#1Fixed Income Investor Presentation December 2021 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 2021 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: the COVID-19 pandemic and collateral events; 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 condition and our operating results, and investors' decisions. Exchange rates (TTM) Sep. 21 SMFG Definitions Sumitomo Mitsui Financial Group, Inc. Sumitomo Mitsui Banking Corporation SMBC Trust Bank SMBC SMBC Trust SMFL SMBC Nikko SMCC SMBCCF SMDAM SMBCAC 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 SMBC Bank International, SMBC Bank EU, SMBC (China) SMFG consolidated SMBC non-consolidated Expenses excluding non-recurring losses Profit 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) Sep. 20 USD JPY 105.78 EUR JPY 124.18 Mar. 21 JPY 110.71 JPY 129.75 JPY 111.95 JPY 129.90 OCI International business Market/Treasury related businesses Net unrealized gains on other securities Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 1#3Agenda Results •Key credit messages ⚫Financial results Impact of COVID-19 Balance sheet and loan balance • Loans • Asset quality Funding & Capital Foreign currency assets and funding Foreign currency issuance and redemptions ⚫TLAC Capital strategy Credit ratings of selected G-SIBS Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 2#4Key credit messages (Consolidated, unless otherwise indicated, 1H FY3/22) Strong and diversified earnings capability USD 4.6 bn (FY3/21) SMFG's profit attributable to owners of parent*1 Breakdown of consolidated net business profit by business unit Sound loan portfolio Robust liquidity 0.88% SMFG NPL ratio 0.58% SMBC NPL ratio (non-consolidated) 55.5% Loan to deposit ratio 144.7% LCR Global Retail Markets Wholesale Global (average Jul. -Sep. 21) Sound capital position High credit ratings 15.92% CET1 ratio (Fully-loaded basis) A1/A1 SMBC/SMFG Moody's rating 18.28% Total capital ratio A/A- SMBC/SMFG S&P rating *1 Converted into USD at period-end exchange rate (As of Oct. 31, 2021) Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 3#51H FY3/2022 financial results 1H FY3/21 YOY (JPY bn) FY3/22 Consolidated gross 1 2,806.2 1,431.3 +53.9 profit G&A expenses 1,747.1 875.9 2 Overhead ratio 62.3% 61.2% +39.5 +0.5% Equity in gains (losses) 3 25.0 30.7 +20.5 of affiliates Consolidated 4 1,084.0 586.1 +34.9 net business profit 5 Total credit cost 360.5 26.7 (173.5) 6 Gains (losses) on stocks 92.6 81.2 +44.9 Other income 7 (105.0) (10.6) +30.4 (expenses) 8 Ordinary profit 711.0 630.0 +283.7 Extraordinary gains 6 (38.8) (3.3) +1.1 (losses) 10 Income taxes 156.3 167.4 +96.0 Profit attributable to 11 512.8 456.1 +185.9 owners of parent 12 ROE 5.4% 9.4% +3.7% Consolidated gross profit: increased YoY due to steady progress of RT, WS, and GB Business Units, despite lower gains on sales of bonds in GM Business Unit. G&A expenses: increased YoY mainly due to business recovery from COVID-19, as well as higher marketing cost of SMCC, which is successfully increasing new customers. ● Equity in gains of affiliates: increased YoY mainly due to business recovery in SMFL (incl. SMBCAC) and affiliates in Asia. • Total credit cost: sharply decreased YoY due to the reversal of credit cost mainly from large borrowers at SMBC. Gains on stocks: increased YoY due to gains on sales of stocks related to the reorganization of Kansai Mirai FG and higher gains on ETF sales. Gains on sales of strategic shareholdings: JPY 36 bn (YoY JPY 1 bn) Other income: increased YoY due to the absence of the loss from forward dealings recorded in FY3/21, which aim to mitigate risk of stock prices. Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 4#6Impact of COVID-19 (1) Consolidated net business profit Increased due to business recovery in the RT, WS, and GB Business Units. (JPY bn) Consolidated net business profit RT.WS.GB +48.9 (JPY bn) *1 Total of RT/WS/GB Business Units 586.1 520.6 GM (9.1) 494.9 505.3 483.9 Others 471.7 551.2 1H FY3/21 1H FY3/22 1H 1H FY3/18 FY3/19 1H FY3/20 1H FY3/21 1H FY3/22 *1 Reflecting the change in the management accounting system in FY3/22 Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 5#7Impact of COVID-19 (2) Credit cost Full-year forecast was revised. Credit cost in 1H sharply decreased due to the reversals, but there are some downgrade risks in specific industries in 2H. (JPY bn) 300 150 Group companies SMBC Group companies Breakdown of credit costs SMBC (JPY bn) Build Reversal 1H 300 242.7 200 100 49.6 0 (100) FY3/20 FY3/21 FY3/22 26.7 SMBC Group companies Build (JPY bn) 51.6 Group companies 40 SMBC 200 Initial New forecast forecast (24.9) 121.0 117.8 Reversal (65) 100 FY3/22 1H FY3/22 0 FY3/20 FY3/21 FY3/22 Downgrade risks in specific industries Restaurants, Leisure and Hotel, Airline, Automobile Maintain steady level Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 6#8Balance sheet and loan balance Balance sheet (as of Sep. 21) (Consolidated) Total assets : JPY 241.3 tn Cash and due from banks JPY 70.9 tn Loans JPY 85.0 tn Deposits, negotiable certificates of deposit (NCD) JPY 153.3 tn Securities JPY 36.3 tn JGBs JPY 13.4 tn Other liabilities JPY 75.7 tn Other assets JPY 49.1 tn Total net assets JPY 12.4 tn Total stockholders' equity JPY 9.8 tn Loan to deposit ratio Risk-weighted assets 55.5% JPY 68.7 tn ROE (Denominator: Total stockholders' equity) 9.4% Loan balance (JPY tn) ■Domestic loans ■ Overseas loans (Non-consolidated) 81.9 82.1 81.1 25.0 23.8 25.7 56.9 57.3 56.4 HH Mar. 19 Mar. 20 Mar. 21 Sep. 20 Sep. 21 Of which loans to the Japanese government, etc. and SMFG 2.6 tn 3.0 tn 2.2 tn Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 7#9Domestic loans*1 Balance (JPY tn) ■ Others ■Individuals 60 ■Mid-sized corporations and SMEs 60 ■Large corporations 60 50 40 40 30 30 20 20 10 (Non-consolidated) | Spread*2 (Non-consolidated) 1.4% Mid-sized corporations and SMEs Large corporations 1.2% 1.0% 0.8% 0.6% 0 HH 0.4% Mar. 19 Mar. 20 Mar. 21 Sep.20 Sep.21 *1 Managerial accounting basis *2 Monthly average loan spread of existing loans, excludes loans to the Japanese government Mar. 16 Sep. 16 Mar. 17 Sep. 17 Mar. 18 Sep. 18 Mar. 19 Sep. 19 Mar. 20 Sep. 20 Mar. 21 Sep. 21 Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 8#10Overseas loans*1 Balance (USD bn) 300 ■ EMEA Americas ■ Asia 250 200 150 100 50 50 | Spread*2 1.4% 1.2% 1.0% 0.8% 0.6% 0 0.4% Mar. 19 Mar. 20 Mar. 21 Sep.20 Sep.21 Mar. 16 Sep. 16 Mar. 17 Sep. 17 Mar. 18 *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 Sep. 18 Mar. 19 Sep. 19 Mar. 20 Sep. 20 Mar. 21 Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. Sep. 21 9#11Asset quality - solid loan portfolio NPLs and NPL ratio*1 (JPY tn) 2.0 Total credit cost and total credit cost ratio*2 O Consolidated (left axis) Non-consolidated (left axis) Consolidated (right axis) (JPY bn) 8% 600 O-Non-consolidated (right axis) 500 Consolidated (left axis) Non-consolidated (left axis) Consolidated (right axis) -Non-consolidated (right axis) (bp) 60 50 50 1.6 6% 400 360.5 36bp 40 40 1.2 0.8 0.7 0.6 0.6 300 30 30 242.7 1.0 4% 200 170.6 25bp 200.2 0.9 20 20 18bp 128.6 100 110 10 5bp 49.6 26.7 0.4 2% 0 0.4 (24.9) 0.98% 0.88% 0.68% (100) (10) 0.65% 0.58% 0.0 0.46% Mar. 17 Mar. 18 Mar. 19 Mar. 20 Mar. 21 Sep. 21 0% (200) (20) FY3/18 FY3/19 FY3/20 FY3/21 1H FY3/21 FY3/22 1H Coverage ratio*3 Consolidated Non-consolidated 66.26% 65.37% 81.71% 80.50% *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 © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 10#12Asset quality – securities portfolio*1 JGBs - Foreign bonds Stocks (JPY tn) JGBs (JPY tn) Foreign bonds (JPY tn) -Net unrealized gains (losses) Net unrealized gains (losses) 14.3 13.4 7.1 12.1 12.2 11.6 (Consolidated) Stocks Net unrealized gains (losses) 2.36 2.26 1.27 3.7 3.8 2.7 0.26 0.01 (0.01) (0.01) (0.01) (0.02) Mar. 19 Mar. 20 Mar. 21 Sep. 21 Mar. 19 Mar. 20 Mar. 21 Sep. 21 Mar. 19 Mar. 20 Mar. 21 Sep. 21 *1 Securities classified as other securities. Includes negotiable certificates of deposit classified as "Cash and due from banks," and beneficiary claims on loan trust classified as "Monetary claims bought," in addition to "Securities" stated in the consolidated balance sheets Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 11#13Agenda Results •Key credit messages ⚫Financial results Impact of COVID-19 Balance sheet and loan balance • Loans • Asset quality Funding & Capital Foreign currency assets and funding Foreign currency issuance and redemptions ⚫TLAC Capital strategy Credit ratings of selected G-SIBS Copyright 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 12#14Foreign currency assets and funding Non-JPY Balance Sheet Overview *1 (as of Sep. 21) 1 Non-JPY Balance Sheet Development (USD bn) 600 (USD bn) (USD bn) Deposits 600 400 Med-Long term funding Loans, etc 550 550 300 500 500 200 450 450 Deposits (incl. deposits from 100 400 Interest earning assets central banks) 400 (Loans, trade bills 0 350 and securities, etc.) 350 Mar. 18 Mar. 19 Mar. 20 Mar. 21 Sep. 21 300 300 Medium-to long-term Currency Breakdown 250 funding 250 (incl. Corporate bonds, Currency swaps, etc.) 200 200 Interest earning assets Deposits Medium-long term funding *3 AUD Others 150 Others (incl. highly CDs & CP 150 liquid assets) *2 EUR Others Others 100 100 AUD GBP GBP USD 50 Foreign bonds, NCD Interbank (incl. Repo) 50 USD USD EUR EUR 0 0 Assets Liabilities *1 Managerial accounting basis. Sum of SMBC and Major local subsidiaries *2 Deposit placed with central banks, etc. *3 Excludes JPY funding, certificate of deposits and transferable deposits. Among all bonds priced by Sep. 21, only includes issuance with original maturity of two years or more and tap its issue as of Sep. 21. Translated into USD at the exchange rates as of Sep. 21. Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 13#15Redemption Issuance Foreign currency issuances and redemptions Non-JPY issuances and redemptions*1 FY3/18 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 FY3/24 FY3/25 FY3/26 FY3/27 (USD bn) 20 16.6 15 14.4 0.5 10.5 10.0 10 13.0 0.9 11.1 5.3 6.4 0.9 LO 5 7.9 ■SMBC covered bonds SMBC senior bonds ■SMFG senior bonds SMBC subordinated bonds ■SMFG subordinated bonds 4.1 5.5 3.6 2.9 1.1 9:3 (0.5 (1.6) (1.0) (1.3) (1.2) (1.2) (0.6) (0.5) (1.3) (5.8) (7.4) (6.9) (2.2) (7.6) (5) (6.5) (6.0) (4.9) (7.7) (4.3) (9.3) (2.5) (7.4) (6.9) (7.6) (0.9) (1.5) (7.6) (1.8) (7.3) (10) (9.2) (9.6) (9.4) (9.3) (9.9) *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. 21, only includes issuance with original maturity of two years or more and its tap issue as of Sep. 21. Translated into USD at the exchange rate as of the end of each period for FY3/18-FY3/21, and as of Sep. 21 for FY3/22-FY3/27 Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 14#16TLAC requirements TLAC and capital buffer requirements TLAC ratio (transitional basis) 2019 - After 2021 (JPY bn) Sep 21 2022 External TLAC A 20,052.9 Minimum external TLAC requirements (before deduction of capital buffers) 16% 18% (RWA basis) Risk-weighted assets (RWA) B 68,689.4 +) capital buffers*1 Effective required level of minimum +3.5% +3.5% TLAC ratio (RWA basis) (A/B) C 29.19% Capital buffers (including CCyB) D (3.52%) 19.5% 21.5% external TLAC (RWA basis) Ref: TLAC ratio of RWA (after deduction basis) (C-D) E 25.67% Leverage exposure (LE) *2 F 199,852.5 Minimum external TLAC 6% 6.75% requirements (LE basis) TLAC ratio (LE basis) (A/F) G 10.03% *1 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 *2 LE excludes deposits with the Bank of Japan under the FSA's temporary relief on leverage ratio calculation until Mar 22 Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 15#17Redemption TLAC Issuance Results and Strategy TLAC issuances and redemptions*1 (USD bn) Issuance 15 13.0 10 5.3 5 11.1 7.9 5.5 - USD ■ EUR AUD Others Maintain issuance level of USD8-10bn 0 Mar. 18 Mar. 19 Mar.20 Mar.21 Mar.22 Mar.23 Mar.24 Mar.25 (5) (10) *2 TLAC Ratio (RWA) Requirement SMFG 24.7% (4.3) (6.0) (6.5) (7.7) 19.5% 19.5% 19.5% 21.5% 21.5% 21.5% 21.5% 30.5% 29.5% 29.3% *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. 21, only includes issuance with original maturity of two years or more and its tap issue as of Sep. 21. Translated into USD at the exchange rate as of the end of each period for FY3/18-FY3/21, and as of Sep. 21 for FY3/22-FY3/25 *2 including capital buffers (other than CCyB) Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 16#18Capital Basel III fully-loaded basis OCI CET1 OCI AT1 Tier2 1.4% 0.9% | Post-Basel III excl. OCI (financial target) OCI 16.4% 15.6% 16.0% 15.9% Mar. 19 Mar. 20 Mar. 21 Sep. 21 Mar. 19 Mar.20 Mar.21 Sep.21 (JPY tn) RWA 58.9 61.6 66.0 68.7 Mid-long term Target 10% Requirement 8% Copyright 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 17#19Subordinated bonds Investment highlights Recent issuances and maturity profile Recent issuances (AT1/Tier 2) High credit quality Strong capital: High CET1 ratio Strong liquidity: Low loan to Security type AT1 deposit ratio Strong credit : Low NPL ratio Tier 2 (USD) Issue date Sep. 9, 2020 Sep. 17, 2021 Amount JPY 100 bn USD 850 mn Tenor PerpNC10 Coupon 20y 1.109%*1 2.930% High credit rating High credit rating of senior and subordinated bonds (Tier 2) due in part to the support framework Maturity profile by debt class* AT1 (USD bn) 0.8 FY3/22 23 24 25 25 Tier 2 (USD bn) Scarcity value Offers investment diversification opportunities to investors 3.4 ■ JPY 1.3 1.3 0.8 0.8 0.9 26 27 27 28 29 29 ■ USD JPY 2.6 1.6 1.1 0.9 30 30 31 32 32 1.1 0.5 FY3/22 23 24 25 26 27 28 29 30 31 32 32 *1 Reset at 5y JGB+105bp every 5 years after the first call date *2 AT1 Capital and Tier 2 Capital include previously issued Basel 2-eligible bonds. The sum of SMFG and SMBC, each on a non-consolidated basis. 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. Include all bonds priced by Sep. 21. Translated at the exchange rate as of Sep. 21 Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 18#20Credit ratings of selected G-SIBS OpCo senior unsecured notes / Excluded liabilities Notch Difference (between OpCo senior and TLAC senior notes) ■ Moody's TLAC eligible senior unsecured notes Basel III Tier 2 notes (As of Oct. 31, 2021) SMFG Mizuho MUFG BAC Citi JPM Barclays HSBC DB*1 BNP*1 CS UBS*2 Aa2 Aa3 0 A1 3 3 3 A2 A3 Baa1 3 2 4 3 4 3 Baa2 Baa3 Ba1 Ba2 | S&P SMFG Mizuho MUFG BAC Citi JPM Barclays HSBC DB*1 BNP*1 CS UBS*2 AA- A+ A A- BBB+ BBB BBB- BB+ 2 2 2 3 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 2 2 2 3 Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 19#21Appendix#22SMFG / SMBC overview SMFG (Consolidated) Global banking group originated in Japan (FY3/21) Market Capitalization (TSE:8316, NYSE:SMFG) Assets Loans B/S Deposits*2 Loans/Deposits Gross Profit P/L Net Income CET1 ratio NPL ratio Ratings (Moody's / S&P) Business Franchise *1 SMBC (Non-consolidated) Core operating entity within SMFG franchise (As of Nov. 24, 2021) JPY 5.4 tn / USD 46.4 bn unlisted (wholly-owned by SMFG) JPY 216 tn / USD 1,950 bn JPY 82 tn USD 740 bn JPY 243 tn / USD 2,191 bn JPY 85 tn USD 769 bn JPY 142 tn / USD 1,283 bn 55.1% JPY 2,806 bn / USD 25.3 bn Consolidated gross profit JPY 513 bn / USD 4.6 bn Profit attributable to owners of parent 16.00% 0.98% A1/A- JPY 135 tn / USD 1,217 bn 60.8% JPY 1,482 bn / USD 13.4 bn Gross banking profit JPY 338 bn / USD 3.1 bn Net income (As of Oct 31, 2021) 0.65% A1/A • Holds top-tier companies in banking, leasing, securities services, consumer finance, and other businesses • 149 overseas offices*3 *1 (As of Oct 31, 2021) • 453 domestic branches ● 27 million retail accounts (As of Sep. 30, 2021) (As of Sep. 30, 2021) *1 Converted into USD at March 2021 fiscal year-end exchange rate Market capitalization converted to USD at the Nov. 24, 2021 exchange rate *2 Excludes negotiable certificates of deposits *3 Excludes offices planned to be closed Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 21#23Group structure*1 Sumitomo Mitsui Financial Group Consolidated total assets Consolidated subsidiary Equity-method affiliate Banking JPY 241 tn Credit Moody's S&P Fitch R&I JCR Sumitomo Mitsui Banking Corporation SMBC Trust Bank ratings A1/P-1 A-/- A/F1 A+/- AA-/- Moody's S&P A1 A Fitch A (92%) PT Bank BTPN Tbk Leasing (SMBC 32%, SMFL 68%) SMBC Aviation Capital (50%) Sumitomo Mitsui Finance and Leasing Consumer Finance Securities SMBC Nikko Securities Sumitomo Mitsui Card SMBC Consumer Finance Japan Research Institute Others (50.1%) Sumitomo Mitsui DS Asset Management *1 As of Sep. 21 Unless otherwise stated, each consolidated subsidiary is a wholly owned subsidiary of Sumitomo Mitsui Financial Group Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 22#24Trend of major income components - Consolidated Consolidated gross profit Consolidated net business profit*1 Consolidated gross profit ■For Apr. to Sep. period (JPY bn) 2,000 2,846.2 2,806.2 2,768.6 1,500 (JPY bn) 3,500 3,000 2,500 2,000 1,377.4 1,431.3 1,000 1,500 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 ■Consolidated net business profit (new definition) ■Consolidated net business profit (old definition) ■ For Apr. to Sep. period 1,192.3 1,085.0 1,084.0 586.1 551.2 FY3/ 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Net income/ Profit attributable to owners of parent Total credit cost (JPY bn) 1,000 Consolidated net income For Apr. to Sep. period (JPY bn) ■Total credit cost 1,500 For Apr. to Sep. period 726.7 750 703.9 512.8 1,000 500 456.1 270.1 250 500 0 0 (250) (500) (500) FY3/ 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 360.5 170.6 110.3 200.2 26.7 FY3/ 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 *1 We have changed the definition of "Consolidated net business profit" from the FY 3/15. The figure for FY 3/14 has been adjusted retrospectively Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 23#25Diversified 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 FY3/22 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. 21) By industry ■Material and energy ■Finance and insurance ■Transportation ■Various services ■Construction and real estate ■Retail, wholesale and commodities Automobile and machinery Electronics ■IT Others By domicile EMEA Western Europe Eastern Europe Northern Europe Middle East Africa Asia/Pacific Asia Pacific Americas North America Central and South America *1 Includes major overseas banking subsidiaries Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 24#26Performance of SMBC and group companies SMBC Other major group companies (left results of 1H FY3/22/right: YoY) 1H *1 YOY (JPY bn) FY3/22 SMBC Nikko SMCC SMBCCF 1 Gross banking profit 746.6 (2.0) (JPY bn) Gross profit 205.7 +6.8 197.7 +9.3 127.6 (3.7) 2 o/w Net interest income 488.6 +53.0 Expenses 156.6 +8.4 164.2 +11.6 58.3 +6.2 o/w Gains (losses) on cancellation of 3 31.0 +19.4 Net business investment trusts 49.1 (1.6) 33.3 (2.7) 69.3 (9.9) profit 4 Domestic 298.7 +27.1 Net income 36.2 (4.0) 14.8 (4.1) 32.1 (11.7) 5 Overseas 189.9 +25.9 6 o/w Net fees and commissions 166.9 +22.7 (Equity method affiliate) *2 SMBC Trust SMDAM 50% SMFL 50% 7 Domestic 85.9 +17.5 8 Overseas 81.0 +5.2 Gross profit 21.9 +3.7 19.0 +3.1 108.3 +28.0 o/w Net trading income+ 9 90.1 (77.8) Expenses 21.9 (0.3) 14.8 (1.2) 49.7 +8.4 Net other operating income 10 o/w Gains (lossses) on bonds 27.8 (77.3) Net business 0.0 +4.0 4.2 +4.3 63.0 +21.8 profit 11 Expenses 418.3 +20.4 Net income (0.2) +5.8 2.7 +3.3 35.9 +23.2 12 Banking profit 328.3 (22.4) 13 Total credit cost (24.9) (153.5) 14 Gains (losses) on stocks 57.6 +23.4 15 Extraordinary gains (losses) 5.0 +70.4 16 Net income 286.2 +141.8 *1 Including profit from overseas equity-method affiliates of SMBC Nikko (consolidated subsidiaries of SMFG) *2 Managerial accounting basis Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 25 25#27Balance sheet Consolidated Composition of loans and deposits *1,2 (JPY tn) Sep.21 vs Mar.21 3% Total assets 241.3 (1.2) 3% 18% 15% o/w Cash and due from banks 70.9 (1.6) o/w BOJ's current account balance*1 56.8 (3.0) 15% o/w Loans 85.0 (0.1) Domestic loans Domestic 12% deposits *1 o/w Domestic loans 56.4 (0.5) 65% 2% 67% *2 o/w Large corporations 19.2 (0.2) Mid-sized corporations & SMEs Individuals*2 *2 18.9 (0.1) *3 12.0 (0.2) o/w Securities 36.3 (0.3) o/w Other securities 36.1 (0.3) ■ Others ■Spread-based ■Prime-rate-based ■Mortgage, etc. Ordinary Current Time ■Foreign currency Others (Sundry, etc.) o/w Stocks 3.8 +0.1 JGBs 13.4 (0.8) Foreign bonds 12.2 +0.1 (USD bn) Total liabilities 229.0 (1.7) o/w Deposits 141.3 (0.7) o/w Domestic deposits *1 114.1 +1.4 Interest earning assets 342 Individuals 54.8 +1.3 Corporates 59.3 +0.1 Others 138 o/w NCD 12.0 (0.6) Deposits (incl. deposits from central banks) 235 Mid-long term funding (incl. corporate bonds, currency swaps, etc.) 134 CD/CP 76 Total net assets 12.4 +0.5 Foreign bonds, NCD 75 Interbank (incl. Repo) 110 Loan to deposit ratio 55.5% Assets Liabilities 555 *1 Non-consolidated *2 Managerial accounting basis *3 After adding back the portion of housing loans securitized in 1H FY3/22 of JPY53.3bn *4 Sum of SMBC and major local subsidiaries Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 26#28Capital / RWA Sep. 21 Requirement Capital ratio Total capital Total capital ratio 18.28% 11.5% Tier1 capital Mar. 21 Sep. 21 (JPY bn) 12,289.3 12,563.1 11,199.3 11,577.4 CET1 ratio (Basel III fully-loaded basis) 15.92% 8% o/w CET1 capital 10,562.8 10,938.9 excl. OCI 12.7% Tier2 capital 1,090.0 985.7 CET1 ratio (Post-Basel III reforms) 11.7% 8% External TLAC 19,373.3 20,052.9 excl. OCI 10.0% Risk-weighted assets 66,008.0 68,689.4 External TLAC ratio Leverage exposure 198,170.8 199,852.5 RWA basis 25.67% 16% Leverage exposure basis 10.03% 6% Leverage ratio 5.79% 3% LCR (Average 2Q FY3/22) 144.7% 100% *1 Excluding countercyclical buffer Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 27#29Financial highlights - IFRS*1 Income statement data Reconciliation with Japanese GAAP (JPY bn) FY3/20 FY3/21 (At and for FY3/21, JPY bn) |Total equity Net profit Net interest income 1,316.3 1,383.1 IFRS 12,276.2 705.1 Net Fee and commission income 943.3 972.7 Scope of consolidation 144.1 (5.7) Net Trading income 134.1 237.7 Derivative financial instruments 235.0 (94.8) Other operating income 310.2 572.1 Total operating income 2,703.9 3,165.6 Net operating income 2,443.9 2,883.1 Profit before tax 282.8 956.5 Net profit 231.0 705.1 | Statement of financial position data (JPY bn) FY3/20 FY3/21 Total assets Loans Deposits Total equity 212,158.5 235,025.0 94,671.8 97,714.9 138,431.4 155,493.7 Differences arising from different accounting for: Investment securities (342.9) (113.3) Loans and advances 337.9 (60.9) Investments in associates and 95.5 (3.4) joint ventures Property, plant and equipment 22.2 2.5 Lease accounting 0.8 (1.0) Defined benefit plans 46.0 0.0 Deferred tax assets (36.7) 15.5 Foreign currency translation Classification of equity and 20.2 (658.4) (12.5) liability Others (95.8) (15.4) Tax effect of the above (124.7) 79.6 10,934.9 12,276.2 Japanese GAAP 11,899.1 515.9 *1 Consolidated Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 28#30Yen 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) ■1 year or less ■1 to 5 years ■5 to 10 years More than 10 years 40 40 55 35 30 50 25 22 19.4 17.8 31.5 28.4 28.9 16.3 16.4 12.3 11.9 10.6 10.0 9.0 17.6 17.0 Mar.08 Mar.09 Mar. 10 Mar. 11 Mar.12 Mar. 13 Mar. 14 Mar.15 Mar. 16 Mar. 17 Mar.18 Mar.19 Mar.20 Mar.21 Sep.21 20 15 12.6 10 5 0 of which JGBs (JPY tn) 13.8 14.0 9.8 8.0 9.3 6.3 7.1 14.3 13.4 Average duration (years)*1 Unrealized 2.4 1.8 1.1 1.4 1.9 1.8 1.1 1.8 2.8 2.9 2.3 3.2 2.9 2.5 2.7 gains (losses) (129.5) (1.2) 116.1 71.9 104.4 95.3 60.0 45.9 103.8 57.5 44.2 60.5 21.4 7.9 11.6 (JPY bn) "2 *1 Excluding bonds classified as held-to-maturity, bonds for which hedge-accounting is applied, and private placement bonds. Duration of 15-year floating rate JGBs is regarded as zero. Duration at Mar. 02 is for JGB portfolio only *2 15-year floating-rate JGBs have been evaluated at their reasonably estimated price from Mar. 09 Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 29 29#31Strategic shareholdings (JPY tn) 6.09 Book value of domestic listed stocks Reduction FY3/21 1H FY3/22 1.80 Previous reduction plan New reduction Plan 1.33 1.29 1.27 1.25 JPY 55 bn JPY 21 bn Consent of sales JPY 48 bn Total JPY 124 bn Apr. 01 Sep.15 Mar. 20 Sep. 20 Mar. 21 Sep. 21 Mar. 25 Ratio of shares to CET1*1 149% 28% 16% 16% 15% 15% *1 Basel III fully-loaded basis, excl. OCI Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 30 50#32Overseas loan balance classified by borrower type*1 Total ■Non-Japanese corporations and others (product type lending) Japanese corporations By region (Sep. 21) ■Non-Japanese corporations and others (product type lending) ■Japanese corporations (USD bn) 300 250 200 150 100 50 50 Mar. 18 Mar. 19 Mar. 20 Mar. 21 Sep. 21 *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. 21)*2 ■Non-Japanese corporations and others (product type lending) ■Japanese corporations 100% 75% 50% 25% 0% Sydney Hong Kong Indonesia Singapore China Bangkok Copyright ©2021 Sumitomo Mitsui Financial Group. Seoul All Rights Reserved. 31#33Loan balance in Asian countries/areas*1 Hong Kong Singapore (JPY bn) (JPY bn) 2,500 2,500 2,000 2,000 2,000 1,500 1,500 1,500 1,000 1,000 1,000 500 500 500 0 0 0 Mar. 18 Mar. 19 Mar.20 Mar. 21 Sep.21 Mar. 18 Mar. 19 Mar.20 Mar. 21 Sep.21 China Indonesia (JPY bn) (JPY bn) Australia (JPY bn) 2,500 ilu Mar. 18 Mar. 19 Mar.20 Mar. 21 Sep.21 Thailand (JPY bn) 2,000 2,000 1,000 1,500 1,500 750 1,000 1,000 500 500 500 250 0 0 0 Mar. 18 Mar. 19 Mar. 20 Mar. 21 Sep.21 Mar. 18 Mar. 19 Mar. 20 Mar. 21 Sep.21 Mar. 18 Mar. 19 Mar. 20 Mar. 21 Sep.21 Taiwan India Korea (JPY bn) (JPY bn) (JPY bn) 1,000 1,000 1,000 750 750 750 500 500 500 250 250 250 0 0 Mar.18 Mar. 19 Mar.20 Mar. 21 Sep.21 Mar.18 Mar.19 Mar.20 Mar. 21 Sep.21 Mar. 18 Mar.19 Mar.20 Mar. 21 Sep.21 *1 Managerial accounting basis. Sum of SMBC and Major local subsidiaries Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 32#34Japanese and non-Japanese corporate exposures*1 Japanese Internal Rating Non-Japanese (Certainty of debt (JPY tn) 40 30 20 10 0 repayment) 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) Others Exposure to China Real estate / REIT JPY 1.8 tn ■Mar.20 ■Mar.21 ■ Sep.21 JPY 55.8 tn Total (as of Sep.21) *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 38.1 tn Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 33#35SMBC Nikko Financial results Client assets 1H FY3/21 YOY (JPY bn) FY3/22 (JPY tn) 80 60 Net operating revenue 357.9 178.3 +15.4 60 60 SG&A expenses 273.4 138.2 +7.7 40 40 Ordinary income 90.7 43.8 +7.9 20 20 Net income 71.7 32.6 +4.3 0 Jun.20 Sep.20 Dec.20 Mar.21 Jun.21 Sep.21 1 Net operating revenue Product sales ■Investment trusts (JPY bn) Equity brokerage commissions Underwriting commissions (JPY tn) Foreign bonds 120 Subscription commissions on investment trust, fund wrap fee and agency commissions Net trading income Subscription of equities 4 100 Fund wrap Domestic bonds Variable annuities/insurances 3 80 60 2 40 1 20 0 0 1Q 2Q 3Q 4Q FY3/21 1Q FY3/22 2Q 1Q FY3/21 2Q 3Q 4Q 1Q FY3/22 2Q Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 34#36SMCC Financial results Key figures Sales handled # of card holders 1H FY3/21 YOY (JPY bn) FY3/22 (JPY tn) (mn) O-YOY Operating revenue 447.5 227.0 +10.2 *1 30 20% 60 -O-YoY (industry) o/w Commission fee 143.7 77.1 +10.0 20 10% 50 Finance 101.5 49.0 (3.1) 10 0% 40 40 Sales on credit 32.3 15.1 (1.5) 0 Receipt agency 48.1 25.0 +1.3 FY3/20 FY3/21 (10%) 0 1H 1H FY3/21 FY3/22 Mar. 19 Mar.20 Mar. 21 Sep.21 Operating expense 413.0 206.9 +14.8 o/w Expenses for Market share* *2 22.7 11.6 +0.0 loan losses Expense for 14.4 Issuing Acquiring interest repayments Ordinary profit (loss) 35.3 23.2 (2.1) 12% 24% Net income 35.8 14.8 (4.1) Finance outstanding 667.5 662.4 *1 The Japan Consumer Credit Association "Credit card behavior investigation" Shopping credit amount *2 METI "Indices of Tertiary Industry Activity" Sales credit business handled (2020 : JPY 62 tn) Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 35 55#37SMBCCF Financial results Consumer loans Loan guarantee 1H ■ Promise (overseas) Mobit ■ Promise FY3/21 YOY (JPY bn) FY3/22 (0.5)% = SMBC Others (4)% Operating income 273.5 134.9 (3.4) (JPY bn) (JPY bn) 1,137.1 1,141.3 1,135.6 o/w Interest revenues 178.8 88.7 (1.8) 1,102.2 1,129.1 104.1 102.4 103.4 1,086.8 Loan guarantee revenues 61.1 28.6 (2.7) 286.2 282.6 291.3 552.3 564.4 547.4 Operating expenses 200.8 95.5 +9.1 o/w Expenses for 53.3 33.0 +2.3 746.8 756.3 740.9 loan losses 549.9 564.7 539.3 Expense for 9.9 2.8 +0.8 loan guarantees Mar. 19 Mar.20 Mar.21 Sep.20 Sep.21 Mar.19 Mar.20 Mar. 21 Sep.20 Sep.21 Expenses for 24.0 interest repayments Ordinary profit 73.5 39.5 (12.9) ■ No. of interest refund claims (Thousand) Net income 54.1 32.1 (11.7) 20- NPLs 85.2 91.8 15 (NPL ratio) 7.49% 8.08% 10 5 Allowance on interest 100.8 87.2 0 repayments (provision) 3.4 yrs 3.2 yrs 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY3/18 FY3/19 FY3/20 FY3/21 FY3/22 Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 36#38SMBCAC Financial results Global passenger demand forecast*2 Domestic demand is expected to recover in 2022 1H FY3/21 YOY (USD mn) FY3/22 (%) Domestic Total revenue 1,214 650 +73 200 Lease revenue 1,119 603 +32 Credit / Asset 334 70 +55 impairment charges 100 Net income 17 83 +64 Aircraft asset*1 15,340 16,349 +1,918 Net asset 3,305 3,366 +297 15 17 19 ROE 0.5% 2.5% +1.3% Aircraft business of SMBC Group Strengths International 21 24 23 23 25 25 Total 27 27 29 29 (CY) (USD mn) SMBCAC related SMFL SMBC 800 Acquired SMBCAC Wide body (A350-B787) 600 Aircraft portfolio Narrow body Over 80% 400 200 0 12 13*3 14 15 16 17 18 19 20 21 1H FY3/22 S&P rating Liquidity - A No.1 in Industry *1 Include Aircraft pre-delivery payments *2 IATA / Tourism Economics. Represents changes from CY19. *3 SMBCAC related includes revenue after the acquisition in June *4 Neo/MAX/A350/B787 Avg. age 4.1 years Fuel efficient*4 Approx. 60% Undrawn commitment lines USD 4.2 bn Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 37#39BTPN Financial results*1 Customer Jan.-Sep. Retail Wholesale 2018 2019 2020 (JPY bn) 2021 sinaya Gross banking profit 77.5 99.6 91.1 76.2 btpn High-net-worth Large corporations SMBC Operating expenses 44.7 56.3 50.9 39.9 Mid-sized corporations Middle class Jenius Net profits 14.0 20.3 12.9 16.0 SMEs ROE Loans 11.6% 9.9% 6.1% 8.9% mita btpn purna btpn 517.8 1,119.9 1,008.0 1,073.7 btpn' owners WOW! Deposits Total assets 538.4 686.8 745.8 805.2 770.2 1,434.9 1,355.4 1,427.6 Digital Banking Mass market Micro business mitra usana btpn' Syariah btpn SMBC's Global Support Net interest margin*2 NPL ratio *2 Loan breakdown*3 3.8 (%) (%) 3.3 3.1 6.6 6.9 5.2 4.8 4.7 1.5 2.4 BNI Mandiri BCA BTPN BRI BTPN BCA Mandiri BRI BNI *1 TTM as of Dec. 18: IDR 1 = 0.0076, Dec. 19: IDR 1 = 0.0079, Dec. 20: IDR 1 = 0.0074, Sep. 21: IDR 1 = 0.0078 *2 Based on each company's disclosure (Sep. 21 results) *3 As of Sep. 21 BTPN Syariah 7% Retail Banking 22% Business Banking 10% Corporate Banking 61% Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 38#40Credit ratings of Aussie and Canadian banks OpCo senior unsecured notes / Excluded liabilities Notch Difference (between TLAC senior and Tier 2 notes) ■ Moody's TLAC eligible senior unsecured notes Basel III Tier 2 notes (As of Oct. 31, 2021) SMFG BMO BNS RBC TD ANZ CBA NAB Westpac Aa1 Aa2 Aa3 A1 A2 11 A3 2 2 2 Baa1 Baa2 Baa3 S&P SMFG BMO BNS RBC TD ANZ CBA NAB Westpac AA- A+ A A- BBB+ BBB BBB- BB+ Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 39#41Safeguards before incurring losses at PoNV - capital requirement-based corrective measures We will be required to meet various capital requirements before reaching a point of non-viability ("PoNV") SMFG CET1 ratio Capital requirement 15.92%*1 (excl. OCI: 12.7%) 8% 7% CET1 ratio (Basel III 5.125% fully-loaded basis) 4.5% *1: as of Sep. 21 0%. Actions G-SIB buffer [Backet 1] (1.0%) Capital conservation buffer (2.5%) 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 Pre-determined recovery plan to be implemented at certain trigger level Minimum CET1 requirement (4.5%) Prompt corrective action to be implemented PONV - suspension of payment or having negative net worth Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 40#42Safeguards before incurring losses at PoNV - safeguards to prevent systemic disruption PONV Prior to Framework Liquidity support and capital injection Specified Item 1 Measures set forth in the Deposit Insurance Act ("DIA") Subject entities Financial institutions Including banks and bank holding companies ("BHCs") Capital injection Banks and BHCs Act on Special Measures for Strengthening Financial Functions Capital injection PONV suspension of payment or having negative net worth Item 1 Measures set forth in the DIA Financial assistance for orderly resolution Specified Item 2 Measures set forth in the DIA Posterior to Financial assistance exceeding payout cost or Temporary nationalization Banks and BHCs Financial institutions Including banks and BHCS Banks Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 41#43Orderly resolution regime in Japan 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 ("HoldCo") Systemically important assets and liabilities, incl. common stock of OpCo Other assets and liabilities, incl. HoldCo senior debt instruments, etc Reaching PONV suspension of payment or having negative net worth Illustrative orderly resolution process Transfer Bridge financial institution ("Good Bank") OpCo common stock, etc. Common stock OpCo Deposits, etc Common stock / intercompany loan Operating Bank ("OpCo") Deposits, etc AT1 and Tier2 Fully written down before insolvency proceedings HoldCo ("Bad Bank”) HoldCo senior debt, etc. Source: Japanese FSA Insolvency proceedings 2 TLAC Senior Notes May incur losses depending on recovery value Copyright 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 42#44Application of Basel III Capital requirements Basel II Transition Fully implemented Bucket 5 (3.5%) Bucket 1 (1.0%) Additional loss absorbency requirement for G-SIBS (Common Equity Tier1 capital) 10.5% 10.5% 10.5% 10.5% 10.5% 8.0% 2.0% 2.0% 2.0% 2.0% 2.0% 1.5% 1.5% 1.5% 1.5% 1.5% Tier 2 2.5% 2.5% 2.5% 2.5% 2.5% Additional Tier 1 ■Capital conservation buffer*1 4.5% 4.5% 4.5% 4.5% 4.5% Minimum common equity Tier 1 ratio Mar.12 Mar. 19 Mar.20 Mar.21 Mar.22 Mar.23 Phase-in of deductions"2 100% 100% 100% 100% 100% Grandfathering of capital instruments 30% 20% 10% 2023 2024 2025 2026 2027 2028 Revised standardized approach and internal ratings-based framework for credit RWA*3 Revised credit valuation adjustment (CVA) framework Revised operational risk framework Output floor Implementation 50% 55% 60% 65% 70% 72.5% Leverage ratio and liquidity rules 2019 2020 Leverage ratio Implementation Revised Leverage ratio*3, 4 LCR 100% NSFR 2021 2022 2023 Implementation Implementation *1 Countercyclical buffer (CCyB) omitted *2 Intangible fixed assets, deferred tax assets and investment of unconsolidated financial institutions, etc. *3 GHOS, the higher committee of the Basel announced that it will postpone the implementation of unimplemented Basel III standards in Mar. 20 (2022 to 2023) *4 Revised exposure definition and G-SIB buffer Copyright 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 43#45Major regulatory updates related to COVID-19 | 1-year deferral of Basel III implementation Postponement of the implementation date for the Basel III standards was declared by GHOS to respond to the immediate financial stability priorities on the global banking system. Revision Standard Leverage ratio framework and G-SIB buffer Standardized approach for credit risk IRB approach for credit risk Operational risk framework CVA framework Market risk framework Output floor Pillar 3 disclosure framework Original implementation date Revised implementation date January 2022 January 2023 January 2022 transitional arrangements to January 2023 transitional arrangements to January 2027 January 2028 January 2022 January 2023 Temporary relief on leverage ratio calculation in Japan The temporarily relieved leverage ratio requirements have been applied by Japanese FSA, in accordance with the Bank of Japan's extended monetary policy easing. • • Exclusion of the deposits at BOJ from the denominator of the leverage ratio calculation until Mar. 2022 Maintaining the current minimum requirement of 3% Source Bank for International Settlements Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 44#46Core policy of the new Medium-Term Management Plan Mid-long term Vision A trusted global solution provider committed to the growth of our customers and advancement of society Future directions 1 Data oriented 2 Building platforms 3 Solution provider Core Policy Transformation Transform existing businesses Business strategy Growth Seek new growth opportunities Management base Quality Elevate quality in all aspects Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 45#47Roadmap to 2022 ~ Cost ~ Control of base expenses (JPY bn) Overseas 50 business Strategic areas 5 1 System cost 30 (50) 2 100 (25) 3 (25) OHR (%) 65 62.8 62.1 62.3 60.9 60.3 60 60 62.0%*1 JPY (100) bn 54.2 55 Previous plan JPY (54) bn 1 Reform of domestic businesses 50 FY3/14 FY3/17FY3/18FY3/19FY3/20FY3/21 FY3/23 | Headcount Previous plan (3.3) K Domestic (4.9) K (6) K Domestic (6.5) K Current plan (7) K Domestic (8.0) K 1.5tn 2 Retail branch reorganization 3 Integration of group operations 106K FY3/20 103K 101K Mar.17*2 Mar. 20 Mar. 21 *1 Excluding impact of group reorganization *2 Added the impact of group reorganization retrospectively 96K Mar. 23 Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 46#48Roadmap to 2022 ~ Cost ~ Key initiatives of cost reduction 1 Reform of domestic businesses Reform of retail business Optimize resource allocation of wealth management business Digitalize mortgage loan procedures Reallocate workforce of domestic wholesale business Cost JPY (50) bn Workload (5.0) K people Reduce headcounts of headquarters (30)% 2 Retail branch reorganization JPY (25) bn 3 Integration of group operations JPY (25) bn Full-service smart branches (2.6) K people Smart branches (21) 438 branches Full-service smart branches Relocate SMCC and SMBCCF to integrate operations Smart branches (300) "SMBC The PERSONAL" • Others 250 PMI of asset management (1.9) K people business 50 Consolidate data centers / base systems of group companies Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 47#49Seven key strategies Transformation 1 Pursue sustainable growth of wealth management business Transform existing businesses 2 Improve productivity and strengthen solutions in the domestic wholesale business 3 Enhance overseas CIB business to improve asset / capital efficiency 4 Hold the number one position in payment business 5 Enhance asset-light business on a global basis 6 Expand franchise in Asia and strengthen digital banking Growth Seek new growth 7 Develop digital solutions for corporate clients opportunities Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 48#50Initiatives against climate change Established "Roadmap Addressing Climate Change" and committed to achieve net zero GHG emissions of Scope3 by 2050. 2023 2030 2040 Roadmap Scope 3 Scope1,2 mid- to long- term goals Net zero GHG emission Zero balance for loans extended to coal-fired power plants - Medium-Term Management Plan Action plan STEP1 Action plan STEP2 Scope1&2 Scope3 : GHG emission of SMBC Group : GHG emission of loan/investment portfolio 2050 Scope3 Net Zero GHG Emission Committed Aug.21 1 2 Main measures Establish mid-/long-term targets Specific efforts for GHG emissions generated by Achieve net zero (Scope3) by 2050 its loan/investment portfolio Reduce the GHG emissions of the entire SMBC Group Enhance businesses addressing 3 climate change and 4 decarbonization Enhance governance/ business management framework Enhance risk management 5 framework Achieve net zero (Scope 1,2) by 2030 Execute JPY 30 tn of sustainable finance by 2030 Appoint Group CSUO and establish Sustainability Committee Expand scenario analysis and revise lending policies by sectors and businesses Participate in global initiatives UN environment programme finance initiative Net-Zero Banking Alliance VPCAF ✓ PCAF Partnership for Carbon Accounting Financials TASKFORCE ON SCALING VOLUNTARY CARBON MARKETS Integrity Council on Voluntary Carbon Markets *1 Greenhouse Gas Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 49#51Manage climate change risks Sophisticate scenario analysis Physical risks JPY 55-65 bn cumulative (up to 2050) Stricter Sector and Business Policies Coal-fired power generation Oil and Gas Hydroelectric power generation Coal mining Tobacco manufacturing Hazard map (Japan) + Al analysis of satellite images (global) Palm oil plantation development Deforestation Nature conservation areas Weapon manufacturing Transition risks JPY 2-24 bn annual (up to 2050) Mitigate CO2 emissions New natural resource energy demand carbon price price 1.5°C scenario of NGFS*1/IEA*2 New *1 Network for Greening the Financial System *2 International Energy Agency Revised FY3/22 Coal-fired power generation Support for newly planned coal-fired power plants and the expansion of existing plants are not provided. <Understanding of the business/sector> • SMBC Group expects our customers to establish and publicly announce long-term strategies aimed at realizing a carbon neutral business model and other initiatives to address climate change. Moreover, SMBC Group will support the activities of our clients contributing to the transition toward and realization of a decarbonized society. Palm oil plantation development and deforestation Added a passage requesting customers to comply with NDPE (No Deforestation, No Peat, No Exploitation) Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 50 50#52Enhance sustainability management Continue to enhance the management structure to realize sustainability under the Group CEO's initiative. Establishment of sustainability management Oct. 18 Establishment of Corporate Sustainability Committee Apr. 20 Amendment of Group Mission "Declaration of Statement on Sustainability" Apr. 21 Jul. 21 Chairman Group CEO Members CEO of SMBC Group "GREEN X GLOBE 2030" "Create the future of the earth and humanity with our customers" Appointment of Establishment of Sustainability Group CSUO Committee group companies Planning Materiality Environment KPIs Green finance Green bond issuance SDGs エネルギーをみんなに そしてクリーンに 13 具体的な対策を Community Next Generation KONURRE Retail deposits in Asia Finance education 4 みんなに 働きがいも **** をつくろう 1 kes 貧困を 11 避けられる まちづくりを M Human Resources Female managers 5 ジェンダー平等を 10 동 をなくそう 16 年開公正毛 すべての人に Governance Childcare leave ①+ Engagement with stakeholders Customers Shareholders Employees Society Copyright 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 51#53Governance Enhance sustainability management Board of Directors Improve the diversity of the Board TITY 2 women 1 foreign national Nomination Committee Compensation Committee Audit Committee Risk Management Committee Joined 30% Club Japan in Apr. 21 Jul. 21 Sustainability Committee Internal Directors (executive) 5 directors Apr. 21 Report Group CSUO (Chief Sustainability Officer) Responding to climate change (incl. business) Corporate initiatives (social contributions, etc.) Engagement with ESG rating agency/ disclosure of non-financial information Internal Director (non-executive) 3 directors 30% Club GROW HIEROUCH 3 VERS1 Ratio: 47% Outside Director 7 directors Expertise # of the Board of Directors 15 directors Management Finance/ Accounting Legal Diplomacy 3 1 2 1 Non-executive directors: 67% Copyright 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 52#54Rationale 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 ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 53 33#55Key Aspects of SMBC Group's Green Bond Framework Based on Green Bond Principles Willy 1. Use of Proceeds 2. Evaluation and Selection • Project Categories Project Categories Allocated Ratio 1. Renewable Energy 97% 2. Energy Efficiency SMBC Group's Sector policy 3. Green Buildings 4. Clean Transportation 5. Pollution Prevention and Control • Look Back Period: 24 months • 0% 0% 0% 3 w 3% SMBC Group's Green Bond framework Category B or C under the Equator Principle • • 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 Environmental Policy Credit Policy Sector Policy Environmental Risk Assessment (Equator Principle) Green Bond Framework Eligible Green Assets 3. Management of Proceeds • Pending allocation of proceeds : short-term financial instruments. Fully allocated the net proceeds, as of Mar. 21 • SUSTAINALYTICS Framework Overview and Decond Party Opon Sumitomo Mitsui Financial Group, Inc./ Sumitomo Mitsui Banking Corporation's Green Bond Framework En S Green Bond Investor SMFG (Issuer) SMBC Green Assets Net Proceeds Inter-Group Loan Loan Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 54#56Overview of Green Bond Issuance and Allocated Green Assets Balance of Green Bond Issuance and Allocated Green Assets *1 (as of Mar. 21) (EUR mn) 2,000 1,600 1,200 800 400 Overview of Allocated Green Assets Total:1,910.9mn Waste to Energy ■ Japan ■Australia UK ■Chile Total:1,675.1mn Biomass 3% 32% 4% By 4% Geography France ■Canada Belgium ■ USA ■ Peru 2021/1/12 Solar Energy SMFG USD500mn 15% ■ India ■Germany Argentina 26% ■Mexico 2019/5/30 SMFG EUR500mn 2018/12/20 SMBC AUD83.2mio, USD227.8mn 2017/10/11 SMFG EUR500mn Green Bond Issuance Outstanding *1 Translated into EUR at the exchange rates as of Mar. 21 Wind Energy Allocated Green Assets Outstanding 3% 10% 23% By Technology 64% Wind Energy Solar Energy Biomass Waste to Energy Facility Capacity (Number of Projects) 8642086420 18 16 14 12 10 16 16 11 4 1 <100MW 100-250MW 250-500MW 500-750MW 750-1000MW Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 55#57Green Bond Impact Reporting Impact Reporting (as of Mar. 21) DOID HEALTH Category Sub Category Country Number of Projects Capacity (MW) Renewable Energy Estimated CO2 emissions reduction (t-CO₂/Year) o/w SMBC Group financed Wind energy Argentina, Australia, Belgium, Canada, Chile, France, Germany, Japan, Peru, UK 27 8,429.15 MW 9,248,043.51 t-CO2 1,792,903.59 t-CO2 Australia, France, Solar energy India, Japan, Mexico, USA 16 1,753.64 MW 1,791,986.80 t-CO₂ 396,831.16 t-CO₂ Biomass Japan, UK 4 424.90 MW 1,969,653.27 t-CO2 454,523.79 t-CO₂ Pollution Prevention & Control Waste to Energy Australia 1 36.00 MW 147,478.56 t-CO2 32,985.11 t-CO2 *1 Translated into EUR at the exchange rates as of Mar. 21 Total 13,157,171.14 t-CO2 2,677,243.66 t-CO₂ SMFG/SMBC Green Bond Outstanding (as of Mar. 21)*1 CO2 Avoidance per EUR1mn EUR 1,675.1mn 1,598.29 t-CO2 Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 56#58Use of Proceeds Statement for each Issuance 1/4 2017/10/11 SMFG Green Bond EUR500mn Net Proceeds from Note Issuance • Sumitomo Mitsui Financial Group EUR500,000,000 0.934% Senior Notes due 2024 Use of Proceeds as of Mar. 2021 EUR 500mn Loan Category Sub-Category Agreement Currency Country Date Loan balance (EUR mn)*1 CO2 Emissions Reduction (t-CO2) (o/w SMBC Group Financed) Renewable Energy Wind Energy 2018/12 GBP UK 88 532,108 45,701 Renewable Energy Wind Energy 2017/2 EUR Germany 9 403,135 40,851 Renewable Energy Wind Energy 2019/7 GBP UK 76 519,746 22,105 Renewable Energy Wind Energy 2018/6 EUR Germany 46 364,710 30,422 Renewable Energy Wind Energy 2017/5 EUR Belgium 23 128,542 16,977 Renewable Energy Wind Energy 2017/12 EUR Belgium 8 93,472 24,216 Renewable Energy Wind Energy 2017/7 EUR France 17 21,128 7,183 Renewable Energy Wind Energy 2017/11 EUR France 30 18,211 4,431 Renewable Energy Renewable Energy Wind Energy 2018/12 GBP UK 36 411,038 58,745 Solar Energy 2017/3 EUR France 21 2,689 592 Renewable Energy Solar Energy 2016/8 USD USA 14 243,814 48,045 Renewable Energy Solar Energy 2016/12 USD USA 22 409,512 37,931 Renewable Energy Solar Energy 2016/11 AUD Australia 15 301,742 60,346 Renewable Energy Renewable Energy Renewable Energy Solar Energy 2016/9 JPY Japan 77 27,862 21,495 Solar Energy 2015/12 JPY Japan 24 14,374 8,033 Solar Energy 2019/7 JPY Japan 21 25,727 8,351 Total 528 3,517,814 435,423 Net Proceeds from Note Issuance EUR 500mn CO2 avoidance per EUR1mn 870.85 t-CO2 *1 Translated into EUR at the exchange rates as of Mar. 21 Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 57#59Use of Proceeds Statement for each Issuance 2/4 | 2018/12/20 SMBC Green Bond USD227.8mn/AUD83.2mn Net Proceeds from Note Issuance • Sumitomo Mitsui Banking Corporation USD227,800,000 3.370% Senior Notes due 2023 • Sumitomo Mitsui Banking Corporation AUD83,200,000 2.900% Senior Notes due 2023 Use of Proceeds as of Mar. 2021 USD 227.8mn AUD 83.2mn Category Sub-Category Loan Agreement Currency Country Loan balance (EUR mn)*1 Date CO2 Emissions Reduction (t-CO₂) (o/w SMBC Group Financed) Renewable Energy Renewable Energy Wind Energy 2018/3 JPY Japan 39 263,994 37,298 Wind Energy 2017/1 AUD Australia 27 344,290 68,367 Renewable Energy Wind Energy 2018/5 EUR Belgium 34 101,380 12,941 Renewable Energy Wind Energy 2018/6 USD Argentina 15 37,192 15,619 Renewable Energy Wind Energy 2018/6 USD Argentina 10 66,830 28,066 Renewable Energy Solar Energy 2018/3 JPY Japan 41 20,744 13,511 Renewable Energy Solar Energy 2018/6 JPY Japan 26 29,307 7,866 Renewable Energy Solar Energy 2017/3 JPY Japan 17 8,046 5,875 Renewable Energy Renewable Energy Renewable Energy Solar Energy 2017/4 JPY Japan 9 7,378 3,320 Solar Energy 2017/5 USD USA 21 76,767 15,353 Biomass 2018/3 JPY Japan 54 268,647 102,527 Total 293 1,224,576 310,743 *1 Translated into EUR at the exchange rates as of Mar. 21 Net Proceeds from Note Issuance CO2 avoidance per EUR1mn USD 227.8mn AUD 83.2mn (EUR 248.44mn equiv.)*1 1,250.78 t-CO₂ Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 58#60Use of Proceeds Statement for each Issuance 3/4 | 2019/05/30 SMFG Green Bond EUR500mn Net Proceeds from Note Issuance • Sumitomo Mitsui Financial Group EUR500,000,000 0.465% Senior Notes due 2024 Use of Proceeds as of Mar. 2021 EUR 500mn Loan Category Sub-Category Agreement Currency Country Date Loan balance (EUR mn)*1 CO2 Emissions Reduction (t-CO2) (o/w SMBC Group Financed) Renewable Energy Wind Energy 2018/12 GBP UK 27 380,302 18,287 Renewable Energy Wind Energy 2018/11 GBP UK 99 777,941 388,970 Renewable Energy Wind Energy 2017/8 AUD Australia 51 752,386 85,531 Renewable Energy Wind Energy 2018/6 AUD Australia 32 378,684 94,671 Renewable Energy Wind Energy 2018/12 CAD Canada 64 205,687 44,257 Renewable Energy Renewable Energy Pollution Prevention & Control Renewable Energy Wind Energy 2017/8 USD Peru 57 184,058 29,776 Wind Energy 2018/8 JPY Japan 86 1,235,160 369,195 Waste to Energy 2018/10 AUD Australia 58 147,488 32,985 Solar Energy 2018/3 USD Mexico 19 141,809 31,837 Renewable Energy Solar Energy 2018/6 JPY Japan 25 16,601 5,953 Renewable Energy Renewable Energy Biomass Biomass 2018/6 JPY Japan 84 279,886 83,320 2018/9 JPY Japan 30 1,140,000 Total 633 5,640,000 230,393 1,415,177 Net Proceeds from Note Issuance EUR 500mn CO2 avoidance per EUR1mn 2,830.35 t-CO₂ *1 Translated into EUR at the exchange rates as of Mar. 21 Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 59#61Use of Proceeds Statement for each Issuance 4/4 | 2021/01/12 SMFG Green Bond USD500mn Net Proceeds from Note Issuance • Sumitomo Mitsui Financial Group USD500,000,000 0.508% Senior Notes due 2024 Use of Proceeds as of Mar. 2021 USD 500mn Loan Category Sub-Category Agreement Currency Country Date Loan balance (EUR mn)*1 CO2 Emissions Reduction (t-CO2) (o/w SMBC Group Financed) Renewable Energy Wind Energy 2019/11 USD Chile 69 198,578 25,611 Renewable Energy Wind Energy 2019/3 GBP UK 90 192,500 43,313 Renewable Energy Wind Energy 2019/8 GBP UK 82 336,528 66,933 Renewable Energy Wind Energy 2019/8 AUD Australia 46 590,525 90,687 Renewable Energy Wind Energy 2020/7 AUD Australia 48 630,025 108,751 Renewable Energy Wind Energy 2020/2 JPY Japan 23 79,890 13,999 Renewable Energy Solar Energy 2019/4 EUR India 45 433,878 115,589 Renewable Energy Renewable Energy Solar Energy 2020/2 JPY Japan 31 31,737 12,734 Biomass 2020/3 JPY Japan 23 281,120 38,284 Total 457 2,774,781 515,901 *1 Translated into EUR at the exchange rates as of Mar. 21 Net Proceeds from Note Issuance CO2 avoidance per EUR1mn USD 500mn (EUR 426.6mn equiv.)*1 1,209.33 t-CO₂ Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 60#62SMBC covered bond: Investment highlights The SMBC Covered Bond Programme offers an opportunity to gain exposure to one of the highest quality asset classes in Japan with a top notch rating. Historically, Japanese banks have not been active in the secured market due to absence of dedicated covered bond legislation. Our contractual framework will satisfy key covered bond requirements for investors and enable SMBC to gain access to broader capital markets and to further diversify its investor base. Solid Credit of SMBC • Strong and diversified earnings capability • Sound loan portfolio Robust liquidity • Sound capital position • High credit ratings Robust Residential Loan Market of Japan Japan's strong and stable economy Solid growth High gross national savings Low unemployment rate • Low household debt to net disposable income • Stable housing market with low delinquency • Robust RMBS market SMBC Covered Bond • SMBC's robust residential loan underwriting and risk management framework • Dual recourse to segregated cover pool and SMBC • Cover pool consisting of AAA-rated Japanese self- originated RMBS • Daily collateral top-up • 25% minimum OC Attractive Product Structure Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 61#63SMBC 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 at issue ongoing & at maturity Trust Deed Bondholders 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 SMBC (acting as trustee of the Trust*1) Issuer Interest & Principal of Covered Bond (Bond Coupon Frequency) RMBS Cash Flow (JPY / Monthly payment) Total Return Swap ("TRS") / Credit Support Annex ("CSA") Interest & Principal of Covered Bond (Bond Coupon Frequency) *1 SMBC, licensed by Japanese FSA as financial institutions 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 Copyright 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 62#64SMBC covered bond: Cover pool summary RMBS Summary Terms*1 Domestic Region*1*2 Collateral Originator/Servicer Self originated residential loans SMBC Asset Trustee Sumitomo Mitsui Trust Bank Revolving Static pool Format Domestic trust beneficiary interest Liquidity Cash reserve Interest Payments Monthly / Fixed coupon Monthly / Pass through Principal Payments Hedging Arrangements Master Trust Clean-up Call Back-up Servicer Credit Enhancement None Standalone structure 10% Not appointed at closing Overcollateralisation Senior/subordinate tranching Excess spread Maximum principal balance JPY 200million Loan Term Up to 35 years Loan Guarantee Senior Tranche Rating *1 Pool data as of Aug. 21 *2 By loan balance Guaranteed by SMBC Guarantee Co., Ltd. Moody's: Aaa (sf) Hyogo Kyoto Greater Osaka Osaka Other Regions Chiba Greater Tokyo Saitama Kanagawa Tokyo Osaka Fukuoka Tokyo + Greater Tokyo Tokyo Nagoya Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 63#650.0% 2.0% 4.0% Historical trend of delinquency and prepayment rate Delinquency rate in the Japanese RMBS market has been low supported by the strong job market and stringent underwriting practices. Current Prepayment rate of Japanese RMBS market is low compared to other developed countries. RMBS 90+ Days Delinquency 6.0% 30% Prepayment Rate Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Japan Source: Moody's UK Mar-16 Germany France Italy Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Murt 5.20% 0.98% 0.71% 0.65% 0.03% 0.02% 0% 10% Mar-06 Mar-07 Mar-08 20% Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Australia -Japan UK Germany France Note: UK data between Mar 2006 and May 2007 is not available Source: Moody's Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Italy Copyright © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 64 7.68% 7.38% 4.63% 4.47% 18.12%#66House Price Index (2002 = 100) 350 Housing 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%. House Prices Housing Starts / Homeownership Rate 300 336.1 2,000 297.7 250 245.1 218.4 200 199.5 195.9 170.0 150 100 50 50 Mar-02 0 Mar-04 Mar-03 Mar-05 Mar-06 Mar-07 Japan France Source: Bank for International Settlements USA Italy Mar-10 Mar-11 Mar-08 Mar-09 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Canada Singapore Mar-19 Mar-20 Mar-21 UK Australia Germany Units (in thousands) 1,500 1,000 61.2% 119.5 89.6 500 0 FY03/01 FY03/02 FY03/03 FY03/04 FY03/05 FY03/06 FY03/07 FY03/09 FY03/08 Housing Starts (left axis) Homeownership Rate (right axis) 61.7% 61.1% 61.2% FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17 FY03/18 FY03/19 FY03/20 FY03/21 Source: Ministry of Land, Infrastructure, Transport and Tourism, Statistics Bureau, Ministry of Internal Affairs and Communications Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 50% 65 55% 60% 65% 70%#67Residential land and condominiums *2 Residential land in all locations in Japan Residential land in Tokyo Condominium in Tokyo Japanese economy Real GDP growth rate (annualized QOQ change)"¹ (contribution, %) 30 20 10 220 Household sector Net Exports Private non-resi.investment Public demand Inventories -Real GDP 150 140 130 120 0 (10) (20) (30) 110 100 90 80 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 123 2013 2014 2015 2016 2017 2018 2019 2020 2021 70 70 1 Indicators to measure progress out of deflation *3 CPI (%) 4 excl. fresh food excl. fresh food & energy 3 2 1 0 (1) 20082009201020112012201320142015201620172018201920202021 (%) GDP deflator GDP gap O-Unit labor cost 8 4 0 (4) (2) 12 34 12 34 12 34 12 34 12 34 12 34 12 34 12 34 123 2013 2014 2015 2016 2017 2018 2019 2020 2021 (8) (12) 1 2 3 4 1 2 3 4123412341234123412341234123 2013 2014 2015 2016 2017 2018 2019 2020 2021 *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 © 2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 66#68BOJ's monetary policy Timeline Apr. 2013 Jan. 2016 Sep. 2016 Jul. 2018 Apr. 2019 Oct. 2019 Apr. 2020 Mar. 2021 Sep. 2021 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 Clarification of forward guidance for policy rates Update of forward guidance for policy rates Enhancement of monetary easing Further Effective and Sustainable Monetary Easing Introduction of Climate Response Financing Operations Three-tier system in current accounts at BOJ Recent announcements Apr. 2020 Enhancement of monetary easing • Increase in purchase of CP and corporate bonds • Strengthening of the Special Funds-Supplying Operations to Facilitate Financing • Further active purchase of JGBS and T-Bills • Yield curve control • Purchase a necessary amount of JGBS without setting an upper limit so that 10-year JGB yield will remain at around zero percent. Mar. 2021 Yield curve control • Purchase a necessary amount of JGBs without setting an upper limit so that 10-year JGB yield will remain at around zero percent. • Yield fluctuations range of +/-0.25% from the target Guidelines for asset purchases • Maintain annual paces of increase for ETFs and J-REITS • Extend purchase of CP and corporate bonds till Sep. 2021 (0.1)% Policy-Rate Balance 0% Sep. 2021 Macro Add-on Balance Basic Balance Source Bank of Japan +0.1% Climate Response Financing Operations To provide funds to financial institutions within the amount outstanding of their investment or loans that contribute to Japan's actions to address climate change, with a view to supporting private sector efforts on climate change. • Interest rate on its program at 0% with the duration of loan being 1 year (it can be rolled over). Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 67#69BOJ's initial monetary policy responses to COVID-19 BOJ's initiative to support the Japanese economy • Measures to facilitate corporate financing •Temporary increase in purchase of CP and corporate bonds •Introduction of special funds-supplying operation by facilitating banks to extend loans to companies affected by COVID-19 • FX liquidity support to banks Enhance the provision of liquidity via the standing USD liquidity swap line arrangements, in coordination with 6 major central banks • Stabilizing financial markets Further active purchases of ETFs & J-REIT as well as JGBs & T-Bills Initiatives CP/Corporate Bond Purchase Special funds-supplying operations ("SFSO")*1 USD Funds-Supplying Operations ETF/J-REIT purchase JGBS & T-Bills purchase Notes with most recent update JPY 20tn holding limit and up to 5yr maturity until Mar. 2021 (increase from JPY 5.4tn and up to 3yr maturity) => Extended till Mar. 2022 New scheme introduced in Mar. 2021 where BOJ set applied interest rate/incentive for categories as following; 0.2% for Category I, 0.1% for Category II and 0% for Category III. Category I is loans through SFSO by financial institutions themselves, Category II is loans through SFSO including private debt pledged as collateral and Category III is loans through Loan Support Program (Including Climate Response Financing Operations). At OIS +25bps (cut by 25bps) and for 1-week maturity operations (84 days maturity operation was discontinued as of July 1st 2021) Increase of the purchase amounts at annual paces of up to about JPY 12tn and about JPY 180bn, respectively for the time being. (In principle, about JPY 6tn and JPY 90bn) => Maintaining the same annual pace increase Purchasing a necessary amounts of JGBS without setting an upper limit for 10-year JGB yields with yield fluctuation range of +/-0.25% to remain at around zero percent. (Previously purchase at an annual pace of holding amounts increase up to about JPY 80tn) *1 Special Funds-Supplying Operations to Facilitate Financing in Response to the Novel Coronavirus (COVID-19) Source Bank of Japan Copyright ©2021 Sumitomo Mitsui Financial Group. All Rights Reserved. 68