#1Fixed Income Investor Presentation November 2023 Unless otherwise indicated, the financial figures for SMFG and SMBC included in this presentation are prepared in accordance with generally accepted accounting principles in Japan, or Japanese GAAP SMBC SUMITOMO MITSUI FINANCIAL GROUP Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved.#2This document contains "forward-looking statements" (as defined in the U.S. Private Securities Litigation Reform Act of 1995), regarding the intent, belief or current expectations of us and our managements with respect to our future financial condition and results of operations. In many cases but not all, these statements contain words such as "anticipate," "believe," "estimate,” “expect,” “intend,” “may,” "plan," "probability," "risk,” “project,” “should,” “seek," "target," "will" and similar expressions. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those expressed in or implied by such forward-looking statements contained or deemed to be contained herein. The risks and uncertainties which may affect future performance include: deterioration of Japanese and global economic conditions and financial markets; declines in the value of our securities portfolio; incurrence of significant credit-related costs; our ability to successfully implement our business strategy through our subsidiaries, affiliates and alliance partners; and exposure to new risks as we expand the scope of our business. Given these and other risks and uncertainties, you should not place undue reliance on forward-looking statements, which speak only as of the date of this document. We undertake no obligation to update or revise any forward- looking statements. Please refer to our most recent disclosure documents such as our annual report on Form 20-F and other documents submitted to the U.S. Securities and Exchange Commission, as well as our earnings press releases, for a more detailed description of the risks and uncertainties that may affect our financial conditions and our operating results, and investors' decisions. Exchange rates (TTM) The end of Sep. 22 The end of Mar. 23 | The end of Sep. 23 USD JPY 144.81 JPY 133.54 JPY 149.58 EUR JPY 142.32 JPY 145.75 JPY 157.99 SMFG Definitions Sumitomo Mitsui Financial Group, Inc. Sumitomo Mitsui Banking Corporation SMBC Trust Bank SMBC SMBC Trust SMFL SMBC Nikko SMCC SMBCCF SMDAM SMBCAC SMICC Major local subsidiaries Consolidated Non-consolidated Expenses (non-consolidated) Net business profit Retail Business Unit (RT) Sumitomo Mitsui Finance and Leasing SMBC Nikko Securities Sumitomo Mitsui Card Company SMBC Consumer Finance Sumitomo Mitsui DS Asset Management SMBC Aviation Capital SMFG India Credit Company (Former Fullerton India) SMBC Bank International, SMBC Bank EU, SMBC (China) SMFG consolidated SMBC non-consolidated Excluding non-recurring losses Before provision for general reserve for possible loan losses Domestic retail business Wholesale Business Unit (WS) Domestic wholesale business Global Business Unit (GB) Global Markets Business Unit (GM) International business Market/Treasury related businesses Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 2#3Agenda Overview / Financial Results 4 II Funding / Capital Strategy wwwwww 17 Appendix 33 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 3#4Overview / Financial Results#5Group Structure*1 Consolidated subsidiary Equity-method affiliate Sumitomo Mitsui Financial Group Consolidated total assets JPY 294 tn Credit Moody's S&P Fitch R&I JCR ratings *2 A1/P-1 A-/ - A-/F1 AA-/- AA/ - Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Card (50%) Moody's S&P Fitch A1 A A- Sumitomo Mitsui Finance and Leasing Japan Research Institute SMBC Consumer Finance SMBC Trust Bank SMBC Nikko Securities (74.9%) SMFG India Credit Company (50.1%) SMBC (92.4%) (49%) Aviation Capital Sumitomo Mitsui DS Asset Management PT Bank BTPN Tbk (SMBC 32%, SMFL 68%) FE Credit Banking *1 As of the end of Sep. 23 Securities Consumer Finance Leasing Others Unless otherwise stated, each consolidated subsidiary is a wholly owned subsidiary of Sumitomo Mitsui Financial Group *2 As of Nov. 15, 2023 Copyright 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 5#6Key credit messages*1 Earnings capability USD 5.4 bn SMFG's profit attributable to owners of parent*2 (FY3/23) Global Retail Markets Wholesale Global Breakdown of consolidated net business profit by business unit Sound loan portfolio Robust liquidity 0.73% SMFG NPL ratio 0.47% SMBC NPL ratio (non-consolidated) 58.1% Loan to deposit ratio (average Jul. - Sep. 23) 134.0% LCR Sound capital position Transitional basis High credit ratings Recent issuances (AT1/Tier 2) (As of Nov. 15, 2023) Tier 2 Additional Tier 1 (AT1) 16.22% 15.20% Issue date Total Amount Common Equity Tier 1 (CET1) 13.94% Apr. 2023 JPY 140 bn AT1 11.66% Sep. 2023 JPY 211 bn Total Capital ratio Tier 1 ratio 9.66% Jul. 2023 USD 1.0 bn 8.16% Tier 2 CET1 ratio Oct. 2023 JPY 130 bn o/w buffer*3 3.66% Capital Requirement A1/A1 SMBC/SMFG Moody's Rating ΑΙΑ- SMBC/SMFG S&P Rating Sep. 23 *1 Consolidated, unless otherwise indicated, 1H FY3/24 *2 Converted into USD at period-end exchange rate *3 Including G-SIB surcharge and countercyclical buffer Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 6#71H FY3/24 financial results 1H YOY (JPY bn) FY3/24 1 Consolidated gross profit 1,817.3 +185.0 G&A expenses 1,082.2 +119.6 2 Overhead ratio 59.5% +0.5% 3 Equity in gains (losses) of affiliates 35.8 (16.3) 4 Consolidated net business profit 770.9 +49.0 5 Total credit cost 100.3 +17.2 6 Gains (losses) on stocks 46.8 (45.3) 7 Other income (expenses) (8.2) (3.4) 8 Ordinary profit 709.2 (16.8) 9 Extraordinary gains (losses) (2.8) (1.4) 10 Income taxes 177.7 (16.0) 11 Profit attributable to owners of parent 526.5 +1.0 12 ROE incl. OCI*1 8.0% (0.5)% 13 ROE*2 10.0% (0.3)% *1 Denominator: Shareholder's equity + total accumulated other comprehensive income *2 Based on shareholder's equity *3 Bank of East Asia Consolidated gross profit increased YoY due to 1) recovery of SMBC Nikko, 2) strong performance of payment business, and 3) increase of income on loans, both domestic and overseas. Impact of FX: +21 G&A expenses increased YoY mainly due to 1) inflation: +25 2) higher variable marketing cost of SMCC: +25, which is successfully increasing new customers. Impact of FX: +14 Equity in gains of affiliates decreased YoY due to absence of gains on change in equity of BEA*³: (20) Impact of FX: +1 Total credit cost increased due to domestic consumer finance business: +24 but managed to keep it lower than forecast Gains on stocks decreased due to 1) impairment of overseas investment: (29) 2) gains on sales of equity holdings: 61, YoY (7), while ETF sales increased :+7) Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 7#8(Ref.) Detail of 1H FY3/24 Recorded the highest 1H result as each Business Unit showed steady progress. Result of 1H FY3/24 Breakdown of YoY 1H YOY (JPY bn) Absence of gains on change in equity (Bank of East Asia) (JPY bn) FY3/24 Consolidated net business profit 770.9 +49.0 GB GM +14.0 Others 770.9 +4.9 Total credit cost 100.3 +17.2 Ordinary profit 709.2 (16.8) 721.9 Profit attributable 526.5 +1.0 to owners of parent 1H FY3/23 WS +39.7 RT +16.1 1H FY3/24 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 8#9(Ref.) One-off impact in FY3/24 1 Received insurance of USD 710 mn in respect of aircraft previously leased to Russian airline. 2 Sold U.S. freight car leasing business to realize a more capital-efficiency business portfolio. 1①Insurance settlement of SMBCAC 34 aircraft lost in Russia (NBV USD 1.6 bn*1) Total impairment by Sep. 2023 Oct. 2023: 3Q Impact on bottom-line profit JPY (81) bn*2 insurance settlement received for 16 aircraft previously leased to Aeroflot Impact on bottom-line profit +USD 311 mn *3 Insurance settlement: USD 710 mn Aeroflot NSK Insurance Lessor Litigation Leasing of 16 aircraft aircraft SMBC AC Terminated Russian airlines 18 aircraft Airline Fleet Insurers/ Reinsures Fleet Insurers 12 Sales of railcar leasing business 2013: Entered into railcar leasing business • Acquired Flagship Rail Services and renamed to SMBC Rail Services (SMBCRS) 2017 Acquired American Railcar Leasing Aimed to expand business size by acquiring more profitable railcars 3Q Became a leading freight car leasing company in the U.S. Changes in the business environment and industry reorganization have led SMBCRS to bear potential impairment risks Strengthened regulation 2023 Decided to sell to ITE • Improve capital efficiency Shrinking margin by reallocating resources to growth areas Impact on *4 RWA (CET1 ratio) USD (2,900) mn +4 bp (7)bp Loss for sales USD (560) mn • Maximum impact of potential impairment on bottom-line profit : USD (90) mn *1 Before write-down *2 After netting security deposits *3 After netting impairment of NBV *4 The amount of loss is calculated based on the SMBC RS net asset forecast at the time of agreement on transfer and is subject to change Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 9#10Balance sheet and loan balance Balance sheet (as of Sep. 23) Total assets : JPY 293.7 tn Cash and due from banks JPY 77.4 tn Loans JPY 102.4 tn (Consolidated) Loan balance (JPY tn) Domestic loans ■ Overseas loans 94.3 87.7 81.9 80.2 (Non-consolidated) +3% 97.2 Deposits, negotiable certificates 35.6 33.2 29.7 25.0 25.6 of deposit (NCD) JPY 176.2 tn Securities JPY 40.4 tn JGBs JPY 9.5 tn Other liabilities JPY 103.7 tn 61.1 61.6 54.6 56.9 58.0 Total net assets JPY 13.8 tn Other assets JPY 73.4 tn Total stockholders' equity JPY 10.6 tn Loan to deposit ratio Risk-weighted assets 58.1% JPY 82.0 tn ROE (Denominator: Total stockholders' equity) 10.0% Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 Of which loans to the Japanese government, etc. and SMFG 2.6 tn 2.6 tn 2.4 tn 2.6 tn 2.6 tn Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 10#11Domestic loans*1 Balance Spread*2 (JPY tn) Others +1% ■Individuals ■Mid-sized corporations and SMEs ■Large corporations 0.8% 61.1 61.6 60 60 58.0 56.9 7.7 7.8 54.6 6.3 7.2 6.9 50 50 40 30 30 20 20 0.69% 11.9 11.9 12.1 11.9 0.66% 12.5 0.64% Mid-sized corporations and SMEs Large corporations 0.63% 0.63% 0.62% 0.62% 0.63% 0.64% 0.62% 0.6% 21.0 21.2 0.60% 19.0 19.6 0.56% 18.6 10 19.4 19.2 20.5 20.8 16.5 0 0.4% Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 *1 Managerial accounting basis *2 Monthly average loan spread of existing loans, excludes loans to the Japanese government Mar. 18 0.54% 0.54% 0.53% 0.54% 0.53% 0.53% 0.51% 0.51% 0.51% 0.49% 0.65% 0.55% Sep. 18 Mar. 19 Sep. 19 Mar. 20 Sep. 20 Mar. 21 Sep. 21 Mar. 22 Sep. 22 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. Mar. 23 Sep. 23 11#12Overseas loans*1 Balance (USD bn) EMEA Americas (4%) Asia 300 288.3 289.5 279.0 274.6 267.8 Spread*2 1.4% 250 80.5 77.0 71.1 77.0 75.5 1.24% 1.2% 1.16% 200 1.15% 1.16% 1.19% 1.17% 1.11% 1.12% 1.13% 105.4 150 116.8 110.1 96.1 113.0 100 50 50 93.5 96.2 102.4 95.7 89.0 1.0% 0 0.8% Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 1.09% 1.07% Mar. 18 Sep. 18 Mar. 19 Sep. 19 Mar. 20 *1 Includes trade bills. Managerial accounting basis, translated into USD at respective period-end exchange rates. Sum of SMBC and major local subsidiaries *2 Managerial accounting basis. Monthly average loan spread of existing loans 1.04% Sep. 20 Mar. 21 Sep. 21 Mar. 22 Sep. 22 Mar. 23 Sep. 23 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 12#13Total credit cost and total credit cost ratio* *2 Asset quality – solid loan portfolio | - NPLs and NPL ratio*1 (JPY tn) 2.0 Consolidated (left axis) Non-consolidated (left axis) Consolidated (right axis) 8% (JPY bn) 600 Non-consolidated (right axis) 1.6 1.2 1.2 Consolidated (left axis) Non-consolidated (left axis) -Consolidated (right axis) -Non-consolidated (right axis) 500 6% 400 360.5 36bp (bp) 60 50 50 40 40 1.0 0.9 4% 300 0.9 0.8 0.8 0.7 0.7 0.6 0.5 0.4 0.4 1.08% 0.98% 0.80% 0.76% 0.68% 0.73% 0.77% 0.54% 0.65% 0.46% 0.52% 0.47% 274.4 30 30 242.7 26bp 210.2 170.6 0.6 200 25bp 0.5 161.1 18bp 20 20 2% 18bp 15bp 115.5 100.3 100 O 10bp 83.1 10 63.5 49.6 5bp 10.2 0.0 0% 0 Mar. 19 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 FY3/20 FY3/21 FY3/22 FY3/23 FY3/23 1H 1H FY3/23 FY3/24 Coverage ratio*3 Consolidated Non-consolidated 68.89% 66.49% 86.18% 86.73% *1 NPL ratio = NPLs based on the Financial Reconstruction Act (excluding normal assets) / Total claims *2 Total credit cost ratio = Total credit cost / Total claims *3 Ratio of the collateral, guarantees and specific and general reserves to total NPLs Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 13#14Asset quality – securities portfolio(1) - Breakdown of other securities (consolidated) Equity holdings (Sep. 23) B/S amount Unrealized gains (losses) (JPY bn) Reduction Consent of sales*2 (JPY bn) Sep. 23 vs Mar. 23 Sep. 23 vs Mar. 23 200 Held-to-maturity Available for sales Stocks (domestic) Bonds (domestic) o/w JGBs 212.2 +46.6 39,439.5 +6,974.6 2,093.5 (1.7) (1.3) 180 +178.4 3,800.6 +455.2 12,958.5 (219.0) 2,426.2 +481.4 (120.0) (55.8) FY3/23 58 120 9,512.1 (64.2) (64.5) (28.1) Consent of Sales Others 22,680.5 +6,738.4 (212.6)*1 (247.2) o/w Foreign bonds 19,103.0 +6,021.5 (1,114.3) Unrealized gains Risk volume is controlled by hedging and others (JPY tn) Stocks (domestic) Bonds (domestic) Others (417.0) FY3/22 +JPY 58 bn 67 62 62 1.9 2.9 FY3/21 55 2.3 2.1 1.9 2.3 2.4 2.0 1.9 1.3 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 *1 The difference between foreign bonds and others is unrealized gain on foreign stocks *2 Excl. investments after Mar. 20 for the business alliance purpose *3 Sep. 23: 32.2%, incl. balance of deemed held shares in numerator *4 FY3/27-29 FY3/21-3/23 31 Mar. 23 Sep. 23 Mar. 26 Reduction plan Reduce JPY 200 bn in 3 years (FY3/24-26) Aim for <20% market value to consolidated net assets *3 during the period of next Medium-Term Management Plan*4 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 14#15- Asset quality – securities portfolio(2) Yen-denominated bonds (Non-consolidated) (JPY bn) B/S amount Duration (years)*1 Foreign bonds (Non-consolidated) (JPY bn) B/S amount Duration (years)*1 4.8 4.3 4.3 4.2 4.3 2.9 2.8 2.5 2.4 2.6 19,625.2 17,655.2 10,067.4 13,346.0 13,140.6 9,253.1 9,516.3 9,709.4 8,970.5 15,270.3 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Unrealized 8.0 gains (losses) (49.4) (62.4) Sep. 23 (117.1) Mar. 20 Unrealized gains (losses) Mar. 21 Mar. 22 Mar. 23 Sep. 23 (40.7) (403.1) (617.1) (989.8) *1 Managerial accounting basis (excl. bonds classified as held-to-maturity, bonds for which hedge-accounting is applied, and private placement bonds) Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 15#16Balance sheet Consolidated Loans JPY 102.4 tn (+JPY 4.0 tn) Domestic loans *1,2 JPY 61.6 tn JPY 176.2 tn (+JPY 4.4 tn) (vs Mar. 23) Domestic loans and deposits *1,2 Deposits Foreign currency NCD 4% Others 15% 4% Others 4 2% Loan to deposit ratio: 58.1% Securities Mortgage, etc. 15% Time 13% JPY 40.4 tn (+JPY 7.2 tn) Domestic deposits 2 JPY 123.3 tn Loans Deposits JGBs Foreign bonds JPY 9.5 tn JPY 19.1 tn NCD JPY 13.8 tn Prime-rate- based 2% Current 11% Others Spread-based 68% Ordinary 66% Others JPY150.8 tn (+JPY 12.0 tn) Cash and due Liquid from banks JPY 77.4 tn *2 JPY 59.5 tn account BoJ's current JPY103.7 tn (+JPY 17.8 tn) Total net assets JPY 13.8 tn (+JPY 1.0 tn) Total assets JPY 293.7 tn (+JPY 23.3 tn) Impact of interest rise in foreign currency Loan/deposit Most of the loans / deposits are based on market rate (A part of the deposits have low sensitivity to interest rate) Foreign bonds Unrealized losses will increase when government bond yields rise Floating rate Impact to net interest income from possible interest hike*5 Short-term rate Medium-to long term rate JPY +30 bn JPY +10 bn (1st year) JPY +50 bn in 5th year by repricing of fixed rate loans Profit from market operation is not included Cautious approach to additional JGB investment considering further rate hike <Assumption> Interest earnings on roll-overs improve while funding cost increases *1 Managerial accounting basis *2 Non-consolidated *3 Overdraft, foreign-currency-denominated, etc. *4 Sundry, etc. *5 Based on assumption of no change in balance sheet *6 Interest rate on basic balance of BOJ's current account remains unchanged at 0.10% Policy rate 0%*6 5 years rate 0.6% (Sep. 23) (0.1)% 0.34% 10 years rate 1.1% 0.77% Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 16#17Funding / Capital Strategy#18Foreign currency assets and funding Non-JPY Balance sheet development Non-JPY Balance sheet overview *1 (as of Sep. 23) (USD bn) 600 (USD bn) 600 (USD bn) Deposits Med-Long term funding Loans, etc 402.9 400.6 384.3 400.0 363.6 550 550 343.1 352.8 337.6 340.2 361.2 340.7 130.0 300.0 128.7 140.0 143.7 500 500 117.4 Deposits (incl. deposits from 450 Interest earning assets 450 200.0 central banks) (Loans, trade bills 400 and securities, etc.) 350 254.3 262.9 256.9 400 225.7 234.9 100.0 350 0.0 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 300 Medium- to long-term funding 300 Currency breakdown (as of Sep. 23) 250 (incl. Corporate bonds, 250 Currency swaps, etc.) Interest-earning 200 Others (incl. highly liquid assets) *2 CDs & CP 150 150 200 assets Deposits Medium-long term funding *3 AUD Others EUR 100 50 60 Others Others 100 AUD GBP Foreign bonds, NCD Interbank (incl. Repo) GBP 50 USD USD EUR EUR Assets Liabilities USD *1 Managerial accounting basis. Sum of SMBC and major local subsidiaries *2 Deposits placed with central banks, etc. *3 Excludes JPY funding, certificate of deposits and transferable deposits. Among all bonds priced by Sep. 23, only includes issuance with original maturity of two years or more and its tap issue as of Sep. 23. Translated into USD at the exchange rates as of the end of Sep. 23 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 18#19Redemption Issuance Foreign currency issuances and redemptions Non-JPY issuances and redemptions *1 FY3/20 FY3/21 (USD bn) FY3/22 FY3/23 FY3/24 FY3/25 FY3/26 FY3/27 FY3/28 FY3/29 20 20 14.4 15 0.5 10.0 10 8.7 ■SMBC covered bonds SMBC senior bonds ■SMFG senior bonds SMBC subordinated bonds ■SMFG subordinated bonds 0.9 8.2 11.1 0.9 7.0 1.0 LO 5 7.9 7.1 7.8 6.0 2.9 0.1 0.2 1.2 0 08 (1.6) (0.5) (1.1) (1.0) (1.8) (0.5) (0.2) (0.2) (1.3) (0.5) (5.8) (2.1) (1.3) (7.6) (6.4) (5.9) (5) (6.6) (5.9) (7.6) (4.2) (2.5) (7.0) (11.4) (7.6) (0.9) (1.5) (7.4) (1.8) (6.6) (6.2) (10) (9.2) (9.6) (9.3) (9.1) (10.1) (11.9) (15) *1 The sum of SMFG and SMBC, each on a non-consolidated basis. Excludes JPY funding, certificate of deposits and transferable deposits. All redemptions were, or are expected, at maturity other than for callable bonds, which were, or are expected to be, redeemed at their respective 1st call dates, while there is no assurance they will be redeemed at such time. Among all bonds priced by Sep. 23, only includes issuance with original maturity of two years or more and its tap issue as of Sep. 23. Translated into USD at the exchange rate as of the end of each period for FY3/20-FY3/23, and as of Sep. 23 for FY3/24-FY3/29 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 19#20TLAC ratio and requirements TLAC ratio Risk-weighted assets basis TLAC ratio (transitional basis) (JPY bn) Sep. 2023 30.2% 29.9% 29.3% External TLAC 30% 29.2% 28.5% 28.9% 28.0% A 24,532.3 Risk-weighted assets (RWA) B 82,041.0 25% TLAC ratio (RWA basis) Capital buffers (including CCyB) (A/B) C 29.90% D (3.60%) 21.5% Ref: TLAC ratio of RWA (C-D) E 26.24% 20% 19.5% Requirement Leverage exposure (LE) F 252,687.3*1 TLAC ratio (LE basis) (A/F) G 9.70% 15% Sep. 20 Mar. 21 Sep. 21 Mar. 22 Sep. 22 Mar. 23 Sep. 23 Requirements Leverage exposure basis Minimum external TLAC (RWA basis) 18% 10.3% 9.8% 10.0% 9.5% 9.7% 9.7% 10% 9.2% +) capital buffers*2 +3.5% 6.75% 6.0% 5% Requirement Effective level of minimum external TLAC (RWA basis) 21.5% Minimum external TLAC (LE basis) 6.75% 0% Sep. 20 Mar. 21 Sep. 21 Mar. 22 Sep. 22 Mar. 23 Sep. 23 *1 LE excludes deposits with the Bank of Japan under the FSA's temporary relief on leverage ratio calculation from Jun. 20 *2 Excludes countercyclical buffer (CCyB) for RWA requirements. As for the G-SIB buffer, SMFG was allocated to bucket 1 according to the latest list published by the FSB Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 20#21TLAC issuance results and strategy TLAC issuances and redemptions" (USD bn) Redemption Issuance 15 11.1 10 7.9 7.8 8.1 6.9 5 ■ USD EUR AUD JPY = Others Maintain issuance level of USD 8-10 bn Mar. 20 (5) Mar. 21 (2.5) Mar. 22 Mar. 23 Mar. 24 (4.2) (6.6) Mar. 25 (5.9) Mar. 26 Mar. 27 Mar. 28 (10) (7.6) (7.5) (6.7) (11.6) (15) Historical issuance calendar *2 Apr FY3/18 FY3/19 FY3/20 FY3/21 $Formosa FY3/22 30nc10 $500mm FY3/23 FY3/24 May € 5y Green €500mm 5.5y AUD750mm Jun Jul Aug $ 5y/10y €1.25bn 5y/10y $4.25bn $ 5y/10y $2.0bn €500mm 5y $ 5y/10y $4.5bn $ 5y/10y $3.0bn¦ € 4nc3/6nic5/11nc10 7y ¥130bn €600mm $ 3y/5y/7y/10y $3.3bn Sep Oct Nov Dec € $ 7y Green 5y/10y €500mm $2.5bn $ 5y/10y $2.5bn A$ 5y/10y 5y 10y $1.5bn AUD625mm €1.25bn ---- Jan Formosa 5y/10y 30nc1p $2.75bn $265mm $ Sy/10y $2.5bn Feb Mar $ by(Re-open) $850mm $ 5y/7y/10y $ Formosa 7y 30nc10 €500mm $500mm $Formosa 3y Green /5y/10y/20y 30nc10 $2.5bn $ $420mm $Formosa $5.0bn $ 5y/10y $2.0bn 5y/7y Green /20y 30nd10 $2.0bn $315mm $ 3y/5y/7y/10y 4nc3/6nc5/11nc10 3y/5y/7/10y(Re-open) $5.8bn ¥130bn $1.3bn $ *1 The sum of SMFG Senior Bonds issuances and redemptions. All redemptions were, or are expected, at maturity other than for callable bonds, which were, or are expected to be, redeemed at their respective 1st call dates, while there is no assurance they will be redeemed at such time. Among all bonds priced by Sep. 23, only includes issuance with original maturity of two years or more and its tap issue as of Sep. 23. Translated into USD at the exchange rate as of the end of each period for Copyright © 2023 Sumitomo Mitsui Financial Group. FY3/20-FY3/23, and as of Sep. 23 for FY3/24-FY3/28 *2 Based on pricing date All Rights Reserved. 21#22Capital Capital ratio Transitional basis Capital strategy AT1 capital Tier 2 | Additional Tier 1 (AT1) Result Tier 2 capital Common Equity Tier 1 (CET1) 16.22% 15.20% Requirement 13.94% 11.66% CET1 Target*1 Total Capital ratio Tier 1 ratio CET1 ratio 9.66% 8.16% o/w buffer*2 3.66% 10% CET1 capital JPY 0.8 tn (1.03%) (as of Sep. 23) JPY 1.0 tn (1.26%) (as of Sep. 23) Plan to fill 2.0% Tier 2 bucket in the medium term, taking account of RWA growth and AT1 capital accumulation Plan to continue issuing AT1 bonds to fill 1.5% AT1 bucket CET1 ratio target (Finalized Basel III basis excl. net unrealized gains) : 10% • CET1 capital ratio remains target level SMFG's recent deals (subordinated bonds) Total capital Tier 1 capital o/w CET1 capital Tier 2 capital Risk-weighted assets (JPY bn) Sep. 23 Security type AT1 AT1 Tier 2 (USD) Issue date Apr. 25, 2023 Amount JPY 89bn Tenor Coupon PerpNC5 1.879% AT1 13,312.8 AT1 Tier 2 12,470.6 Tier 2 Apr. 25, 2023 Jul. 13, 2023 Sep. 15, 2023 Sep. 15, 2023 Oct. 30, 2023 Oct. 30, 2023 JPY 51bn USD 1bn JPY 114.5bn JPY 96.5bn JPY 85bn JPY 45bn PerpNC10 2.180% 20y 6.184% PerpNC5 1.889% PerpNC10 10NC5 2.292% 1.276% 10y 1.758% 11,438.7 842.2 82,040.9 Japan's three megabanks issued JPY 1.09 tn of yen- denominated AT1 bonds this fiscal year in total Most of the outstanding AT1 bonds are issued in JPY ✓ MUFG's USD AT1 bonds issued in Oct. 23 is the first foreign currency AT1 deal in Japan *1 CET1 ratio that (a) includes the impact of RWA inflation expected post the Basel III reforms and (b) is calculated with CET1 excluding net unrealized gains on other securities and RWA excluding RWA associated with net unrealized gains on stocks *2 Including Capital conservation buffer (2.50%), G-SIB surcharge (1.00%) and countercyclical buffer (0.16%) Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 22#23Subordinated bonds issuance results and strategy Subordinated bonds issuances and redemptions*1 (USD bn) 5 FY3/20 FY3/21 FY3/22 FY3/23 FY3/24 FY3/25 FY3/26 ■ JPY AT1 FY3/27 ■ JPY Tier 2 FY3/28 ■ USD Tier 2 4 Redemption Issuance 3 1.0 0.9 2 0.9 1 0.5 0.9 0.7 2.3 0.8 0.9 0.7 0.8 0 (0.3) (1) (2) (1.1) (1.2) (1.1) (0.6) (0.8) (0.8) (1.1) (1.8) (0.6) (1.0) (1.0) (0.7) (3) All of SMFG's callable capital notes have been redeemed at their first call date Historical issuance calendar *2 May Apr FY3/18 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 ¥ AT1 FY3/24 PNC5/PNC10 ¥140bn Jun Jul Aug Sep Oct Nov Dec Jan Feb AT1 PNC10 ¥150bh AT1 PNC10 ¥85bn $Tier2 10y $500mn AT1 $Tier2 PNC10¥100bn 10y $850mn $Tier2 20y $850mm AT1 PNC5/PNC10 ¥107bn Mar Tier2 10y \100bn AT1 PNC10 ¥80bn Tier2 10NC5/10y ¥100bn Tier2 20y $1bn AT1 Tier2¦ PNC5/PNC10 ¥211bn 10NC5/10y ¥130bn *1 The sum of SMFG Subordinated bonds issuances and redemptions. All redemptions were, or are expected, at maturity other than for callable bonds, which were, or are assumed for illustration to be, redeemed at their respective 1st call dates, while there is no assurance they will be redeemed at such time. Among all bonds priced by Oct. 23. Translated into USD at the exchange rate as of the end of each period for FY3/20-FY3/23, and as of Sep. 23 for FY3/24-FY3/28 *2 Based on pricing date. Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 23 23#24Comparison of AT1 securities features Going concern SMFG JPY AT1 U.K. EU CET1 5.125% Trigger Switzerland Australia U.S. 7%*1 5.125%/7% 8% High: 7% Low: 5.125% 5.125% N/A Loss absorption mechanism Temporary write- down (TWD) Conversion TWD or conversion Write-down or conversion Conversion N/A Gone concern PONV mechanism & trigger Public capital injection constitutes PONV or triggers going concern loss absorption Contractual *2 (Specified Item 2 Statutory *3 Statutory *3 Contractual Contractual N/A measures) No*2 (Specified Item 1 measures, etc. won't trigger PoNV or TWD) Yes Yes Yes Yes N/A Dividend stopper Yes*4 No No Yes Yes Yes *1 Some institutions define the 7% trigger as a contractual base to include AT1 securities in their leverage ratio calculations *2 PONV will be triggered when the Prime Minister of Japan confirms that Specified Item 2 measures needs to be applied to us if and when our liabilities exceed or are likely to exceed our assets, or we have suspended or are likely to suspend payment of our obligations. However, (1) liquidity support and capital injection under Specified Item 1 measures, (2) capital injection under Act on Special Measures for Strengthening Financial Functions and (3) capital injection under Item 1 Measures could be applied before PoNV when the Prime Minister of Japan deems these measures appropriate. Measures to be taken depend on each case. Specified Item 2 measures may be taken without the implementation of a capital injection prior to PONV *3 Contractual bail-in clause for effectiveness or statutory loss absorption if the AT1 is governed by foreign law *4 If SMFG is unable to pay interest on its AT1 Notes, either voluntarily or due to restrictions on the distributable amount, SMFG shall not resolve at the meeting of its Board of Directors to pay cash dividends on its common stock and shall not propose Copyright © 2023 Sumitomo Mitsui Financial Group. that cash dividends be paid to common stockholders in its shareholder's meeting All Rights Reserved. 24#25Safeguards to prevent systemic disruption PONV Prior to PONV*1 suspension of payment or having negative net worth (including the likelihood thereof) Posterior to Framework • Liquidity support and capital injection Specified Item 1 Measures set forth in the Deposit Insurance Act ("DIA") • Capital injection Act on Special Measures for Strengthening Financial Functions • Capital injection Item 1 Measures set forth in the DIA Financial assistance for orderly resolution Specified Item 2 Measures set forth in the DIA This measure can be applied after the non-viability event of both AT1 and Tier 2 instruments Financial assistance exceeding payout cost or Temporary nationalization Comparison of Measures established in 2014 Situation Financial condition of target financial institution Support tools Write-down of AT1 securities *1 See note 2 on p.75 Specified Item 1 Measures Subject entities Financial institutions Including banks and bank holding companies ("BHCs") Banks and BHCs Banks and BHCS*2 Financial institutions Including banks and BHCs Banks Specified Item 2 Measures Where there is a risk that severe disruption could occur in Japan's financial market and any other financial systems Capital: not having negative net worth No requirement as to liquidity Liquidity support Capital injection Not required*3 Capital: having negative net worth or Liquidity: suspension of payment (including the likelihood thereof) ● Financial assistance Full permanent write-down as PoNV *2 The DIA permits capital injection into a BHC which is the parent company of the subject bank to enhance the bank's capital adequacy *3 If the issuer's CET1 ratio is below 5.125% at the time Specified Item 1 Measures are applied, AT1 securities will be subject to partial or full write-down pursuant to the temporary write-down clause Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 25#26Buffers to capital distribution constraints / write-down | Capital requirements CET1 ratio well above requirement / trigger (Ref.) Profit attributable to owners of parent 13.94% 5.78% A Buffer to capital distribution constraints B (JPY tn) 1.0 Buffer to temporary write-down 0.8 including AT1 coupon payment*1 0.6 0.51 Countercyclical buffer 0.16% G-SIB buffer 1.0% JPY 4.74tn (578bps) JPY 7.23tn (882bps) 0.4 8.16%*1 Capital conservation buffer 2.5% Minimum CET1 requirement 4.5% CET1 ratio as of September 2023 0.2 5.125% 0.0 (0.2) (0.4) (0.37) (0.6) FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 *1 Reflects CET1 buffers applicable at Sep. 2023. Whenever CET1 ratio falls below 8.16%, capital distributions will be restricted up to a certain amount depending on the level of the deficit in our regulatory capital buffers. Such capital distributions include dividends, interest payments on the AT1 Securities, share buybacks, redemption and repurchases of the AT1 Securities, and bonus payments Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 0.81 0.71 26#27(Ref.) Capital ratio / leverage ratio (Transitional basis) 35% 30% 25% 20% CET1 AT1 Tier 2 *1 Contribution of DIFR Other TLAC Eligible Debt Requirement 16.22% 29.90% 21.66% Leverage ratio TLAC leverage ratio Requirement *2 15% 13.94% 15.20% 1.26% 26.40% 1.02% 1.26% 11.66% 9.66% 10% Require- ment 8.16% 9.70% 6.75% 13.94% 13.94% 13.94% 5% Require- ment Require- ment Require- ment 3.50% 4.93% 3.50% Require- Require- ment ment 0% CET1 ratio Tier 1 ratio Total capital ratio TLAC ratio Leverage ratio (including leverage buffer) TLAC leverage ratio Buffer to requirement 578bps 554bps 456bps 824bps 143bps 295bps Buffer to requirement (JPY) 4.74tn 4.55tn 3.74tn 6.76tn 3.63tn 7.48tn *1 Contribution of Deposit Insurance Fund Reserves: Japanese Deposit Insurance Fund Reserves fulfill the requirements for ex- ante commitments to recapitalize a G-SIB in resolution set out in the FSB's TLAC termsheet (Can include 3.5% of RWAs, in external TLAC ratio) respectively from Apr. 2024 *2 Leverage ratio minimum requirement and TLAC leverage ratio minimum requirement expected to increase to 3.70% and 7.10% Copyright © 2023 Sumitomo Mitsui Financial Group. 27 All Rights Reserved.#28(Ref.) Comparison of inflation | CPI (YOY)*1 Core CPI (YoY)*1 excluding food & energy (%) (%) 14 7 -Japan -Japan 12 6 -U.S. -U.S. 10 5 -Euro -Euro 8 4 6 4 2 0 -2 -4 3 2 1 трим 0 -1 -2 -6 -3 2015 2016 2017 2018 2019 2020 2021 2022 2023 *1 Bureau of Labor Statistics (BLS), Eurostat, Statistics Bureau of Japan (SBJ), Bloomberg 2015 2016 2017 2018 2019 2020 2021 2022 2023 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 28#29(YoY, %) 5.0 Energy of Goods Others of Goods 4.0 General Service Food products of Goods Public Service All items, less fresh food SMBC forecast (Ref.) Outlook for Japan's CPI | CPI Forecast (YoY)*1 3.0 2.0 1.0 0.0 N N NY W -1.0 T UN W TNN TNT AWT W 20 20 W IN W NII 21 AN 22 22 *1 Statistics Bureau of Japan (SBJ), SMBC. Including SMBC Treasury Unit's own estimate as of November 1, 2023 -2.0 19 23 23 ☐ L 24 24 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 29#30(Ref.) Comparison of GDP & Output Gap GDP level*1 (2019=100) 110 105 100 95 95 90 90 *1 Output gap Bloomberg (%) Consensus 4 2 0 -2 -4 -6 Japan -8 U.S. -10 Euro -12 85 2019 2020 2021 2022 2023 T SMBC Estimates The output gap is estimated by using HP filter. Japan U.S. Euro -14 2019 2020 2021 2022 2023 2024 *1 Cabinet Office (CAO), Congressional Budget Office (CBO), Bloomberg, SMBC. Including SMBC Treasury Unit's own estimate as of November 1, 2023 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 30#31(Ref.) Consumption in Japan Household inflation expectations" Nominal and real wage" (2020 = 100) 12% 10% 8% 6% 4% 2% 0% 2010 2012 2014 2016 2018 2020 2022 *1 Bank of Japan (BOJ), Ministry of Health, Labour and Welfare (MHLW) 110 105 100 95 -Nominal Wage Real Wage приверну my 2010 2012 2014 2016 2018 2020 2022 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 31#32(Ref.) Trend in Yen interest rate Trend in short- and long-term rates*1 Trend in super-long-term rates*1 1.4% 2-year JGB 5-year JGB 2% -20-year JGB 5-year swap 10-year JGB -30-year JGB 1.2% 10-year swap 1.8% 1% 0.8% 0.6% 0.4% 0.2% 0% 1.6% 1.4% 1.2% 1% 0.8% 0.6% -0.2% 0.4% 2021/12 2022/6 2022/12 2023/6 2021/12 2022/6 2022/12 2023/6 *1 Bloomberg Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 32#33Appendix#34SMFG / SMBC overview SMFG (Consolidated) *1 Global banking group originated in Japan SMBC (Non-consolidated) Core operating entity within SMFG franchise unlisted (wholly-owned by SMFG) (FY3/23) Market Capitalization (TSE:8316, NYSE:SMFG) B/S Assets Loans Deposits*2 Loans/Deposits Gross Profit P/L Net Income CET1 ratio NPL ratio Ratings (Moody's / S&P) JPY 9.8 tn / USD 65.4 bn (As of Nov. 24, 2023) JPY 270 tn / USD 2,025 bn JPY 98 tn / USD 737 bn JPY 159 tn/USD 1,189 bn 57.3% JPY 235 tn/USD 1,762 bn JPY 94 tn USD 706 bn JPY 150 tn/USD 1,123 bn 57.9% JPY 3,170 bn / USD 23.7 bn Consolidated gross profit JPY 806 bn / USD 6.0 bn Profit attributable to owners of parent 14.02% 0.80% JPY 1,699 bn / USD 12.7 bn Gross banking profit JPY 634 bn / USD 4.7 bn Net income *1 A1/A- 0.52% A1/A (As of Nov. 15, 2023) (As of Nov. 15, 2023) Business Franchise • Holds top-tier companies in banking, leasing, securities services, consumer finance, and other businesses • 455 domestic branches • 28 million retail accounts 155 overseas offices*3 *1 Converted into USD at March 2023 fiscal year-end exchange rate Market capitalization converted to USD at the Nov. 24, 2023 exchange rate *2 Excludes negotiable certificates of deposits *3 Excludes offices planned to be closed (As of Sep. 30, 2023) (As of Sep. 30, 2023) Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 34#35Credit ratings of selected G-SIBS OpCo senior unsecured bonds/ Excluded liabilities Additional Tier 1 (AT1) securities Moody's TLAC eligible senior unsecured bonds Notch Difference (between OpCo senior and TLAC senior bonds) Basel III Tier 2 bonds (As of the end of Oct. 23) SMFG Mizuho MUFG BAC Citi JPM Barclays HSBC DB*1 BNP*1 UBS*2 Aa1 Aa2 3 Aa3 0 0 0 2 A1 3 A2 A3 Baa1 Baa2 Baa3 Ba1 Ba2 | S&P 2 3 SMFG Mizuho MUFG BAC Citi JPM Barclays HSBC DB*1 BNP*1 UBS*2 A+ A 2 2 2 2 2 3 3 A- BBB+ BBB BBB- BB+ BB BB- 3 *1 For DB and BNP, OpCo senior notes and TLAC eligible senior notes mean preferred senior notes and non-preferred senior notes, respectively *2 Backed senior unsecured rating of UBS Group Funding (Switzerland) guaranteed by UBS Group AG for TLAC eligible senior notes Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 3 35 55#36Credit ratings of Aussie and Canadian banks OpCo senior unsecured bonds/ Excluded liabilities Additional Tier 1 (AT1) securities Moody's TLAC eligible senior unsecured bonds Notch Difference (between TLAC senior and Tier 2 bonds) Basel III Tier 2 bonds (As of the end of Oct. 23) SMFG BMO BNS RBC TD ANZ CBA NAB Westpac Aa1 Aa2 Aa3 A1 11 A2 2 A3 2 2 Baa1 Baa2 Baa3 S&P SMFG BMO BNS RBC TD ANZ CBA NAB Westpac AA- A+ A A- BBB+ +1 BBB BBB- BB+ Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 36#37Financial highlights - IFRS*1 Income statement data Reconciliation with Japanese GAAP (JPY bn) FY3/22 FY3/23 (At and for FY3/23, JPY bn) |Total equity Net profit Net interest income 1,443.9 1,755.1 IFRS 13,537.0 935.8 Net Fee and commission income 1,038.5 1,039.8 Scope of consolidation 96.7 (4.9) Net Trading income 280.3 626.0 Derivative financial instruments (504.3) (374.0) Other operating income 374.7 369.7 Total operating income 3,137.5 3,790.7 Net operating income 2,857.5 3,642.2 Profit before tax 676.5 1,261.9 Net profit 515.1 935.8 Statement of financial position data (JPY bn) FY3/22 FY3/23 Total assets Loans 248,160.8 257,687.0 104,635.8 111,891.1 Differences arising from different accounting for: Investment securities (428.3) 147.0 Loans and advances 407.7 (13.6) Investments in associates and 221.1 10.6 joint ventures Property, plant and equipment 16.7 (1.6) Lease accounting 2.6 0.5 Defined benefit plans 140.5 60.7 Deferred tax assets (61.4) (25.3) Foreign currency translation Classification of equity and 6.6 (770.4) (11.3) liability Others 40.9 29.9 Deposits 162,593.5 172,927.8 Tax effect of the above 92.3 69.2 Total equity 12,781.7 13,537.0 Japanese GAAP 12,791.1 816.3 *1 Consolidated Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 37#38Consolidated gross profit (JPY bn) ■Consolidated gross profit For Apr. to Sep. period 3,500 3,170.2 2,945.5 3,000 2,806.2 Trend of major income components - Consolidated Consolidated net business profit*1 ■Consolidated net business profit (new definition) ■Consolidated net business profit (old definition) ■ For Apr. to Sep. period (JPY bn) 2,000 2,500 2,000 1,500 1817.3 1,632.4 1,000 1,500 1,276.4 1,152.9 1,084.0 770.9 721.9 1,000 500 500 0 0 FY3/ 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 FY3/ 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Net income / | Profit attributable to owners of parent (JPY bn) Consolidated net income For Apr. to Sep. period 1,000 Total credit cost (JPY bn) 1,500 Total credit cost ■For Apr. to Sep. period 805.8 750 706.6 526.5 512.8 525.4 1,000 500 250 500 0 360.5 274.4 210.2 100.3 83.1 (250) (500) (500) FY3/ 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 FY3/ 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 *1 We have changed the definition of "Consolidated net business profit" from the FY3/15. The figure for FY3/14 has been adjusted retrospectively Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 38#39Trend of major capital ratio - Consolidated Historical capital adequacy ratio (Transitional basis) CET1 AT1 Tier 2 Minimum Requirements *1 2.67% 2.57% 1.82% 3.34% 1.87% 2.87% 2.19% 2.11% 1.09% 1.65% 0.96% 1.09% 1.10% 1.03% 1.89% 11.50% 92% 1.26% 8.88% 9.75% 10.62% 16.37% 14.50% 15.55% 16.00% 14.45% 14.02% 13.94% 11.81% 12.17% Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 Mar. 2020 Mar. 2021 Mar. 2022 Mar. 2023 Sep. 2023 Historical leverage ratio*2 CET1 AT1 Minimum Requirements 0.32% 0.66% 0.49% 0.63% 0.64% 0.28% 0.34% 0.31% 0.41% 3.50% 3.00% 3.98% 4.11% 4.35% 4.40% 5.33% 4.84% 4.72% 4.53% 4.03% Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 Mar. 2020 Mar. 2021 Mar. 2022 Mar. 2023 Sep. 2023 *1 Including G-SIB surcharge and excluding countercyclical buffer. Transitional basis does not reflect finalized Basel III standards, which are expected to phase in from Mar. 2024 *2 Leverage exposure excludes deposits with the Bank of Japan under the FSA's temporary relief on leverage ratio calculation Copyright © 2023 Sumitomo Mitsui Financial Group. from Jun. 2020. Leverage ratio minimum requirement expected to increase to 3.70% from Apr. 2024 All Rights Reserved. 39#40Diversified revenue sources Breakdown of consolidated gross profit FY3/03 Other group companies SMBC Domestic loan / deposit related revenue International business*1 Fee income, Trading income, etc. 1H FY3/24 Other group companies • Leasing Securities Services • Consumer Finance • Others SMBC Domestic loan / deposit related revenue International business*1 Fee income, Trading income, etc. Breakdown of overseas loan balance (Sep. 23) By industry By domicile ■Material and energy ■Finance and insurance ■Transportation ■Various services ■Construction and real estate ■Retail, wholesale and commodities Automobile and machinery Electronics EMEA Western Europe Eastern Europe Northern Europe Middle East Africa Asia/Pacific Asia Pacific Americas North America ■IT Others *1 Includes major overseas banking subsidiaries Central and South America Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 40#41Japanese and non-Japanese corporate exposures*1 Japanese (JPY tn) 40 30 20 10 0 Internal Rating (Certainty of debt repayment) Non-Japanese 0 10 20 30 40 (JPY tn) 1-3 (Very high - Satisfactory) 4-6 (Likely - Currently no problem) 7 (excl. 7R) (Borrowers requiring caution) 7R, 8-10 (Substandard borrowers Bankrupt borrowers) ■Mar. 22 ■ Mar. 23 ■Sep. 23 JPY 59.0 tn Total (as of Sep. 23) *1 Managerial accounting basis. Exposure includes loans, acceptances and guarantees, foreign exchanges, private placement, suspense payments, undrawn commitments, and derivatives, etc. Excluding the exposure to SMFG consolidated subsidiaries, retail customers in Japan, Japanese government, etc., and specialized lending JPY 47.0 tn Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 41#42Overseas loan balance classified by borrower type*1 Total ■Non-Japanese corporations and others (product type lending) Japanese corporations ■ By region (Sep. 23) ■Non-Japanese corporations and others (product type lending) ■Japanese corporations (USD bn) 350 300 250 200 150 100 50 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 *1 Managerial accounting basis. Sum of SMBC and major local subsidiaries *2 Excludes BTPN in Indonesia 100% 75% 50% 25% 0% Total Asia Americas EMEA Major marketing channels in Asia (Sep. 23)*2 ■Non-Japanese corporations and others (product type lending) ■Japanese corporations 100% 75% 50% 25% 0% Sydney Hong Kong Indonesia Singapore China Bangkok Copyright © 2023 Sumitomo Mitsui Financial Group. Seoul All Rights Reserved. 42#43Australia (JPY bn) 3,000 2,500 2,000 1,500 1,000 500 500 0 0 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 Indonesia India (JPY bn) 2,000 1,394 1,500 Loan balance in Asian countries / areas*1 2,534 Singapore (JPY bn) 3,000 2,500 2,000 2,158 Hong Kong (JPY bn) 3,000 2,500 2,000 1,500 1,744 աաաա (JPY bn) 2,000 1,500 1,500 1,000 1,000 500 0 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 Thailand (JPY bn) 2,000 1,500 1,084 1,066 1,000 1,000 1,000 500 500 500 0 0 0 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 China Taiwan Korea (JPY bn) (JPY bn) (JPY bn) 2,000 2,000 2,000 1,500 1,500 1,500 1,065 1,000 1,000 1,000 602 487 500 500 500 0 0 0 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 Mar. 20 Mar. 21 Mar. 22 Mar. 23 Sep. 23 *1 Managerial accounting basis. Sum of SMBC and major local subsidiaries Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 43#44CRE Exposure (Sep. 23) SMBC Group's Exposure*1 CRE Exposure JPY 19 tn • 13% of total exposure • NPL ratio: 0.5% JPY 155 tn Japan U.S. CRE JPY 12 tn JPY 82 tn Corporate: 50%, NRL: 30%, REITs: 20% Investment grade: 70% NPL ratio: 0.3% CRE JPY 2 tn NRL: 50%, REITs: 50% Investment grade: 70% JPY 26 tn ● NPL ratio: 0.3% Office: JPY 0.3 tn, NPL ratio of 2% China Hong Kong CRE JPY 1.4 tn JPY 4 tn Corporate: 70%, NRLS and REITs: over 10% each Investment grade: 80% Main corporate clients are high-rated conglomerates ◆ NPL ratio: 5% due to large borrowers, but the rest are of good asset quality *1 SMBC consolidated, calculated based on location of headquarters, managerial accounting basis Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 44#45Yen bond portfolio Non-consolidated (Total balance of other securities with maturities and bonds classified as held-to-maturity - total of JGBs, local gov. bonds and corporate bonds) (JPY tn) 40 1 year or less ■1 to 5 years ■5 to 10 years More than 10 years 55 35 31.5 28.9 30 25 20 19.6 17.6 16.3 16.4 15 13.4 13.2 12.3 11.9 10.6 10.0 9.0 10 5 0 Mar.12 Mar.13 Mar.14 Mar.15 Mar. 16 Mar. 17 Mar. 18 Mar.19 Mar.20 Mar.21 Mar.22 Mar.23 Sep.23 of which JGBs (JPY tn) 14.0 9.8 8.0 9.3 6.3 7.1 14.3 15.8 9.6 9.5 Average duration (years)*1 1.9 1.8 1.1 1.8 2.8 2.9 2.3 3.2 2.9 2.5 2.8 2.4 2.6 Unrealized gains/losses 104.4 95.3 60.0 45.9 103.8 57.5 44.2 60.5 21.4 7.9 (49.7) (62.8) (117.7) (JPY bn)*2 *1 Excl. bonds classified as held-to-maturity, for which hedge-accounting is applied, and private placement bonds *2 15-year floating-rate JGBs have been evaluated at their reasonably estimated price until Sep. 20 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 45#46Reduction of shareholdings Reduction plan of JPY 200 bn in 3 years is progressing steadily, with consent of sales also increasing ahead of schedule. Progress of Reduction Plan (JPY bn) 180 FY3/23 58 FY3/22 67 FY3/21 55 Reduction Consent of sales*1 FY3/21-3/23 120 Consent of Sales +JPY 58 bn 62 31 Mar. 23 Sep. 23 *1 Incl. the amount scheduled to be sold after FY3/25 *2 Excl. investments after Mar. 20 for the business alliance purpose *3 Sep. 23: 32.2%, incl. balance of deemed held shares in numerator *4 FY3/27-29 Balance of equity holdings (JPY tn) Book value of domestic listed stock*2 6.09 200 Mar. 26 1.33 1.15 1.11 Apr. 01 Mar. 20 Mar. 23 Sep. 23 Mar. 26 Aim for <20% market value to consolidated net assets *3 during the period of next Medium-Term Management Plan *4 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 46#471H FY3/24 performance of SMBC and group companies SMBC Other major group companies 1H YOY *1 (left results of 1H FY3/24/right: YoY) *2 *1 (JPY bn) FY3/24 SMCC SMBC Nikko SMBCCF (JPY bn) 1 Gross banking profit 895.4 (32.8) Gross profit 266.7 +30.4 218.4 +44.4 123.1 +7.4 2 o/w Net interest income 527.7 (83.7) Expenses 218.1 +26.8 193.0 +16.0 51.3 +2.1 o/w Gains (losses) on cancellation 3 4.7 (26.6) Absence of of investment trusts Net business dividend from 49.1 +4.0 25.5 +28.4 58.8 (3.9) 4 Domestic 297.8 (55.5) subsidiary: (42) profit 5 Overseas 229.9 (28.2) ⇒eliminated in Net income 17.0 (2.2) 18.5 +19.7 9.1 (18.4) consolidated 6 o/w Net fees and commissions 231.6 +9.4 basis (Equity method affiliate) *3 7 Domestic 111.9 +17.2 SMBC Trust SMDAM 50.1% SMFL 50% 8 Overseas 119.7 (7.8) o/w Net trading income+ Gross profit 35.5 +10.6 19.9 +1.6 140.3 +14.9 9 134.7 +41.2 Net other operating income Expenses 19.7 +1.7 16.4 +1.2 61.1 +2.9 10 o/w Gains (lossses) on bonds (0.2) +63.1 Net business 11 Expenses 481.6 +37.8 15.7 +8.9 3.5 +0.4 84.3 +11.0 profit 12 Banking profit 413.9 (70.6) Net income 12.3 +6.4 2.4 +0.6 42.1 +4.6 13 Total credit cost 10.2 (53.3) 14 Gains (losses) on stocks 40.6 (43.6) 15 Extraordinary gains (losses) 6.8 (29.5) 16 Net income 345.7 (54.0) *1 Incl. impact from reorganization of SMBC Mobit *2 Incl. profits from SMBC Nikko America and SMBC Capital Markets (managerial accounting basis) *3 Managerial accounting basis Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 47#48SMBC Nikko Financial results 1H FY3/23 YOY (JPY bn) FY3/24 Client assets (JPY tn) 80 Net operating revenue 222.8 149.2 +41.5 60 60 SG&A expenses 267.3 137.4 +10.0 40 40 Ordinary income (42.1) 11.9 +30.0 Net income (39.8) 1.4*1 20 20 +10.8 0 Sep.22 Dec.22 Mar.23 Jun.23 Sep.23 ■ Net operating revenue (JPY bn) 100 88 80 Equity brokerage commissions Subscription commissions on investment trust, fund wrap fee and agency commissions Product sales Underwriting commissions Net trading income (JPY tn) Investment trusts Foreign bonds 3 2 Subscription of equities ■Fund wrap Domestic bonds ■ Variable annuities/insurances 60 40 1 20 0 0 1Q 2Q 3Q 4Q FY3/23 1Q FY3/24 2Q 1Q 2Q 3Q 4Q FY3/23 1Q FY3/24 2Q *1 Recorded JPY 7.9 bn of loss on sale of shares of a subsidiary related to Intermediate Parent Undertaking (IPU) requirement (eliminated on consolidated basis) Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 48#49SMCC Financial results* *1 Key figures 1H FY3/23 YOY Sales handled (JPY bn) FY3/24 (JPY tn) O-YOY # of card holders (mn) Operating revenue 523.5 306.3 +55.4 YoY (industry) 2 30% 60 30 30 o/w Commission fee 193.8 109.3 +17.3 20% 50 20 Finance 103.3 78.4 +27.8 10% 40 10 Sales on credit 28.0 14.2 (0.1) Receipt agency 52.7 27.0 +1.4 0% 0 FY3/22FY3/23 1H 1H FY3/23 FY3/24 Mar.21 Mar.22 Mar.23 Sep.23 Operating expense 490.7 282.5 +53.4 *3 o/w Expenses for Market share 34.1 26.4 +11.0 loan losses Expense for Issuing Acquiring 10.0 interest repayments Ordinary profit (loss) 33.1 24.5 +2.9 12% 26% Net income 21.8 17.0 +2.2 Finance outstanding 736.6 1,067.3 *1 Figure for FY3/23 and YoY change has not been adjusted to the reorganization of SMBC Mobit in Apr. 23 *2 Japan Consumer Credit Association "Credit card behavior investigation" Shopping credit amount *3 METI "Indices of Tertiary Industry Activity" Sales credit business handled (2022 JPY 79 tn) Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 49#50SMBCCF Financial results Consumer loans Loan guarantee 1H FY3/23 YOY *1 ■Promise (overseas) (JPY bn) ■ Promise +8% SMBC Others +8% (JPY bn) (JPY bn) FY3/24 1,199.5 950.3 Operating income 294.1 131.1 (15.6) 907.4 880.7 125.6 128.6 1,143.7 1,112.7 138.5 o/w Interest revenues 183.4 72.1 (19.2) 625.2 584.7 565.2 Loan guarantee 71.4 38.1 +2.8 revenues 781.8 752.1 811.9 Operating expenses 216.8 102.0 +1.7 559.0 547.5 574.3 o/w Expenses for 56.8 46.1 +10.6 loan losses Mar.21 Mar.22 Mar.23 Sep.22 Sep.23 Mar.21 Mar.22 Mar.23 Sep.22 Sep.23 Expense for 11.4 3.4 +1.4 loan guarantees Expenses for 19.0 interest repayments # of interest refund claims (Thousand) 15 Ordinary profit 59.5 15.9 (26.2) Net income 44.1 9.1 (22.8) 10 NPLs (NPL ratio) 107.0 91.6 5 8.74% 9.64% Allowance on interest 89.5 78.2 repayments (provision) 3.5 yrs 3.1 yrs 0 L L 1Q 2 3 4 1 2 3 4 1 FY3/19 FY3/20 2 3 FY3/21 4 1 2 3 4 FY3/22 1 2 3 4 FY3/23 1 2 FY3/24 *1 Figure for FY3/23 and YoY change has not been adjusted to the reorganization of SMBC Mobit in Apr. 23 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 50#51SMBCAC Financial results Global passenger demand forecast* *3 Domestic demand exceeded pre-COVID-19 levels 1H FY3/23 YOY (USD mn) FY3/24 (%) Total revenue 1,488 990 +363 200 o/w Lease revenue 1,428 962 +363 Credit / Asset impairment charges*1 (506) (15) +24 Net income (77) 182 +77 100 Aircraft assets *2 22,770 22,224 +5,007 Net asset 3,245 3,427 ±0 ROE (2.4)% 5.3% +2.3% 0 | Aircraft Business of SMBC Group (USD mn) 800 ■SMBCAC related SMFL SMBC Acquired SMBCAC 600 400 200 Domestic 2Q15 | Our strengths Aircraft portfolio 5 International -Total 2Q19 2Q23 2Q27 (CY) Wide body (A350-B787) Narrow body Avg. age 5.5 years Fuel efficient*6 Over 85% More than 60% 11 12*4 13 14 15 16 17 18 19 20 21 (200) 22 23 1H (FY) Liquidity S&P Rating A- No.1 in industry *1 Gross before netting guarantee deposits, etc. *2 Includes aircraft pre-delivery payment *3 IATA/Tourism Economics. Represent changes from CY-19 *4 SMBCAC related includes revenue after the acquisition in June. *5 As of Dec. 22 *6 Neo/MAX/A350/B787 Undrawn commitment lines USD 9.8 bn Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 51#52BTPN Financial results** Coverage Jan.- Jun. Retail Wholesale 2020 2021 2022 (JPY bn) 2023 sinaya Gross banking profit 91.1 106.2 116.1 66.7 btpn High-net-worth Large corporations SMBC… Operating expenses 50.9 56.6 60.9 34.8 Mid-sized corporations Middle class Jenius Net profit 12.9 21.6 26.3 14.0 mitra SMEs btpr ROE 6.1% 8.6% 9.6% 9.8% pur btpn Mass market Micro business Loans 1,008.0 1,098.4 1,242.0 1,427.7 btpn' mitra usaha btpn' Syariah owners WOW! btpn Deposits Total assets 745.8 886.0 976.4 1030.5 1,355.4 1,554.5 1,777.9 1,853.8 Net interest margin"2 NPL ratio*2 Digital Banking Loan breakdown*3 SMBC's Global Support (%) (%) 7.9 6.3 5.3 5.6 4.6 3.3 2.5 1.9 1.4 1.5 BNI Mandiri BCA BTPN BRI BTPN Mandiri BCA BNI BRI BTPN Syariah 8% Retail 17% Business Banking 8% Corporate Banking 67% *1 TTM as of Dec. 20: IDR 1= 0.0074, Dec. 21: IDR 1= 0.0081, Dec.22: IDR 1= 0.0085, Jun. 23: IDR 1= 0.0096 *2 Based on each company's disclosure (Jun.23 results) *3 As of Jun. 23 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 52#53SMICC Financial results** *1 Coverage 1H Retail Wholesale FY3/21 FY3/22 FY3/23 (JPY bn) FY3/24 Gross operating 48.1 40.8 58.8 41.8 profit Operating expenses 18.0 23.5 33.8 23.2 Net profit (18.3) 1.2 11.6 5.4 SMFG IndiaCredit Pragati Ki Nayi Pehchaan ROE (24)% 2% 14.7% 11.4% Loans 378.2 411.4 596.7 716.2 SMFG India Credit SMEs Pragati Ki Nayi Pehchaan High-net-worth Large corporations SMBC Middle class Medium-sized corporations SMFG India Credit Pragati Ki Nayi Pehchaan Sole proprietor Total assets 419.3 441.4 728.1 795.2 Mass market Micro business operator Loan balance*2 (INR bn) 1,975 943 614 512 385 254 Loan spread*2 (%) *3 Loan breakdowns 10.7 10.0 6% 9.1 8.2 Secured loans ■Business loans 14% 6.7 6.3 30% ■ Personal loans Group loans 11% Mortgage loans ■Digital 9% 13% ■Others 18% (vehicles/ motorcycle loans, etc.) Bajaj Tata HDB IIFL SCUF SMICC Capital Fin SCUF Bajaj SMICC HDB IIFL Tata Fin Capital *1 TTM as of Mar. 21: INR1= 1.51, Mar. 22: INR1=1.62, Mar. 23: INR1= 1.63, Sep. 23: INR1=1.80 *2 Based on each company's published data (Mar.22 results) *3 As of data acquisition Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 53 33#54FE Credit Financial results** *1 Coverage Jan.- Jun. Retail Wholesale 2020 2021 2022 (JPY bn) 2023 Gross operating 78.4 77.0 84.9 31.5 profit Large High-net-worth corporations SMBC Operating expenses 22.7 23.4 34.3 15.6 Net profit 13.4 0.6 (13.3) (18.3) FE CREDIT Middle class VAY TIÊU DÙNG TÍN CHẤP ROE 21.2% 0.8% (16.5)% (51.0)% Mid-sized corporations SMEs Loans 297.2 377.1 385.4 372.4 Total assets 330.3 388.1 428.2 402.1 VAY TIÊU DÙNG TÍN CHẤP FE CREDIT Mass market Micro business owners Loan balance*2 (VND tn) 61.0 21.1 21.0 15.6 11.4 Loan spread*2 (%) 30.0 28.0 22.0 21.0 19.9 Sector average 17.4% FE Credit Home Mcredit HD Shinhan Credit Sasion Finance HD Home Mcredit Shinhan FE Sasion Credit Finance Credit Loan breakdown (Jun. 23) *1 TTM as of Dec.20: VND1=0.0045, Dec.21: VND1=0.0050, Dec.22: VND1=0.0056, Jun. 23: VND1= 0.0061 *2 Based on FiinGroup data (Jun. 23 results) Motorcycle loans 4% Installment 3% Credit cards 41% Unsecured loans 52% Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 54#55RCBC Financial results** *1 Coverage Retail 1H 2020 2021 2022 (JPY bn) 2023 Gross operating Large 81.9 81.9 105.8 61.5 RCBC High-net-worth Wholesale SMBC RCBC profit corporations We lising it you Operating expenses 47.6 50.7 59.7 37.5 Net profit 10.8 15.9 28.8 16.3 Mid-sized RCBC Middle class corporations RCBC ROE 5.5% 6.7% 10.1% 11.1% We beli We believe in u SMEs Loans 1,061.2 1,211.2 1,330.1 1,539.9 Deposits Total assets 1,157.3 1,513.0 2,040.2 2,357.3 1,667.7 2,158.0 2,746.8 3,076.6 Mass market RCBC Micro business owners RCBC We baie in you Wabalipu Total assets *2 ROE *2 Loan breakdown (Jun. 23) *3 (PHP bn) 4,158 (%) 2,864 2,685 1,385 1,1741,163 15.9 15.5 15.1 12.9 Credit cards 10% Mortgage 13% 11.1 10.6 Motorcycle loans 7% Large corporations 50% SMEs 20% BDO MBT BPI CHIB RCBC PNB CHIB BPI BDO MBT RCBC EW *1 TTM as of Dec. 20: PHP1=2.16, Dec. 21: PHP1=2.25, Dec. 22: PHP1=2.38, Jun. 23: PHP1=2.62 *2 As of Jun. 23 *3 Figures are rounded off and will not necessarily be 100% in total. Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 55#56Core Policy VISION A trusted global solution provider committed to the growth of our customers and advancement of society Growth with Qualit™™™™ 折 Create Social Value Contribute to "Fulfilled Growth" Pursue Economic Value Transformation & Growth Rebuild Corporate Infrastructure Quality builds Trust Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 56#57Key strategic areas (JPY bn) External FY3/23 1,180 1,276.4 factors Transformation Continuous reform of business model 1 Build digital-based retail business 2 Strengthen payment business Reform domestic business I for possible interest rate hike Enhance wholesale business 3 utilizing digital technology Expand Improve capital efficiency 4 II institutional investor business with B/S discipline 5 Strengthen global CIB and S&T 6 7 Deepen and expand U.S. business Realize growth through our Multi-Franchise Strategy Growth Establish franchise in key strategic areas Build global portfolio III based on growth potential FY3/26 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 57#58Improve capital efficiency / reallocate business portfolio ROCET1 has improved by focusing on capital efficiency and strategically reallocating our business portfolio. Continue to allocate capital selectively to strategic areas by reducing unprofitable assets and equity holdings. (JPY tn) RWA 99.2 ROCET1 9.4% Mar. 23 Change of RWA 106.9 Market Impact +5.4 RWA Controls Reduction Reduce unprofitable assets Project Finance • Regions of low growth and excessive competition 1H FY3/24 JPY (1.7) tn JPY (1.5) tn Review significance of holding JPY (0.2) tn Equity holdings 9.8% U.S. freight car leasing 2H: USD (2.9) bn Investment 1H FY3/24 +JPY 4.0 tn Credit card and RT +JPY 0.4 tn consumer finance business WS PE funds, real estate, etc. +JPY 0.8 tn Americas and target countries GB +JPY 1.3 tn of Multi-Franchise Strategy Sep. 23 GM Portfolio management capturing market trends +JPY 1.4 tn *1 Numerator is the full-year forecast of bottom-line profit (JPY 920 bn) Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 58#59Cost control Overhead ratio remains flat despite the increase in G&A expenses due to growth of top-line profit. Accelerate base expense control initiatives to offset increase due to proactive investments. Base expense control Reduction (JPY bn) 1,082.2 G&A expenses 962.6 Environmental factors: +39 Growth investment: +16 Revenue-linked: +25 Reform of domestic business e.g. 8 STORES in 1H, aiming for 50 in FY3/24 Digitize wholesale businesses 810 Base expenses*1 Change in 795 base expenses Overhead ratio 59.0% 1H FY3/23 1H FY3/24 Base expense Workload JPY (12) bn (1,700) people JPY (5) bn (800) people JPY (6) bn Group functions e.g. • Optimize headquarter operation Integrate functions of SMCC and SMBCFS Overseas operations ● Additional reduction measures (850) people JPY (1) bn (50) people 59.5% Investment 1H FY3/24 Base expense Workload 1H FY3/24 + JPY 27 bn +2,100 people Overseas personnel costs + JPY 15 bn IT investment + JPY 3 bn Investment in strategic areas ● Progress ahead of schedule *1 G&A expenses excl. cost related to investment for future growth, revenue-linked variable cost, impact from market conditions and others Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 59#60Strengthen global CIB / U.S. businesses Collaboration with Jefferies has progressed steadily, and many projects have been executed in various areas. U.S. Digital Bank opened in July to be a growth driver of the U.S. busienss in the medium- to long-term. Global CIB gross profit +USD 90 mn YoY U.S. Collaboration with Jefferies Jul.21- Apr.23- DCM Sub-IG 8 Cross- border M&A/IPO 3 SMBC IG Healthcare sector 7 + Sub- IG U.S. IG bond issuance share (Corporate) (%) Accelerate with collaboration with Jefferies + 3 2 1 ECM # of deals closed Europe M&A 4 Leverage mutual strengths 15 Jefferies Building pipeline through collaborative proposals Digital Bank in the U.S. Jeniusbank Jul. 23 Personal loan Nov. 23 Savings deposits '24- 1H FY3/21 1H FY3/22 1H FY3/23 1H FY3/24 Expand product lineup Mobile apps Checking deposits Credit card Auto loans Student loans - Year 10 - Bottom-line profit USD <500 mn ROE≥10% Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 60#61Realize growth through Multi-Franchise Strategy Develop as a future growth driver by focusing on PMI of each investee, on top of capturing macro growth. Bank BTPN OTO/SOF Priority Areas in PMI Ownership ratio 92% 35% = SMICC 75% (%) 10 Economy is recovering GDP growth forecast*1 Strengthen Retail & SME business Promote digitalization and cross-selling Bolster the missing parts Expand business by capturing economic growth Diversify funding sources Expand sales financing with SMBC clients referrals VPBank 15% RCBC 20% Expected to continue to grow around or above 5% 19 20 (10) 20 21 22 23 India Indonesia 24 Vietnam Philippines 25 (CY) Bottom-line profit contribution (JPY bn) FE Credit 49% Support recovery of FE Credit with VPBank Economy recover from '24 Focus on rebuilding FE Credit with VPBank Promote various type of business collaboration Establish Alliance Committee Dispatch directors and advisory board members Amortization of goodwill Before 28 *1 IMF "World Economic Outlook Database" After (1) FY3/23 1H FY3/24 FY3/24 FY3/26 FY3/29 target target Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 61#62Reinforce IT infrastructures Proceed with investment ahead of schedule to realize effects earlier, by allocating resources both to business growth and corporate infrastructure. (JPY bn) 535 650 Business growth o/w CEO budget 180 Digitalization Retail 1H FY3/24 JPY 36 bn о o/w CEO budget 135 Olive 200 STORE Wholesale Web payment service Efficient New Business U.S. Digital Bank Personal loans Savings deposits Less paper work business operation 200 450 335 Previous Current Plan Plan Corproate infrastructure 1H FY3/24 JPY 90 bn Risk Response / Governance Compliance Internal management Resilience Disaster Employees Workplace Cybersecurity Ransomware protection System failure Productivity Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 62#63Rebuild corporate governance and compliance Measures to prevent recurrence have been confirmed effective through internal audits and by external lawyers. Continue implementation and penetration of these measures under top management's leadership. Nov. 22 Filing of improvement plans Formulate a framework for preventing recurrence 1 Business management <SMBC Nikko > Strengthen supervision of management execution Compliance training for directors Resource allocation Enhance First Line and Market manipulation Second Line Products & Services Council <SMFG> As of Nov. 23 Implement 2 Internal management Three Lines management Develop target operating model • Enhance Compliance division Unfair Trade Prevention Subcommittee Penetrate 3 Healthy organizational culture New corporate philosophy Continue management philosophy meetings Town hall meetings "A day to learn from incidents" Firewall regulation violation Enhance involvement to SMBC Nikko's executive appointment and resource alloacation 4 Business management 5 Compliance training for directors Strengthen Compliance Dept. Established Group Business Management Office Information management Thorough implementation of information management rules Continued post-monitoring CEO message 6 Awareness of compliance Study sessions at each branch Enhance training opportunities Verify effectiveness through internal audits and by external lawyers Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 63#64Sophisticated human capital management Thoroughly implement the "SMBC Group Talent Policy" to create a workplace where employees can continuously challenge, grow, and generate additional value. Build HR portfolio Promote employees' growth Maximize team performance Shift to strategic areas (people) Provide diversified experiences DE&I Improve efficiency (1,700) Female managers 25% 19% 20% 日本を世界で 誇れる国にする SMBC Wevox Strategic areas +2,100 Certified experts Support in creating one's own career Mar. 23 Sep. 23 Train future management Mar. 26 1,652 (people) 1,230 Open reruitment ■ Side-job (people) # of candidates (people) 1,595 1,693 Ratio of candidates vs. major positions 174 6.4x 1,171 Others Governance Investment banking 89 91 318 3.2x 3.3x 117 183 Digital Mar. 22 Mar. 23 FY3/21 FY3/22 FY3/23 Ready Within 5 years Future candidates Inner communication CHRO Seminars & Roundtable Discussions Reflect in evaluation SMBC Group Talent Policy Verify effectiveness Survery Plan-Do- Check-Act Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 64#65Target towards decarbonized society Set targets for reducing Scope 1&2 emissions and phasing out finance to thermal coal mining. Will disclose medium-term reduction targets for steel and automotive sectors in FY3/24. GHG emissions Scope1&2 (kt-CO2e) Power 2030 2040 2050 2022 2023 2024 2025 vs. 2021 (40)% Net zero Oil & Gas Set target for 2030 NZBA 9 sectors Scope3: Financed Coal emissions Steel Transportation (auto) Set target for 2030 by Mar.24 Coal-related finance (JPY bn) Coal-fired Project finance power generation Corporate finance*2 Thermal coal mining Complete setting of medium- term target 138-195 (g-CO2e/kWh) vs. 2020 (12)-(29)% vs. 2020 (37)-(60)% vs. 2020 (50)% Zero Net zero OECD countries Non-OECD countries Zero Zero *1 Expanded boundary of calculation to both domestic and overseas offices of SMFG and its subsidiaries from 2021. *2 Asset-specific financing Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 65#66Sustainability management structure Sustainability Management System Board of Directors Nomination Committee Audit Committee Executive compensation Base salary Fixed Compensation Committee Risk Committee Linked annual performance (0-150%) Sustainability Committee Bonus ●Cash Base amount •Stock Compensation Plan II Annual Individuals' performance ESG ±10% Executive Committee Corporate Sustainability Committee Group CSUO Quantitative Achievement of KPIs*1 Qualitative ESG ratings of major agencies Linked medium-term performance (0-150%) Financial Stock Base ☑ amount Non-financial Stock 15% Quantitative Environment Compensation Sustainability Division Sustainable finance Plan I Financed emissions Employees Engagement score DE&I Global Advisors Mar. 23 Appointed Paul Polman Stock United Nations Global Compact Vice Chair (former CEO of the Unilever) Plan III Qualitative Materiality initiatives Compensation Promotion reward plan Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 66#67Governance (As of Jun. 23) Internal Directors (executive) 5 directors # of the Board of Directors 15 Ratio: 47% Outside Director Knowledge and experience we expect in particular 7 directors Manage- ment |Legal/risk| Finance Global manage- ment Accounti- ng Sustaina- IT/DX bility T.Kunibe J.Ohta Internal Directors 3 directors A.Fukutome 、 (non-executive) Non-executive directors: 67% T.Kudo F.Ito Improve Board diversity T.Isshiki Female 13% 20% Y.Gono Foreign 7% >>> 13% nationals New directors Y.Kawasaki A་ M.Matsumoto S.Yamazaki Y.Tsutsui A་ K.Shinbo ব Charles D. Lake II E.Sakurai AM Jenifer Rogers Asurion Japan Holdings C.D.Lake II J.Rogers Aflac Life Insurance Japan Chairman and Representative Director General Counsel Asia Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 67#68Rationale for issuing green bonds SMBC Group's motivation toward green bond issuance Strong Track Record in Green Finance SMBC Group's significant growth in Renewable Energy Finance SMBC Group Green Bonds Development of Green Bond Market Green bonds have been utilized for sustainability commitment Attract New Investors Attract new investors and thereby diversify investor base What will be achieved by green bond issuance Promotion of SMBC Group's Sustainability Commitment Transformation to more resilient business model Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 68#69Key aspects of SMBC group's green finance framework based on green bond/loan principles Willy 1. Use of Proceeds • • Project Categories 1.Renewable Energy 2.Energy Efficiency 3.Green Buildings AFFORDABLE AND CLIMATE ACTION CLEAN ENERGY 4.Clean Transportation SUSTAINABLE CITIES AND COMMUNITIES AFFORDABLE AND CLEAN ENERGY INDUSTRY, INNOVATION AND INFRASTRUCTURE INDUSTRY, INNOVATION AND INFRASTRUCTURE SUSTAINABLE CITIES AND COMMUNITIES 5.Pollution Prevention & Control 3 GOOD HEALTH AND WELL-BEING 11 SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION 2. Evaluation and Selection SMBC Group's Sector policy SMBC Group's Green Finance framework Environmental Policy Credit Policy Sector Policy Green Finance Framework . ll Look Back Period: 24 months More than 90% of the funds are allocated to Renewable Energy • • 4. Reporting Annually updated ✓ Allocation Proceeds Project Category, Amount, Country, Agreement Date Impact Reporting CO2 Emissions Reduction (inc. o/w SMBC Financed base) ✓ External Review Report from Sustainalytics All of information is ✓ Updated within one year from issue date ✓ Available on our Website SUSTAINALYTICS Eligible Green Assets 3. Management of Proceeds . Pending allocation of proceeds SUSTAINALYTICS Framework Overview and Decond Party Opon Sumitomo Mitsui Financial Group, Inc./ Sumitomo Mitsui Banking Corporation's Green Bond Framework : short-term financial instruments. En S Green Bond / Loan SMFG Investor (Issuer/ Borrower) SMBC Net Proceeds Inter-Group Loan Green Assets Loan Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 69#70Overview of green bond issuance and allocated green assets Balance of Green Bond Issuance and Allocated Green Assets *1 (as of Mar. 23) (EUR mn) Overview of Allocated Green Assets Total:2,523.0 mn 2,500 Total:2,345.6 mn Waste to Energy 4% 26% Biomass 4% 2022/12/22 SMBC AUD 52 mn, USD 150 mn By 6% Geography Solar/Wind Energy 10% ■ Japan Australia India ■ Chile ■France Canada ■ UK ■ USA ■ UAE 2,000 2022/1/14 20% SMFG USD 500 mn 17% Peru ■Germany ■ Saudi Arabia ■ Belgium Argentina ■ Mexico 2021/1/12 Solar Energy 1,500 9% 2% SMFG USD 500 mn 13% By Technology 49% 2019/5/30 1,000 SMFG EUR 500 mn 26% Wind Energy Solar Energy ■Solar / Wind Energy Biomass Waste to Energy 2018/12/20 SMBC Wind Energy 500 AUD83.2mio, USD 227.8 mn Facility Capacity (Number of Projects) 20 18 16 2017/10/11 14 SMFG EUR 500 mn 12 10 19 13 0 Green Bond Issuance Allocated Green Outstanding Assets Outstanding 11 8 8 <100MW 100-250MW 250-500MW 500-750MW 750MW< *1 Translated into EUR at the exchange rates as of Mar. 23 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 70 10#71Green bond impact reporting Impact Reporting (as of Mar. 23) 3DORD HEALTH ONE WELL-BEING Category Sub Category Country Number of Capacity Projects (MW) Estimated CO2 emissions reduction (t-CO₂/Year) o/w SMBC Group financed Wind energy Argentina, Australia, Belgium, Canada, Chile, France, Germany, Japan, UK, USA 29 29 13,993.32 MW 13,676,275.31 t-CO2 2,096,094.67 t-CO₂ Renewable Energy Solar energy France, India, Japan, Mexico, Peru, Saudi Arabia, UAE, USA 22 5,690.80 MW 4,888,505.70 t-CO2 2,004,895.51 t-CO2 Solar / Wind energy Australia, India 3,755.00 MW 6,389,660.02 t-CO2 840,386.25 t-CO2 Biomass Japan 424.90 MW 909,521.71 t-CO2 206,226.09 t-CO₂ Pollution Prevention & Control Waste to Energy Australia 1 34.00 MW 204,700.18 t-CO2 45,780.53 t-CO2 *1 Translated into EUR at the exchange rates as of Mar. 23 Total 26,068,662.92 t-CO2 5,193,383.05 t-CO₂ SMFG/SMBC Green Bond Outstanding (as of Mar. 23)*1 EUR 2,345.6 mn CO2 Avoidance per EUR 1 mn 2,214.11 t-CO₂ Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 71#72SMBC covered bond programme Under the Trust Act of Japan, bondholders have dual recourse to SMBC's assets and the segregated cover pool assets. To protect bondholders, the Programme puts self-originated Japanese RMBS as collateral under the TRS. Segregation of assets is ensured in the case of SMBC's insolvency because enforceability of the TRS is protected under the Netting Act of Japan. Cover pool assets remain on the balance sheet of SMBC acting in its own capacity. BNY Mellon Corporate Trustee Services Limited Bond Trustee / Security Trustee Bondholders at issue ongoing & at maturity Trust Deed Covered Bonds (Moody's: Aaa) Covered Bond Proceeds SMBC (acting in its proprietary capacity) TRS Counterparty SMBC (Moody's: A1 (Stable) / S&P: A (Positive)) Covered Bond Proceeds Self-originated Japanese Aaa-rated RMBS*2 Interest & Principal of Covered Bond (Bond Coupon Frequency) RMBS Cash Flow (JPY/ Monthly payment) Total Return Swap ("TRS") / Credit Support Annex ("CSA") SMBC (acting as trustee of the Trust*1) Issuer *1 SMBC, licensed by Japanese FSA as a financial institution which engage in trust business, acting as trustee on behalf of a specified money trust (tokutei kinsen shintaku) No. 0010-377600-0001 (the "Trust") *2 Cover pool assets may include senior tranches Aa-rated RMBS where higher haircut ratio of 20% is applied, JGB and cash Interest & Principal of Covered Bond (Bond Coupon Frequency) Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 72#73Self originated residential loans SMBC SMBC covered bond: Cover pool summary RMBS summary terms* Collateral Originator/Servicer Kyoto Domestic region Asset Trustee Sumitomo Mitsui Trust Bank Hyogo Revolving Static pool Other Regions Format Liquidity Interest Payments Principal Payments Hedging Arrangements Master Trust Clean-up Call Back-up Servicer Credit Enhancement Not appointed at closing Overcollateralisation Senior/subordinate tranching Excess spread Domestic trust beneficiary interest Cash reserve Greater Osaka Osaka Monthly / Fixed coupon Monthly / Pass through None Standalone structure 10% Chiba Greater Tokyo Saitama Kanagawa Maximum principal balance Loan Term Loan Guarantee Senior Tranche Rating *1 Pool data as of Aug. 23 *2 By loan balance JPY 200 mn Up to 35 years Guaranteed by SMBC Guarantee Co., Ltd. Moody's: Aaa (sf) Tokyo Osaka Fukuoka Tokyo + Greater Tokyo Tokyo Nagoya Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 73#74Housing market developments Japanese house prices have been stable with limited impact of the global financial crisis compared to other developed countries, and are now in an upward trend. Negative impact of COVID-19 on housing starts is smaller than during the financial crisis and homeownership rate has been stable at approx. 60%. 450 400 House price index (2004 = 100) 15060 100 150 200 380 300 350 50 50 0 Jun. 04 House prices 338.2*1 250 247.1"1 241.8 Jun. 05 Jun. 06 Jun. 07 Jun. 08 Jun. 09 Jun. 10 Jun. 11 Jun. 12 Jun. 13 Australia UK Jun. 14 Jun. 15 Jun. 16 Jun. 17 Jun. 18 Jun. 19 Japan France USA Italy *1: As of Mar. 23 for Canada and Australia Source: Bank for International Settlements Jun. 20 Canada Singapore Jun. 21 Jun. 22 Jun. 23 196.9 194.3 182.7 178.9 Units (in thousands) Housing starts / Homeownership rate 2,000 1,500 1,000 117.9 500 113.0 Germany 0 61.2% Housing starts (left axis) Homeownership rate (right axis) 61.7% 61.1% 61.2% 70% 65% 60% 55% 50% Mar. 04 Mar. 05 Mar. 06 Mar. 07 Mar. 08 Mar. 09 Mar. 10 Mar. 11 Source: Ministry of Land, Infrastructure, Transport and Tourism, Statistics Bureau, Ministry of Internal Affairs and Communications Mar. 12 Mar. 13 Mar. 14 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 74 Mar. 15 Mar. 16 Mar. 17 Mar. 18 Mar. 19 Mar. 20 Mar. 21 Mar. 22 Mar. 23#75Actions before incurring losses at PoNV We will be required to meet various capital requirements before reaching a point of non-viability ("PoNV"). CET1 ratio 13.94%*1 (excl. Net unrealized gains on other securities: 12.5%) CET1 ratio (Transitional basis) 8.16% 5.125% 4.5% Capital requirement*2 Countercyclical buffer (0.16%) G-SIB buffer [Bucket 1] (1.0%) Capital conservation buffer (2.5%) Minimum CET1 requirement (4.5%) Actions Capital remediation plan to be required Capital distribution to be limited (including dividend on and buy-back/redemption of common equity and AT1 instruments) CET1 can be generated by write-down of AT1 instruments (Our yen-denominated AT1 bonds come with a principal write-up clause) Prompt corrective action to be implemented Pre-determined recovery plan to be implemented at certain trigger level *1 As of the end of Sep. 23 0%. PONV *2- suspension of payment or having negative net worth (including the likelihood thereof) *2 PONV will be deemed to have been reached when the Prime Minister of Japan, following deliberation by Japan's Financial Crisis Response Council pursuant to the Deposit Insurance Act ("DIA"), confirms (nintei) that "specified Item 2 measures (tokutei dai nigo sochi)", which are the measures set forth in Article 126-2, Paragraph 1, Item 2 of the DIA, as then in effect, need to be applied to a financial institution if and when its liabilities exceed or are likely to exceed its assets, or it has suspended or is likely to suspend payment of its obligations Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 75#76Precedents of public sector support and resolution Precedents of public sector support and resolution in Japan Framework*1 Article 102, Paragraph 1 of Deposit Insurance Act (DIA) Article 126-2 of DIA Precedents Recent precedents of banks Date Amount (JPY bn) Jimoto Holdings (Kirayaka Bank)*2 Howa Bank Sep. 2023 18.0 Mar. 2014 16.0 Jimoto Holdings (Kirayaka Bank)*2 Dec. 2012 30.0 Tohoku Bank Sep. 2012 10.0 77 Bank Dec. 2011 20.0 Sep. 2011 35.0 Sep. 2011 30.0 304.5 Act on Special Measures for Strengthening Financial Functions Capital injection Tsukuba Bank Jimoto Holdings (Sendai Bank)*2 Other precedents of banks before 2011 Precedents of credit associations (Shinkumi/Shinkin) Item 1 measures Capital injection Item 2 measures Resona Bank Financial assistance exceeding N.A. payout cost Item 3 measures Temporary nationalization Specified Item 1 measures Jun. 2003 (12 cases) 213.1 (14 cases) Total 676.6 (33 cases) 1,960.0 N.A. N.A. PONV*4 Ashikaga Bank Nov. 2003 N.A.*3 N.A. Liquidity support Capital injection Specified Item 2 measures Supervision or control and Financial N.A. assistance for orderly resolution *1 There is no assurance that any such measures would be applied in any given case *2 Names of financial institutions in parentheses refer to the entities that effectively received capital injection *3 The Deposit Insurance Company of Japan acquired all the shares of the bank against nil consideration *4 See note 2 on p.75 N.A. N.A. N.A. N.A. PONV*4 Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 76#77Orderly resolution regime in Japan*1 An orderly resolution is expected to be commenced subsequent to PoNV after SMFG absorbs losses incurred by its material subsidiaries. 1 All Basel III eligible AT1 and Tier 2 instruments will be fully written down upon PONV pursuant to their terms. 2 Senior notes may incur losses depending on recovery value through court-administered insolvency proceedings. Business as usual Holding Company Illustrative orderly resolution process Reaching PONV*2 suspension of payment Transfer ("HoldCo") Systemically important assets and liabilities, incl. common stock of OpCo Other assets and liabilities, incl. HoldCo senior debt instruments, etc or having negative net worth (including the likelihood thereof) Bridge financial institution ("Good Bank”) OpCo common stock, etc. Common stock Орсо Deposits, etc Common stock / intercompany loan Operating Bank ("OpCo") Deposits, etc 1 AT1 and Tier 2 HoldCo ("Bad Bank") HoldCo senior debt, etc. Fully written down before insolvency proceedings *1: Based on a possible model of Japanese G-SIB's resolution under the SPE resolution strategy, as stated in "The FSA's Approach to Introduce the TLAC Framework" published in Apr. 16 and revised in Apr. 18. However, it is uncertain which 2 TLAC Senior Notes May incur losses depending on Insolvency proceedings recovery value resolution strategy or specific measures will be taken in a given case, including whether or not the SPE resolution strategy is Copyright © 2023 Sumitomo Mitsui Financial Group. to be chosen and implemented in a given case. *2 See note 2 on p. 75 All Rights Reserved. 77#78Comparison of recent Japanese bank AT1 bond issuances Pricing date Maturity 1st call date Currency Tranche size New issue spread Coupon structure Form of securities Coupon cancellation Going concern trigger Going concern loss absorption mechanism Gone concern trigger Gone concern loss absorption mechanism Dividend stopper Sumitomo Mitsui Financial Group Mitsubishi UFJ Financial Group, Inc. October 6, 2023 Perpetual September 8, 2023 Perpetual December 5, 2028 JPY JPY JPY 114.5 bn JGB+164bp Fixed to fixed Initial coupon: 1.889% Coupon after 1st call: 5y JGB+164bps January 15, 2029 JPY 72 bn JGB+161bp Fixed to floating Initial coupon: 1.963% Coupon after 1st call: 6mth Tibor + 122.9bps Subordinated notes Discretionary, mandatory (Non-cumulative) CET1 ratio falls below 5.125% Temporary write down Mitsubishi UFJ Financial Group, Inc. October 18, 2023 Perpetual January 15, 2029 USD USD 750 mn UST+329.4bp Fixed to fixed Initial coupon: 8.200% Coupon after 1st call: 5y UST + 329.4bps Specified Item 2 measures (tokutei dai nigo sochi) & bankruptcy event Permanent write down Yes Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 78#79Application of Basel III (capital ratio)*1 Mar. 24 Mar. 25 Mar. 26 Mar. 27 Mar. 28 Mar. 29 Revised standardized approach and internal ratings- based framework for credit Revised credit valuation adjustment (CVA) framework Implement RWA Revised operational risk framework Output floor Capital requirements Total capital ratio 72.5% 70% 65% 60% 55% 50% Implementation of output floor A: RWA based on internal ratings-based approach (IRB) B: RWA based on standardized approach (SA) Tier 1 ratio A > B x capital floor RWA = A CET1 ratio Capital conservation buffer*2 Common Equity Tier 1 Additional (CET1) Tier 2 B x capital floor Tier 1 A: IRB B: SA 2.5% 4.5% 1.5% 2.0% 10.5% A ≤ B x capital floor RWA = B x capital floor + G-SIB surcharge (CET1 capital) Bucket 1 Bucket 2 Bucket 3 1.0% Bucket 4 Bucket 5 1.5% 2.0% 2.5% 3.5% A: IRB *1 FSA announced that it will postpone the implementation of unimplemented Basel III standards until Mar. 24 for internationally active backs and bank holding companies including SMFG *2 Countercyclical buffer (CCYB) omitted B x capital floor B: SA Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 79#80BOJ's monetary policy Timeline Apr. 2013 Jan. 2016 Sep. 2016 Jul. 2018 Mar. 2021 Sep. 2021 Apr. 2022 Dec. 2022 Jul. 2023 Oct. 2023 Introduction of the Quantitative and Qualitative Monetary Easing (QQE) Introduction of Negative Interest Rate Policy Introduction of QQE with yield curve control Introduction of forward guidance for policy rates Further Effective and Sustainable Monetary Easing Introduction of Climate Response Financing Operations Clarification of consecutive fixed-rate purchase Operations Modification of the conduct of YCC BOJ conducted YCC tweak to allow rates over 0.5% Set to allow Long-Term Interest Rates to rise above 1.0% with revision to YCC Three-tier system in current accounts at BOJ (0.1)% Policy-Rate Balance 0% Macro Add-on Balance Basic Balance +0.1% Recent announcements Dec. 2022 Modification of the conduct of Yield Curve Control(YCC) The following measures are decided at the December meeting to encourage a smoother formation of the entire yield curve. • Significant increase in the amount of JGB purchases: from 7.3 trillion yen per month to about 9 trillion yen per month • Expansion of the range of 10-year JGB yield fluctuations from the target level: from around ±0.25% to around ±0.5% • Nimble responses for each maturity: Offer to purchase 10-year JGBs at 0.5% every business day through fixed-rate purchase operations Make nimble responses for each maturity by increasing the amount of JGB purchases even more and conducting fixed-rate purchase operations when deemed necessary Jul. 2023 BOJ conducted YCC tweak to allow rates over 0.5% • Offer to purchase 10-year JGBS at 1.0% every business day through fixed-rate purchase operations, in the range of around ±0.5% from the target level, to attain its 2.0% inflation target. Oct. 2023 Set to allow Long-Term Interest Rates to rise above 1.0% with revision to YCC • While BOJ will maintain the target level of 10-year JGB yields at around 0%, it will conduct YCC with the upper bound of 1.0% for these yields as a reference. Source: Bank of Japan Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 80#81Japanese economy Real GDP growth rate (annualized QoQ change)*1 (contribution, %) 30 Household sector Net Exports Private non-resi.investment Public demand Inventories Real GDP 220 10 0 (10) (20) (30) 1234123412341234123412341234123412341234123 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Indicators to measure progress out of deflation CPI (%) excl. fresh food excl. fresh food & energy 1 (1) (2) 5432-0 EŹ *3 Property price of residential land and condominiums *2 Residential land in all locations in Japan Residential land in Tokyo Condominium in Tokyo 170 160 150 140 130 120 110 100 90 80 70 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 GDP gap O-Unit labor cost 2018 2019 2020 2021 2022 2023 (%) GDP deflator 8 4 0 (4) (8) (12) 1234123412341234123412341234123412341234123 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1234123412341234123412341234123412341234123 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 *1 Cabinet Office. Seasonally adjusted series. Household sector = Private consumption + Private residential investment, Inventories = Change in private and public inventory, Public demand = Government consumption + Public investment *2 Ministry of Land, Infrastructure, Transport and Tourism. Real Estate Economic Institute Co., Ltd. Condominium in Tokyo is the first half of the year *3 Statistics Bureau, Cabinet Office and Ministry of Internal Affairs and Communications Copyright © 2023 Sumitomo Mitsui Financial Group. All Rights Reserved. 81