SMBC Group's Financial and Credit Portfolio
Orderly resolution regime in Japan*1
An orderly resolution is expected to be commenced subsequent to PoNV after SMFG absorbs losses
incurred by its material subsidiaries.
1
All Basel III eligible AT1 and Tier 2 instruments will be fully written down upon PONV pursuant to their terms.
2 Senior notes may incur losses depending on recovery value through court-administered insolvency proceedings.
Business as usual
Holding Company
Illustrative orderly resolution process
Reaching
PONV*2
suspension
of payment
Transfer
("HoldCo")
Systemically important assets
and liabilities, incl. common
stock of OpCo
Other assets and liabilities, incl.
HoldCo senior debt
instruments, etc
or having
negative
net worth
(including the
likelihood thereof)
Bridge financial institution
("Good Bank”)
OpCo common stock, etc.
Common stock
Орсо
Deposits, etc
Common stock /
intercompany loan
Operating Bank
("OpCo")
Deposits, etc
1
AT1 and Tier 2
HoldCo
("Bad Bank")
HoldCo senior debt, etc.
Fully written
down before
insolvency
proceedings
*1: Based on a possible model of Japanese G-SIB's resolution under the SPE resolution strategy, as stated in "The FSA's
Approach to Introduce the TLAC Framework" published in Apr. 16 and revised in Apr. 18. However, it is uncertain which
2
TLAC
Senior Notes
May incur
losses
depending on
Insolvency
proceedings
recovery value
resolution strategy or specific measures will be taken in a given case, including whether or not the SPE resolution strategy is Copyright © 2023 Sumitomo Mitsui Financial Group.
to be chosen and implemented in a given case. *2 See note 2 on p. 75
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