(680,456	)
Net loans and advances	¥	85,129,070		¥	95,273,845

(1) Loans and advances to borrowers who are classified in the borrower categories of substandard borrowers, potentially bankrupt borrowers, effectively bankrupt borrowers, and bankrupt borrowers described in the obligor grading system represent impaired loans and advances.

Loans and Advances Neither Past Due nor Impaired

The following tables show the credit quality of the portfolio of loans and advances that were neither past due nor impaired, by geography and by industry based on the corporate obligor grading system of SMBC at March 31, 2018 and 2017. Since the internal rating system of SMBC’s consumer portfolio differs from the corporate obligor grading system, the balances of loans and advances to consumers are included in the grade category of “Other.” Additionally, as the SMBC Group’s subsidiaries are adopting various internal rating systems which differ from SMBC, the grade category of “Other” also includes some balances of loans and advances held by those subsidiaries.

	At March 31, 2018
	Normal								Requiring Caution
	J 1-3		J 4-6		Japanese government and local municipal corporations		Other		J 7		Other		Total
	(In millions)
Domestic:
Manufacturing	¥	4,275,861	¥	2,190,117	¥	—	¥	1,196,566	¥	199,616	¥	22,681	¥	7,884,841
Agriculture, forestry, fisheries and mining		81,900		42,892		13,973		207		599		—		139,571
Construction		319,394		468,222		—		119,439		26,779		459		934,293
Transportation, communications and public enterprises		4,069,995		1,066,246		86,932		133,132		46,657		148		5,403,110
Wholesale and retail		2,333,434		2,399,747		—		297,583		155,584		1,421		5,187,769
Finance and insurance		1,801,410		349,934		2,785		618,935		1,630		5		2,774,699
Real estate and goods rental and leasing		5,696,289		3,082,764		13,696		95,634		87,218		7		8,975,608
Services		1,599,011		2,355,545		37,693		94,218		96,498		115		4,183,080
Municipalities		—		—		1,000,286		—		—		—		1,000,286
Lease financing		—		—		—		14,629		—		—		14,629
Consumer(1)		—		234		—		15,900,425		1,669		73,180		15,975,508
Others		53,633		2,057,571		1,685,694		728,206		69,005		680		4,594,789
Total domestic		20,230,927		14,013,272		2,841,059		19,198,974		685,255		98,696		57,068,183
	G 1-3		G 4-6		—		Other		G 7		Other		Total
Foreign:
Public sector		191,678		81,448		—		97,890		30		941		371,987
Financial institutions		2,381,927		338,659		—		1,752,693		—		7,891		4,481,170
Commerce and industry		14,009,273		2,425,819		—		4,114,066		222,395		53,793		20,825,346
Lease financing		23,290		—		—		330,406		—		3,964		357,660
Others		1,194,334		161,795		—		383,463		9,964		2,433		1,751,989
Total foreign		17,800,502		3,007,721		—		6,678,518		232,389		69,022		27,788,152
Total	¥	38,031,429	¥	17,020,993	¥	2,841,059	¥	25,877,492	¥	917,644	¥	167,718	¥	84,856,335

(1) The balance in the grade category of “Other” in Consumer includes housing loans, which amounted to ¥11,302,350 million and ¥51,189 million for the borrower category of Normal and Requiring Caution, respectively.

	At March 31, 2017
	Normal								Requiring Caution
	J 1-3		J 4-6		Japanese government and local municipal corporations		Other		J 7		Other		Total
	(In millions)
Domestic:
Manufacturing	¥	5,220,451	¥	2,294,471	¥	—	¥	1,528,465	¥	371,365	¥	34,956	¥	9,449,708
Agriculture, forestry, fisheries and mining		111,241		45,573		500		5,955		7,905		588		171,762
Construction		271,321		479,408		—		323,281		33,050		16,279		1,123,339
Transportation, communications and public enterprises		3,000,896		1,805,631		129,708		317,943		58,684		18,869		5,331,731
Wholesale and retail		2,182,359		2,483,635		—		733,264		155,778		36,234		5,591,270
Finance and insurance		1,897,381		346,939		3,243		575,688		1,344		15,702		2,840,297
Real estate and goods rental and leasing		5,188,687		3,028,913		35,078		1,496,839		99,237		104,524		9,953,278
Services		1,552,427		2,350,110		34,826		690,201		97,651		45,520		4,770,735
Municipalities		—		—		1,042,346		157,144		—		16,721		1,216,211
Lease financing		—		—		—		2,610,519		—		87,533		2,698,052
Consumer(1)		—		146		—		18,470,768		3,012		183,247		18,657,173
Others		53,091		2,090,278		2,298,829		590,353		94,415		6,101		5,133,067
Total domestic		19,477,854		14,925,104		3,544,530		27,500,420		922,441		566,274		66,936,623
	G 1-3		G 4-6		—		Other		G 7		Other		Total
Foreign:
Public sector		220,796		72,198		—		6,516		—		211		299,721
Financial institutions		2,586,295		431,372		—		1,538,913		—		24,481		4,581,061
Commerce and industry		14,068,055		2,546,812		—		3,778,524		306,315		106,831		20,806,537
Lease financing		24,592		—		—		355,141		—		12,763		392,496
Others		1,219,303		181,808		—		386,418		10,914		10,253		1,808,696
Total foreign		18,119,041		3,232,190		—		6,065,512		317,229		154,539		27,888,511
Total	¥	37,596,895	¥	18,157,294	¥	3,544,530	¥	33,565,932	¥	1,239,670	¥	720,813	¥	94,825,134

(1) The balance in the grade category of “Other” in Consumer includes housing loans, which amounted to ¥13,519,680 million and ¥70,963 million for the borrower category of Normal and Requiring Caution, respectively.

Loans and Advances Past Due but not Impaired by Geography and Industry

The aggregate balances of loans and advances of borrowers with one or more facilities, where any of the facilities are past due for less than three months but not impaired as at March 31, 2018 and 2017 were ¥163,902 million and ¥167,159 million, respectively. Those aggregate balances therefore include individual loans and advances which are not past due. Thus, in the tables below, the SMBC Group provides the amount of loans and advances where the final payment at contractual maturity is past due, by geography and by industry, at March 31, 2018 and 2017. For reference, since all the loans and advances that are past due over three months are treated as impaired, those loans and advances are not included in the tables below.

	At March 31, 2018
	Past due up to 1 month		Past due 1-2 months		Past due 2-3 months		Total
	(In millions)
Domestic:
Manufacturing	¥	476	¥	50	¥	—	¥	526
Agriculture, forestry, fisheries and mining		—		—		—		—
Construction		1		10		51		62
Transportation, communications and public enterprises		45		—		—		45
Wholesale and retail		2,240		318		21		2,579
Finance and insurance		65		76		—		141
Real estate and goods rental and leasing		73		44		—		117
Services		245		—		—		245
Lease financing		—		—		—		—
Consumer		55,020		10,298		3,378		68,696
Others		2,791		44		21		2,856
Total domestic		60,956		10,840		3,471		75,267
Foreign:
Financial institutions		11,934		165		1,548		13,647
Commerce and industry		14,822		2,705		13,554		31,081
Others		2,402		1,676		651		4,729
Total foreign		29,158		4,546		15,753		49,457
Total	¥	90,114	¥	15,386	¥	19,224	¥	124,724

	At March 31, 2017
	Past due up to 1 month		Past due 1-2 months		Past due 2-3 months		Total
	(In millions)
Domestic:
Manufacturing	¥	701	¥	153	¥	4	¥	858
Agriculture, forestry, fisheries and mining		8		—		—		8
Construction		423		118		27		568
Transportation, communications and public enterprises		612		2		—		614
Wholesale and retail		5,436		1,345		235		7,016
Finance and insurance		59		55		—		114
Real estate and goods rental and leasing		832		164		56		1,052
Services		1,421		306		212		1,939
Lease financing		523		51		46		620
Consumer		41,103		12,508		22,666		76,277
Others		3,617		—		531		4,148
Total domestic		54,735		14,702		23,777		93,214
Foreign:
Financial institutions		2,313		234		2,022		4,569
Commerce and industry		17,326		8,418		9,641		35,385
Others		1,822		1,293		621		3,736
Total foreign		21,461		9,945		12,284		43,690
Total	¥	76,196	¥	24,647	¥	36,061	¥	136,904

Impaired Loans and Advances by Geography and Industry

The following table shows the impaired loans and advances, by geography and by industry, at March 31, 2018 and 2017.

	At March 31,
	2018			2017
	(In millions)
Domestic:
Manufacturing	¥	76,253		¥	127,581
Agriculture, forestry, fisheries and mining		6,386			2,251
Construction		13,410			28,082
Transportation, communications and public enterprises		20,899			32,880
Wholesale and retail		98,419			122,719
Finance and insurance		3,022			4,135
Real estate and goods rental and leasing		41,939			147,516
Services		71,903			112,573
Lease financing		—			7,969
Consumer		319,285			363,305
Others		35,661			41,246
Total domestic		687,177			990,257
Foreign:
Public sector		21			25
Financial institutions		1,829			2,371
Commerce and industry		167,458			199,983
Lease financing		—			12,162
Others		22,383			23,890
Total foreign		191,691			238,431
Total impaired loans and advances before allowance for loan losses		878,868			1,228,688
Less: Allowance for loan losses for impaired loans and advances		(369,386	)		(532,451	)
Net impaired loans and advances	¥	509,482		¥	696,237

Loans and Advances Whose Terms Have Been Renegotiated

The following table shows loans and advances at March 31, 2018 and 2017 that would otherwise be past due or impaired, but whose terms have been renegotiated without providing any financial concessions. These loans and advances are mainly classified as requiring caution in the table of “Loans and advances neither past due nor impaired” in the section “Loans and advances by credit quality category.”

The SMBC Group continually assesses the creditworthiness of a borrower for whom terms of the loans and advances have been renegotiated, taking into account the actual state of the borrower’s financial position and qualitative factors. Further details are described in “Credit risk evaluation” in the section “Credit risk management methods.” Loans and advances whose terms have been renegotiated and financial concessions have been provided are reported as impaired and included in the table of “Impaired loans and advances” in the section “Loans and advances by credit quality category.”

	At March 31,
	2018	2017
	(In millions)
Renegotiated loans and advances	¥292,466	¥463,092

Trading Assets and Investment Securities Based on External Rating System

The following table shows an analysis of trading assets, financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets based on the external rating system at March 31, 2018 and 2017, excluding equity instruments. Collateral is generally not obtained directly from the issuers.

	At March 31, 2018
	Trading assets		Financial assets at fair value through profit or loss		Held-to-maturity investments		Available-for-sale financial assets		Total
	(In millions)
AAA	¥	190,650	¥	—	¥	—	¥	4,865,723	¥	5,056,373
AA- to AA+		2,399,644		1,518,748		372,459		8,538,879		12,829,730
A- to A+		192,943		—		—		276,042		468,985
Lower than A-		56,458		—		—		532,626		589,084
Unrated		1,453		10,173		—		69,436		81,062
Total	¥	2,841,148	¥	1,528,921	¥	372,459	¥	14,282,706	¥	19,025,234

Impaired available-for-sale financial assets with a carrying amount of ¥154 million at March 31, 2018 are included in the table above.

	At March 31, 2017
	Trading assets		Financial assets at fair value through profit or loss		Held-to-maturity investments		Available-for-sale financial assets		Total
	(In millions)
AAA	¥	242,240	¥	—	¥	—	¥	4,666,664	¥	4,908,904
AA- to AA+		2,803,467		1,570,904		1,173,419		6,822,953		12,370,743
A- to A+		236,348		—		—		132,943		369,291
Lower than A-		39,380		—		—		482,097		521,477
Unrated		18,493		12,053		—		19,113		49,659
Total	¥	3,339,928	¥	1,582,957	¥	1,173,419	¥	12,123,770	¥	18,220,074

Impaired available-for-sale financial assets with a carrying amount of ¥526 million at March 31, 2017 are included in the table above.

VaR by Risk Category

The following tables show the SMBC Group’s VaR by risk category and these figures are prepared based on the internal reporting provided to management. The SMBC Group’s material market risk exposure categories consist of interest rate risk, foreign exchange risk, equities and commodities risk and others. The section headed “VaR for Trading Activity” shows VaR for instruments entered into for trading purposes and the VaR model for the trading book includes principal consolidated subsidiaries. The section headed “VaR for Non-Trading Activity” shows VaR for instruments entered into for purposes other than trading purposes. “Strategic Equity Investment” in the “VaR for Non-Trading Activity” section is a portfolio that consists principally of publicly traded Japanese equities. This portfolio, like that of other financial institutions in Japan, has historically included shares of the SMBC Group’s customers.

(a) VaR for Trading Activity

	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	3.2	¥	4.3	¥	3.9	¥	3.6	¥	11.2
Minimum		1.3		1.2		0.0		1.4		3.5
Daily average		2.1		2.4		1.5		2.3		7.2
At March 31, 2018		2.6		3.6		0.0		3.2		8.1
SMFG Consolidated
Maximum	¥	30.9	¥	5.0	¥	11.4	¥	3.6	¥	39.5
Minimum		6.7		1.5		4.3		1.4		14.5
Daily average		12.3		3.0		6.3		2.3		22.1
At March 31, 2018		11.3		4.3		4.3		3.2		21.5
	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	19.2	¥	3.1	¥	5.3	¥	2.5	¥	22.6
Minimum		1.5		1.0		0.3		1.2		3.9
Daily average		8.1		1.7		1.8		1.7		11.8
At March 31, 2017		1.9		1.2		0.4		1.7		3.9
SMFG Consolidated
Maximum	¥	27.9	¥	3.9	¥	5.8	¥	2.5	¥	34.0
Minimum		10.3		1.2		1.1		1.2		13.1
Daily average		16.1		1.9		3.1		1.7		21.4
At March 31, 2017		16.7		1.6		4.2		1.7		23.6

(1) Total for “Maximum,” “Minimum,” and “Daily average” represent the maximum, minimum and daily average of the total of the trading book. For certain subsidiaries, the SMBC Group employs the standardized method and/or the historical simulation method for the VaR calculation method.

(b) VaR for Non-Trading Activity

(i) Banking

	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	31.5	¥	0.0	¥	39.9	¥	0.0	¥	54.5
Minimum		25.2		0.0		21.5		0.0		38.0
Daily average		27.4		0.0		30.4		0.0		44.4
At March 31, 2018		31.3		0.0		28.1		0.0		45.7
SMFG Consolidated
Maximum	¥	34.0	¥	0.0	¥	39.9	¥	0.0	¥	57.0
Minimum		27.8		0.0		21.6		0.0		40.8
Daily average		30.2		0.0		30.5		0.0		47.2
At March 31, 2018		33.7		0.0		28.1		0.0		48.2

	Interest rate risk		Foreign exchange risk		Equities and commodities risk		Others		Total(1)
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	34.2	¥	0.0	¥	38.9	¥	0.0	¥	49.9
Minimum		23.2		0.0		24.7		0.0		37.8
Daily average		27.0		0.0		32.1		0.0		43.0
At March 31, 2017		27.4		0.0		34.2		0.0		44.1
SMFG Consolidated
Maximum	¥	37.3	¥	0.0	¥	38.9	¥	0.0	¥	53.2
Minimum		26.4		0.0		24.8		0.0		40.2
Daily average		30.0		0.0		32.2		0.0		46.1
At March 31, 2017		30.6		0.0		34.3		0.0		47.4

(1) Total for “Maximum,” “Minimum,” and “Daily average” represent the maximum, minimum and daily average of the total of the banking book.

(ii) Strategic Equity Investment

	Equities risk
	(In billions)
For the fiscal year ended March 31, 2018:
SMBC Consolidated
Maximum	¥	1,622.9
Minimum		1,309.8
Daily average		1,456.6
At March 31, 2018		1,389.4
SMFG Consolidated
Maximum	¥	1,855.9
Minimum		1,488.1
Daily average		1,664.2
At March 31, 2018		1,603.6

	Equities risk
	(In billions)
For the fiscal year ended March 31, 2017:
SMBC Consolidated
Maximum	¥	1,421.0
Minimum		1,146.2
Daily average		1,303.7
At March 31, 2017		1,361.8
SMFG Consolidated
Maximum	¥	1,603.9
Minimum		1,272.8
Daily average		1,460.5
At March 31, 2017		1,544.5

Decline in Economic Value Based on Interest Rate Risk

The decline in economic value based on the outlier framework of SMBC on a consolidated basis is shown in the following table.

	At March 31, 2017
	(In billions, except percentages)
SMBC Consolidated
Total	¥	150.5
Impact of yen interest rates		77.2
Impact of U.S. dollar interest rates		50.8
Impact of euro interest rates		8.8
Percentage of total capital		1.5	%

Note: Decline in economic value is the decline of the present value of a banking portfolio after interest rate shocks (1st and 99th percentile of observed interest rate changes using a one-year holding period and an observation period of five years).

Maturity Analysis of Contractual Undiscounted Cash Flows for Financial Liabilities

The following tables show a maturity analysis of the contractual undiscounted cash flows for financial liabilities at March 31, 2018 and 2017. The amount of interest on debt instruments is not included in the maturity tables below due to its insignificance.

	At March 31, 2018
	On demand		Not later than three months		Later than three months and not later than one year		Later than one year and not later than three years		Later than three years and not later than five years		Later than five years		Total
		(In millions)
Non-derivative financial instruments:
Deposits	¥	79,239,076	¥	31,907,636	¥	12,755,005	¥	3,189,790	¥	701,374	¥	654,717	¥	128,447,598
Call money and bills sold		47,942		1,141,653		1,334		—		—		—		1,190,929
Repurchase agreements and cash collateral on securities lent		20,833		12,001,760		—		—		—		—		12,022,593
Trading liabilities		2,143,899		—		—		—		—		—		2,143,899
Borrowings		61,205		435,708		6,765,228		601,326		652,481		2,126,169		10,642,117
Debt securities in issue		—		2,407,601		950,334		1,818,271		2,185,578		3,227,737		10,589,521
Lease payable		—		683		1,884		2,999		1,665		3,086		10,317
Other financial liabilities		2,554,069		4,129,478		4,342		139		—		3,014		6,691,042
Off balance sheet items:
Loan commitments		60,107,128		—		—		—		—		—		60,107,128
Financial guarantee contracts		8,426,245		—		—		—		—		—		8,426,245
Total non-derivative financial instruments	¥	152,600,397	¥	52,024,519	¥	20,478,127	¥	5,612,525	¥	3,541,098	¥	6,014,723	¥	240,271,389
Derivative financial instruments	¥	3,498,016	¥	—	¥	—	¥	—	¥	—	¥	—	¥	3,498,016

	At March 31, 2017
	On demand		Not later than three months		Later than three months and not later than one year		Later than one year and not later than three years		Later than three years and not later than five years		Later than five years		Total
	(In millions)
Non-derivative financial instruments:
Deposits	¥	76,476,402	¥	32,358,045	¥	16,420,032	¥	3,303,700	¥	961,405	¥	755,341	¥	130,274,925
Call money and bills sold		30,563		2,052,776		362		4,319		—		—		2,088,020
Repurchase agreements and cash collateral on securities lent		1,902		9,414,026		8,578		—		—		—		9,424,506
Trading liabilities		2,071,584		—		—		—		—		—		2,071,584
Borrowings		69,370		926,538		6,960,401		868,247		949,406		2,364,402		12,138,364
Debt securities in issue		—		3,205,952		1,422,649		1,527,880		2,213,439		2,806,492		11,176,412
Lease payable		—		7,042		20,859		48,550		30,408		6,129		112,988
Other financial liabilities		2,223,233		4,863,181		11,397		14,966		12,458		75,902		7,201,137
Off balance sheet items:
Loan commitments		62,357,210		—		—		—		—		—		62,357,210
Financial guarantee contracts		7,924,711		—		—		—		—		—		7,924,711
Total non-derivative financial instruments	¥	151,154,975	¥	52,827,560	¥	24,844,278	¥	5,767,662	¥	4,167,116	¥	6,008,266	¥	244,769,857
Derivative financial instruments	¥	3,889,694	¥	—	¥	—	¥	—	¥	—	¥	—	¥	3,889,694

Notes:

1. Embedded derivatives which are separately accounted for, but presented together with the host contract in the consolidated statement of financial position are not included in the contractual tables above as they relate to the interest cash flow of the host contract, which are also not included in the tables above.

2. Derivative financial instruments are recorded at fair value and included in the column “On demand.” These instruments are not used for hedging under IAS 39 and the fair value represents the cash flow on demand.

Balance of Loans and Advances and Deposits

The following table presents the balance of loans and advances, and deposits at March 31, 2018 and 2017. The balance of deposits, which was mainly composed of individual customer deposits at March 31, 2018 and 2017, exceeded the balance of loans and advances at the same time due to the stable deposit base in Japan.

	At March 31,
	2018		2017
	(In millions)
Loans and advances	¥	85,129,070	¥	95,273,845
Deposits		128,461,527		130,295,290

Deposits by Domestic and Foreign Offices

The following table presents a breakdown of deposits by domestic and foreign offices. Domestic inter-bank money was classified as “Call money and bills sold” and not included in “Deposits” in the consolidated statement of financial position. Over half of domestic deposits was composed of individual customer deposits.

	At March 31,
	2018		2017
	(In millions)
Domestic offices:
Non-interest-bearing demand deposits		¥  20,370,064		¥  18,737,973
Interest-bearing demand deposits		49,580,166		48,879,089
Deposits at notice		855,978		1,066,201
Time deposits		18,185,591		22,269,409
Negotiable certificates of deposit		5,408,021		6,021,236
Others		7,338,619		7,290,869
Total domestic offices		101,738,439		104,264,777
Foreign offices:
Non-interest-bearing demand deposits		1,241,450		1,115,579
Interest-bearing demand deposits		2,574,099		2,402,906
Deposits at notice		9,499,686		9,264,068
Time deposits		7,469,541		7,256,466
Negotiable certificates of deposit		5,812,264		5,859,702
Others		126,048		131,792
Total foreign offices		26,723,088		26,030,513
Total deposits		¥128,461,527		¥130,295,290

Regulatory Capital Requirements

The table below presents the SMBC Group’s total capital ratio, total capital and risk-weighted assets under Japanese GAAP at March 31, 2018 and 2017 based on the Basel III rules.

	At March 31,
	2018			2017
	(In billions, except percentages)
SMFG Consolidated:
Total risk-weighted capital ratio		19.36	%		16.93	%
Tier 1 risk-weighted capital ratio		16.69	%		14.07	%
Common Equity Tier 1 risk-weighted capital ratio		14.50	%		12.17	%
Total capital (Common Equity Tier 1 capital + Additional Tier 1 capital + Tier 2 capital)	¥	12,304.1		¥	11,973.7
Tier 1 capital (Common Equity Tier 1 capital + Additional Tier 1 capital)		10,610.2			9,946.2
Common Equity Tier 1 capital		9,217.4			8,608.5
Risk-weighted assets		63,540.3			70,683.5
The amount of minimum total capital requirements(1)		5,083.2			5,654.7

(1) The amount of minimum total capital requirements is calculated by multiplying risk-weighted assets by 8%.

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Related-Party Transactions (Tables)

12 Months Ended

Mar. 31, 2018

Compensation Expenses of Key Management Personnel

The following table presents the compensation expenses of key management personnel.

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Short-term employee benefits	¥	1,135	¥	1,157	¥	1,161
Share-based compensation		295		204		214

Key management personnel of entity or parent [member]

Transaction Amounts with Related Party

	At March 31,
	2018		2017
	(In millions)
Assets:
Loans and advances	¥	2	¥	29
Liabilities:
Deposits	¥	1,612	¥	2,878
Others		94		110

Associates, joint ventures, and other entities [Member]

Transaction Amounts with Related Party

The transaction amounts included in the accounts, in aggregate, by category of related party were as follows:

Transactions with associates, joint ventures and other entities

	At March 31,
	2018		2017
	(In millions)
Assets:
Loans and advances	¥	222,890	¥	219,680
Others		39,254		13,807
Liabilities:
Deposits	¥	267,289	¥	143,801
Others		29,049		46,486

	For the fiscal year ended March 31,
	2018		2017		2016
	(In millions)
Income statement:
Income (interest income, fee and commission income, and others)	¥	15,665	¥	17,433	¥	34,135
Expense (interest expense and others)		15,601		17,411		19,169

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Principal Subsidiaries (Tables)

12 Months Ended

Mar. 31, 2018

Foreign [member]

Principal Subsidiaries

Principal foreign subsidiaries

Company Name	Country of Incorporation	Proportion of Ownership Interest(1)		Proposition of Voting Rights(1)		Main Business
		(%)		(%)
Sumitomo Mitsui Banking Corporation Europe Limited	U.K.		100.0		100.0	Commercial banking
Sumitomo Mitsui Banking Corporation (China) Limited	China		100.0		100.0	Commercial banking
Manufacturers Bank	U.S.A.		100.0		100.0	Commercial banking
Banco Sumitomo Mitsui Brasileiro S.A	Brazil		100.0		100.0	Commercial banking
JSC Sumitomo Mitsui Rus Bank	Russia		100.0		100.0	Commercial banking
PT Bank Sumitomo Mitsui Indonesia	Indonesia		98.4		98.4	Commercial banking
Sumitomo Mitsui Banking Corporation Malaysia Berhad	Malaysia		100.0		100.0	Commercial banking
SMBC Leasing and Finance, Inc.	U.S.A.		100.0		100.0	Leasing
SMBC Aviation Capital Limited	Ireland		90.0		90.0	Leasing
SMBC Nikko Securities America, Inc.	U.S.A.		100.0		100.0	Securities
SMBC Nikko Capital Markets Limited	U.K.		100.0		100.0	Securities
SMBC Capital Markets, Inc.	U.S.A.		100.0		100.0	Derivatives

(1) Percentages of proportion of ownership interest and proportion of voting rights have been truncated.

Domestic [member]

Principal Subsidiaries

Principal domestic subsidiaries

Company Name	Proportion of Ownership Interest(1)		Proportion of Voting Rights(1)		Main Business
	(%)		(%)
Sumitomo Mitsui Banking Corporation		100.0		100.0	Commercial banking
SMBC Trust Bank Ltd.		100.0		100.0	Trust banking
SMBC Guarantee Co., Ltd.		100.0		100.0	Credit guarantee
Sumitomo Mitsui Finance and Leasing Company, Limited		60.0		60.0	Leasing
SMFL Capital Company, Limited		100.0		100.0	Leasing
SMBC Nikko Securities Inc.		100.0		100.0	Securities
Sumitomo Mitsui Card Company, Limited		65.9		65.9	Credit card
Cedyna Financial Corporation		100.0		100.0	Credit card and consumer credit
SMBC Consumer Finance Co., Ltd.		100.0		100.0	Consumer lending
SMBC Mobit Co., Ltd.		100.0		100.0	Consumer lending
SMM Auto Finance, Inc.		51.0		51.0	Automobile sales financing
SMBC Finance Service Co., Ltd.		100.0		100.0	Collecting agent and factoring
The Japan Research Institute, Limited		100.0		100.0	System development, data processing, management consulting and economic research
Sumitomo Mitsui Asset Management Company, Limited		60.0		60.0	Investment advisory and investment trust management
SAKURA KCS Corporation		47.4		47.4	System engineering and data processing
NCore Co., Ltd.		51.0		51.0	Data processing service and consulting
SMBC Venture Capital Co., Ltd.		40.0		40.0	Venture capital
SMBC Consulting Co., Ltd.		100.0		100.0	Management consulting and information services
Japan Pension Navigator Co., Ltd.		69.7		69.7	Operational management of defined contribution pension plans

(1) Percentages of proportion of ownership interest and proportion of voting rights have been truncated.

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Structured Entities (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Interests in Unconsolidated Structured Entities and Maximum Exposure to Loss

The following tables represent the carrying amounts of the SMBC Group’s interests in unconsolidated structured entities recognized in its consolidated statement of financial position by line item and the maximum exposure to loss from its interests at March 31, 2018 and 2017.

	At March 31, 2018
	Securitizations		Investment funds		Structured finance		Others		Total
	(In millions)
Interests in unconsolidated structured entities recognized in:
Trading assets	¥	10,157	¥	68,639	¥	—	¥	—	¥	78,796
Investment securities		64,113		1,055,971		51,018		479		1,171,581
Loans and advances		1,921,725		—		5,202,253		400,549		7,524,527
Assets held for sale		32,755		—		81,494		—		114,249
Total	¥	2,028,750	¥	1,124,610	¥	5,334,765	¥	401,028	¥	8,889,153
Maximum exposure to loss from interests in unconsolidated structured entities	¥	2,925,137	¥	1,126,551	¥	6,296,368	¥	538,660	¥	10,886,716

	At March 31, 2017
	Securitizations		Investment funds		Structured finance		Others		Total
	(In millions)
Interests in unconsolidated structured entities recognized in:
Trading assets	¥	—	¥	87,639	¥	—	¥	—	¥	87,639
Investment securities		6,716		1,162,195		69,705		551		1,239,167
Loans and advances		1,919,703		—		5,092,321		501,180		7,513,204
Total	¥	1,926,419	¥	1,249,834	¥	5,162,026	¥	501,731	¥	8,840,010
Maximum exposure to loss from interests in unconsolidated structured entities	¥	2,495,428	¥	1,251,497	¥	6,232,900	¥	702,236	¥	10,682,061

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Acquisitions (Tables)

12 Months Ended

Mar. 31, 2018

Total Amount of Cash Consideration Paid and Cash Acquired by Obtaining Control of Subsidiaries and Businesses

The total amount of cash consideration paid and cash acquired by obtaining control of subsidiaries during the fiscal year ended March 31, 2017 were as follows:

	For the fiscal year ended March 31, 2017
	(In millions)
Cash consideration paid	¥	(201,245	)
Cash and cash equivalents transferred as a result of the acquisitions		1,889
Cash consideration paid, net of cash and cash equivalents acquired by obtaining control of the subsidiaries	¥	(199,356	)

Retail banking business of Citibank Japan Ltd. [member]

Fair Values of Assets and Liabilities at the Date of Acquisition and Consideration Paid

The fair values of assets and liabilities of the retail banking business of Citibank Japan at the date of acquisition and the consideration paid were as follows:

	At November 1, 2015
	(In millions)
Assets:
Cash and deposits with banks	¥	2,296,107
All other assets		110,978
Total assets	¥	2,407,085
Liabilities:
Deposits	¥	2,361,908
All other liabilities		8,620
Total liabilities	¥	2,370,528
Net assets acquired		36,557
Goodwill		8,443
Consideration	¥	45,000
Consideration:
Fair value of consideration transferred	¥	45,000
Total	¥	45,000
Acquisition related costs recognized as an expense in “General and administrative expenses” in the consolidated income statement	¥	286

Sumitomo mitsui asset management company, limited [member]

Fair Values of Assets and Liabilities at the Date of Acquisition and Consideration Paid

The fair values of assets and liabilities of SMAM at the date of acquisition and the consideration paid were as follows:

	At July 29, 2016
	(In millions)
Assets:
Cash and deposits with banks	¥	15,411
Trading assets		12,030
Intangible assets		14,555
All other assets		11,007
Total assets	¥	53,003
Liabilities	¥	14,995
Net assets	¥	38,008
Non-controlling interests measured at their proportionate share of the identifiable net assets		(15,203	)
Net assets acquired		22,805
Goodwill		38,053
Consideration	¥	60,858
Consideration:
Cash	¥	20,286
Fair value of the equity interest in SMAM held before the acquisition		40,572
Total	¥	60,858
Acquisition related costs recognized as an expense in “General and administrative expenses” in the consolidated income statement	¥	8

GE Japan GK [member]

Fair Values of Assets and Liabilities at the Date of Acquisition and Consideration Paid

The fair values of assets and liabilities of GE Japan at the date of acquisition and the consideration paid were as follows:

	At April 1, 2016
	(In millions)
Assets:
Loans and advances	¥	470,538
All other assets		203,069
Total assets	¥	673,607
Liabilities:
Borrowings	¥	436,537
All other liabilities		58,134
Total liabilities	¥	494,671
Net assets	¥	178,936
Non-controlling interests measured at their proportionate share of the identifiable net assets		(394	)
Net assets acquired		178,542
Goodwill		2,417
Consideration	¥	180,959
Consideration:
Cash	¥	180,959
Total	¥	180,959
Acquisition related costs recognized as an expense in “General and administrative expenses” in the consolidated income statement	¥	752

American Railcar Leasing LLC [member]

Fair Values of Assets and Liabilities at the Date of Acquisition and Consideration Paid

The fair values of assets and liabilities of ARL at the date of acquisition and the consideration paid were as follows:

	At June 1, 2017
	(In millions)
Assets:
Property, plant and equipment	¥	304,257
All other assets		15,719
Total assets	¥	319,976
Liabilities:
Borrowings	¥	147,523
All other liabilities		1,947
Total liabilities	¥	149,470
Net assets acquired		170,506
Goodwill		—
Consideration	¥	170,506
Consideration:
Cash	¥	170,506
Total	¥	170,506
Acquisition related costs recognized as an expense in “General and administrative expenses” in the consolidated income statement	¥	1,264

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Assets and Disposal Groups Held For Sale (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Non Current Asset And Disposal

The table below shows non-current assets and disposal groups held for sale at March 31, 2018 and 2017.

	At March 31,
	2018			2017
	(In millions)
Assets held for sale:
Loans and advances(1)	¥	3,010,314		¥	—
Property, plant and equipment		1,435,637			300
Intangible assets		179,358			—
All other assets		1,026,641			134,007
Total		5,651,950	(2)		134,307	(3)
Liabilities directly associated with the assets held for sale:
Borrowings		1,631,681			—
Debt securities in issue		1,422,402			—
All other liabilities		562,858			27,665
Total	¥	3,616,941	(2)	¥	27,665	(3)

(1) The balance in Loans and advances mainly consists of lease financing.

(2) The assets and liabilities of SMFL were classified as held for sale during the fiscal year ended March 31, 2018.

(3) The comparative amounts of “Assets held for sale” and “Liabilities directly associated with the assets held for sale” have been reclassified from “Other assets” and “Other liabilities”, respectively, to conform to the current presentation.

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Current and Non-current Distinction (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Summary of Current and Non-Current Distinction

The following tables present an analysis of financial assets and liabilities, excluding cash and deposits with banks, trading assets and liabilities, derivative financial instruments, financial assets included in assets held for sale and financial liabilities included in liabilities directly associated with the assets held for sale, by amounts recovered or settled, not more than twelve months or more than twelve months, at March 31, 2018 and 2017.

	At March 31, 2018
	Amounts recovered or settled
	Not more than twelve months		More than twelve months		Total
	(In millions)
Assets:
Call loans and bills bought	¥	1,802,317	¥	79,563	¥	1,881,880
Reverse repurchase agreements and cash collateral on securities borrowed		8,418,341		73,362		8,491,703
Financial assets at fair value through profit or loss		205,525		1,342,147		1,547,672
Investment securities:
Held-to-maturity investments		92,033		280,426		372,459
Available-for-sale financial assets		5,034,184		15,088,432		20,122,616
Loans and advances		29,469,067		55,660,003		85,129,070
Other financial assets		3,490,685		107,957		3,598,642
Liabilities:
Deposits	¥	123,901,761	¥	4,559,766	¥	128,461,527
Call money and bills sold		1,190,929		—		1,190,929
Repurchase agreements and cash collateral on securities lent		12,022,593		—		12,022,593
Borrowings		7,264,455		3,388,026		10,652,481
Debt securities in issue		3,356,401		7,212,716		10,569,117
Other financial liabilities		6,687,889		3,153		6,691,042

	At March 31, 2017
	Amounts recovered or settled
	Not more than twelve months		More than twelve months		Total
	(In millions)
Assets:
Call loans and bills bought	¥	1,824,730	¥	47,479	¥	1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed		8,851,521		72,864		8,924,385
Financial assets at fair value through profit or loss		—		1,599,093		1,599,093
Investment securities:
Held-to-maturity investments		792,357		381,062		1,173,419
Available-for-sale financial assets		2,042,240		15,858,278		17,900,518
Loans and advances		32,655,787		62,618,058		95,273,845
Other financial assets		3,307,191		117,400		3,424,591
Liabilities:
Deposits	¥	125,254,104	¥	5,041,186	¥	130,295,290
Call money and bills sold		2,083,701		4,319		2,088,020
Repurchase agreements and cash collateral on securities lent		9,424,506		—		9,424,506
Borrowings		7,982,814		4,263,129		12,245,943
Debt securities in issue		4,628,884		6,536,739		11,165,623
Other financial liabilities		7,097,811		103,326		7,201,137

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Condensed Financial Information of Registrant (SMFG) (Tables)

12 Months Ended

Mar. 31, 2018

Text block1 [abstract]

Condensed Statement of Financial Position

Condensed Statement of Financial Position

	At March 31,
	2018		2017
	(In millions)
Assets:
Deposits with SMBC	¥	251,681	¥	728,445
Investments in SMBC		4,613,844		4,613,844
Loans to SMBC		5,537,801		3,424,217
Investments in other subsidiaries and associates		1,548,012		1,547,319
Other assets		90,605		58,670
Current tax assets		67,414		87,571
Total assets	¥	12,109,357	¥	10,460,066
Liabilities and equity:
Short-term borrowings from SMBC	¥	1,228,030	¥	1,228,030
Long-term borrowings		199,221		132,806
Debt securities in issue due to other subsidiaries		280,880		280,784
Debt securities in issue		4,216,292		2,821,356
Other liabilities		47,001		22,612
Total liabilities		5,971,424		4,485,588
Shareholders’ equity		5,541,687		5,527,691
Other equity instruments holders’ equity		596,246		446,787
Total equity		6,137,933		5,974,478
Total equity and liabilities	¥	12,109,357	¥	10,460,066

Condensed Income Statement

Condensed Income Statement

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Income:
Interest income from SMBC	¥	99,100		¥	52,938		¥	18,313
Dividends from SMBC		223,334			408,419			522,636
Dividends from other subsidiaries and associates		33,668			20,428			20,508
Fees and commission income from subsidiaries		10,226			20,706			16,622
Other income		217			178			234
Total income		366,545			502,669			578,313
Expense:
Interest expense to SMBC		4,298			4,474			5,753
Interest expense to other subsidiaries		16,309			13,039			12,780
Interest expense		89,699			45,223			12,814
Operating and other expense		21,525			12,165			9,868
Total expense		131,831			74,901			41,215
Profit before tax		234,714			427,768			537,098
Income tax expense		(7,085	)		(33,344	)		4
Net profit	¥	241,799		¥	461,112		¥	537,094
Profit attributable to:
Shareholders		232,077			453,183			534,321
Other equity instruments holders		9,722			7,929			2,773

Condensed Statement of Cash Flows

Condensed Statement of Cash Flows

	For the fiscal year ended March 31,
	2018			2017			2016
	(In millions)
Operating Activities:
Profit before tax	¥	234,714		¥	427,768		¥	537,098
Income taxes paid—net		35,010			23,427			(7,980	)
Other operating activities—net		(3,736	)		(4,580	)		(3,019	)
Net cash and cash equivalents provided by operating activities		265,988			446,615			526,099
Investing Activities:
Loans provided to SMBC		(2,241,774	)		(1,972,253	)		(1,073,640	)
Other investing activities—net		(13,833	)		(5	)		(76	)
Net cash and cash equivalents used in investing activities		(2,255,607	)		(1,972,258	)		(1,073,716	)
Financing Activities:
Proceeds from issuance of long-term borrowings		66,415			83,806			18,000
Proceeds from issuance of debt securities		1,525,271			1,738,267			754,274
Proceeds from issuance of other equity instruments		149,080			149,081			297,431
Dividends paid to shareholders		(218,569	)		(211,501	)		(218,589	)
Coupons paid to other equity instruments holders		(9,722	)		(7,929	)		(2,773	)
Purchases of treasury stock and proceeds from sale of treasury stock—net		380			(86	)		(138	)
Net cash and cash equivalents provided by financing activities		1,512,855			1,751,638			848,205
Net increase of cash and cash equivalents		(476,764	)		225,995			300,588
Cash and cash equivalents at beginning of period		728,445			502,450			201,862
Cash and cash equivalents at end of period	¥	251,681		¥	728,445		¥	502,450

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Summary of Significant Accounting Policies - Additional Information (Detail) ¥ in Billions	12 Months Ended
	Mar. 31, 2018 JPY (¥)
Primary Impact of Initial Application of IFRS15 [member]
Disclosure of summary of significant accounting policies [line items]
Increase (decrease) in equity	¥ 15
Primary Impact of Initial Application of IFRS9 [member]
Disclosure of summary of significant accounting policies [line items]
Increase (decrease) in equity	¥ (150)
Software [member]
Disclosure of summary of significant accounting policies [line items]
Estimated useful lives	5 to 10 years
Contractual customer relationships [member]
Disclosure of summary of significant accounting policies [line items]
Estimated useful lives	10 to 20 years
Trademarks [member]
Disclosure of summary of significant accounting policies [line items]
Estimated useful lives	10 to 20 years
Buildings [member]
Disclosure of summary of significant accounting policies [line items]
Estimated useful lives	7-50 years
Leased assets [member]
Disclosure of summary of significant accounting policies [line items]
Estimated useful lives	5-20 years
Assets for rent [member]
Disclosure of summary of significant accounting policies [line items]
Estimated useful lives	2-40 years

XML

Critical Accounting Estimates and Judgments - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Critical accounting estimates and judgments [line items]
Impairment charges	¥ 126,623	¥ 141,457	¥ 118,750
Impairment charges	136,808	212,967	148,356
Impairment losses on goodwill	28,607	74,616	1,124
Provision	188,267	194,700	262,401
Net assets of retirement benefits	279,567	192,772
Deferred tax assets	19,436	81,961
Net total of deferred tax assets and liabilities amounted to net liabilities	378,305	238,240	220,574
Provision for interest repayment [member]
Critical accounting estimates and judgments [line items]
Provision	¥ 145,179	157,333	229,422
Interest Rate Restriction Act [member] | Minimum [member]
Critical accounting estimates and judgments [line items]
Interest rates on loans	15.00%
Interest Rate Restriction Act [member] | Maximum [member]
Critical accounting estimates and judgments [line items]
Interest rates on loans	20.00%
Act regulating the receipt of contributions, receipt of deposits and interest rates [member] | Maximum [member]
Critical accounting estimates and judgments [line items]
Interest rates on loans	29.20%
Available-for-sale financial assets [member]
Critical accounting estimates and judgments [line items]
Impairment charges	¥ 10,185	¥ 71,510	¥ 29,606

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Segment Analysis - Additional Information (Detail)	12 Months Ended
	Mar. 31, 2018 Segments Customer
Disclosure of operating segments [abstract]
Number of main business segments | Segments	4
Number of consumer finance companies | Customer	3

XML

Segment Analysis - Segmental Results of Operations (Detail) - JPY (¥) ¥ in Billions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of operating segments [line items]
Consolidated gross profit	¥ 2,981.1	¥ 2,920.7	¥ 2,904.0
General and administrative expenses	(1,816.2)	(1,812.4)	(1,724.8)
Others	38.9	24.6	(36.3)
Consolidated net business profit	1,203.8	1,132.9	1,142.9
Operating segments [member] | Wholesale Business Unit [member]
Disclosure of operating segments [line items]
Consolidated gross profit	772.9	776.4	749.2
General and administrative expenses	(347.9)	(344.8)	(325.3)
Others	53.7	45.6	48.0
Consolidated net business profit	478.7	477.2	471.9
Operating segments [member] | Retail Business Unit [member]
Disclosure of operating segments [line items]
Consolidated gross profit	1,311.7	1,313.9	1,272.7
General and administrative expenses	(1,027.7)	(1,041.1)	(1,000.6)
Others	15.6	12.1	10.0
Consolidated net business profit	299.6	284.9	282.1
Operating segments [member] | International Business Unit [member]
Disclosure of operating segments [line items]
Consolidated gross profit	632.0	566.1	588.8
General and administrative expenses	(280.7)	(241.2)	(236.5)
Others	46.9	38.5	(23.9)
Consolidated net business profit	398.2	363.4	328.4
Operating segments [member] | Global Markets Business Unit [member]
Disclosure of operating segments [line items]
Consolidated gross profit	356.2	346.8	354.1
General and administrative expenses	(53.9)	(50.2)	(49.2)
Others	17.5	8.2	8.8
Consolidated net business profit	319.8	304.8	313.7
Head office account and others [member]
Disclosure of operating segments [line items]
Consolidated gross profit	(91.7)	(82.5)	(60.8)
General and administrative expenses	(106.0)	(135.1)	(113.2)
Others	(94.8)	(79.8)	(79.2)
Consolidated net business profit	¥ (292.5)	¥ (297.4)	¥ (253.2)

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Segment Analysis - Reconciliation of Segmental Results of Operations to Consolidated Income Statement (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of operating segments [line items]
Consolidated net business profit	¥ 1,203,800	¥ 1,132,900	¥ 1,142,900
Others	38,900	24,600	(36,300)
Profit before tax	1,118,976	880,352	1,325,700
Reconciling management reporting under Japanese GAAP to IFRS [member]
Disclosure of operating segments [line items]
Total credit costs	(94,200)	(164,400)	(102,800)
Gains on equity instruments	118,900	55,000	69,000
Extraordinary gains or losses and others	(119,600)	(44,200)	(128,900)
Profit before tax under Japanese GAAP	1,108,900	979,300	980,200
Scope of consolidation	(1,600)	(12,000)	(3,100)
Derivative financial instruments	(20,700)	(110,900)	173,100
Investment securities	68,800	(8,800)	56,600
Loans and advances	(33,500)	(700)	(35,200)
Investments in associates and joint ventures	(1,600)	(15,900)	53,400
Property, plant and equipment	1,000	1,300	1,300
Lease accounting	(500)	(3,700)	(1,500)
Defined benefit plans	(13,200)	22,900	6,600
Foreign currency translation	12,700	3,600	61,700
Classification of equity and liability	14,100	8,400	5,400
Others	¥ (15,400)	¥ 16,900	¥ 27,200

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Segment Analysis - Operating Income by Geographical Area (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of geographical areas [Line Items]
Total operating income	¥ 3,812,347	¥ 3,347,895	¥ 3,688,226
Japan [member]
Disclosure of geographical areas [Line Items]
Total operating income	2,670,858	2,356,627	2,840,058
Domestic [member]
Disclosure of geographical areas [Line Items]
Total operating income	2,670,858	2,356,627	2,840,058
Americas [member]
Disclosure of geographical areas [Line Items]
Total operating income	350,118	313,742	196,399
Europe and Middle East [member]
Disclosure of geographical areas [Line Items]
Total operating income	484,807	401,320	352,232
Asia and Oceania [member]
Disclosure of geographical areas [Line Items]
Total operating income	306,564	276,206	299,537
Foreign [member]
Disclosure of geographical areas [Line Items]
Total operating income	¥ 1,141,489	¥ 991,268	¥ 848,168

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Cash and Deposits with Banks - Summary of Cash and Deposits with Banks (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Cash [abstract]
Cash	¥ 703,138	¥ 1,123,128
Deposits with banks	53,992,931	46,207,027
Total cash and deposits with banks	¥ 54,696,069	¥ 47,330,155	¥ 43,144,654

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Cash and Deposits with Banks - Reconciliation of Cash and Cash Equivalents Used for the Purposes of the Consolidated Statement of Cash Flows (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2015
Cash and cash equivalents [abstract]
Cash and deposits with banks	¥ 54,696,069	¥ 47,330,155	¥ 43,144,654
Less: term deposits with original maturities over three months	(627,837)	(606,795)	(597,960)
Less: cash segregated as deposits and others	(667,099)	(478,541)	(419,728)
Add: cash and cash equivalents included in assets held for sale	15,323
Cash and cash equivalents	¥ 53,416,456	¥ 46,244,819	¥ 42,126,966	¥ 39,108,757

XML

Cash and Deposits with Banks - Additional Information (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Cash and cash equivalents [abstract]
Reserves funds required to be maintained by the SMBC Group	¥ 1,689,340	¥ 1,644,684	¥ 1,436,232

XML

Trading Assets - Summary of Trading Assets (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of financial assets [line items]
Total trading assets	¥ 3,169,123	¥ 3,776,671
Debt instruments [member]
Disclosure of financial assets [line items]
Total trading assets	2,841,148	3,339,928
Equity instruments [member]
Disclosure of financial assets [line items]
Total trading assets	¥ 327,975	¥ 436,743

XML

Derivative Financial Instruments - Derivative Financial Instruments by Type and Purpose of Derivatives (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Assets	¥ 3,885,271	¥ 4,063,982
Liabilities	3,498,016	3,889,694
Trading [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	801,583,625	713,415,655
Assets	3,301,647	3,390,869
Liabilities	3,052,357	3,156,164
Trading [member] | Interest rate derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	676,464,541	591,977,855
Assets	1,771,745	1,864,348
Liabilities	1,639,850	1,738,961
Trading [member] | Interest rate derivatives [member] | Futures [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	78,295,049	78,549,213
Assets	28,689	20,278
Liabilities	28,871	16,579
Trading [member] | Interest rate derivatives [member] | Listed options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	66,989,307	35,011,822
Assets	4,538	6,622
Liabilities	722	459
Trading [member] | Interest rate derivatives [member] | Forwards [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	25,030,851	22,776,789
Assets	274	152
Liabilities	994	1,986
Trading [member] | Interest rate derivatives [member] | Swaps [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	429,498,805	393,798,232
Assets	1,651,945	1,723,403
Liabilities	1,500,361	1,584,833
Trading [member] | Interest rate derivatives [member] | OTC options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	76,650,529	61,841,799
Assets	86,299	113,893
Liabilities	108,902	135,104
Trading [member] | Currency derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	120,282,459	117,119,766
Assets	1,439,993	1,444,103
Liabilities	1,293,900	1,321,157
Trading [member] | Currency derivatives [member] | Futures [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	689	2,261
Assets
Liabilities	19	19
Trading [member] | Currency derivatives [member] | Listed options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Trading [member] | Currency derivatives [member] | Forwards [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	74,380,475	74,918,488
Assets	759,993	778,100
Liabilities	708,645	833,024
Trading [member] | Currency derivatives [member] | Swaps [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	39,668,889	36,026,356
Assets	577,350	561,985
Liabilities	490,014	378,036
Trading [member] | Currency derivatives [member] | OTC options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	6,232,406	6,172,661
Assets	102,650	104,018
Liabilities	95,222	110,078
Trading [member] | Equity derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	3,354,789	2,744,981
Assets	71,344	60,395
Liabilities	105,194	77,197
Trading [member] | Equity derivatives [member] | Futures [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	829,262	1,075,040
Assets	5,946	13,743
Liabilities	9,747	3,154
Trading [member] | Equity derivatives [member] | Listed options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	1,779,546	1,012,228
Assets	42,209	21,657
Liabilities	68,341	41,439
Trading [member] | Equity derivatives [member] | Forwards [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	7,564	15,677
Assets	745	410
Liabilities	208	253
Trading [member] | Equity derivatives [member] | Swaps [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	77,015	106,228
Assets	186	307
Liabilities	8,171	8,922
Trading [member] | Equity derivatives [member] | OTC options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	661,402	535,808
Assets	22,258	24,278
Liabilities	18,727	23,429
Trading [member] | Commodity derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	161,539	172,973
Assets	6,516	11,679
Liabilities	4,948	10,491
Trading [member] | Commodity derivatives [member] | Futures [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	20,902	28,568
Assets	402	489
Liabilities	464	513
Trading [member] | Commodity derivatives [member] | Listed options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Trading [member] | Commodity derivatives [member] | Forwards [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Trading [member] | Commodity derivatives [member] | Swaps [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	128,467	116,525
Assets	6,052	11,037
Liabilities	3,974	9,230
Trading [member] | Commodity derivatives [member] | OTC options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	12,170	27,880
Assets	62	153
Liabilities	510	748
Trading [member] | Credit derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	1,320,297	1,400,080
Assets	12,049	10,344
Liabilities	8,465	8,358
Risk management [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	77,539,041	66,678,975
Assets	583,624	673,113
Liabilities	445,659	733,530
Risk management [member] | Interest rate derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	69,550,646	60,318,601
Assets	300,376	450,889
Liabilities	333,182	466,643
Risk management [member] | Interest rate derivatives [member] | Futures [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	18,269,263	5,853,880
Assets	5,534	221
Liabilities	1,167	865
Risk management [member] | Interest rate derivatives [member] | Listed options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Interest rate derivatives [member] | Forwards [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Interest rate derivatives [member] | Swaps [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	51,131,039	54,335,702
Assets	294,842	450,665
Liabilities	329,446	464,152
Risk management [member] | Interest rate derivatives [member] | OTC options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	150,344	129,019
Assets		3
Liabilities	2,569	1,626
Risk management [member] | Currency derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	7,986,176	6,360,374
Assets	283,248	222,224
Liabilities	112,322	266,887
Risk management [member] | Currency derivatives [member] | Futures [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Currency derivatives [member] | Listed options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Currency derivatives [member] | Forwards [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	1,866,249	5,364
Assets	49,440	106
Liabilities	24,929
Risk management [member] | Currency derivatives [member] | Swaps [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	6,119,927	6,355,010
Assets	233,808	222,118
Liabilities	87,393	266,887
Risk management [member] | Currency derivatives [member] | OTC options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Equity derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	2,219
Assets
Liabilities	155
Risk management [member] | Equity derivatives [member] | Futures [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Equity derivatives [member] | Listed options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Equity derivatives [member] | Forwards [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Equity derivatives [member] | Swaps [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	2,219
Assets
Liabilities	¥ 155
Risk management [member] | Equity derivatives [member] | OTC options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Commodity derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Commodity derivatives [member] | Futures [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Commodity derivatives [member] | Listed options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Commodity derivatives [member] | Forwards [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Commodity derivatives [member] | Swaps [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Commodity derivatives [member] | OTC options [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities
Risk management [member] | Credit derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts
Assets
Liabilities

XML

Derivative Financial Instruments - Additional Information (Detail) - Hedges of net investment in foreign operations [member] ¥ in Millions	12 Months Ended
	Mar. 31, 2018 JPY (¥)
Disclosure of detailed information about financial instruments [line items]
Gain (loss) on hedge ineffectiveness	¥ 0
Financial liabilities designated as hedging instruments	208,294
Derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Derivative financial assets	49,440
Derivative financial liabilities	24,929
Notional amounts	¥ 1,866,249

XML

Derivative Financial Instruments - Notional Amounts and Fair Value of Credit Derivatives by Purpose of Transactions (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Assets	¥ 3,885,271	¥ 4,063,982
Liabilities	3,498,016	3,889,694
Trading [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	801,583,625	713,415,655
Assets	3,301,647	3,390,869
Liabilities	3,052,357	3,156,164
Trading [member] | Credit derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	1,320,297	1,400,080
Assets	12,049	10,344
Liabilities	8,465	8,358
Trading [member] | Credit derivatives [member] | Protection purchased [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	549,343	611,396
Assets	307	315
Liabilities	7,682	7,468
Trading [member] | Credit derivatives [member] | Protection purchased [member] | Managing the SMBC Group's credit risk portfolio
Disclosure of detailed information about financial instruments [line items]
Notional amounts	442,991	471,994
Assets	220	238
Liabilities	5,950	5,141
Trading [member] | Credit derivatives [member] | Protection purchased [member] | Facilitating client transactions [Member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	106,352	139,402
Assets	87	77
Liabilities	1,732	2,327
Trading [member] | Credit derivatives [member] | Protection sold [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	770,954	788,684
Assets	11,742	10,029
Liabilities	783	890
Trading [member] | Credit derivatives [member] | Protection sold [member] | Managing the SMBC Group's credit risk portfolio
Disclosure of detailed information about financial instruments [line items]
Notional amounts	684,080	633,094
Assets	10,615	7,796
Liabilities	751	556
Trading [member] | Credit derivatives [member] | Protection sold [member] | Facilitating client transactions [Member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	86,874	155,590
Assets	1,127	2,233
Liabilities	¥ 32	¥ 334

XML

Derivative Financial Instruments - Notional Amounts and Fair Value of Credit Derivative Portfolio by Type of Counterparty (Detail) - Trading [member] - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Notional amounts	¥ 801,583,625	¥ 713,415,655
Credit derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	1,320,297	1,400,080
Credit derivatives [member] | Protection purchased [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	549,343	611,396
Credit derivatives [member] | Protection purchased [member] | Banks and broker dealers [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	537,843	599,896
Credit derivatives [member] | Protection purchased [member] | Insurance and other financial guaranty firms [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	11,500	11,500
Credit derivatives [member] | Protection sold [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	770,954	788,684
Credit derivatives [member] | Protection sold [member] | Banks and broker dealers [member]
Disclosure of detailed information about financial instruments [line items]
Notional amounts	¥ 770,954	¥ 788,684

XML

Financial Assets at Fair Value through Profit or Loss - Summary of Financial Assets at Fair Value through Profit or Loss (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of financial assets [line items]
Financial assets at fair value through profit or loss	¥ 1,547,672	¥ 1,599,093
Debt instruments [member]
Disclosure of financial assets [line items]
Financial assets at fair value through profit or loss	1,528,921	1,582,957
Equity instruments [member]
Disclosure of financial assets [line items]
Financial assets at fair value through profit or loss	¥ 18,751	¥ 16,136

XML

Investment Securities - Summary of Investment Securities (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Held-to-maturity investments	¥ 372,459	¥ 1,173,419
Available-for-sale financial assets	20,122,616	17,900,518
Total investment securities	20,495,075	19,073,937
Domestic [member]
Disclosure of detailed information about financial instruments [line items]
Held-to-maturity investments	372,459	1,173,419
Available-for-sale financial assets	13,190,670	11,286,633
Domestic [member] | Japanese government bonds [member]
Disclosure of detailed information about financial instruments [line items]
Held-to-maturity investments	372,459	1,160,751
Domestic [member] | Japanese municipal bonds [member]
Disclosure of detailed information about financial instruments [line items]
Held-to-maturity investments		7,463
Domestic [member] | Japanese corporate bonds [member]
Disclosure of detailed information about financial instruments [line items]
Held-to-maturity investments		5,205
Domestic [member] | Debt instruments [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	8,028,936	6,169,004
Domestic [member] | Debt instruments [member] | Japanese government bonds [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	7,685,303	5,722,674
Domestic [member] | Debt instruments [member] | Japanese municipal bonds [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	47,032	82,780
Domestic [member] | Debt instruments [member] | Japanese corporate bonds [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	296,601	363,550
Domestic [member] | Equity instruments [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	5,161,734	5,117,629
Foreign [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	6,931,946	6,613,885
Foreign [member] | Debt instruments [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	6,253,770	5,954,766
Foreign [member] | Debt instruments [member] | U.S. Treasury and other U.S. government agency bonds [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	3,246,646	3,468,263
Foreign [member] | Debt instruments [member] | Bonds issued by other governments and official institutions [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	2,187,450	1,669,853
Foreign [member] | Debt instruments [member] | Mortgage-backed securities [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	488,183	633,629
Foreign [member] | Debt instruments [member] | Other debt instruments [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	331,491	183,021
Foreign [member] | Equity instruments [member]
Disclosure of detailed information about financial instruments [line items]
Available-for-sale financial assets	¥ 678,176	¥ 659,119

XML

Loans and Advances - Loans and Advances by Industry Classification (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Gross carrying amount [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Domestic [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	57,830,627	68,020,094
Gross carrying amount [member] | Domestic [member] | Manufacturing [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	7,961,620	9,578,147
Gross carrying amount [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	145,957	174,021
Gross carrying amount [member] | Domestic [member] | Construction [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	947,765	1,151,989
Gross carrying amount [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	5,424,054	5,365,225
Gross carrying amount [member] | Domestic [member] | Wholesale and retail [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	5,288,767	5,721,005
Gross carrying amount [member] | Domestic [member] | Finance and insurance [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	2,777,862	2,844,546
Gross carrying amount [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	9,017,664	10,101,846
Gross carrying amount [member] | Domestic [member] | Services [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	4,255,228	4,885,247
Gross carrying amount [member] | Domestic [member] | Municipalities [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	1,000,286	1,216,211
Gross carrying amount [member] | Domestic [member] | Lease financing [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	14,629	2,706,641
Gross carrying amount [member] | Domestic [member] | Consumer [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	16,363,489	19,096,755
Gross carrying amount [member] | Domestic [member] | Others [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	4,633,306	5,178,461
Gross carrying amount [member] | Foreign [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	28,029,300	28,170,632
Gross carrying amount [member] | Foreign [member] | Public sector [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	372,008	299,746
Gross carrying amount [member] | Foreign [member] | Financial institutions [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	4,496,646	4,588,001
Gross carrying amount [member] | Foreign [member] | Commerce and industry [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	21,023,885	21,041,905
Gross carrying amount [member] | Foreign [member] | Lease financing [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	357,660	404,658
Gross carrying amount [member] | Foreign [member] | Others [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	1,779,101	1,836,322
Adjust: Unearned income, unamortized premiums - net and deferred loan fees - net [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	(239,181)	(236,425)
Less: Allowance for loan losses [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	¥ (491,676)	¥ (680,456)

XML

Loans and Advances - Loans and Advances by Industry Classification (Parenthetical) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Gross carrying amount [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Domestic [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	57,830,627	68,020,094
Gross carrying amount [member] | Domestic [member] | Consumer [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	16,363,489	19,096,755
Gross carrying amount [member] | Housing loan [member] | Domestic [member] | Consumer [member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	¥ 11,482,678	¥ 13,766,771

XML

Loans and Advances - Reconciliation of Allowance for Loan Losses (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of detailed information about financial instruments [line items]
Allowance for loan losses at beginning of period	¥ 680,456	¥ 722,717	¥ 793,552
Provision for loan losses	126,623	141,457	118,750
Charge-offs	185,060	190,508	193,649
Recoveries	10,232	10,297	10,348
Net charge-offs	174,828	180,211	183,301
Others	(140,575)	(3,507)	(6,284)
Allowance for loan losses at end of period	491,676	680,456	722,717
Domestic [member]
Disclosure of detailed information about financial instruments [line items]
Charge-offs	161,526	157,373	173,431
Recoveries	9,658	9,852	9,477
Foreign [member]
Disclosure of detailed information about financial instruments [line items]
Allowance for loan losses at beginning of period	128,347	134,664	100,783
Provision for loan losses	19,872	29,699	60,002
Charge-offs	23,534	33,135	20,218
Recoveries	574	445	871
Allowance for loan losses at end of period	¥ 114,306	¥ 128,347	¥ 134,664

XML

Investments in Associates and Joint Ventures - Summary of Investments in Associates and Joint Ventures (Detail)	12 Months Ended
	Mar. 31, 2018
Daiwa Securities SMBC Principal Investments Co., Ltd. [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Joint Venture, Company Name	Daiwa Securities SMBC Principal Investments Co., Ltd.
Principal Joint Venture, Country of Incorporation	Japan
Principal Joint Venture, Proportion of Ownership Interest	40.00%
Principal Joint Venture, Proportion of Voting Rights	40.00%
Principal Joint Venture, Main Business	Investments, fund management
THE MINATO BANK, LTD. [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	THE MINATO BANK, LTD.
Principal Associates, Country of Incorporation	Japan
Principal Associates, Proportion of Ownership Interest	3.90%
Principal Associates, Proportion of Voting Rights	34.10%
Principal Associates, Main Business	Commercial banking
Kansai Urban Banking Corporation [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	Kansai Urban Banking Corporation
Principal Associates, Country of Incorporation	Japan
Principal Associates, Proportion of Ownership Interest	47.90%
Principal Associates, Proportion of Voting Rights	48.10%
Principal Associates, Main Business	Commercial banking
The Japan Net Bank, Limited [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	The Japan Net Bank, Limited
Principal Associates, Country of Incorporation	Japan
Principal Associates, Proportion of Ownership Interest	41.10%
Principal Associates, Proportion of Voting Rights	41.10%
Principal Associates, Main Business	Internet banking
PT Bank Tabungan Pensiunan Nasional Tbk [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	PT Bank Tabungan Pensiunan Nasional Tbk
Principal Associates, Country of Incorporation	Indonesia
Principal Associates, Proportion of Ownership Interest	40.60%
Principal Associates, Proportion of Voting Rights	40.60%
Principal Associates, Main Business	Commercial banking
The Bank of East Asia, Limited [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	The Bank of East Asia, Limited
Principal Associates, Country of Incorporation	China
Principal Associates, Proportion of Ownership Interest	19.40%
Principal Associates, Proportion of Voting Rights	19.40%
Principal Associates, Main Business	Commercial banking
ACLEDA Bank Plc. [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	ACLEDA Bank Plc.
Principal Associates, Country of Incorporation	Cambodia
Principal Associates, Proportion of Ownership Interest	18.20%
Principal Associates, Proportion of Voting Rights	18.20%
Principal Associates, Main Business	Commercial banking
Vietnam Export Import Commercial Joint Stock Bank [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	Vietnam Export Import Commercial Joint Stock Bank
Principal Associates, Country of Incorporation	Vietnam
Principal Associates, Proportion of Ownership Interest	15.00%
Principal Associates, Proportion of Voting Rights	15.00%
Principal Associates, Main Business	Commercial banking
Sumitomo Mitsui Auto Service Company, Limited [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	Sumitomo Mitsui Auto Service Company, Limited
Principal Associates, Country of Incorporation	Japan
Principal Associates, Proportion of Ownership Interest	33.90%
Principal Associates, Proportion of Voting Rights	33.90%
Principal Associates, Main Business	Leasing
NEC Capital Solutions Limited [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	NEC Capital Solutions Limited
Principal Associates, Country of Incorporation	Japan
Principal Associates, Proportion of Ownership Interest	25.00%
Principal Associates, Proportion of Voting Rights	25.00%
Principal Associates, Main Business	Leasing
POCKET CARD CO., LTD. [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	POCKET CARD CO., LTD.
Principal Associates, Country of Incorporation	Japan
Principal Associates, Proportion of Ownership Interest	20.00%
Principal Associates, Proportion of Voting Rights	20.00%
Principal Associates, Main Business	Credit card
JSOL Corporation [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	JSOL Corporation
Principal Associates, Country of Incorporation	Japan
Principal Associates, Proportion of Ownership Interest	50.00%
Principal Associates, Proportion of Voting Rights	50.00%
Principal Associates, Main Business	System development and data processing
Sakura Information Systems Co., Ltd. [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	Sakura Information Systems Co., Ltd.
Principal Associates, Country of Incorporation	Japan
Principal Associates, Proportion of Ownership Interest	49.00%
Principal Associates, Proportion of Voting Rights	49.00%
Principal Associates, Main Business	System engineering and data processing
Daiwa SB Investments Ltd. [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	Daiwa SB Investments Ltd.
Principal Associates, Country of Incorporation	Japan
Principal Associates, Proportion of Ownership Interest	43.90%
Principal Associates, Proportion of Voting Rights	43.90%
Principal Associates, Main Business	Investment advisory and investment trust management
China Post & Capital Fund Management Co., Ltd. [member]
Disclosure of significant investments in associates and joint ventures [line items]
Principal Associates, Company Name	China Post & Capital Fund Management Co., Ltd.
Principal Associates, Country of Incorporation	China
Principal Associates, Proportion of Ownership Interest	23.60%
Principal Associates, Proportion of Voting Rights	23.60%
Principal Associates, Main Business	Investment advisory and investment trust management

XML

Investments in Associates and Joint Ventures - Summary of Investments in Associates and Joint Ventures (Parenthetical) (Detail) - THE MINATO BANK, LTD. [member]	12 Months Ended
	Mar. 31, 2018
Disclosure of significant investments in associates and joint ventures [line items]
Percentage of interest in associate	3.90%
Optional controlling interest percentage	30.20%

XML

Investments in Associates and Joint Ventures -Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of associates and joint ventures [line items]
Cash and cash equivalents in Subsidiaries		¥ 1,889	¥ 2,296,517
Assets other than cash or cash equivalents in Subsidiaries		724,721	175,263
Liabilities in Subsidiaries		¥ 509,666	¥ 2,430,332
THE MINATO BANK, LTD. and Kansai Urban Banking Corporation [member] | SMFG [member]
Disclosure of associates and joint ventures [line items]
Cash consideration received for losing control of Subsidiaries	¥ 88,389
Cash and cash equivalents in Subsidiaries	940,568
Assets other than cash or cash equivalents in Subsidiaries	7,314,397
Liabilities in Subsidiaries	7,883,267
Loss from remeasuring interests retained at fair value in Subsidiaries	22,037
Profit recognized through losing control of Subsidiaries	¥ 19,392

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Investments in Associates and Joint Ventures - Financial Information of all Individually Immaterial Associates and Joint Ventures (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Investments in subsidiaries, joint ventures and associates [abstract]
Carrying amount of investments in associates and joint ventures	¥ 730,414	¥ 675,704
Profit from continuing operations	49,323	29,318	¥ 31,056
Other comprehensive income (loss)	7,885	(21,602)
Total comprehensive income	¥ 57,208	¥ 7,716

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Property, Plant and Equipment - Changes in Property, Plant and Equipment (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	¥ 2,686,055	¥ 2,590,951
Additions	502,311	380,302
Acquisition of subsidiaries and businesses	304,257	53,811
Disposals	(1,737,069)	(158,164)
Depreciation	(145,974)	(144,556)
Impairment losses	(27,816)	(6,396)	¥ (4,237)
Exchange differences	(66,830)	(10,287)
Others	(4,802)	(19,606)
Carrying amount, ending balance	1,510,132	2,686,055	2,590,951
Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	3,824,680	3,560,717
Carrying amount, ending balance	2,243,156	3,824,680	3,560,717
Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	(1,138,625)	(969,766)
Carrying amount, ending balance	(733,024)	(1,138,625)	(969,766)
Assets for rent [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	1,658,916	1,545,360
Additions	415,397	320,921
Acquisition of subsidiaries and businesses	304,233	52,636
Disposals	(1,640,222)	(152,172)
Depreciation	(91,906)	(88,198)
Exchange differences	(66,033)	(9,670)
Others	302	(9,961)
Carrying amount, ending balance	580,687	1,658,916	1,545,360
Assets for rent [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	2,086,804	1,833,990
Carrying amount, ending balance	607,769	2,086,804	1,833,990
Assets for rent [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	(427,888)	(288,630)
Carrying amount, ending balance	(27,082)	(427,888)	(288,630)
Land [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	514,492	512,819
Additions	44	1,268
Acquisition of subsidiaries and businesses		20
Disposals	(52,327)	(3,058)
Impairment losses	(2,446)	(453)
Exchange differences	(4)
Others	(192)	3,896
Carrying amount, ending balance	459,567	514,492	512,819
Land [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	520,078	518,564
Carrying amount, ending balance	466,046	520,078	518,564
Land [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	(5,586)	(5,745)
Carrying amount, ending balance	(6,479)	(5,586)	(5,745)
Buildings [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	370,807	375,679
Additions	30,144	15,117
Acquisition of subsidiaries and businesses		604
Disposals	(33,796)	(1,089)
Depreciation	(21,344)	(24,507)
Impairment losses	(25,203)	(5,618)
Exchange differences	(284)	(192)
Others	11,673	10,813
Carrying amount, ending balance	331,997	370,807	375,679
Buildings [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	774,233	760,244
Carrying amount, ending balance	738,023	774,233	760,244
Buildings [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	(403,426)	(384,565)
Carrying amount, ending balance	(406,026)	(403,426)	(384,565)
Leased assets [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	7,187	7,558
Additions	1,775	1,704
Acquisition of subsidiaries and businesses		4
Disposals	(660)	(74)
Depreciation	(2,061)	(2,102)
Impairment losses	(136)
Exchange differences	(3)
Others	47	97
Carrying amount, ending balance	6,149	7,187	7,558
Leased assets [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	17,837	16,741
Carrying amount, ending balance	17,373	17,837	16,741
Leased assets [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	(10,650)	(9,183)
Carrying amount, ending balance	(11,224)	(10,650)	(9,183)
Other tangible assets [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	134,653	149,535
Additions	54,951	41,292
Acquisition of subsidiaries and businesses	24	547
Disposals	(10,064)	(1,771)
Depreciation	(30,663)	(29,749)
Impairment losses	(31)	(325)
Exchange differences	(506)	(425)
Others	(16,632)	(24,451)
Carrying amount, ending balance	131,732	134,653	149,535
Other tangible assets [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	425,728	431,178
Carrying amount, ending balance	413,945	425,728	431,178
Other tangible assets [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Carrying amount, beginning balance	(291,075)	(281,643)
Carrying amount, ending balance	¥ (282,213)	¥ (291,075)	¥ (281,643)

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Property, Plant and Equipment - Additional Information (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about property, plant and equipment [abstract]
Contractual commitments to acquire property, plant and equipment	¥ 2,626	¥ 2,773,096
Carrying amount of property, plant and equipment with restrictions on title	¥ 6,149	¥ 7,187

XML

Leases - Carrying Amount of Assets Held under Finance Leases (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of recognised finance lease as assets by lessee [line items]
Carrying amount of assets held under finance leases	¥ 6,293	¥ 7,372
Land and buildings [member]
Disclosure of recognised finance lease as assets by lessee [line items]
Carrying amount of assets held under finance leases	2,837	3,295
Other tangible assets [member]
Disclosure of recognised finance lease as assets by lessee [line items]
Carrying amount of assets held under finance leases	3,312	3,892
Property, plant and equipment [member]
Disclosure of recognised finance lease as assets by lessee [line items]
Carrying amount of assets held under finance leases	6,149	7,187
Software [member]
Disclosure of recognised finance lease as assets by lessee [line items]
Carrying amount of assets held under finance leases	¥ 144	¥ 185

XML

Leases - Total of Future Minimum Lease Payments and Their Present Value Under Finance Leases (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of finance lease and operating lease by lessee [line items]
Future minimum lease payments	¥ 10,317	¥ 112,988
Less: Future interest charges	(1,151)	(6,064)
Present value of finance lease commitments	9,166	106,924
Not later than one year [member]
Disclosure of finance lease and operating lease by lessee [line items]
Future minimum lease payments	2,567	27,901
Later than one year and not later than five years [member]
Disclosure of finance lease and operating lease by lessee [line items]
Future minimum lease payments	4,664	78,958
Later than five years [member]
Disclosure of finance lease and operating lease by lessee [line items]
Future minimum lease payments	¥ 3,086	¥ 6,129

XML

Leases - Additional Information (Detail) - JPY (¥)	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Lease and sublease payments recognised as expense [abstract]
Future minimum sublease payments to be received under non-cancellable sublease	¥ 0	¥ 108,351,000,000
Operating lease and sublease expense	50,561,000,000	49,047,000,000	¥ 50,801,000,000
Minimum lease payments expense	50,058,000,000	48,527,000,000	50,278,000,000
Sublease payments expense	503,000,000	520,000,000	¥ 523,000,000
Accumulated allowance for uncollectible minimum lease payments receivable	¥ 1,828,000,000	¥ 10,827,000,000

XML

Leases - Total Amounts of Future Minimum Lease Payments Under Non-cancellable Operating Leases (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of finance lease and operating lease by lessee [line items]
Future minimum lease payments under non-cancellable operating leases	¥ 293,046	¥ 299,004
Not later than one year [member]
Disclosure of finance lease and operating lease by lessee [line items]
Future minimum lease payments under non-cancellable operating leases	42,329	44,746
Later than one year and not later than five years [member]
Disclosure of finance lease and operating lease by lessee [line items]
Future minimum lease payments under non-cancellable operating leases	129,298	124,946
Later than five years [member]
Disclosure of finance lease and operating lease by lessee [line items]
Future minimum lease payments under non-cancellable operating leases	¥ 121,419	¥ 129,312

XML

Leases - Gross Investment in Lease, Unearned Finance Income, Present Value of Minimum Lease Payments Receivable and Unguaranteed Residual Values Under Finance Leases (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of finance lease and operating lease by lessor [line items]
Gross investment in the lease	¥ 356,273	¥ 3,208,200
Unearned finance income	54,790	285,564
Present value of the minimum lease payments receivable	301,483	2,922,636
Unguaranteed residual values	70,806	188,663
Not later than one year [member]
Disclosure of finance lease and operating lease by lessor [line items]
Gross investment in the lease	54,501	1,023,842
Unearned finance income	13,470	91,070
Present value of the minimum lease payments receivable	41,031	932,772
Unguaranteed residual values	6,483	16,831
Later than one year and not later than five years [member]
Disclosure of finance lease and operating lease by lessor [line items]
Gross investment in the lease	227,793	1,841,026
Unearned finance income	29,746	155,534
Present value of the minimum lease payments receivable	198,047	1,685,492
Unguaranteed residual values	43,206	112,474
Later than five years [member]
Disclosure of finance lease and operating lease by lessor [line items]
Gross investment in the lease	73,979	343,332
Unearned finance income	11,574	38,960
Present value of the minimum lease payments receivable	62,405	304,372
Unguaranteed residual values	¥ 21,117	¥ 59,358

XML

Leases - Total Amounts of Future Minimum Lease Payments Receivable Under Non-cancellable Operating Leases (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of finance lease and operating lease by lessor [line items]
Future minimum lease payments receivable under non-cancellable operating leases	¥ 127,742	¥ 1,490,619
Not later than one year [member]
Disclosure of finance lease and operating lease by lessor [line items]
Future minimum lease payments receivable under non-cancellable operating leases	38,072	215,329
Later than one year and not later than five years [member]
Disclosure of finance lease and operating lease by lessor [line items]
Future minimum lease payments receivable under non-cancellable operating leases	70,813	790,394
Later than five years [member]
Disclosure of finance lease and operating lease by lessor [line items]
Future minimum lease payments receivable under non-cancellable operating leases	¥ 18,857	¥ 484,896

XML

Intangible Assets - Changes in Goodwill by Business Segment (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	¥ 426,455	¥ 460,787
Disposals	(11,197)
Acquisitions		40,470
Impairment losses	(28,607)	(74,616)	¥ (1,124)
Reclassification to assets held for sale	(112,337)
Exchange differences	(589)	(186)
Carrying amount, ending balance	273,725	426,455	460,787
Gross carrying amount [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	514,220	473,936
Carrying amount, ending balance	390,097	514,220	473,936
Accumulated impairment [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	(87,765)	(13,149)
Carrying amount, ending balance	(116,372)	(87,765)	(13,149)
Wholesale Business Unit [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	2,417
Acquisitions		2,417
Impairment losses	(956)
Reclassification to assets held for sale	(1,461)
Carrying amount, ending balance		2,417
Wholesale Business Unit [member] | Gross carrying amount [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	2,417
Carrying amount, ending balance	956	2,417
Wholesale Business Unit [member] | Accumulated impairment [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, ending balance	(956)
Retail Business Unit [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	63,418	63,418
Carrying amount, ending balance	63,418	63,418	63,418
Retail Business Unit [member] | Gross carrying amount [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	63,418	63,418
Carrying amount, ending balance	63,418	63,418	63,418
International Business Unit [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	13,047	13,233
Impairment losses	(4,292)
Reclassification to assets held for sale	(8,166)
Exchange differences	(589)	(186)
Carrying amount, ending balance		13,047	13,233
International Business Unit [member] | Gross carrying amount [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	13,047	13,233
Carrying amount, ending balance	4,292	13,047	13,233
International Business Unit [member] | Accumulated impairment [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, ending balance	(4,292)
Head Office Account and Others [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	347,573	384,136
Disposals	(11,197)
Acquisitions		38,053
Impairment losses	(23,359)	(74,616)
Reclassification to assets held for sale	(102,710)
Carrying amount, ending balance	210,307	347,573	384,136
Head Office Account and Others [member] | Gross carrying amount [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	435,338	397,285
Carrying amount, ending balance	321,431	435,338	397,285
Head Office Account and Others [member] | Accumulated impairment [member]
Disclosure of reconciliation of changes in goodwill [line items]
Carrying amount, beginning balance	(87,765)	(13,149)
Carrying amount, ending balance	¥ (111,124)	¥ (87,765)	¥ (13,149)

XML

Intangible Assets - Changes in Goodwill by Business Segment (Parenthetical) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Jul. 29, 2016	Apr. 01, 2016	Mar. 31, 2016
Disclosure of reconciliation of changes in goodwill [line items]
Goodwill	¥ 273,725	¥ 426,455			¥ 460,787
Reclassification of goodwill	112,337
Wholesale Business Unit [member]
Disclosure of reconciliation of changes in goodwill [line items]
Goodwill		2,417
Reclassification of goodwill	1,461
Head Office Account and Others [member]
Disclosure of reconciliation of changes in goodwill [line items]
Goodwill	210,307	¥ 347,573			¥ 384,136
Reclassification of goodwill	¥ 102,710
SMFL Capital Company, Limited [member] | Wholesale Business Unit [member]
Disclosure of reconciliation of changes in goodwill [line items]
Goodwill				¥ 2,417
Sumitomo mitsui asset management company, limited [member]
Disclosure of reconciliation of changes in goodwill [line items]
Goodwill			¥ 38,053
Sumitomo mitsui asset management company, limited [member] | Head Office Account and Others [member]
Disclosure of reconciliation of changes in goodwill [line items]
Goodwill			¥ 38,053

XML

Intangible Assets - Additional Information (Detail) ¥ in Millions	12 Months Ended
	Mar. 31, 2018 JPY (¥) Segments Segment	Mar. 31, 2017 JPY (¥)	Mar. 31, 2016 JPY (¥)
Disclosure of detailed information about intangible assets [line items]
Number of main business segments | Segments	4
Goodwill	¥ 273,725	¥ 426,455	¥ 460,787
Impairment loss	28,607	74,616	1,124
Contractual commitments to acquire intangible assets	383	317
Research and development expenditure recognized	84	89	207
Leasehold rights [member]
Disclosure of detailed information about intangible assets [line items]
Other intangibles	5,436	6,825
Securities [member] | SMBC Trust Bank Ltd. [member]
Disclosure of detailed information about intangible assets [line items]
Impairment loss	¥ 23,359
Securities [member] | SMBC Friend Securities Co., Ltd. [member]
Disclosure of detailed information about intangible assets [line items]
Impairment loss		74,616
Wholesale Business Unit [member]
Disclosure of detailed information about intangible assets [line items]
Number of main business segments | Segment	4
Goodwill		2,417
Impairment loss	¥ 956
Retail Business Segment [Member] | SMBC Consumer Finance Co., Ltd [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill	56,692	56,692
Head Office Account and Others [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill	210,307	347,573	¥ 384,136
Impairment loss	23,359	74,616
Head Office Account and Others [member] | SMBC Trust Bank Ltd. [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill		23,359
Head Office Account and Others [member] | SMBC Nikko Securities Inc. [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill	172,253	172,253
Head Office Account and Others [member] | Sumitomo mitsui asset management company, limited [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill	38,053	38,053
Head Office Account and Others [member] | Sumitomo mitsui finance and leasing company, limited [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill		102,710
Head Office Account and Others [member] | Kansai Urban Banking Corporation [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill		11,197
Aggregated individually immaterial business combinations [member]
Disclosure of detailed information about intangible assets [line items]
Goodwill	¥ 6,727	¥ 22,191

XML

Intangible Assets - Key Assumptions Used in Impairment Testing (Detail)	Mar. 31, 2018	Mar. 31, 2017
SMBC Trust Bank Ltd. [member] | Corporate business [member]
Disclosure of impairment loss and reversal of impairment loss [line items]
Pre-tax discount rate	12.61%	9.75%
Growth rate	1.00%	1.00%
SMBC Trust Bank Ltd. [member] | Retail banking [member]
Disclosure of impairment loss and reversal of impairment loss [line items]
Pre-tax discount rate	9.91%	6.52%
Growth rate	1.00%	1.00%
Kansai Urban Banking Corporation [member]
Disclosure of impairment loss and reversal of impairment loss [line items]
Pre-tax discount rate		6.24%
Growth rate		1.00%
Sumitomo mitsui finance and leasing company, limited [member]
Disclosure of impairment loss and reversal of impairment loss [line items]
Pre-tax discount rate		6.63%
Growth rate		1.00%
SMBC Nikko Securities Inc. [member]
Disclosure of impairment loss and reversal of impairment loss [line items]
Pre-tax discount rate	11.42%	8.12%
Growth rate	1.00%	1.00%
SMBC Consumer Finance Co., Ltd [member]
Disclosure of impairment loss and reversal of impairment loss [line items]
Pre-tax discount rate	11.20%	10.58%
Growth rate	1.00%	1.00%
Sumitomo mitsui asset management company, limited [member]
Disclosure of impairment loss and reversal of impairment loss [line items]
Pre-tax discount rate	9.01%	7.17%
Growth rate	1.00%	1.00%

XML

Intangible Assets - Changes in Other Intangible Assets (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	¥ 670,113	¥ 587,306
Additions	136,170	145,501
Acquisition of subsidiaries and businesses	222	91,668
Disposals	(80,179)	(5,207)
Amortization	(157,425)	(151,907)
Impairment losses	(7,059)	(172)
Exchange differences	(618)	(45)
Others	953	2,969
Carrying amount ending balance	562,177	670,113
Gross carrying amount [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	1,380,574	1,211,083
Carrying amount ending balance	1,264,315	1,380,574
Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	(710,461)	(623,777)
Carrying amount ending balance	(702,138)	(710,461)
Software [member] | Internally generated [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	292,137	273,809
Additions	93,977	102,193
Acquisition of subsidiaries and businesses		879
Disposals	(8,420)	(1,376)
Amortization	(84,662)	(82,158)
Exchange differences	142	(32)
Others	343	(1,178)
Carrying amount ending balance	293,517	292,137
Software [member] | Internally generated [member] | Gross carrying amount [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	648,463	591,118
Carrying amount ending balance	650,632	648,463
Software [member] | Internally generated [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	(356,326)	(317,309)
Carrying amount ending balance	(357,115)	(356,326)
Software [member] | Purchased [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	139,697	134,463
Additions	40,024	41,080
Acquisition of subsidiaries and businesses	222	851
Disposals	(11,928)	(2,379)
Amortization	(43,818)	(40,722)
Impairment losses		(97)
Exchange differences	(731)	2
Others	2,099	6,499
Carrying amount ending balance	125,565	139,697
Software [member] | Purchased [member] | Gross carrying amount [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	372,531	346,819
Carrying amount ending balance	340,593	372,531
Software [member] | Purchased [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	(232,834)	(212,356)
Carrying amount ending balance	(215,028)	(232,834)
Contractual customer relationships [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	170,464	114,629
Acquisition of subsidiaries and businesses		76,027
Disposals	(57,987)
Amortization	(20,192)	(20,192)
Impairment losses	(1,830)
Carrying amount ending balance	90,455	170,464
Contractual customer relationships [member] | Gross carrying amount [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	248,977	172,950
Carrying amount ending balance	172,950	248,977
Contractual customer relationships [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	(78,513)	(58,321)
Carrying amount ending balance	(82,495)	(78,513)
Trademarks [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	15,853	15,821
Acquisition of subsidiaries and businesses		4,288
Amortization	(4,280)	(4,256)
Carrying amount ending balance	11,573	15,853
Trademarks [member] | Gross carrying amount [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	46,116	41,828
Carrying amount ending balance	46,116	46,116
Trademarks [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	(30,263)	(26,007)
Carrying amount ending balance	(34,543)	(30,263)
Other intangibles [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	51,962	48,584
Additions	2,169	2,228
Acquisition of subsidiaries and businesses		9,623
Disposals	(1,844)	(1,452)
Amortization	(4,473)	(4,579)
Impairment losses	(5,229)	(75)
Exchange differences	(29)	(15)
Others	(1,489)	(2,352)
Carrying amount ending balance	41,067	51,962
Other intangibles [member] | Gross carrying amount [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	64,487	58,368
Carrying amount ending balance	54,024	64,487
Other intangibles [member] | Accumulated depreciation, amortisation and impairment [member]
Disclosure of detailed information about intangible assets [line items]
Carrying amount beginning balance	(12,525)	(9,784)
Carrying amount ending balance	¥ (12,957)	¥ (12,525)

XML

Other Assets - Summary of Other Assets (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Miscellaneous assets [abstract]
Prepaid expenses	¥ 49,300	¥ 72,594
Accrued income	416,210	380,018
Receivables from brokers, dealers and customers for securities transactions	1,175,495	1,438,977
Cash collateral provided for derivative and other financial transactions	1,560,972	1,089,481
Retirement benefit assets	316,455	257,744
Security deposits	99,247	115,064
Investment properties	13,889	436,985
Others	412,340	530,861
Total other assets	¥ 4,043,908	¥ 4,321,724

XML

Other Assets - Summary of Other Assets (Parenthetical) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Miscellaneous assets [abstract]
Rental income from investment properties	¥ 29,427	¥ 25,322	¥ 20,879

XML

Deposits - Summary of Deposits (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Deposits from customers [abstract]
Non-interest-bearing demand deposits	¥ 21,611,514	¥ 19,853,552
Interest-bearing demand deposits	52,154,265	51,281,995
Deposits at notice	10,355,664	10,330,269
Time deposits	25,655,132	29,525,875
Negotiable certificates of deposit	11,220,285	11,880,938
Others	7,464,667	7,422,661
Total deposits	¥ 128,461,527	¥ 130,295,290

XML

Trading Liabilities - Summary of Trading Liabilities (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of financial liabilities [line items]
Trading liabilities	¥ 2,143,899	¥ 2,071,584
Debt instruments [member]
Disclosure of financial liabilities [line items]
Trading liabilities	2,008,711	2,038,330
Equity instruments [member]
Disclosure of financial liabilities [line items]
Trading liabilities	¥ 135,188	¥ 33,254

XML

Borrowings - Short-term Borrowings and Long-term Borrowings (with Original Maturities of More Than One Year) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about borrowings [line items]
Borrowings	¥ 10,652,481	¥ 12,245,943
Liabilities associated with securitization transactions [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	¥ 1,204,722	1,169,741
Liabilities associated with securitization transactions [member] | Fixed interest rate [member] | Japanese Yen [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Japanese yen
Borrowings	¥ 1,152,826	1,077,539
Liabilities associated with securitization transactions [member] | Fixed interest rate [member] | Japanese Yen [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2021
Borrowings, Interest rate	0.09%
Liabilities associated with securitization transactions [member] | Fixed interest rate [member] | Japanese Yen [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2049
Borrowings, Interest rate	2.70%
Liabilities associated with securitization transactions [member] | Floating interest rate [member] | Japanese Yen [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Japanese yen
Borrowings	¥ 47,533	85,421
Liabilities associated with securitization transactions [member] | Floating interest rate [member] | Japanese Yen [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2017
Borrowings, Interest rate	0.16%
Liabilities associated with securitization transactions [member] | Floating interest rate [member] | Japanese Yen [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2027
Borrowings, Interest rate	1.66%
Liabilities associated with securitization transactions [member] | Floating interest rate [member] | U.S. Dollar [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	United States dollars
Borrowings	¥ 4,363	6,781
Liabilities associated with securitization transactions [member] | Floating interest rate [member] | U.S. Dollar [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2019
Borrowings, Interest rate	1.86%
Liabilities associated with securitization transactions [member] | Floating interest rate [member] | U.S. Dollar [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2020
Borrowings, Interest rate	3.01%
Lease obligations [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	¥ 9,166	106,924
Sumitomo mitsui banking corporation [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	8,015,562	8,021,331
Sumitomo mitsui banking corporation [member] | Short term borrowings [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	¥ 3,521,478	6,640,069
Sumitomo mitsui banking corporation [member] | Short term borrowings [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Interest rate	0.00%
Sumitomo mitsui banking corporation [member] | Short term borrowings [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Interest rate	2.18%
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Japanese yen
Borrowings	¥ 3,126,970	4,351
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2017
Borrowings, Interest rate	0.00%
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2028
Borrowings, Interest rate	6.10%
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | U.S. Dollar [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	United States dollars
Borrowings	¥ 42,666	45,387
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | U.S. Dollar [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2017
Borrowings, Interest rate	0.00%
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | U.S. Dollar [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2025
Borrowings, Interest rate	4.17%
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Euro [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	euros
Borrowings	¥ 122,023	101,492
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Euro [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2017
Borrowings, Interest rate	0.00%
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Euro [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2045
Borrowings, Interest rate	3.50%
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Japanese Yen [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Japanese yen
Borrowings	¥ 59,500	68,000
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Japanese Yen [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2018
Borrowings, Interest rate	(0.18%)
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Japanese Yen [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2037
Borrowings, Interest rate	0.02%
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | U.S. Dollar [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	United States dollars
Borrowings	¥ 894,797	904,263
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | U.S. Dollar [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2017
Borrowings, Interest rate	1.18%
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | U.S. Dollar [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2033
Borrowings, Interest rate	3.45%
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Euro [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	euros
Borrowings	¥ 32,128	31,769
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Euro [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2021
Borrowings, Interest rate	0.00%
Sumitomo mitsui banking corporation [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Euro [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2022
Borrowings, Interest rate	0.06%
Sumitomo mitsui banking corporation [member] | Subordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Japanese yen
Borrowings	¥ 216,000	226,000
Sumitomo mitsui banking corporation [member] | Subordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2018
Borrowings, Interest rate	1.28%
Sumitomo mitsui banking corporation [member] | Subordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2027
Borrowings, Interest rate	2.25%
Other subsidiaries [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	¥ 1,223,810	2,815,141
Other subsidiaries [member] | Short term borrowings [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	¥ 421,662	906,427
Other subsidiaries [member] | Short term borrowings [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Interest rate	0.09%
Other subsidiaries [member] | Short term borrowings [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Interest rate	7.91%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Japanese yen
Borrowings	¥ 227,231	617,358
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2017
Borrowings, Interest rate	0.00%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2042
Borrowings, Interest rate	2.67%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | U.S. Dollar [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	United States dollars
Borrowings	¥ 197,806	216,213
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | U.S. Dollar [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2017
Borrowings, Interest rate	0.81%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | U.S. Dollar [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2044
Borrowings, Interest rate	5.40%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Chinese Yuan [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Chinese yuan
Borrowings		24,348
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Chinese Yuan [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2017
Borrowings, Interest rate	2.40%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Chinese Yuan [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2021
Borrowings, Interest rate	6.15%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Thailand, Baht [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Thai baht
Borrowings		12,724
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Thailand, Baht [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2018
Borrowings, Interest rate	1.85%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Thailand, Baht [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2021
Borrowings, Interest rate	4.03%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Japanese Yen [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Japanese yen
Borrowings	¥ 267,598	431,141
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Japanese Yen [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2017
Borrowings, Interest rate	0.04%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Japanese Yen [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2042
Borrowings, Interest rate	1.92%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | U.S. Dollar [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	United States dollars
Borrowings	¥ 21,610	498,860
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | U.S. Dollar [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2017
Borrowings, Interest rate	1.00%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | U.S. Dollar [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2027
Borrowings, Interest rate	3.86%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Euro [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	euros
Borrowings, Maturity year	2020
Borrowings, Interest rate	1.00%
Borrowings	¥ 52,403	47,952
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Great Britain, Pounds [Member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Great Britain pound
Borrowings	¥ 24,627	20,190
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Great Britain, Pounds [Member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2042
Borrowings, Interest rate	1.51%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | Great Britain, Pounds [Member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2043
Borrowings, Interest rate	8.49%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Other fixed or floating interest rate [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	¥ 10,873	30,728
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Other fixed or floating interest rate [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2017
Borrowings, Interest rate	0.58%
Other subsidiaries [member] | Unsubordinated long term borrowings [member] | Other fixed or floating interest rate [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2043
Borrowings, Interest rate	11.79%
Other subsidiaries [member] | Subordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Japanese yen
Borrowings, Maturity year	2021
Borrowings, Interest rate	1.35%
Borrowings		5,200
Other subsidiaries [member] | Subordinated long term borrowings [member] | Floating interest rate [member] | Japanese Yen [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Japanese yen
Borrowings, Maturity year	2025
Borrowings, Interest rate	1.95%
Borrowings		4,000
SMFG [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	¥ 199,221	132,806
SMFG [member] | Unsubordinated long term borrowings [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	¥ 150,000	84,000
SMFG [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | U.S. Dollar [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	United States dollars
Borrowings	¥ 31,875	33,657
SMFG [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | U.S. Dollar [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2022
Borrowings, Interest rate	2.89%
SMFG [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | U.S. Dollar [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2031
Borrowings, Interest rate	3.87%
SMFG [member] | Unsubordinated long term borrowings [member] | Fixed interest rate [member] | Australia, Dollars [Member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Australian dollars
Borrowings, Maturity year	2027
Borrowings, Interest rate	3.73%
Borrowings	¥ 8,165
SMFG [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | U.S. Dollar [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	United States dollars
Borrowings	¥ 110,181	50,149
SMFG [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | U.S. Dollar [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2026
Borrowings, Interest rate	2.31%
SMFG [member] | Unsubordinated long term borrowings [member] | Floating interest rate [member] | U.S. Dollar [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2028
Borrowings, Interest rate	3.76%
SMFG [member] | Subordinated long term borrowings [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	¥ 49,000	49,000
SMFG [member] | Subordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Currency payable in	Japanese yen
Borrowings	¥ 49,000	¥ 49,000
SMFG [member] | Subordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member] | Minimum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2024
Borrowings, Interest rate	0.56%
SMFG [member] | Subordinated long term borrowings [member] | Fixed interest rate [member] | Japanese Yen [member] | Maximum [member]
Disclosure of detailed information about borrowings [line items]
Borrowings, Maturity year	2031
Borrowings, Interest rate	1.27%

XML

Debt Securities in Issue - Summary of Debt Securities in Issue (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Debt securities in issue [line items]
Debt securities in issue	¥ 10,569,117	¥ 11,165,623
Sumitomo mitsui banking corporation [member]
Debt securities in issue [line items]
Debt securities in issue	4,716,206	5,313,238
Sumitomo mitsui banking corporation [member] | Commercial paper [member]
Debt securities in issue [line items]
Debt securities in issue	¥ 1,521,437	1,389,908
Sumitomo mitsui banking corporation [member] | Commercial paper [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Interest rate	(0.50%)
Sumitomo mitsui banking corporation [member] | Commercial paper [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Interest rate	2.26%
Sumitomo mitsui banking corporation [member] | Bonds [member] | Japanese Yen [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Japanese yen
Debt securities in issue	¥ 99,000	156,182
Sumitomo mitsui banking corporation [member] | Bonds [member] | Japanese Yen [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2017
Debt securities in issue, Interest rate	0.25%
Sumitomo mitsui banking corporation [member] | Bonds [member] | Japanese Yen [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2019
Debt securities in issue, Interest rate	0.33%
Sumitomo mitsui banking corporation [member] | Bonds [member] | U.S. Dollar [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	United States dollars
Debt securities in issue	¥ 2,072,295	2,404,015
Sumitomo mitsui banking corporation [member] | Bonds [member] | U.S. Dollar [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2017
Debt securities in issue, Interest rate	1.21%
Sumitomo mitsui banking corporation [member] | Bonds [member] | U.S. Dollar [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2045
Debt securities in issue, Interest rate	4.30%
Sumitomo mitsui banking corporation [member] | Bonds [member] | Euro [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	euros
Debt securities in issue	¥ 260,236	417,767
Sumitomo mitsui banking corporation [member] | Bonds [member] | Euro [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2017
Debt securities in issue, Interest rate	0.00%
Sumitomo mitsui banking corporation [member] | Bonds [member] | Euro [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2023
Debt securities in issue, Interest rate	2.75%
Sumitomo mitsui banking corporation [member] | Bonds [member] | Australia, Dollars [Member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Australian dollars
Debt securities in issue	¥ 63,572	77,270
Sumitomo mitsui banking corporation [member] | Bonds [member] | Australia, Dollars [Member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2017
Debt securities in issue, Interest rate	2.97%
Sumitomo mitsui banking corporation [member] | Bonds [member] | Australia, Dollars [Member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2025
Debt securities in issue, Interest rate	4.13%
Sumitomo mitsui banking corporation [member] | Bonds [member] | Hong Kong, Dollars [Member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Hong Kong dollars
Debt securities in issue	¥ 32,009	34,136
Sumitomo mitsui banking corporation [member] | Bonds [member] | Hong Kong, Dollars [Member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2020
Debt securities in issue, Interest rate	2.09%
Sumitomo mitsui banking corporation [member] | Bonds [member] | Hong Kong, Dollars [Member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2025
Debt securities in issue, Interest rate	2.92%
Sumitomo mitsui banking corporation [member] | Bonds [member] | Thailand, Baht [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Thai baht
Debt securities in issue	¥ 25,575	11,410
Sumitomo mitsui banking corporation [member] | Bonds [member] | Thailand, Baht [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2019
Debt securities in issue, Interest rate	2.00%
Sumitomo mitsui banking corporation [member] | Bonds [member] | Thailand, Baht [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2020
Debt securities in issue, Interest rate	2.09%
Sumitomo mitsui banking corporation [member] | Subordinated bonds [Member] | Japanese Yen [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Japanese yen
Debt securities in issue	¥ 385,522	565,599
Sumitomo mitsui banking corporation [member] | Subordinated bonds [Member] | Japanese Yen [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2017
Debt securities in issue, Interest rate	0.87%
Sumitomo mitsui banking corporation [member] | Subordinated bonds [Member] | Japanese Yen [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2026
Debt securities in issue, Interest rate	2.80%
Sumitomo mitsui banking corporation [member] | Subordinated bonds [Member] | U.S. Dollar [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	United States dollars
Debt securities in issue, Maturity year	2022
Debt securities in issue, Interest rate	4.85%
Debt securities in issue	¥ 158,912	167,724
Sumitomo mitsui banking corporation [member] | Subordinated bonds [Member] | Euro [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	euros
Debt securities in issue, Maturity year	2020
Debt securities in issue, Interest rate	4.00%
Debt securities in issue	¥ 97,648	89,227
Other subsidiaries [member]
Debt securities in issue [line items]
Debt securities in issue	1,636,619	3,031,029
Other subsidiaries [member] | Commercial paper [member]
Debt securities in issue [line items]
Debt securities in issue	¥ 946,208	2,128,438
Other subsidiaries [member] | Commercial paper [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Interest rate	0.00%
Other subsidiaries [member] | Commercial paper [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Interest rate	2.42%
Other subsidiaries [member] | Bonds [member] | Japanese Yen [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Japanese yen
Debt securities in issue	¥ 616,267	788,633
Other subsidiaries [member] | Bonds [member] | Japanese Yen [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2017
Debt securities in issue, Interest rate	0.01%
Other subsidiaries [member] | Bonds [member] | Japanese Yen [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2048
Debt securities in issue, Interest rate	21.00%
Other subsidiaries [member] | Bonds [member] | U.S. Dollar [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	United States dollars
Debt securities in issue	¥ 24,599	68,616
Other subsidiaries [member] | Bonds [member] | U.S. Dollar [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2017
Debt securities in issue, Interest rate	0.01%
Other subsidiaries [member] | Bonds [member] | U.S. Dollar [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2037
Debt securities in issue, Interest rate	8.00%
Other subsidiaries [member] | Bonds [member] | Indonesia, Rupiahs [Member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Indonesian rupiah
Debt securities in issue, Maturity year	2018
Debt securities in issue, Interest rate	9.85%
Debt securities in issue	¥ 19,081	8,688
Other subsidiaries [member] | Bonds [member] | Australia, Dollars [Member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Australian dollars
Debt securities in issue	¥ 1,896	1,654
Other subsidiaries [member] | Bonds [member] | Australia, Dollars [Member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2019
Debt securities in issue, Interest rate	0.01%
Other subsidiaries [member] | Bonds [member] | Australia, Dollars [Member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2031
Debt securities in issue, Interest rate	3.00%
Other subsidiaries [member] | Bonds [member] | Turkish Lira [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Turkish lira
Debt securities in issue	¥ 3,568
Other subsidiaries [member] | Bonds [member] | Turkish Lira [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2019
Debt securities in issue, Interest rate	0.01%
Other subsidiaries [member] | Bonds [member] | Turkish Lira [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2023
Debt securities in issue, Interest rate	9.00%
Other subsidiaries [member] | Subordinated bonds [Member] | Japanese Yen [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Japanese yen
Debt securities in issue	¥ 25,000	35,000
Other subsidiaries [member] | Subordinated bonds [Member] | Japanese Yen [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2019
Debt securities in issue, Interest rate	2.31%
Other subsidiaries [member] | Subordinated bonds [Member] | Japanese Yen [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2028
Debt securities in issue, Interest rate	4.15%
SMFG [member]
Debt securities in issue [line items]
Debt securities in issue	¥ 4,216,292	2,821,356
SMFG [member] | Bonds [member]
Debt securities in issue [line items]
Debt securities in issue	¥ 3,285,000	1,979,000
SMFG [member] | Bonds [member] | U.S. Dollar [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	United States dollars
Debt securities in issue	¥ 2,583,513	1,639,109
SMFG [member] | Bonds [member] | U.S. Dollar [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2021
Debt securities in issue, Interest rate	1.99%
SMFG [member] | Bonds [member] | U.S. Dollar [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2048
Debt securities in issue, Interest rate	4.30%
SMFG [member] | Bonds [member] | Euro [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	euros
Debt securities in issue	¥ 509,987	239,081
SMFG [member] | Bonds [member] | Euro [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2022
Debt securities in issue, Interest rate	0.12%
SMFG [member] | Bonds [member] | Euro [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2033
Debt securities in issue, Interest rate	1.72%
SMFG [member] | Bonds [member] | Australia, Dollars [Member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Australian dollars
Debt securities in issue	¥ 179,367	93,691
SMFG [member] | Bonds [member] | Australia, Dollars [Member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2022
Debt securities in issue, Interest rate	3.07%
SMFG [member] | Bonds [member] | Australia, Dollars [Member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2028
Debt securities in issue, Interest rate	4.13%
SMFG [member] | Subordinated bonds [Member]
Debt securities in issue [line items]
Debt securities in issue	¥ 945,000	856,000
SMFG [member] | Subordinated bonds [Member] | Japanese Yen [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	Japanese yen
Debt securities in issue	¥ 757,999	653,778
SMFG [member] | Subordinated bonds [Member] | Japanese Yen [member] | Minimum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2024
Debt securities in issue, Interest rate	0.30%
SMFG [member] | Subordinated bonds [Member] | Japanese Yen [member] | Maximum [member]
Debt securities in issue [line items]
Debt securities in issue, Maturity year	2030
Debt securities in issue, Interest rate	1.33%
SMFG [member] | Subordinated bonds [Member] | U.S. Dollar [member]
Debt securities in issue [line items]
Debt securities in issue, Currency payable in	United States dollars
Debt securities in issue, Maturity year	2024
Debt securities in issue, Interest rate	4.44%
Debt securities in issue	¥ 185,426	195,697
SMFG [member] | Other subsidiaries [member]
Debt securities in issue [line items]
Debt securities in issue	¥ 280,880	¥ 280,784

XML

Debt Securities in Issue - Summary of Movement in Subordinated Bonds (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Debt Securities In Issue [Abstract]
Bonds Issued Beginning Balance	¥ 1,707,025
Cash flows:
Proceeds from issuance of subordinated bonds	104,866	¥ 244,315	¥ 276,949
Redemption of subordinated bonds	(180,034)	(371,640)	¥ (186,785)
Non-cash changes:
Foreign exchange translations	(11,138)
Others	(10,212)
Bonds Issued Ending Balance	¥ 1,610,507	¥ 1,707,025

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Provisions - Movements by Class of Provisions (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disclosure of other provisions [line items]
Beginning balance	¥ 194,700	¥ 262,401
Additional provisions	79,037	26,743
Amounts used	(76,863)	(94,241)
Unused amounts reversed	(3,726)	(664)
Amortization of discount and effect of change in discount rate	67	92
Acquisition of subsidiaries and businesses		381
Others	(4,948)	(12)
Ending balance	188,267	194,700
Provision for interest repayment [member]
Disclosure of other provisions [line items]
Beginning balance	157,333	229,422
Additional provisions	50,500	12,000
Amounts used	(61,961)	(83,528)
Unused amounts reversed	(479)	(439)
Amortization of discount and effect of change in discount rate	(142)	(122)
Others	(72)
Ending balance	145,179	157,333
Other provisions [member]
Disclosure of other provisions [line items]
Beginning balance	37,367	32,979
Additional provisions	28,537	14,743
Amounts used	(14,902)	(10,713)
Unused amounts reversed	(3,247)	(225)
Amortization of discount and effect of change in discount rate	209	214
Acquisition of subsidiaries and businesses		381
Others	(4,876)	(12)
Ending balance	¥ 43,088	¥ 37,367

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Provisions - Additional Information (Detail) - Claims Claims in Thousands	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of other provisions [line items]
Historical number of customer claims for refund of gray zone interest	94	127	137
Interest Rate Restriction Act [member] | Minimum [member]
Disclosure of other provisions [line items]
Interest rates on loans	15.00%
Interest Rate Restriction Act [member] | Maximum [member]
Disclosure of other provisions [line items]
Interest rates on loans	20.00%
Act regulating the receipt of contributions, receipt of deposits and interest rates [member] | Maximum [member]
Disclosure of other provisions [line items]
Interest rates on loans	29.20%

XML

Other Liabilities - Summary of Other Liabilities (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Miscellaneous liabilities [abstract]
Accrued expenses	¥ 313,226	¥ 291,871
Unearned income	133,478	168,952
Financial guarantees and other credit-related contingent liabilities	119,170	119,913
Due to trust account	1,328,271	1,180,976
Payables to brokers, dealers and customers for securities transactions	1,737,919	2,618,322
Payables related to credit card services	640,487	563,268
Obligations from factoring transactions	566,284	487,209
Retirement benefit liabilities	36,888	64,972
Guarantee deposits received	701,177	563,739
Others	1,305,840	1,401,879
Total other liabilities	¥ 6,882,740	¥ 7,461,101

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Deferred Income Tax - Changes of Net Deferred Tax Assets and Liabilities (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Reconciliation of changes in deferred tax liability (asset) [abstract]
At beginning of period	¥ (238,240)	¥ (220,574)
Deferred tax benefit (expense)	(1,036)	120,468	¥ (125,832)
Deferred tax relating to other comprehensive income:
Remeasurements of defined benefit plans reserve	(22,492)	(2,315)
Available-for-sale financial assets reserve	(99,383)	(82,619)
Exchange differences on translating foreign operations reserve	3,137	2,545
Acquisition and disposal of subsidiaries and businesses	(17,196)	(6,259)
Reclassification to assets held for sale	(5,540)
Exchange differences and others	2,445	(49,486)
At end of period	¥ (378,305)	¥ (238,240)	¥ (220,574)

XML

Deferred Income Tax - Changes of Net Deferred Tax Assets and Liabilities (Parenthetical) (Detail) ¥ in Millions	12 Months Ended
	Mar. 31, 2018 JPY (¥)
Reconciliation of changes in deferred tax liability (asset) [abstract]
Reclassification of net deferred tax assets	¥ 5,540

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Deferred Income Tax - Deferred Tax Assets and Liabilities (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Deferred tax assets and liabilities [Line Items]
Deferred tax assets	¥ 19,436	¥ 81,961
Net deferred tax liabilities	(378,305)	(238,240)	¥ (220,574)
Deferred tax liabilities	397,741	320,201
Gross carrying amount [member]
Deferred tax assets and liabilities [Line Items]
Deferred tax assets	490,657	611,385
Deferred tax liabilities	868,962	849,625
Gross carrying amount [member] | Loans and advances [member]
Deferred tax assets and liabilities [Line Items]
Deferred tax assets	206,928	231,971
Gross carrying amount [member] | Tax losses carried forward [member]
Deferred tax assets and liabilities [Line Items]
Deferred tax assets	24,082	98,788
Gross carrying amount [member] | Derivatives [member]
Deferred tax assets and liabilities [Line Items]
Deferred tax assets	59,530	55,989
Gross carrying amount [member] | Provision for interest repayment [member]
Deferred tax assets and liabilities [Line Items]
Deferred tax assets	36,779	40,638
Gross carrying amount [member] | Retirement benefits [member]
Deferred tax assets and liabilities [Line Items]
Deferred tax assets	9,204	21,772
Deferred tax liabilities	19,484	3,485
Gross carrying amount [member] | Investment securities [member]
Deferred tax assets and liabilities [Line Items]
Deferred tax assets	1,243	981
Deferred tax liabilities	680,425	571,489
Gross carrying amount [member] | Goodwill and intangible assets [member]
Deferred tax assets and liabilities [Line Items]
Deferred tax liabilities	81,076	111,145
Gross carrying amount [member] | Property, plant and equipment [member]
Deferred tax assets and liabilities [Line Items]
Deferred tax liabilities	28,786	91,703
Gross carrying amount [member] | Lease transactions [member]
Deferred tax assets and liabilities [Line Items]
Deferred tax liabilities	10,866	16,026
Gross carrying amount [member] | Other temporary differences-net [member]
Deferred tax assets and liabilities [Line Items]
Deferred tax assets	152,891	161,246
Deferred tax liabilities	¥ 48,325	¥ 55,777

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Deferred Income Tax - Additional Information (Detail) - JPY (¥) ¥ in Billions	12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of income tax expense [Line Items]
Effective statutory tax rate		30.90%	30.90%	33.10%
Deferred tax assets for deductible temporary differences related to investments in subsidiaries, associates and joint ventures		¥ 818	¥ 810
Temporary differences associated with investments in subsidiaries, associates and joint ventures for which deferred tax liabilities had not been recognized		¥ 2,041	¥ 1,352
Government of Japan promulgated an amendment to the Corporation Tax Act and the Local Tax Act on March 31, 2016 [Member]
Disclosure of income tax expense [Line Items]
Reduction in national corporation tax rate			0.50%
Reduction in enterprise tax rate			1.20%
Effective statutory tax rate		30.90%	32.30%
Changes in tax rates or tax laws enacted or announced [member] | Government of Japan promulgated an amendment to the Corporation Tax Act and the Local Tax Act on March 31, 2016 [Member]
Disclosure of income tax expense [Line Items]
Reduction in national corporation tax rate	0.20%
Effective statutory tax rate	30.60%

XML

Deferred Income Tax - Amounts of Deductible Temporary Differences and Tax Losses Carried Forward by Expiration Date (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of temporary difference, unused tax losses and unused tax credits which no deferred tax assets were recognized [Line Items]
Deductible temporary differences	¥ 445,649	¥ 436,481
Total deductible temporary differences and tax losses carried forward	1,523,348	1,679,395
Tax losses carried forward which will expire in 1 year [member]
Disclosure of temporary difference, unused tax losses and unused tax credits which no deferred tax assets were recognized [Line Items]
Tax losses carried forward	224,298	112,010
Tax losses carried forward which will expire in 2 years [member]
Disclosure of temporary difference, unused tax losses and unused tax credits which no deferred tax assets were recognized [Line Items]
Tax losses carried forward	209,109	251,300
Tax losses carried forward which will expire in 3 years [member]
Disclosure of temporary difference, unused tax losses and unused tax credits which no deferred tax assets were recognized [Line Items]
Tax losses carried forward	252,812	219,834
Tax losses carried forward which will expire in 4 years [member]
Disclosure of temporary difference, unused tax losses and unused tax credits which no deferred tax assets were recognized [Line Items]
Tax losses carried forward	70,222	259,636
Tax losses carried forward which will expire in 5 years [member]
Disclosure of temporary difference, unused tax losses and unused tax credits which no deferred tax assets were recognized [Line Items]
Tax losses carried forward	140,879	78,055
Tax losses carried forward which will expire in 6 years [member]
Disclosure of temporary difference, unused tax losses and unused tax credits which no deferred tax assets were recognized [Line Items]
Tax losses carried forward	59,791	168,288
Tax losses carried forward which will expire in 7 years [member]
Disclosure of temporary difference, unused tax losses and unused tax credits which no deferred tax assets were recognized [Line Items]
Tax losses carried forward	44,575	75,171
Tax losses carried forward which will expire in 8 years [member]
Disclosure of temporary difference, unused tax losses and unused tax credits which no deferred tax assets were recognized [Line Items]
Tax losses carried forward	16,279	59,230
Tax losses carried forward which will expire in 9 years and thereafter [member]
Disclosure of temporary difference, unused tax losses and unused tax credits which no deferred tax assets were recognized [Line Items]
Tax losses carried forward	¥ 59,734	¥ 19,390

XML

Deferred Income Tax - Amounts of Deductible Temporary Differences and Tax Losses Carried Forward by Expiration Date (Parenthetical) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of temporary difference, unused tax losses and unused tax credits [abstract]
Deductible temporary differences and tax losses carried forward for which deferred tax assets are recognized	¥ 421,319	¥ 503,511

XML

Deferred Income Tax - Deferred Tax Expense (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of deferred tax expense attributable to the temporary differences and tax losses carried forward [Line Items]
Deferred tax benefit (expense)	¥ (1,036)	¥ 120,468	¥ (125,832)
Investment securities [member]
Disclosure of deferred tax expense attributable to the temporary differences and tax losses carried forward [Line Items]
Deferred tax benefit (expense)	(34,881)	26,999
Derivatives [member]
Disclosure of deferred tax expense attributable to the temporary differences and tax losses carried forward [Line Items]
Deferred tax benefit (expense)	9,296	39,101
Goodwill and intangible assets [member]
Disclosure of deferred tax expense attributable to the temporary differences and tax losses carried forward [Line Items]
Deferred tax benefit (expense)	7,809	2,201
Loans and advances [member]
Disclosure of deferred tax expense attributable to the temporary differences and tax losses carried forward [Line Items]
Deferred tax benefit (expense)	6,092	(10,496)
Lease transactions [member]
Disclosure of deferred tax expense attributable to the temporary differences and tax losses carried forward [Line Items]
Deferred tax benefit (expense)	5,223	2,389
Provision for interest repayment [member]
Disclosure of deferred tax expense attributable to the temporary differences and tax losses carried forward [Line Items]
Deferred tax benefit (expense)	(3,840)	28,186
Tax losses carried forward [member]
Disclosure of deferred tax expense attributable to the temporary differences and tax losses carried forward [Line Items]
Deferred tax benefit (expense)	(3,448)	66,378
Retirement benefits [member]
Disclosure of deferred tax expense attributable to the temporary differences and tax losses carried forward [Line Items]
Deferred tax benefit (expense)	(2,604)	3,139
Property, plant and equipment [member]
Disclosure of deferred tax expense attributable to the temporary differences and tax losses carried forward [Line Items]
Deferred tax benefit (expense)	(1,137)	(45,285)
Other temporary differences-net [member]
Disclosure of deferred tax expense attributable to the temporary differences and tax losses carried forward [Line Items]
Deferred tax benefit (expense)	¥ 16,454	¥ 7,856

XML

Retirement Benefits - Detailed Information for the Defined Benefit Plans (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of net defined benefit liability (asset) [Line Items]
Fair value of plan assets	¥ 1,453,238	¥ 1,432,556
Net retirement benefit assets (liabilities)	279,567	192,772
Of which retirement benefit liabilities included in "Other liabilities"	(36,888)	(64,972)
Of which retirement benefit assets included in "Other assets"	316,455	257,744
Present value of unfunded obligations [member]
Disclosure of net defined benefit liability (asset) [Line Items]
Present value of obligations	(30,082)	(52,494)
Present value of funded obligations [member]
Disclosure of net defined benefit liability (asset) [Line Items]
Present value of obligations	¥ (1,143,589)	¥ (1,187,290)

XML

Retirement Benefits - Movements in Defined Benefit Obligation (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of net defined benefit liability (asset) [Line Items]
Current service cost	¥ 40,387	¥ 40,030	¥ 35,032
Interest cost	(1,453)	(1,153)	(3,553)
Past service cost	(44)	(3)	(32)
Present value of defined benefit obligation [member]
Disclosure of net defined benefit liability (asset) [Line Items]
At beginning of period	1,239,784	1,177,090
Current service cost	40,387	40,030
Interest cost	8,637	6,970
Actuarial losses-demographic assumptions	15,485	77,112
Actuarial losses (gains)-financial assumptions	5,896	(17,385)
Actuarial losses-experience	2,519	3,980
Benefits paid	(44,433)	(42,387)
Lump-sum payments	(24,109)	(11,365)
Past service cost	(44)	(3)
Acquisition of subsidiaries and businesses		7,096
Settlements		(621)
Others	(70,451)	(733)
At end of period	¥ 1,173,671	¥ 1,239,784	¥ 1,177,090

XML

Retirement Benefits - Movements in Fair Value of the Plan Assets (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of net defined benefit liability (asset) [Line Items]
Interest income	¥ 1,453	¥ 1,153	¥ 3,553
Plan assets [member]
Disclosure of net defined benefit liability (asset) [Line Items]
At beginning of period	1,432,556	1,354,202
Interest income	10,090	8,123
Return on plan assets excluding interest income	97,433	71,841
Contributions by employer	19,208	44,535
Benefits paid	(44,433)	(42,387)
Settlements		(696)
Others	(61,616)	(3,062)
At end of period	¥ 1,453,238	¥ 1,432,556	¥ 1,354,202

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Retirement Benefits - Amounts Recognized in Consolidated Income Statement (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of net defined benefit liability (asset) [abstract]
Current service cost	¥ 40,387	¥ 40,030	¥ 35,032
Net interest cost	(1,453)	(1,153)	(3,553)
Past service cost	(44)	(3)	(32)
Total	¥ 38,890	¥ 38,874	¥ 31,447

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Retirement Benefits - Plan Assets (Detail) - Plan assets [member] - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of fair value of plan assets [Line Items]
Total	¥ 1,453,238	¥ 1,432,556	¥ 1,354,202
Level 1 [member]
Disclosure of fair value of plan assets [Line Items]
Total	873,099	888,532
Level 2 and 3 of fair value hierarchy [member]
Disclosure of fair value of plan assets [Line Items]
Total	580,139	544,024
Pension funds [member]
Disclosure of fair value of plan assets [Line Items]
Equity instruments	434,981	405,590
Debt instruments	241,610	331,584
General account of life insurance companies	45,445	67,650
Other investments and short-term assets	215,728	127,460
Pension funds [member] | Level 1 [member]
Disclosure of fair value of plan assets [Line Items]
Equity instruments	286,542	269,706
Debt instruments	36,290	107,075
General account of life insurance companies	356	758
Other investments and short-term assets	45,252	21,970
Pension funds [member] | Level 2 and 3 of fair value hierarchy [member]
Disclosure of fair value of plan assets [Line Items]
Equity instruments	148,439	135,884
Debt instruments	205,320	224,509
General account of life insurance companies	45,089	66,892
Other investments and short-term assets	170,476	105,490
Retirement benefit trusts [member]
Disclosure of fair value of plan assets [Line Items]
Other short-term assets	45,613	42,125
Retirement benefit trusts [member] | Level 1 [member]
Disclosure of fair value of plan assets [Line Items]
Other short-term assets	36,340	32,276
Retirement benefit trusts [member] | Level 2 and 3 of fair value hierarchy [member]
Disclosure of fair value of plan assets [Line Items]
Other short-term assets	9,273	9,849
Retirement benefit trusts [member] | Japan [member]
Disclosure of fair value of plan assets [Line Items]
Equity instruments	469,861	458,147
Retirement benefit trusts [member] | Japan [member] | Level 1 [member]
Disclosure of fair value of plan assets [Line Items]
Equity instruments	468,319	456,747
Retirement benefit trusts [member] | Japan [member] | Level 2 and 3 of fair value hierarchy [member]
Disclosure of fair value of plan assets [Line Items]
Equity instruments	¥ 1,542	¥ 1,400

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Retirement Benefits - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of defined benefit plans [Line Items]
Expected contributions to defined benefit plans for the fiscal year ending March 31, 2019	¥ 21,269
Recognized as expenses for the defined contribution plans	10,769	¥ 9,621	¥ 7,258
Contributions charged to expense for the Employees' Pension Insurance Plan	¥ 42,694	¥ 43,650	¥ 40,173
Average life expectancy at age 60 [member]
Disclosure of defined benefit plans [Line Items]
Current average remaining life expectancy of individual male employees retiring at age 60	23 years	23 years	23 years
Current average remaining life expectancy of individual female employees retiring at age 60	28 years	28 years	28 years
Retirement benefit trusts [member] | Equity investments where voting rights were retained [member]
Disclosure of defined benefit plans [Line Items]
Fair values of equity instruments where company retained voting rights	¥ 457,217	¥ 418,221
Fair values of equity instruments where company retained voting rights, percentage of fair values of plan assets	31.50%	29.20%

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Retirement Benefits - Principal Actuarial Assumptions (Detail)	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of defined benefit plans [abstract]
Discount rates	0.70%	0.70%	0.60%

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Retirement Benefits - Sensitivity Analyses of Effect of Changes in Key Assumptions on Defined Benefit Obligations (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Discount rates [member]
Disclosure of sensitivity analysis for actuarial assumptions [Line Items]
Percentage increase in assumption	0.50%	0.50%
Increase/(decrease) in defined benefit obligations due to increase in assumption	¥ (73,146)	¥ (71,373)
Percentage decrease in assumption	0.50%	0.50%
Increase/(decrease) in defined benefit obligations due to decrease in assumption	¥ 83,014	¥ 80,864
Average life expectancy at age 60 [member]
Disclosure of sensitivity analysis for actuarial assumptions [Line Items]
Increase/(decrease) in defined benefit obligations due to increase in assumption	¥ 38,291	¥ 37,166

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Retirement Benefits - Sensitivity Analyses of Effect of Changes in Key Assumptions on Defined Benefit Obligations (Parenthetical) (Detail)	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Average life expectancy at age 60 [member]
Disclosure of sensitivity analysis for actuarial assumptions [Line Items]
Year increase in assumption	1 year	1 year

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Retirement Benefits - Weighted Average Durations of Defined Benefit Plans (Detail) - yr	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Lump-sum severance indemnity plans [member]
Disclosure of defined benefit plans [Line Items]
Weighted average durations of defined benefit plans	12.8	12.9	12.8
Defined benefit pension plans [member]
Disclosure of defined benefit plans [Line Items]
Weighted average durations of defined benefit plans	18.9	18.2	17.6

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Shareholders' Equity - Changes in Number of Issued Shares of Common Stock and Common Stock Held by SMFG or its Subsidiaries (Detail) - shares	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Common stock [member]
Disclosure of classes of share capital [line items]
At beginning of period	1,414,055,625	1,414,055,625	1,414,055,625
Net change	387,765
At end of period	1,414,443,390	1,414,055,625	1,414,055,625
Treasury stock [member]
Disclosure of classes of share capital [line items]
At beginning of period	4,028,883	46,830,882	46,814,201
Net change	(143,915)	(42,801,999)	16,681
At end of period	3,884,968	4,028,883	46,830,882

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Shareholders' Equity - Changes in Number of Issued Shares of Common Stock and Common Stock Held by SMFG or its Subsidiaries (Parenthetical) (Detail)	12 Months Ended
	Mar. 31, 2017 shares
Sumitomo mitsui banking corporation [member]
Disclosure of classes of share capital [line items]
Decrease of shares through the sale of the company shares held by SMBC	42,820,864

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Shareholders' Equity - Additional Information (Detail) - JPY (¥) ¥ in Billions	Mar. 31, 2018	Mar. 31, 2017
Total amount the company can pay out as a dividend	¥ 1,623
Common stock [member]
Total number of authorized shares of common stock	3,000,000,000	3,000,000,000

XML

Shareholders' Equity - Additional Information 2 (Detail) - JPY (¥) ¥ in Millions		12 Months Ended
	Jun. 19, 2018	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	May 14, 2018
Shares repurchased amount		¥ 142	¥ 100	¥ 192
Events after reporting period [member]
Number of shares authorized to be repurchased					20,000,000
Shares authorized to be repurchased amount					¥ 70,000
Number of shares repurchased	15,368,300
Shares repurchased amount	¥ 70,000

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Shareholders' Equity - Number of Shares of Preferred Stock (Detail) - shares	Mar. 31, 2018	Mar. 31, 2017
Type 5 preferred stock [member]
Disclosure of classes of share capital [line items]
Preferred stock, Authorized	167,000	167,000
Preferred stock, Issued
Type 7 preferred stock [member]
Disclosure of classes of share capital [line items]
Preferred stock, Authorized	167,000	167,000
Preferred stock, Issued
Type 8 preferred stock [member]
Disclosure of classes of share capital [line items]
Preferred stock, Authorized	115,000	115,000
Preferred stock, Issued
Type 9 preferred stock [member]
Disclosure of classes of share capital [line items]
Preferred stock, Authorized	115,000	115,000
Preferred stock, Issued

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Shareholders' Equity - Movements of Remeasurements of the Defined Benefit Plans Reserve (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
At beginning of period	¥ 11,887,283	¥ 11,042,099	¥ 11,020,850
Gains (losses) arising during the period, before tax	73,662	8,134	(154,273)
Income tax (expense) benefit for changes arising during the period	(22,492)	(2,315)	48,550
Share of other comprehensive income (loss) of associates and joint ventures	58	(462)	558
At end of period	12,495,799	11,887,283	11,042,099
Remeasurements of defined benefit plans [member]
At beginning of period	22,774	18,985	120,316
Gains (losses) arising during the period, before tax	73,662	8,134	(154,273)
Income tax (expense) benefit for changes arising during the period	(22,492)	(2,315)	48,550
Amount attributable to non-controlling interests	45	(1,568)	3,834
Share of other comprehensive income (loss) of associates and joint ventures	58	(462)	558
Transfer of (gains) losses on remeasurements, net of tax to retained earnings	2,055
At end of period	¥ 76,102	¥ 22,774	¥ 18,985

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Shareholders' Equity - Movements of the Available-for-sale Financial Assets Reserve (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
At beginning of period	¥ 11,887,283	¥ 11,042,099	¥ 11,020,850
Gains (losses) arising during the period, before tax	582,435	371,438	(551,572)
Reclassification adjustments for (gains) losses included in net profit, before tax	(275,038)	(109,990)	(217,529)
Share of other comprehensive income (loss) of associates and joint ventures	7,827	(21,140)	(14,362)
At end of period	12,495,799	11,887,283	11,042,099
Available-for-sale financial assets [member]
At beginning of period	1,929,894	1,756,634	2,234,636
Gains (losses) arising during the period, before tax	582,435	371,438	(551,572)
Income tax (expense) benefit for changes arising during the period	(184,128)	(116,277)	217,723
Reclassification adjustments for (gains) losses included in net profit, before tax	(275,038)	(109,990)	(217,529)
Income tax benefit for reclassification adjustments	84,745	33,658	71,876
Amount attributable to non-controlling interests	(15,653)	(3,971)	2,251
Share of other comprehensive income (loss) of associates and joint ventures	5	(1,598)	(751)
At end of period	¥ 2,122,260	¥ 1,929,894	¥ 1,756,634

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Shareholders' Equity - Movements of Exchange Differences on Translating the Foreign Operations Reserve (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
At beginning of period	¥ 11,887,283	¥ 11,042,099	¥ 11,020,850
Gains (losses) arising during the period, before tax	(75,409)	(24,063)	(219,904)
Reclassification adjustments for (gains) losses included in net profit, before tax	49	(4)	8
Share of other comprehensive income (loss) of associates and joint ventures	7,827	(21,140)	(14,362)
At end of period	12,495,799	11,887,283	11,042,099
Exchange differences on translating foreign operations [member]
At beginning of period	181,374	216,336	404,132
Gains (losses) arising during the period, before tax	(75,409)	(24,063)	(219,904)
Income tax (expense) benefit for changes arising during the period	3,152	2,544	19,027
Reclassification adjustments for (gains) losses included in net profit, before tax	49	(4)	8
Income tax (expense) benefit for reclassification adjustments	(15)	1	(3)
Amount attributable to non-controlling interests	9,014	6,102	26,687
Share of other comprehensive income (loss) of associates and joint ventures	7,822	(19,542)	(13,611)
At end of period	¥ 125,987	¥ 181,374	¥ 216,336

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Non-controlling Interests and Equity Attributable to Other Equity Instruments Holders - Non-controlling Interests (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Equity [abstract]
Preferred securities issued by subsidiaries	¥ 730,153	¥ 870,979
Others	502,827	634,022
Total non-controlling interests	¥ 1,232,980	¥ 1,505,001

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Non-controlling Interests and Equity Attributable to Other Equity Instruments Holders - Preferred Securities Issued by Subsidiaries (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disclosure of preferred securities issued by subsidiaries [line Items]
Preferred securities issued by subsidiaries, Amount	¥ 730,153	¥ 870,979
SMFG preferred capital JPY 1 limited [member]
Disclosure of preferred securities issued by subsidiaries [line Items]
Preferred securities issued by subsidiaries, Redemption at the option of Issuer	2018-01	2018-01
Preferred securities issued by subsidiaries, Amount		¥ 135,000
SMFG preferred capital USD 3 limited [member]
Disclosure of preferred securities issued by subsidiaries [line Items]
Preferred securities issued by subsidiaries, Redemption at the option of Issuer	2018-07	2018-07
Preferred securities issued by subsidiaries, Amount	¥ 143,438	¥ 151,456
SMFG preferred capital GBP 2 limited [member]
Disclosure of preferred securities issued by subsidiaries [line Items]
Preferred securities issued by subsidiaries, Redemption at the option of Issuer	2029-01	2029-01
Preferred securities issued by subsidiaries, Amount	¥ 37,215	¥ 35,023
SMFG preferred capital JPY 2 limited [member] | Series A shares [member]
Disclosure of preferred securities issued by subsidiaries [line Items]
Preferred securities issued by subsidiaries, Redemption at the option of Issuer	2019-01	2019-01
Preferred securities issued by subsidiaries, Amount	¥ 113,000	¥ 113,000
SMFG preferred capital JPY 2 limited [member] | Series B shares [member]
Disclosure of preferred securities issued by subsidiaries [line Items]
Preferred securities issued by subsidiaries, Redemption at the option of Issuer	2019-07	2019-07
Preferred securities issued by subsidiaries, Amount	¥ 140,000	¥ 140,000
SMFG preferred capital JPY 2 limited [member] | Series E shares [member]
Disclosure of preferred securities issued by subsidiaries [line Items]
Preferred securities issued by subsidiaries, Redemption at the option of Issuer	2019-07	2019-07
Preferred securities issued by subsidiaries, Amount	¥ 33,000	¥ 33,000
SMFG preferred capital JPY 3 limited [member] | Series A shares [member]
Disclosure of preferred securities issued by subsidiaries [line Items]
Preferred securities issued by subsidiaries, Redemption at the option of Issuer	2020-01	2020-01
Preferred securities issued by subsidiaries, Amount	¥ 99,000	¥ 99,000
SMFG preferred capital JPY 3 limited [member] | Series B shares [member]
Disclosure of preferred securities issued by subsidiaries [line Items]
Preferred securities issued by subsidiaries, Redemption at the option of Issuer	2020-01	2020-01
Preferred securities issued by subsidiaries, Amount	¥ 164,500	¥ 164,500

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Non-controlling Interests and Equity Attributable to Other Equity Instruments Holders - Equity Attributable to Other Equity Instruments Holders (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Equity [abstract]
Perpetual subordinated bonds	¥ 599,522	¥ 449,709
Total equity attributable to other equity instruments holders	¥ 599,522	¥ 449,709

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Non-controlling Interests and Equity Attributable to Other Equity Instruments Holders - Additional Information (Detail)	12 Months Ended
	Mar. 31, 2018
Equity [abstract]
Common Equity Tier 1 capital ratio threshold where bonds may be written down	5.125%

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Net Interest Income - Summary of Net Interest Income (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Interest income from:
Deposits with banks	¥ 78,217	¥ 45,770	¥ 40,472
Call loans and bills bought	19,362	12,065	21,828
Reverse repurchase agreements and cash collateral on securities borrowed	40,021	29,601	22,011
Investment securities	102,295	87,348	84,912
Loans and advances	1,904,175	1,725,477	1,703,361
Total interest income	2,144,070	1,900,261	1,872,584
Interest expense from:
Deposits	382,753	249,028	202,312
Call money and bills sold	8,763	5,286	5,583
Repurchase agreements and cash collateral on securities lent	61,341	20,623	15,105
Borrowings	89,196	79,835	72,203
Debt securities in issue	190,774	146,937	135,172
Others	1,142	629	726
Total interest expense	733,969	502,338	431,101
Net interest income	¥ 1,410,101	¥ 1,397,923	¥ 1,441,483

XML

Net Interest Income - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Revenue [abstract]
Interest income recorded on impaired financial assets	¥ 18,886	¥ 16,892	¥ 20,545

XML

Net Fee and Commission Income - Summary of Net Fee and Commission Income (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Fee and commission income from:
Loans	¥ 120,998	¥ 128,305	¥ 121,934
Credit card business	289,509	261,253	253,136
Guarantees	62,934	58,221	55,618
Securities-related business	147,016	146,655	133,019
Deposits	16,169	15,929	14,882
Remittances and transfers	140,621	138,029	133,110
Safe deposits	5,224	5,414	5,511
Trust fees	3,854	3,607	3,619
Investment trusts	154,419	126,590	116,057
Agency	16,577	16,753	16,432
Others	174,043	165,656	178,362
Total fee and commission income	1,131,364	1,066,412	1,031,680
Fee and commission expense from:
Remittances and transfers	40,214	39,419	38,358
Guarantees	3,750	3,434	3,071
Others	134,903	138,720	89,952
Total fee and commission expense	178,867	181,573	131,381
Net fee and commission income	¥ 952,497	¥ 884,839	¥ 900,299

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Net Trading Income - Summary of Net Trading Income (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Trading income (expense) [abstract]
Interest rate	¥ 128,137	¥ 79,650	¥ 240,763
Foreign exchange	87,322	51,143	204,349
Equity	48,047	39,478	18,019
Credit	5,735	13,063	(2,641)
Others	1,223	629	2,192
Total net trading income	¥ 270,464	¥ 183,963	¥ 462,682

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Net Income (Loss) from Financial Assets at Fair Value through Profit or Loss - Summary of Net Income (Loss) from Financial Assets at Fair Value Through Profit or Loss (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of detailed information about financial instruments [line items]
Net income (loss) from financial assets at fair value through profit or loss	¥ (667)	¥ 2,018	¥ 12,260
Debt instruments [member]
Disclosure of detailed information about financial instruments [line items]
Net income (loss) from financial assets at fair value through profit or loss	(1,775)	428	11,311
Equity instruments [member]
Disclosure of detailed information about financial instruments [line items]
Net income (loss) from financial assets at fair value through profit or loss	¥ 1,108	¥ 1,590	¥ 949

XML

Net Investment Income - Summary of Net Investment Income (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of detailed information about financial instruments [line items]
Dividend income	¥ 138,874	¥ 123,827	¥ 128,094
Total net investment income	424,097	305,327	375,229
Debt instruments [member]
Disclosure of detailed information about financial instruments [line items]
Net gain from disposal of instruments	4,187	39,484	71,641
Equity instruments [member]
Disclosure of detailed information about financial instruments [line items]
Net gain from disposal of instruments	¥ 281,036	¥ 142,016	¥ 175,494

XML

Other Income - Summary of Other Income (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Material income [Abstract]
Income from operating leases	¥ 276,850	¥ 250,460	¥ 206,561
Income related to disposal of assets leased	322,673	152,564	155,280
Income related to IT solution services	29,172	37,678	33,991
Gains on disposal of property, plant and equipment, and other intangible assets	852	937	3,714
Reversal of impairment losses of investments in associates and joint ventures	8,123		4,847
Gains on step acquisition of subsidiaries		20,344	118
Gains on step acquisition of associates and joint ventures			1,714
Others	118,185	111,842	90,048
Total other income	¥ 755,855	¥ 573,825	¥ 496,273

XML

Impairment Charges on Financial Assets - Summary of Impairment Loss and Reversal of Impairment Loss (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of impairment loss and reversal of impairment loss [line items]
Impairment charges on financial assets	¥ 136,808	¥ 212,967	¥ 148,356
Loans and advances [member]
Disclosure of impairment loss and reversal of impairment loss [line items]
Impairment charges on financial assets	126,623	141,457	118,750
Available-for-sale financial assets [member]
Disclosure of impairment loss and reversal of impairment loss [line items]
Impairment charges on financial assets	¥ 10,185	¥ 71,510	¥ 29,606

XML

General and Administrative Expenses - Summary of General and Administrative Expenses (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Material expense [Abstract]
Personnel expenses	¥ 864,396	¥ 833,755	¥ 785,547
Depreciation and amortization	171,043	172,496	157,672
Rent and lease expenses	117,400	115,425	117,482
Building and maintenance expenses	11,167	10,657	13,966
Supplies expenses	16,902	16,694	16,628
Communication expenses	38,171	37,250	36,634
Publicity and advertising expenses	80,464	79,570	79,453
Taxes and dues	83,976	85,967	76,695
Outsourcing expenses	96,733	96,063	91,837
Premiums for deposit insurance	37,938	38,180	36,175
Office equipment expenses	54,708	49,127	47,621
Others	240,223	216,951	246,553
Total general and administrative expenses	¥ 1,813,121	¥ 1,752,135	¥ 1,706,263

XML

Other Expenses - Summary of Other Expenses (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Material expense [Abstract]
Cost of operating leases	¥ 144,708	¥ 126,320	¥ 95,440
Cost related to disposal of assets leased	310,460	140,255	140,083
Cost related to IT solution services and IT systems	92,975	92,247	90,563
Provision for interest repayment	49,879	11,439	141,024
Losses on disposal of property, plant and equipment, and other intangible assets	4,913	6,041	4,302
Impairment losses of property, plant and equipment	27,816	6,396	4,237
Impairment losses of intangible assets	35,666	74,788	1,278
Losses on sale of investments in subsidiaries and associates	28,250		24
Impairment losses of investments in associates and joint ventures	19,851	14,941	17,306
Others	78,247	59,332	44,706
Total other expenses	¥ 792,765	¥ 531,759	¥ 538,963

XML

Income Tax Expense - Detail of Income Tax Expense (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Current tax:
Charge for period	¥ 228,342	¥ 260,234	¥ 247,046
Deferred tax:
Origination and reversal of temporary differences	66,875	12,391	130,072
Change in the write-down of deferred tax assets on the current fiscal year income tax expense	(63,194)	(132,859)	(34,000)
Changes in tax rates and others	(2,645)		29,760
Total deferred tax expense (benefit)	1,036	(120,468)	125,832
Total income tax expense	¥ 229,378	¥ 139,766	¥ 372,878

XML

Income Tax Expense - Detail of Income Tax Expense (Parenthetical) (Detail)	3 Months Ended	9 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of Income Taxes [Line Items]
U.S. federal income tax rate			30.90%	30.90%	33.10%
Americas [Member]
Disclosure of Income Taxes [Line Items]
U.S. federal income tax rate	21.00%	36.00%

XML

Income Tax Expense - Reconciliations of Effective Income Tax Rates (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Reconciliation of average effective tax rate and applicable tax rate [abstract]
Profit before tax	¥ 1,118,976	¥ 880,352	¥ 1,325,700
Income tax expense	¥ 229,378	¥ 139,766	¥ 372,878
Effective income tax rate	20.50%	15.90%	28.10%
Effective statutory tax rate in Japan	30.90%	30.90%	33.10%
Effect of the change in the write-down of deferred tax assets on the current fiscal year income tax expense	(5.70%)	(15.10%)	(2.60%)
Non-Japanese earnings	(3.60%)	(1.90%)	(2.70%)
Tax impact of share of post-tax profit in associates and joint ventures	(1.40%)	(1.00%)	(0.80%)
Tax impact of impairment losses of goodwill	0.80%	2.60%
Nontaxable dividends received	(0.80%)	(1.00%)	(0.50%)
Tax impact of impairment losses and reversal of impairment losses for investments in associates and joint ventures-net	0.30%	0.50%	0.30%
Gains on step acquisition of subsidiaries and associates and joint ventures which were not taxable		(0.70%)
Changes in Japanese corporation tax rates			2.20%
Others-net		1.60%	(0.90%)
Effective income tax rate	20.50%	15.90%	28.10%

XML

Income Tax Expense - Reconciliations of Effective Income Tax Rates (Parenthetical) (Detail)	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Reconciliation of effective tax rate [Line Items]
Effective tax rate	30.90%	30.90%	33.10%
Effective corporation tax rate [member]
Reconciliation of effective tax rate [Line Items]
Effective tax rate	23.40%	23.40%	22.50%
Effective local corporation tax rate [member]
Reconciliation of effective tax rate [Line Items]
Effective tax rate	1.00%	1.00%
Effective inhabitant tax rate [member]
Reconciliation of effective tax rate [Line Items]
Effective tax rate	3.80%	3.80%	3.70%
Effective enterprise tax rate [member]
Reconciliation of effective tax rate [Line Items]
Effective tax rate	2.70%	2.70%	5.90%

XML

Earnings Per Share - Summary of Earnings Per Share (Detail) - JPY (¥) ¥ / shares in Units, shares in Thousands, ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Basic:
Profit attributable to shareholders of the Company	¥ 759,998	¥ 627,870	¥ 843,920
Weighted average number of common stock in issue (in thousands of shares)	1,410,442	1,369,231	1,367,229
Basic earnings per share	¥ 538.84	¥ 458.56	¥ 617.25
Diluted:
Profit attributable to the common shareholders of the Company	¥ 759,998	¥ 627,870	¥ 843,920
Impact of dilutive potential ordinary shares issued by subsidiaries	(10)	(11)	(1)
Net profit used to determine diluted earnings per share	¥ 759,988	¥ 627,859	¥ 843,919
Weighted average number of common stock in issue (in thousands of shares)	1,410,442	1,369,231	1,367,229
Adjustments for stock options (in thousands of shares)	1,052	1,093	928
Weighted average number of common stock for diluted earnings per share (in thousands of shares)	1,411,494	1,370,324	1,368,157
Diluted earnings per share	¥ 538.43	¥ 458.18	¥ 616.83

XML

Transfers of Financial Assets - Carrying Amounts and Fair Values of Transferred Financial Assets that did not Qualify for Derecognition and Associated Financial Liabilities (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Repurchase agreements and securities lending transactions [member]
Disclosure of transferred financial assets that are not derecognised in their entirety [Line Items]
Carrying amount of assets	¥ 7,730,783	¥ 5,169,540
Carrying amount of associated liabilities	7,271,817	5,116,003
Loans and advances [member] | Residential mortgages [member]
Disclosure of transferred financial assets that are not derecognised in their entirety [Line Items]
Carrying amount of assets	1,432,966	1,353,938
Carrying amount of associated liabilities	1,154,831	1,079,329
For those liabilities that have recourse only to the transferred assets:
Fair value of assets	1,615,329	1,535,929
Fair value of associated liabilities	1,207,899	1,138,815
Net position	407,430	397,114
Loans and advances [member] | Corporate loans [member]
Disclosure of transferred financial assets that are not derecognised in their entirety [Line Items]
Carrying amount of assets	857,690	1,063,092
Carrying amount of associated liabilities	853,207	1,060,812
For those liabilities that have recourse only to the transferred assets:
Fair value of assets	861,824	1,067,234
Fair value of associated liabilities	853,551	1,061,389
Net position	8,273	5,845
Loans and advances [member] | Others [member]
Disclosure of transferred financial assets that are not derecognised in their entirety [Line Items]
Carrying amount of assets	49,151	59,562
Carrying amount of associated liabilities	40,584	49,804
For those liabilities that have recourse only to the transferred assets:
Fair value of assets	48,254	59,169
Fair value of associated liabilities	40,870	50,271
Net position	¥ 7,384	¥ 8,898

XML

Assets Pledged and Received as Collateral - Carrying Amounts of Assets Pledged as Collateral (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Carrying amounts of assets pledged as collateral	¥ 27,832,918	¥ 24,748,519
Cash and deposits with banks [member]
Disclosure of detailed information about financial instruments [line items]
Carrying amounts of assets pledged as collateral	32,010	87,670
Trading assets [member]
Disclosure of detailed information about financial instruments [line items]
Carrying amounts of assets pledged as collateral	2,423,002	2,426,665
Financial assets at fair value through profit or loss [member]
Disclosure of detailed information about financial instruments [line items]
Carrying amounts of assets pledged as collateral	1,518,748	1,570,904
Held-to-maturity investments [member]
Disclosure of detailed information about financial instruments [line items]
Carrying amounts of assets pledged as collateral	365,450	1,168,111
Available-for-sale financial assets [member]
Disclosure of detailed information about financial instruments [line items]
Carrying amounts of assets pledged as collateral	10,648,468	8,128,082
Loans and advances [member]
Disclosure of detailed information about financial instruments [line items]
Carrying amounts of assets pledged as collateral	11,019,253	10,058,951
Other assets [member]
Disclosure of detailed information about financial instruments [line items]
Carrying amounts of assets pledged as collateral	¥ 1,825,987	¥ 1,308,136

XML

Assets Pledged and Received as Collateral - Additional information (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about financial instruments [abstract]
Loaned securities for which the borrowers have the right to sell or repledge	¥ 7,731,243	¥ 5,201,373
Fair value of securities and bills accepted as collateral	12,218,264	13,673,077
Fair value of securities sold or repledged to others	¥ 8,839,133	¥ 7,787,059

XML

Share-based Payment - Significant Terms and Conditions of Stock Option Plan (Detail) - SMFG stock acquisition rights [member]	12 Months Ended
	Mar. 31, 2018
Disclosure of terms and conditions of share-based payment arrangement [Line Items]
Title of grantees	Directors, corporate auditors and executive officers of SMFG and SMBC
Exercise period	Not exceeding 30 years from the date of allocation of stock acquisition rights
Requisite service period	One year from the date of the ordinary general meeting of shareholders of SMFG to the closing of the next ordinary general meeting of shareholders of SMFG
Method of settlement	Common stock of SMFG

XML

Share-based Payment - Significant Terms and Conditions of Stock Option Plan (Parenthetical) (Detail)	12 Months Ended
	Mar. 31, 2018 yr	Mar. 31, 2017
Disclosure of terms and conditions of share-based payment arrangement [Line Items]
Term of options granted for director, a corporate auditor or an executive officer		4
Maximum [member]
Disclosure of terms and conditions of share-based payment arrangement [Line Items]
Term of options granted for director, a corporate auditor or an executive officer	30
Term of options granted for director, a corporate auditor or an executive officer who are relieved of their positions	20 years

XML

Share-based Payment - Number and Weighted Average Exercise Prices of Stock Options (Detail)	12 Months Ended
	Mar. 31, 2018 JPY (¥)	Mar. 31, 2017 JPY (¥)
Disclosure of terms and conditions of share-based payment arrangement [Line Items]
Number of options, Granted	0
SMFG stock acquisition rights [member]
Disclosure of terms and conditions of share-based payment arrangement [Line Items]
Number of options, Outstanding at beginning of period	1,180,000	984,400
Number of options, Granted		201,200
Number of options, Exercised	(174,700)	(4,400)
Number of options, Forfeited or expired	(2,300)	(1,200)
Number of options, Outstanding at end of period	1,003,000	1,180,000
Number of options, Exercisable at end of period	463,100	421,900
Weighted average exercise price, Outstanding at beginning of period	¥ 1	¥ 1
Weighted average exercise price, Granted		1
Weighted average exercise price, Exercised	1	1
Weighted average exercise price, Forfeited or expired	1	1
Weighted average exercise price, Outstanding at end of period	1	1
Weighted average exercise price, Exercisable at end of period	¥ 1	¥ 1

XML

Share-based Payment - Additional Information (Detail)	12 Months Ended
	Mar. 31, 2018 JPY (¥)	Mar. 31, 2017 JPY (¥)
Disclosure of terms and conditions of share-based payment arrangement [abstract]
Weighted average stock price at the date of exercise	¥ 4,245	¥ 4,400
Stock options recognized as expenses	¥ 135,000,000	¥ 581,000,000
Issuances of new stock options	0
Restricted shares recognized as expenses	¥ 803,000,000

XML

Share-based Payment - Summarized Information about Stock Options Outstanding (Detail)	12 Months Ended
	Mar. 31, 2018 JPY (¥) yr	Mar. 31, 2017 JPY (¥) yr	Mar. 31, 2016
Disclosure of terms and conditions of share-based payment arrangement [Line Items]
Exercise price		¥ 1
SMFG stock acquisition rights [member]
Disclosure of terms and conditions of share-based payment arrangement [Line Items]
Exercise price	¥ 1
Number of options	1,003,000	1,180,000	984,400
Remaining contractual lives in years | yr	25.3	26.3

XML

Share-based Payment - Fair Value of Stock Options and Assumptions Used to Measure Fair Value (Detail)	12 Months Ended
	Mar. 31, 2017 JPY (¥) ¥ / shares
Disclosure of terms and conditions of share-based payment arrangement [abstract]
Fair value at measurement date	¥ 2,811
Stock price | ¥ / shares	¥ 3,362
Exercise price	¥ 1
Expected volatility	32.20%
Expected remaining lives (in years)	4
Expected dividends per share	¥ 150
Risk free interest rate	0.17%

XML

Share-based Payment - Fair Value of Stock Options and Assumptions Used to Measure Fair Value (Parenthetical) (Detail)	12 Months Ended
	Mar. 31, 2017
Disclosure of terms and conditions of share-based payment arrangement [abstract]
Stock price period used to calculate volatility	4 years

XML

Share-based Payment -Summary Of Restricted Share (Detail) - Restricted Shares [Member]	12 Months Ended
	Mar. 31, 2018 JPY (¥)
Disclosure of terms and conditions of share-based payment arrangement [Line Items]
Outstanding at beginning of period
Allotted	387,765
Released
Forfeited
Outstanding at end of period	387,765
Fair value at measurement date	¥ 4,372

XML

Dividends Per Share - Summary of Dividend Per Share (Detail) - JPY (¥) ¥ / shares in Units, ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Aggregate amount	¥ 280,272	¥ 271,039	¥ 288,632
Sumitomo mitsui banking corporation [member]
Dividends per share	¥ 155	¥ 150	¥ 155
Aggregate amount	¥ 218,596	¥ 205,083	¥ 211,922

XML

Dividends Per Share - Additional Information (Detail) ¥ / shares in Units, ¥ in Millions	12 Months Ended
	Mar. 31, 2018 JPY (¥) ¥ / shares
Dividends 1 [Abstract]
Proposed dividend, per share | ¥ / shares	¥ 90
Proposed dividend, total | ¥	¥ 126,950

XML

Contingency and Capital Commitments - Additional Information (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Capital commitments [abstract]
Contractual commitments to acquire property, plant and equipment	¥ 2,626	¥ 2,773,096
Contractual commitments to acquire intangible assets	¥ 383	¥ 317

XML

Contingency and Capital Commitments - Nominal Amounts of Undrawn Loan Commitments and Financial Guarantees and Other Credit-Related Contingent Liabilities (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of contingent liabilities [Line Items]
Nominal amounts	¥ 247,637,992	¥ 248,268,034
Loan commitments [Member]
Disclosure of contingent liabilities [Line Items]
Nominal amounts	60,107,128	62,357,210
Financial guarantees and other credit-related contingent liabilities [Member]
Disclosure of contingent liabilities [Line Items]
Nominal amounts	8,426,245	7,924,711
Loan commitments and financial guarantees and other credit-related contingent liabilities [Member]
Disclosure of contingent liabilities [Line Items]
Nominal amounts	¥ 68,533,373	¥ 70,281,921

XML

Analysis of Financial Assets and Liabilities by Measurement Basis - Carrying Amounts of Financial Assets and Liabilities by Category and Line Item (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Financial assets:
Cash and deposits with banks	¥ 54,696,069	¥ 47,330,155	¥ 43,144,654
Call loans and bills bought	1,881,880	1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed	8,491,703	8,924,385
Trading assets	3,169,123	3,776,671
Derivative financial instruments	3,885,271	4,063,982
Financial assets at fair value through profit or loss	1,547,672	1,599,093
Investment securities	20,495,075	19,073,937
Loans and advances	85,129,070	95,273,845
Other financial assets	3,598,642	3,424,591
Financial assets included in assets held for sale	3,208,771
Total	186,103,276	185,338,868
Financial liabilities:
Deposits	128,461,527	130,295,290
Call money and bills sold	1,190,929	2,088,020
Repurchase agreements and cash collateral on securities lent	12,022,593	9,424,506
Trading liabilities	2,143,899	2,071,584
Derivative financial instruments	3,498,016	3,889,694
Borrowings	10,652,481	12,245,943
Debt securities in issue	10,569,117	11,165,623
Other financial liabilities	6,691,042	7,201,137
Financial liabilities included in liabilities directly associated with the assets held for sale	3,377,527
Total	178,607,131	178,381,797
Financial liabilities at fair value through profit or loss, category [member]
Financial liabilities:
Deposits	13,929	20,365
Trading liabilities	2,143,899	2,071,584
Derivative financial instruments	3,498,016	3,889,694
Borrowings	1,198	654
Debt securities in issue	(7,635)	2,232
Financial liabilities included in liabilities directly associated with the assets held for sale	5,971
Total	5,655,378	5,984,529
Financial liabilities measured at amortized cost [Member]
Financial liabilities:
Deposits	128,447,598	130,274,925
Call money and bills sold	1,190,929	2,088,020
Repurchase agreements and cash collateral on securities lent	12,022,593	9,424,506
Borrowings	10,651,283	12,245,289
Debt securities in issue	10,576,752	11,163,391
Other financial liabilities	6,691,042	7,201,137
Financial liabilities included in liabilities directly associated with the assets held for sale	3,371,556
Total	172,951,753	172,397,268
Financial assets at fair value through profit or loss [Member]
Financial assets:
Cash and deposits with banks	4,773	5,511
Trading assets	3,169,123	3,776,671
Derivative financial instruments	3,885,271	4,063,982
Financial assets at fair value through profit or loss	1,547,672	1,599,093
Investment securities	2,588	1,251
Loans and advances	3,169	3,474
Financial assets included in assets held for sale	1,693
Total	8,614,289	9,449,982
Held-to-maturity investments [member]
Financial assets:
Investment securities	372,459	1,173,419
Total	372,459	1,173,419
Loans and receivables [Member]
Financial assets:
Cash and deposits with banks	54,691,296	47,324,644
Call loans and bills bought	1,881,880	1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed	8,491,703	8,924,385
Loans and advances	85,125,901	95,270,371
Other financial assets	3,598,642	3,424,591
Financial assets included in assets held for sale	3,098,196
Total	156,887,618	156,816,200
Available-for-sale financial assets [member]
Financial assets:
Investment securities	20,120,028	17,899,267
Financial assets included in assets held for sale	108,882
Total	¥ 20,228,910	¥ 17,899,267

XML

Fair Value of Financial Assets and Liabilities - Carrying Amounts of Financial Assets and Liabilities Carried at Fair Value (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Financial assets:
Trading assets	¥ 3,169,123	¥ 3,776,671
Derivative financial instruments	3,885,271	4,063,982
Financial assets at fair value through profit or loss	1,547,672	1,599,093
Available-for-sale financial assets	20,122,616	17,900,518
Others	3,598,642	3,424,591
Total	186,103,276	185,338,868
Financial liabilities:
Trading liabilities	2,143,899	2,071,584
Derivative financial instruments	3,498,016	3,889,694
Others	6,691,042	7,201,137
Total	178,607,131	178,381,797
At fair value [member]
Financial assets:
Trading assets	3,169,123	3,776,671
Derivative financial instruments	3,886,964	4,063,982
Financial assets at fair value through profit or loss	1,547,672	1,599,093
Available-for-sale financial assets	20,231,498	17,900,518
Others	7,942	8,985
Total	28,843,199	27,349,249
Financial liabilities:
Trading liabilities	2,143,899	2,071,584
Derivative financial instruments	3,503,987	3,889,694
Others	7,492	23,251
Total	5,655,378	5,984,529
At fair value [member] | Level 1 [member]
Financial assets:
Trading assets	2,732,402	3,155,817
Derivative financial instruments	87,316	63,010
Financial assets at fair value through profit or loss	541	1,667
Available-for-sale financial assets	15,939,723	13,733,782
Total	18,759,982	16,954,276
Financial liabilities:
Trading liabilities	1,981,776	1,998,412
Derivative financial instruments	109,331	63,028
Total	2,091,107	2,061,440
At fair value [member] | Level 2 [member]
Financial assets:
Trading assets	436,721	620,854
Derivative financial instruments	3,793,087	3,996,890
Financial assets at fair value through profit or loss	1,518,931	1,571,087
Available-for-sale financial assets	3,447,269	3,329,958
Others	7,942	8,985
Total	9,203,950	9,527,774
Financial liabilities:
Trading liabilities	162,123	73,172
Derivative financial instruments	3,394,220	3,826,645
Others	6,659	23,554
Total	3,563,002	3,923,371
At fair value [member] | Level 3 [member]
Financial assets:
Derivative financial instruments	6,561	4,082
Financial assets at fair value through profit or loss	28,200	26,339
Available-for-sale financial assets	844,506	836,778
Total	879,267	867,199
Financial liabilities:
Derivative financial instruments	436	21
Others	833	(303)
Total	1,269	(282)
At fair value [member] | Debt instruments [member]
Financial assets:
Trading assets	2,841,148	3,339,928
Financial assets at fair value through profit or loss	1,528,921	1,582,957
Available-for-sale financial assets	3,350,757	2,932,833
Financial liabilities:
Trading liabilities	2,008,711	2,038,330
At fair value [member] | Debt instruments [member] | Level 1 [member]
Financial assets:
Trading assets	2,424,460	2,734,340
Available-for-sale financial assets	700,500	466,901
Financial liabilities:
Trading liabilities	1,948,602	1,979,564
At fair value [member] | Debt instruments [member] | Level 2 [member]
Financial assets:
Trading assets	416,688	605,588
Financial assets at fair value through profit or loss	1,518,778	1,570,904
Available-for-sale financial assets	2,650,103	2,465,406
Financial liabilities:
Trading liabilities	60,109	58,766
At fair value [member] | Debt instruments [member] | Level 3 [member]
Financial assets:
Financial assets at fair value through profit or loss	10,143	12,053
Available-for-sale financial assets	154	526
At fair value [member] | Equity instruments [member]
Financial assets:
Trading assets	327,975	436,743
Financial liabilities:
Trading liabilities	135,188	33,254
At fair value [member] | Equity instruments [member] | Level 1 [member]
Financial assets:
Trading assets	307,942	421,477
Financial liabilities:
Trading liabilities	33,174	18,848
At fair value [member] | Equity instruments [member] | Level 2 [member]
Financial assets:
Trading assets	20,033	15,266
Financial liabilities:
Trading liabilities	102,014	14,406
At fair value [member] | Interest rate derivatives [member]
Financial assets:
Derivative financial instruments	2,072,654	2,315,237
Financial liabilities:
Derivative financial instruments	1,978,433	2,205,604
At fair value [member] | Interest rate derivatives [member] | Level 1 [member]
Financial assets:
Derivative financial instruments	38,760	27,121
Financial liabilities:
Derivative financial instruments	30,760	17,903
At fair value [member] | Interest rate derivatives [member] | Level 2 [member]
Financial assets:
Derivative financial instruments	2,033,894	2,288,114
Financial liabilities:
Derivative financial instruments	1,947,673	2,187,701
At fair value [member] | Interest rate derivatives [member] | Level 3 [member]
Financial assets:
Derivative financial instruments		2
At fair value [member] | Currency derivatives [member]
Financial assets:
Derivative financial instruments	1,724,401	1,666,327
Financial liabilities:
Derivative financial instruments	1,406,792	1,588,044
At fair value [member] | Currency derivatives [member] | Level 1 [member]
Financial liabilities:
Derivative financial instruments	19	19
At fair value [member] | Currency derivatives [member] | Level 2 [member]
Financial assets:
Derivative financial instruments	1,724,387	1,666,305
Financial liabilities:
Derivative financial instruments	1,406,759	1,588,004
At fair value [member] | Currency derivatives [member] | Level 3 [member]
Financial assets:
Derivative financial instruments	14	22
Financial liabilities:
Derivative financial instruments	14	21
At fair value [member] | Equity derivatives [member]
Financial assets:
Derivative financial instruments	71,344	60,395
Financial liabilities:
Derivative financial instruments	105,349	77,197
At fair value [member] | Equity derivatives [member] | Level 1 [member]
Financial assets:
Derivative financial instruments	48,154	35,400
Financial liabilities:
Derivative financial instruments	78,088	44,593
At fair value [member] | Equity derivatives [member] | Level 2 [member]
Financial assets:
Derivative financial instruments	21,310	23,668
Financial liabilities:
Derivative financial instruments	27,261	32,604
At fair value [member] | Equity derivatives [member] | Level 3 [member]
Financial assets:
Derivative financial instruments	1,880	1,327
At fair value [member] | Commodity derivatives [member]
Financial assets:
Derivative financial instruments	6,516	11,679
Financial liabilities:
Derivative financial instruments	4,948	10,491
At fair value [member] | Commodity derivatives [member] | Level 1 [member]
Financial assets:
Derivative financial instruments	402	489
Financial liabilities:
Derivative financial instruments	464	513
At fair value [member] | Commodity derivatives [member] | Level 2 [member]
Financial assets:
Derivative financial instruments	6,114	11,190
Financial liabilities:
Derivative financial instruments	4,484	9,978
At fair value [member] | Credit derivatives [member]
Financial assets:
Derivative financial instruments	12,049	10,344
Financial liabilities:
Derivative financial instruments	8,465	8,358
At fair value [member] | Credit derivatives [member] | Level 2 [member]
Financial assets:
Derivative financial instruments	7,382	7,613
Financial liabilities:
Derivative financial instruments	8,043	8,358
At fair value [member] | Credit derivatives [member] | Level 3 [member]
Financial assets:
Derivative financial instruments	4,667	2,731
Financial liabilities:
Derivative financial instruments	422
At fair value [member] | Equity instruments [member]
Financial assets:
Financial assets at fair value through profit or loss	18,751	16,136
Available-for-sale financial assets	5,948,792	5,776,748
At fair value [member] | Equity instruments [member] | Level 1 [member]
Financial assets:
Financial assets at fair value through profit or loss	541	1,667
Available-for-sale financial assets	4,307,274	4,075,944
At fair value [member] | Equity instruments [member] | Level 2 [member]
Financial assets:
Financial assets at fair value through profit or loss	153	183
Available-for-sale financial assets	797,166	864,552
At fair value [member] | Equity instruments [member] | Level 3 [member]
Financial assets:
Financial assets at fair value through profit or loss	18,057	14,286
Available-for-sale financial assets	844,352	836,252
At fair value [member] | Japanese government bonds [member]
Financial assets:
Available-for-sale financial assets	7,685,303	5,722,674
At fair value [member] | Japanese government bonds [member] | Level 1 [member]
Financial assets:
Available-for-sale financial assets	7,685,303	5,722,674
At fair value [member] | U.S. Treasury and other U.S. government agency bonds [member]
Financial assets:
Available-for-sale financial assets	3,246,646	3,468,263
At fair value [member] | U.S. Treasury and other U.S. government agency bonds [member] | Level 1 [member]
Financial assets:
Available-for-sale financial assets	¥ 3,246,646	¥ 3,468,263

XML

Fair Value of Financial Assets and Liabilities - Carrying Amounts of Financial Assets and Liabilities Carried at Fair Value (Parenthetical) (Detail) ¥ in Millions	Mar. 31, 2018 JPY (¥)
Equity instruments [member]
Disclosure of detailed information about financial instruments [line items]
Assets held for sale categorized within Level 2	¥ 5,225
Assets held for sale categorized within Level 1	56,447
Assets held for sale categorized within Level 3	47,210
Interest rate derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Assets held for sale categorized within Level 2	533
Liabilities held for sale categorized within Level 2	5,401
Currency derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Assets held for sale categorized within Level 2	1,160
Liabilities held for sale categorized within Level 2	¥ 570

XML

Fair Value of Financial Assets and Liabilities - Reconciliations for Financial Assets and Liabilities Carried at Fair Value (Detail) - At fair value [member] - Level 3 [member] - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Beginning balance	¥ 867,481	¥ 826,227
Total gains (losses), Included in profit or loss	(4,986)	6,150
Total gains (losses), Included in other comprehensive income	46,196	51,218
Purchases	73,673	94,187
Sales	(11,768)	(9,918)
Settlement	(80,950)	(87,617)
Transfers into Level 3	325	306
Transfers out of Level 3	(21,945)	(772)
Ending balance	877,998	867,481
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	730	(13,347)
Derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	4,061	(3,142)
Total gains (losses), Included in profit or loss	9,163	13,568
Total gains (losses), Included in other comprehensive income	(158)	221
Purchases	517	521
Sales	(1,027)
Settlement	(6,456)	(7,177)
Transfers into Level 3	25
Transfers out of Level 3		70
Ending balance	6,125	4,061
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	9,601	13,785
Derivatives [member] | Interest rate derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	2
Total gains (losses), Included in profit or loss	(45)	(163)
Purchases	43	165
Ending balance		2
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance		(5)
Derivatives [member] | Currency derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	1	5
Total gains (losses), Included in profit or loss	(1)	(21)
Transfers out of Level 3		17
Ending balance		1
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	(1)	(3)
Derivatives [member] | Equity derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	1,327	(13)
Total gains (losses), Included in profit or loss	1,106	931
Purchases	474	356
Sales	(1,027)
Transfers out of Level 3		53
Ending balance	1,880	1,327
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	1,499	973
Derivatives [member] | Credit derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	2,731	(3,134)
Total gains (losses), Included in profit or loss	8,103	12,821
Total gains (losses), Included in other comprehensive income	(158)	221
Settlement	(6,456)	(7,177)
Transfers into Level 3	25
Ending balance	4,245	2,731
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	8,103	12,820
Financial assets at fair value through profit or loss [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	26,339	39,261
Total gains (losses), Included in profit or loss	(1,353)	575
Purchases	4,915	4,711
Sales	(648)	(1,430)
Settlement	(251)	(16,195)
Transfers out of Level 3	(802)	(583)
Ending balance	28,200	26,339
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	(1,622)	(3)
Financial assets at fair value through profit or loss [member] | Debt instruments [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	12,053	11,667
Total gains (losses), Included in profit or loss	(1,731)	401
Purchases		180
Settlement	(149)	(195)
Transfers out of Level 3	(30)
Ending balance	10,143	12,053
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	(1,731)	401
Financial assets at fair value through profit or loss [member] | Equity instruments [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	14,286	27,594
Total gains (losses), Included in profit or loss	378	174
Purchases	4,915	4,531
Sales	(648)	(1,430)
Settlement	(102)	(16,000)
Transfers out of Level 3	(772)	(583)
Ending balance	18,057	14,286
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	109	(404)
Available-for-sale financial assets [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	836,778	791,348
Total gains (losses), Included in profit or loss	(2,012)	(21,836)
Total gains (losses), Included in other comprehensive income	46,354	50,997
Purchases	68,241	88,955
Sales	(10,093)	(8,488)
Settlement	(74,243)	(64,245)
Transfers into Level 3	624	306
Transfers out of Level 3	(21,143)	(259)
Ending balance	844,506	836,778
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	(6,393)	(26,927)
Available-for-sale financial assets [member] | Debt instruments [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	526	2,022
Total gains (losses), Included in profit or loss	1,600	(1,258)
Total gains (losses), Included in other comprehensive income	(13)	(30)
Purchases		269
Sales	(1,613)
Settlement	(346)	(477)
Ending balance	154	526
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	(13)	(1,181)
Available-for-sale financial assets [member] | Equity instruments [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	836,252	789,326
Total gains (losses), Included in profit or loss	(3,612)	(20,578)
Total gains (losses), Included in other comprehensive income	46,367	51,027
Purchases	68,241	88,686
Sales	(8,480)	(8,488)
Settlement	(73,897)	(63,768)
Transfers into Level 3	624	306
Transfers out of Level 3	(21,143)	(259)
Ending balance	844,352	836,252
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	(6,380)	(25,746)
Others-liabilities [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	303	(1,240)
Total gains (losses), Included in profit or loss	(812)	1,543
Transfers into Level 3	(324)
Ending balance	(833)	303
Changes in unrealized gains (losses) included in profit or loss related to assets and liabilities held at ending balance	¥ (856)	¥ (202)

XML

Fair Value of Financial Assets and Liabilities - Reconciliations for Financial Assets and Liabilities Carried at Fair Value (Parenthetical) (Detail) ¥ in Millions	12 Months Ended
	Mar. 31, 2018 JPY (¥)
Disclosure of detailed information about financial instruments [abstract]
Transfers out of Level 3	¥ 21,945

XML

Fair Value of Financial Assets and Liabilities - Total and Changes in Unrealized Gains or Losses Included in Profit or Loss for Level 3 Financial Assets and Liabilities (Detail) - At fair value [member] - Level 3 [member] - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Total gains (losses) included in profit or loss	¥ 4,986	¥ (6,150)
Changes in unrealized gains(losses) included in profit or loss related to assets and liabilities held	730	(13,347)
Net interest income [Member]
Disclosure of detailed information about financial instruments [line items]
Total gains (losses) included in profit or loss	1,273	524
Changes in unrealized gains(losses) included in profit or loss related to assets and liabilities held	762	322
Net trading income (loss) [Member]
Disclosure of detailed information about financial instruments [line items]
Total gains (losses) included in profit or loss	7,064	14,474
Changes in unrealized gains(losses) included in profit or loss related to assets and liabilities held	7,970	13,148
Net income (loss) from financial assets at fair value through profit or loss [Member]
Disclosure of detailed information about financial instruments [line items]
Total gains (losses) included in profit or loss	(1,353)	575
Changes in unrealized gains(losses) included in profit or loss related to assets and liabilities held	(1,622)	(3)
Net investment income [Member]
Disclosure of detailed information about financial instruments [line items]
Total gains (losses) included in profit or loss	4,399	7,394
Impairment charges on financial assets [member]
Disclosure of detailed information about financial instruments [line items]
Total gains (losses) included in profit or loss	(6,397)	(29,117)
Changes in unrealized gains(losses) included in profit or loss related to assets and liabilities held	¥ (6,380)	¥ (26,814)

XML

Fair Value of Financial Assets and Liabilities - Quantitative Information about Significant Unobservable Inputs Used in Fair Value Measurement for Level 3 Financial Assets and Liabilities (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Financial assets:
Derivative financial instruments	¥ 3,885,271	¥ 4,063,982
Available-for-sale financial assets	20,122,616	17,900,518
Financial liabilities:
Derivative financial instruments	3,498,016	3,889,694
Others	6,691,042	7,201,137
At fair value [member]
Financial assets:
Derivative financial instruments	3,886,964	4,063,982
Available-for-sale financial assets	20,231,498	17,900,518
Financial liabilities:
Derivative financial instruments	3,503,987	3,889,694
Others	7,492	23,251
At fair value [member] | Interest rate derivatives [member]
Financial assets:
Derivative financial instruments	2,072,654	2,315,237
Financial liabilities:
Derivative financial instruments	1,978,433	2,205,604
At fair value [member] | Currency derivatives [member]
Financial assets:
Derivative financial instruments	1,724,401	1,666,327
Financial liabilities:
Derivative financial instruments	1,406,792	1,588,044
At fair value [member] | Equity derivatives [member]
Financial assets:
Derivative financial instruments	71,344	60,395
Financial liabilities:
Derivative financial instruments	105,349	77,197
At fair value [member] | Credit derivatives [member]
Financial assets:
Derivative financial instruments	12,049	10,344
Financial liabilities:
Derivative financial instruments	8,465	8,358
At fair value [member] | Equity instruments [member]
Financial assets:
Available-for-sale financial assets	5,948,792	5,776,748
At fair value [member] | Debt instruments [member]
Financial assets:
Available-for-sale financial assets	3,350,757	2,932,833
At fair value [member] | Level 3 [member]
Financial assets:
Derivative financial instruments	6,561	4,082
Available-for-sale financial assets	844,506	836,778
Financial liabilities:
Derivative financial instruments	436	21
Others	833	(303)
At fair value [member] | Level 3 [member] | Interest rate derivatives [member]
Financial assets:
Derivative financial instruments		2
At fair value [member] | Level 3 [member] | Currency derivatives [member]
Financial assets:
Derivative financial instruments	14	22
Financial liabilities:
Derivative financial instruments	14	21
At fair value [member] | Level 3 [member] | Equity derivatives [member]
Financial assets:
Derivative financial instruments	1,880	1,327
At fair value [member] | Level 3 [member] | Credit derivatives [member]
Financial assets:
Derivative financial instruments	4,667	2,731
Financial liabilities:
Derivative financial instruments	422
At fair value [member] | Level 3 [member] | Equity instruments [member]
Financial assets:
Financial assets at fair value through profit or loss	18,057	14,286
Available-for-sale financial assets	844,352	836,252
At fair value [member] | Level 3 [member] | Debt instruments [member]
Financial assets:
Financial assets at fair value through profit or loss	10,143	12,053
Available-for-sale financial assets	¥ 154	¥ 526
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Credit default model [member] | Minimum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Quanto correlation	15.00%
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Credit default model [member] | Maximum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Quanto correlation	90.00%
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Interest rate derivatives [member] | Option pricing model [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Interest rate volatility		4.00%
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Currency derivatives [member] | Option pricing model [member] | Minimum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Foreign exchange volatility	10.00%	9.00%
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Currency derivatives [member] | Option pricing model [member] | Maximum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Foreign exchange volatility	14.00%	17.00%
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Equity derivatives [member] | Option pricing model [member] | Minimum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Volatility	11.00%	20.00%
Equity to equity correlation	45.00%	44.00%
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Equity derivatives [member] | Option pricing model [member] | Maximum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Volatility	52.00%	49.00%
Equity to equity correlation	94.00%	93.00%
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Credit derivatives [member] | CDO pricing model [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Additional withdrawal ratio	48.00%	49.00%
At fair value [member] | Level 3 [member] | Financial assets at fair value through profit or loss [member] | Equity instruments [member] | Market comparable companies [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
EV/EBITDA multiple	8.7	8.1
At fair value [member] | Level 3 [member] | Financial assets at fair value through profit or loss [member] | Equity instruments [member] | Market comparable companies [member] | Minimum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Price/Earnings multiple	8.3	10.3
Liquidity discount	0.00%	0.00%
At fair value [member] | Level 3 [member] | Financial assets at fair value through profit or loss [member] | Equity instruments [member] | Market comparable companies [member] | Maximum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Price/Earnings multiple	19.5	30.2
Liquidity discount	20.00%	20.00%
At fair value [member] | Level 3 [member] | Financial assets at fair value through profit or loss [member] | Debt instruments [member] | Monte Carlo simulation model [member] | Minimum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Volatility	12.00%	16.00%
At fair value [member] | Level 3 [member] | Financial assets at fair value through profit or loss [member] | Debt instruments [member] | Monte Carlo simulation model [member] | Maximum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Volatility	25.00%	26.00%
At fair value [member] | Level 3 [member] | Available-for-sale financial assets [member] | Equity instruments [member] | Monte Carlo simulation model [member] | Minimum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Volatility	42.00%	20.00%
At fair value [member] | Level 3 [member] | Available-for-sale financial assets [member] | Equity instruments [member] | Monte Carlo simulation model [member] | Maximum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Volatility	51.00%	51.00%
At fair value [member] | Level 3 [member] | Available-for-sale financial assets [member] | Equity instruments [member] | Market comparable companies [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Liquidity discount	20.00%	20.00%
At fair value [member] | Level 3 [member] | Available-for-sale financial assets [member] | Equity instruments [member] | Market comparable companies [member] | Minimum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Price/Book value multiple	0.3	0.3
Price/Earnings multiple	11.7	8.7
EV/EBITDA multiple	5.4	5.0
At fair value [member] | Level 3 [member] | Available-for-sale financial assets [member] | Equity instruments [member] | Market comparable companies [member] | Maximum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Price/Book value multiple	2.4	2.0
Price/Earnings multiple	31.4	42.6
EV/EBITDA multiple	16.8	14.8
At fair value [member] | Level 3 [member] | Available-for-sale financial assets [member] | Debt instruments [member] | Discounted cash flow [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Discount margin	8.00%	9.00%
At fair value [member] | Level 3 [member] | Derivative financial liabilities [member] | Currency derivatives [member] | Option pricing model [member] | Minimum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Foreign exchange volatility	10.00%	9.00%
At fair value [member] | Level 3 [member] | Derivative financial liabilities [member] | Currency derivatives [member] | Option pricing model [member] | Maximum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Foreign exchange volatility	14.00%	17.00%
At fair value [member] | Level 3 [member] | Derivative financial liabilities [member] | Credit derivatives [member] | Credit default model [member] | Minimum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Quanto correlation	20.00%
At fair value [member] | Level 3 [member] | Derivative financial liabilities [member] | Credit derivatives [member] | Credit default model [member] | Maximum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Quanto correlation	30.00%
At fair value [member] | Level 3 [member] | Others-liabilities [member] | Option pricing model [member] | Minimum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Volatility	23.00%	24.00%
Equity to equity correlation	45.00%	44.00%
Interest rate to interest rate correlation	31.00%	14.00%
At fair value [member] | Level 3 [member] | Others-liabilities [member] | Option pricing model [member] | Maximum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Volatility	38.00%	64.00%
Equity to equity correlation	94.00%	93.00%
Interest rate to interest rate correlation	100.00%	100.00%
At fair value [member] | Level 3 [member] | Others-liabilities [member] | Credit derivatives [member] | Credit default model [member] | Minimum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Quanto correlation	15.00%
At fair value [member] | Level 3 [member] | Others-liabilities [member] | Credit derivatives [member] | Credit default model [member] | Maximum [member]
Disclosure of significant unobservable inputs used in fair value measurement [Abstract]
Quanto correlation	90.00%

XML

Fair Value of Financial Assets and Liabilities - Impact of Valuation Sensitivity (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Financial assets:
Derivative financial instruments	¥ 3,885,271	¥ 4,063,982
Financial assets at fair value through profit or loss	1,547,672	1,599,093
Available-for-sale financial assets	20,122,616	17,900,518
Financial liabilities:
Derivative financial instruments	3,498,016	3,889,694
Others	6,691,042	7,201,137
At fair value [member]
Financial assets:
Derivative financial instruments	3,886,964	4,063,982
Financial assets at fair value through profit or loss	1,547,672	1,599,093
Available-for-sale financial assets	20,231,498	17,900,518
Financial liabilities:
Derivative financial instruments	3,503,987	3,889,694
Others	7,492	23,251
At fair value [member] | Currency derivatives [member]
Financial assets:
Derivative financial instruments	1,724,401	1,666,327
Financial liabilities:
Derivative financial instruments	1,406,792	1,588,044
At fair value [member] | Equity derivatives [member]
Financial assets:
Derivative financial instruments	71,344	60,395
Financial liabilities:
Derivative financial instruments	105,349	77,197
At fair value [member] | Credit derivatives [member]
Financial assets:
Derivative financial instruments	12,049	10,344
Financial liabilities:
Derivative financial instruments	8,465	8,358
At fair value [member] | Interest rate derivatives [member]
Financial assets:
Derivative financial instruments	2,072,654	2,315,237
Financial liabilities:
Derivative financial instruments	1,978,433	2,205,604
At fair value [member] | Debt instruments [member]
Financial assets:
Financial assets at fair value through profit or loss	1,528,921	1,582,957
Available-for-sale financial assets	3,350,757	2,932,833
At fair value [member] | Equity instruments [member]
Financial assets:
Financial assets at fair value through profit or loss	18,751	16,136
Available-for-sale financial assets	5,948,792	5,776,748
At fair value [member] | Level 3 [member]
Financial assets:
Derivative financial instruments	6,561	4,082
Financial assets at fair value through profit or loss	28,200	26,339
Available-for-sale financial assets	844,506	836,778
Financial liabilities:
Derivative financial instruments	436	21
Others	833	(303)
At fair value [member] | Level 3 [member] | Currency derivatives [member]
Financial assets:
Derivative financial instruments	14	22
Financial liabilities:
Derivative financial instruments	14	21
At fair value [member] | Level 3 [member] | Equity derivatives [member]
Financial assets:
Derivative financial instruments	1,880	1,327
At fair value [member] | Level 3 [member] | Credit derivatives [member]
Financial assets:
Derivative financial instruments	4,667	2,731
Financial liabilities:
Derivative financial instruments	422
Credit derivatives	422
At fair value [member] | Level 3 [member] | Interest rate derivatives [member]
Financial assets:
Derivative financial instruments		2
At fair value [member] | Level 3 [member] | Debt instruments [member]
Financial assets:
Financial assets at fair value through profit or loss	10,143	12,053
Available-for-sale financial assets	154	526
At fair value [member] | Level 3 [member] | Equity instruments [member]
Financial assets:
Financial assets at fair value through profit or loss	18,057	14,286
Available-for-sale financial assets	844,352	836,252
At fair value [member] | Level 3 [member] | Derivative financial liabilities [member] | Currency derivatives [member] | Recorded in profit and loss [member]
Financial liabilities:
Financial liabilities, Favorable changes	2	2
Financial liabilities, Unfavorable changes	80	92
At fair value [member] | Level 3 [member] | Derivative financial liabilities [member] | Credit derivatives [member] | Recorded in profit and loss [member]
Financial liabilities:
Financial liabilities, Favorable changes	35
Financial liabilities, Unfavorable changes	35
At fair value [member] | Level 3 [member] | Others-liabilities [member] | Recorded in profit and loss [member]
Financial liabilities:
Financial liabilities, Favorable changes	1,375	1,121
Financial liabilities, Unfavorable changes	3,090	1,716
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Currency derivatives [member] | Recorded in profit and loss [member]
Financial liabilities:
Financial assets, Favorable changes	80	93
Financial assets, Unfavorable changes	1	1
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Equity derivatives [member] | Recorded in profit and loss [member]
Financial liabilities:
Financial assets, Favorable changes	271	199
Financial assets, Unfavorable changes	310	254
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Credit derivatives [member] | Recorded in profit and loss [member]
Financial liabilities:
Financial assets, Favorable changes	4,515	6,706
Financial assets, Unfavorable changes	11,765	15,730
At fair value [member] | Level 3 [member] | Derivative financial assets [member] | Interest rate derivatives [member] | Recorded in profit and loss [member]
Financial liabilities:
Financial assets, Favorable changes		7
Financial assets, Unfavorable changes		2
At fair value [member] | Level 3 [member] | Financial assets at fair value through profit or loss [member] | Debt instruments [member] | Recorded in profit and loss [member]
Financial liabilities:
Financial assets, Favorable changes	278	244
Financial assets, Unfavorable changes		26
At fair value [member] | Level 3 [member] | Financial assets at fair value through profit or loss [member] | Equity instruments [member] | Recorded in profit and loss [member]
Financial liabilities:
Financial assets, Favorable changes	361	99
Financial assets, Unfavorable changes	336	99
At fair value [member] | Level 3 [member] | Available-for-sale financial assets [member] | Debt instruments [member] | Recorded in equity [member]
Financial liabilities:
Financial assets, Favorable changes	4	13
Financial assets, Unfavorable changes	2	13
At fair value [member] | Level 3 [member] | Available-for-sale financial assets [member] | Equity instruments [member] | Recorded in equity [member]
Financial liabilities:
Financial assets, Favorable changes	26,835	24,785
Financial assets, Unfavorable changes	¥ 25,290	¥ 24,137

XML

Fair Value of Financial Assets and Liabilities - Financial Assets and Liabilities Not Carried at Fair Value (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Financial assets:
Cash and deposits with banks	¥ 54,696,069	¥ 47,330,155	¥ 43,144,654
Call loans and bills bought:
Reverse repurchase agreements and cash collateral on securities borrowed	8,491,703	8,924,385
Investment securities:
Held-to-maturity investments	372,459	1,173,419
Loans and advances	85,129,070	95,273,845
Other financial assets	3,598,642	3,424,591
Financial assets included in assets held for sale	3,208,771
Call money and bills sold:
Repurchase agreements and cash collateral on securities lent	12,022,593	9,424,506
Borrowings	10,652,481	12,245,943
Debt securities in issue	10,569,117	11,165,623
Other financial liabilities	6,691,042	7,201,137
Financial liabilities included in liabilities directly associated with the assets held for sale	3,377,527
Carrying value [member]
Financial assets:
Cash and deposits with banks	54,696,069	47,330,155
Call loans and bills bought:
Call loans	1,858,802	1,860,620
Bills bought	23,078	11,589
Reverse repurchase agreements and cash collateral on securities borrowed	8,491,703	8,924,385
Investment securities:
Held-to-maturity investments	372,459	1,173,419
Loans and advances	85,129,070	95,273,845
Other financial assets	3,598,642	3,424,591
Financial assets included in assets held for sale	3,098,196
Deposits:
Non-interest-bearing deposits, demand deposits and deposits at notice	84,121,443	81,465,816
Other deposits	44,340,084	48,829,474
Call money and bills sold:
Call money	1,190,929	2,088,020
Bills sold
Repurchase agreements and cash collateral on securities lent	12,022,593	9,424,506
Borrowings	10,652,481	12,245,943
Debt securities in issue	10,569,117	11,165,623
Other financial liabilities	6,691,042	7,201,137
Financial liabilities included in liabilities directly associated with the assets held for sale	3,371,556
Not carried at fair value [member]
Financial assets:
Cash and deposits with banks	54,708,231	47,330,763
Call loans and bills bought:
Call loans	1,859,176	1,860,539
Bills bought	23,051	11,567
Reverse repurchase agreements and cash collateral on securities borrowed	8,491,858	8,926,312
Investment securities:
Held-to-maturity investments	374,597	1,180,319
Loans and advances	87,538,646	98,053,056
Other financial assets	3,595,216	3,421,172
Financial assets included in assets held for sale	3,224,902
Deposits:
Non-interest-bearing deposits, demand deposits and deposits at notice	84,121,124	81,466,078
Other deposits	44,339,583	48,831,229
Call money and bills sold:
Call money	1,190,936	2,088,067
Bills sold
Repurchase agreements and cash collateral on securities lent	12,022,593	9,424,506
Borrowings	10,761,610	12,318,246
Debt securities in issue	10,767,745	11,329,967
Other financial liabilities	6,691,016	7,200,488
Financial liabilities included in liabilities directly associated with the assets held for sale	3,380,139
Not carried at fair value [member] | Level 1 [member]
Financial assets:
Cash and deposits with banks	53,401,133	46,244,819
Investment securities:
Held-to-maturity investments	374,597	1,180,319
Financial assets included in assets held for sale	3,824
Call money and bills sold:
Bills sold
Not carried at fair value [member] | Level 2 [member]
Financial assets:
Cash and deposits with banks	1,307,098	1,085,944
Call loans and bills bought:
Call loans	1,859,176	1,860,539
Bills bought	23,051	11,567
Reverse repurchase agreements and cash collateral on securities borrowed	8,491,858	8,926,312
Investment securities:
Loans and advances	258,673	348,691
Other financial assets	3,429,143	3,255,765
Financial assets included in assets held for sale	84,058
Deposits:
Non-interest-bearing deposits, demand deposits and deposits at notice	84,121,124	81,466,078
Other deposits	44,339,583	48,831,229
Call money and bills sold:
Call money	1,190,936	2,088,067
Bills sold
Repurchase agreements and cash collateral on securities lent	12,022,593	9,424,506
Borrowings	10,739,893	12,306,066
Debt securities in issue	10,587,917	11,257,502
Other financial liabilities	6,571,846	7,080,575
Financial liabilities included in liabilities directly associated with the assets held for sale	3,380,139
Not carried at fair value [member] | Level 3 [member]
Investment securities:
Loans and advances	87,279,973	97,704,365
Other financial assets	166,073	165,407
Financial assets included in assets held for sale	3,137,020
Call money and bills sold:
Bills sold
Borrowings	21,717	12,180
Debt securities in issue	179,828	72,465
Other financial liabilities	¥ 119,170	¥ 119,913

XML

Offsetting of Financial Assets and Liabilities - Summary of Offsetting of Financial Assets and Liabilities (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of offsetting of financial assets and liabilities [Line Items]
Financial assets, Gross amounts of recognized financial assets and liabilities	¥ 14,076,436	¥ 14,838,697
Financial assets, Gross amounts offset in statement of financial position	(1,699,462)	(1,850,330)
Financial assets, Net amounts presented in statement of financial position	12,376,974	12,988,367
Financial assets, Related amounts not offset in statement of financial position, Financial instruments	(10,458,050)	(11,116,509)
Financial assets, Related amounts not offset in statement of financial position, Cash collateral	(479,814)	(318,106)
Financial assets, Net amounts	1,439,110	1,553,752
Financial liabilities, Gross amounts of recognized financial assets and liabilities	17,404,249	15,339,320
Financial liabilities, Gross amounts offset in statement of financial position	(1,883,640)	(2,025,120)
Financial liabilities, Net amounts presented in statement of financial position	15,520,609	13,314,200
Financial liabilities, Related amounts not offset in statement of financial position, Financial instruments	(14,029,125)	(11,618,344)
Financial liabilities, Related amounts not offset in statement of financial position, Cash collateral	(587,693)	(719,483)
Financial liabilities, Net amounts	903,791	976,373
Repurchase agreements and cash collateral on securities lent [Member]
Disclosure of offsetting of financial assets and liabilities [Line Items]
Financial liabilities, Gross amounts of recognized financial assets and liabilities	12,877,484	10,160,409
Financial liabilities, Gross amounts offset in statement of financial position	(854,891)	(735,903)
Financial liabilities, Net amounts presented in statement of financial position	12,022,593	9,424,506
Financial liabilities, Related amounts not offset in statement of financial position, Financial instruments	(12,019,290)	(9,410,305)
Financial liabilities, Net amounts	3,303	14,201
Derivative financial liabilities [member]
Disclosure of offsetting of financial assets and liabilities [Line Items]
Financial liabilities, Gross amounts of recognized financial assets and liabilities	4,526,765	5,178,911
Financial liabilities, Gross amounts offset in statement of financial position	(1,028,749)	(1,289,217)
Financial liabilities, Net amounts presented in statement of financial position	3,498,016	3,889,694
Financial liabilities, Related amounts not offset in statement of financial position, Financial instruments	(2,009,835)	(2,208,039)
Financial liabilities, Related amounts not offset in statement of financial position, Cash collateral	(587,693)	(719,483)
Financial liabilities, Net amounts	900,488	962,172
Reverse repurchase agreements and cash collateral on securities borrowed [member]
Disclosure of offsetting of financial assets and liabilities [Line Items]
Financial assets, Gross amounts of recognized financial assets and liabilities	9,346,594	9,660,288
Financial assets, Gross amounts offset in statement of financial position	(854,891)	(735,903)
Financial assets, Net amounts presented in statement of financial position	8,491,703	8,924,385
Financial assets, Related amounts not offset in statement of financial position, Financial instruments	(8,458,707)	(8,889,400)
Financial assets, Net amounts	32,996	34,985
Derivative financial assets [member]
Disclosure of offsetting of financial assets and liabilities [Line Items]
Financial assets, Gross amounts of recognized financial assets and liabilities	4,729,842	5,178,409
Financial assets, Gross amounts offset in statement of financial position	(844,571)	(1,114,427)
Financial assets, Net amounts presented in statement of financial position	3,885,271	4,063,982
Financial assets, Related amounts not offset in statement of financial position, Financial instruments	(1,999,343)	(2,227,109)
Financial assets, Related amounts not offset in statement of financial position, Cash collateral	(479,814)	(318,106)
Financial assets, Net amounts	¥ 1,406,114	¥ 1,518,767

XML

Financial Risk Management - Maximum Exposure to Credit Risk before Collateral Held or Other Credit Enhancements (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	¥ 247,637,992	¥ 248,268,034
Deposits with banks [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	53,992,931	46,207,027
Call loans and bills bought [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	1,881,880	1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	8,491,703	8,924,385
Trading assets [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	2,841,148	3,339,928
Derivatives [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	3,885,271	4,063,982
Financial assets at fair value through profit or loss [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	1,528,921	1,582,957
Held-to-maturity investments [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	372,459	1,173,419
Available-for-sale financial assets [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	14,282,706	12,123,770
Loans and advances [member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	85,129,070	95,273,845
Other financial asset [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	3,598,642	3,424,591
Financial assets included in assets held for sale [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	3,099,888
Loan commitments [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	60,107,128	62,357,210
Financial guarantees and other credit-related contingent liabilities [Member]
Disclosure of credit risk exposure [line items]
Maximum exposure to credit risk before collateral held or other credit enhancements	¥ 8,426,245	¥ 7,924,711

XML

Financial Risk Management - Financial Effect of Collateral and Other Credit Enhancements on Loans and Advances for Borrowers Requiring Caution and Impaired Loans and Advances (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of credit risk exposure [abstract]
Loans and advances for borrowers requiring caution and impaired loans and advances	¥ 1,965,681	¥ 3,212,447
Financial effect of collateral and other credit enhancements	¥ 959,015	¥ 1,422,996

XML

Financial Risk Management - Loans and Advances by Geographical Sector (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Gross carrying amount [member]
Disclosure of credit risk exposure [line items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	57,830,627	68,020,094
Gross carrying amount [member] | Americas [member]
Disclosure of credit risk exposure [line items]
Loans and advances	11,221,244	11,417,162
Gross carrying amount [member] | Europe [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,949,471	5,031,197
Gross carrying amount [member] | Asia [member]
Disclosure of credit risk exposure [line items]
Loans and advances	8,423,747	8,412,109
Gross carrying amount [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	3,434,838	3,310,164
Gross carrying amount [member] | Foreign [member]
Disclosure of credit risk exposure [line items]
Loans and advances	28,029,300	28,170,632
Adjust: Unearned income, unamortized premiums - net and deferred loan fees - net [member]
Disclosure of credit risk exposure [line items]
Loans and advances	(239,181)	(236,425)
Less: Allowance for loan losses [member]
Disclosure of credit risk exposure [line items]
Loans and advances	¥ (491,676)	¥ (680,456)

XML

Financial Risk Management - Loans and Advances by Industry Sector (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Gross carrying amount [member]
Disclosure of credit risk exposure [line items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	57,830,627	68,020,094
Gross carrying amount [member] | Domestic [member] | Manufacturing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	7,961,620	9,578,147
Gross carrying amount [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of credit risk exposure [line items]
Loans and advances	145,957	174,021
Gross carrying amount [member] | Domestic [member] | Construction [member]
Disclosure of credit risk exposure [line items]
Loans and advances	947,765	1,151,989
Gross carrying amount [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of credit risk exposure [line items]
Loans and advances	5,424,054	5,365,225
Gross carrying amount [member] | Domestic [member] | Wholesale and retail [member]
Disclosure of credit risk exposure [line items]
Loans and advances	5,288,767	5,721,005
Gross carrying amount [member] | Domestic [member] | Finance and insurance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,777,862	2,844,546
Gross carrying amount [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	9,017,664	10,101,846
Gross carrying amount [member] | Domestic [member] | Services [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,255,228	4,885,247
Gross carrying amount [member] | Domestic [member] | Municipalities [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,000,286	1,216,211
Gross carrying amount [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	16,363,489	19,096,755
Gross carrying amount [member] | Domestic [member] | Lease financing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	14,629	2,706,641
Gross carrying amount [member] | Domestic [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,633,306	5,178,461
Gross carrying amount [member] | Foreign [member]
Disclosure of credit risk exposure [line items]
Loans and advances	28,029,300	28,170,632
Gross carrying amount [member] | Foreign [member] | Public sector [member]
Disclosure of credit risk exposure [line items]
Loans and advances	372,008	299,746
Gross carrying amount [member] | Foreign [member] | Financial institutions [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,496,646	4,588,001
Gross carrying amount [member] | Foreign [member] | Commerce and industry [member]
Disclosure of credit risk exposure [line items]
Loans and advances	21,023,885	21,041,905
Gross carrying amount [member] | Foreign [member] | Lease financing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	357,660	404,658
Gross carrying amount [member] | Foreign [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,779,101	1,836,322
Adjust: Unearned income, unamortized premiums - net and deferred loan fees - net [member]
Disclosure of credit risk exposure [line items]
Loans and advances	(239,181)	(236,425)
Less: Allowance for loan losses [member]
Disclosure of credit risk exposure [line items]
Loans and advances	¥ (491,676)	¥ (680,456)

XML

Financial Risk Management - Loans and Advances by Industry Sector (Parenthetical) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Gross carrying amount [member]
Disclosure of credit risk exposure [line items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	57,830,627	68,020,094
Gross carrying amount [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	16,363,489	19,096,755
Gross carrying amount [member] | Housing loan [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 11,482,678	¥ 13,766,771

XML

Financial Risk Management - Disaggregation of Structured Finance Loans and Advances (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Real estate finance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,421,408	2,222,530
Project finance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	3,976,222	3,859,424
Other structured finance [Member]
Disclosure of credit risk exposure [line items]
Loans and advances	374,430	370,160
Structured finance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 6,772,060	¥ 6,452,114

XML

Financial Risk Management - Secured and Unsecured Consumer Loans (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Gross carrying amount [member]
Disclosure of credit risk exposure [line items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	57,830,627	68,020,094
Gross carrying amount [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	16,363,489	19,096,755
Gross carrying amount [member] | Domestic [member] | Consumer [member] | Secured loans [Member]
Disclosure of credit risk exposure [line items]
Loans and advances	12,255,845	14,994,042
Gross carrying amount [member] | Domestic [member] | Consumer [member] | Unsecured loans [Member]
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 4,107,644	¥ 4,102,713

XML

Financial Risk Management - Secured and Unsecured Consumer Loans (Parenthetical) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Gross carrying amount [member]
Disclosure of credit risk exposure [line items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	57,830,627	68,020,094
Gross carrying amount [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	16,363,489	19,096,755
Gross carrying amount [member] | Secured loans [Member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	12,255,845	14,994,042
Gross carrying amount [member] | Housing loan [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	11,482,678	13,766,771
Gross carrying amount [member] | Housing loan [member] | Secured loans [Member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 11,482,678	¥ 13,766,771

XML

Financial Risk Management - Summary of Loans and Advances (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of loans and advances by credit quality category [Line Items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Impaired [Member]
Disclosure of loans and advances by credit quality category [Line Items]
Loans and advances	509,482	696,237
Gross carrying amount [member]
Disclosure of loans and advances by credit quality category [Line Items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Neither past due nor impaired [member]
Disclosure of loans and advances by credit quality category [Line Items]
Loans and advances	84,856,335	94,825,134
Gross carrying amount [member] | Past due but not impaired [Member]
Disclosure of loans and advances by credit quality category [Line Items]
Loans and advances	124,724	136,904
Gross carrying amount [member] | Impaired [Member]
Disclosure of loans and advances by credit quality category [Line Items]
Loans and advances	878,868	1,228,688
Adjust: Unearned income, unamortized premiums - net and deferred loan fees - net [member]
Disclosure of loans and advances by credit quality category [Line Items]
Loans and advances	(239,181)	(236,425)
Less: Allowance for loan losses [member]
Disclosure of loans and advances by credit quality category [Line Items]
Loans and advances	(491,676)	(680,456)
Less: Allowance for loan losses [member] | Impaired [Member]
Disclosure of loans and advances by credit quality category [Line Items]
Loans and advances	¥ (369,386)	¥ (532,451)

XML

Financial Risk Management - Loans and Advances Neither Past Due nor Impaired (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Gross carrying amount [member]
Disclosure of credit risk exposure [line items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	57,830,627	68,020,094
Gross carrying amount [member] | Domestic [member] | Manufacturing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	7,961,620	9,578,147
Gross carrying amount [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of credit risk exposure [line items]
Loans and advances	145,957	174,021
Gross carrying amount [member] | Domestic [member] | Construction [member]
Disclosure of credit risk exposure [line items]
Loans and advances	947,765	1,151,989
Gross carrying amount [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of credit risk exposure [line items]
Loans and advances	5,424,054	5,365,225
Gross carrying amount [member] | Domestic [member] | Wholesale and retail [member]
Disclosure of credit risk exposure [line items]
Loans and advances	5,288,767	5,721,005
Gross carrying amount [member] | Domestic [member] | Finance and insurance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,777,862	2,844,546
Gross carrying amount [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	9,017,664	10,101,846
Gross carrying amount [member] | Domestic [member] | Services [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,255,228	4,885,247
Gross carrying amount [member] | Domestic [member] | Municipalities [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,000,286	1,216,211
Gross carrying amount [member] | Domestic [member] | Lease financing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	14,629	2,706,641
Gross carrying amount [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	16,363,489	19,096,755
Gross carrying amount [member] | Domestic [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,633,306	5,178,461
Gross carrying amount [member] | Foreign [member]
Disclosure of credit risk exposure [line items]
Loans and advances	28,029,300	28,170,632
Gross carrying amount [member] | Foreign [member] | Public sector [member]
Disclosure of credit risk exposure [line items]
Loans and advances	372,008	299,746
Gross carrying amount [member] | Foreign [member] | Financial institutions [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,496,646	4,588,001
Gross carrying amount [member] | Foreign [member] | Commerce and industry [member]
Disclosure of credit risk exposure [line items]
Loans and advances	21,023,885	21,041,905
Gross carrying amount [member] | Foreign [member] | Lease financing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	357,660	404,658
Gross carrying amount [member] | Foreign [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,779,101	1,836,322
Gross carrying amount [member] | Neither past due nor impaired [member]
Disclosure of credit risk exposure [line items]
Loans and advances	84,856,335	94,825,134
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	57,068,183	66,936,623
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Manufacturing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	7,884,841	9,449,708
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of credit risk exposure [line items]
Loans and advances	139,571	171,762
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Construction [member]
Disclosure of credit risk exposure [line items]
Loans and advances	934,293	1,123,339
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of credit risk exposure [line items]
Loans and advances	5,403,110	5,331,731
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Wholesale and retail [member]
Disclosure of credit risk exposure [line items]
Loans and advances	5,187,769	5,591,270
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Finance and insurance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,774,699	2,840,297
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	8,975,608	9,953,278
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Services [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,183,080	4,770,735
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Municipalities [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,000,286	1,216,211
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Lease financing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	14,629	2,698,052
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	15,975,508	18,657,173
Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,594,789	5,133,067
Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member]
Disclosure of credit risk exposure [line items]
Loans and advances	27,788,152	27,888,511
Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Public sector [member]
Disclosure of credit risk exposure [line items]
Loans and advances	371,987	299,721
Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Financial institutions [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,481,170	4,581,061
Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Commerce and industry [member]
Disclosure of credit risk exposure [line items]
Loans and advances	20,825,346	20,806,537
Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Lease financing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	357,660	392,496
Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,751,989	1,808,696
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member]
Disclosure of credit risk exposure [line items]
Loans and advances	38,031,429	37,596,895
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	20,230,927	19,477,854
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Manufacturing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,275,861	5,220,451
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of credit risk exposure [line items]
Loans and advances	81,900	111,241
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Construction [member]
Disclosure of credit risk exposure [line items]
Loans and advances	319,394	271,321
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,069,995	3,000,896
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Wholesale and retail [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,333,434	2,182,359
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Finance and insurance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,801,410	1,897,381
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	5,696,289	5,188,687
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Services [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,599,011	1,552,427
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	53,633	53,091
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member]
Disclosure of credit risk exposure [line items]
Loans and advances	17,800,502	18,119,041
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Public sector [member]
Disclosure of credit risk exposure [line items]
Loans and advances	191,678	220,796
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Financial institutions [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,381,927	2,586,295
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Commerce and industry [member]
Disclosure of credit risk exposure [line items]
Loans and advances	14,009,273	14,068,055
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Lease financing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	23,290	24,592
Normal [member] | 1-3 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,194,334	1,219,303
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member]
Disclosure of credit risk exposure [line items]
Loans and advances	17,020,993	18,157,294
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	14,013,272	14,925,104
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Manufacturing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,190,117	2,294,471
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of credit risk exposure [line items]
Loans and advances	42,892	45,573
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Construction [member]
Disclosure of credit risk exposure [line items]
Loans and advances	468,222	479,408
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,066,246	1,805,631
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Wholesale and retail [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,399,747	2,483,635
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Finance and insurance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	349,934	346,939
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	3,082,764	3,028,913
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Services [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,355,545	2,350,110
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	234	146
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,057,571	2,090,278
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member]
Disclosure of credit risk exposure [line items]
Loans and advances	3,007,721	3,232,190
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Public sector [member]
Disclosure of credit risk exposure [line items]
Loans and advances	81,448	72,198
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Financial institutions [member]
Disclosure of credit risk exposure [line items]
Loans and advances	338,659	431,372
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Commerce and industry [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,425,819	2,546,812
Normal [member] | 4-6 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	161,795	181,808
Normal [member] | Japanese government and local municipal corporations [member] | Gross carrying amount [member] | Neither past due nor impaired [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,841,059	3,544,530
Normal [member] | Japanese government and local municipal corporations [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,841,059	3,544,530
Normal [member] | Japanese government and local municipal corporations [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of credit risk exposure [line items]
Loans and advances	13,973	500
Normal [member] | Japanese government and local municipal corporations [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of credit risk exposure [line items]
Loans and advances	86,932	129,708
Normal [member] | Japanese government and local municipal corporations [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Finance and insurance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	2,785	3,243
Normal [member] | Japanese government and local municipal corporations [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	13,696	35,078
Normal [member] | Japanese government and local municipal corporations [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Services [member]
Disclosure of credit risk exposure [line items]
Loans and advances	37,693	34,826
Normal [member] | Japanese government and local municipal corporations [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Municipalities [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,000,286	1,042,346
Normal [member] | Japanese government and local municipal corporations [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,685,694	2,298,829
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member]
Disclosure of credit risk exposure [line items]
Loans and advances	25,877,492	33,565,932
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	19,198,974	27,500,420
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Manufacturing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,196,566	1,528,465
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of credit risk exposure [line items]
Loans and advances	207	5,955
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Construction [member]
Disclosure of credit risk exposure [line items]
Loans and advances	119,439	323,281
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of credit risk exposure [line items]
Loans and advances	133,132	317,943
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Wholesale and retail [member]
Disclosure of credit risk exposure [line items]
Loans and advances	297,583	733,264
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Finance and insurance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	618,935	575,688
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	95,634	1,496,839
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Services [member]
Disclosure of credit risk exposure [line items]
Loans and advances	94,218	690,201
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Municipalities [member]
Disclosure of credit risk exposure [line items]
Loans and advances		157,144
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Lease financing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	14,629	2,610,519
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	15,900,425	18,470,768
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	728,206	590,353
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member]
Disclosure of credit risk exposure [line items]
Loans and advances	6,678,518	6,065,512
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Public sector [member]
Disclosure of credit risk exposure [line items]
Loans and advances	97,890	6,516
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Financial institutions [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,752,693	1,538,913
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Commerce and industry [member]
Disclosure of credit risk exposure [line items]
Loans and advances	4,114,066	3,778,524
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Lease financing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	330,406	355,141
Normal [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	383,463	386,418
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member]
Disclosure of credit risk exposure [line items]
Loans and advances	917,644	1,239,670
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	685,255	922,441
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Manufacturing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	199,616	371,365
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of credit risk exposure [line items]
Loans and advances	599	7,905
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Construction [member]
Disclosure of credit risk exposure [line items]
Loans and advances	26,779	33,050
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of credit risk exposure [line items]
Loans and advances	46,657	58,684
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Wholesale and retail [member]
Disclosure of credit risk exposure [line items]
Loans and advances	155,584	155,778
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Finance and insurance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,630	1,344
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	87,218	99,237
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Services [member]
Disclosure of credit risk exposure [line items]
Loans and advances	96,498	97,651
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,669	3,012
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	69,005	94,415
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member]
Disclosure of credit risk exposure [line items]
Loans and advances	232,389	317,229
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Public sector [member]
Disclosure of credit risk exposure [line items]
Loans and advances	30
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Commerce and industry [member]
Disclosure of credit risk exposure [line items]
Loans and advances	222,395	306,315
Requiring caution [member] | 7 [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	9,964	10,914
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member]
Disclosure of credit risk exposure [line items]
Loans and advances	167,718	720,813
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	98,696	566,274
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Manufacturing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	22,681	34,956
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of credit risk exposure [line items]
Loans and advances		588
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Construction [member]
Disclosure of credit risk exposure [line items]
Loans and advances	459	16,279
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of credit risk exposure [line items]
Loans and advances	148	18,869
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Wholesale and retail [member]
Disclosure of credit risk exposure [line items]
Loans and advances	1,421	36,234
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Finance and insurance [member]
Disclosure of credit risk exposure [line items]
Loans and advances	5	15,702
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	7	104,524
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Services [member]
Disclosure of credit risk exposure [line items]
Loans and advances	115	45,520
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Municipalities [member]
Disclosure of credit risk exposure [line items]
Loans and advances		16,721
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Lease financing [member]
Disclosure of credit risk exposure [line items]
Loans and advances		87,533
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	73,180	183,247
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Domestic [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	680	6,101
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member]
Disclosure of credit risk exposure [line items]
Loans and advances	69,022	154,539
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Public sector [member]
Disclosure of credit risk exposure [line items]
Loans and advances	941	211
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Financial institutions [member]
Disclosure of credit risk exposure [line items]
Loans and advances	7,891	24,481
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Commerce and industry [member]
Disclosure of credit risk exposure [line items]
Loans and advances	53,793	106,831
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Lease financing [member]
Disclosure of credit risk exposure [line items]
Loans and advances	3,964	12,763
Requiring caution [member] | Other [member] | Gross carrying amount [member] | Neither past due nor impaired [member] | Foreign [member] | Others [member]
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 2,433	¥ 10,253

XML

Financial Risk Management - Loans and Advances Neither Past Due nor Impaired (Parenthetical) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Gross carrying amount [member]
Disclosure of credit risk exposure [line items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Neither past due nor impaired [member]
Disclosure of credit risk exposure [line items]
Loans and advances	84,856,335	94,825,134
Gross carrying amount [member] | Other [member] | Neither past due nor impaired [member] | Normal [member]
Disclosure of credit risk exposure [line items]
Loans and advances	25,877,492	33,565,932
Gross carrying amount [member] | Other [member] | Neither past due nor impaired [member] | Requiring caution [member]
Disclosure of credit risk exposure [line items]
Loans and advances	167,718	720,813
Gross carrying amount [member] | Domestic [member]
Disclosure of credit risk exposure [line items]
Loans and advances	57,830,627	68,020,094
Gross carrying amount [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	16,363,489	19,096,755
Gross carrying amount [member] | Domestic [member] | Neither past due nor impaired [member]
Disclosure of credit risk exposure [line items]
Loans and advances	57,068,183	66,936,623
Gross carrying amount [member] | Domestic [member] | Neither past due nor impaired [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	15,975,508	18,657,173
Gross carrying amount [member] | Domestic [member] | Other [member] | Neither past due nor impaired [member] | Normal [member]
Disclosure of credit risk exposure [line items]
Loans and advances	19,198,974	27,500,420
Gross carrying amount [member] | Domestic [member] | Other [member] | Neither past due nor impaired [member] | Requiring caution [member]
Disclosure of credit risk exposure [line items]
Loans and advances	98,696	566,274
Gross carrying amount [member] | Domestic [member] | Other [member] | Neither past due nor impaired [member] | Consumer [member] | Normal [member]
Disclosure of credit risk exposure [line items]
Loans and advances	15,900,425	18,470,768
Gross carrying amount [member] | Domestic [member] | Other [member] | Neither past due nor impaired [member] | Consumer [member] | Requiring caution [member]
Disclosure of credit risk exposure [line items]
Loans and advances	73,180	183,247
Gross carrying amount [member] | Housing loan [member] | Domestic [member] | Consumer [member]
Disclosure of credit risk exposure [line items]
Loans and advances	11,482,678	13,766,771
Gross carrying amount [member] | Housing loan [member] | Domestic [member] | Other [member] | Neither past due nor impaired [member] | Consumer [member] | Normal [member]
Disclosure of credit risk exposure [line items]
Loans and advances	11,302,350	13,519,680
Gross carrying amount [member] | Housing loan [member] | Domestic [member] | Other [member] | Neither past due nor impaired [member] | Consumer [member] | Requiring caution [member]
Disclosure of credit risk exposure [line items]
Loans and advances	¥ 51,189	¥ 70,963

XML

Financial Risk Management - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Trading assets and investment securities based on the external rating system	¥ 247,637,992	¥ 248,268,034
VaR holding period	1 day
VaR confidence interval percentage	99.00%
BPV movement in interest rates	0.01%
VaR observation period	4 years
Threshold percentage applied by FSA	15.00%
Ratio of decline in the economic value of equity to Tier 1 capital	4.20%
Total capital requirement on full implementation	8.00%
Maximum [member]
Disclosure of detailed information about financial instruments [line items]
Permitted level of percentage for reducing strategic equity investments	100.00%
Before adoption of Basel III [Member]
Disclosure of detailed information about financial instruments [line items]
Minimum Common Equity Tier 1 capital requirement	2.00%
Minimum Tier 1 capital requirement	4.00%
Basel III [Member]
Disclosure of detailed information about financial instruments [line items]
Minimum Common Equity Tier 1 capital requirement	4.50%
Total minimum Common Equity Tier 1 capital ratio on full implementation	7.00%
Minimum Tier 1 capital requirement	6.00%
Minimum Tier 1 capital requirement on full implementation	8.50%
G-SIB surcharge on full implementation	1.00%
G-SIB surcharge phase-in arrangements	0.75%
Minimum Common Equity Tier 1 capital requirement phase-in arrangements	4.50%
Basel III [Member] | Maximum [member]
Disclosure of detailed information about financial instruments [line items]
Capital conservation buffer on full implementation	2.50%
Total capital requirement on full implementation	10.50%
Countercyclical buffer	2.50%
G-SIB surcharge on full implementation	2.50%
Basel III [Member] | Minimum [member]
Disclosure of detailed information about financial instruments [line items]
Capital conservation buffer on full implementation	0.625%
Total capital requirement on full implementation	8.00%
Countercyclical buffer	0.00%
G-SIB surcharge on full implementation	1.00%
Sumitomo mitsui banking corporation [member]
Disclosure of detailed information about financial instruments [line items]
Ratio of decline in the economic value of equity to Tier 1 capital	4.80%
Outlier ratio for decrease in economic value of bank		1.50%
Sumitomo mitsui banking corporation [member] | Maximum [member]
Disclosure of detailed information about financial instruments [line items]
Demand deposits, maturity period	5 years
Sumitomo mitsui banking corporation [member] | Daily average [Member]
Disclosure of detailed information about financial instruments [line items]
Demand deposits, maturity period	2 years 6 months
Sumitomo mitsui banking corporation [member] | Minimum [member]
Disclosure of detailed information about financial instruments [line items]
Economic value threshold of bank decline of total capital where the bank would fall into the category of "outlier bank"		20.00%
VaR for Non-trading Activity - Strategic Equity Investment [Member]
Disclosure of detailed information about financial instruments [line items]
VaR holding period	1 year
VaR observation period	10 years
Impaired [Member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	¥ 509,482	¥ 696,237
External credit grades [member]
Disclosure of detailed information about financial instruments [line items]
Trading assets and investment securities based on the external rating system	19,025,234	18,220,074
Available-for-sale financial assets [member]
Disclosure of detailed information about financial instruments [line items]
Trading assets and investment securities based on the external rating system	14,282,706	12,123,770
Available-for-sale financial assets [member] | External credit grades [member]
Disclosure of detailed information about financial instruments [line items]
Trading assets and investment securities based on the external rating system	14,282,706	12,123,770
Available-for-sale financial assets [member] | External credit grades [member] | Impaired [Member]
Disclosure of detailed information about financial instruments [line items]
Trading assets and investment securities based on the external rating system	154	526
Loans and advances past due but not impaired [Member]
Disclosure of detailed information about financial instruments [line items]
Loans and advances	¥ 163,902	¥ 167,159

XML

Financial Risk Management - Loans and Advances Past Due but not Impaired by Geography and Industry (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Gross carrying amount [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Domestic [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	57,830,627	68,020,094
Gross carrying amount [member] | Domestic [member] | Manufacturing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	7,961,620	9,578,147
Gross carrying amount [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	145,957	174,021
Gross carrying amount [member] | Domestic [member] | Construction [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	947,765	1,151,989
Gross carrying amount [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	5,424,054	5,365,225
Gross carrying amount [member] | Domestic [member] | Wholesale and retail [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	5,288,767	5,721,005
Gross carrying amount [member] | Domestic [member] | Finance and insurance [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	2,777,862	2,844,546
Gross carrying amount [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	9,017,664	10,101,846
Gross carrying amount [member] | Domestic [member] | Services [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	4,255,228	4,885,247
Gross carrying amount [member] | Domestic [member] | Lease financing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	14,629	2,706,641
Gross carrying amount [member] | Domestic [member] | Consumer [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	16,363,489	19,096,755
Gross carrying amount [member] | Domestic [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	4,633,306	5,178,461
Gross carrying amount [member] | Foreign [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	28,029,300	28,170,632
Gross carrying amount [member] | Foreign [member] | Financial institutions [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	4,496,646	4,588,001
Gross carrying amount [member] | Foreign [member] | Commerce and industry [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	21,023,885	21,041,905
Gross carrying amount [member] | Foreign [member] | Lease financing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	357,660	404,658
Gross carrying amount [member] | Foreign [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	1,779,101	1,836,322
Gross carrying amount [member] | Past due but not impaired [Member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	124,724	136,904
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	75,267	93,214
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Manufacturing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	526	858
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		8
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Construction [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	62	568
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	45	614
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Wholesale and retail [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	2,579	7,016
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Finance and insurance [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	141	114
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	117	1,052
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Services [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	245	1,939
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Lease financing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		620
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Consumer [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	68,696	76,277
Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	2,856	4,148
Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	49,457	43,690
Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Financial institutions [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	13,647	4,569
Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Commerce and industry [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	31,081	35,385
Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	4,729	3,736
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	90,114	76,196
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	60,956	54,735
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Manufacturing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	476	701
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		8
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Construction [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	1	423
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	45	612
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Wholesale and retail [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	2,240	5,436
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Finance and insurance [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	65	59
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	73	832
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Services [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	245	1,421
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Lease financing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		523
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Consumer [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	55,020	41,103
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	2,791	3,617
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	29,158	21,461
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Financial institutions [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	11,934	2,313
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Commerce and industry [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	14,822	17,326
Not later than one month [member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	2,402	1,822
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	15,386	24,647
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	10,840	14,702
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Manufacturing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	50	153
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Construction [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	10	118
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		2
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Wholesale and retail [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	318	1,345
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Finance and insurance [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	76	55
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	44	164
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Services [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		306
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Lease financing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		51
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Consumer [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	10,298	12,508
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	44
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	4,546	9,945
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Financial institutions [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	165	234
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Commerce and industry [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	2,705	8,418
Past due 1-2 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	1,676	1,293
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	19,224	36,061
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	3,471	23,777
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Manufacturing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		4
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Construction [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	51	27
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Wholesale and retail [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	21	235
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		56
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Services [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		212
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Lease financing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		46
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Consumer [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	3,378	22,666
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Domestic [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	21	531
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	15,753	12,284
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Financial institutions [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	1,548	2,022
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Commerce and industry [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	13,554	9,641
Past due 2-3 months [Member] | Gross carrying amount [member] | Past due but not impaired [Member] | Foreign [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	¥ 651	¥ 621

XML

Financial Risk Management - Impaired Loans and Advances by Geography and Industry (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Impaired [Member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	509,482	696,237
Gross carrying amount [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Domestic [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	57,830,627	68,020,094
Gross carrying amount [member] | Domestic [member] | Manufacturing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	7,961,620	9,578,147
Gross carrying amount [member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	145,957	174,021
Gross carrying amount [member] | Domestic [member] | Construction [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	947,765	1,151,989
Gross carrying amount [member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	5,424,054	5,365,225
Gross carrying amount [member] | Domestic [member] | Wholesale and retail [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	5,288,767	5,721,005
Gross carrying amount [member] | Domestic [member] | Finance and insurance [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	2,777,862	2,844,546
Gross carrying amount [member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	9,017,664	10,101,846
Gross carrying amount [member] | Domestic [member] | Services [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	4,255,228	4,885,247
Gross carrying amount [member] | Domestic [member] | Lease financing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	14,629	2,706,641
Gross carrying amount [member] | Domestic [member] | Consumer [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	16,363,489	19,096,755
Gross carrying amount [member] | Domestic [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	4,633,306	5,178,461
Gross carrying amount [member] | Foreign [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	28,029,300	28,170,632
Gross carrying amount [member] | Foreign [member] | Public sector [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	372,008	299,746
Gross carrying amount [member] | Foreign [member] | Financial institutions [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	4,496,646	4,588,001
Gross carrying amount [member] | Foreign [member] | Commerce and industry [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	21,023,885	21,041,905
Gross carrying amount [member] | Foreign [member] | Lease financing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	357,660	404,658
Gross carrying amount [member] | Foreign [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	1,779,101	1,836,322
Gross carrying amount [member] | Impaired [Member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	878,868	1,228,688
Gross carrying amount [member] | Impaired [Member] | Domestic [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	687,177	990,257
Gross carrying amount [member] | Impaired [Member] | Domestic [member] | Manufacturing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	76,253	127,581
Gross carrying amount [member] | Impaired [Member] | Domestic [member] | Agriculture, forestry, fisheries and mining [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	6,386	2,251
Gross carrying amount [member] | Impaired [Member] | Domestic [member] | Construction [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	13,410	28,082
Gross carrying amount [member] | Impaired [Member] | Domestic [member] | Transportation, communications and public enterprises [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	20,899	32,880
Gross carrying amount [member] | Impaired [Member] | Domestic [member] | Wholesale and retail [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	98,419	122,719
Gross carrying amount [member] | Impaired [Member] | Domestic [member] | Finance and insurance [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	3,022	4,135
Gross carrying amount [member] | Impaired [Member] | Domestic [member] | Real estate and goods rental and leasing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	41,939	147,516
Gross carrying amount [member] | Impaired [Member] | Domestic [member] | Services [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	71,903	112,573
Gross carrying amount [member] | Impaired [Member] | Domestic [member] | Lease financing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		7,969
Gross carrying amount [member] | Impaired [Member] | Domestic [member] | Consumer [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	319,285	363,305
Gross carrying amount [member] | Impaired [Member] | Domestic [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	35,661	41,246
Gross carrying amount [member] | Impaired [Member] | Foreign [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	191,691	238,431
Gross carrying amount [member] | Impaired [Member] | Foreign [member] | Public sector [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	21	25
Gross carrying amount [member] | Impaired [Member] | Foreign [member] | Financial institutions [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	1,829	2,371
Gross carrying amount [member] | Impaired [Member] | Foreign [member] | Commerce and industry [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	167,458	199,983
Gross carrying amount [member] | Impaired [Member] | Foreign [member] | Lease financing [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances		12,162
Gross carrying amount [member] | Impaired [Member] | Foreign [member] | Others [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	22,383	23,890
Less: Allowance for loan losses [member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	(491,676)	(680,456)
Less: Allowance for loan losses [member] | Impaired [Member]
Disclosure of financial assets that are either past due or impaired [line items]
Loans and advances	¥ (369,386)	¥ (532,451)

XML

Financial Risk Management - Loans and Advances Whose Terms Have Been Renegotiated (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of renegociated loans and advances [Line Items]
Loans and advances	¥ 85,129,070	¥ 95,273,845
Gross carrying amount [member]
Disclosure of renegociated loans and advances [Line Items]
Loans and advances	85,859,927	96,190,726
Gross carrying amount [member] | Neither past due nor impaired [member]
Disclosure of renegociated loans and advances [Line Items]
Loans and advances	84,856,335	94,825,134
Gross carrying amount [member] | Neither past due nor impaired [member] | Renegotiated loans and advances without providing any financial concessions [Member]
Disclosure of renegociated loans and advances [Line Items]
Loans and advances	¥ 292,466	¥ 463,092

XML

Financial Risk Management - Trading Assets and Investment Securities Based on External Rating System (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	¥ 247,637,992	¥ 248,268,034
AAA [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	5,056,373	4,908,904
AA- to AA+ [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	12,829,730	12,370,743
A- to A+ [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	468,985	369,291
Lower than A- [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	589,084	521,477
Unrated [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	81,062	49,659
External credit grades [member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	19,025,234	18,220,074
Trading assets [member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	2,841,148	3,339,928
Trading assets [member] | AAA [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	190,650	242,240
Trading assets [member] | AA- to AA+ [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	2,399,644	2,803,467
Trading assets [member] | A- to A+ [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	192,943	236,348
Trading assets [member] | Lower than A- [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	56,458	39,380
Trading assets [member] | Unrated [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	1,453	18,493
Trading assets [member] | External credit grades [member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	2,841,148	3,339,928
Financial assets at fair value through profit or loss [member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	1,528,921	1,582,957
Financial assets at fair value through profit or loss [member] | AA- to AA+ [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	1,518,748	1,570,904
Financial assets at fair value through profit or loss [member] | Unrated [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	10,173	12,053
Financial assets at fair value through profit or loss [member] | External credit grades [member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	1,528,921	1,582,957
Held-to-maturity investments [member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	372,459	1,173,419
Held-to-maturity investments [member] | AA- to AA+ [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	372,459	1,173,419
Held-to-maturity investments [member] | External credit grades [member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	372,459	1,173,419
Available-for-sale financial assets [member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	14,282,706	12,123,770
Available-for-sale financial assets [member] | AAA [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	4,865,723	4,666,664
Available-for-sale financial assets [member] | AA- to AA+ [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	8,538,879	6,822,953
Available-for-sale financial assets [member] | A- to A+ [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	276,042	132,943
Available-for-sale financial assets [member] | Lower than A- [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	532,626	482,097
Available-for-sale financial assets [member] | Unrated [Member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	69,436	19,113
Available-for-sale financial assets [member] | External credit grades [member]
Disclosure of external credit grades [line items]
Trading assets and investment securities based on the external rating system	¥ 14,282,706	¥ 12,123,770

XML

Financial Risk Management - VaR by Risk Category (Detail) - JPY (¥) ¥ in Billions	Mar. 31, 2018	Mar. 31, 2017
VaR for Trading Activity [Member] | Interest rate risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	¥ 11.3	¥ 16.7
VaR for Trading Activity [Member] | Interest rate risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	30.9	27.9
VaR for Trading Activity [Member] | Interest rate risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	6.7	10.3
VaR for Trading Activity [Member] | Interest rate risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	12.3	16.1
VaR for Trading Activity [Member] | Currency risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	4.3	1.6
VaR for Trading Activity [Member] | Currency risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	5.0	3.9
VaR for Trading Activity [Member] | Currency risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1.5	1.2
VaR for Trading Activity [Member] | Currency risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	3.0	1.9
VaR for Trading Activity [Member] | Equities and commodities risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	4.3	4.2
VaR for Trading Activity [Member] | Equities and commodities risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	11.4	5.8
VaR for Trading Activity [Member] | Equities and commodities risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	4.3	1.1
VaR for Trading Activity [Member] | Equities and commodities risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	6.3	3.1
VaR for Trading Activity [Member] | Other risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	3.2	1.7
VaR for Trading Activity [Member] | Other risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	3.6	2.5
VaR for Trading Activity [Member] | Other risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1.4	1.2
VaR for Trading Activity [Member] | Other risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	2.3	1.7
VaR for Trading Activity [Member] | Market risk [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	21.5	23.6
VaR for Trading Activity [Member] | Market risk [member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	39.5	34.0
VaR for Trading Activity [Member] | Market risk [member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	14.5	13.1
VaR for Trading Activity [Member] | Market risk [member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	22.1	21.4
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Interest rate risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	2.6
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Interest rate risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	3.2	19.2
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Interest rate risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1.3	1.5
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Interest rate risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	2.1	8.1
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Currency risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	3.6
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Currency risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	4.3	3.1
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Currency risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1.2	1.0
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Currency risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	2.4	1.7
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Equities and commodities risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Equities and commodities risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	3.9	5.3
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Equities and commodities risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.3
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Equities and commodities risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1.5	1.8
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Other risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	3.2
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Other risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	3.6	2.5
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Other risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1.4	1.2
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Other risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	2.3	1.7
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Market risk [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	8.1
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Market risk [member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	11.2	22.6
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Market risk [member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	3.5	3.9
VaR for Trading Activity [Member] | Sumitomo mitsui banking corporation [member] | Market risk [member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	7.2	11.8
VaR for Non-trading Activity - Banking [Member] | Interest rate risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	33.7	30.6
VaR for Non-trading Activity - Banking [Member] | Interest rate risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	34.0	37.3
VaR for Non-trading Activity - Banking [Member] | Interest rate risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	27.8	26.4
VaR for Non-trading Activity - Banking [Member] | Interest rate risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	30.2	30.0
VaR for Non-trading Activity - Banking [Member] | Currency risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Currency risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Currency risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Currency risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Equities and commodities risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	28.1	34.3
VaR for Non-trading Activity - Banking [Member] | Equities and commodities risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	39.9	38.9
VaR for Non-trading Activity - Banking [Member] | Equities and commodities risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	21.6	24.8
VaR for Non-trading Activity - Banking [Member] | Equities and commodities risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	30.5	32.2
VaR for Non-trading Activity - Banking [Member] | Other risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Other risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Other risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Other risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Market risk [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	48.2	47.4
VaR for Non-trading Activity - Banking [Member] | Market risk [member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	57.0	53.2
VaR for Non-trading Activity - Banking [Member] | Market risk [member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	40.8	40.2
VaR for Non-trading Activity - Banking [Member] | Market risk [member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	47.2	46.1
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Interest rate risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	31.5	34.2
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Interest rate risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	25.2	23.2
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Interest rate risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	27.4	27.0
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Currency risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Currency risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Currency risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Equities and commodities risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	39.9	38.9
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Equities and commodities risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	21.5	24.7
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Equities and commodities risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	30.4	32.1
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Other risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Other risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Other risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	0.0	0.0
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Market risk [member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	54.5	49.9
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Market risk [member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	38.0	37.8
VaR for Non-trading Activity - Banking [Member] | Sumitomo mitsui banking corporation [member] | Market risk [member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	44.4	43.0
VaR for Non-trading Activity - Strategic Equity Investment [Member] | Equity risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1,603.6	1,544.5
VaR for Non-trading Activity - Strategic Equity Investment [Member] | Equity risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1,855.9	1,603.9
VaR for Non-trading Activity - Strategic Equity Investment [Member] | Equity risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1,488.1	1,272.8
VaR for Non-trading Activity - Strategic Equity Investment [Member] | Equity risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1,664.2	1,460.5
VaR for Non-trading Activity - Strategic Equity Investment [Member] | Sumitomo mitsui banking corporation [member] | Equity risk [Member] | Maximum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1,622.9	1,421.0
VaR for Non-trading Activity - Strategic Equity Investment [Member] | Sumitomo mitsui banking corporation [member] | Equity risk [Member] | Minimum [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	1,309.8	1,146.2
VaR for Non-trading Activity - Strategic Equity Investment [Member] | Sumitomo mitsui banking corporation [member] | Equity risk [Member] | Daily average [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Value at risk amount	¥ 1,456.6	¥ 1,303.7

XML

Financial Risk Management - Decline in Economic Value Based on Interest Rate Risk (Detail) - Sumitomo mitsui banking corporation [member] ¥ in Billions	Mar. 31, 2017 JPY (¥)
Disclosure of nature and extent of risks arising from financial instruments [line items]
Percentage of total capital	1.50%
Interest rate risk [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Decline in economic value based on the outlier framework	¥ 150.5
Percentage of total capital	1.50%
Interest rate risk [Member] | Japanese Yen [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Decline in economic value based on the outlier framework	¥ 77.2
Interest rate risk [Member] | U.S. Dollar [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Decline in economic value based on the outlier framework	50.8
Interest rate risk [Member] | Euro [member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Decline in economic value based on the outlier framework	¥ 8.8

XML

Financial Risk Management - Maturity Analysis of Contractual Undiscounted Cash Flows for Financial Liabilities (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	¥ 240,271,389	¥ 244,769,857
Contractual undiscounted cash flows, Derivative financial instruments	3,498,016	3,889,694
On demand [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	152,600,397	151,154,975
Contractual undiscounted cash flows, Derivative financial instruments	3,498,016	3,889,694
Not later than three months [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	52,024,519	52,827,560
Later than three months and not later than one year [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	20,478,127	24,844,278
Later than one year and not later than three years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	5,612,525	5,767,662
Later than three years and not later than five years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	3,541,098	4,167,116
Later than five years [member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	6,014,723	6,008,266
Deposits from customers [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	128,447,598	130,274,925
Deposits from customers [Member] | On demand [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	79,239,076	76,476,402
Deposits from customers [Member] | Not later than three months [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	31,907,636	32,358,045
Deposits from customers [Member] | Later than three months and not later than one year [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	12,755,005	16,420,032
Deposits from customers [Member] | Later than one year and not later than three years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	3,189,790	3,303,700
Deposits from customers [Member] | Later than three years and not later than five years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	701,374	961,405
Deposits from customers [Member] | Later than five years [member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	654,717	755,341
Call money and bills sold [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	1,190,929	2,088,020
Call money and bills sold [Member] | On demand [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	47,942	30,563
Call money and bills sold [Member] | Not later than three months [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	1,141,653	2,052,776
Call money and bills sold [Member] | Later than three months and not later than one year [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	1,334	362
Call money and bills sold [Member] | Later than one year and not later than three years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments		4,319
Repurchase agreements and cash collateral on securities lent [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	12,022,593	9,424,506
Repurchase agreements and cash collateral on securities lent [Member] | On demand [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	20,833	1,902
Repurchase agreements and cash collateral on securities lent [Member] | Not later than three months [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	12,001,760	9,414,026
Repurchase agreements and cash collateral on securities lent [Member] | Later than three months and not later than one year [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments		8,578
Financial liabilities at fair value through profit or loss that meet definition of held for trading, category [member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	2,143,899	2,071,584
Financial liabilities at fair value through profit or loss that meet definition of held for trading, category [member] | On demand [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	2,143,899	2,071,584
Borrowings [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	10,642,117	12,138,364
Borrowings [Member] | On demand [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	61,205	69,370
Borrowings [Member] | Not later than three months [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	435,708	926,538
Borrowings [Member] | Later than three months and not later than one year [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	6,765,228	6,960,401
Borrowings [Member] | Later than one year and not later than three years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	601,326	868,247
Borrowings [Member] | Later than three years and not later than five years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	652,481	949,406
Borrowings [Member] | Later than five years [member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	2,126,169	2,364,402
Debt securities in issue [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	10,589,521	11,176,412
Debt securities in issue [Member] | Not later than three months [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	2,407,601	3,205,952
Debt securities in issue [Member] | Later than three months and not later than one year [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	950,334	1,422,649
Debt securities in issue [Member] | Later than one year and not later than three years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	1,818,271	1,527,880
Debt securities in issue [Member] | Later than three years and not later than five years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	2,185,578	2,213,439
Debt securities in issue [Member] | Later than five years [member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	3,227,737	2,806,492
Lease payable [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	10,317	112,988
Lease payable [Member] | Not later than three months [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	683	7,042
Lease payable [Member] | Later than three months and not later than one year [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	1,884	20,859
Lease payable [Member] | Later than one year and not later than three years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	2,999	48,550
Lease payable [Member] | Later than three years and not later than five years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	1,665	30,408
Lease payable [Member] | Later than five years [member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	3,086	6,129
Others-liabilities [member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	6,691,042	7,201,137
Others-liabilities [member] | On demand [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	2,554,069	2,223,233
Others-liabilities [member] | Not later than three months [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	4,129,478	4,863,181
Others-liabilities [member] | Later than three months and not later than one year [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	4,342	11,397
Others-liabilities [member] | Later than one year and not later than three years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	139	14,966
Others-liabilities [member] | Later than three years and not later than five years [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments		12,458
Others-liabilities [member] | Later than five years [member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	3,014	75,902
Loan commitments [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	60,107,128	62,357,210
Loan commitments [Member] | On demand [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	60,107,128	62,357,210
Financial guarantee contracts [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	8,426,245	7,924,711
Financial guarantee contracts [Member] | On demand [Member]
Non-derivative financial instruments:
Contractual undiscounted cash flows, Non-derivative financial instruments	¥ 8,426,245	¥ 7,924,711

XML

Financial Risk Management - Balance of Loans and Advances and Deposits (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure Of Loans and advances, and Deposits [abstract]
Net loans and advances	¥ 85,129,070	¥ 95,273,845
Deposits	¥ 128,461,527	¥ 130,295,290

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Financial Risk Management - Deposits by Domestic and Foreign Offices (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of deposits from customers [Line Items]
Non-interest-bearing demand deposits	¥ 21,611,514	¥ 19,853,552
Interest-bearing demand deposits	52,154,265	51,281,995
Deposits at notice	10,355,664	10,330,269
Time deposits	25,655,132	29,525,875
Negotiable certificates of deposit	11,220,285	11,880,938
Others	7,464,667	7,422,661
Deposits	128,461,527	130,295,290
Domestic [member]
Disclosure of deposits from customers [Line Items]
Non-interest-bearing demand deposits	20,370,064	18,737,973
Interest-bearing demand deposits	49,580,166	48,879,089
Deposits at notice	855,978	1,066,201
Time deposits	18,185,591	22,269,409
Negotiable certificates of deposit	5,408,021	6,021,236
Others	7,338,619	7,290,869
Deposits	101,738,439	104,264,777
Foreign [member]
Disclosure of deposits from customers [Line Items]
Non-interest-bearing demand deposits	1,241,450	1,115,579
Interest-bearing demand deposits	2,574,099	2,402,906
Deposits at notice	9,499,686	9,264,068
Time deposits	7,469,541	7,256,466
Negotiable certificates of deposit	5,812,264	5,859,702
Others	126,048	131,792
Deposits	¥ 26,723,088	¥ 26,030,513

XML

Financial Risk Management - Regulatory Capital Requirements (Detail) - JPY (¥) ¥ in Billions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of objectives, policies and processes for managing capital [abstract]
Total risk-weighted capital ratio	19.36%	16.93%
Tier 1 risk-weighted capital ratio	16.69%	14.07%
Common Equity Tier 1 risk-weighted capital ratio	14.50%	12.17%
Total capital (Common Equity Tier 1 capital + Additional Tier 1 capital + Tier 2 capital)	¥ 12,304.1	¥ 11,973.7
Tier 1 capital (Common Equity Tier 1 capital + Additional Tier 1 capital)	10,610.2	9,946.2
Common Equity Tier 1 capital	9,217.4	8,608.5
Risk-weighted assets	63,540.3	70,683.5
The amount of minimum total capital requirements	¥ 5,083.2	¥ 5,654.7

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Financial Risk Management - Regulatory Capital Requirements (Parenthetical) (Detail)	12 Months Ended
	Mar. 31, 2018
Disclosure of objectives, policies and processes for managing capital [abstract]
Total capital requirement	8.00%

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Related-Party Transactions - Transactions with Associates, Joint Ventures and Other Entities (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Assets:
Loans and advances	¥ 85,129,070	¥ 95,273,845
Others	4,043,908	4,321,724
Liabilities:
Deposits	128,461,527	130,295,290
Others	6,882,740	7,461,101
Income statement:
Expense (interest expense and others)	2,605,886	2,283,894	¥ 2,245,226
Associates, joint ventures, and other entities [Member]
Assets:
Loans and advances	222,890	219,680
Others	39,254	13,807
Liabilities:
Deposits	267,289	143,801
Others	29,049	46,486
Income statement:
Income (interest income, fee and commission income, and others)	15,665	17,433	34,135
Expense (interest expense and others)	¥ 15,601	¥ 17,411	¥ 19,169

XML

Related-Party Transactions - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of transactions between related parties [line items]
Compensation of key management personnel, post-employment benefits
Compensation of key management personnel, other long-term benefits
Compensation of key management personnel, termination benefits
Associates [member]
Disclosure of transactions between related parties [line items]
Financial guarantees provided by related party	99,673	63,597
Associates and joint ventures [Member]
Disclosure of transactions between related parties [line items]
Loan commitments to associates and joint ventures	¥ 125,015	¥ 173,492

XML

Related-Party Transactions - Transactions with Key Management Personnel and Their Close Family Members (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Assets:
Loans and advances	¥ 85,129,070	¥ 95,273,845
Liabilities:
Deposits	128,461,527	130,295,290
Others	6,882,740	7,461,101
Key management personnel of entity or parent [member]
Assets:
Loans and advances	2	29
Liabilities:
Deposits	1,612	2,878
Others	¥ 94	¥ 110

XML

Related-Party Transactions - Compensation Expenses of Key Management Personnel (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of transactions between related parties [abstract]
Short-term employee benefits	¥ 1,135	¥ 1,157	¥ 1,161
Share-based compensation	¥ 295	¥ 204	¥ 214

XML

Principal Subsidiaries - Principal Domestic Subsidiaries (Detail) - Domestic [member]	12 Months Ended
	Mar. 31, 2018
Sumitomo mitsui banking corporation [member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	100.00%
Proportion of Voting Rights	100.00%
Main Business	Commercial banking
SMBC Trust Bank Ltd. [member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	100.00%
Proportion of Voting Rights	100.00%
Main Business	Trust banking
SMBC Guarantee Co., Ltd. [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	100.00%
Proportion of Voting Rights	100.00%
Main Business	Credit guarantee
Sumitomo mitsui finance and leasing company, limited [member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	60.00%
Proportion of Voting Rights	60.00%
Main Business	Leasing
SMFL Capital Company, Limited [member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	100.00%
Proportion of Voting Rights	100.00%
Main Business	Leasing
SMBC Nikko Securities Inc. [member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	100.00%
Proportion of Voting Rights	100.00%
Main Business	Securities
Sumitomo Mitsui Card Company, Limited [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	65.90%
Proportion of Voting Rights	65.90%
Main Business	Credit card
Cedyna Financial Corporation [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	100.00%
Proportion of Voting Rights	100.00%
Main Business	Credit card and consumer credit
SMBC Consumer Finance Co., Ltd [member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	100.00%
Proportion of Voting Rights	100.00%
Main Business	Consumer lending
SMBC Mobit Co., Ltd. [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	100.00%
Proportion of Voting Rights	100.00%
Main Business	Consumer lending
SMM Auto Finance, Inc. [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	51.00%
Proportion of Voting Rights	51.00%
Main Business	Automobile sales financing
SMBC Finance Service Co., Ltd. [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	100.00%
Proportion of Voting Rights	100.00%
Main Business	Collecting agent and factoring
The Japan Research Institute, Limited [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	100.00%
Proportion of Voting Rights	100.00%
Main Business	System development, data processing, management consulting and economic research
Sumitomo mitsui asset management company, limited [member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	60.00%
Proportion of Voting Rights	60.00%
Main Business	Investment advisory and investment trust management
SAKURA KCS Corporation [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	47.40%
Proportion of Voting Rights	47.40%
Main Business	System engineering and data processing
NCore Co., Ltd [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	51.00%
Proportion of Voting Rights	51.00%
Main Business	Data processing service and consulting
SMBC Venture Capital Co., Ltd. [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	40.00%
Proportion of Voting Rights	40.00%
Main Business	Venture capital
SMBC Consulting Co., Ltd. [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	100.00%
Proportion of Voting Rights	100.00%
Main Business	Management consulting and information services
Japan Pension Navigator Co., Ltd. [Member]
Disclosure of subsidiaries [Line Items]
Proportion of Ownership Interest	69.70%
Proportion of Voting Rights	69.70%
Main Business	Operational management of defined contribution pension plans

XML

Principal Subsidiaries - Principal Foreign Subsidiaries (Detail) - Foreign [member]	12 Months Ended
	Mar. 31, 2018
Sumitomo Mitsui Banking Corporation Europe Limited [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	U.K.
Proportion of Ownership Interest	100.00%
Proposition of Voting Rights	100.00%
Main Business	Commercial banking
Sumitomo Mitsui Banking Corporation (China) Limited [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	China
Proportion of Ownership Interest	100.00%
Proposition of Voting Rights	100.00%
Main Business	Commercial banking
Manufacturers Bank [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	U.S.A.
Proportion of Ownership Interest	100.00%
Proposition of Voting Rights	100.00%
Main Business	Commercial banking
Banco Sumitomo Mitsui Brasileiro S.A. [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	Brazil
Proportion of Ownership Interest	100.00%
Proposition of Voting Rights	100.00%
Main Business	Commercial banking
JSC Sumitomo Mitsui Rus Bank [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	Russia
Proportion of Ownership Interest	100.00%
Proposition of Voting Rights	100.00%
Main Business	Commercial banking
PT Bank Sumitomo Mitsui Indonesia [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	Indonesia
Proportion of Ownership Interest	98.40%
Proposition of Voting Rights	98.40%
Main Business	Commercial banking
Sumitomo Mitsui Banking Corporation Malaysia Berhad [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	Malaysia
Proportion of Ownership Interest	100.00%
Proposition of Voting Rights	100.00%
Main Business	Commercial banking
SMBC Leasing and Finance, Inc. [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	U.S.A.
Proportion of Ownership Interest	100.00%
Proposition of Voting Rights	100.00%
Main Business	Leasing
SMBC Aviation Capital Limited [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	Ireland
Proportion of Ownership Interest	90.00%
Proposition of Voting Rights	90.00%
Main Business	Leasing
SMBC Nikko Securities America, Inc. [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	U.S.A.
Proportion of Ownership Interest	100.00%
Proposition of Voting Rights	100.00%
Main Business	Securities
SMBC Nikko Capital Markets Limited [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	U.K.
Proportion of Ownership Interest	100.00%
Proposition of Voting Rights	100.00%
Main Business	Securities
SMBC Capital Markets, Inc. [Member]
Disclosure of subsidiaries [Line Items]
Country of Incorporation	U.S.A.
Proportion of Ownership Interest	100.00%
Proposition of Voting Rights	100.00%
Main Business	Derivatives

XML

Structured Entities - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disclosure of information about structured entities [Line Items]
Assets	¥ 192,175,566	¥ 191,150,981
Unconsolidated structured entities [Member]
Disclosure of information about structured entities [Line Items]
Income from sponsored unconsolidated structured entities	23,901	16,085
Assets transferred to sponsored unconsolidated structured entities	1,640,396	1,479,572
Asset backed commercial paper conduits [Member]
Disclosure of information about structured entities [Line Items]
Assets	807,780	1,017,221
Notional amounts of liquidity and credit enhancement facilities	¥ 1,129,257	¥ 1,345,987

XML

Structured Entities - Interests in Unconsolidated Structured Entities and Maximum Exposure to Loss (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Interests in unconsolidated structured entities recognized in:
Trading assets	¥ 3,169,123	¥ 3,776,671
Investment securities	20,495,075	19,073,937
Loans and advances	85,129,070	95,273,845
Assets held for sale	5,651,950	134,307
Securitisation [Member]
Interests in unconsolidated structured entities recognized in:
Trading assets	10,157
Investment securities	64,113	6,716
Loans and advances	1,921,725	1,919,703
Assets held for sale	32,755
Total	2,028,750	1,926,419
Maximum exposure to loss from interests in unconsolidated structured entities	2,925,137	2,495,428
Investment funds [Member]
Interests in unconsolidated structured entities recognized in:
Trading assets	68,639	87,639
Investment securities	1,055,971	1,162,195
Total	1,124,610	1,249,834
Maximum exposure to loss from interests in unconsolidated structured entities	1,126,551	1,251,497
Structured finance [member]
Interests in unconsolidated structured entities recognized in:
Investment securities	51,018	69,705
Loans and advances	5,202,253	5,092,321
Assets held for sale	81,494
Total	5,334,765	5,162,026
Maximum exposure to loss from interests in unconsolidated structured entities	6,296,368	6,232,900
Others [Member]
Interests in unconsolidated structured entities recognized in:
Investment securities	479	551
Loans and advances	400,549	501,180
Total	401,028	501,731
Maximum exposure to loss from interests in unconsolidated structured entities	538,660	702,236
Unconsolidated structured entities [Member]
Interests in unconsolidated structured entities recognized in:
Trading assets	78,796	87,639
Investment securities	1,171,581	1,239,167
Loans and advances	7,524,527	7,513,204
Assets held for sale	114,249
Total	8,889,153	8,840,010
Maximum exposure to loss from interests in unconsolidated structured entities	¥ 10,886,716	¥ 10,682,061

XML

Acquisitions -Summary of Fair Values of Assets and Liabilities (Detail) - JPY (¥) ¥ in Millions	Jun. 01, 2017	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Assets:
Property, plant and equipment		¥ 1,510,132	¥ 2,686,055	¥ 2,590,951
All other assets		4,043,908	4,321,724
Total assets		192,175,566	191,150,981
Liabilities:
Borrowings		10,652,481	12,245,943
All other liabilities		6,882,740	7,461,101
Total liabilities		179,679,767	179,263,698
Goodwill		¥ (273,725)	¥ (426,455)	¥ (460,787)
American Railcar Leasing LLC [member]
Assets:
Property, plant and equipment	¥ 304,257
All other assets	15,719
Total assets	319,976
Liabilities:
Borrowings	147,523
All other liabilities	1,947
Total liabilities	149,470
Net assets acquired	170,506
Goodwill	0
Consideration	170,506
Consideration:
Cash	170,506
Total	170,506
Acquisition related costs recognized as an expense in "General and administrative expenses" in the consolidated income statement	¥ 1,264

XML

Acquisitions - Additional Information (Detail) - JPY (¥) ¥ in Millions		12 Months Ended
	Jul. 29, 2016	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	Apr. 01, 2016
Disclosure of detailed information about business combination [Line Items]
Cash consideration paid, net of cash and cash equivalents acquired by obtaining control of the subsidiaries		¥ 160,862	¥ 199,356	¥ (2,249,594)
Gain recognized as a result of remeasuring previously held interest to fair value			20,344	118
Total operating income, if all acquisitions had occurred on April 1, 2016			3,358,377
Net profit, if all acquisitions had occurred on April 1, 2016			741,214
Assets other than cash or cash equivalents			724,721	175,263
Liabilities assumed			509,666	2,430,332
GE Japan GK [member]
Disclosure of detailed information about business combination [Line Items]
Equity interest acquired					100.00%
Loans and receivables to customers					¥ 470,668
Gross contractual amounts receivable					488,335
Gross contractual amounts receivable, expected to be uncollectible					¥ 21,692
Profit (loss) since acquisition date			8,041
Sumitomo mitsui asset management company, limited [member]
Disclosure of detailed information about business combination [Line Items]
Equity interest acquired	20.00%
Goodwill deductible for tax purposes
Equity ownership interest	60.00%
Gain recognized as a result of remeasuring previously held interest to fair value			20,344
Retail banking business of Citibank Japan Ltd. [member]
Disclosure of detailed information about business combination [Line Items]
Goodwill and other intangible assets deductible for tax purposes				¥ 40,683
American Railcar Leasing LLC [member]
Disclosure of detailed information about business combination [Line Items]
Cash consideration paid, net of cash and cash equivalents acquired by obtaining control of the subsidiaries		¥ 9,644	¥ 160,862

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Acquisitions - Fair Values of Assets and Liabilities of GE Japan at the Date of Acquisition and the Consideration Paid (Detail) - JPY (¥) ¥ in Millions	Apr. 01, 2016	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Assets:
Loans and advances		¥ 85,129,070	¥ 95,273,845
All other assets		4,043,908	4,321,724
Total assets		192,175,566	191,150,981
Liabilities:
Borrowings		10,652,481	12,245,943
All other liabilities		6,882,740	7,461,101
Total liabilities		179,679,767	179,263,698
Goodwill		¥ 273,725	¥ 426,455	¥ 460,787
GE Japan GK [member]
Assets:
Loans and advances	¥ 470,538
All other assets	203,069
Total assets	673,607
Liabilities:
Borrowings	436,537
All other liabilities	58,134
Total liabilities	494,671
Net assets	178,936
Non-controlling interests measured at their proportionate share of the identifiable net assets	(394)
Net assets acquired	178,542
Goodwill	2,417
Total consideration	180,959
Consideration:
Cash	180,959
Total consideration	180,959
Acquisition related costs recognized as an expense in "General and administrative expenses" in the consolidated income statement	¥ 752

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Acquisitions - Fair Values of Assets and Liabilities of SMAM at the Date of Acquisition and the Consideration Paid (Detail) - JPY (¥) ¥ in Millions	Jul. 29, 2016	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Assets:
Cash and deposits with banks		¥ 54,696,069	¥ 47,330,155	¥ 43,144,654
Trading assets		3,169,123	3,776,671
Intangible assets		562,177	670,113	587,306
All other assets		4,043,908	4,321,724
Total assets		192,175,566	191,150,981
Liabilities		179,679,767	179,263,698
Goodwill		¥ 273,725	¥ 426,455	¥ 460,787
Sumitomo mitsui asset management company, limited [member]
Assets:
Cash and deposits with banks	¥ 15,411
Trading assets	12,030
Intangible assets	14,555
All other assets	11,007
Total assets	53,003
Liabilities	14,995
Net assets	38,008
Non-controlling interests measured at their proportionate share of the identifiable net assets	(15,203)
Net assets acquired	22,805
Goodwill	38,053
Total consideration	60,858
Consideration:
Cash	20,286
Fair value of the equity interest in SMAM held before the acquisition	40,572
Total consideration	60,858
Acquisition related costs recognized as an expense in "General and administrative expenses" in the consolidated income statement	¥ 8

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Acquisitions - Total Amount of Cash Consideration Paid and Cash Acquired by Obtaining Control of Subsidiaries (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Disclosure of detailed information about business combination [abstract]
Cash consideration paid		¥ (201,245)	¥ (46,923)
Cash and cash equivalents transferred as a result of the acquisitions		1,889	2,296,517
Cash consideration paid, net of cash and cash equivalents acquired by obtaining control of the subsidiaries	¥ (160,862)	¥ (199,356)	¥ 2,249,594

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Acquisitions - Fair Values of Assets and Liabilities of the Retail Banking Business of Citibank Japan at the Date of Acquisition and the Consideration Paid (Detail) - JPY (¥) ¥ in Millions	Nov. 01, 2015	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Assets:
Cash and deposits with banks		¥ 54,696,069	¥ 47,330,155	¥ 43,144,654
All other assets		4,043,908	4,321,724
Total assets		192,175,566	191,150,981
Liabilities:
Deposits		128,461,527	130,295,290
All other liabilities		6,882,740	7,461,101
Total liabilities		179,679,767	179,263,698
Goodwill		¥ 273,725	¥ 426,455	¥ 460,787
Retail banking business of Citibank Japan Ltd. [member]
Assets:
Cash and deposits with banks	¥ 2,296,107
All other assets	110,978
Total assets	2,407,085
Liabilities:
Deposits	2,361,908
All other liabilities	8,620
Total liabilities	2,370,528
Net assets acquired	36,557
Goodwill	8,443
Total consideration	45,000
Consideration:
Fair value of consideration transferred	45,000
Total consideration	45,000
Acquisition related costs recognized as an expense in "General and administrative expenses" in the consolidated income statement	¥ 286

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Assets And Disposal Groups Held For Sale - Summary of Non-current Assets and Disposal Groups Held for Sale (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Assets held for sale:
Loans and advances	¥ 85,129,070	¥ 95,273,845
Property, plant and equipment	1,510,132	2,686,055	¥ 2,590,951
Intangible assets	835,902	1,096,568
All other assets	4,043,908	4,321,724
Total	5,651,950	134,307
Liabilities directly associated with the assets held for sale:
Borrowings	10,652,481	12,245,943
Debt securities in issue	10,569,117	11,165,623
All other liabilities	6,882,740	7,461,101
Total	3,616,941	27,665
Assets and liabilities classified as held for sale [member]
Assets held for sale:
Loans and advances	3,010,314
Property, plant and equipment	1,435,637	300
Intangible assets	179,358
All other assets	1,026,641	134,007
Total	5,651,950	134,307
Liabilities directly associated with the assets held for sale:
Borrowings	1,631,681
Debt securities in issue	1,422,402
All other liabilities	562,858	27,665
Total	¥ 3,616,941	¥ 27,665

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Assets And Disposal Groups Held For Sale - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017
Disclosure of noncurrent assets and disposal groups classified as held for sale [line items]
Other reserves relating to non-current assets and disposal groups held for sale		¥ 52,146	¥ 0
Sumitomo mitsui finance and leasing company, limited [member] | Sumitomo Corporation [member]
Disclosure of noncurrent assets and disposal groups classified as held for sale [line items]
Equity ownership interest		40.00%
Sumitomo mitsui finance and leasing company, limited [member] | Domestic [member]
Disclosure of noncurrent assets and disposal groups classified as held for sale [line items]
Equity ownership interest		60.00%
Scenario, Forecast [Member] | Sumitomo mitsui finance and leasing company, limited [member] | Sumitomo Corporation [member]
Disclosure of noncurrent assets and disposal groups classified as held for sale [line items]
Equity ownership interest	50.00%
Scenario, Forecast [Member] | Sumitomo mitsui finance and leasing company, limited [member] | Domestic [member]
Disclosure of noncurrent assets and disposal groups classified as held for sale [line items]
Equity ownership interest	50.00%

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Current and Non-Current Distinction - Summary of Current and Non-Current Distinction (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Assets:
Call loans and bills bought	¥ 1,881,880	¥ 1,872,209
Reverse repurchase agreements and cash collateral on securities borrowed	8,491,703	8,924,385
Financial assets at fair value through profit or loss	1,547,672	1,599,093
Investment securities:
Held-to-maturity investments	372,459	1,173,419
Available-for-sale financial assets	20,122,616	17,900,518
Loans and advances	85,129,070	95,273,845
Other financial assets	3,598,642	3,424,591
Liabilities:
Deposits	128,461,527	130,295,290
Call money and bills sold	1,190,929	2,088,020
Repurchase agreements and cash collateral on securities lent	12,022,593	9,424,506
Borrowings	10,652,481	12,245,943
Debt securities in issue	10,569,117	11,165,623
Other financial liabilities	6,691,042	7,201,137
Not later than one year [member]
Assets:
Call loans and bills bought	1,802,317	1,824,730
Reverse repurchase agreements and cash collateral on securities borrowed	8,418,341	8,851,521
Financial assets at fair value through profit or loss	205,525
Investment securities:
Held-to-maturity investments	92,033	792,357
Available-for-sale financial assets	5,034,184	2,042,240
Loans and advances	29,469,067	32,655,787
Other financial assets	3,490,685	3,307,191
Liabilities:
Deposits	123,901,761	125,254,104
Call money and bills sold	1,190,929	2,083,701
Repurchase agreements and cash collateral on securities lent	12,022,593	9,424,506
Borrowings	7,264,455	7,982,814
Debt securities in issue	3,356,401	4,628,884
Other financial liabilities	6,687,889	7,097,811
More than twelve months [Member]
Assets:
Call loans and bills bought	79,563	47,479
Reverse repurchase agreements and cash collateral on securities borrowed	73,362	72,864
Financial assets at fair value through profit or loss	1,342,147	1,599,093
Investment securities:
Held-to-maturity investments	280,426	381,062
Available-for-sale financial assets	15,088,432	15,858,278
Loans and advances	55,660,003	62,618,058
Other financial assets	107,957	117,400
Liabilities:
Deposits	4,559,766	5,041,186
Call money and bills sold		4,319
Borrowings	3,388,026	4,263,129
Debt securities in issue	7,212,716	6,536,739
Other financial liabilities	¥ 3,153	¥ 103,326

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Condensed Financial Information of Registrant (SMFG) - Condensed Statement of Financial Position (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2015
Assets:
Deposits with SMBC	¥ 53,992,931	¥ 46,207,027
Loans to SMBC	85,129,070	95,273,845
Other assets	4,043,908	4,321,724
Current tax assets	87,961	240,385
Total assets	192,175,566	191,150,981
Liabilities and equity:
Debt securities in issue	10,569,117	11,165,623
Other liabilities	6,882,740	7,461,101
Total liabilities	179,679,767	179,263,698
Shareholders' equity	10,663,297	9,932,573
Other equity instruments holders' equity	599,522	449,709
Total equity	12,495,799	11,887,283	¥ 11,042,099	¥ 11,020,850
Total equity and liabilities	192,175,566	191,150,981
Sumitomo mitsui banking corporation [member]
Liabilities and equity:
Debt securities in issue	4,716,206	5,313,238
Other subsidiaries [member]
Liabilities and equity:
Debt securities in issue	1,636,619	3,031,029
SMFG [member]
Assets:
Investments in other subsidiaries and associates	1,548,012	1,547,319
Other assets	90,605	58,670
Current tax assets	67,414	87,571
Total assets	12,109,357	10,460,066
Liabilities and equity:
Long-term borrowings	199,221	132,806
Debt securities in issue	4,216,292	2,821,356
Other liabilities	47,001	22,612
Total liabilities	5,971,424	4,485,588
Shareholders' equity	5,541,687	5,527,691
Other equity instruments holders' equity	596,246	446,787
Total equity	6,137,933	5,974,478
Total equity and liabilities	12,109,357	10,460,066
SMFG [member] | Sumitomo mitsui banking corporation [member]
Assets:
Deposits with SMBC	251,681	728,445
Investments in SMBC	4,613,844	4,613,844
Loans to SMBC	5,537,801	3,424,217
Liabilities and equity:
Short-term borrowings from SMBC	1,228,030	1,228,030
SMFG [member] | Other subsidiaries [member]
Liabilities and equity:
Debt securities in issue	¥ 280,880	¥ 280,784

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Condensed Financial Information of Registrant (SMFG) - Condensed Income Statement (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Income:
Interest income from SMBC	¥ 2,144,070	¥ 1,900,261	¥ 1,872,584
Dividends	138,874	123,827	128,094
Fees and commission income from subsidiaries	1,131,364	1,066,412	1,031,680
Other income	755,855	573,825	496,273
Expense:
Interest expense	733,969	502,338	431,101
Operating and other expense	2,605,886	2,283,894	2,245,226
Profit before tax	1,118,976	880,352	1,325,700
Income tax expense	229,378	139,766	372,878
Net profit	889,598	740,586	952,822
Profit attributable to:
Shareholders	759,998	627,870	843,920
Other equity instruments holders	9,722	7,929	2,773
SMFG [member]
Income:
Fees and commission income from subsidiaries	10,226	20,706	16,622
Other income	217	178	234
Total income	366,545	502,669	578,313
Expense:
Interest expense	89,699	45,223	12,814
Operating and other expense	21,525	12,165	9,868
Total expense	131,831	74,901	41,215
Profit before tax	234,714	427,768	537,098
Income tax expense	(7,085)	(33,344)	4
Net profit	241,799	461,112	537,094
Profit attributable to:
Shareholders	232,077	453,183	534,321
Other equity instruments holders	9,722	7,929	2,773
SMFG [member] | Sumitomo mitsui banking corporation [member]
Income:
Interest income from SMBC	99,100	52,938	18,313
Dividends	223,334	408,419	522,636
Expense:
Interest expense	4,298	4,474	5,753
SMFG [member] | Other subsidiaries and associate [Member]
Income:
Dividends	33,668	20,428	20,508
SMFG [member] | Other subsidiaries [member]
Expense:
Interest expense	¥ 16,309	¥ 13,039	¥ 12,780

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Condensed Financial Information of Registrant (SMFG) - Condensed Statement of Cash Flows (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2016
Operating Activities:
Profit before tax	¥ 1,118,976	¥ 880,352	¥ 1,325,700
Income taxes paid-net	(105,880)	(337,299)	(297,767)
Other operating activities-net	395,318	104,575	420,231
Net cash and cash equivalents provided by (used in) operating activities	11,171,981	3,740,599	(1,912,325)
Investing Activities:
Other investing activities-net		1,192	6,697
Net cash and cash equivalents provided by (used in) investing activities	(3,593,677)	851,580	5,485,518
Financing Activities:
Proceeds from issuance of long-term borrowings			18,000
Proceeds from issuance of other equity instruments	149,916	149,887	299,895
Dividends paid to shareholders	(218,569)	(205,078)	(211,952)
Coupons paid to other equity instruments holders	(9,722)	(7,929)	(2,773)
Purchases of treasury stock and proceeds from sale of treasury stock-net	379	179,657	(137)
Net cash and cash equivalents provided by financing activities	(360,802)	(174,251)	(65,653)
Net increase of cash and cash equivalents	7,171,637	4,117,853	3,018,209
Cash and cash equivalents at beginning of period	46,244,819	42,126,966	39,108,757
Cash and cash equivalents at end of period	53,416,456	46,244,819	42,126,966
SMFG [member]
Operating Activities:
Profit before tax	234,714	427,768	537,098
Income taxes paid-net	35,010	23,427	(7,980)
Other operating activities-net	(3,736)	(4,580)	(3,019)
Net cash and cash equivalents provided by (used in) operating activities	265,988	446,615	526,099
Investing Activities:
Other investing activities-net	(13,833)	(5)	(76)
Net cash and cash equivalents provided by (used in) investing activities	(2,255,607)	(1,972,258)	(1,073,716)
Financing Activities:
Proceeds from issuance of long-term borrowings	66,415	83,806	18,000
Proceeds from issuance of debt securities	1,525,271	1,738,267	754,274
Proceeds from issuance of other equity instruments	149,080	149,081	297,431
Dividends paid to shareholders	(218,569)	(211,501)	(218,589)
Coupons paid to other equity instruments holders	(9,722)	(7,929)	(2,773)
Purchases of treasury stock and proceeds from sale of treasury stock-net	380	(86)	(138)
Net cash and cash equivalents provided by financing activities	1,512,855	1,751,638	848,205
Net increase of cash and cash equivalents	(476,764)	225,995	300,588
Cash and cash equivalents at beginning of period	728,445	502,450	201,862
Cash and cash equivalents at end of period	251,681	728,445	502,450
SMFG [member] | Sumitomo mitsui banking corporation [member]
Investing Activities:
Loans provided to SMBC	¥ (2,241,774)	¥ (1,972,253)	¥ (1,073,640)

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Condensed Financial Information of Registrant (SMFG) - Additional Information (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2018	Mar. 31, 2017
Disclosure of detailed information about borrowings [line items]
Perpetual subordinated bonds	¥ 599,522	¥ 449,709
Borrowings	10,652,481	12,245,943
Bonds	10,569,117	11,165,623
SMFG [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	199,221	132,806
Bonds	4,216,292	2,821,356
Guarantee deposit	298,000	516,000
SMFG [member] | Subordinated bonds [Member]
Disclosure of detailed information about borrowings [line items]
Bonds	945,000	856,000
SMFG [member] | Bonds [member]
Disclosure of detailed information about borrowings [line items]
Bonds	3,285,000	1,979,000
SMFG [member] | Subsidiaries [Member] | Subordinated bonds [Member]
Disclosure of detailed information about borrowings [line items]
Bonds	2,000	7,000
SMFG [member] | Subsidiaries [Member] | Bonds [member]
Disclosure of detailed information about borrowings [line items]
Bonds	12,000	7,000
SMFG [member] | Subordinated long term borrowings [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	49,000	49,000
SMFG [member] | Unsubordinated long term borrowings [member]
Disclosure of detailed information about borrowings [line items]
Borrowings	150,000	84,000
SMFG preferred capital JPY 3 limited [member]
Disclosure of detailed information about borrowings [line items]
Perpetual subordinated bonds	¥ 267,000	¥ 267,000
Minimum [member] | SMFG preferred capital JPY 3 limited [member]
Disclosure of detailed information about borrowings [line items]
Perpetual subordinated bonds, interest rates	4.00%
Maximum [member] | SMFG preferred capital JPY 3 limited [member]
Disclosure of detailed information about borrowings [line items]
Perpetual subordinated bonds, interest rates	4.50%