3. Reforming domestic business operations
SMFG’s consolidated net income began to grow steadily in the second half of fiscal year 2012, driven by an upturn in economic conditions in and outside of Japan, recording a new high for two straight years in fiscal years 2012 and 2013. Despite these favorable results, the management team shared concerns over the future possibility of facing a bleak outcome from simply maintaining existing business models, given huge changes likely to occur in the economy and society as well as in our customers’ behavior. They recognized the need to drastically transform business in response to the expected changes. Thus, SMFG began to develop new business models, looking ahead five to ten years.
At SMBC, major domestic business reforms were implemented, starting in April 2014. These reforms were undertaken to revise customer segmentation, with the aim of increasing customer service capabilities. The primary objective was to “overhaul corporate service functions from the viewpoint of customers” with a focus on refurbishing domestic corporate business to create a “next-generation business model” (President Kunibe).
Specific procedures were as follows: 1. Broaden the definition of the large corporation and increase the number of Corporate Banking Departments in charge of large corporate clients to apply the Global-Corporate and Investment Banking (G-CIB) model; 2. Consolidate the Business Support Plaza, the small enterprise business with annual sales below one billion yen, and the customer segment with annual sales below three billion yen in the Middle Market Banking Unit into the Retail Banking Unit; and 3. Serve customers categorized between large enterprises and small- to medium-sized enterprises, applying the one-to-one model which delivers services tailored to the needs of each customer.
The three previous units, Consumer Banking, Middle Market Banking and Corporate Banking, were restructured into two units: Wholesale Banking Unit and Retail Banking Unit. This reorganization was the largest-ever cross-organizational restructuring plan since the inception of SMBC.
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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