Chapter 1
Business Model Reform Under Challenging Business Conditions

1. Our journey under new leadership (the second decade)

On April 1, 2011, the tenth year of Sumitomo Mitsui Banking Corporation (SMBC), Teisuke Kitayama and Masayuki Oku stepped down as President of Sumitomo Mitsui Financial Group (SMFG) and President of SMBC, respectively. Kitayama and Oku remained in office as Chairman of the Board of SMBC and SMFG, respectively, to engage in full-time oversight of business execution.

On the same day, Koichi Miyata and Takeshi Kunibe were appointed as President of SMFG and President and CEO of SMBC, respectively. They both formerly doubled as Director and Senior Managing Executive Officer at SMBC and Director at SMFG. The new leaders formed the third top management team to open a new chapter for the second decade of the Group’s history.

The launch of the new team was challenged by unfavorable external conditions, such as the stagnant economy after the global financial crisis, the appreciation of the yen which was at historically high levels, and the impact of the Great East Japan Earthquake. Starting in the second half of fiscal year 2012 (ended March 2013), the Group suffered from dwindling income resulting from loan deposit interest margins thinning due to continuing extremely low interest rates, although economies began to pick up in and outside of Japan. At the same time, growing international trends toward tighter financial regulations in the wake of the global financial crisis posed major management issues, notably incluing raising the quality and the level of its capital.