Accelerating Value Creation for Shareholders

Establishment of new business model Consumer finance: Loan business model by alliance with Promise SMBC's business franchise + Promise's expertise Target loan balance of approx. 500 billion yen* after 3 years Interest rate 8% Channel 15% 18% SMBC marketing channels → Install loan processing machines developed by Promise SMIFG FY04: Book SMBC SMBC Consumer Finance** Promise <<Cascade Method>> <<Cascade Method>> Approx. 100 channels FY05: Marketing Promise's expertise in marketing Guarantee Collection Credit monitoring Promise's expertise in credit monitoring and collection Target loan balance after 3 years ¥200 bn ¥200 bn ¥100 bn * Jointly by SMFG and Promise. ** Tentative name. Expand sequentially 11 Next, I would like to explain the structure of the new consumer loan business model. The basic concept is to merge and leverage SMFG's franchise and Promise's expertise. The three entities - SMBC, the joint venture "SMBC Consumer Finance Company", and Promise - will cover the different range of interest rates and seamlessly capture customers' loan needs utilizing so-called Cascade Method. An example of our marketing channel strategy is the installment of a loan. processing machine developed by Promise at approximately 100 branches by the end of this fiscal year. We will expand the network further next fiscal year. By taking advantage of the business structure as I have explained, SMFG and Promise aim to expand the combined loan balance of both groups by JPY500 billion after 3 years.

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