January 17^th, 2012

 

Sumitomo Mitsui Financial Group, Inc.(Code: 8316)                         

Sumitomo Mitsui Finance and Leasing Company, Limited.

Sumitomo Mitsui Banking Corporation

Sumitomo Corporation (Code: 8053)

 

Acquisition of Aircraft Leasing Business from The Royal Bank of Scotland Group plc

 

Sumitomo Mitsui Banking Corporation (SMBC; President: Takeshi Kunibe) and Sumitomo Mitsui Finance and Leasing Company, Limited (SMFL; President: Yoshinori Kawamura), both subsidiaries of Sumitomo Mitsui Financial Group, Inc. (SMFG; President: Koichi Miyata), and Sumitomo Corporation (SC; President and CEO: Susumu Kato) have reached an agreement with The Royal Bank of Scotland Group plc (RBS; Group Chief Executive: Stephen Hester) on the acquisition of RBS’s aircraft leasing business, subject to regulatory approval and clearance.

 

In December 2008, SMFL and SC established a company, SMFL Aircraft Capital Corporation B.V., to jointly launch and develop an aircraft leasing business as part of the strategic partnership between SMFG and SC, and have been vigorously expanding the business.

 

The aircraft leasing industry expects demand for commercial aircrafts to continue to grow steadily underpinned by the increasing volume of air travelers on the back of the growth of emerging markets, especially in Asia, and the rapid growth of low cost careers (LCCs). The acquisition of RBS’s aircraft leasing unit, the fourth largest player in the world in terms of book value, will enable SMFG and SC to further expand and develop the business in Asia and other emerging market as the new unit cooperates with the existing aircraft leasing unit.

 

Furthermore, the consortium will explore stable long-term funding sources for this acquisition, including funding supports by export credit agencies and government-affiliated financial institutions of various countries such as The Japan Bank for International Cooperation, in light of the current uncertain financial market climate.

 

Both groups, SMFG and SC, will continue their concerted efforts to further strengthen the aircraft leasing business and offer higher-value-added financial services to the airline industry and aircraft manufacturers in both domestic and foreign markets by leveraging their advantages, such as a sound financial position, ability to provide sophisticated financial solutions, broad global client base, and advanced risk management practice.  

 

○ Overview of the business to acquire

Business name	RBS Aviation Capital
Head office location	Dublin, Ireland
Incorporation	2001
Primary business	Aircraft Leasing
Total assets(*)	Approx. USD 7.2 billion
Ownership percentage （current）	RBS 100%
Planned ownership percentages （after acquisition）	¨  SMFL, the joint venture business of both groups, is to be the main investor (over 50%) ¨  SMFG group will eventually have, directly and indirectly, approx.  60-70% ownership and SC group will have the remaining approx. 30-40% ownership. ¨  The detailed shareholding structure is to be determined based upon further discussion.

(*) as of June 30, 2011

○ Overview of the principal existing joint venture business

(1) Company name                                   ：   SMFL Aircraft Capital Corporation B.V.

(2) Location                                             ：   Netherlands

(3) Date of incorporation                          ：   December 1, 2008

(4) Primary business                                 ：   Aircraft leasing

(5) Shareholders & shareholding ratio       ：   SMFL 60%,  SC 40%