3. Enhancing our overseas securities business

Nikko Cordial Securities (renamed SMBC Nikko Securities Inc. ) had developed its business mostly on domestic retail services, with overseas operations at almost zero, before it became a wholly owned subsidiary of SMBC in October 2009. Upon joining the Group, the new member company started to prepare functions to enter the overseas securities business. For this purpose, a battery of plans was introduced and carried out to build and enhance overseas operations and relevant capabilities, such as personnel, securities trading systems, sales and underwriting skills, and investor relationship, while the company opened offices in major global financial centers.

In May 2013, SMFG and SMBC obtained a status as the financial holding company (FHC) under the relevant U.S. law. The FHC status, together with substantial efforts by the sales staffs, helped expand business such that non-Japanese customers of SMBC increasingly invited the U.S. securities subsidiary to participate in the underwriting syndicate at the time of their bond issuance.

With the increasing needs of both Japanese and non-Japanese large companies for sophisticated global funding methods, SMFG aimed to upgrade its business models to provide solutions to customers in a comprehensive manner by a combination of commercial banking and investment banking products and services, from deposit and loan programs to financing arrangements and M&A advisory. For this purpose, SMFG enhanced overseas banking-securities collaboration as well as strengthening the relationship with investors by offering products derived from project finance and other products in which we boast of having a competitive advantage.