Medium-Term Management Plan

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Under the Medium-Term Management Plan, we have established three core policies in order to achieve sustainable growth and get to the next stage of our journey towards our mid- to long-term vision of becoming "a global financial group that by earning the highest trust of our customers, leads the growth of Japan and the Asian region".

Overview of Medium-Term Management Plan (FY3/2018-FY3/2020)

SMBC Grou Next Stage

To achieve sustainable growth by combining the Group's strengths with more focused business management

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Core Policy

Financial Targets

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Taking into consideration the current business environment, SMBC Group is working to improve capital, asset, and cost efficiencies in order to become a top tier financial group. We have thus established three financial targets to guide us in our efforts to improve profitability and secure financial soundness.

Capital Efficiency

ROE

7-8%

Maintain at least 7% notwithstanding accumulation of capital

Cost Efficiency

OHR

1% reduction compared with FY 3/2017

Reduce to around 60% at the earliest opportunity (FY 3/2017: 62.1%)

Financial Soundness

CET1 ratio*1,2

10%

Maintain capital in line with likely raised requirement*1 (FY 3/2017: 8.3%)

  • *1Calculated with RwA inflated by 25% compared to the current level based on our assumption of the final impact of Basel III reforms
  • *2CET1: excludes net unrealized gains on other securities
    RwA: excludes RwA associated with net unrealized gains on stocks

Capital Policy

( updated May 2018 )

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  • Achieve a healthy balance among securing financial soundness, enhancing shareholder returns, and investing for growth
  • Dividends will be our principal approach to shareholder returns. In addition, we will proceed with share buybacks on a flexible basis assuming our financial soundness is maintained
  • We aim to pay progressive dividends supported by our sustainable earnings growth, and achieve a payout ratio of 40% during the period of the next Medium-Term Management Plan
  • We will execute share buybacks as and when appropriate taking into account the factors such as our capital position, earnings trends, stock price, growth investment opportunities and an improvement of capital efficiency