Strengths and Challenges

Challenges (2) - Initiatives in targeted growth business areas
(Case 2) Payment & settlement services, Consumer finance (Credit card / consumer finance business)

We expect that the amount of domestic credit card settlement is continuously expanding, centered on credit card shopping market. To capture this opportunity, SMFG has consolidated its credit card business into two companies, Sumitomo Mitsui Card and Cedyna Financial, after the formation of Cedyna Financial in April 2009. Going forward, we aim to become a "number one credit card business entity in Japan" by

· realizing top-line synergy through integration of expertises, customer bases and networks
· realizing cost synergy by leveraging enlarged business bases of a whole group.

Meanwhile, consumer finance market is expected to be contracted further, due mainly to the implementation of ceiling on loan interest rates and the introduction of an upper limit on aggregate borrowings. Nevertheless, sound borrowing needs from consumers still remain in the so-called "middle-risk middle-return market segment."

Our group has been responding to customers’ sound borrowing needs in line with changes of their lifestyle so far, by promoting mainly through expansion of automated contract machines networks in collaboration business with Promise. In addition, we have reached an agreement with ORIX last May on a joint business development of ORIX Credit Corporation, which became a consolidated subsidiary in July 2009. Through this new alliance, we aim to enhance our market presence in the changing consumer finance market by expanding market shares as well as improving business efficiency.