Sumitomo Mitsui Financial Group Announces

Revision of Earnings Forecast of

a Consolidated Subsidiary (Kansai Urban Banking Corporation)

 

 

TOKYO, April 30, 2010 --- Sumitomo Mitsui Financial Group, Inc. (“SMFG”) hereby announces that Kansai Urban Banking Corporation, a consolidated subsidiary of SMFG, has revised its earnings forecast for the fiscal year ended March 31, 2010, published on November 13, 2009 (see Appendix).

 

 

Notice regarding Revision of Earnings Forecast for Fiscal 2009

 

 

OSAKA, April 30, 2010 --- Kansai Urban Banking Corporation (“KUBC”) hereby announces that it has resolved, at the meeting of the Board of Directors held today, to revise its earnings forecast for the fiscal year ended March 31, 2010 (“fiscal 2009”) published on November 13, 2009, as follows:

 

1.    Revision of earnings forecast for fiscal 2009 (from April 1, 2009 to March 31, 2010)

 

(1)  Consolidated basis

(JPY million, except percentages and per share amounts)

	Ordinary Income	Ordinary Profit (Loss)	Net Income (Loss)	Net Income (Loss) per Share
Previous Forecast (A) (*)	¥100,000	¥  (1,500)	¥  2,500	¥  3.94
Revised forecast (B)	99,000	(39,300)	(24,100)	(40.14)
Difference (B – A)	(1,000)	(37,800)	(26,600)	–
Percentage change (%)	(1.0)	–	–	–
(Ref.)  fiscal 2008	108,796	(37,898)	(24,963)	(52.11)

 

(2) Non-consolidated

(JPY million, except percentages and per share amounts)

	Ordinary Income	Ordinary Profit (Loss)	Net Income (Loss)	Net Income (Loss) per Share
Previous Forecast (A) (*)	¥90,000	¥  (2,500)	¥  3,000	¥  4.73
Revised forecast (B)	89,400	(37,800)	(21,700)	(36.40)
Difference (B – A)	(600)	(35,300)	(24,700)	–
Percentage change (%)	(0.6)	–	–	–
(Ref.)  fiscal 2008	96,261	(38,225)	(24,815)	(51.80)

　

(*)  Previous forecast published on November 13, 2009 did not include the impact of the merger with The Biwako Bank, Limited on March 1, 2010

 

 

2.    Reasons for the revision

 

(1)  Revision of earnings forecast

(i)     Non-consolidated basis
The Japanese economy has been recovering since the beginning of this year because of the improvement of overseas economies and the effect of the economic stimulus measures. However, domestic capital expenditure and housing investment remain suppressed. Furthermore, the land prices in the public notice, both commercial and residential, in the Kinki district as of January 1, 2010, declined two consecutive years, showing further decline in this year than the last year. 
  Under these financial and economic circumstances, KUBC merged with The Biwako Bank, Limited on March 1, 2010.

KUBC expects core banking profit in fiscal 2009 to be JPY 21.1 billion, JPY 1.9 billion below the previous forecast because of the decline in loan balance and interest earned on lending. Further, total credit cost increased due mainly to further deterioration in creditworthiness of clients and unexpectedly sharp decline of collateral value of real estate, as well as additional provisions for KUBC’s assets that KUBC has decided to make in order to enhance its financial stability and reduce future risks. As a result, ordinary loss is expected to be JPY 37.8 billion, JPY 35.3 billion below the previous forecast. Net loss is expected to be JPY 21.7 billion, JPY 24.7 billion below the previous forecast.

 

(ii)    Consolidated basis
KUBC expects ordinary loss in fiscal 2009 to be JPY 39.3 billion, JPY 37.8 billion below the previous forecast. Net loss is expected to be JPY 24.1 billion, JPY 26.6 billion below the previous forecast. These amounts principally reflect the revisions of the non-consolidated earnings forecast.

 

KUBC expects year-end dividend of common stock to be ¥3.00 per share, as announced on November 13, 2009.

KUBC separately announced today a medium-term management plan from fiscal 2010.

 

(Reference 1) Earnings forecast on a non-consolidated basis (for fiscal 2009)

(JPY million)

			Previous Forecast (i) (*)			Revised Forecast (ii)		Difference (ii) – (i)
				Results for the nine months ended Dec. 2009
Core Banking Profit			¥23,000	¥16,129		¥21,100		¥ (1,900)
Banking Profit (before provision for general reserve for possible loan losses)			25,000	19,163		23,800		(1,200)
Ordinary Profit (Loss)			(2,500)	(7,222)		(37,800)		(35,300)
Net Income (Loss)			3,000	2,837		(21,700)		(24,700)
Total Credit Cost		26,500		24,288		59,800		33,300
	Of which, provision for general reserve for possible loan losses	1,300		128		300		(1,000)
Capital Ratio		Approx. 10%			10.29%		Approx. 9%

 

(*)  Previous forecast published on November 13, 2009 did not include the impact of the merger with The Biwako Bank, Limited on March 1, 2010.

 

(Reference 2) Earnings forecast on a consolidated basis (for fiscal 2009)

 

(JPY million)

	Previous Forecast (i) (*)			Revised Forecast (ii)		Difference (ii) – (i)
		Results for the nine months ended Dec. 2009
Ordinary Profit (Loss)	¥ (1,500)	¥ (7,689)		¥ (39,300)		¥ (37,800)
Net Income (Loss)	2,500	1,888		(24,100)		(26,600)
Capital Ratio	Approx. 10%		10.12%		Approx. 9%

 

(*)  Previous forecast published on November 13, 2009 did not include the impact of the merger with The Biwako Bank, Limited on March 1, 2010.

 

 

 

The forecasts presented in this material are based on information available as of today. Please note that actual results may vary from these forecasts due to various factors that may arise in the future.