[Sumitomo Mitsui Financial Group, Inc]Announcement of New Medium-term Management Plan(1/1)
Sumitomo Mitsui Financial Group, Inc
new medium-term management plan, the basic policy of SMFG is to aim for a globally competitive financial services group
with the highest trust by maximizing its strengths – “Spirit of Innovation,” “Speed”
and “Solution & Execution .” Under this basic policy, SMFG has set
the following three goals.
Aim for top quality in growth business areas
Realize solid financial base as a global player
Increase return to shareholders.
its group companies (“the Group”) will make every effort to achieve the goals
of the medium-term management plan in order to realize sustainable growth and
higher corporate value.
outline of the new medium-term plan is as follows.
1. Growth Strategies
will implement strategic initiatives centered on “strengthening targeted growth business areas” and “fortifying platform to support sustainable
growth business areas
will focus on business areas with high growth potential and achieve top quality in such areas by creating added
values that exceed customers’ expectations, thereby realizing sustainable growth. Under the medium-term management plan,
SMFG will especially strengthen the following seven growth areas.
SMFG has been strengthening the financial consulting
business for individuals as a strategic business area and expects the market to
continue to expand steadily and client needs to become more diversified and sophisticated
due to macro-trends such as advances in deregulation, regulatory system changes,
and shrinking and aging population.
will develop new products and services in
a timely manner in response to the diversified needs of customers amid changing business
environment, such as deregulation, and also increase marketing channels and the number of financial consultants. At the same time, SMFG will establish a
business model to offer individual customers “one-stop shopping” of various financial services such as
investment trusts, insurance products, securities, trust services and other
products and services as their sales are deregulated.
providing for corporations
SMFG has been strengthening its ability to provide solutions
to corporate customers as a strategic business area by expanding the lineup of unsecured
loan products to small- and medium-sized enterprises, strengthening investment banking,
and establishing the Corporate Advisory Dept. within Sumitomo Mitsui Banking
Corporation (SMBC). SMFG expects the
demand for solutions for solving corporate customers’ managerial issues such as
various types of funding according to growth stage, business succession due to
generational changes and so on.
order to strengthen coverage of business areas where needs of individual
customers and corporate customers co-exist, such as private banking, workplace
banking and business succession consulting, SMBC established Private
Advisory Dept. at SMBC in April 2007. SMBC also established a Merchant Banking Dept. to nurturing growth companies through equity or other investments. Through these initiatives, SMFG will provide more sophisticated solutions to
meet the rising demand for such services.
Advisory (PA) Dept. and Corporate Advisory (CA) Dept.>
areas in global markets
SMFG will strengthen initiatives in (a) specific growth industries in which the needs for fund raising or
business consolidation are expected to expand globally, (b)
<SMFG’s focus in global business expansion>
Settlement service, Consumer finance
IT technology for payment and settlement is becoming more sophisticated
as symbolized by the rapid diffusion of electronic money. SMFG intends to lead this trend and provide
its customers with innovative, convenient and secure payment & settlement
consumer finance, SMFG, with the vision of “further
leap forward as an industry leader,” will strengthen its credit card
business centered on Sumitomo Mitsui Card Company, Limited through aggressive growth strategies including
further alliances. Further,
SMFG will continue to strengthen collaborative business with Promise Co., Ltd.
in order to meet the sound financial needs of consumers with various life
styles while keeping a close eye on changes in the consumer finance industry’s
and trust business
Amid globalization of corporate customers and investors, the
demand for sophisticated financial solutions matching customers’ business
strategies has been increasing. In
order to address such demand and become a
market leader in investment banking, SMFG will take an active approach to implement
strategies including greater collaboration with Daiwa Securities SMBC Co. Ltd. In addition, SMFG will reinforce the trust business for which
customer needs are expected to rise with greater flexibility due to the revision
of trust-related laws.
In view of the globalization of investment markets and
diversification of investment instruments, SMFG will broaden the frontier of its investments and loans to alternative
fields, such as mezzanine, equity, and fund investments. SMFG will improve return on its assets and capital by
conducting a more risk diversified portfolio.
derivative, trading & distribution
Along with a more sophisticated risk management, SMFG will create
financial products by structuring various types of risk on its balance sheet
and distribute such risks to investors who have different risk appetites,
thereby reinforcing its ability to meet
the investment and financing needs of customers and improving the asset efficiency of the Group.
to support sustainable growth
SMFG will maximize its ability to provide added value by (a)
implementing an internal business performance evaluation system centered on
medium-term targets and strategic measures, (b) establishing a framework for developing
professionals capable of challenging and achieving top quality in growth
business areas, (c) reinforcing IT and operational infrastructure to support
SMFG’s business in a flexible manner, (d) strengthening compliance, and (e)
improving ALM and risk management system.
2. Financial targets
has set the following financial targets for fiscal 2009, the last year of medium-term
Tier I ratio
Tier I ratio
net income RORA
net income RORA
Risk-adjusted Assets) of approximately 1%
from the perspective of improving risk-return efficiency.
expects consolidated net income ROE during the period of medium-term management
plan to be 10 - 15%.
aiming for a payout ratio of over 20% on
a consolidated net income basis in fiscal 2009.
the medium-term management plan, in order to improve the quality of products
and services, SMFG will aggressively invest in growth business areas, establish
a solid financial base as a global player, and fortify platform to support
sustainable growth. At the same
time, SMFG will increase return to shareholders in step with the progress made
in achieving the goals of the plan.
Economic Assumptions on the medium-term management plan
3 month TIBOR*
Yen Swap Rate*
* Average rate during
each fiscal year
** Rate at the end of
(Reference 1) What “LEAD THE VALUE” Plan aims for
2) Corporate statement
we aim to be is a group of highly qualified professionals that can provide
truly valuable financial services to our customers.
of us think and act with pride as experts in each business area in order to LEAD the competition in creating and
delivering customer VALUE in a
continually changing business environment.
support such activity are our three core strengths.
“Spirit of Innovation” : We LEAD the market by providing innovative, globally competitive
services meeting customer needs.
“Speed” : We LEAD the pace by providing our customers with desirable services in
a timely manner with speed and determination.
“Solution & Execution” :We LEAD the
business by using all the knowledge and experiences of our group to solve the
issues of our customers, whether individuals or corporates, identified through
the deep understanding of their needs and situations.
new VALUE by forming teams of
specialists in various fields and provide optimal services to our customers
through two-way communication. And
as a result, we will be selected as a truly-trusted partner.
are our commitments.
3) Outline of “LEAD THE VALUE” Plan
4) Strategic Initiatives in “LEAD
the VALUE” Plan