2. Introducing group-wide business units and CxO system

Prior to the shift to a “Company with a Nominating Committee, etc.” SMFG introduced group-wide business units and the CxO system in April 2017 to bolster the group management structure. Specifically, four business units―the Retail Business Unit, Wholesale Business Unit, International Business Unit (renamed the Global Business Unit in April 2020), and Global Markets Business Unit―were formed in accordance with each customer segment, and a head was assigned to each business unit to oversee the operations of the unit across the Group. Also, with the purpose of reinforcing the group management framework centering on SMFG, nine Group CxOs, including the Group CEO, were assigned to undertake overall management of the relevant head office functions.

Behind these initiatives for enhancing the group management structure were the following three primary reasons related to internal and external factors: 1. Out of the total amount of consolidated gross profit posted in fiscal year 2016, 38% was attributable to group companies excluding SMBC, representing a significant increase from 18% in fiscal year 2002; 2. In order to respond to the increasingly sophisticated and diversifying needs of customers, it was imperative to increase capabilities to build group-wide business development strategies and provide products and services best suited to each customer in a seamless manner and on a group-wide basis; and 3. In order to address tightening regulations and oversight processes targeting global financial institutions on a consolidated basis, represented by Basel III standards, it was an urging issue to build a solid management structure on a group-wide basis and on a global scale as well as improve capital and asset efficiency.