UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of July 2020
Commission file number 001-34919
SUMITOMO MITSUI FINANCIAL GROUP, INC.
(Translation of registrants name into English)
1-2, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-0005, Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: |
Form 20-F ☒ | or | Form 40-F ☐ | |||
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): |
☐ | |||||
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): |
☐ | |||||
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. |
Yes ☐ | No ☒ | ||||
* If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): |
82- |
The information, documents and exhibits set forth in this Form 6-K shall be deemed to be incorporated by reference into the prospectus forming a part of Sumitomo Mitsui Financial Group, Inc.s Registration Statement on Form F-3 (File No. 333-228913) and to be a part of such prospectus from the date of the filing thereof, to the extent not superseded by documents or reports subsequently filed or furnished.
TABLE OF DOCUMENT(S) SUBMITTED
1. |
2. |
EXHIBIT INDEX
Exhibit |
Description | |
15.1 | Consent of KPMG AZSA LLC |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Sumitomo Mitsui Financial Group, Inc. | ||||
By: | /s/ Toru Nakashima | |||
Name: | Toru Nakashima | |||
Title: | Senior Managing Executive Officer Group Chief Financial Officer |
Date: July 2, 2020
AUDITED CONSOLIDATED JAPANESE GAAP FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED MARCH 31, 2019 AND 2020
On June 26, 2020, we published our consolidated financial statements as of and for the years ended March 31, 2019 and 2020 prepared in accordance with accounting principles generally accepted in Japan, or Japanese GAAP, as part of our annual securities report (yukashoken hokokusho) for the year ended March 31, 2020 filed by us with the relevant Japanese authorities. This document includes such audited consolidated financial statements and the notes thereto. Japanese GAAP differs in certain respects from International Financial Reporting Standards as issued by the International Accounting Standards Board, or IFRS, and generally accepted accounting principles in the United States. For a description of certain differences between IFRS and Japanese GAAP, see Item 5.A Operating ResultsReconciliation with Japanese GAAP in our most recent annual report on Form 20-F filed with the SEC.
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
March 31 |
Millions of yen |
Millions of U.S. dollars |
||||||||||||||
2019 |
2020 |
2020 | ||||||||||||||
Assets: |
||||||||||||||||
Cash and due from banks |
*8 | ¥ | 57,411,276 | *8 | ¥ | 61,768,573 | $ | 567,674 | ||||||||
Call loans and bills bought |
2,465,744 | 896,739 | 8,241 | |||||||||||||
Receivables under resale agreements |
6,429,365 | 8,753,816 | 80,450 | |||||||||||||
Receivables under securities borrowing transactions |
4,097,473 | 5,005,103 | 45,999 | |||||||||||||
Monetary claims bought |
*8 | 4,594,578 | 4,559,429 | 41,903 | ||||||||||||
Trading assets |
*8 | 5,328,778 | *8 | 7,361,253 | 67,652 | |||||||||||
Money held in trust |
390 | 353 | 3 | |||||||||||||
Securities |
*1, *2, *8, *16 | 24,338,005 | *1, *8, *16 | 27,128,751 | 249,322 | |||||||||||
Loans and bills discounted |
*3, *4, *5, *6, *7, *8, *9 | 77,979,190 | *3, *4, *5, *6, *7, *8, *9 | 82,517,609 | 758,364 | |||||||||||
Foreign exchanges |
*7 | 1,719,402 | *7 | 2,063,284 | 18,962 | |||||||||||
Lease receivables and investment assets |
247,835 | 219,733 | 2,019 | |||||||||||||
Other assets |
*8 | 7,307,305 | *8 | 8,298,393 | 76,265 | |||||||||||
Tangible fixed assets |
*10, *11, *12 | 1,504,703 | *10, *11, *12 | 1,450,323 | 13,329 | |||||||||||
Assets for rent |
573,292 | 506,755 | 4,657 | |||||||||||||
Buildings |
345,420 | 341,505 | 3,139 | |||||||||||||
Land |
427,484 | 423,346 | 3,891 | |||||||||||||
Lease assets |
25,548 | 28,933 | 266 | |||||||||||||
Construction in progress |
37,663 | 46,138 | 424 | |||||||||||||
Other tangible fixed assets |
95,293 | 103,645 | 953 | |||||||||||||
Intangible fixed assets |
769,231 | 753,579 | 6,926 | |||||||||||||
Software |
431,135 | 440,407 | 4,047 | |||||||||||||
Goodwill |
193,127 | 194,289 | 1,786 | |||||||||||||
Lease assets |
990 | 986 | 9 | |||||||||||||
Other intangible fixed assets |
143,977 | 117,896 | 1,084 | |||||||||||||
Net defined benefit asset |
329,434 | 230,573 | 2,119 | |||||||||||||
Deferred tax assets |
40,245 | 26,314 | 242 | |||||||||||||
Customers liabilities for acceptances and guarantees |
9,564,993 | 9,308,882 | 85,552 | |||||||||||||
Reserve for possible loan losses |
(468,808) | (479,197) | (4,404) | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total assets |
¥ | 203,659,146 | ¥ | 219,863,518 | $ | 2,020,619 | ||||||||||
|
|
|
|
|
|
1
(Continued)
March 31 |
Millions of yen |
Millions of U.S. dollars |
||||||||||||||
2019 |
2020 |
2020 | ||||||||||||||
Liabilities and net assets: |
||||||||||||||||
Liabilities: |
||||||||||||||||
Deposits |
*8 | ¥ | 122,325,038 | *8 | ¥ | 127,042,217 | $ | 1,167,560 | ||||||||
Negotiable certificates of deposit |
11,165,486 | 10,180,435 | 93,562 | |||||||||||||
Call money and bills sold |
1,307,778 | 3,740,539 | 34,377 | |||||||||||||
Payables under repurchase agreements |
*8 | 11,462,559 | *8 | 13,237,913 | 121,661 | |||||||||||
Payables under securities lending transactions |
*8 | 1,812,820 | *8 | 2,385,607 | 21,925 | |||||||||||
Commercial paper |
2,291,813 | 1,409,249 | 12,951 | |||||||||||||
Trading liabilities |
4,219,293 | 6,084,528 | 55,919 | |||||||||||||
Borrowed money |
*8, *13 | 10,656,897 | *8, *13 | 15,210,894 | 139,793 | |||||||||||
Foreign exchanges |
1,165,141 | 1,461,308 | 13,430 | |||||||||||||
Short-term bonds |
84,500 | 379,000 | 3,483 | |||||||||||||
Bonds |
*14 | 9,227,367 | *14 | 9,235,639 | 84,879 | |||||||||||
Due to trust account |
*8, *15 | 1,352,773 | *8, *15 | 1,811,355 | 16,647 | |||||||||||
Other liabilities |
4,873,630 | 7,011,967 | 64,442 | |||||||||||||
Reserve for employee bonuses |
70,351 | 73,868 | 679 | |||||||||||||
Reserve for executive bonuses |
3,091 | 3,362 | 31 | |||||||||||||
Net defined benefit liability |
31,816 | 35,777 | 329 | |||||||||||||
Reserve for executive retirement benefits |
1,374 | 1,270 | 12 | |||||||||||||
Reserve for point service program |
23,948 | 26,576 | 244 | |||||||||||||
Reserve for reimbursement of deposits |
7,936 | 4,687 | 43 | |||||||||||||
Reserve for losses on interest repayment |
147,594 | 142,890 | 1,313 | |||||||||||||
Reserves under the special laws |
2,847 | 3,145 | 29 | |||||||||||||
Deferred tax liabilities |
378,220 | 257,384 | 2,365 | |||||||||||||
Deferred tax liabilities for land revaluation |
*10 | 30,259 | *10 | 30,111 | 277 | |||||||||||
Acceptances and guarantees |
*8 | 9,564,993 | *8 | 9,308,882 | 85,552 | |||||||||||
|
|
|
|
|
|
|||||||||||
Total liabilities |
192,207,534 | 209,078,615 | 1,921,502 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Net assets: |
||||||||||||||||
Capital stock |
2,339,443 | 2,339,964 | 21,505 | |||||||||||||
Capital surplus |
739,047 | 692,003 | 6,360 | |||||||||||||
Retained earnings |
5,992,247 | 6,336,311 | 58,233 | |||||||||||||
Treasury stock |
(16,302) | (13,983) | (129) | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total stockholders equity |
9,054,436 | 9,354,296 | 85,969 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Net unrealized gains (losses) on other securities |
1,688,852 | 1,371,407 | 12,604 | |||||||||||||
Net deferred gains (losses) on hedges |
(54,650) | 82,257 | 756 | |||||||||||||
Land revaluation excess |
*10 | 36,547 | *10 | 36,878 | 339 | |||||||||||
Foreign currency translation adjustments |
50,379 | (32,839) | (302) | |||||||||||||
Accumulated remeasurements of defined benefit plans |
(7,244) | (92,030) | (846) | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total accumulated other comprehensive income |
1,713,884 | 1,365,673 | 12,551 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Stock acquisition rights |
4,750 | 2,064 | 19 | |||||||||||||
Non-controlling interests |
678,540 | 62,869 | 578 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total net assets |
11,451,611 | 10,784,903 | 99,117 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total liabilities and net assets |
¥ | 203,659,146 | ¥ | 219,863,518 | $ | 2,020,619 | ||||||||||
|
|
|
|
|
|
2
CONSOLIDATED STATEMENTS OF INCOME
Millions of yen | Millions of U.S. dollars |
|||||||||||||||||||
Year ended March 31 |
2019 | 2020 | 2020 | |||||||||||||||||
Ordinary income |
¥ | 5,735,312 | ¥ | 5,314,313 | $ | 48,840 | ||||||||||||||
Interest income |
2,488,904 | 2,456,364 | 22,575 | |||||||||||||||||
Interest on loans and discounts |
1,666,283 | 1,693,016 | 15,559 | |||||||||||||||||
Interest and dividends on securities |
364,685 | 346,822 | 3,187 | |||||||||||||||||
Interest on call loans and bills bought |
16,551 | 15,890 | 146 | |||||||||||||||||
Interest on receivables under resale agreements |
20,457 | 31,449 | 289 | |||||||||||||||||
Interest on receivables under securities borrowing transactions |
17,784 | 21,247 | 195 | |||||||||||||||||
Interest on deposits with banks |
103,135 | 80,924 | 744 | |||||||||||||||||
Interest on lease transactions |
47,573 | 7,307 | 67 | |||||||||||||||||
Other interest income |
252,433 | 259,705 | 2,387 | |||||||||||||||||
Trust fees |
4,656 | 4,701 | 43 | |||||||||||||||||
Fees and commissions |
1,240,917 | 1,287,538 | 11,833 | |||||||||||||||||
Trading income |
194,676 | 262,826 | 2,415 | |||||||||||||||||
Other operating income |
1,578,159 | 1,050,065 | 9,650 | |||||||||||||||||
Lease-related income |
233,675 | 39,123 | 360 | |||||||||||||||||
Installment-related income |
981,090 | 752,775 | 6,918 | |||||||||||||||||
Other |
363,393 | 258,166 | 2,373 | |||||||||||||||||
Other income |
227,997 | 252,816 | 2,323 | |||||||||||||||||
Gains on reversal of reserve for possible loan losses |
5,729 | | | |||||||||||||||||
Recoveries of written-off claims |
11,047 | 12,414 | 114 | |||||||||||||||||
Other |
*1 | 211,220 | *1 | 240,401 | 2,209 | |||||||||||||||
Ordinary expenses |
4,600,012 | 4,382,249 | 40,274 | |||||||||||||||||
Interest expenses |
1,157,482 | 1,179,770 | 10,842 | |||||||||||||||||
Interest on deposits |
463,989 | 441,477 | 4,057 | |||||||||||||||||
Interest on negotiable certificates of deposit |
136,178 | 131,849 | 1,212 | |||||||||||||||||
Interest on call money and bills sold |
14,270 | 10,284 | 95 | |||||||||||||||||
Interest on payables under repurchase agreements |
119,733 | 131,320 | 1,207 | |||||||||||||||||
Interest on payables under securities lending transactions |
1,272 | 1,111 | 10 | |||||||||||||||||
Interest on commercial paper |
45,356 | 31,525 | 290 | |||||||||||||||||
Interest on borrowed money |
75,883 | 57,632 | 530 | |||||||||||||||||
Interest on short-term bonds |
60 | 29 | 0 | |||||||||||||||||
Interest on bonds |
226,536 | 220,874 | 2,030 | |||||||||||||||||
Other interest expenses |
74,201 | 153,666 | 1,412 | |||||||||||||||||
Fees and commissions payments |
181,019 | 204,188 | 1,877 | |||||||||||||||||
Trading losses |
3,305 | | | |||||||||||||||||
Other operating expenses |
1,319,328 | 908,951 | 8,354 | |||||||||||||||||
Lease-related expenses |
120,097 | 26,514 | 244 | |||||||||||||||||
Installment-related expenses |
930,884 | 722,440 | 6,639 | |||||||||||||||||
Other |
268,347 | 159,997 | 1,470 | |||||||||||||||||
General and administrative expenses |
*2 | 1,715,050 | *2 | 1,739,603 | 15,988 | |||||||||||||||
Other expenses |
223,825 | 349,734 | 3,214 | |||||||||||||||||
Provision for reserve for possible loan losses |
| 70,571 | 649 | |||||||||||||||||
Other |
*3 | 223,825 | *3 | 279,163 | 2,566 | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Ordinary profit |
1,135,300 | 932,064 | 8,566 | |||||||||||||||||
|
|
|
|
|
|
3
(Continued) | ||||||||||||||||||||
Millions of yen | Millions of U.S. dollars |
|||||||||||||||||||
Year ended March 31 |
2019 | 2020 | 2020 | |||||||||||||||||
Extraordinary gains |
¥ | 2,826 | ¥ | 23,896 | $ | 220 | ||||||||||||||
Gains on disposal of fixed assets |
541 | 1,855 | 17 | |||||||||||||||||
Other extraordinary gains |
*4 | 2,285 | *4 | 22,040 | 203 | |||||||||||||||
Extraordinary losses |
14,547 | 67,314 | 619 | |||||||||||||||||
Losses on disposal of fixed assets |
4,485 | 1,910 | 18 | |||||||||||||||||
Losses on impairment of fixed assets |
*5 | 9,610 | *5 | 65,106 | 598 | |||||||||||||||
Provision for reserve for eventual future operating losses from |
450 | 297 | 3 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Income before income taxes |
1,123,579 | 888,646 | 8,167 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Income taxes-current |
276,329 | 213,526 | 1,962 | |||||||||||||||||
Income taxes-deferred |
55,095 | (45,842) | (421) | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Income taxes |
331,424 | 167,684 | 1,541 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Profit |
792,155 | 720,962 | 6,626 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Profit attributable to non-controlling interests |
65,474 | 17,078 | 157 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Profit attributable to owners of parent |
¥ | 726,681 | ¥ | 703,883 | $ | 6,469 | ||||||||||||||
|
|
|
|
|
|
4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||||||
Millions of yen | Millions of U.S. dollars |
|||||||||||||||||||
Year ended March 31 |
2019 | 2020 | 2020 | |||||||||||||||||
Profit |
¥ | 792,155 | ¥ | 720,962 | $ | 6,626 | ||||||||||||||
Other comprehensive income (losses) |
*1 | 3,035 | *1 | (347,990) | (3,198) | |||||||||||||||
Net unrealized gains (losses) on other securities |
31,157 | (314,792) | (2,893) | |||||||||||||||||
Net deferred gains (losses) on hedges |
29,981 | 166,177 | 1,527 | |||||||||||||||||
Land revaluation excess |
| (39) | (0) | |||||||||||||||||
Foreign currency translation adjustments |
10,396 | (74,052) | (681) | |||||||||||||||||
Remeasurements of defined benefit plans |
(65,530) | (84,420) | (776) | |||||||||||||||||
Share of other comprehensive income of affiliates |
(2,970) | (40,864) | (376) | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total comprehensive income |
795,191 | 372,971 | 3,428 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Comprehensive income attributable to owners of parent |
687,690 | 355,302 | 3,265 | |||||||||||||||||
Comprehensive income attributable to non-controlling interests |
107,500 | 17,669 | 162 |
5
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Year ended March 31, 2019 |
Millions of yen | |||||||||||||||||||||||
Stockholders equity | ||||||||||||||||||||||||
Capital stock |
Capital surplus |
Retained earnings |
Treasury stock |
Total | ||||||||||||||||||||
Balance at the beginning of the fiscal year |
¥ | 2,338,743 | ¥ | 758,215 | ¥ | 5,552,573 | ¥ | (12,493) | ¥ | 8,637,039 | ||||||||||||||
Changes in the fiscal year |
||||||||||||||||||||||||
Issuance of new stock |
699 | 699 | 1,398 | |||||||||||||||||||||
Cash dividends |
(245,576) | (245,576) | ||||||||||||||||||||||
Profit attributable to owners of parent |
726,681 | 726,681 | ||||||||||||||||||||||
Purchase of treasury stock |
(70,094) | (70,094) | ||||||||||||||||||||||
Disposal of treasury stock |
(68) | 363 | 294 | |||||||||||||||||||||
Cancellation of treasury stock |
(65,922) | 65,922 | | |||||||||||||||||||||
Changes in shareholders interest due to transaction with non-controlling interests |
4,419 | 4,419 | ||||||||||||||||||||||
Increase due to increase in subsidiaries |
0 | 0 | ||||||||||||||||||||||
Increase due to decrease in subsidiaries |
4 | 4 | ||||||||||||||||||||||
Decrease due to increase in subsidiaries |
(11) | (11) | ||||||||||||||||||||||
Decrease due to decrease in subsidiaries |
(23) | (23) | ||||||||||||||||||||||
Reversal of land revaluation excess |
302 | 302 | ||||||||||||||||||||||
Transfer from retained earnings to capital surplus |
41,704 | (41,704) | | |||||||||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net changes in the fiscal year |
699 | (19,167) | 439,673 | (3,809) | 417,396 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at the end of the fiscal year |
¥ | 2,339,443 | ¥ | 739,047 | ¥ | 5,992,247 | ¥ | (16,302) | ¥ | 9,054,436 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended March 31, 2019 |
Millions of yen |
|||||||||||||||||||||||
Accumulated other comprehensive income | ||||||||||||||||||||||||
Net unrealized gains (losses) on other securities |
Net deferred gains (losses) on hedges |
Land revaluation excess |
Foreign currency translation adjustments |
Accumulated remeasurements of defined benefit plans |
Total | |||||||||||||||||||
Balance at the beginning of the fiscal year |
¥ | 1,688,842 | ¥ | (68,543) | ¥ | 37,097 | ¥ | 36,906 | ¥ | 59,121 | ¥ | 1,753,424 | ||||||||||||
Changes in the fiscal year |
||||||||||||||||||||||||
Issuance of new stock |
||||||||||||||||||||||||
Cash dividends |
||||||||||||||||||||||||
Profit attributable to owners of parent |
||||||||||||||||||||||||
Purchase of treasury stock |
||||||||||||||||||||||||
Disposal of treasury stock |
||||||||||||||||||||||||
Cancellation of treasury stock |
||||||||||||||||||||||||
Changes in shareholders interest due to transaction with non-controlling interests |
||||||||||||||||||||||||
Increase due to increase in subsidiaries |
||||||||||||||||||||||||
Increase due to decrease in subsidiaries |
||||||||||||||||||||||||
Decrease due to increase in subsidiaries |
||||||||||||||||||||||||
Decrease due to decrease in subsidiaries |
||||||||||||||||||||||||
Reversal of land revaluation excess |
||||||||||||||||||||||||
Transfer from retained earnings to capital surplus |
||||||||||||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
10 | 13,893 | (549) | 13,473 | (66,366) | (39,540) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net changes in the fiscal year |
10 | 13,893 | (549) | 13,473 | (66,366) | (39,540) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at the end of the fiscal year |
¥ | 1,688,852 | ¥ | (54,650) | ¥ | 36,547 | ¥ | 50,379 | ¥ | (7,244) | ¥ | 1,713,884 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
6
Year ended March 31, 2019 |
Millions of yen | |||||||||
Stock acquisition rights |
Non- controlling interests |
Total | ||||||||
Balance at the beginning of the fiscal year |
¥ | 2,823 | ¥ | 1,219,604 | ¥ 11,612,892 | |||||
Changes in the fiscal year |
||||||||||
Issuance of new stock |
1,398 | |||||||||
Cash dividends |
(245,576) | |||||||||
Profit attributable to owners of parent |
726,681 | |||||||||
Purchase of treasury stock |
(70,094) | |||||||||
Disposal of treasury stock |
294 | |||||||||
Cancellation of treasury stock |
| |||||||||
Changes in shareholders interest due to transaction with non-controlling interests |
4,419 | |||||||||
Increase due to increase in subsidiaries |
0 | |||||||||
Increase due to decrease in subsidiaries |
4 | |||||||||
Decrease due to increase in subsidiaries |
(11) | |||||||||
Decrease due to decrease in subsidiaries |
(23) | |||||||||
Reversal of land revaluation excess |
302 | |||||||||
Transfer from retained earnings to capital surplus |
| |||||||||
Net changes in items other than stockholders equity in the fiscal year |
1,926 | (541,063) | (578,677) | |||||||
|
|
|
|
| ||||||
Net changes in the fiscal year |
1,926 | (541,063) | (161,280) | |||||||
|
|
|
|
| ||||||
Balance at the end of the fiscal year |
¥ | 4,750 | ¥ | 678,540 | ¥ 11,451,611 | |||||
|
|
|
|
|
7
(Continued)
Year ended March 31, 2020 |
Millions of yen | |||||||||||||||||||||||
Stockholders equity | ||||||||||||||||||||||||
Capital stock |
Capital surplus |
Retained earnings |
Treasury stock |
Total | ||||||||||||||||||||
Balance at the beginning of the fiscal year |
¥ | 2,339,443 | ¥ | 739,047 | ¥ | 5,992,247 | ¥ | (16,302) | ¥ | 9,054,436 | ||||||||||||||
Changes in the fiscal year |
||||||||||||||||||||||||
Issuance of new stock |
521 | 521 | 1,043 | |||||||||||||||||||||
Cash dividends |
(255,834) | (255,834) | ||||||||||||||||||||||
Profit attributable to owners of parent |
703,883 | 703,883 | ||||||||||||||||||||||
Purchase of treasury stock |
(100,088) | (100,088) | ||||||||||||||||||||||
Disposal of treasury stock |
(250) | 733 | 483 | |||||||||||||||||||||
Cancellation of treasury stock |
(101,673) | 101,673 | | |||||||||||||||||||||
Changes in shareholders interest due to transaction with non-controlling interests |
(47,565) | (47,565) | ||||||||||||||||||||||
Decrease due to decrease in subsidiaries |
(945) | (945) | ||||||||||||||||||||||
Decrease due to decrease in affiliates accounted for by the equity method |
(679) | (679) | ||||||||||||||||||||||
Reversal of land revaluation excess |
(435) | (435) | ||||||||||||||||||||||
Transfer from retained earnings to capital surplus |
101,923 | (101,923) | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net changes in the fiscal year |
521 | (47,044) | 344,064 | 2,318 | 299,860 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at the end of the fiscal year |
¥ | 2,339,964 | ¥ | 692,003 | ¥ | 6,336,311 | ¥ | (13,983) | ¥ | 9,354,296 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended March 31, 2020 |
Millions of yen | |||||||||||||||||||||||
Accumulated other comprehensive income | ||||||||||||||||||||||||
Net unrealized gains (losses) on other securities |
Net deferred gains (losses) on hedges |
Land revaluation excess |
Foreign currency translation adjustments |
Accumulated remeasurements of defined benefit plans |
Total | |||||||||||||||||||
Balance at the beginning of the fiscal year |
¥ | 1,688,852 | ¥ | (54,650) | ¥ | 36,547 | ¥ | 50,379 | ¥ | (7,244) | ¥ | 1,713,884 | ||||||||||||
Changes in the fiscal year |
||||||||||||||||||||||||
Issuance of new stock |
||||||||||||||||||||||||
Cash dividends |
||||||||||||||||||||||||
Profit attributable to owners of parent |
||||||||||||||||||||||||
Purchase of treasury stock |
||||||||||||||||||||||||
Disposal of treasury stock |
||||||||||||||||||||||||
Cancellation of treasury stock |
||||||||||||||||||||||||
Changes in shareholders interest due to transaction with non-controlling interests |
||||||||||||||||||||||||
Decrease due to decrease in subsidiaries |
||||||||||||||||||||||||
Decrease due to decrease in affiliates accounted for by the equity method |
||||||||||||||||||||||||
Reversal of land revaluation excess |
||||||||||||||||||||||||
Transfer from retained earnings to capital surplus |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
(317,445) | 136,907 | 331 | (83,219) | (84,785) | (348,211) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net changes in the fiscal year |
(317,445) | 136,907 | 331 | (83,219) | (84,785) | (348,211) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at the end of the fiscal year |
¥ | 1,371,407 | ¥ | 82,257 | ¥ | 36,878 | ¥ | (32,839) | ¥ | (92,030) | ¥ | 1,365,673 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
8
Year ended March 31, 2020 |
Millions of yen | |||||||||
Stock acquisition rights |
Non- controlling interests |
Total | ||||||||
Balance at the beginning of the fiscal year |
¥ | 4,750 | ¥ | 678,540 | ¥11,451,611 | |||||
Changes in the fiscal year |
||||||||||
Issuance of new stock |
1,043 | |||||||||
Cash dividends |
(255,834) | |||||||||
Profit attributable to owners of parent |
703,883 | |||||||||
Purchase of treasury stock |
(100,088) | |||||||||
Disposal of treasury stock |
483 | |||||||||
Cancellation of treasury stock |
| |||||||||
Changes in shareholders interest due to transaction with non-controlling interests |
(47,565) | |||||||||
Decrease due to decrease in subsidiaries |
(945) | |||||||||
Decrease due to decrease in affiliates accounted for by the equity method |
(679) | |||||||||
Reversal of land revaluation excess |
(435) | |||||||||
Transfer from retained earnings to capital surplus |
| |||||||||
|
|
|
|
| ||||||
Net changes in items other than stockholders equity in the fiscal year |
(2,685) | (615,671) | (966,568) | |||||||
|
|
|
|
| ||||||
Net changes in the fiscal year |
(2,685) | (615,671) | (666,708) | |||||||
|
|
|
|
| ||||||
Balance at the end of the fiscal year |
¥ | 2,064 | ¥ | 62,869 | ¥10,784,903 | |||||
|
|
|
|
|
9
(Continued)
Year ended March 31, 2020 |
Millions of U.S. dollars | |||||||||||||||||||||||
Stockholders equity | ||||||||||||||||||||||||
Capital stock |
Capital surplus |
Retained earnings |
Treasury stock |
Total | ||||||||||||||||||||
Balance at the beginning of the fiscal year |
$ | 21,500 | $ | 6,792 | $ | 55,071 | $ | (150) | $ | 83,213 | ||||||||||||||
Changes in the fiscal year |
||||||||||||||||||||||||
Issuance of new stock |
5 | 5 | ||||||||||||||||||||||
Cash dividends |
(2,351) | (2,351) | ||||||||||||||||||||||
Profit attributable to owners of parent |
6,469 | 6,469 | ||||||||||||||||||||||
Purchase of treasury stock |
(920) | (920) | ||||||||||||||||||||||
Disposal of treasury stock |
(2) | 7 | 4 | |||||||||||||||||||||
Cancellation of treasury stock |
(934) | 934 | | |||||||||||||||||||||
Changes in shareholders interest due to transaction with non-controlling interests |
(437) | (437) | ||||||||||||||||||||||
Decrease due to decrease in subsidiaries |
(9) | (9) | ||||||||||||||||||||||
Decrease due to decrease in affiliates accounted for by the equity method |
(6) | (6) | ||||||||||||||||||||||
Reversal of land revaluation excess |
(4) | (4) | ||||||||||||||||||||||
Transfer from retained earnings to capital surplus |
937 | (937) | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net changes in the fiscal year |
5 | (432) | 3,162 | 21 | 2,756 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at the end of the fiscal year |
$ | 21,505 | $ | 6,360 | $ | 58,233 | $ | (129) | $ | 85,969 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended March 31, 2020 |
Millions of U.S. dollars | |||||||||||||||||||||||
Accumulated other comprehensive income | ||||||||||||||||||||||||
Net unrealized gains (losses) on other securities |
Net deferred gains (losses) on hedges |
Land revaluation excess |
Foreign currency translation adjustments |
Accumulated remeasurements of defined benefit plans |
Total | |||||||||||||||||||
Balance at the beginning of the fiscal year |
$ | 15,521 | $ | (502) | $ | 336 | $ | 463 | $ | (67) | $ | 15,751 | ||||||||||||
Changes in the fiscal year |
||||||||||||||||||||||||
Issuance of new stock |
||||||||||||||||||||||||
Cash dividends |
||||||||||||||||||||||||
Profit attributable to owners of parent |
||||||||||||||||||||||||
Purchase of treasury stock |
||||||||||||||||||||||||
Disposal of treasury stock |
||||||||||||||||||||||||
Cancellation of treasury stock |
| |||||||||||||||||||||||
Changes in shareholders interest due to transaction with non-controlling interests |
||||||||||||||||||||||||
Decrease due to decrease in subsidiaries |
||||||||||||||||||||||||
Decrease due to decrease in affiliates accounted for by the equity method |
||||||||||||||||||||||||
Reversal of land revaluation excess |
||||||||||||||||||||||||
Transfer from retained earnings to capital surplus |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
(2,917) | 1,258 | 3 | (765) | (779) | (3,200) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net changes in the fiscal year |
(2,917) | 1,258 | 3 | (765) | (779) | (3,200) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at the end of the fiscal year |
$ | 12,604 | $ | 756 | $ | 339 | $ | (302) | $ | (846) | $ | 12,551 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
10
Year ended March 31, 2020 |
Millions of U.S. dollars | |||||||||||
Stock acquisition rights |
Non- controlling interests |
Total net assets |
||||||||||
Balance at the beginning of the fiscal year |
$ | 44 | $ | 6,236 | $ | 105,244 | ||||||
Changes in the fiscal year |
||||||||||||
Issuance of new stock |
10 | |||||||||||
Cash dividends |
(2,351) | |||||||||||
Profit attributable to owners of parent |
6,469 | |||||||||||
Purchase of treasury stock |
(920) | |||||||||||
Disposal of treasury stock |
4 | |||||||||||
Cancellation of treasury stock |
| |||||||||||
Changes in shareholders interest due to transaction with non-controlling interests |
(437) | |||||||||||
Decrease due to decrease in subsidiaries |
(9) | |||||||||||
Decrease due to decrease in affiliates accounted for by the equity method |
(6) | |||||||||||
Reversal of land revaluation excess |
(4) | |||||||||||
Transfer from retained earnings to capital surplus |
| |||||||||||
|
|
|
|
|
|
|||||||
Net changes in items other than stockholders equity in the fiscal year |
(25) | (5,658) | (8,883) | |||||||||
|
|
|
|
|
|
|||||||
Net changes in the fiscal year |
(25) | (5,658) | (6,127) | |||||||||
|
|
|
|
|
|
|||||||
Balance at the end of the fiscal year |
$ | 19 | $ | 578 | $ | 99,117 | ||||||
|
|
|
|
|
|
11
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended March 31 |
Millions of yen |
Millions of U.S. dollars |
||||||||||||||
2019 |
2020 |
2020 | ||||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Income before income taxes |
¥ | 1,123,579 | ¥ | 888,646 | $ | 8,167 | ||||||||||
Depreciation |
269,010 | 209,198 | 1,923 | |||||||||||||
Losses on impairment of fixed assets |
9,610 | 65,106 | 598 | |||||||||||||
Amortization of goodwill |
25,919 | 17,533 | 161 | |||||||||||||
Gains on step acquisitions |
(2,285) | (22,040) | (203) | |||||||||||||
Equity in losses of affiliates |
(61,145) | (56,051) | (515) | |||||||||||||
Net change in reserve for possible loan losses |
(60,213) | 13,411 | 123 | |||||||||||||
Net change in reserve for employee bonuses |
(16,467) | 3,103 | 29 | |||||||||||||
Net change in reserve for executive bonuses |
(757) | 201 | 2 | |||||||||||||
Net change in net defined benefit asset and liability |
(25,570) | 101,532 | 933 | |||||||||||||
Net change in reserve for executive retirement benefits |
(196) | (84) | (1) | |||||||||||||
Net change in reserve for point service program |
1,704 | 2,627 | 24 | |||||||||||||
Net change in reserve for reimbursement of deposits |
(9,828) | (3,249) | (30) | |||||||||||||
Net change in reserve for losses on interest repayment |
2,830 | (4,703) | (43) | |||||||||||||
Interest income |
(2,488,904) | (2,456,364) | (22,575) | |||||||||||||
Interest expenses |
1,157,482 | 1,179,770 | 10,842 | |||||||||||||
Net (gains) losses on securities |
(101,219) | (143,877) | (1,322) | |||||||||||||
Net (gains) losses from money held in trust |
(0) | (0) | (0) | |||||||||||||
Net exchange (gains) losses |
(148,278) | 118,815 | 1,092 | |||||||||||||
Net (gains) losses from disposal of fixed assets |
3,944 | 54 | 0 | |||||||||||||
Net change in trading assets |
477,890 | (1,859,195) | (17,087) | |||||||||||||
Net change in trading liabilities |
(1,603,188) | 1,930,360 | 17,741 | |||||||||||||
Net change in loans and bills discounted |
(3,152,247) | (4,839,243) | (44,474) | |||||||||||||
Net change in deposits |
5,039,495 | 5,064,595 | 46,545 | |||||||||||||
Net change in negotiable certificates of deposit |
(73,017) | (982,400) | (9,029) | |||||||||||||
Net change in borrowed money (excluding subordinated borrowings) |
1,418,493 | 4,844,384 | 44,521 | |||||||||||||
Net change in deposits with banks |
1,520,423 | (1,455,747) | (13,379) | |||||||||||||
Net change in call loans and bills bought and others |
(6,235,713) | (812,970) | (7,471) | |||||||||||||
Net change in receivables under securities borrowing transactions |
4,240,226 | (907,630) | (8,341) | |||||||||||||
Net change in call money and bills sold and others |
6,097,354 | 4,256,015 | 39,114 | |||||||||||||
Net change in commercial paper |
(95,014) | (882,878) | (8,114) | |||||||||||||
Net change in payables under securities lending transactions |
(5,374,040) | 572,787 | 5,264 | |||||||||||||
Net change in foreign exchanges (assets) |
446,136 | (346,503) | (3,184) | |||||||||||||
Net change in foreign exchanges (liabilities) |
298,550 | 296,890 | 2,729 | |||||||||||||
Net change in lease receivables and investment assets |
(53,975) | 17,309 | 159 | |||||||||||||
Net change in short-term bonds (liabilities) |
(51,200) | 294,500 | 2,707 | |||||||||||||
Issuance and redemption of bonds (excluding subordinated bonds) |
467,587 | 152,729 | 1,404 | |||||||||||||
Net change in due to trust account |
24,502 | 458,581 | 4,215 | |||||||||||||
Interest received |
2,435,453 | 2,471,480 | 22,714 | |||||||||||||
Interest paid |
(1,116,584) | (1,201,792) | (11,045) | |||||||||||||
Other, net |
489,142 | 386,091 | 3,548 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Subtotal |
4,879,488 | 7,370,996 | 67,742 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Income taxes paid |
(283,245) | (283,536) | (2,606) | |||||||||||||
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) operating activities |
4,596,242 | 7,087,460 | 65,136 | |||||||||||||
|
|
|
|
|
|
12
(Continued)
Year ended March 31 |
Millions of yen |
Millions of U.S. dollars |
||||||||||||||
2019 |
2020 |
2020 | ||||||||||||||
Cash flows from investing activities: |
||||||||||||||||
Purchases of securities |
¥ | (26,615,239) | ¥ | (35,544,708) | $ | (326,668) | ||||||||||
Proceeds from sale of securities |
17,969,410 | 23,204,983 | 213,261 | |||||||||||||
Proceeds from redemption of securities |
10,078,569 | 9,550,000 | 87,768 | |||||||||||||
Purchases of money held in trust |
(2) | (284) | (3) | |||||||||||||
Proceeds from sale of money held in trust |
1,094 | 321 | 3 | |||||||||||||
Purchases of tangible fixed assets |
(510,213) | (103,052) | (947) | |||||||||||||
Proceeds from sale of tangible fixed assets |
104,451 | 19,206 | 177 | |||||||||||||
Purchases of intangible fixed assets |
(139,329) | (147,784) | (1,358) | |||||||||||||
Purchase of stocks of subsidiaries resulting in change in scope of consolidation |
*2 | (57,182) | (17,365) | (160) | ||||||||||||
Proceeds from sale of stocks of subsidiaries resulting in change in scope of consolidation |
*3 | 174,702 | 27,021 | 248 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) investing activities |
1,006,260 | (3,011,660) | (27,678) | |||||||||||||
|
|
|
|
|
|
|||||||||||
Cash flows from financing activities: |
||||||||||||||||
Repayment of subordinated borrowings |
(8,000) | (8,000) | (74) | |||||||||||||
Proceeds from issuance of subordinated bonds and bonds with stock acquisition rights |
| 139,405 | 1,281 | |||||||||||||
Redemption of subordinated bonds and bonds with stock acquisition rights |
(27,539) | (113,000) | (1,039) | |||||||||||||
Dividends paid |
(245,594) | (255,771) | (2,351) | |||||||||||||
Repayments to non-controlling stockholders |
(212,537) | (436,500) | (4,012) | |||||||||||||
Dividends paid to non-controlling stockholders |
(77,185) | (16,922) | (156) | |||||||||||||
Purchases of treasury stock |
(70,094) | (100,088) | (920) | |||||||||||||
Proceeds from disposal of treasury stock |
294 | 483 | 4 | |||||||||||||
Purchase of stocks of subsidiaries not resulting in change in scope of consolidation |
| (234,159) | (2,152) | |||||||||||||
Proceeds from sale of stocks of subsidiaries not resulting in change in scope of consolidation |
7,837 | | | |||||||||||||
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) financing activities |
(632,819) | (1,024,554) | (9,416) | |||||||||||||
|
|
|
|
|
|
|||||||||||
Effect of exchange rate changes on cash and cash equivalents |
166,646 | (74,480) | (685) | |||||||||||||
|
|
|
|
|
|
|||||||||||
Net change in cash and cash equivalents |
5,136,329 | 2,976,764 | 27,357 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents at the beginning of the fiscal year |
47,983,114 | 53,120,963 | 488,199 | |||||||||||||
Net change in cash and cash equivalents resulting from business combinations between subsidiaries |
| 79 | 1 | |||||||||||||
Increase in cash and cash equivalents resulting from inclusion of subsidiaries in consolidation |
1,519 | | | |||||||||||||
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents at the end of the fiscal year |
*1 | ¥ | 53,120,963 | *1 | ¥ | 56,097,807 | $ | 515,557 | ||||||||
|
|
|
|
|
|
13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Basis of presentation)
Sumitomo Mitsui Financial Group, Inc. (the Company) was established on December 2, 2002 as a holding company for the SMBC Group (the Group) through a statutory share transfer (kabushiki iten) of all of the outstanding equity securities of Sumitomo Mitsui Banking Corporation (SMBC) in exchange for the Companys newly issued securities. The Company is a joint stock corporation with limited liability (Kabushiki Kaisha) incorporated under the Companies Act of Japan. Upon formation of the Company and completion of the statutory share transfer, SMBC became a direct wholly owned subsidiary of the Company.
The Company has prepared the accompanying consolidated financial statements in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, and in conformity with accounting principles generally accepted in Japan (Japanese GAAP), which are different in certain respects as to application and disclosure requirements from International Financial Reporting Standards (IFRS).
The accounts of overseas subsidiaries and affiliated companies, are, in principle, integrated with those of the Companys accounting policies for purposes of consolidation unless they apply different accounting principles and standards as required under U.S. GAAP or IFRS, in which case a certain limited number of items are adjusted based on their materiality.
These consolidated financial statements are translated from the consolidated financial statements contained in the annual securities report filed under the Financial Instrument and Exchange Act of Japan (FIEA based financial statements) except for the addition of the non-consolidated financial statements and US dollar figures.
Amounts less than 1 million yen have been rounded down. As a result, the totals in Japanese yen shown in the financial statements do not necessarily agree with the sum of the individual amounts.
The translation of the Japanese yen amounts into U.S. dollars is included solely for the convenience of readers outside Japan, using the prevailing exchange rate at March 31, 2020 which was ¥108.81 to US$1. These translations should not be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at that rate.
14
(Significant accounting policies for preparing consolidated financial statements)
1. Scope of consolidation
(1) | Consolidated subsidiaries |
The number of consolidated subsidiaries at March 31, 2020 is 174.
Principal companies: |
Sumitomo Mitsui Banking Corporation (SMBC) | |
SMBC Trust Bank Ltd | ||
SMBC Nikko Securities Inc. (SMBC Nikko) | ||
Sumitomo Mitsui Card Company, Limited (SMCC) | ||
Cedyna Financial Corporation | ||
SMBC Consumer Finance Co., Ltd. | ||
The Japan Research Institute, Limited | ||
Sumitomo Mitsui Asset Management Company, Limited (SMAM) | ||
Sumitomo Mitsui Banking Corporation Europe Limited | ||
Sumitomo Mitsui Banking Corporation (China) Limited | ||
PT Bank BTPN Tbk | ||
SMBC Americas Holdings, Inc. | ||
SMBC Guarantee Co., Ltd. |
Changes in the consolidated subsidiaries in the fiscal year ended March 31, 2020 are as follows:
TT International Asset Management Ltd and 15 other companies were newly included in the scope of consolidation as a result of acquisition of shares and for other reasons.
SMM Auto Finance, Inc. and 14 other companies were excluded from the scope of consolidation as they ceased to be subsidiaries due to the sale of their stocks and for other reasons.
(2) | Unconsolidated subsidiaries |
Principal company: |
SBCS Co., Ltd. |
Unconsolidated subsidiaries are also excluded from the scope of consolidation because their total amounts in terms of total assets, ordinary income, net income and retained earnings are immaterial, as such, they do not hinder a rational judgment of the financial position and results of operations of the Company and its consolidated subsidiaries when excluded from the scope of consolidation.
2. Application of the equity method
(1) | Unconsolidated subsidiaries accounted for by the equity method |
The number of unconsolidated subsidiaries accounted for by the equity method at March 31, 2020 is 5.
Principal company: |
SBCS Co., Ltd. |
(2) | Equity method affiliates |
The number of affiliates accounted for by the equity method at March 31, 2020 is 96.
Principal companies: |
Sumitomo Mitsui Finance and Leasing Company, Limited | |
Sumitomo Mitsui Auto Service Company, Limited |
Changes in the equity method affiliates in the fiscal year ended March 31, 2020 are as follows:
3 companies became equity method affiliates due to new establishment.
Daiwa SB Investments Ltd. and 16 other companies were excluded from the scope of equity method affiliates as they ceased to be affiliates due to merger and for other reasons.
(3) | Unconsolidated subsidiaries that are not accounted for by the equity method |
There are no corresponding companies.
15
(4) | Affiliates that are not accounted for by the equity method |
Principal company: |
Park Square Capital / SMBC Loan Programme S. à r. l. |
Affiliates that are not accounted for by the equity method are also excluded from the scope of equity method because their total amounts in terms of net income and retained earnings are immaterial, and as such, they do not hinder a rational judgment of the Companys financial position and results of operations when excluded from the scope of equity method.
3. The balance sheet dates of consolidated subsidiaries
(1) | The balance sheet dates of the consolidated subsidiaries at March 31, 2020 are as follows: |
June 30 |
4 | |||||
October 31 |
2 | |||||
December 31 |
82 | |||||
January 31 |
1 | |||||
March 31 |
85 |
(2) | The subsidiaries with balance sheets dated June 30 are consolidated using the financial statements as of March 31, the subsidiaries with balance sheets dated October 31 are consolidated using the financial statements as of January 31 and a subsidiary with balance sheets dated January 31 as well as certain subsidiaries with balance sheets dated December 31 are consolidated using the financial statements as of March 31. Other subsidiaries are consolidated using the financial statements as of their respective balance sheet dates. |
Appropriate adjustments were made to material transactions during the periods between their respective balance sheet dates and the consolidated closing date.
4. Accounting policies
(1) | Standards for recognition and measurement of trading assets/liabilities and trading income/losses |
Transactions for trading purposes (seeking gains arising from short-term changes in interest rates, currency exchange rates, or market prices of securities and other market related indices or from variation among markets) are included in Trading assets or Trading liabilities on the consolidated balance sheets on a trade date basis. Profits and losses on trading-purpose transactions are recognized on a trade date basis, and recorded as Trading income and Trading losses on the consolidated statements of income.
Securities and monetary claims purchased for trading purposes are stated at the fiscal year-end market value, and financial derivatives such as swaps, futures and options are stated at amounts that would be settled if the transactions were terminated at the consolidated balance sheet date.
Trading income and Trading losses include interest received or paid during the fiscal year. The year-on-year valuation differences of securities and monetary claims are also recorded in the above-mentioned accounts. As for the derivatives, assuming that the settlement will be made in cash, the year-on-year valuation differences are also recorded in the above-mentioned accounts.
16
(2) | Standards for recognition and measurement of securities |
1) | Debt securities that consolidated subsidiaries have the positive intent and ability to hold to maturity are classified as held-to-maturity securities and are carried at amortized cost (based on straight-line method) using the moving-average method. Investments in affiliates that are not accounted for by the equity method are carried at cost using the moving-average method. Securities other than trading purpose securities, held-to-maturity securities and investments in unconsolidated subsidiaries and affiliates are classified as other securities (available-for-sale securities). Stocks (including foreign stocks) in other securities are carried at their average market prices during the final month of the fiscal year, and bonds and others are carried at their fiscal year-end market prices (cost of securities sold is calculated using primarily the moving-average method). Other securities which are extremely difficult to determine fair value are carried at cost using the moving-average method. |
Net unrealized gains (losses) on other securities, net of income taxes, are included in Net assets except for the amount reflected on the gains or losses by applying fair value hedge accounting.
2) | Securities included in money held in trust are carried in the same method as in (1) and (2), 1) above. |
(3) | Standards for recognition and measurement of derivative transactions |
Derivative transactions, excluding those classified as trading derivatives, are carried at fair value.
(4) | Depreciation |
1) | Tangible fixed assets (excluding assets for rent and lease assets) |
Buildings owned by the Company and SMBC, which is a consolidated subsidiary of the Company, are depreciated using the straight-line method. Others are depreciated using the declining-balance method. The estimated useful lives of major items are as follows:
Buildings: |
7 to 50 years |
|||
Others: |
2 to 20 years |
Other consolidated subsidiaries depreciate tangible fixed assets primarily using the straight-line method over the estimated useful lives of the respective assets.
2) | Intangible fixed assets |
Intangible fixed assets are depreciated using the straight-line method. Capitalized software for internal use owned by the Company and its consolidated domestic subsidiaries is depreciated over its estimated useful life (5 to 10 years).
3) | Assets for rent |
Assets for rent are depreciated using the straight-line method, assuming that lease terms are, in principle, their depreciation period and the salvage is estimated disposal value when the lease period expires.
4) | Lease assets |
Lease assets with respect to non-transfer ownership finance leases, which are recorded in Tangible fixed assets, are depreciated using the straight-line method, assuming that lease terms are their expected lifetime and salvage values are zero.
17
(5) | Reserve for possible loan losses |
The reserve for possible loan losses of major consolidated subsidiaries is provided as detailed below in accordance with the internal standards for write-offs and provisions.
For claims on borrowers that have entered into bankruptcy, special liquidation proceedings or similar legal proceedings (Bankrupt borrowers) or borrowers that are not legally or formally insolvent but are regarded as substantially in the same situation (Effectively bankrupt borrowers), a reserve is provided based on the amount of claims, after the write-off stated below, net of the expected amount of recoveries from collateral and guarantees. For claims on borrowers that are not currently bankrupt but are perceived to have a high risk of falling into bankruptcy (Potentially bankrupt borrowers), a reserve is provided in the amount deemed necessary based on an overall solvency assessment of the claims, net of the expected amount of recoveries from collateral and guarantees.
Discounted Cash Flows (DCF) method is used for claims on borrowers whose cash flows from collection of principals and interest can be rationally estimated, and SMBC, which is a consolidated subsidiary of the Company, applies it to claims on large potentially bankrupt borrowers and claims on large borrowers requiring close monitoring that have been classified as Past due loans (3 months or more) or Restructured loans, whose total loans from SMBC exceed a certain amount. SMBC establishes a reserve for possible loan losses using the DCF method for such claims in the amount of the difference between the present value of principal and interest (calculated using the rationally estimated cash flows discounted at the initial contractual interest rate) and the book value.
For other claims, a reserve is primarily provided by setting the potential losses in the next one year or three years. The potential losses are calculated by determining the loss ratio based on the historical loan-loss ratio derived from actual loan losses or bankruptcies in the past one year or three years, or average (of a certain period) probability of bankruptcies, and by making necessary adjustments including future estimations.
In addition, in light of the latest economic situation and risk factors, for potential losses for specific portfolios that are based on the future prospects with high probability, but cannot be reflected in actual loan losses in the past and in any individual borrowers classification, a reserve is provided in the amount deemed necessary based on an overall assessment.
For claims originated in specific overseas countries, an additional reserve is provided in the amount deemed necessary based on the assessment of political and economic conditions.
Branches and credit supervision departments assess all claims in accordance with the internal rules for self-assessment of assets, and the Credit Review Department, independent from these operating sections, audits their assessment.
The reserve for possible loan losses of other consolidated subsidiaries for general claims is provided in the amount deemed necessary based on the historical loan-loss ratios, and for doubtful claims in the amount deemed uncollectible based on assessment of each claim.
For collateralized or guaranteed claims on bankrupt borrowers and effectively bankrupt borrowers, the amount exceeding the estimated value of collateral and guarantees is deemed to be uncollectible and written off against the total outstanding amount of the claims. The amount of write-off for the years ended March 31, 2019 and 2020 were ¥139,981 million and ¥142,834 million, respectively.
(6) | Reserve for employee bonuses |
The reserve for employee bonuses is provided for payment of bonuses to employees, in the amount of estimated bonuses, which are attributable to the fiscal year.
(7) | Reserve for executive bonuses |
The reserve for executive bonuses is provided for payment of bonuses to executives, in the amount of estimated bonuses, which are attributable to the fiscal year.
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(8) | Reserve for executive retirement benefits |
The reserve for executive retirement benefits is provided for payment of retirement benefits to directors, corporate auditors and other corporate executive officers, in the amount deemed accrued at the fiscal year-end based on our internal regulations.
(9) | Reserve for point service program |
The reserve for point service program is provided for the potential future redemption of points awarded to customers under the SMBC Point Pack, credit card points programs, and other customer points award programs. The amount is calculated by converting the outstanding points into a monetary amount, and rationally estimating and recognizing the amount that will be redeemed in the future.
(10) | Reserve for reimbursement of deposits |
The reserve for reimbursement of deposits which were derecognized as liabilities under certain conditions is provided for the possible losses on the future claims of withdrawal based on the historical reimbursements.
(11) | Reserve for losses on interest repayment |
The reserve for losses on interest repayment is provided for the possible losses on future claims of repayment of interest based on historical interest repayment experience.
(12) | Reserve under the special laws |
The reserve under the special laws is a reserve for contingent liabilities and provided for compensation for losses from securities related transactions or derivative transactions, pursuant to Article 46-5 of the Financial Instruments and Exchange Act.
(13) | Employee retirement benefits |
In calculating the projected benefit obligation, mainly the benefit formula basis is used to attribute the expected benefit attributable to the respective fiscal year.
Unrecognized prior service cost is amortized on a straight-line basis, primarily over 9 years within the employees average remaining service period at incurrence.
Unrecognized net actuarial gain (loss) is amortized on a straight-line basis, primarily over 9 years within the employees average remaining service period, commencing from the next fiscal year of incurrence.
(14) | Translation of foreign currency assets and liabilities |
Assets and liabilities of the Company and SMBC, which is a consolidated subsidiary of the Company, denominated in foreign currencies and accounts of SMBC overseas branches are translated into Japanese yen mainly at the exchange rate prevailing at the consolidated balance sheet date, with the exception of stocks of subsidiaries and affiliates translated at rates prevailing at the time of acquisition.
Other consolidated subsidiaries assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rate prevailing at their respective balance sheet dates.
(15) | Lease transactions |
1) | Recognition of income on finance leases |
Interest income is allocated to each period.
2) | Recognition of income on operating leases |
Primarily, lease-related income is recognized on a straight-line basis over the full term of the lease, based on the contractual amount of lease fees per month.
3) | Recognition of income and expenses on installment sales |
Primarily, installment-sales-related income and installment-sales-related expenses are recognized on a due-date basis over the full period of the installment sales.
19
(16) | Hedge accounting |
1) | Hedging against interest rate changes |
As for the hedge accounting method applied to hedging transactions for interest rate risk arising from financial assets and liabilities, SMBC, which is a consolidated subsidiary of the Company, applies deferred hedge accounting.
SMBC applies deferred hedge accounting stipulated in Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry (JICPA Industry Audit Committee Report No. 24, February 13, 2002) to portfolio hedges on groups of large-volume, small-value monetary claims and debts.
As for the portfolio hedges to offset market fluctuation, SMBC assesses the effectiveness of such hedges by classifying the hedged items (such as deposits and loans) and the hedging instruments (such as interest rate swaps) by their maturity. As for the portfolio hedges to fix cash flows, SMBC assesses the effectiveness of such hedges by verifying the correlation between the hedged items and the hedging instruments.
As for the individual hedges, SMBC also assesses the effectiveness of such individual hedges.
2) | Hedging against currency fluctuations |
SMBC, which is a consolidated subsidiary of the Company, applies deferred hedge accounting stipulated in Treatment of Accounting and Auditing Concerning Accounting for Foreign Currency Transactions in Banking Industry (JICPA Industry Audit Committee Report No. 25, July 29, 2002) to currency swap and foreign exchange swap transactions executed for the purpose of lending or borrowing funds in different currencies.
Pursuant to JICPA Industry Audit Committee Report No. 25, SMBC assesses the effectiveness of currency swap and foreign exchange swap transactions executed for the purpose of offsetting the risk of changes in currency exchange rates by verifying that there are foreign-currency monetary claims and debts corresponding to the foreign-currency positions.
In order to hedge risk arising from volatility of exchange rates for stocks of subsidiaries and affiliates and other securities (excluding bonds) denominated in foreign currencies, SMBC applies deferred hedge accounting or fair value hedge accounting, on the conditions that the hedged securities are designated in advance and that sufficient on-balance (actual) or off-balance (forward) liability exposure exists to cover the cost of the hedged securities denominated in the same foreign currencies.
3) | Hedging against share price fluctuations |
SMBC, which is a consolidated subsidiary of the Company, applies fair value hedge accounting to individual hedges offsetting the price fluctuation of the shares that are classified under other securities, and accordingly evaluates the effectiveness of such individual hedges.
4) | Transactions between consolidated subsidiaries |
As for derivative transactions between consolidated subsidiaries or internal transactions between trading accounts and other accounts (or among internal sections), SMBC manages the interest rate swaps and currency swaps that are designated as hedging instruments in accordance with the non-arbitrary and strict criteria for external transactions stipulated in JICPA Industry Audit Committee Report No. 24 and No. 25. Therefore, SMBC accounts for the gains or losses that arise from interest rate swaps and currency swaps in its earnings or defers them, rather than eliminating them.
Certain other consolidated subsidiaries apply the deferred hedge accounting, fair value hedge accounting or the special treatment for interest rate swaps.
(17) | Amortization of goodwill |
Goodwill is amortized using the straight-line method over a period in which its benefit is expected to be realized, not to exceed 20 years. Immaterial goodwill is charged or credited to income directly when incurred.
20
(18) | Scope of Cash and cash equivalents on consolidated statements of cash flows |
For the purpose of presenting the consolidated statements of cash flows, Cash and cash equivalents are cash on hand, non-interest earning deposits with banks and deposits with the Bank of Japan.
(19) | Consumption taxes |
National and local consumption taxes of the Company and its consolidated domestic subsidiaries are accounted for using the tax-excluded method.
(20) | Adoption of the consolidated corporate-tax system |
The Company and certain consolidated domestic subsidiaries apply the consolidated corporate-tax system.
(Unapplied Accounting Standards and Others)
1.Revised Accounting Standard for Revenue Recognition (ASBJ Statement No.29) etc. (issued March 30, 2018, revised March 31, 2020)
(1) | Outline |
The accounting standard etc. provide comprehensive principles for revenue recognition by taking into account of international trends. The principles of revenue recognition in the standard etc are to recognize revenue by depicting the transfer of promised goods or services to customers in an amount that reflects the consideration expected to be earned in exchange for those goods or services.
(2) | Date of Application |
The Company will apply the standard etc. from the beginning of the fiscal year commencing on April 1, 2021.
(3) | Effects of Application of the Accounting Standard etc. |
The effects of the application of the accounting standard etc. are currently being assessed.
2.Accounting Standard for Fair Value Measurement (ASBJ Statement No.30) etc. (issued July 4, 2019)
(1) | Outline |
The accounting standard etc. provide the guidance regarding methods of measuring fair values to improve comparability with those stipulated by international accounting standards.
(2) | Date of Application |
The Company applies the standard etc. from the beginning of the fiscal year commencing on April 1, 2020.
(3) | Effects of Application of the Accounting Standard etc. |
The effects of the application of the accounting standard etc. are currently being assessed.
3.Accounting Standard for Disclosure of Accounting Estimates (ASBJ Statement No.31) (issued March 31, 2020)
(1) | Outline |
The accounting standard aims to disclose information to help users of financial statements to understand accounting estimates for items with risks that could have significant effects on consolidated financial statements of the following fiscal year, among the amounts determined by the accounting estimates on consolidated financial statements of the current fiscal year.
21
(2) | Date of Application |
The Company will apply the standard etc. from the end of the fiscal year ending on March 31, 2021.
4.Revised Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections and its Implementation Guidance (ASBJ Statement No.24) (revised March 31, 2020)
(1) | Outline |
The accounting standard aims to provide the outline of adopted accounting principles and procedures in case that provisions of related accounting standards etc. are not evident.
(2) | Date of Application |
The Company will apply the standard etc. from the end of the fiscal year ending on March 31, 2021.
(Additional information)
1.The estimates of reserve for possible loan losses related to the increasing impact of the spread of the novel coronavirus disease (COVID-19)
The estimates of reserve for possible loan losses related to the increased impact of COVID-19 are reflected in the consolidated financial statements using the following method.
For potential losses related to individual borrowers due to deterioration in business performance and funding, a reserve for possible loan losses is provided by reviewing, as necessary, the borrowers classification based on the most recent available information.
In addition, for potential losses for specific portfolios that are based on the future prospects with high probability, which cannot be reflected in any of individual borrowers classification, a reserve is provided in the amount deemed necessary based on an overall assessment in light of impacts such as fluctuations in market indices including crude oil price due to factors such as COVID-19.
2.Transition from the consolidated corporate-tax system to the group tax sharing system
Companies are required to shift from the consolidated corporate-tax system to the group tax sharing system from the fiscal year beginning on or after April 1, 2022, in accordance with the Act for Partial Amendment of the Income Tax Act, etc. (Act No. 8, 2020) enacted on March 31, 2020. However, the Company and certain consolidated domestic subsidiaries, currently adopting the consolidated corporate-tax system, applied the accounting treatment based on the provisions of the Income Tax Act before the amendment for the fiscal year ended March 31, 2020, in accordance with the Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System (ASBJ Practical Issue Task Force No. 39, March 31, 2020).
22
(Notes to consolidated balance sheets)
*1 | Stocks and investments in unconsolidated subsidiaries and affiliates |
Stocks and investments in unconsolidated subsidiaries and affiliates at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Stocks |
¥ | 969,481 | ¥ | 943,980 | ||||
Investments |
6,368 | 661 |
Stocks of jointly controlled entities were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Stocks of jointly controlled entities |
¥ | 340,821 | ¥ | 322,598 |
*2 | Unsecured loaned securities for which borrowers have the right to sell or pledge |
The amount of unsecured loaned securities for which borrowers have the right to sell or pledge at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Japanese government bonds in Securities |
¥ | 902 | ¥ | |
As for the unsecured borrowed securities, securities under resale agreements and securities borrowed with cash collateral with rights to sell or pledge without restrictions, those securities pledged, those securities lent and those securities held without being disposed at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Securities pledged |
¥ | 7,270,140 | ¥ | 11,030,067 | ||||
Securities lent |
140,772 | 171,224 | ||||||
Securities held without being disposed |
2,232,706 | 2,546,017 |
*3 | Bankrupt loans and non-accrual loans |
Bankrupt loans and non-accrual loans at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Bankrupt loans |
¥ | 12,806 | ¥ | 13,978 | ||||
Non-accrual loans |
456,802 | 378,173 |
Bankrupt loans are loans, after write-off, to legally bankrupt borrowers as defined in Article 96-1-3 and 96-1-4 of Order for Enforcement of the Corporation Tax Act (Cabinet Order No. 97 of 1965) and on which accrued interest income is not recognized as there is substantial doubt about the ultimate collectability of either principal or interest because they are past due for a considerable period of time or for other reasons.
Non-accrual loans are loans on which accrued interest income is not recognized, excluding Bankrupt loans and loans on which interest payments are deferred in order to support the borrowers recovery from financial difficulties.
23
*4 | Past due loans (3 months or more) |
Past due loans (3 months or more) at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Past due loans (3 months or more) |
¥ | 13,444 | ¥ | 14,400 |
Past due loans (3 months or more) are loans on which the principal or interest payment is past due for 3 months or more, excluding Bankrupt loans and Non-accrual loans.
*5 | Restructured loans |
Restructured loans at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Restructured loans |
¥ | 193,427 | ¥ | 221,288 |
Restructured loans are loans on which terms and conditions have been amended in favor of the borrowers (e.g. reduction of the original interest rate, deferral of interest payments, extension of principal repayments or debt forgiveness) in order to support the borrowers recovery from financial difficulties, excluding Bankrupt loans, Non-accrual loans and Past due loans (3 months or more).
*6 | Risk-monitored loans |
The total amount of bankrupt loans, non-accrual loans, past due loans (3 months or more) and restructured loans at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Risk-monitored loans |
¥ | 676,481 | ¥ | 627,840 |
The amounts of loans presented in Notes *3 to *6 above are the amounts before deduction of reserve for possible loan losses.
*7 | Bills discounted |
Bills discounted are accounted for as financial transactions in accordance with the Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry (JICPA Industry Audit Committee Report No. 24, February 13, 2002). SMBC and its banking subsidiaries have rights to sell or pledge bank acceptance bought, commercial bills discounted, documentary bills and foreign exchanges bought without restrictions, etc. The total face value at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Bills discounted |
¥ | 906,636 | ¥ | 850,324 |
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*8 | Assets pledged as collateral |
Assets pledged as collateral at March 31, 2019 and 2020 consisted of the following:
March 31, 2019 |
Millions of yen | March 31, 2020 |
Millions of yen | |||||||
Assets pledged as collateral: |
Assets pledged as collateral: | |||||||||
Cash and due from banks |
¥ | 7,353 | Cash and due from banks |
¥ | 78,112 | |||||
Monetary claims bought |
11,459 | Trading assets |
834,864 | |||||||
Trading assets |
514,328 | Securities |
10,502,767 | |||||||
Securities |
6,286,499 | Loans and bills discounted |
10,679,243 | |||||||
Loans and bills discounted |
9,086,500 | |||||||||
Liabilities corresponding to assets pledged as collateral: |
Liabilities corresponding to assets pledged as collateral: |
|||||||||
Deposits |
26,089 | Deposits |
21,908 | |||||||
Payables under repurchase agreements |
5,762,587 | Payables under repurchase agreements |
6,670,132 | |||||||
Payables under securities lending transactions |
1,582,791 | Payables under securities lending transactions |
2,334,251 | |||||||
Borrowed money |
7,922,955 | Borrowed money |
10,587,419 | |||||||
Trust account |
124,550 | Trust account |
432,135 | |||||||
Acceptances and guarantees |
167,027 | Acceptance and guarantees |
103,886 |
In addition to the assets presented above, the following assets were pledged as collateral for cash settlements, and substitution for margins of futures transactions and certain other purposes at March 31, 2019 and 2020:
March 31, 2019 |
Millions of yen | March 31, 2020 |
Millions of yen | |||||||
Cash and due from banks |
¥ | 41,584 | Cash and due from banks | ¥ | 12,543 | |||||
Trading assets |
1,591,280 | Trading assets | 1,179,599 | |||||||
Securities |
4,812,271 | Securities | 3,570,617 | |||||||
Loans and bills discounted |
853,603 | Loans and bills discounted | 10,350 |
Other assets include collateral money deposited for financial instruments, surety deposits, margin of futures markets and other margins. The amounts for such assets were as follows:
March 31, 2019 |
Millions of yen | March 31, 2020 |
Millions of yen | |||||||
Collateral money deposited for financial instruments |
¥ | 1,630,600 | Collateral money deposited for financial instruments | ¥ | 2,240,739 | |||||
Surety deposits |
92,281 | Surety deposits | 87,976 | |||||||
Margins of futures markets |
64,340 | Margins of futures markets | 101,838 | |||||||
Other margins |
43,365 | Other margins | 46,569 |
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*9 | Commitment line contracts on overdrafts and loans |
Commitment line contracts on overdrafts and loans are agreements to lend to customers, up to a prescribed amount, as long as there is no violation of any condition established in the contracts. The amounts of unused commitments at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
The amounts of unused commitments |
¥ | 62,409,943 | ¥ | 61,881,806 | ||||
The amounts of unused commitments whose original contract terms are within 1 year or unconditionally cancelable at any time |
44,048,947 | 44,330,598 |
Since many of these commitments are expected to expire without being drawn upon, the total amount of unused commitments does not necessarily represent actual future cash flow requirements. Many of these commitments include clauses under which SMBC and other consolidated subsidiaries can reject an application from customers or reduce the contract amounts in the event that economic conditions change, SMBC and other consolidated subsidiaries need to secure claims, or other events occur. In addition, SMBC and other consolidated subsidiaries 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 such need arises and securing claims after the contracts are made.
*10 | Land revaluation excess |
SMBC, a consolidated subsidiary of the Company, revalued its own land for business activities in accordance with Act on Revaluation of Land (the Act) (Act No. 34, effective March 31, 1998) and Act for Partial Revision of Act on Revaluation of Land (Act No. 19, effective March 31, 2001). The income taxes corresponding to the net unrealized gains are reported in Liabilities as Deferred tax liabilities for land revaluation excess, and the Companys share of the net unrealized gains, net of deferred taxes, are reported as Land revaluation excess in Net assets.
Certain equity method affiliates also revalued its own land for business activities in accordance with the Act. The Companys share of the net unrealized gains and net of deferred taxes are reported as Land revaluation excess in Net assets.
Date of the revaluation
SMBC: March 31, 1998 and March 31, 2002
Certain equity method affiliates: March 31, 1999 and March 31, 2002
Method of revaluation (stipulated in Article 3-3 of the Act)
SMBC: Fair values were determined by applying appropriate adjustments for land shape and timing of appraisal to the values stipulated in Article 2-3, 2-4 or 2-5 of Order for Enforcement of Act on Revaluation of Land (Cabinet Order No. 119 effective March 31, 1998).
Certain equity method affiliates: Fair values were determined based on the values stipulated in Article 2-3 and 2-5 of Order for Enforcement of Act on Revaluation of Land (Cabinet Order No. 119 effective March 31, 1998).
*11 | Accumulated depreciation on tangible fixed assets |
Accumulated depreciation on tangible fixed assets at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Accumulated depreciation |
¥ | 741,648 | ¥ | 783,544 |
26
*12 | Deferred gain on tangible fixed assets deductible for tax purposes |
Deferred gain on tangible fixed assets deductible for tax purposes at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Deferred gain on tangible fixed assets deductible for tax purposes |
¥ | 62,127 | ¥ | 62,099 | ||||
[The consolidated fiscal year concerned] |
[] | [] |
*13 | Subordinated borrowings |
The balance of subordinated borrowings in Borrowed money at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Subordinated borrowings |
¥ | 257,000 | ¥ | 249,000 |
*14 | Subordinated bonds |
The balance of subordinated bonds included in Bonds at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Subordinated bonds |
¥ | 2,195,130 | ¥ | 2,216,743 |
*15 | Borrowings from trust account in relation to covered bonds issued by trust account |
The amount of borrowings from trust account in relation to covered bonds issued by trust account included in Due to trust account at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
The amount of borrowings from trust account in relation to covered bonds issued by trust account |
¥ | 124,550 | ¥ | 432,135 |
*16 | Guaranteed amount to privately-placed bonds |
The amount guaranteed by SMBC and its banking subsidiaries to privately-placed bonds (stipulated by Article 2-3 of the Financial Instruments and Exchange Act) in Securities at March 31, 2019 and 2020 were as follows:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Guaranteed amount to privately-placed bonds |
¥ | 1,662,777 | ¥ | 1,603,941 |
27
(Notes to consolidated statements of income)
*1 | Other income |
Other in Other income for the fiscal years ended March 31, 2019 and 2020 included the following:
Year ended March 31, 2019 |
Millions of yen |
Year ended March 31, 2020 |
Millions of yen | |||
Gains on sales of stocks |
¥ 134,748 | Gains on sales of stocks |
¥ 154,735 |
*2 | General and administrative expenses |
General and administrative expenses for the fiscal years ended March 31, 2019 and 2020 included the following:
Year ended March 31, 2019 |
Millions of yen |
Year ended March 31, 2020 |
Millions of yen | |||
Salaries and related expenses |
¥ 641,844 | Salaries and related expenses |
¥ 618,071 | |||
Research and development costs |
167 | Depreciation expense |
180,765 | |||
Research and development costs |
77 |
*3 | Other expenses |
Other expenses for the fiscal years ended March 31, 2019 and 2020 included the following:
Year ended March 31, 2019 |
Millions of yen |
Year ended March 31, 2020 |
Millions of yen | |||
Write-off of loans |
¥ 105,429 | Write-off of loans |
¥ 105,307 | |||
Write-off of stocks and others |
45,374 |
*4 | Other extraordinary gains |
Other extraordinary gains for the fiscal year ended March 31, 2019 and 2020 including the following gains:
Year ended March 31, 2019 |
Millions of yen |
Year ended March 31, 2020 |
Millions of yen | |||
Gains on step acquisitions |
¥ 2,285 | Gains on step acquisitions |
¥ 22,040 |
28
*5 | Losses on impairment of fixed assets |
The differences between the recoverable amounts and the book value of the following asset is recognized as Losses on impairment of fixed assets, and included in Extraordinary losses for the fiscal year ended March 31, 2019 and 2020.
Year ended March 31, 2019 |
Millions of yen | |||||||
Area |
Purpose of use |
Type |
Impairment loss | |||||
Tokyo metropolitan area |
Branches (14 items) | Land and buildings, etc. | ¥ | 205 | ||||
Idle assets (64 items) | 2,335 | |||||||
Kinki area |
Branches (7 items) | Land and buildings, etc. | 77 | |||||
Idle assets (40 items) | 2,139 | |||||||
Other |
Branches (2 items) | Land and buildings, etc. | 258 | |||||
Idle assets (19 items) | 889 | |||||||
|
| Intangible fixed assets | 3,703 | |||||
Year ended March 31, 2020 |
Millions of yen | |||||||
Area |
Purpose of use |
Type |
Impairment loss | |||||
Tokyo metropolitan area |
Branches (21 items) | Land and buildings, etc. | ¥ | 2,180 | ||||
Idle assets (87 items) | 6,221 | |||||||
Kinki area |
Branches (7 items) | Land and buildings, etc. | 769 | |||||
Idle assets (57 items) | 1,105 | |||||||
Other area in Japan |
Branches (5 items) | Land and buildings, etc. | 456 | |||||
Idle assets (20 items) | 609 | |||||||
Americas |
Lease assets for freight cars | Assets for rent | 13,805 | |||||
|
| Goodwill and other intangible fixed assets | 39,958 |
As for land and building, etc., at SMBC, a consolidated subsidiary of the Company, a branch, which continuously manages and determines its income and expenses, is the smallest unit of asset group for recognition and measurement of impairment loss of land and buildings, etc. Assets such as corporate headquarters facilities, training facilities, data and system centers, and health and recreational facilities which do not produce cash flows that can be attributed to individual assets are treated as corporate assets. As for idle assets, impairment loss is measured individually. At other consolidated subsidiaries, a branch or other group is the smallest asset grouping unit as well.
The carrying amounts of idle assets at SMBC are reduced to their recoverable amounts, and the decreased amounts are included in Extraordinary losses as Losses on impairment of fixed assets, if there are indicators that the invested amounts may not be recoverable.
The recoverable amount is calculated using net realizable value which is basically determined by subtracting the expected disposal cost from the appraisal value based on the Real Estate Appraisal Standard.
Assets for rent are grouped by type of freight cars. For the fiscal year ended March 31, 2020, the carrying amounts of some of the freight cars were reduced to their recoverable amounts, and the decreased amounts were included in Extraordinary losses as Losses on impairment of fixed assets, as the invested amounts were considered not to be recoverable. The recoverable amount is measured by value in use, which is calculated by discounting future cash flows by 6%.
For goodwill and other intangible fixed assets, a consolidated subsidiary is the main unit of asset group. For the fiscal year ended March 31, 2020, SMBC Trust Bank Ltd. reviewed its future cash flows in view of the current market environment. As a result, all of the unamortized balance of goodwill and other intangible fixed assets at the end of the fiscal year ended March 31, 2020 were included in Extraordinary losses as Losses on impairment of intangible fixed assets, as the carrying amounts of the aforementioned assets associated with its PRESTIA business were considered not to be recoverable. The recoverable amount is measured by value in use, which is calculated by discounting future cash flows by 6%.
29
(Notes to consolidated statements of comprehensive income)
*1 | Reclassification adjustment and tax effect of other comprehensive income |
Year ended March 31 |
Millions of yen | |||||||||||||||
2019 | 2020 | |||||||||||||||
Net unrealized gains (losses) on other securities: |
||||||||||||||||
Amount arising during the fiscal year |
¥ | 67,769 | ¥ | (203,676 | ) | |||||||||||
Reclassification adjustments |
(142,464 | ) | (211,281 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Before adjustments to tax effect |
(74,694 | ) | (414,958 | ) | ||||||||||||
Tax effect |
105,852 | 100,166 | ||||||||||||||
|
|
|
|
|||||||||||||
Net unrealized gains (losses) on other securities |
31,157 | (314,792 | ) | |||||||||||||
|
|
|
|
|||||||||||||
Net deferred gains (losses) on hedges: |
||||||||||||||||
Amount arising during the fiscal year |
381 | 128,887 | ||||||||||||||
Reclassification adjustments |
40,513 | 110,070 | ||||||||||||||
|
|
|
|
|||||||||||||
Before adjustments to tax effect |
40,895 | 238,957 | ||||||||||||||
Tax effect |
(10,914 | ) | (72,779 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Net deferred gains (losses) on hedges |
29,981 | 166,177 | ||||||||||||||
|
|
|
|
|||||||||||||
Land revaluation excess: |
||||||||||||||||
Amount arising during the fiscal year |
| | ||||||||||||||
Reclassification adjustments |
| | ||||||||||||||
|
|
|
|
|||||||||||||
Before adjustments to tax effect |
| | ||||||||||||||
Tax effect |
| (39 | ) | |||||||||||||
|
|
|
|
|||||||||||||
Land revaluation excess |
| (39 | ) | |||||||||||||
|
|
|
|
|||||||||||||
Foreign currency translation adjustments: |
||||||||||||||||
Amount arising during the fiscal year |
13,212 | (74,067 | ) | |||||||||||||
Reclassification adjustments |
(2,815 | ) | 15 | |||||||||||||
|
|
|
|
|||||||||||||
Before adjustments to tax effect |
10,396 | (74,052 | ) | |||||||||||||
Tax effect |
| | ||||||||||||||
|
|
|
|
|||||||||||||
Foreign currency translation adjustments |
10,396 | (74,052 | ) | |||||||||||||
|
|
|
|
|||||||||||||
Remeasurements of defined benefit plans: |
||||||||||||||||
Amount arising during the fiscal year |
(80,149 | ) | (125,218 | ) | ||||||||||||
Reclassification adjustments |
(15,063 | ) | 5,429 | |||||||||||||
|
|
|
|
|||||||||||||
Before adjustments to tax effect |
(95,212 | ) | (119,789 | ) | ||||||||||||
Tax effect |
29,682 | 35,369 | ||||||||||||||
|
|
|
|
|||||||||||||
Remeasurements of defined benefit plans |
(65,530 | ) | (84,420 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Share of other comprehensive income of affiliates: |
||||||||||||||||
Amount arising during the fiscal year |
(22,857 | ) | (42,843 | ) | ||||||||||||
Reclassification adjustments |
19,886 | 1,979 | ||||||||||||||
|
|
|
|
|||||||||||||
Before adjustments to tax effect |
(2,970 | ) | (40,864 | ) | ||||||||||||
Tax effect |
| | ||||||||||||||
|
|
|
|
|||||||||||||
Share of other comprehensive income of affiliates |
(2,970 | ) | (40,864 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Total other comprehensive income |
¥ | 3,035 | ¥ | (347,990 | ) | |||||||||||
|
|
|
|
30
(Notes to consolidated statements of changes in net assets)
Fiscal year ended March 31, 2019
1. Type and number of shares issued and treasury stock
Year ended March 31, 2019 |
Number of shares | |||||||||||||||||
At the beginning of the fiscal year |
Increase | Decrease | At the end of the fiscal year |
Notes | ||||||||||||||
Shares issued |
||||||||||||||||||
Common stock |
1,414,443,390 | 326,330 | 15,368,300 | 1,399,401,420 | 1,2 | |||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||
Total |
1,414,443,390 | 326,330 | 15,368,300 | 1,399,401,420 | ||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||
Treasury stock |
||||||||||||||||||
Common stock |
3,884,968 | 15,390,528 | 15,474,578 | 3,800,918 | 3,4 | |||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||
Total |
3,884,968 | 15,390,528 | 15,474,578 | 3,800,918 | ||||||||||||||
|
|
|
|
|
|
|
|
|
Notes: |
1. | The increase of 326,330 shares in the total number of shares issued was due to issuance of new stocks as stock-based compensation. | ||
2. | The decrease of 15,368,300 shares in the total number of shares issued was due to cancellation of treasury stock. | |||
3. | The increase of 15,390,528 shares in the number of treasury common stock comprises the increase of 22,228 shares due to purchase of fractional shares, and the increase of 15,368,300 shares due to purchase of treasury stock. | |||
4. | The decrease of 15,474,578 shares in the number of treasury common stock comprises the decrease of 106,278 shares due to sales of fractional shares as well as exercise of stock option, and the decrease of 15,368,300 shares due to cancellation of treasury stock. |
2. Information on stock acquisition rights
Year ended March 31, 2019 |
Number of shares | Millions of yen | ||||||||||||||||||||||||||||
Details of stock |
Type of shares |
At the beginning of the fiscal year |
Increase | Decrease | At the end of the fiscal year |
At the end of the fiscal year |
Notes | |||||||||||||||||||||||
The Company |
Stock acquisition rights as stock options |
| | | | | ¥ | 2,539 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Consolidated subsidiaries |
| | | | | | 2,210 | |||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total |
¥ | 4,750 | ||||||||||||||||||||||||||||
|
|
3. Information on dividends
(1) | Dividends paid in the fiscal year |
Date of resolution |
Type of shares |
Millions of yen, except per share amount | ||||||||||||||||
Cash dividends | Cash dividends per share |
Record date | Effective date | |||||||||||||||
Ordinary General Meeting of Shareholders held on June 28, 2018 |
Common stock | ¥ | 126,950 | ¥ | 90 | March 31, 2018 | June 29, 2018 | |||||||||||
Meeting of the Board of Directors |
Common stock | 118,626 | 85 | September 30, 2018 | December 4, 2018 | |||||||||||||
(2) Dividends to be paid in the next fiscal year
| ||||||||||||||||||
Date of resolution |
Type of shares |
Millions of yen, except per share amount | ||||||||||||||||
Cash dividends |
Source of dividends |
Cash dividends per share |
Record date | Effective date | ||||||||||||||
Ordinary General Meeting of Shareholders held on June 27, 2019 |
Common stock | ¥ | 132,582 | |
Retained earnings |
|
¥ | 95 | March 31, 2019 | June 28, 2019 |
31
Fiscal year ended March 31, 2020
1. Type and number of shares issued and treasury stock
Number of shares | ||||||||||||||||
Year ended March 31, 2020 |
At the beginning of the fiscal year |
Increase | Decrease |
At the end of the fiscal year |
Notes | |||||||||||
Shares issued |
||||||||||||||||
Common stock |
1,399,401,420 | 272,536 | 26,502,400 | 1,373,171,556 | 1,2 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total |
1,399,401,420 | 272,536 | 26,502,400 | 1,373,171,556 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Treasury stock |
||||||||||||||||
Common stock |
3,800,918 | 26,525,707 | 26,681,582 | 3,645,043 | 3,4 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total |
3,800,918 | 26,525,707 | 26,681,582 | 3,645,043 | ||||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The increase of 272,536 shares in the total number of shares issued was due to issuance of new stocks as stock-based compensation. | ||||
2. | The decrease of 26,502,400 shares in the total number of shares issued was due to cancellation of treasury stock. | |||||
3. | The increase of 26,525,707 shares in the number of treasury common stock comprises the increase of 23,307 shares due to purchase of fractional shares, and the increase of 26,502,400 shares due to purchase of treasury stock. | |||||
4. | The decrease of 26,681,582 shares in the number of treasury common stock comprises the decrease of 179,182 shares due to sales of fractional shares as well as exercise of stock option, and the decrease of 26,502,400 shares due to cancellation of treasury stock. |
2. Information on stock acquisition rights
Number of shares | Millions of yen | |||||||||||||||
Year ended March 31, 2020 |
Details of stock |
Type of shares |
At the beginning of the fiscal year |
Increase | Decrease | At the end of the fiscal year |
At the end of the fiscal year |
Notes | ||||||||
The Company |
Stock acquisition rights as stock options |
| | | | | ¥ 2,064 | |||||||||
|
|
|
| |||||||||||||
Total |
¥ 2,064 | |||||||||||||||
|
3. Information on dividends
(1) Dividends paid in the fiscal year | ||||||||||||||||||
Type of shares | Millions of yen, except per share amount | |||||||||||||||||
Date of resolution |
Cash dividends | Cash dividends per share |
Record date | Effective date | ||||||||||||||
Ordinary General Meeting of Shareholders |
Common stock | ¥ | 132,582 | ¥ | 95 | March 31, 2019 | June 28, 2019 | |||||||||||
Meeting of the Board of Directors held on |
Common stock | 123,252 | 90 | September 30, 2019 | December 3, 2019 | |||||||||||||
(2) Dividends to be paid in the next fiscal year
| ||||||||||||||||||
Type of shares | Millions of yen, except per share amount | |||||||||||||||||
Date of resolution |
Cash dividends |
Source of dividends |
Cash dividends per share |
Record date | Effective date | |||||||||||||
Ordinary General Meeting of Shareholders |
Common stock |
¥ | 136,952 | |
Retained earnings |
¥ | 100 | March 31, 2020 | June 29, 2020 |
32
(Notes to consolidated statements of cash flows)
*1 | Reconciliation of balance of Cash and cash equivalents at the end of the fiscal year and the amounts of items stated in the consolidated balance sheet |
Millions of yen | ||||||||
Year ended March 31 |
2019 | 2020 | ||||||
Cash and due from banks |
¥ | 57,411,276 | ¥ | 61,768,573 | ||||
Interest earning deposits with banks (excluding the deposit with the Bank of Japan) |
(4,290,312) | (5,670,766) | ||||||
|
|
|
|
|||||
Cash and cash equivalents |
¥ | 53,120,963 | ¥ | 56,097,807 | ||||
|
|
|
|
*2 | The major components of assets and liabilities for the companies newly consolidated by stock acquisition and for other reasons |
The major components of assets and liabilities at the commencement of consolidation due to consolidation of PT Bank Tabungan Pensiunan Nasional Tbk (BTPN) and 1 other company by SMBCs stock acquisition and the relation between the acquisition cost of the shares and expenditure to acquire were as follows:
Year ended March 31, 2019 |
Millions of yen | |||||||
Assets |
¥ | 837,523 | ||||||
Loans and bills discounted |
522,918 | |||||||
Liabilities |
(643,346) | |||||||
Deposits |
(538,529) | |||||||
Foreign currency translation adjustments |
5,049 | |||||||
Stock acquisition rights |
(2,141) | |||||||
Non-controlling interests |
(12,402) | |||||||
Goodwill |
4,707 | |||||||
|
|
|||||||
Acquisition cost of 2 companies |
189,390 | |||||||
Cash and cash equivalents included in acquired assets of 2 companies |
(54,182) | |||||||
Fair value of BTPNs common stocks immediately prior to the business combination |
(78,025) | |||||||
|
|
|||||||
Expenditure for acquisition of 2 companies |
¥ | 57,182 | ||||||
|
|
33
*3 | The major components of assets and liabilities of companies which were excluded from the scope of consolidation by sale of the shares |
The major components of assets and liabilities of Sumitomo Mitsui Finance and Leasing Company, Limited (SMFL) and 184 other companies which were excluded from the scope of consolidation due to the partial sale of SMFLs stock by the Company and the relation between the selling price of the shares and the income for sales were as follows:
Year ended March 31, 2019 |
Millions of yen | |||||
Assets |
¥ | 6,154,253 | ||||
Lease receivables and investment assets |
2,157,141 | |||||
Tangible fixed assets |
2,267,524 | |||||
Liabilities |
(5,435,353) | |||||
Borrowed money |
(3,101,458) | |||||
Non-controlling interests |
(258,602) | |||||
Investment account after sales of stocks |
(301,028) | |||||
Gains (losses) on sales of stocks |
17,014 | |||||
|
|
|||||
Selling price of 185 companies |
176,284 | |||||
Cash and cash equivalents included in disposed assets of 185 companies |
(1,582) | |||||
|
|
|||||
Income for sales of 185 companies |
¥ | 174,702 | ||||
|
|
34
(Notes to lease transactions)
1. Finance leases
(1) | Lessee side |
1) | Lease assets |
(a) | Tangible fixed assets |
Tangible fixed assets mainly consisted of branches and equipment. |
(b) | Intangible fixed assets |
Intangible fixed assets are software. |
2) | Depreciation method of lease assets |
Depreciation method of lease assets is reported in 4. Accounting policies (4) Depreciation.
(2) | Lessor side |
1) | Breakdown of lease investment assets |
March 31 |
Millions of yen | |||||||
2019 | 2020 | |||||||
Lease receivables |
¥ | 269,214 | ¥ | 258,052 | ||||
Residual value |
65,094 | 47,285 | ||||||
Unearned interest income |
(86,474) | (85,604) | ||||||
|
|
|
|
|||||
Total |
¥ | 247,835 | ¥ | 219,733 | ||||
|
|
|
|
2) | The scheduled collections of lease payments receivable related to lease investment assets are as follows: |
March 31 |
Millions of yen | |||||||
2019 | 2020 | |||||||
Within 1 year |
¥ | 43,411 | ¥ | 26,938 | ||||
More than 1 year to 2 years |
24,003 | 26,318 | ||||||
More than 2 years to 3 years |
21,214 | 23,880 | ||||||
More than 3 years to 4 years |
20,682 | 16,453 | ||||||
More than 4 years to 5 years |
13,813 | 13,612 | ||||||
More than 5 years |
146,089 | 150,848 | ||||||
|
|
|
|
|||||
Total |
¥ | 269,214 | ¥ | 258,052 | ||||
|
|
|
|
3) | Non-transfer ownership finance leases, which commenced in fiscal years beginning before April 1, 2008, are valued at their appropriate book value, net of accumulated depreciation, as of March 31, 2008, and recorded as the beginning balance of Lease receivables and investment assets. |
Moreover, interest on such non-transfer ownership finance leases during the remaining term of the leases is allocated over the lease term using the straight-line method.
As a result of this accounting treatment, Income before income taxes for the fiscal years ended March 31, 2019 was ¥1,332 million more than it would have been if such transactions had been treated in a similar way to sales of the underlying assets.
35
2. Operating leases
(1) | Lessee side |
Future minimum lease payments on operating leases which were not cancelable were as follows:
March 31 |
Millions of yen | |||||||
2019 | 2020 | |||||||
Due within 1 year |
¥ | 44,385 | ¥ | 42,384 | ||||
Due after 1 year |
271,612 | 247,206 | ||||||
|
|
|
|
|||||
Total |
¥ | 315,997 | ¥ | 289,591 | ||||
|
|
|
|
(2) | Lessor side |
Future minimum lease payments on operating leases which were not cancelable were as follows:
March 31 |
Millions of yen | |||||||
2019 | 2020 | |||||||
Due within 1 year |
¥ | 35,936 | ¥ | 31,498 | ||||
Due after 1 year |
85,242 | 72,655 | ||||||
|
|
|
|
|||||
Total |
¥ | 121,178 | ¥ | 104,154 | ||||
|
|
|
|
36
(Notes to financial instruments)
1. Status of financial instruments
(1) | Policies on financial instruments |
The Group conducts banking and other financial services such as leasing, securities, consumer finance, system development and information processing. Its banking business includes deposit taking, lending, securities trading and investment, remittance and transfer, foreign exchange, bond subscription agent, trust business, and over-the-counter sales of securities investment trusts and insurance products.
These services entail holding of financial assets such as loans and bills discounted, bonds, and stocks. Meanwhile, the Group raises funds through deposit taking, borrowing, bond offering, etc. Furthermore, it undertakes derivative transactions to meet customers hedging needs to control market risk associated with deposit taking and lending (ALM purposes), and to make profit on short-term fluctuations in interest rates, foreign exchange rates, etc. (trading purposes). At SMBC, the Companys major consolidated subsidiary, derivative transactions for ALM purposes are undertaken by the Treasury Dept. and the International Treasury Dept. of the Treasury Unit, while derivative transactions for trading purposes are undertaken by the Trading Dept. of the Treasury Unit (derivative transactions for both ALM and trading purposes are undertaken by the Asia and Oceania Treasury Dept. in Asia and Oceania region, and are undertaken by the East Asia Treasury Dept. in East Asia region).
(2) | Details of financial instruments and associated risks |
1) | Financial assets |
The main financial assets held by the Group include loans to foreign and domestic companies and domestic individuals, and securities such as bonds (government and corporate bonds) and stocks (foreign and domestic stocks), etc. Bonds such as government bonds are held for both trading and ALM purposes, and certain bonds are held as held-to-maturity securities. Stocks are held mainly for strategic purposes. These assets expose the Group to credit risk, market risk and liquidity risk. Credit risk is the risk of loss arising from nonperformance of obligations by the borrower or issuer due to factors such as deterioration in the borrowers/issuers financial conditions. Market risk is the risk stemming from fluctuations in interest rates, exchange rates, or share prices. Liquidity risk is the risk arising from difficulty executing transactions in desired quantities at appropriate prices due to low market liquidity. These risks are properly monitored and managed based on (3) Risk management framework for financial instruments below.
2) | Financial liabilities |
Financial liabilities of the Group include borrowed money and bonds, etc. in addition to deposits. Deposits mainly comprise deposits of domestic and foreign companies and domestic individuals. Borrowed money and bonds include subordinated borrowings and subordinated bonds with special clause specifying that the repayment order of borrowing or bond subordinates to other borrowings or bonds. Also, financial liabilities, like financial assets, expose the Group to not only market risk but also funding liquidity risk: the risk of the Group not being able to raise funds due to market turmoil, deterioration in the Groups creditworthiness or other factors. These risks are properly monitored and managed based on (3) Risk management framework for financial instruments below.
3) | Derivative transactions |
Derivatives handled by the Group include foreign exchange futures; futures, forwards, swaps and options related to interest rates, currencies, equities, bonds and commodities; and credit and weather derivatives.
Major risks associated with derivatives include market risk, liquidity risk, and credit risk arising from nonperformance of contractual obligations due to deterioration in the counterpartys financial conditions. These risks are properly monitored and managed based on (3) Risk management framework for financial instruments below.
Hedge accounting is applied to derivative transactions executed for ALM purposes, as necessary. Hedging instruments, hedged items, hedging policy and hedging method to assess the effectiveness of the hedge are described in (Notes to significant accounting policies for preparing consolidated financial statements), 4. Accounting policies, (16) Hedge accounting.
37
(3) | Risk management framework for financial instruments |
The fundamental matters on risk management for the entire Group are set forth in Regulations on Comprehensive Risk Management. The Companys Management Committee establishes the basic risk management policy for the entire Group, based on the regulations, which is then approved by the Board of Directors. Each Group company has a risk management system based on the characteristics of its particular businesses and in accordance with the basic policy. Furthermore, the Group CRO is established to assess risk management across the Group unitarily and implement appropriate risk management. The Company is sharing information on 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 Group companies.
1) | Management of credit risk |
The Company has established fundamental principles on credit risk management to thoroughly manage the credit risk of the entire Group. Each group company conducts integrated management of credit risk according to its operational characteristics, and the credit risk inherent in the entire portfolio as well as the risk in individual credits are managed quantitatively and continuously.
(a) | Credit risk management system |
The Group CRO formulates credit risk management policies each year based on the group-wide basic policies for risk management. Meanwhile, the Credit & Investment Planning Dept. is responsible for the comprehensive management of credit risk. This department drafts and administers credit risk regulations, including the Groups credit policies, and performs credit portfolio management including non-performing loans. The Company has also established the Credit Risk Committee to serve as a body for deliberating on matters related to group-wide credit portfolios.
At SMBC, the Companys major consolidated subsidiary, the Credit & Investment Planning Dept. of the Risk Management Unit is responsible for the comprehensive management of credit risk. This department establishes, revises or abolishes credit policies, the internal rating system, credit authority regulations, credit application regulations, and manages non-performing loans and other aspects of credit portfolio management. The department also controls SMBCs total credit risk by quantifying credit risk (i.e. calculating risk capital and risk-weighted assets) in cooperation with the Corporate Risk Management Dept. Moreover, the Credit Portfolio Management Dept. within the Credit & Investment Planning Dept. works to stabilize SMBCs overall credit portfolio through selling credit derivatives and loan claims.
The credit departments of each business unit conduct credit risk management for loans handled by their units and manage their units portfolios. Credit approval authority is generally determined based on the credit amounts and internal grades, and the credit departments focus on analysis and management of customers and transactions with relatively high credit risk. The Credit Administration Dept. is mainly responsible for formulating and implementing measures to reduce the exposure of non-performing loans. Through industrial and sector-specific surveys and studies of individual companies, the Corporate Research Dept. works to form an accurate idea of the circumstances of borrower companies and identify those with potentially troubled credit positions at early stage.
Moreover, the Credit Risk Committee, a cross-departmental consultative body, rounds out SMBCs oversight systems for undertaking flexible and efficient control of credit risk and ensuring the overall soundness of SMBCs loan operations.
In addition to these, the Internal Audit Unit, operating independently of the business units, audits asset quality, grading accuracy, self-assessment, and appropriateness of the credit risk management system, and reports the results directly to the Management Committee and the Audit Committee.
(b) | Method of credit risk management |
The Company properly manages the credit risk inherent in individual loans and the entire portfolio by assessing and quantifying the credit risk of each borrower/loan using the internal rating system. In addition to management of individual loans through credit screening and monitoring, it manages the credit portfolio as described below in order to secure and improve the credit portfolios soundness and medium-term profitability.
| Appropriate risk-taking within capital |
To keep credit risk exposure to a permissible level relative to capital, the Company sets credit risk capital limit for internal control purposes. Under these limits, separate guidelines are issued for each business unit and marketing unit. The Company regularly monitors compliance with these guidelines.
38
| Controlling concentration of risk |
Because concentration of credit risk in an industry or corporate group has the potential to impair the Companys capital significantly, the Company implements measures to prevent excessive concentration of loan in a single industry and to control large exposure to individual borrowers by setting maximum loan amounts and conducting loan reviews thoroughly. To manage country risk, the Company also has credit limit guidelines based on each countrys creditworthiness.
| Greater understanding of actual corporate conditions and balancing returns and risks |
The Company runs credit operations on the basic principle of thoroughly understanding actual corporate conditions and gaining profit commensurate with the level of credit risk entailed, and makes every effort to improve profit at after-cost (credit cost, capital cost and overhead cost) level.
| Reduction and prevention of non-performing loans |
For non-performing loans and potential non-performing loans, the Company carries out loan reviews to clarify credit policies and action plans, enabling it to swiftly implement measures to prevent deterioration of borrowers business situations, support business recoveries, collect on loans, and enhance loan security.
In regard to financial instruments such as investments in certain funds, securitized products and credit derivatives that indirectly retain risks related to assets such as corporate bonds and loan claims (underlying assets), such instruments entail market and liquidity risks in addition to credit risk, since such instruments are traded on the market. Credit risk management for these instruments involving detailed analysis and evaluation of characteristics of underlying assets is performed while market risk is comprehensively managed within the framework for managing market and liquidity risks. Moreover, guidelines have been established based on the characteristics of each type of risk to appropriately manage risks of incurring losses.
In regard to credit risk of derivative transactions, the potential exposure based on the market price is regularly calculated and properly managed. When the counterparty is a financial institution with which the Company frequently conducts derivative transactions, measures such as a close-out netting provision, which provide offsetting credit exposures between two parties in a single net payment from one party to the other in case of bankruptcy or other default event, are implemented to reduce credit risk.
2) | Management of market and liquidity risks |
The Company manages market and liquidity risks across the entire Group by setting allowable risk limits; ensuring the transparency of the risk management process; and clearly separating front-office, middle-office, and back-office operations for a highly efficient system of mutual checks and balances.
(a) | Market and liquidity risk management systems |
In accordance with the group-wide basic policies for risk management decided upon by the Management Committee, the Company determines important matters relating to the management of market and liquidity risks, such as basic policies and risk limits, in order to manage these risks. The ALM Committee meets four times a year, in principle, to report on the state of market and liquidity risk management and to discuss ALM operation policies. The Corporate Risk Management Dept., which is independent from the business units that directly handle market transactions, manages market and liquidity risks in an integrated manner. This department not only monitors the current risk situations but also reports regularly to the Management Committee and the Audit Committee. Furthermore, the ALM Committee at SMBC, the core bank of the Company, meets on a monthly basis to examine reports on the state of observance of limits on market and liquidity risks and to discuss ALM operation policies.
In addition, the Internal Audit Dept., which is independent of other departments, periodically performs comprehensive internal audits to verify that the risk management framework is properly functioning and reports the audit results to the Management Committee, the Audit Committee and other concerned committees and departments.
39
(b) | Market and liquidity risk management methodology |
| Market risk management |
The Company manages market risk by setting maximum loss and VaR (value at risk: maximum potential loss that may be incurred to a specific financial instrument for a given probability) within the market risk capital limit, which is set taking into account stockholders equity and other factors in accordance with the market transaction policies.
The Company uses the historical simulation method (a method for estimating the maximum loss by running simulations of changes in profit and loss on market fluctuations scenarios based on historical data) to measure VaR. Regarding banking activities (activities for generating profit through management of interest rates, terms, and other aspects such as loans and bonds in assets, deposits in liabilities) and trading activities (activities for generating profit by taking advantage of short-term fluctuations in market values and differences in value among markets), the Company calculates the maximum loss that may occur as a result of market fluctuations in 1 day with a probability of 1% based on 4 years of historical observation. With regard to the holding of shares (such as listed shares) for the purpose of strategic investment, the Company calculates the maximum loss that may occur as a result of market fluctuations in 1 year with a probability of 1% based on 10 years of historical observation.
Regarding risks associated with foreign exchange rates, interest rates, equity risk, option prices and other market risk factors, the Company manages such risks by setting a maximum limit on the indicator suited for each market risk factor such as BPV (basis point value: denotes the change in value of a financial instrument resulting from a 0.01 percentage-point change in the yield).
| Quantitative information on market risks |
As of March 31, 2020, total VaR of SMBC and its major consolidated subsidiaries was ¥50.5 billion for the banking activities, ¥16.2 billion for the trading activities and ¥942.4 billion for the holding of shares (such as listed shares) for the purpose of strategic investment.
However, it should be noted that these figures are statistical figures that change according to changes in assumptions and calculation methods, and may not cover the risk of future market conditions fluctuating drastically compared to market fluctuations of the past.
| Liquidity risk management |
The Company manages liquidity risk based on the framework of setting management levels of risk appetite indicators and developing contingency plans. Risk appetite indicators are quantitative benchmarks that select the types and indicate the levels of risk that the Company is willing to take on or tolerate. As an example, the Company sets a lower limit on the number of days over which cash flows could be maintained under the stress conditions such as deposit outflow, so as to secure funding sources that do not fall below the benchmark to avoid excessive reliance on short term funding. In addition, the Company develops contingency plans consisting of instructions, reporting lines and action plans in case of emergency.
Moreover, to manage the liquidity risk of marketable instruments, derivative transactions, etc., the Company has trading limits for each business office classified by currency, instrument, transaction period, etc. As for financial futures, etc., risks are managed by restricting positions to within a certain percentage of open interest in the entire market.
(4) | Supplementary explanations about matters concerning fair value of financial instruments |
Fair values of financial instruments are based on their market prices and, in cases where market prices are not available, on reasonably calculated prices. These prices have been calculated using certain assumptions, and may differ if calculated based on different assumptions.
40
2. Fair value of financial instruments
(1) | Consolidated balance sheet amount, Fair value and Net unrealized gains (losses) of financial instruments as of March 31, 2019 and 2020 are as follows: |
The amounts shown in the following tables do not include financial instruments (see (3) below) whose fair values are extremely difficult to determine, such as unlisted stocks classified as other securities, and stocks of subsidiaries and affiliates.
Millions of yen | ||||||||||||||||||||
March 31, 2019 | Consolidated balance sheet amount |
Fair value | Net unrealized gains (losses) |
|||||||||||||||||
1) | Cash and due from banks *1 |
¥ | 57,404,619 | ¥ | 57,414,384 | ¥ | 9,765 | |||||||||||||
2) | Call loans and bills bought *1 |
2,463,660 | 2,466,418 | 2,757 | ||||||||||||||||
3) | Receivables under resale agreements |
6,429,365 | 6,429,231 | (133) | ||||||||||||||||
4) | Receivables under securities borrowing transactions *1 |
4,097,238 | 4,097,502 | 263 | ||||||||||||||||
5) | Monetary claims bought *1 |
4,591,920 | 4,609,409 | 17,489 | ||||||||||||||||
6) | Trading assets |
|||||||||||||||||||
Securities classified as trading purposes |
2,755,519 | 2,755,519 | | |||||||||||||||||
7) | Money held in trust |
390 | 390 | | ||||||||||||||||
8) | Securities |
|||||||||||||||||||
Bonds classified as held-to-maturity |
280,247 | 281,136 | 888 | |||||||||||||||||
Other securities |
22,696,091 | 22,696,091 | | |||||||||||||||||
9) | Loans and bills discounted |
77,979,190 | ||||||||||||||||||
Reserve for possible loan losses *1 |
(301,809) | |||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
77,677,380 | 79,713,860 | 2,036,479 | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
10) | Foreign exchanges *1 |
1,717,469 | 1,720,319 | 2,850 | ||||||||||||||||
11) | Lease receivables and investment assets *1 |
247,550 | 242,941 | (4,609) | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total assets |
¥ | 180,361,453 | ¥ | 182,427,205 | ¥ | 2,065,752 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
1) | Deposits |
¥ | 122,325,038 | ¥ | 122,320,963 | ¥ | (4,074) | |||||||||||||
2) | Negotiable certificates of deposit |
11,165,486 | 11,170,627 | 5,140 | ||||||||||||||||
3) | Call money and bills sold |
1,307,778 | 1,307,710 | (68) | ||||||||||||||||
4) | Payables under repurchase agreements |
11,462,559 | 11,462,559 | | ||||||||||||||||
5) | Payables under securities lending transactions |
1,812,820 | 1,812,820 | | ||||||||||||||||
6) | Commercial paper |
2,291,813 | 2,291,785 | (27) | ||||||||||||||||
7) | Trading liabilities |
|||||||||||||||||||
Trading securities sold for short sales |
1,992,314 | 1,992,314 | | |||||||||||||||||
8) | Borrowed money |
10,656,897 | 10,706,117 | 49,219 | ||||||||||||||||
9) | Foreign exchanges |
1,165,141 | 1,165,141 | | ||||||||||||||||
10) | Short-term bonds |
84,500 | 84,500 | | ||||||||||||||||
11) | Bonds |
9,227,367 | 9,387,562 | 160,195 | ||||||||||||||||
12) | Due to trust account |
1,352,773 | 1,354,823 | 2,050 | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total liabilities |
¥ | 174,844,490 | ¥ | 175,056,926 | ¥ | 212,435 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Derivative transactions *2 |
||||||||||||||||||||
Hedge accounting not applied |
¥ | 391,707 | ¥ | 391,707 | ¥ | | ||||||||||||||
Hedge accounting applied |
[45,676] | [45,676] | | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total |
¥ | 346,030 | ¥ | 346,030 | ¥ | | ||||||||||||||
|
|
|
|
|
|
*1 | The amounts do not include general reserve for possible loan losses and specific reserve for possible loan losses. The reserves for possible losses on Cash and due from banks, Call loans and bills bought, Receivables under securities borrowing transactions, Monetary claims bought, Foreign exchanges and Lease receivables and investment assets are deducted directly from consolidated balance sheet amount since they are immaterial. |
*2 | The amounts collectively represent the derivative transactions which are recorded in Trading assets, Trading liabilities, Other assets and Other liabilities. Debts and credits arising from derivative transactions are presented on a net basis, with a net debt presented in square brackets. |
41
Millions of yen | ||||||||||||||||||||
March 31, 2020 | Consolidated balance sheet amount |
Fair value | Net unrealized gains (losses) |
|||||||||||||||||
1) | Cash and due from banks *1 |
¥ | 61,763,910 | ¥ | 61,765,323 | ¥ | 1,412 | |||||||||||||
2) | Call loans and bills bought *1 |
894,743 | 896,463 | 1,720 | ||||||||||||||||
3) | Receivables under resale agreements |
8,753,816 | 8,753,505 | (311) | ||||||||||||||||
4) | Receivables under securities borrowing transactions *1 |
5,005,089 | 5,005,125 | 36 | ||||||||||||||||
5) | Monetary claims bought *1 |
4,556,779 | 4,588,270 | 31,490 | ||||||||||||||||
6) | Trading assets |
|||||||||||||||||||
Securities classified as trading purposes |
2,752,881 | 2,752,881 | | |||||||||||||||||
7) | Money held in trust |
353 | 353 | | ||||||||||||||||
8) | Securities |
|||||||||||||||||||
Bonds classified as held-to-maturity |
282,379 | 282,519 | 140 | |||||||||||||||||
Other securities |
25,484,707 | 25,484,707 | | |||||||||||||||||
9) | Loans and bills discounted |
82,517,609 | ||||||||||||||||||
Reserve for possible loan losses *1 |
(301,752) | |||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
82,215,856 | 84,118,833 | 1,902,976 | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
10) | Foreign exchanges *1 |
2,060,975 | 2,063,721 | 2,745 | ||||||||||||||||
11) | Lease receivables and investment assets *1 |
219,548 | 218,858 | (690) | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total assets |
¥ | 193,991,042 | ¥ | 195,930,563 | ¥ | 1,939,520 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
1) | Deposits |
¥ | 127,042,217 | ¥ | 127,049,743 | ¥ | 7,526 | |||||||||||||
2) | Negotiable certificates of deposit |
10,180,435 | 10,187,496 | 7,060 | ||||||||||||||||
3) | Call money and bills sold |
3,740,539 | 3,740,628 | 88 | ||||||||||||||||
4) | Payables under repurchase agreements |
13,237,913 | 13,237,913 | | ||||||||||||||||
5) | Payables under securities lending transactions |
2,385,607 | 2,385,607 | | ||||||||||||||||
6) | Commercial paper |
1,409,249 | 1,409,249 | | ||||||||||||||||
7) | Trading liabilities |
|||||||||||||||||||
Trading securities sold for short sales |
2,012,475 | 2,012,475 | | |||||||||||||||||
8) | Borrowed money |
15,210,894 | 15,254,734 | 43,839 | ||||||||||||||||
9) | Foreign exchanges |
1,461,308 | 1,461,308 | | ||||||||||||||||
10) | Short-term bonds |
379,000 | 379,000 | | ||||||||||||||||
11) | Bonds |
9,235,639 | 9,360,807 | 125,167 | ||||||||||||||||
12) | Due to trust account |
1,811,355 | 1,824,319 | 12,964 | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total liabilities |
¥ | 188,106,637 | ¥ | 188,303,284 | ¥ | 196,647 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Derivative transactions *2 |
||||||||||||||||||||
Hedge accounting not applied |
¥ | 517,570 | ¥ | 517,570 | ¥ | | ||||||||||||||
Hedge accounting applied |
294,816 | 294,816 | | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total |
¥ | 812,386 | ¥ | 812,386 | ¥ | | ||||||||||||||
|
|
|
|
|
|
*1 | The amounts do not include general reserve for possible loan losses and specific reserve for possible loan losses. The reserves for possible losses on Cash and due from banks, Call loans and bills bought, Receivables under securities borrowing transactions, Monetary claims bought, Foreign exchanges and Lease receivables and investment assets are deducted directly from consolidated balance sheet amount since they are immaterial. |
*2 | The amounts collectively represent the derivative transactions which are recorded in Trading assets, Trading liabilities, Other assets and Other liabilities. Debts and credits arising from derivative transactions are presented on a net basis, with a net debt presented in square brackets. |
42
(2) | Fair value calculation methodology for financial instruments |
Assets |
1) | Cash and due from banks, 2) Call loans and bills bought, 3) Receivables under resale agreements, 4) Receivables under securities borrowing transactions, 9) Loans and bills discounted, 10) Foreign exchanges and 11) Lease receivables and investment assets: |
Of these transactions, for dues from banks without maturity and overdrafts with no specified repayment dates, the book values are used as fair value as they are considered to approximate their fair value.
For short-term transactions with remaining maturity not exceeding 6 months, in principle, the book values are used as fair value as they are considered to approximate their fair value.
The fair value of those with a remaining maturity of more than 6 months is, in principle, the present value of future cash flows (calculated by discounting estimated future cash flows, taking into account factors such as the borrowers internal rating and pledged collateral, using a rate comprising of a risk-free interest rate and an adjustment). Certain consolidated subsidiaries of the Company calculate the present value by discounting the estimated future cash flows computed based on the contractual interest rate, using a rate comprising a risk-free rate and a credit risk premium.
Regarding claims on bankrupt borrowers, effectively bankrupt borrowers and potentially bankrupt borrowers, expected losses on such claims are calculated based on either the expected recoverable amount from disposal of collateral or guarantees, or the present value of expected future cash flows. Since the claims balance sheet amounts minus the expected amount of loan losses approximate their fair values, such amounts are considered to be their fair values.
5) | Monetary claims bought: |
The fair values of monetary claims bought, such as subordinated trust beneficiary interests related to securitized housing loans, are based on the assessed value of underlying housing loans securitized through the trust scheme minus the assessed value of senior beneficial interests, etc. The fair values of other transactions are, in principle, based on prices calculated using methods similar to the methods applied to 9) Loans and bills discounted.
6) | Trading assets: |
The fair values of bonds and other securities held for trading purposes are, in principle, based on their market price at the end of the fiscal year.
7) | Money held in trust: |
The fair values of money held in trust are, in principle, based on the market prices of securities held in trust calculated using methods similar to the methods applied to 8) Securities.
8) | Securities: |
In principle, the fair values of stocks (including foreign stocks) are based on the average market price during 1 month before the end of the fiscal year. The fair values of bonds and securities with market prices other than stocks are prices calculated based on their market prices as of the end of the fiscal year.
43
In light of the Practical Solution on Measurement of Fair Value for Financial Assets (ASBJ Practical Issue Task Force No. 25), the fair values of floating rate government bonds are based on the present value of future cash flows (the government bond yield is used to discount and estimate future cash flows). Bond yield and yield volatility are the main price parameters. The fair values of those without market prices, such as private placement bonds, are based on the present value of future cash flows calculated by discounting estimated future cash flows taking into account the borrowers internal rating and pledged collateral by a rate comprising a risk-free interest rate and an adjustment.
However, the fair values of bonds, such as private placement bonds issued by bankrupt borrowers, effectively bankrupt borrowers and potentially bankrupt borrowers are based on the bonds book value after the deduction of the expected amount of a loss on the bond computed by using the same method applied to the estimation of a loan loss. Meanwhile, the fair values of publicly offered investment trusts are calculated based on the published net asset value (NAV) per share, while those of private placement investment trusts are calculated based on the NAV published by securities firms and other financial institutions.
Liabilities |
1) | Deposits, 2) Negotiable certificates of deposit and 12) Due to trust account: |
The fair values of demand deposits and deposits without maturity are based on their book values. The fair values of short-term transactions with remaining maturity not exceeding 6 months are also based on their book values, as their book values are regarded to approximate their market values.
The fair values of transactions with a remaining maturity of more than 6 months are, in principle, based on the present value of estimated future cash flows calculated using the rate applied to the same type of deposits that are newly accepted until the end of the remaining maturity. The fair values of borrowings from the trust account related to covered bond issued by the trust account are based on the amount calculated in accordance with the price quoted by industry associations, etc.
3) | Call money and bills sold, 4) Payables under repurchase agreements, 5) Payables under securities lending transactions, 6) Commercial paper, 8) Borrowed money, 10) Short-term bonds and 11) Bonds: |
The fair values of short-term transactions with remaining maturity not exceeding 6 months are based on their book values, as their book values are considered to approximate their fair values. For transactions with a remaining maturity of more than 6 months, their fair values are, in principle, based on the present value of estimated future cash flows calculated using the refinancing rate applied to the same type of instruments for the remaining maturity. For certain type of instruments, however, fair values are based on either the amount calculated in accordance with the price quoted by industry associations, etc., or the present value of future cash flows calculated by using the rate derived from the published yield data, etc.
7) | Trading liabilities: |
The fair values of bonds sold for short sales and other securities for trading purposes are, in principle, based on their market prices as of the end of the fiscal year.
9) | Foreign exchanges: |
The fair values of foreign currency-denominated deposits without maturity received from other banks are based on their book values.
The fair values of foreign exchange related short-term borrowings are based on their book values, as their book values are regarded to approximate their fair values.
44
Derivatives transactions
The fair values of exchange-traded derivatives are based on their closing prices. With regard to OTC transactions, the fair values of interest rate, currency, stock, bond and credit derivatives are based on their prices calculated based on the present value of the future cash flows, option valuation models, etc. The fair values of commodity derivatives transactions are based on their prices calculated based on the derivative instruments components, including price and contract term.
(3) | Consolidated balance sheet amount of financial instruments whose fair values are extremely difficult to determine are as follows: |
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Securities: |
||||||||
Unlisted stocks, etc. *1*3 |
¥ | 170,572 | ¥ | 174,347 | ||||
Investments in partnership, etc. *2*3 |
215,245 | 242,674 | ||||||
|
|
|
|
|||||
Total |
¥ | 385,817 | ¥ | 417,022 | ||||
|
|
|
|
*1 | They are not included in the scope of fair value disclosure since there are no market prices and it is extremely difficult to determine their fair values. |
*2 | They are capital contributions with no market prices. The above-stated amount includes the book value amount of investments in the partnership of which the Company records net changes in their balance sheets and statements of income. |
*3 | Unlisted stocks and investments in partnership totaling ¥9,669 million and ¥22,903 million were written-off in the fiscal year ended March 31, 2019 and 2020, respectively. |
45
(4) | Redemption schedule of monetary claims and securities with maturities |
Millions of yen | ||||||||||||||||
March 31, 2019 |
Within 1 year | After 1 year through 5 years |
After 5 years through 10 years |
After 10 years | ||||||||||||
Deposits with banks |
¥ | 56,196,163 | ¥ | 142,027 | ¥ | 8,980 | ¥ | 1,125 | ||||||||
Call loans and bills bought |
2,416,537 | 49,206 | | | ||||||||||||
Receivables under resale agreements |
6,169,917 | 72,150 | | | ||||||||||||
Receivables under securities borrowing transactions |
4,097,473 | | | | ||||||||||||
Monetary claims bought |
3,587,450 | 514,675 | 161,745 | 286,006 | ||||||||||||
Securities*1 |
3,857,187 | 8,960,637 | 3,667,235 | 2,116,326 | ||||||||||||
Bonds classified as held-to-maturity |
20,000 | 260,000 | | | ||||||||||||
Japanese government bonds |
20,000 | 260,000 | | | ||||||||||||
Japanese local government bonds |
| | | | ||||||||||||
Japanese corporate bonds |
| | | | ||||||||||||
Other |
| | | | ||||||||||||
Other securities with maturity |
3,837,187 | 8,700,637 | 3,667,235 | 2,116,326 | ||||||||||||
Japanese government bonds |
1,217,500 | 4,080,400 | 520,900 | 335,700 | ||||||||||||
Japanese local government bonds |
| 11,072 | 87,188 | 7 | ||||||||||||
Japanese corporate bonds |
292,202 | 1,200,987 | 840,586 | 273,372 | ||||||||||||
Other |
2,327,484 | 3,408,177 | 2,218,560 | 1,507,246 | ||||||||||||
Loans and bills discounted*1*2 |
19,029,803 | 32,387,618 | 13,497,696 | 6,642,339 | ||||||||||||
Foreign exchanges*1 |
1,703,142 | 15,882 | | | ||||||||||||
Lease receivables and investment assets |
38,813 | 55,765 | 23,295 | 64,866 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
¥ | 97,096,488 | ¥ | 42,197,963 | ¥ | 17,358,954 | ¥ | 9,110,664 | ||||||||
|
|
|
|
|
|
|
|
*1 | The amounts shown in the table above do not include amounts for claims on bankrupt borrowers, effectively bankrupt borrowers and potentially bankrupt borrowers and other claims for which redemption is unlikely. The amounts for such claims are Securities: ¥12,958 million, Loans and bills discounted: ¥417,829 million, Foreign exchanges: ¥378 million. |
*2 | Loans and bills discounted without the maturity dates are not included. Such amount is totaled to ¥6,000,359 million at March 31, 2019. |
Millions of yen | ||||||||||||||||
March 31, 2020 |
Within 1 year | After 1 year through 5 years |
After 5 years through 10 years |
After 10 years | ||||||||||||
Deposits with banks |
¥ | 60,891,144 | ¥ | 26,083 | ¥ | 5,413 | ¥ | 906 | ||||||||
Call loans and bills bought |
853,031 | 43,708 | | | ||||||||||||
Receivables under resale agreements |
8,427,511 | 65,286 | | | ||||||||||||
Receivables under securities borrowing transactions |
5,000,653 | 4,450 | | | ||||||||||||
Monetary claims bought*1 |
3,310,435 | 735,646 | 163,273 | 295,468 | ||||||||||||
Securities |
6,702,393 | 7,787,784 | 3,250,285 | 4,241,524 | ||||||||||||
Bonds classified as held-to-maturity |
260,000 | | 22,300 | | ||||||||||||
Japanese government bonds |
260,000 | | | | ||||||||||||
Japanese local government bonds |
| | 22,300 | | ||||||||||||
Japanese corporate bonds |
| | | | ||||||||||||
Other |
| | | | ||||||||||||
Other securities with maturity |
6,442,393 | 7,787,784 | 3,227,985 | 4,241,524 | ||||||||||||
Japanese government bonds |
3,388,590 | 2,780,300 | 450,200 | 413,700 | ||||||||||||
Japanese local government bonds |
2,912 | 45,000 | 179,449 | 12,775 | ||||||||||||
Japanese corporate bonds |
316,475 | 1,123,144 | 814,564 | 449,623 | ||||||||||||
Other |
2,734,414 | 3,839,340 | 1,783,771 | 3,365,426 | ||||||||||||
Loans and bills discounted*1*2 |
20,530,820 | 34,431,806 | 13,516,514 | 6,514,499 | ||||||||||||
Foreign exchanges*1 |
2,057,021 | 2,911 | | | ||||||||||||
Lease receivables and investment assets |
21,006 | 58,938 | 26,716 | 65,787 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
¥ | 107,794,017 | ¥ | 43,156,614 | ¥ | 16,962,203 | ¥ | 11,118,187 | ||||||||
|
|
|
|
|
|
|
|
*1 | The amounts shown in the table above do not include amounts for claims on bankrupt borrowers, effectively bankrupt borrowers and potentially bankrupt borrowers and other claims for which redemption is unlikely. The amounts for such claims are Monetary claims bought: ¥292 million, Loans and bills discounted: ¥339,003 million, Foreign exchanges: ¥3,351 million. |
*2 | Loans and bills discounted without the maturity dates are not included. Such amount is totaled to ¥7,182,191 million at March 31, 2020. |
46
(5) | Redemption schedule of bonds, borrowed money and other interest-bearing debts |
Millions of yen | ||||||||||||||||
March 31, 2019 |
Within 1 year | After 1 year through 5 years |
After 5 years through 10 years |
After 10 years | ||||||||||||
Deposits * |
¥ | 118,166,614 | ¥ | 3,495,841 | ¥ | 182,195 | ¥ | 480,387 | ||||||||
Negotiable certificates of deposit |
10,605,811 | 559,675 | | | ||||||||||||
Call money and bills sold |
1,307,778 | | | | ||||||||||||
Payables under repurchase agreements |
11,443,460 | | | | ||||||||||||
Payables under securities lending transactions |
1,812,820 | | | | ||||||||||||
Commercial paper |
2,291,813 | | | | ||||||||||||
Borrowed money |
8,430,682 | 1,086,996 | 765,268 | 373,949 | ||||||||||||
Foreign exchanges |
1,165,141 | | | | ||||||||||||
Short-term bonds |
84,500 | | | | ||||||||||||
Bonds |
1,087,139 | 4,240,236 | 2,833,135 | 1,067,400 | ||||||||||||
Due to trust account |
1,228,223 | 124,550 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
¥ | 157,623,985 | ¥ | 9,507,299 | ¥ | 3,780,600 | ¥ | 1,921,736 | ||||||||
|
|
|
|
|
|
|
|
* | Demand deposits are included in Within 1 year. Deposits include current deposits. |
Millions of yen | ||||||||||||||||
March 31, 2020 |
Within 1 year | After 1 year through 5 years |
After 5 years through 10 years |
After 10 years | ||||||||||||
Deposits * |
¥ | 123,191,393 | ¥ | 3,269,858 | ¥ | 158,359 | ¥ | 422,607 | ||||||||
Negotiable certificates of deposit |
9,488,288 | 692,146 | | | ||||||||||||
Call money and bills sold |
3,740,539 | | | | ||||||||||||
Payables under repurchase agreements |
13,219,904 | | | | ||||||||||||
Payables under securities lending transactions |
2,385,607 | | | | ||||||||||||
Commercial paper |
1,409,249 | | | | ||||||||||||
Borrowed money |
10,116,503 | 4,185,181 | 637,820 | 271,389 | ||||||||||||
Foreign exchanges |
1,461,308 | | | | ||||||||||||
Short-term bonds |
379,000 | | | | ||||||||||||
Bonds |
1,311,716 | 3,876,955 | 3,016,822 | 1,030,816 | ||||||||||||
Due to trust account |
1,379,220 | 282,735 | 149,400 | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
¥ | 168,082,732 | ¥ | 12,306,877 | ¥ | 3,962,402 | ¥ | 1,724,812 | ||||||||
|
|
|
|
|
|
|
|
* | Demand deposits are included in Within 1 year. Deposits include current deposits. |
47
(Notes to securities)
The amounts shown in the following tables include trading securities and short-term bonds classified as Trading assets, negotiable certificates of deposit classified as Cash and due from banks, and beneficiary claims on loan trust classified as Monetary claims bought, in addition to Securities stated in the consolidated balance sheets.
1. | Securities classified as trading purposes |
Millions of yen | ||||||
March 31 |
2019 | 2020 | ||||
Valuation gains (losses) included in the earnings for the fiscal year |
¥ 20,551 | ¥ | (27,480) |
2. | Bonds classified as held-to-maturity |
Millions of yen | ||||||||||||||
March 31, 2019 |
Consolidated balance sheet amount |
Fair value | Net unrealized gains (losses) |
|||||||||||
Bonds with unrealized gains: |
Japanese government bonds |
¥ | 280,247 | ¥ | 281,136 | ¥ | 888 | |||||||
Japanese local government bonds |
| | | |||||||||||
Japanese corporate bonds |
| | | |||||||||||
Other | | | | |||||||||||
|
|
|
|
|
|
|||||||||
Subtotal | 280,247 | 281,136 | 888 | |||||||||||
|
|
|
|
|
|
|||||||||
Bonds with unrealized losses: |
Japanese government bonds |
| | | ||||||||||
Japanese local government bonds |
| | | |||||||||||
Japanese corporate bonds |
| | | |||||||||||
Other | | | | |||||||||||
|
|
|
|
|
|
|||||||||
Subtotal | | | | |||||||||||
|
|
|
|
|
|
|||||||||
Total |
¥ | 280,247 | ¥ | 281,136 | ¥ | 888 | ||||||||
|
|
|
|
|
|
|||||||||
Millions of yen | ||||||||||||||
March 31, 2020 |
Consolidated balance sheet amount |
Fair value | Net unrealized gains (losses) |
|||||||||||
Bonds with unrealized gains: |
Japanese government bonds |
¥ | 260,079 | ¥ | 260,286 | ¥ | 206 | |||||||
Japanese local government bonds |
2,000 | 2,001 | 1 | |||||||||||
Japanese corporate bonds |
| | | |||||||||||
Other | | | | |||||||||||
|
|
|
|
|
|
|||||||||
Subtotal | 262,079 | 262,287 | 208 | |||||||||||
|
|
|
|
|
|
|||||||||
Bonds with unrealized losses: |
Japanese government bonds |
| | | ||||||||||
Japanese local government bonds |
20,300 | 20,232 | (67) | |||||||||||
Japanese corporate bonds |
| | | |||||||||||
Other | | | | |||||||||||
|
|
|
|
|
|
|||||||||
Subtotal | 20,300 | 20,232 | | |||||||||||
|
|
|
|
|
|
|||||||||
Total |
¥ | 282,379 | ¥ | 282,519 | ¥ | 140 | ||||||||
|
|
|
|
|
|
48
3. | Other securities |
Millions of yen | ||||||||||||||
March 31, 2019 |
Consolidated balance sheet amount |
Acquisition cost | Net unrealized gains (losses) |
|||||||||||
Other securities with unrealized gains: |
Stocks | ¥ | 3,175,611 | ¥ | 1,242,178 | ¥ | 1,933,433 | |||||||
Bonds | 8,094,287 | 8,031,868 | 62,419 | |||||||||||
Japanese government bonds |
5,547,344 | 5,523,497 | 23,847 | |||||||||||
Japanese local government bonds |
89,608 | 88,868 | 740 | |||||||||||
|
Japanese corporate bonds |
2,457,334 | 2,419,502 | 37,831 | ||||||||||
Other | 5,885,370 | 5,398,325 | 487,045 | |||||||||||
|
|
|
|
|
|
|||||||||
Subtotal | 17,155,270 | 14,672,372 | 2,482,898 | |||||||||||
|
|
|
|
|
|
|||||||||
Other securities with unrealized losses: |
Stocks | 171,965 | 202,460 | (30,495) | ||||||||||
Bonds | 889,443 | 891,497 | (2,053) | |||||||||||
Japanese government bonds |
686,982 | 687,573 | (591) | |||||||||||
Japanese local government bonds |
9,555 | 9,560 | (4) | |||||||||||
Japanese corporate bonds |
192,906 | 194,363 | (1,457) | |||||||||||
Other | 5,198,045 | 5,327,052 | (129,007) | |||||||||||
|
|
|
|
|
|
|||||||||
Subtotal | 6,259,454 | 6,421,010 | (161,555) | |||||||||||
|
|
|
|
|
|
|||||||||
Total |
¥ | 23,414,725 | ¥ | 21,093,383 | ¥ | 2,321,342 | ||||||||
|
|
|
|
|
|
Notes: | 1. | Net unrealized gains (losses) on other securities shown above include losses of ¥12,777 million for the fiscal year ended March 31, 2019 that are recognized in the earnings by applying fair value hedge accounting. | ||
2. | Consolidated balance sheet amounts of other securities whose fair values are extremely difficult to determine are as follows: |
March 31, 2019 |
Millions of yen | |||
Stocks |
¥ | 139,051 | ||
Other |
246,765 | |||
|
|
|||
Total |
¥ | 385,817 | ||
|
|
These amounts are not included in 3. Other securities since there are no market prices and it is extremely difficult to determine their fair values.
Millions of yen | ||||||||||||||
March 31, 2020 |
Consolidated balance sheet amount |
Acquisition cost | Net unrealized gains (losses) |
|||||||||||
Other securities with unrealized gains: |
Stocks | ¥ | 2,372,608 | ¥ | 1,038,349 | ¥ | 1,334,258 | |||||||
Bonds | 5,197,614 | 5,159,687 | 37,927 | |||||||||||
Japanese government bonds |
2,871,225 | 2,865,395 | 5,829 | |||||||||||
Japanese local government bonds |
76,337 | 75,981 | 356 | |||||||||||
Japanese corporate bonds |
2,250,052 | 2,218,310 | 31,741 | |||||||||||
Other | 10,655,671 | 9,934,324 | 721,347 | |||||||||||
|
|
|
|
|
|
|||||||||
Subtotal | 18,225,894 | 16,132,361 | 2,093,533 | |||||||||||
|
|
|
|
|
|
|||||||||
Other securities with unrealized losses: |
Stocks | 222,431 | 287,126 | (64,694) | ||||||||||
Bonds | 4,869,781 | 4,886,191 | (16,410) | |||||||||||
|
Japanese government bonds |
4,216,709 | 4,229,667 | (12,957) | ||||||||||
Japanese local government bonds |
164,044 | 164,575 | (530) | |||||||||||
Japanese corporate bonds |
489,027 | 491,949 | (2,921) | |||||||||||
Other | 2,914,076 | 3,034,175 | (120,098) | |||||||||||
|
|
|
|
|
|
|||||||||
Subtotal | 8,006,289 | 8,207,493 | (201,204) | |||||||||||
|
|
|
|
|
|
|||||||||
Total |
¥ | 26,232,183 | ¥ | 24,339,854 | ¥ | 1,892,329 | ||||||||
|
|
|
|
|
|
Notes: | 1. | Net unrealized gains (losses) on other securities shown above include losses of ¥26,403 million for the fiscal year ended March 31, 2020 that are recognized in the earnings by applying fair value hedge accounting. | ||
2. | Consolidated balance sheet amounts of other securities whose fair values are extremely difficult to determine are as follows: |
49
March 31, 2020 |
Millions of yen | |||
Stocks |
¥ | 141,767 | ||
Other |
275,254 | |||
|
|
|||
Total |
¥ | 417,022 | ||
|
|
These amounts are not included in 3. Other securities since there are no market prices and it is extremely difficult to determine their fair values.
50
4. | Held-to-maturity bonds sold during the fiscal year |
Fiscal year ended March 31, 2019
There are no corresponding transactions.
Fiscal year ended March 31, 2020
There are no corresponding transactions.
5. | Other securities sold during the fiscal year |
Millions of yen | ||||||||||||
Year ended March 31, 2019 |
Sales amount | Gains on sales | Losses on sales | |||||||||
Stocks |
¥ | 206,738 | ¥ | 96,067 | ¥ | (1,139) | ||||||
Bonds |
8,071,326 | 11,418 | (2,154) | |||||||||
Japanese government bonds |
7,797,751 | 10,798 | (2,065) | |||||||||
Japanese local government bonds |
80,253 | 67 | (71) | |||||||||
Japanese corporate bonds |
193,321 | 551 | (17) | |||||||||
Other |
9,588,573 | 48,653 | (36,968) | |||||||||
|
|
|
|
|
|
|||||||
Total |
¥ | 17,866,638 | ¥ | 156,140 | ¥ | (40,262) | ||||||
|
|
|
|
|
|
|||||||
Millions of yen | ||||||||||||
Year ended March 31, 2020 |
Sales amount | Gains on sales | Losses on sales | |||||||||
Stocks |
¥ | 205,299 | ¥ | 115,228 | ¥ | (11,013) | ||||||
Bonds |
8,380,330 | 26,478 | (4,384) | |||||||||
Japanese government bonds |
8,036,803 | 25,415 | (4,349) | |||||||||
Japanese local government bonds |
92,994 | 295 | (34) | |||||||||
Japanese corporate bonds |
250,532 | 766 | (0) | |||||||||
Other |
14,797,180 | 120,696 | (33,219) | |||||||||
|
|
|
|
|
|
|||||||
Total |
¥ | 23,382,810 | ¥ | 262,403 | ¥ | (48,617) | ||||||
|
|
|
|
|
|
6. | Change of classification of securities |
Fiscal year ended March 31, 2019
There are no significant corresponding transactions to be disclosed.
Fiscal year ended March 31, 2020
There are no significant corresponding transactions to be disclosed.
51
7. | Write-down of securities |
Bonds classified as held-to-maturity and other securities (excluding securities whose fair values are extremely difficult to determine) are considered as impaired if the fair value decreases materially below the acquisition cost and such decline is not considered as recoverable. The fair value is recognized as the consolidated balance sheet amount and the amount of write-down is accounted for as valuation loss for the fiscal year. Valuation losses for the fiscal years ended March 31, 2019 and 2020 were ¥9,013 million and ¥23,000 million, respectively. The rule for determining material decline is as follows and is based on the classification of issuers under the rules of self-assessment of assets.
Bankrupt/Effectively bankrupt/Potentially bankrupt issuers: |
Fair value is lower than acquisition cost. | |
Issuers requiring caution: |
Fair value is 30% or lower than acquisition cost. | |
Normal issuers: |
Fair value is 50% or lower than acquisition cost. | |
Bankrupt issuers: Issuers that are legally bankrupt or formally declared bankrupt. | ||
Effectively bankrupt issuers: Issuers that are not legally bankrupt but regarded as substantially bankrupt. | ||
Potentially bankrupt issuers: Issuers that are not bankrupt now, but are perceived to have a high risk of falling into bankruptcy. | ||
Issuers requiring caution: Issuers that are identified for close monitoring. | ||
Normal issuers: Issuers other than the above 4 categories of issuers. |
52
(Notes to money held in trust)
1. Money held in trust classified as trading purposes
Fiscal year ended March 31, 2019
There are no corresponding transactions.
Fiscal year ended March 31, 2020
There are no corresponding transactions.
2. Money held in trust classified as held-to-maturity
Fiscal year ended March 31, 2019
There are no corresponding transactions.
Fiscal year ended March 31, 2020
There are no corresponding transactions.
3. Other money held in trust
March 31, 2019 |
Millions of yen | |||||||||||
Consolidated balance sheet amount |
Acquisition cost | Net unrealized gains (losses) |
||||||||||
Other money held in trust |
¥ | 390 | ¥ | 390 | | |||||||
March 31, 2020 |
Millions of yen | |||||||||||
Consolidated balance sheet amount |
Acquisition cost | Net unrealized gains (losses) |
||||||||||
Other money held in trust |
¥ | 353 | ¥ | 353 | |
53
(Notes to net unrealized gains (losses) on other securities)
The breakdown of Net unrealized gains (losses) on other securities reported on the consolidated balance sheets is as shown below:
March 31, 2019 |
Millions of yen | |||
Net unrealized gains (losses) |
¥ | 2,333,619 | ||
Other securities |
2,333,619 | |||
Other money held in trust |
| |||
(-) Deferred tax liabilities |
553,246 | |||
|
|
|||
Net unrealized gains (losses) on other securities (before following adjustments) |
1,780,372 | |||
|
|
|||
(-) Non-controlling interests |
102,611 | |||
(+) The Companys interest in net unrealized gains (losses) on valuation of other securities held by equity method affiliates |
11,090 | |||
|
|
|||
Net unrealized gains (losses) on other securities |
¥ | 1,688,852 | ||
|
|
Notes: |
1. | Net unrealized losses of ¥12,277 million for the fiscal year ended March 31, 2019 recognized in the fiscal years earnings by applying fair value hedge accounting are deducted from net unrealized gains on other securities. | ||||
2. | Net unrealized gains (losses) on other securities include foreign currency translation adjustments on foreign currency denominated securities whose fair value is extremely difficult to determine. |
March 31, 2020 |
Millions of yen | |||
Net unrealized gains (losses) |
¥ | 1,918,660 | ||
Other securities |
1,918,660 | |||
Other money held in trust |
| |||
(-) Deferred tax liabilities |
453,080 | |||
|
|
|||
Net unrealized gains (losses) on other securities (before following adjustments) |
1,465,580 | |||
|
|
|||
(-) Non-controlling interests |
103,969 | |||
(+) The Companys interest in net unrealized gains (losses) on valuation of other securities held by equity method affiliates |
9,795 | |||
|
|
|||
Net unrealized gains (losses) on other securities |
¥ | 1,371,407 | ||
|
|
Notes: |
1. | Net unrealized losses of ¥26,403 million for the fiscal year ended March 31, 2020 recognized in the fiscal years earnings by applying fair value hedge accounting are deducted from net unrealized gains on other securities. | ||||
2. | Net unrealized gains (losses) on other securities include foreign currency translation adjustments on foreign currency denominated securities whose fair value is extremely difficult to determine. | |||||
3. | Non-controlling interests include equity acquired from non-controlling stockholders. |
54
(Notes to derivative transactions)
1. Derivative transactions to which the hedge accounting method is not applied
The following tables set forth the contract amount or the amount equivalent to the notional amount, fair value, valuation gains (losses) and fair value calculation methodologies by type of derivative with respect to derivative transactions to which the hedge accounting method is not applied at the end of the fiscal year. Contract amount does not indicate the market risk relating to derivative transactions.
(1) Interest rate derivatives
Millions of yen | ||||||||||||||||
Contract amount | Valuation gains (losses) |
|||||||||||||||
March 31, 2019 |
Total | Over 1 year | Fair value | |||||||||||||
Listed |
||||||||||||||||
Interest rate futures: |
||||||||||||||||
Sold |
¥ | 30,533,013 | ¥ | 3,061,730 | ¥ | (16,015) | ¥ | (16,015) | ||||||||
Bought |
28,898,271 | 5,902,494 | 16,633 | 16,633 | ||||||||||||
Interest rate options: |
||||||||||||||||
Sold |
3,452,722 | 3,286,192 | (1,929) | (1,929) | ||||||||||||
Bought |
130,788,808 | 65,425,283 | 24,009 | 24,009 | ||||||||||||
Over-the-counter |
||||||||||||||||
Forward rate agreements: |
||||||||||||||||
Sold |
26,319,818 | 1,420,320 | 12,029 | 12,029 | ||||||||||||
Bought |
28,150,897 | 1,305,595 | (12,572) | (12,572) | ||||||||||||
Interest rate swaps: |
444,871,798 | 354,014,671 | 294,408 | 294,408 | ||||||||||||
Receivable fixed rate/payable floating rate |
197,044,427 | 156,309,066 | 2,831,588 | 2,831,588 | ||||||||||||
Receivable floating rate/payable fixed rate |
189,646,811 | 153,321,990 | (2,545,878) | (2,545,878) | ||||||||||||
Receivable floating rate/payable floating rate |
58,102,014 | 44,309,569 | (156) | (156) | ||||||||||||
Interest rate swaptions: |
||||||||||||||||
Sold |
6,329,197 | 3,871,862 | (39,722) | (39,722) | ||||||||||||
Bought |
5,706,918 | 3,485,353 | 39,242 | 39,242 | ||||||||||||
Caps: |
||||||||||||||||
Sold |
48,034,687 | 31,841,749 | (57,898) | (57,898) | ||||||||||||
Bought |
11,030,207 | 7,991,304 | 6,571 | 6,571 | ||||||||||||
Floors: |
||||||||||||||||
Sold |
939,796 | 767,715 | (3,380) | (3,380) | ||||||||||||
Bought |
1,253,804 | 776,639 | 4,160 | 4,160 | ||||||||||||
Other: |
||||||||||||||||
Sold |
1,519,045 | 772,769 | (3,053) | (3,053) | ||||||||||||
Bought |
7,769,837 | 6,281,874 | 31,891 | 31,891 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | 294,374 | ¥ | 294,374 | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. | Fair value of transactions listed on an exchange is calculated using the closing price on the Tokyo Financial Exchange or other relevant exchanges. Fair value of OTC transactions is calculated using discounted present value and option pricing models. |
55
Millions of yen | ||||||||||||||||
Contract amount | Valuation gains (losses) |
|||||||||||||||
March 31, 2020 |
Total | Over 1 year | Fair value | |||||||||||||
Listed |
||||||||||||||||
Interest rate futures: |
||||||||||||||||
Sold |
¥ | 21,076,337 | ¥ | 4,765,699 | ¥ | (27,290) | ¥ | (27,290) | ||||||||
Bought |
14,737,369 | 2,199,856 | 27,550 | 27,550 | ||||||||||||
Interest rate options: |
||||||||||||||||
Sold |
6,750,245 | 4,521,273 | (11,465) | (11,465) | ||||||||||||
Bought |
158,524,331 | 67,831,291 | 48,263 | 48,263 | ||||||||||||
Over-the-counter |
||||||||||||||||
Forward rate agreements: |
||||||||||||||||
Sold |
62,823,188 | 4,805,635 | 132,247 | 132,247 | ||||||||||||
Bought |
61,810,031 | 3,914,222 | (132,242) | (132,242) | ||||||||||||
Interest rate swaps: |
466,801,624 | 363,010,583 | 571,893 | 571,893 | ||||||||||||
Receivable fixed rate/payable floating rate |
204,935,762 | 162,453,955 | 9,871,580 | 9,871,580 | ||||||||||||
Receivable floating rate/payable fixed rate |
199,732,233 | 157,519,483 | (9,312,725) | (9,312,725) | ||||||||||||
Receivable floating rate/payable floating rate |
62,049,122 | 42,972,238 | 4,408 | 4,408 | ||||||||||||
Interest rate swaptions: |
||||||||||||||||
Sold |
7,216,094 | 3,744,854 | 5,054 | 5,054 | ||||||||||||
Bought |
6,612,746 | 3,503,884 | (22,405) | (22,405) | ||||||||||||
Caps: |
||||||||||||||||
Sold |
58,316,271 | 35,057,852 | (27,575) | (27,575) | ||||||||||||
Bought |
13,991,264 | 9,813,927 | 689 | 689 | ||||||||||||
Floors: |
||||||||||||||||
Sold |
3,427,268 | 3,271,036 | (34,570) | (34,570) | ||||||||||||
Bought |
2,001,857 | 1,816,324 | 21,728 | 21,728 | ||||||||||||
Other: |
||||||||||||||||
Sold |
1,723,114 | 1,045,482 | (2,327) | (2,327) | ||||||||||||
Bought |
6,906,532 | 4,948,922 | 74,235 | 74,235 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | 623,785 | ¥ | 623,785 | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. | Fair value of transactions listed on an exchange is calculated using the closing price on the Tokyo Financial Exchange or other relevant exchanges. Fair value of OTC transactions is calculated using discounted present value and option pricing models. |
56
(2) Currency derivatives
March 31, 2019 |
Millions of yen | |||||||||||||||
Contract amount | Fair value | Valuation gains (losses) |
||||||||||||||
Total | Over 1 year | |||||||||||||||
Listed |
||||||||||||||||
Currency futures: |
||||||||||||||||
Sold |
¥ | 2,833 | ¥ | | ¥ | 21 | ¥ | 21 | ||||||||
Bought |
1,109 | | 0 | 0 | ||||||||||||
Over-the-counter |
||||||||||||||||
Currency swaps |
46,383,650 | 34,753,013 | 82,884 | 76,881 | ||||||||||||
Currency swaptions: |
||||||||||||||||
Sold |
341,280 | 256,973 | (628) | (628) | ||||||||||||
Bought |
817,560 | 708,288 | 1,484 | 1,484 | ||||||||||||
Forward foreign exchange |
81,510,434 | 11,113,122 | 24,012 | 24,012 | ||||||||||||
Currency options: |
||||||||||||||||
Sold |
3,031,324 | 1,496,970 | (62,269) | (62,269) | ||||||||||||
Bought |
2,676,865 | 1,186,165 | 67,564 | 67,564 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | 113,069 | ¥ | 107,066 | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. |
Fair value of transactions listed on exchange is calculated using the closing price on the Tokyo Financial Exchange or other relevant exchanges. Fair value of OTC transactions is calculated using discounted present value, option pricing models and other methodologies. |
March 31, 2020 |
Millions of yen | |||||||||||||||
Contract amount | Fair value | Valuation gains (losses) |
||||||||||||||
Total | Over 1 year | |||||||||||||||
Listed |
||||||||||||||||
Currency futures: |
||||||||||||||||
Sold |
¥ | 4,500 | ¥ | | ¥ | (7) | ¥ | (7) | ||||||||
Bought |
| | | | ||||||||||||
Over-the-counter |
||||||||||||||||
Currency swaps |
55,227,153 | 41,204,948 | (116,557) | (97,022) | ||||||||||||
Currency swaptions: |
||||||||||||||||
Sold |
229,152 | 45,273 | (429) | (429) | ||||||||||||
Bought |
789,974 | 577,080 | 1,766 | 1,766 | ||||||||||||
Forward foreign exchange |
80,636,837 | 10,126,712 | (1,771) | (1,771) | ||||||||||||
Currency options: |
||||||||||||||||
Sold |
3,622,112 | 1,493,867 | (115,008) | (115,008) | ||||||||||||
Bought |
3,258,083 | 1,206,448 | 120,743 | 120,743 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | (111,265) | ¥ | (91,729) | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. |
Fair value of transactions listed on exchange is calculated using the closing price on the Tokyo Financial Exchange or other relevant exchanges. Fair value of OTC transactions is calculated using discounted present value, option pricing models and other methodologies. |
57
(3) Equity derivatives
Millions of yen | ||||||||||||||||
Contract amount | Fair value | Valuation gains (losses) |
||||||||||||||
March 31, 2019 |
Total | Over 1 year | ||||||||||||||
Listed |
||||||||||||||||
Equity price index futures: |
||||||||||||||||
Sold |
¥ | 635,249 | ¥ | 28,221 | ¥ | 3,170 | ¥ | 3,170 | ||||||||
Bought |
295,976 | 15,021 | (1,081) | (1,081) | ||||||||||||
Equity price index options: |
||||||||||||||||
Sold |
682,846 | 350,760 | (56,853) | (56,853) | ||||||||||||
Bought |
576,496 | 317,636 | 29,383 | 29,383 | ||||||||||||
Over-the-counter |
||||||||||||||||
Equity options: |
||||||||||||||||
Sold |
401,236 | 290,126 | (25,905) | (25,905) | ||||||||||||
Bought |
320,518 | 242,408 | 24,375 | 24,375 | ||||||||||||
Equity index forward contracts: |
||||||||||||||||
Sold |
| | | | ||||||||||||
Bought |
8,094 | 115 | 554 | 554 | ||||||||||||
Equity price index swaps: |
||||||||||||||||
Receivable equity index/payable short-term floating rate |
67,491 | 43,666 | (8,214) | (8,214) | ||||||||||||
Receivable short-term floating rate/payable equity index |
254,937 | 177,164 | 21,736 | 21,736 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | (12,835) | ¥ | (12,835) | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. | Fair value of transactions listed on exchange is calculated using the closing price on the Osaka Exchange or other relevant exchanges. Fair value of OTC transactions is calculated using discounted present value and option pricing models. |
Millions of yen | ||||||||||||||||
Contract amount | Fair value | Valuation gains (losses) |
||||||||||||||
March 31, 2020 |
Total | Over 1 year | ||||||||||||||
Listed |
||||||||||||||||
Equity price index futures: |
||||||||||||||||
Sold |
¥ | 683,868 | ¥ | 3,250 | ¥ | (7,234) | ¥ | (7,234) | ||||||||
Bought |
470,636 | 30,247 | 1,286 | 1,286 | ||||||||||||
Equity price index options: |
||||||||||||||||
Sold |
625,316 | 253,364 | (69,629) | (69,629) | ||||||||||||
Bought |
476,035 | 197,739 | 31,351 | 31,351 | ||||||||||||
Over-the-counter |
||||||||||||||||
Equity options: |
||||||||||||||||
Sold |
342,896 | 52,544 | (30,674) | (30,674) | ||||||||||||
Bought |
312,867 | 38,253 | 32,382 | 32,382 | ||||||||||||
Equity index forward contracts: |
||||||||||||||||
Sold |
| | | | ||||||||||||
Bought |
2,614 | 28 | 448 | 448 | ||||||||||||
Equity price index swaps: |
||||||||||||||||
Receivable equity index/payable short-term floating rate |
58,774 | 31,271 | (18,606) | (18,606) | ||||||||||||
Receivable short-term floating rate/payable equity index |
268,608 | 151,227 | 51,513 | 51,513 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | (9,162) | ¥ | (9,162) | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. | Fair value of transactions listed on exchange is calculated using the closing price on the Osaka Exchange or other relevant exchanges. Fair value of OTC transactions is calculated using discounted present value and option pricing models. |
58
(4) Bond derivatives
Millions of yen | ||||||||||||||||
Contract amount | Fair value | Valuation gains (losses) |
||||||||||||||
March 31, 2019 |
Total | Over 1 year | ||||||||||||||
Listed |
||||||||||||||||
Bond futures: |
||||||||||||||||
Sold |
¥ | 2,145,140 | ¥ | | ¥ | (298,956) | ¥ | (28,956) | ||||||||
Bought |
1,755,892 | | 26,722 | 26,722 | ||||||||||||
Bond futures options: |
||||||||||||||||
Sold |
446,325 | | (662) | (662) | ||||||||||||
Bought |
45,285 | | 120 | 120 | ||||||||||||
Over-the-counter |
||||||||||||||||
Bond forward contract: |
||||||||||||||||
Sold |
1,328 | | 2 | 2 | ||||||||||||
Bought |
| | | | ||||||||||||
Bond options: |
||||||||||||||||
Sold |
505,303 | | (1,887) | (1,887) | ||||||||||||
Bought |
595,039 | 83,476 | 853 | 853 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | (3,805) | ¥ | (3,805) | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. | Fair value of transactions listed on exchange is calculated using the closing price on the Osaka Exchange or other relevant exchanges. Fair value of OTC transactions is calculated using option pricing models. |
Millions of yen | ||||||||||||||||
Contract amount | Fair value | Valuation gains (losses) |
||||||||||||||
March 31, 2020 |
Total | Over 1 year | ||||||||||||||
Listed |
||||||||||||||||
Bond futures: |
||||||||||||||||
Sold |
¥ | 1,098,669 | ¥ | | ¥ | (15,128) | ¥ | (15,128) | ||||||||
Bought |
1,137,437 | | 16,168 | 16,168 | ||||||||||||
Bond futures options: |
||||||||||||||||
Sold |
3,000 | | 2 | 2 | ||||||||||||
Bought |
2,992 | | 10 | 10 | ||||||||||||
Over-the-counter |
||||||||||||||||
Bond forward contract: |
||||||||||||||||
Sold |
499 | | 0 | 0 | ||||||||||||
Bought |
| | | | ||||||||||||
Bond options: |
||||||||||||||||
Sold |
298,310 | | (119) | (119) | ||||||||||||
Bought |
371,168 | 71,357 | 8,240 | 8,240 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | 9,174 | ¥ | 9,174 | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. | Fair value of transactions listed on exchange is calculated using the closing price on the Osaka Exchange or other relevant exchanges. Fair value of OTC transactions is calculated using option pricing models. |
59
(5) Commodity derivatives
Millions of yen | ||||||||||||||||
Contract amount | Fair value | Valuation gains (losses) |
||||||||||||||
March 31, 2019 |
Total | Over 1 year | ||||||||||||||
Listed |
||||||||||||||||
Commodity futures: |
||||||||||||||||
Sold |
¥ | 14,158 | ¥ | | ¥ | 326 | ¥ | 326 | ||||||||
Bought |
14,664 | | (296) | (296) | ||||||||||||
Over-the-counter |
||||||||||||||||
Commodity swaps: |
||||||||||||||||
Receivable fixed price/payable floating price |
91,437 | 42,874 | (1,163) | (1,163) | ||||||||||||
Receivable floating price/payable fixed price |
89,660 | 41,086 | 3,089 | 3,089 | ||||||||||||
Receivable floating price/payable floating price |
2,018 | 1,461 | (10) | (10) | ||||||||||||
Commodity options: |
||||||||||||||||
Sold |
7,918 | 2,678 | (401) | (401) | ||||||||||||
Bought |
5,796 | 778 | 12 | 12 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | 1,556 | ¥ | 1,556 | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. | Fair value of transactions listed on exchange is calculated using the closing price on the New York Mercantile Exchange or other relevant exchanges. Fair value of OTC transactions is calculated based on factors such as price of the relevant commodity and contract term. | |||||
3. | Underlying assets of commodity derivatives are fuels and metals. |
Millions of yen | ||||||||||||||||
Contract amount | Fair value | Valuation gains (losses) |
||||||||||||||
March 31, 2020 |
Total | Over 1 year | ||||||||||||||
Listed |
||||||||||||||||
Commodity futures: |
||||||||||||||||
Sold |
¥ | 3,090 | ¥ | | ¥ | 171 | ¥ | 171 | ||||||||
Bought |
4,044 | | (379) | (379) | ||||||||||||
Over-the-counter |
||||||||||||||||
Commodity swaps: |
||||||||||||||||
Receivable fixed price/payable floating price |
80,464 | 47,610 | 18,209 | 18,209 | ||||||||||||
Receivable floating price/payable fixed price |
76,311 | 44,804 | (15,201) | (15,201) | ||||||||||||
Receivable floating price/payable floating price |
1,363 | 1,347 | 0 | 0 | ||||||||||||
Commodity options: |
||||||||||||||||
Sold |
3,153 | 2,199 | (529) | (529) | ||||||||||||
Bought |
1,307 | 532 | (89) | (89) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | 2,181 | ¥ | 2,181 | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. | Fair value of transactions listed on exchange is calculated using the closing price on the New York Mercantile Exchange or other relevant exchanges. Fair value of OTC transactions is calculated based on factors such as price of the relevant commodity and contract term. | |||||
3. | Underlying assets of commodity derivatives are fuels and metals. |
60
(6) Credit derivative transactions
Millions of yen | ||||||||||||||||
Contract amount | Fair value | Valuation gains (losses) |
||||||||||||||
March 31, 2019 |
Total | Over 1 year | ||||||||||||||
Over-the-counter |
||||||||||||||||
Credit default options: |
||||||||||||||||
Sold |
¥ | 692,851 | ¥ | 639,636 | ¥ | 6,303 | ¥ | 6,303 | ||||||||
Bought |
811,914 | 713,858 | (6,955) | (6,955) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | (651) | ¥ | (651) | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. | Fair value is calculated using discounted present value and option pricing models. | |||||
3. | Sold represents transactions in which the credit risk is accepted; Bought represents transactions in which the credit risk is transferred. |
Millions of yen | ||||||||||||||||
Contract amount | Fair value | Valuation gains (losses) |
||||||||||||||
March 31, 2020 |
Total | Over 1 year | ||||||||||||||
Over-the-counter |
||||||||||||||||
Credit default options: |
||||||||||||||||
Sold |
¥ | 1,010,046 | ¥ | 871,799 | ¥ | (10,922) | ¥ | (10,922) | ||||||||
Bought |
1,173,724 | 1,012,367 | 13,779 | 13,779 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | 2,856 | ¥ | 2,856 | ||||||||||
|
|
|
|
|
|
|
|
Notes: |
1. | The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income. | ||||
2. | Fair value is calculated using discounted present value and option pricing models. | |||||
3. | Sold represents transactions in which the credit risk is accepted; Bought represents transactions in which the credit risk is transferred. |
61
2. | Derivative transactions to which the hedge accounting method is applied |
The following tables set forth the contract amount or the amount equivalent to the notional amount, fair value and fair value calculation methodologies by type of derivative and hedge accounting method with respect to derivative transactions to which the hedge accounting method is applied at the end of the fiscal year. Contract amount does not indicate the market risk relating to derivative transactions.
(1) Interest rate derivatives
March 31, 2019 |
Millions of yen | |||||||||||||||
Hedge accounting |
Type of derivative |
Principal items hedged |
Contract amount | |||||||||||||
Total | Over 1 year | Fair value | ||||||||||||||
Deferral hedge |
Interest futures: | Interest-earning/bearing financial assets/liabilities such as loans and bills discounted, other securities, deposits and negotiable certificates of deposit | ||||||||||||||
Sold |
¥ | 2,220,000 | ¥ | 2,220,000 | ¥ | (149) | ||||||||||
Bought |
| | | |||||||||||||
Interest rate swaps: | ||||||||||||||||
Receivable fixed rate/payable floating rate |
33,822,621 | 30,249,753 | 252,739 | |||||||||||||
Receivable floating rate/payable fixed rate |
15,191,315 | 13,130,451 | (282,377) | |||||||||||||
Interest rate swaptions: | ||||||||||||||||
Sold |
157,065 | 157,065 | 3,441 | |||||||||||||
Bought |
| | | |||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Recognition of gain or loss on the hedged items |
Interest rate swaps: | Loans and bills discounted | ||||||||||||||
Receivable floating rate/payable fixed rate |
301,178 | 291,450 | (3,274) | |||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Special treatment for interest rate swaps |
Interest rate swaps: | Borrowed money, corporate bonds | ||||||||||||||
Receivable floating rate/payable fixed rate |
68,690 | 66,690 | (Note 3) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | (29,620) | ||||||||||||
|
|
|
|
|
|
Notes: |
1. | The Company applies deferred hedge accounting stipulated in Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry (JICPA Industry Audit Committee Report No. 24, February 13, 2002). |
| |||
2. | Fair value of transactions listed on exchange is calculated using the closing price on the Tokyo Financial Exchange or other relevant exchanges. Fair value of OTC transactions is calculated using discounted present value and option pricing models. |
|||||
3. | Interest rate swap amounts measured by the special treatment for interest rate swaps are treated with the borrowed money or other transactions that are subject to the hedge. Therefore, such fair value is included in the fair value of the relevant hedged items such as borrowed money disclosed in (Notes to financial instruments) 2. Fair value of financial instruments. |
March 31, 2020 |
Millions of yen | |||||||||||||||
Hedge accounting |
Type of derivative |
Principal items hedged |
Contract amount | |||||||||||||
Total | Over 1 year | Fair value | ||||||||||||||
Deferral hedge method |
Interest futures: | Interest-earning/bearing financial assets/liabilities such as loans and bills discounted, other securities, deposits and negotiable certificates of deposit | ||||||||||||||
Sold |
¥ | 435,240 | ¥ | | ¥ | 43 | ||||||||||
Bought |
1,142,505 | | 269 | |||||||||||||
Interest rate swaps: | ||||||||||||||||
Receivable fixed rate/payable floating rate |
36,700,930 | 28,992,026 | 697,034 | |||||||||||||
Receivable floating rate/payable fixed rate |
14,785,349 | 13,677,981 | (507,233) | |||||||||||||
Interest rate swaptions: | ||||||||||||||||
Sold |
151,789 | 151,789 | 26,130 | |||||||||||||
Bought |
| | | |||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Recognition of gain or loss on the hedged items |
Interest rate swaps: | Loans and bills discounted | ||||||||||||||
Receivable floating rate/payable fixed rate |
409,908 | 390,290 | (13,781) | |||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Special treatment for interest rate swaps |
Interest rate swaps: | Borrowed money | ||||||||||||||
Receivable floating rate/payable fixed rate |
71,880 | 55,700 | (Note 3) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | 202,463 | ||||||||||||
|
|
|
|
|
|
Notes: |
1. | The Company applies deferred hedge accounting stipulated in Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry (JICPA Industry Audit Committee Report No. 24, February 13, 2002). |
| |||
2. | Fair value of transactions listed on exchange is calculated using the closing price on the Tokyo Financial Exchange or other relevant exchanges. Fair value of OTC transactions is calculated using discounted present value and option pricing models. |
|||||
3. | Interest rate swap amounts measured by the special treatment for interest rate swaps are treated with the borrowed money or other transactions that are subject to the hedge. Therefore, such fair value is included in the fair value of the relevant transaction subject to the hedge in the (Notes to financial instruments) 2. Fair value of financial instruments. |
62
(2) Currency derivatives
March 31, 2019 |
Type of derivative |
Principal items hedged |
Millions of yen | |||||||||||||
Hedge accounting |
Contract amount | |||||||||||||||
Total | Over 1 year | Fair value | ||||||||||||||
Deferral hedge method | Currency swaps | Foreign currency denominated loans and bills discounted, other securities, deposits, foreign exchange, etc. | ¥ | 7,828,136 | ¥ | 5,000,432 | ¥ | (22,720) | ||||||||
Forward foreign exchange |
2,772 | | (218) | |||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Recognition of gain or loss on the hedged items | Currency swaps | Loans and bills discounted, other securities | 186,032 | 131,640 | 5,056 | |||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total |
/ | / | ¥ | (17,882) | ||||||||||||
|
|
|
|
|
|
|||||||||||
|
||||||||||||||||
Notes: 1. The Company applies deferred hedge accounting stipulated in Treatment of Accounting and Auditing Concerning Accounting for Foreign Currency Transactions in Banking Industry (JICPA Industry Audit Committee Report No. 25, July 29, 2002). |
| |||||||||||||||
2. Fair value is calculated using discounted present value. |
| |||||||||||||||
March 31, 2020 |
Type of derivative |
Principal items hedged |
Millions of yen | |||||||||||||
Hedge accounting |
Contract amount | |||||||||||||||
Total | Over 1 year | Fair value | ||||||||||||||
Deferral hedge method |
Currency swaps | Foreign currency denominated loans and bills discounted, other securities, deposits, foreign exchange, etc. | ¥ | 9,966,619 | ¥ | 5,490,043 | ¥ | 64,752 | ||||||||
Forward foreign exchange |
|
39,426 |
|
|
|
|
|
723 |
| |||||||
|
|
|
|
|
|
|
|
|
||||||||
Recognition of gain or loss on the hedged items | Currency swaps | Loans and bills discounted, other securities | 254,494 | 208,359 | 18,015 | |||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total |
/ | / | ¥ | 83,491 | ||||||||||||
|
|
|
|
|
|
|||||||||||
|
||||||||||||||||
Notes: 1. The Company applies deferred hedge accounting stipulated in Treatment of Accounting and Auditing Concerning Accounting for Foreign Currency Transactions in Banking Industry (JICPA Industry Audit Committee Report No. 25, July 29, 2002). |
| |||||||||||||||
2. Fair value is calculated using discounted present value. |
| |||||||||||||||
(3) Equity derivatives |
||||||||||||||||
March 31, 2019 |
Type of derivative |
Principal items hedged |
Millions of yen | |||||||||||||
Hedge accounting |
Contract amount | |||||||||||||||
Total | Over 1 year | Fair value | ||||||||||||||
Recognition of gain or loss on the hedged items | Equity price index swaps: | Other securities | ||||||||||||||
Receivable floating rate/payable equity index |
48,510 | 48,510 | 1,826 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | 1,826 | ||||||||||||
|
|
|
|
|
|
|||||||||||
|
||||||||||||||||
Note: Fair value is calculated using discounted present value. |
|
|||||||||||||||
March 31, 2020 |
Type of derivative |
Principal items hedged |
Millions of yen | |||||||||||||
Hedge accounting method |
Contact amount | |||||||||||||||
Total | Over 1 year | Fair value | ||||||||||||||
Recognition of gain or loss on the hedged items | Equity price index swaps: | Other securities | ||||||||||||||
Receivable floating rate/payable equity index |
41,556 | 41,556 | 8,861 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
/ | / | ¥ | 8,861 | ||||||||||||
|
|
|
|
|
|
Note: Fair value is calculated using discounted present value. |
63
(Notes to employee retirement benefits)
1. Outline of employee retirement benefits
The Companys consolidated subsidiaries have funded and unfunded contributory defined benefit pension plans and defined-contribution pension plans for benefit payments to their employees.
Funded contributory defined benefit pension plans mainly consist of contributory funded defined benefit pension plans and lump-sum severance indemnity plans which set up employee retirement benefit trusts.
Unfunded contributory defined benefit pension plans are lump-sum severance indemnity plans which do not use such trust scheme.
Some consolidated subsidiaries adopt the simplified method in calculating the projected benefit obligation. Additional benefits may also be granted when employees retire.
2. Contributory defined benefit pension plan
(1) | Reconciliation of beginning and ending balances of projected benefit obligation |
Millions of yen | ||||||||
Year ended March 31 |
2019 | 2020 | ||||||
Beginning balance of projected benefit obligation |
¥ | 1,125,746 | ¥ | 1,123,760 | ||||
Service cost |
38,597 | 37,323 | ||||||
Interest cost on projected benefit obligation |
5,946 | 4,098 | ||||||
Unrecognized net actuarial gain or loss incurred |
31,582 | 13,225 | ||||||
Payments of retirement benefits |
(55,656) | (55,337) | ||||||
Unrecognized prior service cost |
96 | | ||||||
Net change as a result of business combinations |
(22,529) | 1,227 | ||||||
Other |
(22) | (318) | ||||||
|
|
|
|
|||||
Ending balance of projected benefit obligation |
¥ | 1,123,760 | ¥ | 1,123,979 | ||||
|
|
|
|
(2) | Reconciliation of beginning and ending balances of plan assets |
Millions of yen | ||||||||
Year ended March 31 |
2019 | 2020 | ||||||
Beginning balance of plan assets |
¥ | 1,469,182 | ¥ | 1,421,378 | ||||
Expected return on plan assets |
43,473 | 42,510 | ||||||
Unrecognized net actuarial gain or loss incurred |
(48,332) | (112,013) | ||||||
Contributions by the employer |
15,746 | 13,108 | ||||||
Payments of retirement benefits |
(42,816) | (43,656) | ||||||
Net change as a result of business combinations |
(14,348) | | ||||||
Other |
(1,525) | (2,551) | ||||||
|
|
|
|
|||||
Ending balance of plan assets |
¥ | 1,421,378 | ¥ | 1,318,775 | ||||
|
|
|
|
64
(3) Reconciliation of the projected benefit obligation and plan assets to net defined benefit asset and net defined benefit liability reported on the consolidated balance sheets
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Funded projected benefit obligation |
¥ | (1,099,416) | ¥ | (1,096,602) | ||||
Plan assets |
1,421,378 | 1,318,775 | ||||||
|
|
|
|
|||||
321,961 | 222,172 | |||||||
Unfunded projected benefit obligation |
(24,343) | (27,376) | ||||||
|
|
|
|
|||||
Net amount of asset and liability reported on the consolidated balance sheet |
¥ | 297,617 | ¥ | 194,795 | ||||
|
|
|
|
|||||
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Net defined benefit asset |
¥ | 329,434 | ¥ | 230,573 | ||||
Net defined benefit liability |
(31,816) | (35,777) | ||||||
|
|
|
|
|||||
Net amount of asset and liability reported on the consolidated balance sheet |
¥ | 297,617 | ¥ | 194,795 | ||||
|
|
|
|
(4) | Pension expenses |
Millions of yen | ||||||||
Year ended March 31 |
2019 | 2020 | ||||||
Service cost |
¥ | 38,597 | ¥ | 37,323 | ||||
Interest cost on projected benefit obligation |
5,946 | 4,098 | ||||||
Expected return on plan assets |
(43,473) | (42,510) | ||||||
Amortization of unrecognized net actuarial gain or loss |
(15,100) | 5,569 | ||||||
Amortization of unrecognized prior service cost |
(131) | (140) | ||||||
Other (nonrecurring additional retirement allowance paid and other) |
6,300 | 7,521 | ||||||
|
|
|
|
|||||
Pension expenses |
¥ | (7,861) | ¥ | 11,861 | ||||
|
|
|
|
Note: | Pension expenses of consolidated subsidiaries which adopt the simplified method are included in Service cost. |
(5) | Remeasurements of defined benefit plans |
The breakdown of Remeasurements of defined benefit plans (before deducting tax effect) is as shown below:
Millions of yen | ||||||||
Year ended March 31 |
2019 | 2020 | ||||||
Prior service cost |
¥ | 227 | ¥ | 140 | ||||
Net actuarial gain or loss |
94,984 | 119,648 | ||||||
|
|
|
|
|||||
Total |
¥ | 95,212 | ¥ | 119,789 | ||||
|
|
|
|
(6) | Accumulated remeasurements of defined benefit plans |
The breakdown of Accumulated remeasurements of defined benefit plans (before deducting tax effect) is as shown below:
Millions of yen | ||||||||
March 31 |
2019 | 2020 | ||||||
Unrecognized prior service cost |
¥ | (300) | ¥ | (159) | ||||
Unrecognized net actuarial gain or loss |
8,596 | 128,245 | ||||||
|
|
|
|
|||||
Total |
¥ | 8,295 | ¥ | 128,085 | ||||
|
|
|
|
65
(7) | Plan assets |
1) | Major asset classes of plan assets |
The proportion of major asset classes to the total plan assets is as follows:
March 31 |
2019 | 2020 | ||||||
Stocks |
58.7% | 56.3% | ||||||
Bonds |
17.8% | 15.1% | ||||||
General account of life insurance |
2.8% | 3.0% | ||||||
Other |
20.7% | 25.6% | ||||||
|
|
|
|
|||||
Total |
100.0% | 100.0% | ||||||
|
|
|
|
Note: | The retirement benefit trusts set up for employee pension plans and lump-sum severance indemnity plans account for 36.3% and 35.5% of the total plan assets at March 31, 2019 and 2020, respectively. |
2) | Method for setting the long-term expected rate of return on plan assets |
The long-term expected rate of return on plan assets is determined based on the current and expected allocation of plan assets and the current and expected long-term rates of return on various asset classes of plan assets.
(8) | Actuarial assumptions |
The principal assumptions used in determining benefit obligation and pension expenses are as follows:
1) | Discount rate |
Year ended March 31, 2019 |
Percentages |
Year ended March 31, 2020 |
Percentages | |||||
Domestic consolidated subsidiaries |
(0.1)% to 0.8% | Domestic consolidated subsidiaries | 0.3% to 0.8% | |||||
Overseas consolidated subsidiaries |
2.4% to 9.0% | Overseas consolidated subsidiaries | 2.3% to 8.3% |
2) | Long-term expected rate of return on plan assets |
Year ended March 31, 2019 |
Percentages |
Year ended March 31, 2020 |
Percentages | |||||
Domestic consolidated subsidiaries |
0% to 4.0% | Domestic consolidated subsidiaries | 0% to 4.0% | |||||
Overseas consolidated subsidiaries |
2.4% to 9.0% | Overseas consolidated subsidiaries | 2.3% to 8.3% |
3. Defined contribution plan
Fiscal year ended March 31, 2019
The amount required to be contributed by the consolidated subsidiaries is ¥11,500 million.
Fiscal year ended March 31, 2020
The amount required to be contributed by the consolidated subsidiaries is ¥11,122 million.
66
(Notes to stock options)
1. Amount of stock options expenses
Stock options expenses which were accounted for as general and administrative expenses for the fiscal years ended March 31, 2019 and 2020 are as follows:
Millions of yen | ||||||||
Year ended March 31 |
2019 | 2020 | ||||||
General and administrative expenses |
¥ | 29 | ¥ | 7 |
2. Amount of profit by non-exercise of stock acquisition rights
Profit by non-exercise of stock acquisition rights which were accounted for as other income for the fiscal years ended March 31, 2019 and 2020 are as follows:
Millions of yen | ||||||||
Year ended March 31 |
2019 | 2020 | ||||||
Other income |
¥ | | ¥ | 1,610 |
67
3. Outline of stock options and changes
The Company
(1) Outline of stock options
Date of resolution |
July 28, 2010 | July 29, 2011 | July 30, 2012 | July 29, 2013 | ||||
|
|
|
|
| ||||
Title and number of grantees |
Directors of the Company 8 Corporate auditors of the Company 3 Executive officers of the Company 2 Directors, corporate auditors and executive officers of SMBC 69 |
Directors of the Company 9 Corporate auditors of the Company 3 Executive officers of the Company 2 Directors, corporate auditors and executive officers of SMBC 71 |
Directors of the Company 9 Corporate auditors of the Company 3 Executive officers of the Company 2 Directors, corporate auditors and executive officers of SMBC 71 |
Directors of the Company 9 Corporate auditors of the Company 3 Executive officers of the Company 3 Directors, corporate auditors and executive officers of SMBC 67 | ||||
Number of stock options* |
Common shares 102,600 |
Common shares 268,200 |
Common shares 280,500 |
Common shares 115,700 | ||||
Grant date |
August 13, 2010 | August 16, 2011 | August 15, 2012 | August 14, 2013 | ||||
Condition for vesting |
Stock acquisition right holders may exercise stock acquisition rights from the day when they are relieved of their positions either as a director, corporate auditor or executive officer of the Company and SMBC. |
Stock acquisition right holders may exercise stock acquisition rights from the day when they are relieved of their positions either as a director, corporate auditor or executive officer of the Company and SMBC. |
Stock acquisition right holders may exercise stock acquisition rights from the day when they are relieved of their positions either as a director, corporate auditor or executive officer of the Company and SMBC. |
Stock acquisition right holders may exercise stock acquisition rights from the day when they are relieved of their positions either as a director, corporate auditor or executive officer of the Company and SMBC. | ||||
Requisite service period |
From June 29, 2010 to the closing of the ordinary general meeting of shareholders of the Company for the fiscal year ended March 31, 2011 |
From June 29, 2011 to the closing of the ordinary general meeting of shareholders of the Company for the fiscal year ended March 31, 2012 |
From June 28, 2012 to the closing of the ordinary general meeting of shareholders of the Company for the fiscal year ended March 31, 2013 |
From June 27, 2013 to the closing of the ordinary general meeting of shareholders of the Company for the fiscal year ended March 31, 2014 | ||||
Exercise period |
August 13, 2010 to August 12, 2040 |
August 16, 2011 to August 15, 2041 |
August 15, 2012 to August 14, 2042 |
August 14, 2013 to August 13, 2043 | ||||
Date of resolution |
July 30, 2014 |
July 31, 2015 |
July 26, 2016 |
|||||
Title and number of grantees |
Directors of the Company 10 Corporate auditors of the Company 3 Executive officers of the Company 2 Directors, corporate auditors and executive officers of SMBC 67 |
Directors of the Company 8 Corporate auditors of the Company 3 Executive officers of the Company 4 Directors, corporate auditors and executive officers of SMBC 68 |
Directors of the Company 8 Corporate auditors of the Company 3 Executive officers of the Company 5 Directors, corporate auditors and executive officers of SMBC 73 |
|||||
Number of stock options* |
Common shares 121,900 |
Common shares 132,400 |
Common shares 201,200 |
|||||
Grant date |
August 15, 2014 | August 18, 2015 | August 15, 2016 | |||||
Condition for vesting |
Stock acquisition right holders may exercise stock acquisition rights from the day when they are relieved of their positions either as a director, corporate auditor or executive officer of the Company and SMBC. |
Stock acquisition right holders may exercise stock acquisition rights from the day when they are relieved of their positions either as a director, corporate auditor or executive officer of the Company and SMBC. |
Stock acquisition right holders may exercise stock acquisition rights from the day when they are relieved of their positions either as a director, corporate auditor or executive officer of the Company and SMBC. |
|||||
Requisite service period |
From June 27, 2014 to the closing of the ordinary general meeting of shareholders of the Company for the fiscal year ended March 31, 2015 |
From June 26, 2015 to the closing of the ordinary general meeting of shareholders of the Company for the fiscal year ended March 31, 2016 |
From June 29, 2016 to the closing of the ordinary general meeting of shareholders of the Company for the fiscal year ended March 31, 2017 |
|||||
Exercise period |
August 15, 2014 to August 14, 2044 |
August 18, 2015 to August 17, 2045 |
August 15, 2016 to August 14, 2046 |
* | Number of stock options is converted and stated as number of shares. |
(2) Stock options granted and changes
1) Number of stock options*
Number of stock options | ||||||||||||||||||||||||||||
Date of resolution |
July 28, 2010 |
July 29, 2011 |
July 30, 2012 |
July 29, 2013 |
July 30, 2014 |
July 31, 2015 |
July 26, 2016 |
|||||||||||||||||||||
Before vested |
||||||||||||||||||||||||||||
Previous fiscal year-end |
7,200 | 13,600 | 65,400 | 42,700 | 59,400 | 91,200 | 121,300 | |||||||||||||||||||||
Granted |
| | | | | | | |||||||||||||||||||||
Forfeited |
| | | | | | | |||||||||||||||||||||
Vested |
2,000 | 7,200 | 7,100 | 3,500 | 17,300 | 13,500 | 18,500 | |||||||||||||||||||||
Outstanding |
5,200 | 6,400 | 58,300 | 39,200 | 42,100 | 77,700 | 102,800 | |||||||||||||||||||||
After vested |
||||||||||||||||||||||||||||
Previous fiscal year-end |
59,700 | 173,600 | 161,000 | 33,300 | 32,000 | 14,400 | 24,600 | |||||||||||||||||||||
Vested |
2,000 | 7,200 | 7,100 | 3,500 | 17,300 | 13,500 | 18,500 | |||||||||||||||||||||
Exercised |
17,000 | 47,800 | 38,500 | 9,900 | 21,500 | 14,800 | 27,400 | |||||||||||||||||||||
Forfeited |
| | | | | | | |||||||||||||||||||||
Exercisable |
44,700 | 133,000 | 129,600 | 26,900 | 27,800 | 13,100 | 15,700 |
* Number of stock options has been converted and stated as number of shares.
68
2) Price information
Yen | ||||||||||||||||||||||||||||
Date of resolution |
July 28, 2010 |
July 29, 2011 |
July 30, 2012 |
July 29, 2013 |
July 30, 2014 |
July 31, 2015 |
July 26, 2016 |
|||||||||||||||||||||
Exercise price |
¥ | 1 | ¥ | 1 | ¥ | 1 | ¥ | 1 | ¥ | 1 | ¥ | 1 | ¥ | 1 | ||||||||||||||
Average exercise price |
3,263 | 3,452 | 3,601 | 3,318 | 3,856 | 4,002 | 3,739 | |||||||||||||||||||||
Fair value at the grant date |
2,215 | 1,872 | 2,042 | 4,159 | 3,661 | 4,904 | 2,811 |
(3) Method of estimating number of stock options vested
Only the actual number of forfeited stock options is reflected because it is difficult to rationally estimate the actual number of stock options that will be forfeited in the future.
PT Bank BTPN Tbk, a consolidated subsidiary of the Company
(1) Outline of stock options
Date of resolution |
March 26, 2015 |
March 26, 2015 |
April 29, 2016 |
|||||
Title and number of grantees |
Executives 16 Employees 309 |
Executive 1 Employees 4 |
Employees 332 | |||||
Number of stock options* |
Common shares 141,575,000 | Common shares 10,500,000 | Common shares 56,645,000 | |||||
Grant date |
April 15, 2015 | October 10, 2016 | September 21, 2016 | |||||
Condition for vesting |
In service at the time of exercise | In service at the time of exercise | In service at the time of exercise | |||||
Requisite service period |
No provisions | No provisions | No provisions | |||||
Exercise period |
30 days from May 1, 2017 30 days from November 5, 2018 30 days from May 6, 2019 30 days from December 2, 2019 |
30 days from May 1, 2017 30 days from November 5, 2018 30 days from May 6, 2019 30 days from December 2, 2019 |
30 days from May 28, 2018 30 days from December 19, 2019 30 days from June 1, 2020 30 days from December 17, 2020 |
* Number of stock options is converted and stated as number of shares.
(2) Stock options granted and changes
1) Number of stock options*
Number of stock options | ||||||||||||
Date of resolution |
March 26, 2015 |
March 26, 2015 |
April 29, 2016 |
|||||||||
Before vested |
||||||||||||
Previous fiscal year-end |
83,240,000 | 9,600,000 | 37,896,500 | |||||||||
Granted |
| | | |||||||||
Forfeited |
83,240,000 | 9,600,000 | 37,896,500 | |||||||||
Vested |
| | | |||||||||
Outstanding |
| | | |||||||||
After vested |
||||||||||||
Previous fiscal year-end |
| | | |||||||||
Vested |
| | | |||||||||
Exercised |
| | | |||||||||
Forfeited |
| | | |||||||||
Exercisable |
| | |
* Number of stock options has been converted and stated as number of shares.
2) Price information
IDR | ||||||||||||
Date of resolution |
March 26, 2015 |
March 26, 2015 |
April 29, 2016 |
|||||||||
Exercise price (IDR) |
4,000.00 | 4,000.00 | 2,617.00 | |||||||||
Average exercise price (IDR) |
| | | |||||||||
Fair value at the grant date (IDR). |
1,408.90 | 1,408.90 | 712.81 |
69
(3) Method of estimating number of stock options vested
Only the actual number of forfeited stock options is reflected because it is difficult to rationally estimate the actual number of stock options that will be forfeited in the future.
70
(Notes to deferred tax assets and liabilities)
1. Significant components of deferred tax assets and liabilities
March 31, 2019 |
Millions of yen | March 31, 2020 |
Millions of yen | |||||||
Deferred tax assets: |
Deferred tax assets: | |||||||||
Reserve for possible loan losses and write-off of loans |
¥ | 181,930 | Reserve for possible loan losses and write-off of loans |
¥ | 209,156 | |||||
Net operating loss carryforwards*2 |
210,814 | Net operating loss carryforwards*2 |
177,351 | |||||||
Securities |
147,466 | Securities |
146,854 | |||||||
Reserve for losses on interest repayment |
45,195 | Reserve for losses on interest repayment |
43,753 | |||||||
Accumulated remeasurements of defined benefit plans |
2,785 | Accumulated remeasurements of defined benefit plans |
39,818 | |||||||
Other |
185,582 | Other |
164,543 | |||||||
|
|
|
|
|||||||
Subtotal |
773,774 | Subtotal |
781,478 | |||||||
Valuation allowance for net operating loss carryforwards*2 |
(166,296 | ) | Valuation allowance for net operating loss carryforwards*2 |
(116,002 | ) | |||||
Valuation allowance for total amount of deductible temporary differences etc. |
(200,111 | ) | Valuation allowance for total amount of deductible temporary differences etc. |
(192,146 | ) | |||||
|
|
|
|
|||||||
Valuation allowance subtotal*1 |
(366,407 | ) | Valuation allowance subtotal*1 |
(308,148 | ) | |||||
|
|
|
|
|||||||
Total deferred tax assets |
407,367 | Total deferred tax assets |
473,329 | |||||||
Deferred tax liabilities: |
Deferred tax liabilities: |
|||||||||
Net unrealized gains on other securities |
(551,785 | ) | Net unrealized gains on other securities |
(445,574 | ) | |||||
Net deferred gains (losses) on hedge |
| Net deferred gains (losses) on hedge |
(57,250 | ) | ||||||
Depreciation |
(44,994 | ) | Depreciation |
(52,125 | ) | |||||
Other |
(148,562 | ) | Other |
(149,449 | ) | |||||
|
|
|
|
|||||||
Total deferred tax liabilities |
(745,341 | ) | Total deferred tax liabilities |
(704,399 | ) | |||||
|
|
|
|
|||||||
Net deferred tax assets (liabilities) |
¥ | (337,974 | ) | Net deferred tax assets (liabilities) |
¥ | (231,070 | ) |
*1 | The change of valuation allowance is mainly due to utilization of net operating loss carryforwards and a decrease in valuation allowance due to the judgement of recoverability of deferred tax assets from expected future taxable income at SMBC Consumer Finance Co., Ltd. |
*2 | Net operating loss carryforwards and the amount of its deferred tax assets by expiry date. |
Millions of yen | ||||||||||||||||||||
March 31, 2019 |
Within 1 year | More than 1 year to 5 years |
More than 5 years to 10 years |
More than 10 years |
Total | |||||||||||||||
Net operating loss carryforwards* |
¥ | 41,259 | ¥ | 105,321 | ¥ | 23,043 | ¥ | 41,190 | ¥ | 210,814 | ||||||||||
Valuation allowance |
(40,810 | ) | (102,113 | ) | (22,063 | ) | (1,308 | ) | (166,296 | ) | ||||||||||
Deferred tax assets |
10,044 | 3,207 | 979 | 39,881 | 44,517 | |||||||||||||||
* Net operating loss carryforwards is multiplied by statutory tax rate.
|
||||||||||||||||||||
Millions of yen | ||||||||||||||||||||
March 31, 2020 |
Within 1 year | More than 1 year to 5 years |
More than 5 years to 10 years |
More than 10 years |
Total | |||||||||||||||
Net operating loss carryforwards* |
¥ | 68,777 | ¥ | 37,998 | ¥ | 20,754 | ¥ | 49,821 | ¥ | 177,351 | ||||||||||
Valuation allowance |
(58,773 | ) | (37,271 | ) | (18,714 | ) | (1,282 | ) | (116,002 | ) | ||||||||||
Deferred tax assets |
448 | 727 | 2,040 | 48,538 | 61,349 |
* Net operating loss carryforwards is multiplied by statutory tax rate.
71
2. | Significant components of difference between the statutory tax rate used by the Company and the effective income tax rate |
March 31, 2019 |
Percentages | March 31, 2020 |
Percentages | |||||||
Statutory tax rate |
¥ | 30.62% | Statutory tax rate | ¥ | 30.62% | |||||
Dividends exempted for income tax purposes |
(3.57) | Valuation allowance |
(8.36) | |||||||
Equity in gains of affiliates |
(1.67) | Equity in gains of affiliates |
(1.93) | |||||||
Difference between the Company and overseas consolidated subsidiaries |
(1.62) | Dividends exempted for income tax purposes |
(1.05) | |||||||
Expired loss carryforwards |
4.27 | Difference of the scope of taxable income between corporate income tax and enterprise income tax |
(1.00) | |||||||
Valuation allowance |
2.39 | Other |
0.59 | |||||||
Other |
(0.92) | Effective income tax rate |
18.87% | |||||||
Effective income tax rate |
29.50% |
72
(Notes to asset retirement obligations)
Fiscal year ended March 31, 2019
There is no significant information to be disclosed.
Fiscal year ended March 31, 2020
There is no significant information to be disclosed.
(Notes to real estate for rent)
Fiscal year ended March 31, 2019
There is no significant information to be disclosed.
Fiscal year ended March 31, 2020
There is no significant information to be disclosed.
73
(Notes to segment and other related information)
[Segment information]
1. Summary of reportable segment
The Groups reportable segment is defined as an operating segment for which discrete financial information is available and reviewed by the Board of Directors and the Companys Management Committee regularly in order to make decisions about resources to be allocated to the segment and assess its performance.
The businesses operated by each business unit are as follows;
Wholesale Business Unit:
|
Business to deal with domestic medium-to-large-sized enterprise | |
Retail Business Unit:
|
Business to deal with domestic individual and small-to-medium-sized enterprise | |
International Business Unit:
|
Business to deal with international (including Japanese) corporate customers | |
Global Markets Business Unit:
|
Business to deal with financial market | |
Head office account: |
Business other than businesses above |
2. Method of calculating profit and loss amount by reportable segment
Accounting methods applied to the reported business segment are the same as those described in (Notes to significant accounting policies for preparing consolidated financial statements). In case several business units cooperate for transactions, profit and loss, and expenses related to the transactions are recognized in the business units cooperating for the transactions and those amounts are calculated in accordance with internal managerial accounting policy.
The Company does not assess assets by business segments.
3. Information on profit and loss amount by reportable segment
Millions of yen | ||||||||||||||||||||||||
Year ended March 31, 2019 |
Wholesale Business Unit |
Retail Business Unit |
International Business Unit |
Global Markets Business Unit |
Head office account and others |
Total | ||||||||||||||||||
Consolidated gross profit |
¥ | 784,886 | ¥ | 1,281,574 | ¥ | 689,603 | ¥ | 333,572 | ¥ | (243,457) | ¥ | 2,846,178 | ||||||||||||
Expenses |
(345,133) | (1,021,383) | (333,382) | (54,239) | 39,087 | (1,715,050) | ||||||||||||||||||
Others |
45,109 | 14,445 | 38,911 | 19,127 | (56,447) | 61,145 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Consolidated net business profit |
¥ | 484,862 | ¥ | 274,637 | ¥ | 395,131 | ¥ | 298,460 | ¥ | (260,818) | ¥ | 1,192,273 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Notes: |
1. | Figures shown in the parenthesis represent the loss. | ||
2. | Others includes equity in profit and loss of affiliates and cooperated profit and loss based on internal managerial accounting. | |||
3. | Head office account and others includes profit or loss to be eliminated as inter-segment transactions. | |||
4. | Income (loss) of Sumitomo Mitsui Finance and Leasing Company, Limited (SMFL) for the period from January 1, 2019 to March 31, 2019 was recorded mainly as Consolidated gross profit and Expenses under Wholesale Business Unit and International Business Unit, and those figures were deducted from Others under Head office account and others. Income (loss) of SMFL was recorded as Equity in gains (losses) of affiliates in the consolidated statement of income. |
Millions of yen | ||||||||||||||||||||||||
Year ended March 31, 2020 |
Wholesale Business Unit |
Retail Business Unit |
International Business Unit |
Global Markets Business Unit |
Head office account and others |
Total | ||||||||||||||||||
Consolidated gross profit |
¥ | 641,542 | ¥ | 1,257,678 | ¥ | 667,083 | ¥ | 421,629 | ¥ | (219,345) | ¥ | 2,768,587 | ||||||||||||
Expenses |
(284,353) | (1,025,179) | (350,579) | (56,235) | (23,256) | (1,739,603) | ||||||||||||||||||
Others |
52,059 | 1,974 | 54,736 | 33,376 | (86,094) | 56,051 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Consolidated net business profit |
¥ | 409,247 | ¥ | 234,473 | ¥ | 371,240 | ¥ | 398,770 | ¥ | (328,696) | ¥ | 1,085,304 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Notes: |
1. | Figures shown in the parenthesis represent the loss. | ||
2. | Others includes equity in profit and loss of affiliates and cooperated profit and loss based on internal managerial accounting. | |||
3. | Head office account and others includes profit or loss to be eliminated as inter-segment transactions. |
74
4. | Difference between total amount of consolidated net business profit by reportable segment and ordinary profit on consolidated statements of income (adjustment of difference) |
Year ended March 31, 2019 |
Millions of yen | |||
Consolidated net business profit |
¥ | 1,192,773 | ||
Other ordinary income (excluding equity in gains of affiliates) |
166,851 | |||
Other ordinary expenses |
(223,825) | |||
|
|
|||
Ordinary profit on consolidated statements of income |
¥ | 1,135,300 | ||
|
|
Note: | Figures shown in the parenthesis represent the loss. |
Year ended March 31, 2020 |
Millions of yen | |||
Consolidated net business profit |
¥ | 1,085,034 | ||
Other ordinary income (excluding equity in gains of affiliates) |
196,764 | |||
Other ordinary expenses |
(349,734) | |||
|
|
|||
Ordinary profit on consolidated statements of income |
¥ | 932,064 | ||
|
|
Note: | Figures shown in the parenthesis represent the loss. |
75
[Related information]
Fiscal year ended March 31, 2019
1. Information on each service
There is no information to be disclosed since information on each service is similar to the segment information.
2. Geographic information
(1) Ordinary income
Millions of yen | ||||||||
Japan | The Americas | Europe and Middle East | Asia and Oceania | Total | ||||
¥ 3,847,287 | ¥ 734,495 | ¥ 524,807 | ¥ 628,721 | ¥ 5,735,312 |
| ||||||
Notes: |
1. | Consolidated ordinary income is presented as a counterpart of sales of companies in other industries. | ||||
2. | Ordinary income from transactions of the Company and its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic consolidated subsidiaries is classified as Japan. Ordinary income from transactions of overseas branches of domestic consolidated banking subsidiaries and overseas consolidated subsidiaries is classified as The Americas, Europe and Middle East and Asia and Oceania, based on their locations and in consideration of their geographic proximity and other factors. | |||||
3. | The Americas includes the United States, Brazil, Canada and others; Europe and Middle East includes the United Kingdom, Germany and others; Asia and Oceania includes China, Singapore, Indonesia and others except Japan. |
(2) Tangible fixed assets
Millions of yen | ||||||||
Japan | The Americas | Europe and Middle East | Asia and Oceania | Total | ||||
¥ 880,935 | ¥ 574,502 | ¥ 23,413 | ¥ 25,851 | ¥ 1,504,703 |
3. Information on major customers
There are no major customers individually accounting for 10% or more of ordinary income reported on the consolidated statements of income.
76
Fiscal year ended March 31, 2020
1. Information on each service
There is no information to be disclosed since information on each service is similar to the segment information.
2. Geographic information
(1) Ordinary income
Millions of yen | ||||||||
Japan | The Americas | Europe and Middle East | Asia and Oceania | Total | ||||
¥ 3,496,033 | ¥ 764,766 | ¥ 395,209 | ¥ 658,303 | ¥ 5,314,313 |
| ||||||
Notes: |
1. | Consolidated ordinary income is presented as a counterpart of sales of companies in other industries. | ||||
2. | Ordinary income from transactions of the Company and its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic consolidated subsidiaries is classified as Japan. Ordinary income from transactions of overseas branches of domestic consolidated banking subsidiaries and overseas consolidated subsidiaries is classified as The Americas, Europe and Middle East and Asia and Oceania, based on their locations and in consideration of their geographic proximity and other factors. | |||||
3. | The Americas includes the United States, Brazil, Canada and others; Europe and Middle East includes the United Kingdom, Germany and others; Asia and Oceania includes China, Singapore, Indonesia and others except Japan. |
(2) Tangible fixed assets
Millions of yen | ||||||||
Japan | The Americas | Europe and Middle East | Asia and Oceania | Total | ||||
¥ 881,203 | ¥ 511,264 | ¥ 26,941 | ¥ 30,914 | ¥ 1,450,323 |
3. Information on major customers
There are no major customers individually accounting for 10% or more of ordinary income reported on the consolidated statements of income.
[Information on impairment loss for fixed assets by reportable segment]
The Company does not allocate impairment loss for fixed assets to the reportable segment.
Impairment loss for the fiscal year ended March 31, 2019 is ¥9,610 million.
Impairment loss for the fiscal year ended March 31, 2020 is ¥65,106 million.
77
[Information on amortization of goodwill and unamortized balance by reportable segment]
Millions of yen | ||||||||||||||||||||||||
Year ended March 31, 2019 |
Wholesale Business Unit |
Retail Business Unit |
International Business Unit |
Global Markets Business Unit |
Head office account and others |
Total | ||||||||||||||||||
Amortization of goodwill |
¥ | 309 | ¥ | 4,019 | ¥ | 5,494 | ¥ | | ¥ | 16,095 | ¥ | 25,919 | ||||||||||||
Unamortized balance |
| 50,100 | | | 143,027 | 193,127 | ||||||||||||||||||
Millions of yen | ||||||||||||||||||||||||
Year ended March 31, 2020 |
Wholesale Business Unit |
Retail Business Unit |
International Business Unit |
Global Markets Business Unit |
Head office account and others |
Total | ||||||||||||||||||
Amortization of goodwill |
¥ | | ¥ | 4,019 | ¥ | | ¥ | | ¥ | 13,513 | ¥ | 17,533 | ||||||||||||
Unamortized balance |
| 46,080 | | | 148,209 | 194,289 |
[Information on gains on negative goodwill by reportable segment]
Fiscal year ended March 31, 2019
There are no corresponding transactions.
Fiscal year ended March 31, 2020
There are no corresponding transactions.
[Information on related parties]
Fiscal year ended March 31, 2019
There is no significant corresponding information to be disclosed.
Fiscal year ended March 31, 2020
There is no significant corresponding information to be disclosed.
78
(Business Combination)
<Business combination through acquisition>
Merger between Sumitomo Mitsui Asset Management Company, Limited and Daiwa SB Investments Ltd.
On April 1, 2019, Sumitomo Mitsui Asset Management Company, Limited (SMAM), a consolidated subsidiary of the Company, merged with Daiwa SB Investments Ltd. (DSBI), an equity method affiliate of the Company, under a merger agreement concluded between the two companies on September 28, 2018. The trade name of the merged company is Sumitomo Mitsui DS Asset Management Company, Limited.
The outline of the merger is as follows.
1 Outline of the business combination
1) Name of the acquired company and its business
Name: |
Daiwa SB Investments Ltd. | |
Business: |
Investment management business, investment advisory and agency business |
2) Main reasons for the business combination
The asset management business is undergoing global growth, and the investment management capabilities and services desired by clients are progressively becoming more sophisticated. The merger aims to establish an asset management company that combines the strengths and expertise of SMAM and DSBI, and offers the highest quality of investment management performance and services based on its fiduciary duties, in order to address the aforesaid client needs.
3) Date of the business combination
April 1, 2019
4) Legal form the business combination
The structure of the merger is an absorption-type merger with SMAM as the surviving company and DSBI as the absorbed company.
5) Name of the entity after the business combination
Sumitomo Mitsui Financial Group, Inc.
6) The ratio of acquired voting rights
Ratio of voting rights owned by the Company immediately prior to the business combination: 48.96%
Ratio of voting rights increased on the date of business combination: 1.16%
Ratio of voting rights after the merger: 50.12%
7) Grounds for deciding on the acquirer
The Company owns a majority of voting rights of Sumitomo Mitsui DS Asset Management Company, Limited.
2 Period of the acquired companys financial results included in the consolidated statements of income of the Company
From April 1, 2019 to March 31, 2020
3 Acquisition cost and consideration of the acquired company
Fair Value at the business combination of the common shares of DSBI held by the Company immediately prior to the business combination | 40,111 million yen | |||||
Consideration (shares of SMAM) for the common shares of DSBI additionally acquired by the Company on the date of business combination | 958 million yen | |||||
Acquisition cost of the acquired company | 41,070 million yen |
79
4 Merger ratio by type of shares, its calculation method and number of shares delivered
1) Type of shares and merger ratio
Common stock SMAM 1: DSBI 4.2156
2) Method for calculating the merger ratio
SMAM and DSBI conducted careful discussion on the merger ratio following a comprehensive consideration of the financial condition, asset condition and future prospects of the two companies based on the analysis by each third-party appraiser regarding merger ratio, Ernst & Young Transaction Advisory Services Co., Ltd., appointed by SMAM, and PwC Advisory LLC, appointed by DSBI. As a result, SMAM and DSBI concluded that the merger ratio was appropriate and reached an agreement.
3) Number of shares delivered
Common share of SMAM 16,230,060 shares
5 Major acquisition-related costs
Advisory fees, etc. 9 million yen
6 Difference between acquisition cost and total amount of acquisition cost of each transaction
Acquisition cost | 41,070 million yen | |||||
Sum of acquisition costs of each transaction resulting in the acquisition | 19,072 million yen | |||||
Difference (gains on step acquisitions) |
21,997 million yen |
7 Amount of goodwill, reason for recognizing goodwill, amortization method and the period
1) Amount of goodwill
17,022 million yen
2) Reason for recognizing goodwill
The Company accounted for the difference between the acquisition cost and fair value of the acquired net assets on the date of the business combination as goodwill.
3) Amortization method and the period
Goodwill is amortized using the straight-line method over 14 years
8 Amounts of assets acquired and liabilities assumed on the date of the business combination
1) Assets
Total assets: |
61,319 million yen | |||||||
Cash and due from banks: |
22,798 million yen |
2) Liabilities
Total liabilities: |
14,178 million yen |
9 Amounts allocated to intangible fixed assets other than goodwill, breakdown by component and the weighted average amortization period by component
Intangible fixed assets other than goodwill: |
19,898 million yen (13 years) | |||||||
Assets related to customers: |
19,898 million yen (13 years) |
10 Approximate amounts and their calculation method of impact on the consolidated statements of income for the fiscal year ended March 31, 2020, assuming that the business combination had been completed at the beginning of the fiscal year
Not applicable as the date of business combination is the beginning day of the fiscal year ended March 31, 2020 (April 1, 2019).
80
(Per Share Data)
Yen | ||||||||||
As of and year ended March 31 |
2019 | 2020 | ||||||||
Net assets per share | ¥ | 7,715.91 | ¥ | 7,827.50 | ||||||
Earnings per share | 519.95 | 511.87 | ||||||||
Earnings per share (diluted) | 519.59 | 511.57 | ||||||||
|
||||||||||
Notes: 1. Earnings per share and earnings per share (diluted) are calculated based on the following. |
| |||||||||
Millions of yen except number of shares | ||||||||||
Year ended March 31 |
2019 | 2020 | ||||||||
Earnings per share: |
||||||||||
Profit attributable to owners of parent |
¥ | 726,681 | ¥ | 703,883 | ||||||
Amount not attributable to common stockholders |
| | ||||||||
|
|
|
|
|||||||
Profit attributable to owners of parent attributable to common stock |
¥ | 726,681 | ¥ | 703,883 | ||||||
|
|
|
|
|||||||
Average number of common stock during the fiscal year (in thousand) |
1,397,599 | 1,375,118 | ||||||||
Earnings per share (diluted): |
||||||||||
Adjustment for profit attributable to owners of parent |
¥ | (21) | ¥ | (6) | ||||||
Adjustment of dilutive shares issued by consolidated subsidiaries and equity method affiliates |
(21) | (6) | ||||||||
|
|
|
|
|||||||
Increase in number of common stock (in thousand) |
923 | 801 | ||||||||
Stock acquisition rights |
923 | 801 | ||||||||
Outline of dilutive shares which were not included in the calculation of Earnings per share (diluted) because they do not have dilutive effect: |
| | ||||||||
2. Net assets per share are calculated based on the following: |
| |||||||||
Millions of yen except number of shares | ||||||||||
March 31 |
2019 | 2020 | ||||||||
Net assets |
¥ | 11,451,611 | ¥ | 10,784,903 | ||||||
Amounts excluded from Net assets |
683,290 | 64,933 | ||||||||
Stock acquisition rights |
4,750 | 2,064 | ||||||||
Non-controlling interests |
678,540 | 62,869 | ||||||||
|
|
|
|
|||||||
Net assets attributable to common stock at the fiscal year-end |
¥ | 10,768,320 | ¥ | 10,719,969 | ||||||
|
|
|
|
|||||||
Number of common stock at the fiscal year-end used for the calculation of Net assets per share (in thousands) |
1,395,600 | 1,369,526 |
(Significant Subsequent Events)
There is no significant corresponding information to be disclosed.
81
[Consolidated Supplementary Financial Schedules]
[Schedule of bonds]
Millions of yen | Percentages | |||||||||||||||||
Company |
Type of bonds |
Date of issuance |
At the beginning of the fiscal year |
At the end of the fiscal year |
Interest rate (Note 1) |
Collat- |
Date of maturity | |||||||||||
The Company | Straight bonds, payable in U.S. dollars (Notes 3 and 4) |
Mar. 2016 ~ Jan. 2020 |
|
3,219,528 ($29,004,761 thousand) [] |
|
|
4,098,762 ($37,668,982 thousand) [270,983] |
|
2.058 ~ 4.306 |
None | Mar. 2021 ~ Feb. 2048 | |||||||
Straight bonds, payable in Euro (Note 3) |
Jun. 2016 ~ Oct. 2019 |
|
555,064 (4,456,556 thousand) |
|
|
754,586 (6,313,473 thousand) |
|
0 ~ 1.716 |
None | Jan. 2022 ~ Feb. 2033 | ||||||||
Straight bonds, payable in Australian dollars (Note 3) |
Sep. 2016 ~ Oct. 2019 |
|
183,344 (A$2,331,738 thousand) |
|
|
195,744 (A$2,956,426 thousand) |
|
1.6617 ~ 4.13 |
None | Mar. 2022 ~ Jul. 2028 | ||||||||
Straight bonds, payable in Hong Kong dollars (Note 3) |
Apr. 26, 2018 | |
4,242 (HK$300,000 thousand) |
|
|
4,212 (HK$300,000 thousand) |
|
3.54 | None | Apr. 26, 2028 | ||||||||
Subordinated bonds, payable in Yen |
Sep. 2014 ~ Sep. 2016 |
370,669 | 371,891 | 0.469 ~ 1.328 |
None | Sep. 2024 ~ May 2030 | ||||||||||||
Subordinated bonds, payable in Yen |
Sep. 2014 ~ Mar. 2018 |
386,312 | 352,794 | 0.3 ~ 0.59 |
None | May 2025 ~ Mar. 2028 | ||||||||||||
Perpetual subordinated bonds, payable in Yen |
Jul. 2015 ~ Jun. 2019 |
598,974 | 684,797 | 1.07~ 2.88 |
None | Perpetual | ||||||||||||
Subordinated bonds, payable in U.S. dollars (Note 3) |
Apr. 2014 ~ Sep. 2019 |
|
191,741 ($1,727,400 thousand) |
|
|
244,822 ($2,250,000 thousand) |
|
3.202 ~ 4.436 |
None | Apr. 2024 ~ Sep. 2029 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
SMBC | Straight bonds, payable in Yen (Note 4) |
Apr. 23, 2014 | |
50,000 [50,000] |
|
| | | | |||||||||
Straight bonds, payable in U.S. dollars (Notes 3 and 4) |
Jan. 2012~ Dec. 2018 |
|
1,591,494 ($14,337,789 thousand) [814,740] |
|
|
761,633 ($6,999,664 thousand) [283,994] |
|
2.00413~ 4.13 |
None | May 2020~ Mar. 2030 | ||||||||
Subordinated bonds, payable in U.S. dollars (Note 3) |
May 28, 2015 | |
72,705 ($655,000 thousand) |
|
|
71,270 ($655,000 thousand) |
|
4.3 | None | May 30, 2045 | ||||||||
Straight bonds, payable in Euro (Notes 3 and 4) |
Jul. 2013 ~ Jul. 2018 |
|
429,901 (3,451,637 thousand) [] |
|
|
412,108 (3,448,026 thousand) [262,944] |
|
0.085~ 2.75 |
None | Apr. 2020 ~ Jul. 2023 | ||||||||
Straight bonds, payable in British pounds (Notes 3 and 4) |
Sep. 2018 | |
36,257 (£250,017 thousand) [] |
|
|
33,338 (£250,005 thousand) [33,337] |
|
0.82188 | None | Sep. 7, 2020 | ||||||||
Straight bonds, payable in Australian dollars (Notes 3 and 4) |
Sep. 2014 ~ Dec. 2018 |
|
41,134 A$523,137 thousand) [17,298] |
|
|
20,074 (A$303,193 thousand) [11,255] |
|
2.9 ~ 3.67 |
None | Aug. 2020 ~ Mar. 2025 | ||||||||
Straight bonds, payable in Hong Kong dollars (Notes 3 and 4) |
Mar. 2015 ~ Jul. 2015 |
|
33,426 (HK$2,364,000 thousand) [] |
|
|
33,190 (HK$2,364,000 thousand) [10,459] |
|
2.09~ 2.92 |
None | Apr. 2020 ~ Apr. 2025 | ||||||||
Straight bonds, payable in Thai Baht (Notes 3 and 4) |
Nov. 2016 ~ Nov. 2018 |
|
33,155 (THB9,500,000 thousand) |
|
|
19,980 (THB6,000,000 thousand) |
|
2 ~ 2.66 |
None | Aug. 2020 ~ Nov. 2021 | ||||||||
Subordinated bonds, payable in Yen (Note 4) |
Jul. 2009 ~ Dec. 2011 |
|
362,786 [73,000] |
|
|
289,899 [150,000] |
|
1.43 ~ 2.21 |
None | Sep. 2020 ~ Dec. 2026 | ||||||||
Perpetual subordinated bonds, payable in U.S. dollars (Note 3) |
Mar.1, 2012 | |
166,395 ($1,499,060 thousand) |
|
|
163,019 ($1,498,199 thousand) |
|
4.85 | None | Mar. 1, 2022 | ||||||||
Subordinated bonds, payable in Euro (Notes 3 and 4) |
Nov. 9, 2010 | |
93,250 (748,695 thousand) [] |
|
|
89,517 (748,976 thousand) [89,565] |
|
4 | None | Nov. 9, 2020 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(*1) | Consolidated subsidiaries, straight bonds, payable in Yen (Notes 2 and 4) |
Feb. 2011 ~ Mar. 2020 |
|
706,988 [180,921] |
|
|
536,998 [156,953] |
|
0.01 ~ 20 |
None | Apr. 2020 ~ Mar. 2050 | |||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(*2) | Consolidated subsidiaries, straight bonds, payable in U.S. dollars (Notes 2,3 and 4) |
Aug. 2015 ~ Mar. 2020 |
|
48,142 ($433,516 thousand) [3,506] |
|
|
43,609 ($400,785 thousand) [6,578] |
|
0.01 ~ 11.4 |
None | Apr. 2020 ~ Nov. 2037 | |||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(*3) | Consolidated subsidiaries, straight bonds, payable in Euro (Notes 2 and 3) |
Dec. 18, 2018 | |
124 (1,000 thousand) |
|
|
95 (800 thousand) |
|
0.1 | None | Dec. 18, 2023 | |||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(*4) | Consolidated subsidiaries, straight bonds, payable in Australian dollars (Notes 2, 3 and 4) |
Mar. 2016~ Dec. 2018 |
|
2,074 (A$26,388 thousand) [] |
|
|
1,290 (A$19,483 thousand) |
|
0.01~ 3 |
None | Jun. 2020~ Aug. 2031 | |||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(*5) | Consolidated subsidiaries, straight bonds, payable in Turkish lira (Notes 2,3 and 4) |
Jul. 2017~ Dec. 2018 |
|
5,164 (TRY 259,660 thousand) [117] |
|
|
4,080 (TRY 246,110 thousand) [863] |
|
0.01~ 15 |
None | Jul. 2020~ Oct. 2023 | |||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(*6) | Consolidated subsidiaries, straight bonds, payable in Indonesia rupiah (Notes 2,3 and 4) |
Jun. 2017 ~ Nov. 2019 |
|
19,487 (IDR2,498,374,855 thousand) [2,340] |
|
|
21,066 (IDR3,191,941,480 thousand) [14,531] |
|
7.50~ 8.25 |
None | Jun. 2020~ Nov. 2024 | |||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(*7) | Consolidated subsidiaries, straight bonds, payable in Renminbi (Notes 2,3 and 4) |
Mar. 2020 | | |
6,855 (CNY 447,756 thousand) [6,889] |
|
0 | None | Jun. 2020~ Sep. 2020 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(*8) | Consolidated subsidiaries, subordinated bonds, payable in Yen (Notes 2 and 4) |
Dec. 1997~ Aug. 1999 |
|
25,000 [5,000] |
|
|
20,000 [] |
|
4 ~ 4.15 |
None | Jan.28, 2028 | |||||||
|
|
|
|
|
|
|
|
|
| |||||||||
(*9) | Consolidated subsidiaries, short-term bonds, payable in Yen (Notes 2 and 4) |
Jan. 2020 ~ Mar. 2020 |
|
84,500 [84,500] |
|
|
379,000 [379,000] |
|
0 ~ 0.01 |
None | Apr. 2020 ~ Sep. 2020 | |||||||
|
|
|
|
|
|
|
|
|
| |||||||||
Total |
| ¥9,311,867 | ¥ 9,614,639 | | | | ||||||||||||
|
|
|
|
82
Notes: | 1. | Interest rate indicates a nominal interest rate which is applied at respective consolidated balance sheet dates. Therefore, this rate may differ from an actual interest rate. | ||
2. | (*1) This represents an aggregate of straight bonds issued in Yen by SMBC Nikko, a domestic consolidated subsidiary. (*2) This represents straight bonds issued in U.S. dollar by SMBC Nikko, a domestic consolidated subsidiary. (*3) This represents straight bonds issued in Euro by SMBC Nikko, a domestic consolidated subsidiary. (*4) This represents straight bonds issued in Australian dollar by SMBC Nikko, a domestic consolidated subsidiary. (*5) This represents straight bonds issued in Turkish lira by SMBC Nikko, a domestic consolidated subsidiary. (*6) This represents straight bonds issued in Indonesia rupiah by PT Bank BTPN Tbk, an overseas consolidated subsidiary. (*7) This represents straight bonds issued in Renminbi by Sumitomo Mitsui Banking Corporation (China) Limited, an overseas consolidated subsidiary. (*8) This represents subordinate term bonds issued in Yen by SMBC International Finance N.V., an overseas consolidated subsidiary. (*9) This represents an aggregate of short-term bonds issued in yen by SMBC Nikko and SMCC, domestic consolidated subsidiaries. | |||
3. | Figures showed in ( ) in At the beginning of the fiscal year and At the end of the fiscal year are in foreign currency. | |||
4. | Figures showed in [ ] in At the beginning of the fiscal year and At the end of the fiscal year are the amounts to be redeemed within one year. | |||
5. | The redemption schedule over the next 5 years after respective balance sheet dates of the consolidated subsidiaries was as follows: |
Millions of yen | ||||||||
Within 1 year |
More than 1 year |
More than 2 years |
More than 3 years |
More than 4 years | ||||
¥ 1,690,716 | ¥ 1,173,258 | ¥ 1,014,148 | ¥ 663,631 | ¥ 1,025,916 |
83
[Schedule of borrowings]
Millions of yen | Percentages |
|||||||||||||
Classification |
At the beginning of the fiscal year |
At the end of the fiscal year |
Average |
Repayment Term | ||||||||||
Borrowed money |
¥ | 10,656,897 | ¥ | 15,210,894 | 0.28 | | ||||||||
Other borrowings |
10,656,897 | 15,210,894 | 0.28 | |
Jan. 2020 ~ Perpetual |
| ||||||||
Lease obligations |
30,379 | 29,103 | 3.06 | |
Apr. 2020 ~ Jul. 2032 |
|
Notes: |
1. | Average interest rate represents the weighted average interest rate based on the interest rates and At the end of the fiscal year at respective balance sheet dates of consolidated subsidiaries. | ||||
2. | The redemption schedule over the next 5 years on Borrowings and Lease obligations after respective balance sheet dates of the consolidated subsidiaries was as follows: |
Millions of yen | ||||||||||||||||||||
Within 1 year | More than 1 year to 2 years |
More than 2 years to 3 years |
More than 3 years to 4 years |
More than 4 years to 5 years |
||||||||||||||||
Other borrowings |
¥ | 10,116,503 | ¥ | 542,906 | ¥ | 1,838,978 | ¥ | 1,581,809 | ¥ | 221,487 | ||||||||||
Lease obligations |
7,338 | 6,006 | 4,773 | 4,550 | 2,816 |
Since the commercial banking business accepts deposits and raises and manages funds through the call loan and commercial paper markets as a normal course of business, the schedule of borrowings shows a breakdown of Borrowed money included in the Liabilities and Lease obligations included in Other liabilities in the consolidated balance sheet.
Reference: Commercial paper issued for funding purpose as a normal course of business is as follows:
Millions of yen | Percentages |
|||||||||||||
At the beginning of the fiscal year |
At the end
of the fiscal year |
Average |
Repayment Term | |||||||||||
Commercial paper |
¥ | 2,291,813 | ¥ | 1,409,249 | 1.35 | Apr. 2020 ~ Aug. 2020 |
[Schedule of asset retirement obligations]
Since the amount of asset retirement obligations accounts for 1% or less than the total of liabilities and net assets, the schedule of asset liability obligation is not disclosed.
[Others]
Quarterly consolidated financial information in the fiscal year ended March 31, 2020 is as follows:
Millions of yen (except Earnings per share) | ||||||||||||||||
First
quarter consolidated total period |
Second quarter consolidated total period |
Third quarter consolidated total period |
Fiscal year ended March 31, 2018 |
|||||||||||||
Ordinary income |
¥ | 1,334,510 | ¥ | 2,707,673 | ¥ | 4,021,547 | ¥ | 5,314,313 | ||||||||
Income before income taxes |
282,383 | 578,978 | 831,431 | 888,646 | ||||||||||||
Profit attributable to owners of parent |
215,727 | 431,955 | 610,830 | 703,883 | ||||||||||||
Earnings per share |
155.24 | 312.84 | 443.60 | 511.87 | ||||||||||||
Yen | ||||||||||||||||
First quarter consolidated accounting period |
Second quarter consolidated accounting period |
Third quarter consolidated accounting period |
Fourth quarter consolidated accounting period |
|||||||||||||
Earnings per share |
¥ | 155.24 | ¥ | 157.61 | ¥ | 130.62 | ¥ | 67.95 |
84
(Non-consolidated financial statements)
1. | Non-consolidated balance sheets |
Millions of yen | Millions of U.S. dollars | |||||||||||
March 31 |
2019 | 2020 | 2020 | |||||||||
Assets: |
||||||||||||
Current assets |
||||||||||||
Cash and due from banks |
¥ | 434,005 | ¥ | 174,641 | $ | 1,605 | ||||||
Prepaid expenses |
365 | 413 | 4 | |||||||||
Accrued income |
42,124 | 45,660 | 420 | |||||||||
Accrued income tax refunds |
118,877 | 127,541 | 1,172 | |||||||||
Current portion of long-term loans receivables from subsidiaries and affiliates |
| 272,025 | 2,500 | |||||||||
Other current assets |
37,124 | 59,769 | 549 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total current assets |
632,497 | 680,051 | 6,250 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Fixed assets |
||||||||||||
Tangible fixed assets |
||||||||||||
Buildings |
85 | 80 | 1 | |||||||||
Equipment |
5 | 12 | 0 | |||||||||
Construction in progress |
13,718 | 29,464 | 271 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total tangible fixed assets |
13,809 | 29,557 | 272 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Intangible fixed assets |
||||||||||||
Software |
276 | 270 | 2 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total intangible fixed assets |
276 | 270 | 2 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Investments and other assets |
||||||||||||
Investment securities |
| 645 | 6 | |||||||||
Investments in subsidiaries and affiliates |
6,085,818 | 6,341,210 | 58,278 | |||||||||
Long-term loans receivable from subsidiaries and affiliates |
6,258,343 | 7,173,150 | 65,924 | |||||||||
Long-term prepaid expenses |
226 | 104 | 1 | |||||||||
Deferred tax assets |
414 | 476 | 4 | |||||||||
Other investments and other assets |
0 | 3 | 0 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total investments and other assets |
12,344,803 | 13,515,590 | 124,213 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total fixed assets |
12,358,889 | 13,545,418 | 124,487 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total assets |
¥ | 12,991,386 | ¥ | 14,225,470 | $ | 130,737 | ||||||
|
|
|
|
|
|
|
|
| ||||
Liabilities: |
||||||||||||
Current liabilities |
||||||||||||
Short-term borrowings |
¥ | 1,228,030 | ¥ | 1,228,030 | $ | 11,286 | ||||||
Accounts payable |
8,924 | 39,682 | 365 | |||||||||
Accrued expenses |
42,571 | 44,409 | 408 | |||||||||
Income taxes payable |
9 | 12 | 0 | |||||||||
Business office taxes payable |
35 | 39 | 0 | |||||||||
Reserve for employee bonuses |
722 | 769 | 7 | |||||||||
Reserve for executive bonuses |
389 | 410 | 4 | |||||||||
Current portion of bonds |
| 272,025 | 2,500 | |||||||||
Other current liabilities |
649 | 673 | 6 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total current liabilities |
1,281,332 | 1,586,051 | 14,576 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Fixed liabilities |
||||||||||||
Bonds |
5,790,820 | 6,441,874 | 59,203 | |||||||||
Long-term borrowings |
234,223 | 231,275 | 2,126 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total fixed liabilities |
6,025,043 | 6,673,150 | 61,328 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total liabilities |
7,306,375 | 8,259,202 | 75,905 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Net assets: |
||||||||||||
Stockholders equity |
||||||||||||
Capital stock |
2,339,443 | 2,339,964 | 21,505 | |||||||||
Capital surplus |
||||||||||||
Capital reserve |
1,560,921 | 1,561,442 | 14,350 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total capital surplus |
1,560,921 | 1,561,442 | 14,350 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Retained earnings |
||||||||||||
Other retained earnings |
||||||||||||
Voluntary reserve |
30,420 | 30,420 | 280 | |||||||||
Retained earnings brought forward |
1,767,989 | 2,046,360 | 18,807 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total retained earnings |
1,798,409 | 2,076,780 | 19,086 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Treasury stock |
(16,302) | (13,983 | ) | (129 | ) | |||||||
|
|
|
|
|
|
|
|
| ||||
Total stockholders equity |
5,682,471 | 5,964,203 | 54,813 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Stock acquisition rights |
2,539 | 2,064 | 19 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total net assets |
5,685,011 | 5,966,267 | 54,832 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total liabilities and net assets |
¥ | 12,991,386 | ¥ | 14,225,470 | $ | 130,737 | ||||||
|
|
|
|
|
|
|
|
|
85
2. | Non-consolidated statements of income |
Year ended March 31 |
Millions of yen | Millions of U.S. dollars | ||||||||||
2019 | 2020 | 2020 | ||||||||||
Operating income: |
||||||||||||
Dividends on investments in subsidiaries and affiliates |
¥ | 371,805 | ¥ | 659,428 | $ | 6,060 | ||||||
Fees and commissions received from subsidiaries |
5,665 | 9,087 | 84 | |||||||||
Interests on loans receivable from subsidiaries and affiliates |
145,072 | 165,319 | 1,519 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total operating income |
522,543 | 833,835 | 7,663 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Operating expenses: |
||||||||||||
General and administrative expenses |
24,332 | 26,146 | 240 | |||||||||
Interest on bonds |
143,809 | 161,535 | 1,485 | |||||||||
Interest on long-term borrowings |
6,449 | 6,843 | 63 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total operating expenses |
174,591 | 194,525 | 1,788 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Operating profit |
347,952 | 639,310 | 5,875 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Non-operating income: |
||||||||||||
Interest income on deposits |
32 | 70 | 1 | |||||||||
Fees and commissions income |
1 | 1 | 0 | |||||||||
Other non-operating income |
178 | 130 | 1 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total non-operating income |
212 | 202 | 2 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Non-operating expenses: |
||||||||||||
Interest on borrowings |
4,298 | 4,312 | 40 | |||||||||
Fees and commissions payments |
254 | 120 | 1 | |||||||||
Amortization of bond issuance cost |
2,407 | 5,816 | 53 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total non-operating expenses |
6,960 | 10,249 | 94 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Ordinary profit |
341,203 | 629,263 | 5,783 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Extraordinary loss: |
||||||||||||
Loss on sales of stocks of subsidiaries and affiliates |
1,414 | | | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total extraordinary loss |
1,414 | | | |||||||||
|
|
|
|
|
|
|
|
| ||||
Income before income taxes |
446,062 | 629,263 | 5,783 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Income taxes-current |
(27,998 | ) | (6,803 | ) | (63 | ) | ||||||
Income taxes-deferred |
(136 | ) | (62 | ) | (1 | ) | ||||||
|
|
|
|
|
|
|
|
| ||||
Income taxes |
(28,134 | ) | (6,865 | ) | (63 | ) | ||||||
|
|
|
|
|
|
|
|
| ||||
Net income |
¥ | 474,196 | ¥ | 636,128 | $ | 5,846 | ||||||
|
|
|
|
|
|
|
|
| ||||
Yen | U.S. dollars | |||||||||||
2019 | 2020 | 2020 | ||||||||||
Per share data: |
||||||||||||
Earnings per share |
¥ | 339.29 | ¥ | 462.60 | $ | 4.25 | ||||||
Earnings per share (diluted) |
339.07 | 462.33 | 4.25 |
86
3. | Non-consolidated statements of changes in net assets |
Millions of yen | ||||||||||||||||
Stockholders equity | ||||||||||||||||
Capital surplus | ||||||||||||||||
Year ended March 31, 2019 |
Capital stock |
Capital reserve |
Other capital surplus |
Total capital surplus |
||||||||||||
Balance at the beginning of the fiscal year |
¥ | 2,338,743 | ¥ | 1,560,221 | ¥ | 24,286 | ¥ | 1,584,508 | ||||||||
Changes in the fiscal year: |
||||||||||||||||
Issuance of new stock |
699 | 699 | 699 | |||||||||||||
Cash dividends |
||||||||||||||||
Net income |
||||||||||||||||
Purchase of treasury stock |
||||||||||||||||
Disposal of treasury stock |
(68) | (68) | ||||||||||||||
Cancellation of treasury stock |
(65,922) | (65,922) | ||||||||||||||
Transfer from retained earnings to capital surplus |
41,704 | 41,704 | ||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net changes in the fiscal year |
699 | 699 | (24,286) | (23,587) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at the end of the fiscal year |
¥ | 2,339,443 | ¥ | 1,560,921 | ¥ | | ¥ | 1,560,921 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Millions of yen | ||||||||||||||||
Stockholders equity | ||||||||||||||||
Retained earnings | ||||||||||||||||
Other retained earnings | ||||||||||||||||
Year ended March 31, 2019 |
Voluntary reserve |
Retained earnings brought forward |
Total retained earnings |
|||||||||||||
Balance at the beginning of the fiscal year |
¥ | 30,420 | ¥ | 1,581,073 | ¥ | 1,611,493 | ||||||||||
Changes in the fiscal year: |
||||||||||||||||
Issuance of new stock |
||||||||||||||||
Cash dividends |
(245,576) | (245,576) | ||||||||||||||
Net income |
474,196 | 474,196 | ||||||||||||||
Purchase of treasury stock |
||||||||||||||||
Disposal of treasury stock |
||||||||||||||||
Cancellation of treasury stock |
||||||||||||||||
Transfer from retained earnings to capital surplus |
(41,704) | (41,704) | ||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Net changes in the fiscal year |
| 186,916 | 186,916 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Balance at the end of the fiscal year |
¥ | 30,420 | ¥ | 1,767,989 | ¥ | 1,798,409 | ||||||||||
|
|
|
|
|
|
|||||||||||
Millions of yen | ||||||||||||||||
Stockholders equity | Stock acquisition rights |
|||||||||||||||
Year ended March 31, 2019 |
Treasury stock |
Total | Total net assets |
|||||||||||||
Balance at the beginning of the fiscal year |
¥ | (12,493) | ¥ | 5,522,252 | ¥ | 2,823 | ¥ | 5,525,075 | ||||||||
Changes in the fiscal year: |
||||||||||||||||
Issuance of new stock |
1,398 | 1,398 | ||||||||||||||
Cash dividends |
(245,576) | (245,576) | ||||||||||||||
Net income |
474,196 | 474,196 | ||||||||||||||
Purchase of treasury stock |
(70,094) | (70,094) | (70,094) | |||||||||||||
Disposal of treasury stock |
363 | 294 | 294 | |||||||||||||
Cancellation of treasury stock |
65,922 | | | |||||||||||||
Transfer from retained earnings to capital surplus |
| | ||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
(283) | (283) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net changes in the fiscal year |
(3,809) | 160,219 | (283) | 159,935 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at the end of the fiscal year |
¥ | (16,302) | ¥ | 5,682,471 | ¥ | 2,539 | ¥ | 5,685,011 | ||||||||
|
|
|
|
|
|
|
|
87
Millions of yen | ||||||||||||||||
Stockholders equity | ||||||||||||||||
Capital surplus | ||||||||||||||||
Year ended March 31, 2020 |
Capital stock |
Capital reserve |
Other capital surplus |
Total capital surplus |
||||||||||||
Balance at the beginning of the fiscal year |
¥ | 2,339,443 | ¥ | 1,560,921 | ¥ | | ¥ | 1,560,921 | ||||||||
Changes in the fiscal year: |
||||||||||||||||
Issuance of new stock |
521 | 521 | 521 | |||||||||||||
Cash dividends |
||||||||||||||||
Net income |
||||||||||||||||
Purchase of treasury stock |
||||||||||||||||
Disposal of treasury stock |
(250) | (250) | ||||||||||||||
Cancellation of treasury stock |
(101,673) | (101,673) | ||||||||||||||
Transfer from retained earnings to capital surplus |
101,923 | 101,923 | ||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net changes in the fiscal year |
521 | 521 | | 521 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at the end of the fiscal year |
¥ | 2,339,964 | ¥ | 1,561,442 | ¥ | | ¥ | 1,561,442 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Millions of yen | ||||||||||||||||
Stockholders equity | ||||||||||||||||
Retained earnings | ||||||||||||||||
Other retained earnings | ||||||||||||||||
Year ended March 31, 2020 |
Voluntary reserve |
Retained earnings brought forward |
Total retained earnings |
|||||||||||||
Balance at the beginning of the fiscal year |
¥ | 30,420 | ¥ | 1,767,989 | ¥ | 1,798,409 | ||||||||||
Changes in the fiscal year: |
||||||||||||||||
Issuance of new stock |
||||||||||||||||
Cash dividends |
(255,834) | (255,834) | ||||||||||||||
Net income |
636,128 | 636,128 | ||||||||||||||
Purchase of treasury stock |
||||||||||||||||
Disposal of treasury stock |
||||||||||||||||
Cancellation of treasury stock |
||||||||||||||||
Transfer from retained earnings to capital surplus |
(101,923) | (101,923) | ||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Net changes in the fiscal year |
| 278,370 | 278,370 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Balance at the end of the fiscal year |
¥ | 30,420 | ¥ | 2,046,360 | ¥ | 2,076,780 | ||||||||||
|
|
|
|
|
|
|||||||||||
Millions of yen | ||||||||||||||||
Stockholders equity | Stock acquisition rights |
|||||||||||||||
Year ended March 31, 2020 |
Treasury stock |
Total | Total net assets |
|||||||||||||
Balance at the beginning of the fiscal year |
¥ | (16,302) | ¥ | 5,682,471 | ¥ | 2,539 | ¥ | 5,685,011 | ||||||||
Changes in the fiscal year: |
||||||||||||||||
Issuance of new stock |
1,043 | 1,043 | ||||||||||||||
Cash dividends |
(255,834) | (255,834) | ||||||||||||||
Net income |
636,128 | 636,128 | ||||||||||||||
Purchase of treasury stock |
(100,088) | (100,088) | (100,088) | |||||||||||||
Disposal of treasury stock |
733 | 483 | 483 | |||||||||||||
Cancellation of treasury stock |
101,673 | | | |||||||||||||
Transfer from retained earnings to capital surplus |
| | ||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
(475) | (475) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net changes in the fiscal year |
2,318 | 281,732 | (475) | 281,256 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at the end of the fiscal year |
¥ | (13,983) | ¥ | 5,964,203 | ¥ | 2,064 | ¥ | 5,966,267 | ||||||||
|
|
|
|
|
|
|
|
88
Millions of U. S. dollars | ||||||||||||||||
Stockholders equity | ||||||||||||||||
Capital surplus | ||||||||||||||||
Year ended March 31, 2020 |
Capital stock |
Capital reserve |
Other capital surplus |
Total capital surplus |
||||||||||||
Balance at the beginning of the fiscal year |
$ | 21,500 | $ | 14,345 | $ | | $ | 14,345 | ||||||||
Changes in the fiscal year: |
||||||||||||||||
Issuance of new stock |
5 | 5 | 5 | |||||||||||||
Cash dividends |
||||||||||||||||
Net income |
||||||||||||||||
Purchase of treasury stock |
||||||||||||||||
Disposal of treasury stock |
(2) | (2) | ||||||||||||||
Cancellation of treasury stock |
(934) | (934) | ||||||||||||||
Transfer from retained earnings to capital surplus |
937 | 937 | ||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net changes in the fiscal year |
5 | 5 | | 5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at the end of the fiscal year |
$ | 21,505 | $ | 14,350 | $ | | $ | 14,350 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Millions of U. S. dollars | ||||||||||||||||
Stockholders equity | ||||||||||||||||
Retained earnings | ||||||||||||||||
Other retained earnings | ||||||||||||||||
Year ended March 31, 2020 |
Voluntary reserve |
Retained earnings brought forward |
Total retained earnings |
|||||||||||||
Balance at the beginning of the fiscal year |
$ | 280 | $ | 16,248 | $ | 16,528 | ||||||||||
Changes in the fiscal year: |
||||||||||||||||
Issuance of new stock |
||||||||||||||||
Cash dividends |
(2,351) | (2,351) | ||||||||||||||
Net income |
5,846 | 5,846 | ||||||||||||||
Purchase of treasury stock |
||||||||||||||||
Disposal of treasury stock |
||||||||||||||||
Cancellation of treasury stock |
||||||||||||||||
Transfer from retained earnings to capital surplus |
(937) | (937) | ||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Net changes in the fiscal year |
| 2,558 | 2,558 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Balance at the end of the fiscal year |
$ | 280 | $ | 18,807 | $ | 19,086 | ||||||||||
|
|
|
|
|
|
|||||||||||
Millions of U. S. dollars | ||||||||||||||||
Stockholders equity | Stock acquisition rights |
|||||||||||||||
Year ended March 31, 2020 |
Treasury stock |
Total | Total net assets |
|||||||||||||
Balance at the beginning of the fiscal year |
$ | (150) | $ | 52,224 | $ | 23 | $ | 52,247 | ||||||||
Changes in the fiscal year: |
||||||||||||||||
Issuance of new stock |
10 | 10 | ||||||||||||||
Cash dividends |
(2,351) | (2,351) | ||||||||||||||
Net income |
5,846 | 5,846 | ||||||||||||||
Purchase of treasury stock |
(920) | (920) | (920) | |||||||||||||
Disposal of treasury stock |
7 | 4 | 4 | |||||||||||||
Cancellation of treasury stock |
934 | | | |||||||||||||
Transfer from retained earnings to capital surplus |
| | ||||||||||||||
Net changes in items other than stockholders equity in the fiscal year |
(4) | (4) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net changes in the fiscal year |
21 | 2,589 | (4) | 2,585 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at the end of the fiscal year |
$ | (129) | $ | 54,813 | $ | 19 | $ | 54,832 | ||||||||
|
|
|
|
|
|
|
|
89
To the Board of Directors of
Sumitomo Mitsui Financial Group, Inc.:
Opinion
We have audited the accompanying consolidated financial statements of Sumitomo Mitsui Financial Group, Inc.(the Company) and its consolidated subsidiaries (collectively referred to as the Group), which comprise the consolidated balance sheets as at March 31, 2020 and 2019, the consolidated statements of income, comprehensive income, changes in net assets and cash flows for the years then ended, and notes, comprising a summary of significant accounting policies, other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2020 and 2019, and its consolidated financial performance and cash flows for the years then ended in accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Measurement of the reserve for possible loan losses | ||
The key audit matter | How the matter was addressed in our audit | |
In the consolidated balance sheet of the Group as of March 31, 2020, reserve for possible loan losses (the Reserve) amounted to ¥301,752 million provided on loans and bills discounted (the Loans) of ¥82,517,609 million (or approximately 37.5% of the total assets). Included in such balances were mainly corporate loans of Sumitomo Mitsui Banking Corporation (SMBC), a commercial banking subsidiary.
SMBC assesses all claims including the Loans in accordance with the internal criteria for self-assessment of asset quality, and classifies borrowers into credit categories through examining individual credit risk profiles. On the basis of each borrower category, reserves and direct write-offs are recorded in accordance with its internal policy for write-offs and provisions. The methodologies used include an expected credit loss (ECL) model based on the historical loan-loss ratios or the probability of default, and a discounted cash flow (DCF) method. Additionally, considering recent economic environment and risk factors, an ECL amount deemed necessary for specific portfolios is reflected in the Reserve based on an overall assessment of a probable future outlook for those portfolios that has not been fully captured in the historical data or individual borrower classification.
The evaluation of the Reserve for SMBCs corporate loans involves significant measurement uncertainty, and therefore requires complex management judgment primarily in the following aspects:
classifying borrowers into appropriate credit categories through performing obligor-specific qualitative assessment, including the use of forward-looking information;
deciding on whether changes to the borrower classification as well as additional provisions for specific portfolios are deemed necessary, and determining appropriate methodologies to measure such provisions, in light of recent economic environment and risk factors, specifically the potential impact of the spread of the COVID-19 and the coinciding fluctuations of market indices such as crude oil prices; and
projecting future cash flow scenarios as an input to the DCF method for borrowers with large claims classified mainly as substandard or potentially bankrupt.
We, therefore, determined that the measurement of the Reserve for SMBC corporate loans; specifically, classifying borrowers into credit categories through qualitative assessment, reflecting recent economic environment and risk factors into the Reserve, and projection of cash flow scenarios used in the DCF method, was one of the most significant in our audit of the consolidated financial statements for this fiscal year, and accordingly, a key audit matter. |
The primary procedures we performed to assess the reasonableness of measurement of the Reserve for SMBCs corporate loans included the following:
(1) Internal control testing
We evaluated the design and operating effectiveness of certain internal controls over the provisioning process by focusing on controls that:
approve the internal rules for accounting for the Reserve, including the criteria for self-assessment and the policy for write-offs and provisions;
validate the obligor grading models;
relate to classification of individual borrowers into credit categories through qualitative assessment;
reflect recent economic environment and risk factors into the Reserve; and
relate to the projection of future cash flow scenarios used in the DCF method.
(2) Evaluation of the appropriateness of the policy for provisions and the borrower classification model
We evaluated the policy for provisions for compliance with the accounting principles generally accepted in Japan. Additionally, we involved credit risk specialists with industry-specific knowledge and expertise who assisted us in evaluating the obligor grading models through analyzing the consistency of obligor grades with external ratings, and evaluating the default prediction capability of the models.
(3) Evaluation of the appropriateness of borrower classification taking into account qualitative factors
For SMBCs corporate borrowers that we selected based on certain criteria, we evaluated the appropriateness of borrower classification taking into account qualitative factors through analyzing the feasibility of their business plan and assessing their liquidity position.
(4) Evaluation of the reasonableness of a provision that reflects the effect of recent economic environment and risk factors
In light of the recent economic environment and risk factors, specifically the potential impact of the spread of COVID-19 and the coinciding fluctuations of market indices such as crude oil price, we evaluated the reasonableness of changes to the borrower classification and of an additional provision for specific portfolios through:
analyzing the liquidity position of borrowers affected by the COVID-19 and the related circumstances including their recent operating performance and request for loan modifications, and assessing the borrower classification on the basis of such analysis; and
analyzing the scope of potential effects and assessing assumptions by inspecting available external reports on market indices including crude oil prices, and evaluating the methodologies used to measure an ECL for specific portfolios. |
(5) Evaluation of the reasonableness of future cash flow scenarios used in the DCF method
For borrowers that we selected based on certain criteria from those in scope of DCF method, we evaluated the reasonableness of future cash flow scenarios through analyzing their restructuring plans and related progress. | ||
Measurement of the value-in-use of goodwill and other intangible assets related to the retail banking business of SMBC Trust Bank, Ltd. | ||
The key audit matter | How the matter was addressed in our audit | |
In the consolidated balance sheet of the Group as of March 31, 2020, goodwill and other intangible fixed assets amounted to ¥194,289 million and ¥117,896 million, respectively. The goodwill and other intangible fixed assets consisting of assets related to customers and core deposits (collectively, the Intangible Assets) recognized in connection with the acquisition of the retail banking business of Citibank Japan Ltd. (the PRESTIA business) by SMBC Trust bank Ltd, (SMBC Trust Bank) were impaired, and an impairment loss of ¥39,958 million for the entire amount of the Intangible Assets was recorded for the fiscal year ended March 31, 2020.
While the Intangible Assets are amortized in a systematic manner, whenever there is an indicator that the carrying amounts of the Intangible Assets may not be recoverable, the Group needs to determine whether an impairment shall be recognized by comparing the undiscounted future cash flows to be generated from the business to which the Intangible Assets relate and its carrying amount. If it is determined that the recognition of an impairment loss is required, the carrying amount is reduced to its recoverable amount, with such reduction being recognized as an impairment loss. The recoverable amount of an asset group is the higher of its fair value less costs to sell and its value in use.
There was an indicator of impairment for the PRESTIA business of SMBC Trust Bank during the year ended March 31, 2020 due to the deterioration in its market environment. As a result of an impairment test, the recognition of an impairment loss was required. The value in use was used as the recoverable amount to measure an impairment loss on the Intangible Assets related to the PRESTIA business of SMBC Trust Bank. The value in use was calculated using the future cash flows based on the business plan approved by management and a discount rate. |
The primary procedures we performed to evaluate the reasonableness of the measurement of the value in use related to the PRESTIA business of SMBC Trust Bank included the following.
(1) Internal control testing
We evaluated the design and operating effectiveness of certain internal controls over the process of calculating the value in use related to the PRESTIA business of SMBC Trust Bank by focusing controls that:
evaluate the reasonableness of estimated future cash flows; and
evaluate the reasonableness of the discount rate.
(2) Evaluation of the appropriateness of valuation methodology used to calculate the value in use
We involved valuation specialists with industry-specific knowledge and expertise who assisted us in evaluating the reasonableness of valuation methodology used to calculate the value in use by comparing it to the standard methods commonly used for the valuation of retail banks.
(3) Evaluation of the reasonableness of future cash flows used to calculate the value in use
We assessed the level of precision of the prior year estimate of future cash flows by comparing it to the actual result. In addition, we evaluated the reasonableness of estimated future cash flows, considering the historical operating performance, the current market environment and economic trends including future prospect of the PRESTIA business of SMBC Trust Bank, and the regulatory environment. |
The estimate of future cash flows inherently requires complex management judgments, and the discount rate may be significantly affected by market interest rates and other market conditions. Also, as SMBC Trust Bank has revised the estimated future cash flows considering the recent market environment, there was a higher degree of uncertainty in the estimates used for calculating the value in use.
We, therefore, determined that the measurement of the value in use related to the PRESTIA business of SMBC Trust Bank was one of the most significant in our audit of the consolidated financial statements for this fiscal year, and accordingly, a key audit matter. |
(4) Evaluation of the reasonableness of the discount rate used to calculate the value in use
We involved valuation specialists with industry-specific knowledge and expertise who assisted us in evaluating the reasonableness of the valuation methodology used to calculate a discount rate and the calculation result, considering historical market data and current market conditions. |
Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Groups ability to continue as a going concern, disclosing, as applicable, matters related to going concern in accordance with accounting principles generally accepted in Japan.
The Audit Committee is responsible for overseeing the directors and the corporate executive officers performance of their duties including the design, implementation and maintenance of the Groups financial reporting process.
Auditors Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in Japan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
| Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. |
| Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, while the objective of the audit is not to express an opinion on the effectiveness of the Groups internal control. |
| Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. |
| Conclude on the appropriateness of managements use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Groups ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Group to cease to continue as a going concern. |
| Evaluate whether the presentation and disclosures in the consolidated financial statements are in accordance with accounting standards generally accepted in Japan, the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. |
| Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. |
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit, significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2020 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis described in basis of presentation.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
/s/ Toshihiro Otsuka
Designated Engagement Partner
Certified Public Accountant
/s/ Noriaki Habuto
Designated Engagement Partner
Certified Public Accountant
/s/ Kazuhide Niki
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Tokyo Office, Japan
June 25, 2020
Exhibit 15.1
Consent of Independent Auditors
The Board of Directors
Sumitomo Mitsui Financial Group, Inc.:
We consent to the incorporation by reference in the registration statement (No. 333-228913) on Form F-3 of Sumitomo Mitsui Financial Group, Inc. of our report dated June 25, 2020, with respect to the consolidated balance sheets of Sumitomo Mitsui Financial Group, Inc. and subsidiaries as of March 31, 2020 and 2019, and the consolidated statements of income, comprehensive income, changes in net assets and cash flows for the years then ended, and basis of presentation, significant accounting policies and other explanatory information, which report appears in the Form 6-K of Sumitomo Mitsui Financial Group, Inc. dated July 2, 2020.
/s/ KPMG AZSA LLC
Tokyo, Japan
July 2, 2020