5. Actions by Treasury Unit in preparation for rising interest rates

At SMBC, the Treasury Unit engaged in market operations. In March 2004, anticipating a future rise in interest rates, the unit began to implement a portfolio strategy, centered on investing in Japanese equity investment trusts and funds of funds. Deftly controlling such operations, the unit responded in a timely manner to the rise in Japanese stock prices that started in 2005, contributing to expanded revenues.

In April 2002, the Treasury Unit set up Asian sales desks in Tokyo, Hong Kong, and Singapore, with the aim of enhancing support of business operations of Japanese companies in Asia with foreign exchange transactions. In August 2002, the unit launched i-Deal, an online foreign exchange dealing system for use by customers. This represented the earliest of the subsequent efforts aimed at increasing capabilities to cater to our customers’ needs related to various market-based transactions.