2. The injection of public funds
Sumitomo Bank and Sakura Bank disposed of non-performing loans worth more than one trillion yen in each of fiscal years 1997 and 1998, resulting in a substantial net loss for two consecutive years. Against this backdrop, in March 1998, the two banks each received 100 billion yen of public funds pursuant to the Act on Emergency Measures for Stabilizing of Financial Functions. While under this legislation 13 trillion yen was prepared for capital injections, actual spending amounted to no more than 1.8 trillion yen in total, which went into 21 financial institutions.
In October 1998, the Act on Emergency Measures for Early Strengthening of Financial Functions was enacted. As a result, 25 trillion yen was prepared for capital injections to strengthen the capital base of financial institutions. In March 1999, public funds of about 7.5 trillion yen in total were injected into 15 major banks for recapitalization. Sumitomo Bank and Sakura Bank received public funds of 501 billion yen and 800 billion yen, respectively, in March 1999, which allowed both banks to raise their capital ratio to above 10% as of March 31, 1999. Subsequently, however, the injected public funds worth 1,501 billion yen from the past two programs was carried over to the new bank, posing a major issue to the post-merger management, which needed five years to pay off the obligation.
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Chapter 1The Financial Crisis and Realignment of the Financial Sector
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Chapter 2The Birth of SMBC and SMFG
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Chapter 3Initiatives Pursued by SMBC Banking Units in the Early Years
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Chapter 3Initiatives Pursued by SMBC Banking Units in the Early Years
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- Enhancing our retail consulting and payments & consumer finance businesses
- Enhancing corporate financial solutions
- Banking-Securities collaboration in the wholesale securities business
- Challenges facing our global banking business
- Actions by Treasury Unit in preparation for rising interest rates
- Integration of operating systems and administrative functions
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Chapter 4Embarking on Fresh Challenges Under New Leadership
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Chapter 4Embarking on Fresh Challenges Under New Leadership
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- Changes of leadership and the announcement of our new management policy
- Developing group business strategies
- Addressing antitrust issues
- Completing repayment of public funds
- LEAD THE VALUE
- Enhancing our retail financial consulting business
- Enhancing our corporate solution business
- Enhancing our investment banking business
- Global banking business turnaround
- Upgrading risk management in preparation for Basel II
- Development of human resources
- CSR activities
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Chapter 5SMFG’s Response to Global Economic and Financial Turmoil
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Chapter 6Preparing for the Next Decade
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Chapter 1Business Model Reform Under Challenging Business Conditions
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Chapter 1Business Model Reform Under Challenging Business Conditions
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- Our journey under new leadership (the second decade)
- Focusing on growth industries and businesses
- Reforming domestic business operations
- Promoting banking-securities collaboration in Wholesale Banking Unit
- Structural reform of our retail business
- Meeting the needs of an aging society
- Abenomics and Treasury Unit's nimble portfolio management
- Operating in a negative-interest-rate environment
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Chapter 2Enhancing Group Businesses
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Chapter 3Expanding Our Global Business
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Chapter 4Enhancing Corporate Infrastructure Under a New Governance Framework
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Chapter 4Enhancing Corporate Infrastructure Under a New Governance Framework
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- New leadership and enhancing corporate governance
- Introducing group-wide business units and CxO system
- Improving capital, asset, and cost efficiency
- Pursuing our cashless payment strategies
- Retail branch reorganization
- Customer-oriented business conduct
- Enhancing internal-control frameworks
- Valuing diversity and revision of our HR framework
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Chapter 5The Path for Our Future
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Chapter 6Opening a New Chapter in SMBC Group’s History