Sumitomo Mitsui Financial Group, Inc.

 

 

Notice Regarding Filing of a Registration Statement on Form 20-F

with the U.S. Securities and Exchange Commission

 

 

TOKYO, October 21, 2010 --- Sumitomo Mitsui Financial Group, Inc. (SMFG, President: Teisuke Kitayama) hereby announces that, on October 20, 2010 (Eastern Daylight Time) we filed a registration statement on Form 20-F with the U.S. Securities and Exchange Commission ("SEC") with the aim of listing our securities on the New York Stock Exchange ("NYSE").

 

The date of listing on the NYSE will be November 1, 2010, subject to certain regulatory authorization and other procedures. The listing on the NYSE will not be accompanied by an offering of new shares.

 

A copy of the Registration Statement on Form 20-F can be viewed and obtained on EDGAR, the SEC’s Electronic Data Gathering, Analysis, and Retrieval system.

 

 

 

(Reference 1) Consolidated Financial Statements (IFRS)

 

Consolidated Statement of Financial Position

(In millions)

	At March 31,2009	At March 31,2010
Assets:
Cash and deposits with banks	¥      5,044,744	¥      6,239,398
Call loans and bills bought	973,772	1,127,035
Reverse repurchase agreements and cash collateral on securities borrowed	2,009,141	5,697,669
Trading assets	1,070,386	3,258,779
Derivative financial instruments	6,062,870	5,061,542
Financial assets at fair value through profit or loss	2,063,790	2,092,383
Investment securities	22,929,529	23,152,188
Loans and advances	74,669,294	71,634,128
Investments in associates and joint ventures	407,835	289,141
Property, plant and equipment	903,956	993,171
Intangible assets	357,851	710,235
Other assets	1,078,151	1,574,769
Current tax assets	50,349	40,362
Deferred tax assets	1,713,208	1,122,129
Total assets	¥    119,334,876	¥    122,992,929
Liabilities:
Deposits	¥     83,231,234	¥     85,697,973
Call money and bills sold	2,750,337	2,119,558
Repurchase agreements and cash collateral on securities lent	8,372,369	5,437,449
Trading liabilities	14,280	1,592,625
Derivative financial instruments	5,743,542	4,756,695
Borrowings	6,423,003	7,321,484
Debt securities in issue	5,277,482	5,323,156
Provisions	29,664	32,236
Other liabilities	2,495,142	3,066,327
Current tax liabilities	54,851	58,978
Deferred tax liabilities	26,957	24,778
Total liabilities	114,418,861	115,431,259
Equity:
Capital stock	1,370,777	2,337,896
Capital surplus	114,594	1,081,432
Retained earnings	1,204,952	1,663,618
Other reserves	228,316	555,289
Treasury stock	(124,024)	(124,062)
Equity attributable to shareholders of Sumitomo Mitsui Financial Group, Inc.	2,794,615	5,514,173
Non-controlling interests	2,121,400	2,047,497
Total equity	4,916,015	7,561,670
Total equity and liabilities	¥    119,334,876	¥    122,992,929

Consolidated Income Statement

(In millions, except per share data)

	For the fiscal year ended March 31,
	2009	2010
Interest income	¥   2,164,048	¥     1,766,047
Interest expense	676,293	346,810
Net interest income	1,487,755	1,419,237
Fee and commission income	570,603	650,437
Fee and commission expense	116,240	121,716
Net fee and commission income	454,363	528,721
Net trading income	134,298	330,130
Net income (loss) from financial assets at fair value through profit or loss	(17,951)	75,579
Net investment income	159,511	178,552
Other income	193,119	232,334
Total operating income	2,411,095	2,764,553
Impairment charges on financial assets	1,240,710	258,641
Net operating income	1,170,385	2,505,912
General and administrative expenses	992,487	1,096,957
Other expenses	261,770	236,760
Operating expenses	1,254,257	1,333,717
Share of post-tax loss of associates and joint ventures	54,318	37,461
Profit (loss) before tax	(138,190)	1,134,734
Income tax expense (benefit)	(56,166)	488,041
Net profit (loss) for the fiscal year	¥       (82,024)	¥       646,693
Profit (loss) attributable to:
Shareholders of Sumitomo Mitsui Financial Group, Inc.	¥      (154,954)	¥       528,692
Non-controlling interests	72,930	118,001
Earnings per share:
Basic	¥       (214.49)	¥        511.51
Diluted	(259.62)	481.59

 

Consolidated Statement of Comprehensive Income

(In millions)

	For the fiscal year ended March 31,
	2009	2010
Net profit (loss) for the fiscal year	¥       (82,024)	¥       646,693
Other comprehensive income:
Available-for-sale financial assets:
Gains (losses) arising during the fiscal year, before tax	(1,134,743)	616,762
Reclassification adjustments for (gains) losses included in net profit, before tax	305,299	(77,339)
Exchange differences on translating foreign operations:
Losses arising during the fiscal year, before tax	(176,865)	(15,009)
Reclassification adjustments for losses included in net profit, before tax	129	2
Share of other comprehensive income (loss) of associates and joint ventures	(16,260)	9,960
Income tax relating to components of other comprehensive income	350,240	(219,887)
Other comprehensive income (loss) for the fiscal year, net of tax	(672,200)	314,489
Total comprehensive income (loss) for the fiscal year	¥      (754,224)	¥       961,182
Total comprehensive income (loss) attributable to:
Shareholders of Sumitomo Mitsui Financial Group, Inc.	¥      (767,086)	¥       855,665
Non-controlling interests	12,862	105,517

 

(Reference 2) Reconciliation with Japanese GAAP

 

		(In billions)
		At and for the fiscal year ended March 31, 2010
		Total equity	Net profit (loss)
	IFRS	¥        7,561.7	¥         646.7
	Differences arising from different accounting for:
	1. Scope of consolidation	96.3	(48.2)
	2. Derivative financial instruments	107.8	(82.2)
	3. Investment securities	(165.1)	(100.8)
	4. Loans and advances	(203.5)	(232.8)
	5. Investments in associates and joint ventures	33.7	(19.6)
	6. Property, plant and equipment	4.0	(6.5)
	7. Lease accounting	(29.8)	8.7
	8. Defined benefit plans	112.9	(45.5)
	9. Deferred tax assets	(532.8)	93.8
	10. Classification of equity and liability	-	(20.2)
	11. Foreign currency translation	-	1.6
	12. Other	(74.9)	(31.1)
	13. Tax effect of the above	90.5	215.3
	Japanese GAAP	¥        7,000.8	¥        *379.2

(*) Includes a net profit of 107.7 billion yen attributable to non-controlling interests.

 

A brief explanation of adjustments with significant impacts arising from differences in equity and/or net profit (loss) between Japanese GAAP and IFRS is provided below. For a more detailed explanation, please refer to Note 51 "Reconciliation of IFRS Comparables from Previous GAAP" disclosed in the registration statement on Form 20-F filed on October 20, 2010 (Eastern Daylight Time).

 

Scope of Consolidation (Item 1)

·    Under IFRS, the SMFG Group consolidated an entity when it “controls” the entity. Control is generally presumed to exist when the SMFG Group has the power to govern the financial and operating policies by owning more than half of the voting power, or by legal or contractual arrangements.

·    A special purpose entity ("SPE") is consolidated under IFRS when the substance of the relationship between the SPE and the SMFG Group indicates that the SPE is controlled by the SMFG Group. Therefore certain SPEs such as securitization vehicles and investment funds which are not consolidated under Japanese GAAP are consolidated under IFRS.

 

Derivative financial instruments (Item 2)

(Hedge accounting)

·    For hedging relationships of types that do qualify for hedge accounting under Japanese GAAP but do not under IFRS, the SMFG Group reversed the hedge accounting under Japanese GAAP.

·    For hedging relationships of types that qualify under both Japanese GAAP and IFRS, the SMFG Group discontinued hedge accounting for these hedging relationships under IFRS as the conditions for hedge accounting under Japanese GAAP did not fully meet those required under IFRS.

(Fair value measurement of derivative financial instruments)

·    Japanese GAAP and IFRS require Over-the-Counter (“OTC”) derivatives (non-exchange traded derivatives) to be measured at fair value. In principle, there is no significant difference in the definitions of fair value, but in practice there is diversity in the application of valuation techniques used for fair value under Japanese GAAP and IFRS. Therefore, to meet the requirements of fair value under IFRS, adjustments have been made to the fair values under Japanese GAAP to reflect the spread between bid and asking prices, as well as credit risk adjustments for OTC derivatives.

 

Investment securities (Item 3)

(Fair value measurement of investment securities)

·    Under IFRS available-for-sale financial assets (and financial assets at fair value through profit or loss) should be measured at fair value. The fair value of financial instruments where there is no quoted price in an active market is determined by using valuation techniques.

·    In addition, the fair values of certain financial instruments under Japanese GAAP have been adjusted in order to meet the requirements of fair value under IFRS. For example, the last 1-month average of the closing transaction prices can be used for the fair value measurement of available-for-sale financial assets (listed stocks) under Japanese GAAP, whereas closing spot prices are used under IFRS.

(Impairment of available-for-sale financial assets)

·    Under IFRS, the SMFG Group assesses whether there is objective evidence that available-for-sale financial assets are impaired. For available-for-sale equity instruments, objective evidence of impairment includes a significant or prolonged decline in the fair value below cost.

 

Loans and advances (Item 4)

(Impairment of loans and advances)

·    Under Japanese GAAP, the reserve for possible loan losses for specifically identified significant loans is calculated by using the discounted cash flow (“DCF”) method which is based on the present value of reasonably estimated cash flows discounted at the original contractual interest rate of the loan. Under IFRS, the allowance for loan losses for individually significant impaired loans is calculated by using the DCF method based on the best estimate of cash flows discounted at the original effective interest rate. In addition, the scope of the loans that are subject to the DCF method under IFRS is wider than that under Japanese GAAP.

·    Under IFRS, the allowance for loan losses for the remaining loans is collectively calculated by homogeneous group using statistical methods based on the historical loss experience and incorporating the effect of the time value of money. A qualitative analysis based on related economic factors is then performed to reflect the current conditions at the end of the reporting period. Under IFRS, the allowance for the non-impaired loan losses is calculated as the incurred but not yet identified (“IBNI”) losses for the period between the impairment occurring and the loss being identified, although the allowance under Japanese GAAP is calculated based on the expected losses.

(Loan origination fees and costs)

·    Under IFRS, loan origination fees and costs that are incremental and directly attributable to the origination of a loan are deferred and thus, included in the calculation of the effective interest rate.

 

Deferred tax assets (Item 9)

·    Under IFRS, deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized, without limiting the period over which the temporary difference can be utilized.