Sumitomo Mitsui Financial Group Announces

Revision of Earnings Forecasts of

a Consolidated Subsidiary (Kansai Urban Banking Corporation)

 

 

TOKYO , September 24, 2009 --- Sumitomo Mitsui Financial Group, Inc. (“SMFG”) hereby announces that Kansai Urban Banking Corporation, a consolidated subsidiary of SMFG, has revised its earnings forecast announced on May 14, 2009 (see Appendix).

 

 

 

(Appendix)

Kansai Urban Banking Corporation Announces

Revision of Earnings Forecasts

 

 

OSAKA , September 24, 2009 --- Kansai Urban Banking Corporation (“KUBC”) announced today a revision of its earnings forecasts for the six months ending September 30, 2009 and the fiscal year ending March 31, 2010, which were announced on May 14, 2009.

 

1. Revision of Earnings Forecasts

(1) Six months ending September 30, 2009

(a) Consolidated basis

(Millions of yen, except percentages and per share amounts)

	Ordinary income	Ordinary profit (loss)	Net income	Net income per share
Previous forecast	¥ 50,000	¥  5,500	¥ 2,500	¥ 3.94
Revised forecast	50,000	(9,000)	200	0.31
Change	–	(14,500)	(2,300)	–
Percentage change	–	–	(92.0)%	–
Results for the six months ended September 30, 2008	55,620	2,554	2,222	4.64

 

(b) Non-consolidated basis

(Millions of yen, except percentages and per share amounts)

	Ordinary income	Ordinary Profit (loss)	Net income	Net income per share
Previous forecast	¥ 45,000	¥  4,800	¥ 2,500	¥ 3.94
Revised forecast	45,000	(8,500)	1,000	1.57
Change	–	(13,300)	(1,500)	–
Percentage change	–	–	(60.0)%	–
Results for the six months ended September 30, 2008	48,409	1,962	1,897	3.96

 

(2) Fiscal year ending March 31, 2010

(a) Consolidated basis

(Millions of yen, except percentages and per share amounts)

	Ordinary income	Ordinary Profit (loss)	Net income	Net income (loss) per share
Previous forecast	¥ 100,000	¥ 13,000	¥ 6,500	¥ 10.25
Revised forecast	100,000	(1,500)	2,500	3.94
Change	–	(14,500)	(4,000)	–
Percentage change	–	–	(61.5)%	–
Results for the year ended March 31, 2009	108,796	(37,898)	(24,963)	(52.11)

(b) Non-consolidated basis

(Millions of yen, except percentages and per share amounts)

	Ordinary income	Ordinary profit (loss)	Net income	Net income (loss) per share
Previous forecast	¥ 90,000	¥ 11,500	¥ 6,500	¥ 10.25
Revised forecast	90,000	(2,500)	3,000	4.73
Change	–	(14,000)	(3,500)	–
Percentage change	–	–	(53.8)%	–
Results for the year ended March 31, 2009	96,261	(38,225)	(24,815)	(51.80)

 

2. Factors behind the Revision

(1) Non-consolidated basis

(a) Six months ending September 30, 2009

KUBC expects banking profit (before provision of reserve for general loan losses) to be ¥12.5 billion, ¥1.0 billion more than the previous forecast, mainly attributable to gains on sales of bonds amid rising bonds markets.

KUBC is scheduled to merge with The Biwako Bank, Limited on March 1, 2010, and in order to improve its asset quality prior to the merger, it has revised its evaluation of collateral and borrower categories more conservatively because of the accelerated decline in land prices under the uncertain economic circumstances. As a result, KUBC expects total credit cost to be ¥20.5 billion, ¥14.5 billion higher than the previous forecast. Ordinary loss will be ¥8.5 billion, ¥13.3 billion lower than the previous forecast.

With recording of extraordinary gains on sale of headquarters building of ¥9.5 billion, KUBC expects net income of ¥1.0 billion, ¥1.5 billion lower than the previous forecast.

 

 

(b) Fiscal year ending March 31, 2010

KUBC revises its earnings forecast for the full year reflecting the factors mentioned above.

 

(2) Consolidated basis

KUBC revises its earnings forecast on a consolidated basis reflecting the factors mentioned above.

 

 

KUBC expects year-end dividend to be ¥3.00 per share, as announced on May 14, 2009.

 

 

(Reference) 1. Non-consolidated Earnings Forecast

(Millions of yen)

	Six months ending Sept. 30, 2009	Change from the previous forecast	Fiscal year ending March 31, 2010	Change from the previous forecast
Banking profit (before provision of reserve for general loan losses)	¥ 12,500	¥  1,000	¥ 25,000	¥   500
Ordinary profit (loss)	(8,500)	(13,300)	(2,500)	(14,000)
Net income	1,000	(1,500)	3,000	(3,500)
Total credit cost	20,500	14,500	26,500	14,500

 

(Reference) 2. Consolidated Earnings Forecast

(Millions of yen)

	Six months ended Sept. 30, 2009	Change from the previous forecast	Fiscal year ending March 31, 2010	Change from the previous forecast
Ordinary profit (loss)	¥ (9,000)	¥ (14,500)	¥ (1,500)	¥ (14,500)
Net income	200	(2,300)	2,500	(4,000)

 

 

This press release contains certain forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may materially differ from those contained in the forward-looking statements as a result of various factors.

The following items are among the factors that could cause actual results to differ materially from the forward-looking statements in this material: business conditions in the banking industry, the regulatory environment, new legislation, competition with other financial services companies, changing technology and evolving banking industry standards and similar matters.

The impact of the merger with The Biwako Bank Limited, which was announced on March 13, 2009, has not been factored into the earnings forecast of this press release.