6-K 1 d217464d6k.htm FORM 6-K FORM 6-K
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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 August 2016

Commission file number 001-34919

 

 

SUMITOMO MITSUI FINANCIAL GROUP, INC.

(Translation of registrant’s 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   x     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   x

 

*

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                

THIS REPORT ON 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NO. 333-209069) AND TO BE A PART OF SUCH PROSPECTUS FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

 

 

 


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TABLE OF DOCUMENT(S) SUBMITTED

 

1.

Unaudited quarterly consolidated Japanese GAAP financial statements as of and for the three months ended June 30, 2016

EXHIBIT INDEX

 

 Exhibit 

No.

 

Description

15.1   Awareness Letter of KPMG AZSA LLC


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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/ Jun Ohta

 

Name:

 

Jun Ohta

 

Title:

 

Director

Date: August 17, 2016


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UNAUDITED QUARTERLY CONSOLIDATED JAPANESE GAAP FINANCIAL STATEMENTS

AS OF AND FOR THE THREE MONTHS ENDED JUNE 30, 2016

On August 12, 2016, we published our unaudited quarterly consolidated financial statements as of and for the three months ended June 30, 2016 prepared in accordance with accounting principles generally accepted in Japan, or Japanese GAAP, as part of our quarterly securities report (shihanki hokokusho) for the same period filed by us with the relevant Japanese authorities. This document is an English translation of the unaudited quarterly consolidated financial statements and the notes thereto included in such quarterly securities report. 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 Results—Reconciliation with Japanese GAAP” in our most recent annual report on Form 20-F filed with the SEC.


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UNAUDITED QUARTERLY

CONSOLIDATED FINANCIAL STATEMENTS (JAPANESE GAAP)

QUARTERLY CONSOLIDATED BALANCE SHEETS

 

     Millions of yen      Millions of
U.S. dollars
 
     March 31, 2016      June 30, 2016      June 30, 2016  

Assets:

              

Cash and due from banks

      ¥ 42,789,236                 ¥ 39,363,896              $ 382,322        

Call loans and bills bought

        1,291,365                   1,210,521                11,757        

Receivables under resale agreements

        494,949                   629,458                6,114        

Receivables under securities borrowing transactions

        7,972,918                   7,897,190                76,702        

Monetary claims bought

        4,350,012                   3,992,309                38,775        

Trading assets

        8,063,281                   8,587,425                83,405        

Money held in trust

        5,163                   4,739                46        

Securities

     *2         25,264,445                *2         22,048,625                214,147        

Loans and bills discounted

     *1         75,066,080                *1         74,951,101                727,963        

Foreign exchanges

        1,577,167                   1,670,992                16,230        

Lease receivables and investment assets

        1,987,034                   2,367,220                22,992        

Other assets

        6,702,774                   7,783,202                75,594        

Tangible fixed assets

        2,919,424                   2,896,767                28,135        

Intangible fixed assets

        878,265                   961,372                9,337        

Net defined benefit asset

        203,274                   216,332                2,101        

Deferred tax assets

        125,832                   122,416                1,189        

Customers’ liabilities for acceptances and guarantees

        7,519,635                   7,251,155                70,427        

Reserve for possible loan losses

        (625,019)                  (583,392)               (5,666)       
     

 

 

       

 

 

    

 

 

 

Total assets

      ¥   186,585,842                 ¥   181,371,336              $   1,761,571        
     

 

 

       

 

 

    

 

 

 

 

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QUARTERLY CONSOLIDATED BALANCE SHEETS

 

    

Millions of yen

     Millions of
U.S. dollars
 
    

March 31, 2016

    

June 30, 2016

     June 30, 2016  

Liabilities and net assets:

              

Liabilities:

              

Deposits

      ¥ 110,668,828                 ¥ 108,205,955              $ 1,050,951        

Negotiable certificates of deposit

        14,250,434                   12,548,658                121,879        

Call money and bills sold

        1,220,455                   1,285,901                12,489        

Payables under repurchase agreements

        1,761,822                   1,769,982                17,191        

Payables under securities lending transactions

        5,309,003                   7,673,911                74,533        

Commercial paper

        3,017,404                   2,408,285                23,390        

Trading liabilities

        6,112,667                   6,840,868                66,442        

Borrowed money

        8,571,227                   5,784,723                56,184        

Foreign exchanges

        1,083,450                   957,379                9,299        

Short-term bonds

        1,271,300                   1,237,000                12,014        

Bonds

        7,006,357                   6,865,392                66,680        

Due to trust account

        944,542                   976,806                9,487        

Other liabilities

        6,632,027                   6,567,138                63,783        

Reserve for employee bonuses

        68,476                   24,814                241        

Reserve for executive bonuses

        2,446                   —                —        

Net defined benefit liability

        48,570                   52,628                511        

Reserve for executive retirement benefits

        2,202                   1,887                18        

Reserve for point service program

        19,706                   20,427                198        

Reserve for reimbursement of deposits

        16,979                   14,517                141        

Reserve for losses on interest repayment

        228,741                   207,013                2,011        

Reserve under the special laws

        1,498                   1,427                14        

Deferred tax liabilities

        348,190                   345,162                3,352        

Deferred tax liabilities for land revaluation

        32,203                   32,197                313        

Acceptances and guarantees

        7,519,635                   7,251,155                70,427        
     

 

 

       

 

 

    

 

 

 

Total liabilities

        176,138,173                   171,073,235                1,661,550        
     

 

 

       

 

 

    

 

 

 

Net assets:

              

Capital stock

        2,337,895                   2,337,895                22,707        

Capital surplus

        757,306                   757,320                7,355        

Retained earnings

        4,534,472                   4,616,228                44,835        

Treasury stock

        (175,381)                  (175,389)               (1,703)       
     

 

 

       

 

 

    

 

 

 

Total stockholders’ equity

        7,454,294                   7,536,055                73,194        
     

 

 

       

 

 

    

 

 

 

Net unrealized gains (losses) on other securities

        1,347,689                   1,196,742                11,623        

Net deferred gains (losses) on hedges

        55,130                   87,474                850        

Land revaluation excess

        39,416                   39,403                383        

Foreign currency translation adjustments

        87,042                   (13,841)               (134)       

Accumulated remeasurements of defined benefit plans

        (69,811)                  (60,078)               (584)       
     

 

 

       

 

 

    

 

 

 

Total accumulated other comprehensive income

        1,459,467                   1,249,700                12,138        
     

 

 

       

 

 

    

 

 

 

Stock acquisition rights

        2,884                   3,036                29        

Non-controlling interests

        1,531,022                   1,509,309                14,659        
     

 

 

       

 

 

    

 

 

 

Total net assets

        10,447,669                   10,298,101                100,020        
     

 

 

       

 

 

    

 

 

 

Total liabilities and net assets

      ¥   186,585,842                 ¥   181,371,336              $   1,761,571        
     

 

 

       

 

 

    

 

 

 

 

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QUARTERLY CONSOLIDATED STATEMENTS OF INCOME

 

     Millions of yen      Millions of
U.S. dollars
 

Three months ended June 30

   2015      2016                2016            

Ordinary income

      ¥       1,259,549                ¥       1,197,817             $       11,634       

Interest income

        534,406                  452,440               4,394       

Interest on loans and discounts

        329,186                  331,003               3,215       

Interest and dividends on securities

        144,393                  61,404               596       

Trust fees

        698                  711               7       

Fees and commissions

        274,214                  260,389               2,529       

Trading income

        76,174                  68,353               664       

Other operating income

        312,705                  381,333               3,704       

Other income

     *1         61,349               *1         34,588               336       

Ordinary expenses

        855,075                  923,843               8,973       

Interest expenses

        101,193                  125,947               1,223       

Interest on deposits

        33,779                  38,723               376       

Fees and commissions payments

        35,436                  41,054               399       

Trading losses

        23,687                  1,814               18       

Other operating expenses

        241,836                  278,633               2,706       

General and administrative expenses

        426,838                  443,197               4,305       

Other expenses

     *2         26,082               *2         33,196               322       
     

 

 

       

 

 

    

 

 

 

Ordinary profit

        404,473                  273,973               2,661       
     

 

 

       

 

 

    

 

 

 

Extraordinary gains

     *3         3,644               *3         84               1       

Extraordinary losses

     *4         1,616               *4         942               9       
     

 

 

       

 

 

    

 

 

 

Income before income taxes

        406,501                  273,115               2,653       
     

 

 

       

 

 

    

 

 

 

Income taxes-current

        88,944                  40,524               394       

Income taxes-deferred

        21,954                  25,140               244       
     

 

 

       

 

 

    

 

 

 

Income taxes

        110,899                  65,665               638       
     

 

 

       

 

 

    

 

 

 

Profit

        295,602                  207,450               2,015       
     

 

 

       

 

 

    

 

 

 

Profit attributable to non-controlling interests

        27,732                  23,164               225       
     

 

 

       

 

 

    

 

 

 

Profit attributable to owners of parent

      ¥ 267,869                ¥ 184,285             $ 1,790       
     

 

 

       

 

 

    

 

 

 

 

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QUARTERLY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

     Millions of yen      Millions of
U.S. dollars
 

Three months ended June 30

   2015      2016                2016            

Profit

      ¥          295,602                ¥          207,450             $        2,015        

Other comprehensive income

        51,016                  (241,826)              (2,349)       

Net unrealized gains (losses) on other securities

        50,803                  (151,744)              (1,474)       

Net deferred gains (losses) on hedges

        (14,122)                 30,083               292        

Foreign currency translation adjustments

        12,260                  (133,782)              (1,299)       

Remeasurements of defined benefit plans

        3,109                  10,363               101        

Share of other comprehensive income of affiliates

        (1,034)                 3,253               32        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total comprehensive income

        346,618                  (34,375)              (334)       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to owners of parent

        307,205                  (25,468)              (247)       

Comprehensive income attributable to non-controlling interests

        39,412                  (8,907)              (87)       

 

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NOTES TO QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS

(Basis of presentation)

Sumitomo Mitsui Financial Group, Inc. (“SMFG”) was established on December 2, 2002 as a holding company for the SMFG group through a statutory share transfer (kabushiki iten) of all of the outstanding equity securities of Sumitomo Mitsui Banking Corporation (“SMBC”) in exchange for SMFG’s newly issued securities. SMFG is a joint stock corporation with limited liability (Kabushiki Kaisha) incorporated under the Companies Act of Japan. Upon formation of SMFG and completion of the statutory share transfer, SMBC became a direct wholly owned subsidiary of SMFG.

SMFG 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 SMFG’s 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 quarterly securities report filed under the Financial Instruments and Exchange Act of Japan (“FIEA based financial statements”) except for the addition of U.S. 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 June 30, 2016 which was ¥102.96 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.

(Changes in the scope of consolidation or in the scope of equity method)

(1) Significant changes in the scope of consolidation

GE Japan GK was newly included in the scope of consolidation as a result of the acquisition of stocks.

SAKURA CARD CO., Ltd. was excluded from the scope of consolidation due to a merger.

(2) Significant changes in the scope of equity method

Not applicable.

(Changes in accounting policies)

In accordance with the revision to the Corporation Tax Act, some domestic consolidated subsidiaries apply the “Practical Solution on a change in depreciation method due to Tax Reform 2016” (ASBJ Practical Issues Task Force No. 32, issued on June 17, 2016) and changed the depreciation method for buildings and accompanying facilities and structures acquired on or after April 1, 2016 from the declining-balance method to the straight-line method, starting from the three months ended June 30, 2016. Effects of this change to Ordinary Profit and Income before income taxes during the three months ended June 30, 2016 are immaterial.

(Additional information)

SMFG applies the “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No.26 issued on March 28, 2016) from the three months ended June 30, 2016.

 

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(Notes to quarterly consolidated balance sheets)

 

*1

Risk-monitored loans

Risk-monitored loans at March 31, 2016 and June 30, 2016 were as follows:

 

     Millions of yen  
           March 31, 2016                  June 30, 2016        

Bankrupt loans

   ¥           44,748               ¥ 69,229           

Non-accrual loans

     594,077                 563,142           

Past due loans (3 months or more)

     19,845                 18,869           

Restructured loans

     266,698                 276,335           
  

 

 

    

 

 

 

Risk-monitored loans

   ¥ 925,370               ¥ 927,576           

The amounts of loans presented above are the amounts before deduction of reserve for possible loan losses.

 

*2

Guaranteed amount to privately-placed bonds

The amounts 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, 2016 and June 30, 2016 were as follows:

 

     Millions of yen  
           March 31, 2016                  June 30, 2016        

Guaranteed amount to privately-placed bonds

   ¥       2,004,096               ¥ 1,912,052           

 

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(Notes to quarterly consolidated statements of income)

 

*1

Other income

Other income for the three months ended June 30, 2015 and 2016 included the following:

 

Three months ended June 30, 2015

       Millions of yen       

Three months ended June 30, 2016                

       Millions of yen    

Gains on sales of stocks and other securities

   ¥         37,321    Equity in gains of affiliates    ¥            6,838

 

*2

Other expenses

Other expenses for the three months ended June 30, 2015 and 2016 included the following:

 

Three months ended June 30, 2015

       Millions of yen       

Three months ended June 30, 2016                

       Millions of yen    

Write-off of loans

   ¥         13,551    Write-off of loans    ¥         13,135

 

*3

Extraordinary gains

Extraordinary gains for the three months ended June 30, 2015 and 2016 included the following:

 

Three months ended June 30, 2015

       Millions of yen       

Three months ended June 30, 2016                

       Millions of yen    

Gains on disposal of fixed assets

   ¥            3,644   

Reversal of reserve for eventual future operating losses from financial instruments transactions

   ¥                82

 

*4

Extraordinary losses

Extraordinary losses for the three months ended June 30, 2015 and 2016 included the following:

 

Three months ended June 30, 2015

       Millions of yen       

Three months ended June 30, 2016                

       Millions of yen    

Losses on disposal of fixed assets

   ¥             667   

Losses on disposal of fixed assets

   ¥             324

Losses on impairment of fixed assets

                  826   

Losses on impairment of fixed assets

                  605

 

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(Notes to quarterly consolidated statements of cash flows)

Quarterly consolidated statements of cash flows are not prepared for the three months ended June 30, 2016. “Depreciation” (including amortization of intangible fixed assets other than goodwill) and “Amortization of goodwill” for the three months ended June 30, 2015 and 2016 are as follows:

 

                     Millions of yen                   

Three months ended June 30

               2015                                   2016                   

Depreciation

   ¥             56,649       ¥             65,526   

Amortization of goodwill

     6,634         6,769   

(Notes to stockholders’ equity)

Dividends paid in the three months ended June 30, 2015

 

     Type of
shares
     Millions of yen, except per share amount  

Date of resolution

      Cash
dividends
     Cash dividends
per share
     Record date      Effective date      Source of
dividends
 

Ordinary general meeting of shareholders held on June 26, 2015

     Common stock       ¥     112,804       ¥ 80         March 31, 2015         June 26, 2015         Retained earnings   

Dividends paid in the three months ended June 30, 2016

 

     Type of
shares
     Millions of yen, except per share amount  

Date of resolution

      Cash
dividends
     Cash dividends
per share
     Record date      Effective date      Source of
dividends
 

Ordinary general meeting of shareholders held on June 29, 2016

     Common stock       ¥     105,753       ¥ 75         March 31, 2016         June 29, 2016         Retained earnings   

 

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(Segment information)

1. Information on profit and loss amount by reportable segment

 

    Millions of yen  
    Commercial banking  
    SMBC              

Three months ended June
30, 2015

  SMBC
Sub-total
    Wholesale
Banking
Unit
    Retail
Banking
Unit
    International
Banking
Unit
    Treasury
Unit
    Head office
account
    Others     Total  

Gross profit

  ¥     440,408         ¥     116,269         ¥     91,357         ¥     87,941         ¥     180,798         ¥     (35,956)        ¥     62,130         ¥     502,539      

Interest income

    324,237           71,472           72,861           57,102           119,942           2,860           44,615           368,853      

Non-interest income

    116,171           44,797           18,496           30,839           60,856           (38,816)          17,514           133,685      
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Expenses, etc.

    (200,967)          (52,845)          (88,800)          (31,566)          (7,774)          (19,982)          (47,097)          (248,065)     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated net business profit

  ¥ 239,440         ¥ 63,424         ¥ 2,557         ¥ 56,375         ¥ 173,024         ¥ (55,939)        ¥ 15,032         ¥ 254,473      
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Millions of yen        
    Leasing     Securities        

Three months ended June
30, 2015

  SMFL     Others     Total     SMBC Nikko     SMBC Friend     Others     Total        

Gross profit

  ¥ 35,164         ¥ 4,656         ¥ 39,821         ¥ 96,669         ¥ 11,458         ¥ (1,048)        ¥ 107,079        

Interest income

    3,897           1,584           5,481           253           615           237           1,106        

Non-interest income

    31,267           3,072           34,339           96,415           10,842           (1,285)          105,972        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Expenses, etc.

    (14,425)          (978)          (15,403)          (67,843)          (9,956)          (2,561)          (80,362)       
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Consolidated net business profit

  ¥ 20,739         ¥ 3,678         ¥ 24,417         ¥ 28,825         ¥ 1,501         ¥ (3,610)        ¥ 26,716        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   
    Millions of yen        
    Consumer finance                    

Three months ended June
30, 2015

  SMCC     Cedyna     SMBCCF     Others     Total     Other
business
    Grand
Total
       

Gross profit

  ¥ 51,035         ¥ 41,276         ¥ 56,457         ¥ 803         ¥ 149,572         ¥ (2,966)        ¥ 796,045        

Interest income

    3,422           6,298           38,471           (2,141)          46,052           11,719           433,212        

Non-interest income

    47,612           34,977           17,985           2,945           103,520           (14,685)          362,832        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Expenses, etc.

    (39,011)          (30,417)          (25,113)          (3,014)          (97,556)          20,358           (421,028)       
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Consolidated net business profit

  ¥ 12,024         ¥ 10,858         ¥ 31,343         ¥ (2,210)        ¥ 52,016         ¥ 17,392         ¥ 375,016        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

Notes:

  1.  

Figures shown in the parenthesis represent the loss.

  2.  

“SMFL” and “SMBCCF” represent consolidated figures of SMFL and SMBCCF.

   

“SMBC Nikko” represents non-consolidated figures of SMBC Nikko plus figures of the overseas incorporated securities companies.

   

“Cedyna” represents consolidated figures of Cedyna excluding figures of the immaterial subsidiaries.

  3.  

“Other business” includes profit or loss to be eliminated as inter-segment transactions.

 

9


Table of Contents
    Millions of yen  
    Commercial banking  
    SMBC              

Three months ended
June 30, 2016

  SMBC
Sub-total
    Wholesale
Banking
Unit
    Retail
Banking
Unit
    International
Banking
Unit
    Treasury
Unit
    Head office
account
    Others     Total  

Gross profit

  ¥ 369,408           ¥ 117,434           ¥ 80,110           ¥ 83,985           ¥ 113,040           ¥ (25,160)          ¥ 75,420           ¥ 444,828        

Interest income

        216,988                 66,060                 70,830                 53,413                   41,201                 (14,515)                42,662                 259,651        

Non-interest income

    152,419             51,374             9,280             30,572             71,839             (10,645)            32,757             185,177        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Expenses, etc.

    (204,574)            (50,409)            (88,305)            (33,387)            (7,223)            (25,250)            (59,082)            (263,656)       
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated net business profit

  ¥ 164,833           ¥ 67,025           ¥ (8,195)          ¥ 50,598           ¥ 105,817           ¥ (50,411)          ¥ 16,338           ¥ 181,172        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Millions of yen        
    Leasing     Securities        

Three months ended
June 30, 2016

  SMFL     Others     Total     SMBC
Nikko
    SMBC Friend     Others     Total        

Gross profit

  ¥ 37,291           ¥ 4,152           ¥ 41,443           ¥ 79,361           ¥ 10,495           ¥ (1,496)          ¥ 88,361          

Interest income

    4,507             977             5,484             1,077             874             153             2,105          

Non-interest income

    32,784             3,175             35,959             78,283             9,621             (1,649)            86,255          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Expenses, etc.

    (15,165)            (2,260)            (17,426)            (63,647)            (9,704)            (2,399)            (75,751)         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Consolidated net business profit

  ¥ 22,125           ¥ 1,891           ¥ 24,017           ¥ 15,714           ¥ 791           ¥ (3,896)          ¥ 12,609          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   
    Millions of yen        
    Consumer finance                    

Three months ended
June 30, 2016

  SMCC     Cedyna     SMBCCF     Others     Total     Other
business
    Grand
Total
       

Gross profit

  ¥ 52,972           ¥ 42,373           ¥ 59,683           ¥ 1,217           ¥ 156,246           ¥ (15,100)          ¥ 715,779          

Interest income

    3,293             6,097             39,703             (301)            48,793             10,458             326,493          

Non-interest income

    49,678             36,275             19,979             1,518             107,452             (25,558)            389,286          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Expenses, etc.

    (43,753)            (31,143)            (26,137)            (4,873)            (105,909)            26,384             (436,359)         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Consolidated net business profit

  ¥ 9,218           ¥ 11,229           ¥ 33,545           ¥ (3,656)          ¥ 50,336           ¥ 11,284           ¥ 279,420          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

Notes:

  1.   Figures shown in the parenthesis represent the loss.
  2.   “SMFL” and “SMBCCF” represent consolidated figures of SMFL and SMBCCF.
    “SMBC Nikko” represents non-consolidated figures of SMBC Nikko plus figures of the overseas incorporated securities companies.
    “Cedyna” represents consolidated figures of Cedyna excluding figures of the immaterial subsidiaries.
  3.   “Other business” includes profit or loss to be eliminated as inter-segment transactions.

 

2. Difference between total amount of consolidated net business profit by reportable segment and ordinary profit on quarterly consolidated statements of income (adjustment of difference)

 

Three months ended June 30, 2015

   Millions of yen  

Consolidated net business profit

   ¥ 375,016        

Other ordinary income (excluding equity in gains of affiliates)

     55,539        

Other ordinary expenses

     (26,082)       
  

 

 

 

Ordinary profit on quarterly consolidated statements of income

   ¥ 404,473        
  

 

 

 

Three months ended June 30, 2016

   Millions of yen  

Consolidated net business profit

   ¥ 279,420        

Other ordinary income (excluding equity in gains of affiliates)

                 27,750        

Other ordinary expenses

     (33,196)       
  

 

 

 

Ordinary profit on quarterly consolidated statements of income

   ¥ 273,973        
  

 

 

 

 

Note:

  Figures shown in the parenthesis represent the loss.

 

10


Table of Contents

(Notes to financial instruments)

There is no significant financial instrument to be disclosed.

(Notes to securities)

The amounts shown in the following tables include 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.

Bonds classified as held-to-maturity

 

March 31, 2016

  Millions of yen        
  Consolidated balance
sheet amount
    Fair value     Net unrealized
gains (losses)
       

Japanese government bonds

  ¥ 2,241,546          ¥ 2,258,065          ¥ 16,518         

Japanese local government bonds

    20,849            20,871            22         

Japanese corporate bonds

    5,202            5,230            27         

Other

    —            —            —         
 

 

 

   

 

 

   

 

 

   

Total

  ¥               2,267,598          ¥           2,284,166          ¥                   16,568         
 

 

 

   

 

 

   

 

 

   

 

Note:

  The fair values are, in principle, based on their market prices, etc. at the end of the fiscal year.

 

June 30, 2016

  Millions of yen        
  Consolidated balance
sheet amount
    Fair value     Net unrealized
gains (losses)
       

Japanese government bonds

  ¥ 1,941,319          ¥ 1,958,261          ¥ 16,941         

Japanese local government bonds

    17,082            17,114            32         

Japanese corporate bonds

    5,202            5,235            32         

Other

    —            —            —         
 

 

 

   

 

 

   

 

 

   

Total

  ¥               1,963,605          ¥           1,980,611          ¥                   17,006         
 

 

 

   

 

 

   

 

 

   

 

Note:

  The fair values are, in principle, based on their market prices, etc. at the end of the period.

 

11


Table of Contents

2.  Other securities

 

March 31, 2016

  Millions of yen  
          Acquisition cost                     Consolidated        
         balance sheet amount        
            Net unrealized        
         gains (losses)        
 

Stocks

   ¥ 1,807,279             ¥ 3,380,280             ¥ 1,573,001         

Bonds

    10,783,903              10,893,090              109,186         

Japanese government bonds

    8,042,610              8,105,050              62,439         

Japanese local government bonds

    31,080              31,220              140         

Japanese corporate bonds

    2,710,211              2,756,819              46,607         

Other

    8,225,965              8,451,291              225,325         
 

 

 

   

 

 

   

 

 

 

Total

   ¥         20,817,149             ¥         22,724,662             ¥         1,907,512         
 

 

 

   

 

 

   

 

 

 

 

Notes:    1.   Consolidated balance sheet amounts of stocks (including foreign stocks) 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.
   2.   Net unrealized gains on other securities shown above include gains of ¥871 million for the fiscal year ended March 31, 2016 that are recognized in the period’s earnings by applying fair value hedge accounting.
   3.   Consolidated balance sheet amounts of other securities whose fair values are extremely difficult to determine are as follows:

 

March 31, 2016

   Millions of yen  

Stocks

    ¥ 131,602               

Other

     277,161               
  

 

 

 

Total

    ¥             408,764               
  

 

 

 

 

     These amounts are not included in “2. Other securities” since there are no market prices and it is extremely difficult to determine their fair values.
   4.   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.

 

June 30, 2016

  Millions of yen  
          Acquisition cost                     Consolidated        
         balance sheet amount        
            Net unrealized        
         gains (losses)        
 

Stocks

   ¥ 1,804,583             ¥ 3,186,496             ¥ 1,381,912         

Bonds

    9,654,775              9,782,822              128,047         

Japanese government bonds

    6,996,468              7,076,113              79,644         

Japanese local government bonds

    41,496              41,741              245         

Japanese corporate bonds

    2,616,810              2,664,967              48,157         

Other

    6,657,344              6,847,714              190,369         
 

 

 

   

 

 

   

 

 

 

Total

   ¥         18,116,703             ¥         19,817,033             ¥         1,700,329         
 

 

 

   

 

 

   

 

 

 

 

Notes:    1.  

Consolidated balance sheet amounts of stocks (including foreign stocks) are carried at their average market prices during the final month of the period, and bonds and others are carried at their period-end market prices.

   2.   Net unrealized losses on other securities shown above include losses of ¥168 million for the three months ended June 30, 2016 that are recognized in the period’s earnings by applying fair value hedge accounting.
   3.   Consolidated balance sheet amounts of other securities whose fair values are extremely difficult to determine are as follows:

 

June 30, 2016

   Millions of yen  

Stocks

    ¥ 145,854               

Other

     268,718               
  

 

 

 

Total

    ¥             414,572               
  

 

 

 

 

     These amounts are not included in “2. Other securities” since there are no market prices and it is extremely difficult to determine their fair values.
   4.   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.

 

12


Table of Contents

3. 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. Valuation losses for the fiscal year ended March 31, 2016 and for the three months ended June 30, 2016 were ¥4,838 million and ¥552 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.

(Notes to money held in trust)

1. Money held in trust classified as held-to-maturity

Fiscal year ended March 31, 2016

There are no corresponding transactions.

Three months ended June 30, 2016

There are no corresponding transactions.

2. Other money held in trust

 

     Millions of yen    

March 31, 2016

       Acquisition cost        Consolidated
      balance sheet      
amount
   Net unrealized
        gains (losses)      
 

Other money held in trust

   ¥        5,163            ¥        5,163             

 

  Note:

Consolidated balance sheet amount is measured at fair value based on its market price, etc. at the end of the fiscal year.

 

     Millions of yen    

June 30, 2016

       Acquisition cost        Consolidated
      balance sheet      
amount
   Net unrealized
        gains (losses)      
 

Other money held in trust

   ¥        4,739            ¥        4,739             

 

  Note:

Quarterly consolidated balance sheet amount is measured at fair value based on its market price, etc. at the end of the period.

 

13


Table of Contents

(Notes to derivative transactions)

 

(1)

Interest rate derivatives

 

    Millions of yen  

March 31, 2016

      Contract amount                 Fair Value             Valuation
    gains (losses)    
 

Listed

     

Interest rate futures

  ¥ 121,043,313         ¥ (3,865)        ¥ (3,865)     

Interest rate options

    34,037,726           6,588           6,588      

Over-the-counter

     

Forward rate agreements

    15,838,272           63           63      

Interest rate swaps

    396,761,415           176,265           176,265      

Interest rate swaptions

    8,098,772           (29,706)          (29,706)     

Caps

    35,844,877           (20,462)          (20,462)     

Floors

    899,246           3,597           3,597      

Other

    6,893,127           51           51      
 

 

 

   

 

 

   

 

 

 

Total

    /         ¥ 132,532         ¥ 132,532      
 

 

 

   

 

 

   

 

 

 

 

Note:

     The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.
     Derivative transactions to which the hedge accounting method is applied are not included in the table above.

 

    Millions of yen  

June 30, 2016

      Contract amount                 Fair Value             Valuation
    gains (losses)    
 

Listed

     

Interest rate futures

  ¥ 106,851,445         ¥ (3,007)        ¥ (3,007)     

Interest rate options

    30,783,687           7,216           7,216      

Over-the-counter

     

Forward rate agreements

    23,261,952           31           31      

Interest rate swaps

    404,821,009           175,170           175,170      

Interest rate swaptions

    8,214,166           (51,683)          (51,683)     

Caps

    35,574,466           (15,352)          (15,352)     

Floors

    1,368,356           4,865           4,865      

Other

    6,806,133           12,813           12,813      
 

 

 

   

 

 

   

 

 

 

Total

    /         ¥ 130,053         ¥ 130,053      
 

 

 

   

 

 

   

 

 

 

 

Note:

     The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the quarterly consolidated statements of income.
     Derivative transactions to which the hedge accounting method is applied are not included in the table above.

 

14


Table of Contents
(2)

Currency derivatives

 

     Millions of yen  

March 31, 2016

       Contract amount         Fair value     Valuation
    gains (losses)    
 

Listed

      

Currency futures

   ¥ 691          ¥ 17           ¥ 17        

Over-the-counter

      

Currency swaps

     33,811,276            387,527             15,992        

Currency swaptions

     1,406,603            126             126        

Forward foreign exchange

     56,831,766            7,441             7,441        

Currency options

     5,250,423                (26,400)            (26,400)       
  

 

 

   

 

 

   

 

 

 

Total

     /          ¥ 368,712           ¥ (2,822)       
  

 

 

   

 

 

   

 

 

 

 

Note:

  

The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.

  

Derivative transactions to which the hedge accounting method is applied are not included in the table above. In addition, transactions related to financial assets and liabilities denominated in foreign currencies and recognized in the consolidated balance sheets, or transactions related to financial assets and liabilities denominated in foreign currencies which have been eliminated in the consolidation are not included in the above table.

 

     Millions of yen  

June 30, 2016

        Contract amount          Fair value     Valuation
    gains (losses)    
 
      

Listed

      

Currency futures

   ¥ 820          ¥ 46           ¥ 46        

Over-the-counter

      

Currency swaps

     34,453,295            312,205             34,263        

Currency swaptions

     1,465,484            1,329             1,329        

Forward foreign exchange

     55,458,195            27,315             27,315        

Currency options

     5,080,922                (8,816)            (8,816)       
  

 

 

   

 

 

   

 

 

 

Total

     /          ¥ 332,081           ¥ 54,138        
  

 

 

   

 

 

   

 

 

 

 

Note:

  

The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the quarterly consolidated statements of income.

  

Derivative transactions to which the hedge accounting method is applied are not included in the table above. In addition, transactions related to financial assets and liabilities denominated in foreign currencies and recognized in the quarterly consolidated balance sheets, or transactions related to financial assets and liabilities denominated in foreign currencies which have been eliminated in the consolidation are not included in the above table.

 

15


Table of Contents
(3)

Equity derivatives

 

    Millions of yen  

March 31, 2016

      Contract amount                 Fair value             Valuation
    gains (losses)    
 

Listed

     

Equity price index futures

  ¥ 1,089,826         ¥ (3,567)        ¥ (3,567)     

Equity price index options

    357,609           (10,952)          (10,952)     

Over-the-counter

     

Equity options

    445,854           (287)          (287)     

Equity index forward contracts

    11,959           485           485      

Equity index swaps

    202,199           8,599           8,599      
 

 

 

   

 

 

   

 

 

 

Total

    /         ¥ (5,723)        ¥ (5,723)     
 

 

 

   

 

 

   

 

 

 

 

  Note:

   The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.
   Derivative transactions to which the hedge accounting method is applied are not included in the table above.

 

    Millions of yen  

June 30, 2016

      Contract amount                 Fair value             Valuation
    gains (losses)    
 

Listed

     

Equity price index futures

  ¥ 1,133,034         ¥ 9,898         ¥ 9,898      

Equity price index options

    766,248           (17,251)          (17,251)     

Over-the-counter

     

Equity options

    466,570           922           922      

Equity index forward contracts

    21,093           (205)          (205)     

Equity index swaps

    250,088           14,040           14,040      
 

 

 

   

 

 

   

 

 

 

Total

    /         ¥ 7,403         ¥ 7,403      
 

 

 

   

 

 

   

 

 

 

 

  Note:

   The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the quarterly consolidated statements of income.
   Derivative transactions to which the hedge accounting method is applied are not included in the table above.

 

16


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(4)

Bond derivatives

 

     Millions of yen  

March 31, 2016

       Contract amount         Fair value     Valuation
    gains (losses)    
 
      

Listed

      

Bond futures

   ¥     5,415,334          ¥     (1,434)          ¥     (1,434)       

Bond futures options

     190,220            (336)            (336)       

Over-the-counter

      

Bond options

     838,238            726             726        
  

 

 

   

 

 

   

 

 

 

Total

     /          ¥ (1,043)          ¥ (1,043)       
  

 

 

   

 

 

   

 

 

 

 

Note:

  

The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.

  

Derivative transactions to which the hedge accounting method is applied are not included in the table above.

 

     Millions of yen  

June 30, 2016

       Contract amount         Fair value     Valuation
    gains (losses)    
 
      

Listed

      

Bond futures

   ¥     4,733,587          ¥     (2,687)          ¥     (2,687)       

Bond futures options

     290,590            (81)            (81)       

Over-the-counter

      

Bond options

     412,539            1,804             1,804        
  

 

 

   

 

 

   

 

 

 

Total

     /          ¥ (964)          ¥ (964)       
  

 

 

   

 

 

   

 

 

 

 

Note:

  

The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the quarterly consolidated statements of income.

  

Derivative transactions to which the hedge accounting method is applied are not included in the table above.

 

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(5)

Commodity derivatives

 

                                                                          
     Millions of yen  

March 31, 2016

       Contract amount         Fair value     Valuation
    gains (losses)    
 

Listed

      

Commodity futures

   ¥ 15,299          ¥ (213)          ¥ (213)       

Over-the-counter

      

Commodity swaps

            166,311                 2,158                  2,158        

Commodity options

     34,333            (968)            (968)       
  

 

 

   

 

 

   

 

 

 

Total

     /          ¥ 975           ¥ 975        
  

 

 

   

 

 

   

 

 

 

 

Notes:   1.    The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.
    

Derivative transactions to which the hedge accounting method is applied are not included in the table above.

  2.    Underlying assets of commodity derivatives are fuels and metals.

 

                                                                          
     Millions of yen  

June 30, 2016

       Contract amount         Fair value     Valuation
    gains (losses)    
 

Listed

      

Commodity futures

   ¥ 43,478            ¥   (86)            ¥        (86)         

Over-the-counter

      

Commodity swaps

        148,940               2,898                2,898          

Commodity options

     31,168              (820)              (820)         
  

 

 

   

 

 

   

 

 

 

Total

     /            ¥ 1,991             ¥ 1,991          
  

 

 

   

 

 

   

 

 

 

 

Notes:   1.    The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the quarterly consolidated statements of income.
    

Derivative transactions to which the hedge accounting method is applied are not included in the table above.

  2.    Underlying assets of commodity derivatives are fuels and metals.

 

(6)

Credit derivative transactions

 

                                                                          
     Millions of yen  

March 31, 2016

       Contract amount         Fair value     Valuation
    gains (losses)    
 

Over-the-counter

      

Credit default options

   ¥ 1,348,785            ¥ (2,885)            ¥ (2,885)         
  

 

 

   

 

 

   

 

 

 

Total

     /            ¥ (2,885)            ¥ (2,885)         
  

 

 

   

 

 

   

 

 

 

 

Note:   The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.
  Derivative transactions to which the hedge accounting method is applied are not included in the table above.

 

                                                                          
     Millions of yen  

June 30, 2016

       Contract amount         Fair value     Valuation
    gains (losses)    
 

Over-the-counter

      

Credit default options

   ¥ 1,382,718          ¥ (3,852)            ¥ (3,852)         
  

 

 

   

 

 

   

 

 

 

Total

     /          ¥ (3,852)            ¥ (3,852)         
  

 

 

   

 

 

   

 

 

 

 

Note:   The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the quarterly consolidated statements of income.
  Derivative transactions to which the hedge accounting method is applied are not included in the table above.

 

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Table of Contents

(Business combination)

<Business combination through acquisition>

GE Japan GK became a consolidated subsidiary of Sumitomo Mitsui Finance and Leasing Company, Limited.

On April 1, 2016, Sumitomo Mitsui Finance and Leasing Company, Limited (“SMFL”), a consolidated subsidiary of SMFG, acquired all stocks of GE Japan GK (“GE Japan”) under the contract entered into between General Electric Company and SMFL on December 15, 2015. As a result, GE Japan and its five leasing subsidiaries became consolidated subsidiaries. The outline of the business combination through acquisition is as follows:

1. Outline of the business combination

(1) Name of the acquired company and its business

GE Japan GK (Leasing)

(2) Main reasons for the business combination

The acquisition is aimed at achieving further improvement in corporate value of SMFG and strengthening the top-class position in domestic leasing market, by using business knowledge and resources from both SMFL and GE Japan.

(3) Date of the business combination

April 1, 2016

(4) Legal form of the business combination

Acquisition of stocks

(5) Name of the entity after the business combination

Sumitomo Mitsui Financial Group, Inc.

(6) Share of voting rights SMFG acquired

100%

(7) Grounds for deciding on the acquirer

SMFL paid cash to GE Japan as the consideration of the acquisition.

2. Period of the acquired company’s financial result included in the quarterly consolidated statements of income of SMFG

Although the date of acquisition was April 1, 2016, financial result of the acquired company is not included in the quarterly consolidated statements of income for the three months ended June 30, 2016, because the difference between the SMFG’s consolidated closing date and the acquired company’s closing date is three months or less.

3. Acquisition cost and consideration of the acquired business

 

 

  Consideration

 

 

Cash

 

 

¥180,959 million

 

 

  Acquisition cost

   

¥180,959 million

4. Amount of goodwill, reason for recognizing goodwill, amortization method and the period

(1) Amount of goodwill

¥13,632 million

(2) Reason for recognizing goodwill

SMFG recognized the difference between the acquisition cost and the SMFL’s share in the fair value of acquired net assets on the date of the business combination as goodwill.

(3) Amortization method and the period

Straight-line method over 20 years

 

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(Per share data)

Earnings per share, earnings per share (diluted) and each calculation method are as follows:

 

     Millions of yen, except per share data
and number of shares
 

Three months ended June 30

       2015              2016      

 

(i) Earnings per share

  

 

¥

 

195.92       

 

  

  

 

¥

 

134.79       

 

  

[The calculation method]

     

Profit attributable to owners of parent

     267,869                184,285          

Amount not attributable to common stockholders

     —                —          

Profit attributable to owners of parent concerning common stock

     267,869                184,285          

Average number of common stock during the period (in thousands)

         1,367,238                    1,367,222          

(ii) Earnings per share (diluted)

   ¥ 195.79              ¥ 134.65          

[The calculation method]

     

Adjustment for profit attributable to owners of parent

     (2)               (58)         

Adjustment of dilutive shares issued by consolidated subsidiaries

     (2)               (58)         

Increase in the number of common stock (in thousands)

     871                983          

Stock acquisition rights (in thousands)

     871                983          

(Significant Subsequent Events)

    There is no significant subsequent event to be disclosed.

(Others)

    Not applicable.

 

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Quarterly Review Report of Independent Auditors

The Board of Directors

Sumitomo Mitsui Financial Group, Inc.

Pursuant to the first paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we have reviewed the quarterly consolidated financial statements, comprising the quarterly consolidated balance sheet as of June 30, 2016, the quarterly consolidated statements of income and the quarterly consolidated statements of comprehensive income for the three-month period (April 1, 2016 to June 30, 2016) for the fiscal year from April 1, 2016 to March 31, 2017 and the related notes, of Sumitomo Mitsui Financial Group, Inc.

Management’s Responsibility for the Quarterly Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the quarterly 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 the quarterly consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the quarterly consolidated financial statements based on our quarterly review as independent auditors. We conducted our review in accordance with quarterly review standards generally accepted in Japan.

A quarterly review consists principally of making inquiries, primarily of management and persons responsible for financial and accounting matters, and perfoming analytical procedures and other quarterly review procedures. The quarterly review is substantially less in scope than an audit conducted in conformity with auditing standards generally accepted in Japan.

We believe that we have obtained the evidence to provide a basis for our conclusion.

Auditor’s Conclusion

In our quarterly review, nothing has come to our attention that causes us to believe that the quarterly consolidated financial statements referred to above do not present fairly, in all material respects, the financial position of Sumitomo Mitsui Financial Group, Inc. and its consolidated subsidiaries as of June 30, 2016 and their operating results for the three-month period ended June 30, 2016, in conformity with accounting principles generally accepted in Japan.

Conflicts of Interest

Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

August 10, 2016

Tokyo, Japan