News Release
December 29, 2000

President's New Year Message to Employees

A Happy New Year!

The year 2001 will surely be a crucial year in the bank's history. As all you know, in April we will make new history as Sumitomo Mitsui Banking Corporation. The merger will give us a firm basis and right to lead the changing financial business and to challenge again the top world financial institutions in this worldwide revolutionary times.

All the challenges will start from now on. At the beginning of the year, I would like to talk about two key phrases, gthe ability to fit oneself for changesh and gmutual understanding and the creation of corporate cultureh.

1. Ability to fit oneself for changes

First, I would like to mention Charles Darwin who is famous for the theory of evolution. As a result of his research on species surviving in large environmental changes, he pointed out a very interesting thing. The key for survival is not gcompetitiveness among the existing speciesh or gphysical abilityh such as the ability to run faster, but is gability to fit oneself for changesh. I think that this key phrase provides the most required sensibility to the spirit of the times to the new bank.

I think that, as a reaction of the glost ninetiesh, Japan will probably be faced with much larger structural changes in politics, economy and society in 10 years or so. We will encounter within several years big changes which may upset our business base. Such changes will be a golden opportunity to the new bank. I believe that, after problems on asset quality are solved at the beginning of the 21st century, the financial business will surely be a growing industry.

No other business has more room to develop schemes, products and network than the financial business which has been regulated for a long time. And, as the financial business is exactly the information industry, it can enjoy the benefits of the IT revolution much more than any other business. In other words, the financial business has great potential for growth and huge business opportunities. It is just the position where gbanksh are currently located, and it is why the financial industry have had successive newcomers from the retail business and from the information and communication business in this severe time.

The circumstances will radically change to those under which competitions among species will be intensified. We should consider seriously about what the evolutionists call, the gability to fit oneself for changesh.

Under the structurally changing circumstances, the only way to survive is to fit oneself for changes in the movement.

That is, what we need is as follows: collecting information extensively without any preconception and analyzing it properly; making original plans ahead of others; and putting the plans into action quickly and accomplishing their goals without fearing trial and error.

Among such important factors, the gintention of the management, the managers and the staff to lead the@changesh is@the most crucial. At the beginning of the 21st century, we would like to keep it in mind above all.

2. Mutual understanding and creation of corporate culture

Our interim financial results have had the market be sure that our results in the last fiscal year were our real performance.

Reports by the mass media show that Sumitomo Mitsui Banking Corporation is considered as a familiar, promising and most innovative financial group. This is our customers' encouragement that the new bank can take over the reputation of familiarity which we have enjoyed for a long time. It is also the result of public recognition of our various new strategies such as @BĩNK, Japan Net Bank and Sakura Loan Partner which we have pursued for the past one or two years.

These facts objectively demonstrate that we have enough power to compete successfully. Therefore, the most important thing for Sumitomo Mitsui Banking Corporation is teamwork. The most important thing for all of us is to first recognize the differences between the two banks. Mutual understanding, not mutual rejecting, should be the starting point for the all. And then we should try to think everything based on the standard of the new bank. By continueing these efforts, we can create the corporate culture of the new bank as quickly as possible.

Mr. Harrison, one of my close friends and the CEO of J.P. Morgan Chase who has succeeded in the three big mergers, said, gThe merger is not science but arth when he visited Japan the other day. He also said, gThe most important key to a successful merger is to pay careful attention to persons and to create new corporate cultureh. Since I exactly believed so, I felt keenly the universality for a successful integration, one of the activities of human being.

I would like to promise to all of you that I will do my best to realize ga challenging and professionally rewarding work environmenth which is one of the missions of the new bank.

3. Closing words

Receiving the authority's approval, the new bank will soon announce its organization and major personnel appointments and practically start. The new bank must succeed. Let us be proud of and be pleased with being involved in this historical project and feel our heavy responsibility. A Japanese saying goes: gIt is the first day of a year that we should make a plan for the year and determine to realize it.hSo, let us do our best together toward April 1, 2001 for the remaining days, as we can make the foundation of a plan for the century at the launch of Sumitomo Mitsui Banking Corporation.