6-K 1 d76153d6k.htm FORM 6-K FORM 6-K
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

For the month of December 2020

Commission file number 001-34919

 

 

SUMITOMO MITSUI FINANCIAL GROUP, INC.

(Translation of registrant’s name into English)

 

 

1-2, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-0005, Japan

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:        

Form 20-F  ☒    or    Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):    ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):    ☐

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.    Yes  ☐    No  ☒

 

*

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                    

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE INTO THE PROSPECTUS FORMING A PART OF SUMITOMO MITSUI FINANCIAL GROUP, INC.’S REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-228913) AND TO BE A PART OF SUCH PROSPECTUS FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

 

 

 


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Sumitomo Mitsui Financial Group, Inc.
By:  

/s/ Toru Nakashima

  Name:       Toru Nakashima
  Title:       Senior Managing Executive Officer
    Group Chief Financial Officer

Date: December 3, 2020


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UNAUDITED INTERIM CONSOLIDATED JAPANESE GAAP FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2020

On November 27, 2020, we published our unaudited interim consolidated financial statements as of and for the six months ended September 30, 2020 prepared in accordance with accounting principles generally accepted in Japan, or Japanese GAAP, as part of our quarterly securities report (shihanki hokokusho) for the quarter ended September 30, 2020 filed by us with the relevant Japanese authorities. This document is an English translation of the unaudited interim consolidated financial statements and the notes thereto included in such quarterly securities report. Japanese GAAP differs in certain respects from International Financial Reporting Standards as issued by the International Accounting Standards Board, or IFRS, and generally accepted accounting principles in the United States. For a description of certain differences between IFRS and Japanese GAAP, see “Item 5.A Operating Results—Reconciliation with Japanese GAAP” in our most recent annual report on Form 20-F filed with the SEC.


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UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (JAPANESE GAAP)

INTERIM CONSOLIDATED BALANCE SHEETS

 

    

Millions of yen

     Millions of
U.S. dollars
 
    

March 31, 2020

    

September 30, 2020

       September 30, 2020    

Assets:

              

Cash and due from banks

   *8     ¥   61,768,573           *8     ¥   68,474,446            $      647,329       

Call loans and bills bought

        896,739                2,346,355             22,181       

Receivables under resale agreements

        8,753,816                3,982,086             37,645       

Receivables under securities borrowing transactions

        5,005,103                5,186,289             49,029       

Monetary claims bought

        4,559,429                4,097,203             38,733       

Trading assets

   *8      7,361,253           *8      6,649,870             62,865       

Money held in trust

        353                333             3       

Securities

   *1, *8, *15      27,128,751           *1, *2, *8, *15      29,190,464             275,954       

Loans and bills discounted

  

*3, *4, *5, *6, *7,

*8, *9

     82,517,609          

*3, *4, *5, *6, *7,

*8, *9

     84,516,005             798,979       

Foreign exchanges

   *7      2,063,284           *7      2,097,207             19,826       

Lease receivables and investment assets

     

 

219,733     

 

        226,046             2,137       

Other assets

   *8      8,298,393           *8      7,958,448             75,236       

Tangible fixed assets

   *10, *11      1,450,323           *10, *11      1,426,529             13,486       

Intangible fixed assets

        753,579                748,040             7,072       

Net defined benefit asset

        230,573                374,032             3,536       

Deferred tax assets

        26,314                28,265             267       

Customers’ liabilities for acceptances and guarantees

        9,308,882                9,020,388             85,275       

Reserve for possible loan losses

        (479,197)               (564,094)            (5,333)      
     

 

 

       

 

 

    

 

 

 

Total assets

       ¥    219,863,518               ¥    225,757,919            $        2,134,221       
     

 

 

       

 

 

    

 

 

 

 

—1—


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(Continued)

 

              
    

Millions of yen

     Millions of
U.S. dollars
 
    

March 31, 2020

    

September 30, 2020

       September 30, 2020    

Liabilities and net assets:

              

Liabilities:

              

Deposits

   *8     ¥    127,042,217           *8     ¥    137,912,817            $     1,303,770       

Negotiable certificates of deposit

        10,180,435                10,237,691             96,783       

Call money and bills sold

        3,740,539                1,240,692             11,729       

Payables under repurchase agreements

   *8      13,237,913           *8      10,925,007             103,280       

Payables under securities lending transactions

   *8      2,385,607           *8      2,293,249             21,679       

Commercial paper

        1,409,249                1,895,452             17,919       

Trading liabilities

        6,084,528                5,465,919             51,673       

Borrowed money

                    *8, *12      15,210,894           *8, *12      16,011,392             151,365       

Foreign exchanges

        1,461,308                1,003,624             9,488       

Short-term bonds

        379,000                727,000             6,873       

Bonds

   *13      9,235,639           *13      9,204,155             87,012       

Due to trust account

   *8, *14      1,811,355                            *8, *14      1,967,293             18,598       

Other liabilities

        7,011,967                5,840,581             55,214       

Reserve for employee bonuses

        73,868                54,133             512       

Reserve for executive bonuses

        3,362                —             —       

Net defined benefit liability

        35,777                35,323             334       

Reserve for executive retirement benefits

        1,270                966             9       

Reserve for point service program

        26,576                26,382             249       

Reserve for reimbursement of deposits

        4,687                2,097             20       

Reserve for losses on interest repayment

        142,890                126,107             1,192       

Reserves under the special laws

        3,145                3,467             33       

Deferred tax liabilities

        257,384                434,457             4,107       

Deferred tax liabilities for land revaluation

   *10      30,111           *10      30,047             284       

Acceptances and guarantees

   *8      9,308,882           *8      9,020,388             85,275       
     

 

 

       

 

 

    

 

 

 

Total liabilities

        209,078,615                214,458,248             2,027,399       
     

 

 

       

 

 

    

 

 

 

Net assets:

              

Capital stock

        2,339,964                2,341,274             22,133       

Capital surplus

        692,003                693,098             6,552       

Retained earnings

        6,336,311                6,427,428             60,762       

Treasury stock

        (13,983)               (13,693)            (129)      
     

 

 

       

 

 

    

 

 

 

Total stockholders’ equity

        9,354,296                9,448,109             89,318       
     

 

 

       

 

 

    

 

 

 

Net unrealized gains (losses) on other securities

        1,371,407                1,729,972             16,354       

Net deferred gains (losses) on hedges

        82,257                105,603             998       

Land revaluation excess

   *10      36,878           *10      37,056             350       

Foreign currency translation adjustments

        (32,839)               (87,545)            (828)      

Accumulated remeasurements of defined benefit plans

        (92,030)               (568)            (5)      
     

 

 

       

 

 

    

 

 

 

Total accumulated other comprehensive income

        1,365,673                1,784,519             16,870       
     

 

 

       

 

 

    

 

 

 

Stock acquisition rights

        2,064                1,808             17       

Non-controlling interests

        62,869                65,234             617       
     

 

 

       

 

 

    

 

 

 

Total net assets

        10,784,903                11,299,671             106,822       
     

 

 

       

 

 

    

 

 

 

Total liabilities and net assets

       ¥    219,863,518               ¥    225,757,919           $        2,134,221       
     

 

 

       

 

 

    

 

 

 

 

—2—


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INTERIM CONSOLIDATED STATEMENTS OF INCOME

 

Six months ended September 30

  

Millions of yen

     Millions of
    U.S. dollars    
 
  

2019

    

2020

     2020  

Ordinary income

       ¥        2,348,511               ¥       1,949,441            $              18,429       

Interest income

        1,285,393                947,734             8,959       

Interest on loans and discounts

        884,363                699,690             6,615       

Interest and dividends on securities

        166,523                136,896             1,294       

Trust fees

        2,129                2,253             21       

Fees and commissions

        624,407                598,328             5,656       

Trading income

        120,456                139,797             1,322       

Other operating income

        182,318                180,705             1,708       

Other income

   *1      133,805           *1      80,622             762       

Ordinary expenses

        1,790,151                1,603,146             15,155       

Interest expenses

        639,380                315,673             2,984       

Interest on deposits

        245,911                89,975             851       

Fees and commissions payments

        104,837                99,807             944       

Trading losses

        —                462             4       

Other operating expenses

        87,283                75,502             714       

General and administrative expenses

   *2      858,710           *2      836,421             7,907       

Other expenses

   *3      99,938           *3      275,278             2,602       
     

 

 

       

 

 

    

 

 

 

Ordinary profit

        558,359                346,294             3,274       
     

 

 

       

 

 

    

 

 

 

Extraordinary gains

   *4      22,815           *4      407             4       

Extraordinary losses

                      *5, *6      2,196                              *5, *6      4,767             45       
     

 

 

       

 

 

    

 

 

 

Income before income taxes

        578,978                341,934             3,233       
     

 

 

       

 

 

    

 

 

 

Income taxes-current

        104,493                87,704             829       

Income taxes-deferred

        31,167                (16,322)            (154)      
     

 

 

       

 

 

    

 

 

 

Income taxes

                                      135,661                                              71,381             675       
     

 

 

       

 

 

    

 

 

 

Profit

        443,317                270,553             2,558       
     

 

 

       

 

 

    

 

 

 

Profit attributable to non-controlling interests

        11,361                422             4       
     

 

 

       

 

 

    

 

 

 

Profit attributable to owners of parent

       ¥ 431,955               ¥ 270,130            $ 2,554       
     

 

 

       

 

 

    

 

 

 

 

—3—


Table of Contents

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

Six months ended September 30

  

Millions of yen

     Millions of
    U.S. dollars    
 
  

2019

    

2020

     2020  

Profit

       ¥      443,317               ¥      270,553            $      2,558       

Other comprehensive income (losses)

                 (37,735)                        420,195             3,972       

Net unrealized gains (losses) on other securities

        (28,523)               358,489             3,389       

Net deferred gains (losses) on hedges

        77,273                24,261             229       

Foreign currency translation adjustments

        (72,635)               (52,920)            (500)      

Remeasurements of defined benefit plans

        2,015                91,672             867       

Share of other comprehensive income of affiliates

        (15,865)               (1,307)            (12)      
     

 

 

       

 

 

    

 

 

 

Total comprehensive income

        405,581                690,749             6,530       
     

 

 

       

 

 

    

 

 

 

Comprehensive income attributable to owners of parent

        393,666                688,797             6,512       

Comprehensive income attributable to non-controlling interests

        11,915                1,951             18       

 

—4—


Table of Contents

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

 

                                                                                                                                                                                         
    

Millions of yen

       
    

Stockholders’ equity

       

Six months ended September 30, 2019

   Capital
stock
    Capital
surplus
    Retained
earnings
    Treasury
stock
    Total        

Balance at the beginning of the period

    ¥     2,339,443      ¥     739,047      ¥     5,992,247      ¥ (16,302)      ¥     9,054,436    

Changes in the period

            

Issuance of new stock

     521       521           1,043    

Cash dividends

         (132,582       (132,582  

Profit attributable to owners of parent

         431,955         431,955    

Purchase of treasury stock

           (100,039     (100,039  

Disposal of treasury stock

       (148       478       330    

Cancellation of treasury stock

       (101,673       101,673          

Changes in shareholders’ interest due to transaction with
non-controlling interests

       (47,584         (47,584  

Decrease due to decrease in subsidiaries

         (945       (945  

Reversal of land revaluation excess

         91         91    

Transfer from retained earnings to capital surplus

       101,821       (101,821          

Net changes in items other than stockholders’ equity in the period

            
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Net changes in the period

     521       (47,062     196,698       2,112       152,269    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Balance at the end of the period

    ¥     2,339,964      ¥     691,985      ¥     6,188,945      ¥     (14,189    ¥     9,206,705    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   
     Millions of yen  
     Accumulated other comprehensive income  

Six months ended September 30, 2019

   Net unrealized
gains (losses)
on other
securities
    Net deferred
gains (losses)
on hedges
    Land
revaluation
excess
    Foreign
currency
translation
adjustments
    Accumulated
remeasurements
of defined
benefit plans
    Total  

Balance at the beginning of the period

    ¥     1,688,852      ¥     (54,650    ¥     36,547      ¥     50,379      ¥     (7,244    ¥     1,713,884  

Changes in the period

                                                                                                                                                                                                        

Issuance of new stock

            

Cash dividends

            

Profit attributable to owners of parent

            

Purchase of treasury stock

            

Disposal of treasury stock

            

Cancellation of treasury stock

            

Changes in shareholders’ interest due to transaction with
non-controlling interests

            

Decrease due to decrease in subsidiaries

            

Reversal of land revaluation excess

            

Transfer from retained earnings to capital surplus

            

Net changes in items other than stockholders’ equity in the period

     (26,024     62,618       (91     (77,467     2,583       (38,381
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net changes in the period

     (26,024     62,618       (91     (77,467     2,583       (38,381
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of the period

    ¥     1,662,827      ¥     7,968      ¥     36,456      ¥     (27,087    ¥ (4,661    ¥     1,675,503  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

—5—


Table of Contents
                                                                                                                                                                                         

 

(Continued)

 

           
    Millions of yen                    

Six months ended September 30, 2019

  Stock
acquisition
rights
    Non-controlling
interests
    Total
net assets
                   

Balance at the beginning of the period

  ¥     4,750     ¥     678,540      ¥      11,451,611                                                                                                       

Changes in the period

                                                                                                                                                                           

Issuance of new stock

        1,043        

Cash dividends

        (132,582      

Profit attributable to owners of parent

        431,955        

Purchase of treasury stock

        (100,039      

Disposal of treasury stock

        330        

Cancellation of treasury stock

               

Changes in shareholders’ interest due to transaction with
non-controlling interests

        (47,584      

Decrease due to decrease in subsidiaries

        (945      

Reversal of land revaluation excess

        91        

Transfer from retained earnings to capital surplus

               

Net changes in items other than stockholders’ equity in the period

    (684     (350,990     (390,056      
 

 

 

   

 

 

   

 

 

       

Net changes in the period

    (684     (350,990     (237,786      
 

 

 

   

 

 

   

 

 

       

Balance at the end of the period

  ¥             4,065     ¥     327,550      ¥     11,213,825        
 

 

 

   

 

 

   

 

 

       
    Millions of yen        
    Stockholders’ equity        

Six months ended September 30, 2020

  Capital
stock
    Capital
surplus
    Retained
earnings
    Treasury
stock
    Total        

Balance at the beginning of the period

   ¥     2,339,964      ¥        692,003      ¥     6,336,311      ¥     (13,983    ¥     9,354,296    

Cumulative effects of changes in accounting policies

                                                                     (41,849                                     (41,849                                           

Restated balance

    2,339,964       692,003       6,294,462       (13,983     9,312,447    

Changes in the period

           

Issuance of new stock

    1,309       1,308           2,618    

Cash dividends

        (136,952       (136,952  

Profit attributable to owners of parent

        270,130         270,130    

Purchase of treasury stock

          (21     (21  

Disposal of treasury stock

      (50       311       261    

Changes in shareholders’ interest due to transaction with
non-controlling interests

      (213         (213  

Reversal of land revaluation excess

        (161       (161  

Transfer from retained earnings to capital surplus

      50       (50          

Net changes in items other than stockholders’ equity in the period

           
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Net changes in the period

    1,309       1,095       132,966       290       135,661    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Balance at the end of the period

   ¥ 2,341,274      ¥ 693,098      ¥ 6,427,428      ¥ (13,693    ¥ 9,448,109    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

—6—


Table of Contents

(Continued)

 

                                                                                                                                                                                         
     Millions of yen  
     Accumulated other comprehensive income  

Six months ended September 30, 2020

   Net unrealized
gains (losses)
on other
securities
        Net deferred    
gains (losses)
on hedges
    Land
revaluation
excess
    Foreign
currency
translation
adjustments
    Accumulated
remeasurements
of defined
benefit plans
    Total  

Balance at the beginning of the period

    ¥     1,371,407      ¥ 82,257      ¥     36,878      ¥ (32,839    ¥ (92,030)      ¥ 1,365,673  

Cumulative effects of changes in accounting policies

            

Restated balance

     1,371,407       82,257       36,878       (32,839     (92,030)       1,365,673  

Changes in the period

            

Issuance of new stock

            

Cash dividends

                                                                                                                                                                                 

Profit attributable to owners of parent

            

Purchase of treasury stock

            

Disposal of treasury stock

            

Changes in shareholders’ interest due to transaction with
non-controlling interests

            

Reversal of land revaluation excess

            

Transfer from retained earnings to capital surplus

            

Net changes in items other than stockholders’ equity in the period

     358,565       23,346       177       (54,706     91,461       418,845  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net changes in the period

     358,565       23,346       177       (54,706     91,461       418,845  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of the period

    ¥ 1,729,972      ¥     105,603      ¥            37,056      ¥ (87,545    ¥ (568    ¥       1,784,519  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Millions of yen                    

Six months ended September 30, 2020

   Stock
acquisition
rights
    Non-controlling
interests
    Total
net assets
                   

Balance at the beginning of the period

    ¥ 2,064      ¥     62,869      ¥     10,784,903        

Cumulative effects of changes in accounting policies

         (41,849      

Restated balance

     2,064       62,869       10,743,054        

Changes in the period

            

Issuance of new stock

         2,618        

Cash dividends

         (136,952      

Profit attributable to owners of parent

         270,130        

Purchase of treasury stock

         (21      

Disposal of treasury stock

         261        

Changes in shareholders’ interest due to transaction with
non-controlling interests

         (213      

Reversal of land revaluation excess

         (161      

Transfer from retained earnings to capital surplus

                

Net changes in items other than stockholders’ equity in the period

     (255     2,365       420,954        
  

 

 

   

 

 

   

 

 

       

Net changes in the period

     (255     2,365       556,616        
  

 

 

   

 

 

   

 

 

       

Balance at the end of the period

    ¥ 1,808      ¥ 65,234      ¥ 11,299,671        
  

 

 

   

 

 

   

 

 

       

 

 

—7—


Table of Contents

(Continued)

 

                                                                                                                                                                                         
     Millions of U.S. dollars        
     Stockholders’ equity        

Six months ended September 30, 2020

   Capital
stock
    Capital
surplus
    Retained
earnings
    Treasury
stock
    Total        

Balance at the beginning of the period

    $ 22,121       $ 6,542       $ 59,901       $ (132    $ 88,432    

Cumulative effects of changes in accounting policies

         (396       (396  

Restated balance

     22,121       6,542       59,505       (132     88,036    

Changes in the period

                                                                                                                                                                                                        

Issuance of new stock

     12       12           25    

Cash dividends

         (1,295       (1,295  

Profit attributable to owners of parent

         2,554         2,554    

Purchase of treasury stock

           (0     (0  

Disposal of treasury stock

       (0       3       2    

Changes in shareholders’ interest due to transaction with
non-controlling interests

       (2         (2  

Reversal of land revaluation excess

         (2       (2  

Transfer from retained earnings to capital surplus

       0       (0          

Net changes in items other than stockholders’ equity in the period

            
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Net changes in the period

     12       10       1,257       3       1,282    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Balance at the end of the period

    $         22,133      $         6,552      $         60,762      $         (129    $         89,318    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   
     Millions of U.S. dollars  
     Accumulated other comprehensive income  

Six months ended September 30, 2020

   Net unrealized
gains (losses)
on other
securities
    Net deferred
gains (losses)
on hedges
    Land
revaluation
excess
    Foreign
currency
translation
adjustments
    Accumulated
remeasurements
of defined
benefit plans
    Total  

Balance at the beginning of the period

    $ 12,965      $ 778      $ 349      $ (310    $ (870    $         12,911  

Cumulative effects of changes in accounting policies

            

Restated balance

     12,965       778       349       (310     (870     12,911  

Changes in the period

            

Issuance of new stock

                                                   

Cash dividends

            

Profit attributable to owners of parent

            

Purchase of treasury stock

            

Disposal of treasury stock

            

Changes in shareholders’ interest due to transaction with
non-controlling interests

            

Reversal of land revaluation excess

            

Transfer from retained earnings to capital surplus

            

Net changes in items other than stockholders’ equity in the period

     3,390       221       2       (517     865       3,960  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net changes in the period

     3,390       221       2       (517     865       3,960  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of the period

    $ 16,354      $ 998      $ 350      $ (828    $ (5    $ 16,870  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

—8—


Table of Contents

(Continued)

 

                                                                                                                                                                                         
     Millions of U.S. dollars                    

Six months ended September 30, 2020

   Stock
acquisition
rights
    Non-controlling
interests
    Total
net assets
                   

Balance at the beginning of the period

    $ 20      $ 594      $ 101,956        

Cumulative effects of changes in accounting policies

         (396      

Restated balance

     20       594       101,560        

Changes in the period

                                                                                                                                                                                                                     

Issuance of new stock

         25        

Cash dividends

         (1,295      

Profit attributable to owners of parent

         2,554                                               

Purchase of treasury stock

         (0      

Disposal of treasury stock

         2        

Changes in shareholders’ interest due to transaction with
non-controlling interests

         (2      

Reversal of land revaluation excess

         (2      

Transfer from retained earnings to capital surplus

                

Net changes in items other than stockholders’ equity in the period

     (2     22        3,980        
  

 

 

   

 

 

   

 

 

       

Net changes in the period

     (2     22       5,262        
  

 

 

   

 

 

   

 

 

       

Balance at the end of the period

    $ 17      $ 617      $ 106,822        
  

 

 

   

 

 

   

 

 

       

 

—9—


Table of Contents

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

 

     Millions of yen      Millions of
U.S. dollars
 

Six months ended September 30

   2019      2020      2020  

Cash flows from operating activities:

                                    

Income before income taxes

       ¥ 578,978               ¥         341,934            $         3,233       

Depreciation

        101,320                103,173             975       

Losses on impairment of fixed assets

        1,441                                3,983             38       

Amortization of goodwill

        8,772                9,870             93       

Net (gains) losses on step acquisitions

        (21,997)               —             —       

Equity in net (gains) losses of affiliates

        (30,098)               (10,223)            (97)      

Net change in reserve for possible loan losses

        (16,490)               84,705             801       

Net change in reserve for employee bonuses

        (22,168)               (19,560)            (185)      

Net change in reserve for executive bonuses

        (3,163)               (3,346)            (32)      

Net change in net defined benefit asset and liability

        (14,928)               (143,940)            (1,361)      

Net change in reserve for executive retirement benefits

        (258)               (350)            (3)      

Net change in reserve for point service program

        1,355                (193)            (2)      

Net change in reserve for reimbursement of deposits

        (3,834)               (2,590)            (24)      

Net change in reserve for losses on interest repayment

        (21,012)               (16,783)            (159)      

Interest income

        (1,285,393)               (947,734)            (8,959)      

Interest expenses

        639,380                315,673             2,984       

Net (gains) losses on securities

        (145,150)               (142,185)            (1,344)      

Net (gains) losses from money held in trust

        (0)               (0)            (0)      

Net exchange (gains) losses

        (15,620)               39,534             374       

Net (gains) losses from disposal of fixed assets

        (62)               54             1       

Net change in trading assets

        (2,191,030)               730,931             6,910       

Net change in trading liabilities

        1,576,011                (517,008)            (4,888)      

Net change in loans and bills discounted

        (865,282)               (1,984,447)            (18,760)      

Net change in deposits

        536,885                10,956,508             103,578       

Net change in negotiable certificates of deposit

        297,455                56,938             538       

Net change in borrowed money (excluding subordinated borrowings)

        752,748                818,525             7,738       

Net change in deposits with banks

        (363,486)               412,822             3,903       

Net change in call loans and bills bought and others

        264,515                3,714,580             35,116       

Net change in receivables under securities borrowing transactions

        (127,970)               (181,185)            (1,713)      

Net change in call money and bills sold and others

        3,115,666                (4,783,443)            (45,221)      

Net change in commercial paper

        (600,980)               515,443             4,873       

Net change in payables under securities lending transactions

        547,960                (92,358)            (873)      

Net change in foreign exchanges (assets)

        (232,047)               (41,407)            (391)      

Net change in foreign exchanges (liabilities)

        4,319                (449,246)            (4,247)      

Net change in lease receivables and investment assets

        (6,527)               (6,362)            (60)      

Net change in short-term bonds (liabilities)

        43,000                348,000             3,290       

Issuance and redemption of bonds (excluding subordinated bonds)

                      427,766                (25,962)            (245)      

Net change in due to trust account

        196,131                155,938             1,474       

Interest received

        1,297,545                995,638             9,412       

Interest paid

        (650,715)               (344,135)            (3,253)      

Other, net

        (73,212)               (342,063)            (3,234)      
     

 

 

       

 

 

    

 

 

 

Subtotal

        3,699,821                9,549,726             90,279       
     

 

 

       

 

 

    

 

 

 

Income taxes paid

        (110,823)               43,550             412       
     

 

 

       

 

 

    

 

 

 

Net cash provided by (used in) operating activities

        3,588,998                9,593,276             90,691       
     

 

 

       

 

 

    

 

 

 

 

—10—


Table of Contents

(Continued)

 

Six months ended September 30

  Millions of yen      Millions of
U.S. dollars
 
  2019      2020      2020  

Cash flows from investing activities:

                                  

Purchases of securities

     ¥  (21,343,615)              ¥  (20,921,515)           $ (197,783)      

Proceeds from sale of securities

      14,239,901                9,348,979             88,381       

Proceeds from redemption of securities

      4,345,761                9,435,117                   89,196       

Purchases of money held in trust

      (102)               (0)            (0)      

Proceeds from sale of money held in trust

      216                20             0       

Purchases of tangible fixed assets

      (39,833)               (28,894)            (273)      

Proceeds from sale of tangible fixed assets

      11,458                5,187             49       

Purchases of intangible fixed assets

      (66,582)               (74,503)            (704)      

Purchases of stocks of subsidiaries resulting in change in scope of consolidation

      —                (2,865)            (27)      

Proceeds from sale of stocks of subsidiaries resulting in change in scope of consolidation

      27,021                —             —       
   

 

 

       

 

 

    

 

 

 

Net cash provided by (used in) investing activities

      (2,825,773)               (2,238,474)            (21,162)      
   

 

 

       

 

 

    

 

 

 

Cash flows from financing activities:

            

Proceeds from issuance of subordinated bonds and bonds with stock acquisition rights

      138,965                189,913             1,795       

Redemption of subordinated bonds and bonds with stock acquisition rights

      (113,000)               (120,000)            (1,134)      

Dividends paid

      (132,542)               (136,922)            (1,294)      

Proceeds from issuance of common stock to non-controlling stockholders

      —                100             1       

Repayment to non-controlling stockholders

      (173,000)               —             —       

Dividends paid to non-controlling stockholders

      (11,162)               (386)            (4)      

Purchases of treasury stock

      (100,039)               (21)            (0)      

Proceeds from disposal of treasury stock

      330                261             2       

Purchase of stocks of subsidiaries not resulting in change in scope of consolidation

      (234,159)               —             —       
   

 

 

       

 

 

    

 

 

 

Net cash provided by (used in) financing activities

      (624,608)               (67,055)            (634)      
   

 

 

       

 

 

    

 

 

 

Effect of exchange rate changes on cash and cash equivalents

      (89,414)               (45,221)            (428)      
   

 

 

       

 

 

    

 

 

 

Net change in cash and cash equivalents

      49,201                7,242,524             68,468       
   

 

 

       

 

 

    

 

 

 

Cash and cash equivalents at the beginning of the period

                  53,120,963                56,097,807             530,325       

Net change in cash and cash equivalents resulting from merger of consolidated subsidiaries

      79                —             —       
   

 

 

       

 

 

    

 

 

 

Cash and cash equivalents at the end of the period

    *1      ¥ 53,170,244             *1       ¥      63,340,332            $ 598,793       
   

 

 

       

 

 

    

 

 

 
   

 

 

       

 

 

    

 

 

 

 

 

—11—


Table of Contents

NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Basis of presentation)

Sumitomo Mitsui Financial Group, Inc. (“the Company”) was established on December 2, 2002 as a holding company for the SMBC Group (“the Group”) through a statutory share transfer (kabushiki iten) of all of the outstanding equity securities of Sumitomo Mitsui Banking Corporation (“SMBC”) in exchange for the Company’s newly issued securities. The Company is a joint stock corporation with limited liability (Kabushiki Kaisha) incorporated under the Companies Act of Japan. Upon formation of the Company and completion of the statutory share transfer, SMBC became a direct wholly owned subsidiary of the Company.

The Company has prepared the accompanying consolidated financial statements in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, and in conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirements from International Financial Reporting Standards (“IFRS”).

The accounts of overseas subsidiaries and affiliated companies are, in principle, integrated with those of the Company’s accounting policies for purposes of consolidation unless they apply different accounting principles and standards as required under U.S. GAAP or IFRS, in which case a certain limited number of items are adjusted based on their materiality.

These consolidated financial statements are translated from the consolidated financial statements contained in the interim securities report filed under the Financial Instrument and Exchange Act of Japan (“FIEA based financial statements”) except for the addition of the non-consolidated financial statements and U.S. dollar figures.

Amounts less than 1 million yen have been rounded down. As a result, the totals in Japanese yen shown in the financial statements do not necessarily agree with the sum of the individual amounts.

The translation of the Japanese yen amounts into U.S. dollars is included solely for the convenience of readers outside Japan, using the prevailing exchange rate at September 30, 2020 which was ¥105.78 to US$1. These translations should not be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at that rate.

 

—12—


Table of Contents

(Significant accounting policies for preparing interim consolidated financial statements)

1.  Scope of consolidation

 

(1)

Consolidated subsidiaries

 

The number of consolidated subsidiaries at September 30, 2020 is 175.

Principal companies:

  

Sumitomo Mitsui Banking Corporation (“SMBC”)

SMBC Trust Bank Ltd.

SMBC Nikko Securities Inc.

Sumitomo Mitsui Card Company, Limited

SMBC Consumer Finance Co., Ltd.

SMBC Finance Service Co., Ltd.

The Japan Research Institute, Limited

Sumitomo Mitsui DS Asset Management Company, Limited

Sumitomo Mitsui Banking Corporation Europe Limited

Sumitomo Mitsui Banking Corporation (China) Limited

PT Bank BTPN Tbk

SMBC Americas Holdings, Inc.

SMBC Guarantee Co., Ltd.

Changes in the consolidated subsidiaries in the six months ended September 30, 2020 are as follows:

7 companies were newly included in the scope of consolidation as a result of the establishment and for other reasons.

SMBC Finance Service Co., Ltd. was excluded from the scope of consolidation because of merger with Cedyna Financial Corporation. 5 other companies were excluded from the scope of consolidation because of liquidation and for other reasons.

Cedyna Financial Corporation changed the name to SMBC Finance Service Co., Ltd.

 

(2)

Unconsolidated subsidiaries

 

Principal company:

   SBCS Co., Ltd.

Unconsolidated subsidiaries are excluded from the scope of consolidation because their total amounts in terms of total assets, ordinary income, net income and retained earnings are immaterial, as such, they do not hinder a rational judgment of the Company’s financial position and results of operations when excluded from the scope of consolidation.

2.  Application of the equity method

 

(1)

Unconsolidated subsidiaries accounted for by the equity method

 

The number of unconsolidated subsidiaries accounted for by the equity method at September 30, 2020 is 5.

Principal company:

   SBCS Co., Ltd.

 

—13—


Table of Contents
(2)

Equity method affiliates

 

The number of equity method affiliates at September 30, 2020 is 112.

 

Principal companies:

  

Sumitomo Mitsui Finance and Leasing Company, Limited

Sumitomo Mitsui Auto Service Company, Limited

Changes in the equity method affiliates in the six months ended September 30, 2020 are as follows:

19 companies became equity method affiliates due to establishment and for other reasons.

3 companies were excluded from the scope of equity method affiliates due to merger and for other reasons.

 

(3)

Unconsolidated subsidiaries that are not accounted for by the equity method

There are no corresponding companies.

 

(4)

Affiliates that are not accounted for by the equity method

 

Principal company:

   Park Square Capital / SMBC Loan Programme S.à r.l.

Affiliates that are not accounted for by the equity method are also excluded from the scope of equity method because their total amounts in terms of net income and retained earnings are immaterial, and as such, they do not hinder a rational judgment of the Company’s financial position and results of operations when excluded from the scope of equity method.

3.  The interim balance sheet dates of consolidated subsidiaries

 

(1)

The interim balance sheet dates of the consolidated subsidiaries at September 30, 2020 are as follows:

 

 

April 30

     2  
 

May 31

     1  
 

June 30

     88  
 

September 30

     84  

 

(2)

The subsidiaries with interim balance sheets dated April 30 are consolidated using the financial statements as of July 31. The subsidiaries with interim balance sheets dated May 31 and certain subsidiaries with interim balance sheets dated June 30 are consolidated using the financial statements as of September 30. Other subsidiaries are consolidated using the financial statements as of their respective interim balance sheet dates.

Appropriate adjustments were made to material transactions during the periods between their respective interim balance sheet dates and the interim consolidated closing date.

 

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4.  Accounting policies

 

(1)

Standards for recognition and measurement of trading assets/liabilities and trading income/losses

Transactions for trading purposes (seeking gains arising from short-term changes in interest rates, currency exchange rates, or market prices of securities and other market related indices or from variation among markets) are included in “Trading assets” or “Trading liabilities” on the interim consolidated balance sheets on a trade date basis. Profits and losses on trading-purpose transactions are recognized on a trade date basis, and recorded as “Trading income” and “Trading losses” on the interim consolidated statement of income.

Securities and monetary claims purchased for trading purposes are stated at the interim period-end market value, and financial derivatives such as swaps, futures and options are stated at amounts that would be settled if the transactions were terminated at the interim consolidated balance sheet date.

“Trading income” and “Trading losses” include interest received or paid during the interim period. The valuation differences of securities and monetary claims between the previous fiscal year-end and the interim period-end are also recorded in the above-mentioned accounts. As for the derivatives, assuming that the settlement will be made in cash, the valuation differences between the previous fiscal year-end and the interim period-end are also recorded in the above-mentioned accounts.

In terms of the evaluation of specific market risks and credit risks for derivative transactions, the net assets or liabilities after offsetting financial assets and liabilities are established as a basis of fair value calculation for the group of such financial assets and liabilities.

 

(2)

Standards for recognition and measurement of securities

 

  1)

Debt securities that consolidated subsidiaries have the positive intent and ability to hold to maturity are classified as held-to-maturity securities and are carried at amortized cost (straight-line method) using the moving-average method. Investments in affiliates that are not accounted for by the equity method are carried at cost using the moving-average method. Securities other than trading purpose securities, held-to-maturity securities and investments in affiliates are classified as “other securities” (available-for-sale securities). Other securities are carried at their interim period-end market prices (cost of securities sold is calculated using primarily the moving-average method). Stocks with no market prices are carried at cost using the moving-average method.

Net unrealized gains (losses) on other securities, net of income taxes, are included in “Net assets” except for the amount reflected on the gains or losses by applying fair value hedge accounting.

 

  2)

Securities included in money held in trust are carried in the same method as in (1) and (2) 1) above.

 

(3)

Standards for recognition and measurement of derivative transactions

Derivative transactions, excluding those classified as trading derivatives, are carried at fair value.

In terms of the evaluation of specific market risks and credit risks for derivative transactions, the net assets or liabilities after offsetting financial assets and liabilities are established as a basis of fair value calculation for the group of such financial assets and liabilities.

 

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(4)

Depreciation

 

  1)

Tangible fixed assets (excluding assets for rent and lease assets)

Buildings owned by the Company and SMBC are depreciated using the straight-line method. Others are depreciated using the declining-balance method. The depreciation expense for the interim period is calculated by proportionally allocating the estimated annual expense to the interim period. The estimated useful lives of major items are as follows:

 

  

 

Buildings:

  7 to 50 years
 

Others:

  2 to 20 years

Other consolidated subsidiaries depreciate tangible fixed assets primarily using the straight-line method over the estimated useful lives of the respective assets.

 

  2)

Intangible fixed assets

Intangible fixed assets are depreciated using the straight-line method. Capitalized software for internal use owned by the Company and its consolidated domestic subsidiaries is depreciated over its estimated useful life (5-10 years).

 

  3)

Assets for rent

Assets for rent are depreciated using the straight-line method, assuming that lease terms are, in principle, their depreciation period and the salvage values are estimated disposal values when the lease period expires.

 

  4)

Lease assets

Lease assets with respect to non-transfer ownership finance leases, which are recorded in “Tangible fixed assets,” are depreciated using the straight-line method, assuming that lease terms are their expected lifetime and salvage values are zero.

 

(5)

Reserve for possible loan losses

The reserve for possible loan losses of major consolidated subsidiaries is provided as detailed below in accordance with the internal standards for write-offs and provisions.

For claims on borrowers that have entered into bankruptcy, special liquidation proceedings or similar legal proceedings (“Bankrupt borrowers”) or borrowers that are not legally or formally insolvent but are regarded as substantially in the same situation (“Effectively bankrupt borrowers”), a reserve is provided based on the amount of claims, after the write-off stated below, net of the expected amount of recoveries from collateral and guarantees. For claims on borrowers that are not currently bankrupt but are perceived to have a high risk of falling into bankruptcy (“Potentially bankrupt borrowers”), a reserve is provided in the amount deemed necessary based on an overall solvency assessment of the claims, net of the expected amount of recoveries from collateral and guarantees.

Discounted Cash Flows (“DCF”) method is used for claims on borrowers whose cash flows from collection of principals and interest can be rationally estimated and SMBC, which is a consolidated subsidiary of the Company, applies it to claims on large potentially bankrupt borrowers and claims on large borrowers requiring close monitoring that have been classified as “Past due loans (3 months or more)” or “Restructured loans,” whose total loans from SMBC exceed a certain amount. SMBC establishes a reserve for possible loan losses using the DCF method for such claims in the amount of the difference between the present value of principal and interest (calculated using the rationally estimated cash flows discounted at the initial contractual interest rate) and the book value.

For other claims, a reserve is primarily provided by setting the potential losses in the next one year or three years. The potential losses are calculated by determining the loss ratio based on the historical loan-loss ratio derived from actual loan losses or bankruptcies in the past one year or three years, or average (of a certain period) probability of bankruptcies, and by making necessary adjustments including future estimations.

 

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In addition, in light of the latest economic situation and risk factors, for potential losses for specific portfolios that are based on the future prospects with high probability, but cannot be reflected in actual loan losses in the past and in any individual borrower’s classification, a reserve is provided in the amount deemed necessary based on an overall assessment.

For claims originated in specific overseas countries, an additional reserve is provided in the amount deemed necessary based on the assessment of political and economic conditions.

Branches and credit supervision departments assess all claims in accordance with the internal rules for self-assessment of assets, and the Credit Review Department, independent from these operating sections, audits their assessment.

The reserve for possible loan losses of other consolidated subsidiaries for general claims is provided in the amount deemed necessary based on the historical loan-loss ratios, and for doubtful claims in the amount deemed uncollectible based on assessment of each claim.

For collateralized or guaranteed claims on bankrupt borrowers and effectively bankrupt borrowers, the amount exceeding the estimated value of collateral and guarantees is deemed to be uncollectible and written off against the total outstanding amount of the claims. The amounts of write-off were ¥166,936 million and ¥142,834 million at September 30 and March 31, 2020, respectively.

 

(6)

Reserve for employee bonuses

The reserve for employee bonuses is provided for payment of bonuses to employees, in the amount of estimated bonuses, which are attributable to the interim period.

 

(7)

Reserve for executive retirement benefits

The reserve for executive retirement benefits is provided for payment of retirement benefits to executives, in the amount of deemed accrued at the interim period-end based on our internal regulations.

 

(8)

Reserve for point service program

The reserve for point service program is provided for the potential future redemption of points awarded to customers under the “SMBC Point Pack,” credit card points programs, and other customer points award programs. The amount is calculated by converting the outstanding points into a monetary amount, and rationally estimating and recognizing the amount that will be redeemed in the future.

 

(9)

Reserve for reimbursement of deposits

The reserve for reimbursement of deposits which were derecognized as liabilities under certain conditions is provided for the possible losses on the future claims of withdrawal based on the historical reimbursements.

 

(10)

Reserve for losses on interest repayment

The reserve for losses on interest repayment is provided for the possible losses on future claims of repayment of interest based on historical interest repayment experience.

 

(11)

Reserves under the special laws

The reserves under the special laws are reserves for contingent liabilities and provided for compensation for losses from securities related transactions or derivative transactions, pursuant to Article 46-5 of the Financial Instruments and Exchange Act.

 

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(12)

Employee retirement benefits

In calculating the projected benefit obligation, mainly the benefit formula basis is used to calculate the expected benefit attributable to the respective interim period.

Unrecognized prior service cost is amortized on a straight-line basis, primarily over 9 years within the employees’ average remaining service period at incurrence.

Unrecognized net actuarial gain (loss) is amortized on a straight-line basis, primarily over 9 years within the employees’ average remaining service period, commencing from the next fiscal year of incurrence.

 

(13)

Translation of foreign currency assets and liabilities

Assets and liabilities of the Company and SMBC, which is a consolidated subsidiary of the Company, denominated in foreign currencies and accounts of SMBC overseas branches are translated into Japanese yen mainly at the exchange rate prevailing at the interim consolidated balance sheet date, with the exception of stocks of subsidiaries and affiliates translated at rates prevailing at the time of acquisition.

Other consolidated subsidiaries’ assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rate prevailing at their respective interim balance sheet dates.

 

(14)

Lease transactions

 

  1)

Recognition of income on finance leases

Interest income is allocated to each period.

 

  2)

Recognition of income on operating leases

Primarily, lease-related income is recognized on a straight-line basis over the full term of the lease, based on the contractual amount of lease fees per month.

 

(15)

Hedge accounting

 

  1)

Hedging against interest rate changes

As for the hedge accounting method applied to hedging transactions for interest rate risk arising from financial assets and liabilities, SMBC, which is a consolidated subsidiary of the Company, applies deferred hedge accounting.

SMBC applies deferred hedge accounting stipulated in “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry” (JICPA Industry Audit Committee Report No. 24, February 13, 2002) to portfolio hedges on groups of large-volume, small-value monetary claims and debts.

As for the portfolio hedges to offset market fluctuation, SMBC assesses the effectiveness of such hedges by classifying the hedged items (such as deposits and loans) and the hedging instruments (such as interest rate swaps) by their maturity. As for the portfolio hedges to fix cash flows, SMBC assesses the effectiveness of such hedges by verifying the correlation between the hedged items and the hedging instruments.

As for the individual hedges, SMBC also assesses the effectiveness of such individual hedges.

 

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  2)

Hedging against currency fluctuations

SMBC, which is a consolidated subsidiary of the Company, applies deferred hedge accounting stipulated in “Treatment of Accounting and Auditing Concerning Accounting for Foreign Currency Transactions in Banking Industry” (JICPA Industry Audit Committee Report No. 25, July 29, 2002) to currency swap and foreign exchange swap transactions executed for the purpose of lending or borrowing funds in different currencies.

Pursuant to JICPA Industry Audit Committee Report No. 25, SMBC assesses the effectiveness of currency swap and foreign exchange swap transactions executed for the purpose of offsetting the risk of changes in currency exchange rates by verifying that there are foreign-currency monetary claims and debts corresponding to the foreign-currency positions.

In order to hedge risk arising from volatility of exchange rates for stocks of subsidiaries and affiliates and other securities (excluding bonds) denominated in foreign currencies, SMBC applies deferred hedge accounting or fair value hedge accounting, on the conditions that the hedged securities are designated in advance and that sufficient on-balance (actual) or off-balance (forward) liability exposure exists to cover the cost of the hedged securities denominated in the same foreign currencies.

 

  3)

Hedging against share price fluctuations

SMBC, which is a consolidated subsidiary, applies fair value hedge accounting to individual hedges offsetting the price fluctuation of the shares that are classified under other securities, and accordingly evaluates the effectiveness of such individual hedges.

 

  4)

Transactions between consolidated subsidiaries

As for derivative transactions between consolidated subsidiaries or internal transactions between trading accounts and other accounts (or among internal sections), SMBC manages the interest rate swaps and currency swaps that are designated as hedging instruments in accordance with the non-arbitrary and strict criteria for external transactions stipulated in JICPA Industry Audit Committee Report No. 24 and No. 25. Therefore, SMBC accounts for the gains or losses that arise from interest rate swaps and currency swaps in its earnings or defers them, rather than eliminating them.

Certain other consolidated subsidiaries apply the deferred hedge accounting, fair value hedge accounting or the special treatment for interest rate swaps.

 

(16)

Amortization of goodwill

Goodwill is amortized using the straight-line method over a period in which its benefit is expected to be realized, not to exceed 20 years. Immaterial goodwill is charged or credited to income directly when incurred.

 

(17)

Scope of “Cash and cash equivalents” on interim consolidated statements of cash flows

For the purposes of presenting the interim consolidated statements of cash flows, “Cash and cash equivalents” are cash on hand, non-interest earning deposits with banks and deposits with the Bank of Japan.

 

(18)

Consumption taxes

National and local consumption taxes of the Company and its consolidated domestic subsidiaries are accounted for using the tax-excluded method.

 

(19)

Adoption of the consolidated corporate-tax system

The Company and certain consolidated domestic subsidiaries apply the consolidated corporate-tax system.

 

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(Changes in accounting policies)

 

(1)

Accounting Standard etc. for Fair Value Measurement (Changes in accounting policies due to application of new or revised accounting standards)

The Company has applied “Accounting Standard for Fair Value Measurement” (ASBJ Statement No.30, July 4, 2019) and “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.31, July 4, 2019) from the beginning of the period for the six months ended September 30, 2020.

Due to the application, the measurement of the fair value of stocks with market price (including foreign stocks, hereinafter the same) in other securities is changed from the fair value method based on their average prices during the final month of fiscal year to the fair value method based on their fiscal year-end market prices. Derivative transactions are carried at fair value reflecting one’s own credit risks and counterparty’s credit risks etc.

As for stocks with market price, in accordance with transitional treatment stipulated in Item 19 of “Accounting Standards for Fair Value Measurement” and Item 44-2 of “Accounting Standard for Financial Instruments,” (ASBJ Statement No.10, July 4, 2019) the Company has applied new accounting policies since the beginning of the period for the six months ended September 30, 2020. As for fair value of derivative transactions, in accordance with transitional treatment stipulated in Item 20 of “Accounting Standards for Fair Value Measurement,” the cumulative effects are adjusted to “Retained earnings” of the beginning of the period for the six months ended September 30, 2020, in the case that the new accounting policy is retroactively applied previous to the beginning of the period for the six months ended September 30, 2020.

As a result, “Trading assets” decreased by ¥66,010 million, “Other assets” decreased by ¥29,768 million, “Deferred tax assets” increased by ¥2,306 million, “Trading liabilities” decreased by ¥21,557 million, “Other liabilities” decreased by ¥14,495 million, “Deferred tax liabilities” decreased by ¥15,570 million, “Retained earnings” decreased by ¥41,849 million, and “Net assets per share” decreased by ¥30.56 at the beginning of the period for the six months ended September 30, 2020.

 

(2)

Changes in recognition of installment-sales-related income and installment-sales-related expenses (Changes in accounting policies due to justifiable reasons other than application of new or revised accounting standards)

As for recognition of installment-sales-related income and installment-sales-related expenses, Sumitomo Mitsui Finance and Leasing Company, Limited (Hereinafter, “SMFL”), which conducts leasing business, had been applying a method for which installment-sales-related income and installment-sales-related expenses are recognized on a due-date basis over the full period of the installment sales in accordance with “Implementation Guidance on Accounting Standards for Leasing Transactions” (ASBJ Guidance No.16, March 25, 2011). However, from the beginning of the period for the six months ended September 30, 2020, the net amount, which is calculated by deducting installment-sales-related expenses from installment-sales-related income, is recorded as “Interest on deferred payment.”

The change is made to properly reflect the fund transaction under the financial type installment-sales transactions on the consolidated financial statements due to SMFL became an equity method affiliate and other reasons.

These changes in accounting policies are applied retroactively, and therefore the interim consolidated financial statements for the six months ended September 30, 2019 and the consolidated financial statements for the fiscal year ended March 31, 2020 reflect the retroactive application. As a result, comparing before and after the retroactive application, “Ordinary income”, “Ordinary expenses”, and “Other operating expenses” decreased by ¥359,162 million respectively, “Interest income” increased by ¥16,995 million, and “Other operating income” decreased by ¥376,157 million, and there are no effects on “Ordinary profit”, “Income before income taxes”, “Profit” and “Profit attributable to owners of parent” for the six months ended September 30, 2019. There is also no cumulative effect on “Net assets” at the beginning of the fiscal year ended March 31, 2020.

 

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(Additional information)

 

(1)

The estimates of reserve for possible loan losses related to the increasing impact of the spread of the novel coronavirus disease (COVID-19)

The estimates of reserve for possible loan losses related to the increased impact of COVID-19 are reflected in the interim consolidated financial statements using the following method.

For potential losses related to individual borrowers due to deterioration in business performance and funding, a reserve for possible loan losses is provided by reviewing, as necessary, the borrower’s classification based on the most recent available information.

In addition, for potential losses which cannot be reflected in any of individual borrower’s classification, a reserve for possible loan losses is provided in the amount deemed necessary based on an overall assessment. The assessment is conducted by specifying the portfolio significantly affected by COVID-19 and estimating impacts such as fluctuations in market indices including crude oil price and change of economic environment due to restraint on economic activities.

 

(2)

Transition from the consolidated corporate-tax system to the group tax sharing system

Companies are required to shift from the consolidated corporate-tax system to the group tax sharing system from the fiscal year beginning on or after April 1, 2022, in accordance with the “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 8, 2020) enacted on March 31, 2020. However, the Company and certain consolidated domestic subsidiaries, currently adopting the consolidated corporate-tax system, applied the accounting treatment based on the provisions of the Income Tax Act before the amendment for the six months ended September 30, 2020, in accordance with the “Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (ASBJ Practical Issue Task Force No. 39, March 31, 2020).

 

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(Notes to interim consolidated balance sheets)

 

*1

Stocks and investments in unconsolidated subsidiaries and affiliates

Stocks and investments in unconsolidated subsidiaries and affiliates at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
     March 31, 2020      September 30, 2020  

Stocks

    ¥            943,980       ¥            929,600  

Investments

     661        640  

 

*2

Unsecured loaned securities for which borrowers have the right to sell or pledge

The amount of unsecured loaned securities for which borrowers have the right to sell or pledge at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
   March 31, 2020      September 30, 2020  

Stocks in “Securities”

    ¥                         —      ¥                9,292  

As for the unsecured borrowed securities, securities under resale agreements and securities borrowed with cash collateral with rights to sell or pledge without restrictions, those securities pledged, those securities lent and those securities held without being disposed at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
   March 31, 2020      September 30, 2020  

Securities pledged

    ¥       11,030,067       ¥         7,208,200  

Securities lent

     171,224        190,235  

Securities held without being disposed

     2,546,017        3,265,751  

 

*3

Bankrupt loans and non-accrual loans

Bankrupt loans and non-accrual loans at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
   March 31, 2020      September 30, 2020  

Bankrupt loans

    ¥              13,978       ¥              69,664  

Non-accrual loans

     378,173        400,202  

“Bankrupt loans” are loans, after write-off, to legally bankrupt borrowers as defined in Article 96-1-3 and 96-1-4 of “Order for Enforcement of the Corporation Tax Act” (Cabinet Order No. 97 of 1965) and on which accrued interest income is not recognized as there is substantial doubt about the ultimate collectability of either principal or interest because they are past due for a considerable period of time or for other reasons.

“Non-accrual loans” are loans on which accrued interest income is not recognized, excluding “Bankrupt loans” and loans on which interest payments are deferred in order to support the borrowers’ recovery from financial difficulties.

 

*4

Past due loans (3 months or more)

Past due loans (3 months or more) at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
   March 31, 2020      September 30, 2020  

Past due loans (3 months or more)

    ¥              14,400       ¥              23,676  

“Past due loans (3 months or more)” are loans on which the principal or interest payment is past due for 3 months or more, excluding “Bankrupt loans” and “Non-accrual loans.”

 

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*5

Restructured loans

Restructured loans at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
     March 31, 2020      September 30, 2020  

Restructured loans

    ¥            221,288       ¥            246,463  

“Restructured loans” are loans on which terms and conditions have been amended in favor of the borrowers (e.g. reduction of the original interest rate, deferral of interest payments, extension of principal repayments or debt forgiveness) in order to support the borrowers’ recovery from financial difficulties, excluding “Bankrupt loans,” “Non-accrual loans” and “Past due loans (3 months or more).”

 

*6

Risk-monitored loans

The total amount of bankrupt loans, non-accrual loans, past due loans (3 months or more) and restructured loans at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
     March 31, 2020      September 30, 2020  

Risk-monitored loans

    ¥            627,840       ¥            740,006  

The amounts of loans presented in Notes *3 to *6 above are the amounts before deduction of reserve for possible loan losses.

 

*7

Bills discounted

Bills discounted are accounted for as financial transactions in accordance with the “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry” (JICPA Industry Audit Committee Report No. 24, February 13, 2002). SMBC and its banking subsidiaries have rights to sell or pledge without restrictions bank acceptance bought, commercial bills discounted, documentary bills and foreign exchanges bought, etc. The total face value at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
     March 31, 2020      September 30, 2020  

Bills discounted

    ¥            850,324       ¥            795,873  

 

*8

Assets pledged as collateral

Assets pledged as collateral at March 31, 2020 and September 30, 2020 consisted of the following:

 

March 31, 2020

 

  Millions of yen  

   

September 30, 2020

    Millions of yen    

Assets pledged as collateral:

    Assets pledged as collateral:  

Cash and due from banks

  ¥ 78,112    

Cash and due from banks

  ¥ 19,389  

Trading assets

    834,864    

Trading assets

    671,202  

Securities

    10,502,767    

Securities

    10,723,115  

Loans and bills discounted

    10,679,243    

Loans and bills discounted

    11,048,259  

Liabilities corresponding to assets pledged as collateral:

    Liabilities corresponding to assets pledged as collateral:  

Deposits

    21,908    

Deposits

    21,542  

Payables under repurchase agreements

    6,670,132    

Payables under repurchase agreements

    4,714,108  

Payables under securities lending transactions

    2,334,251    

Payables under securities lending transactions

    1,187,298  

Borrowed money

    10,587,419    

Borrowed money

    13,833,134  

Due to trust account

    432,135    

Due to trust account

    563,354  

Acceptances and guarantees

    103,886    

Acceptances and guarantees

    100,993  

 

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In addition to the assets presented above, the following assets were pledged as collateral for cash settlements, and substitution for margins of futures transactions and certain other purposes at March 31, 2020 and September 30, 2020:

 

March 31, 2020

 

  Millions of yen  

   

September 30, 2020  

    Millions of yen    

Cash and due from banks

  ¥ 12,543     Cash and due from banks   ¥ 11,993  
Trading assets     1,179,599     Trading assets     1,003,665  
Securities     3,570,617     Securities     4,162,561  
Loans and bills discounted     10,350     Loans and bills discounted     9,664  

Other assets include collateral money deposited for financial instruments, surety deposits, margin of futures markets and other margins. The amounts for such assets were as follows:

 

March 31, 2020

 

  Millions of yen  

   

September 30, 2020

    Millions of yen    

Collateral money deposited for financial instruments

  ¥ 2,240,739     Collateral money deposited for financial instruments   ¥ 2,054,812  
Surety deposits     87,976     Surety deposits     86,942  
Margins of futures markets     101,838     Margins of futures markets     90,846  
Other margins     46,569     Other margins     51,757  

 

*9

Commitment line contracts on overdrafts and loans

Commitment line contracts on overdrafts and loans are agreements to lend to customers, up to a prescribed amount, as long as there is no violation of any condition established in the contracts. The amounts of unused commitments at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
     March 31, 2020      September 30, 2020  

The amounts of unused commitments

   ¥          61,881,806      ¥          70,038,394  

The amounts of unused commitments whose original contract terms are within 1 year or unconditionally cancelable at any time

     44,330,598        50,210,857  

Since many of these commitments are expected to expire without being drawn upon, the total amount of unused commitments does not necessarily represent actual future cash flow requirements. Many of these commitments include clauses under which SMBC and other consolidated subsidiaries can reject an application from customers or reduce the contract amounts in the event that economic conditions change, SMBC and other consolidated subsidiaries need to secure claims, or other events occur. In addition, SMBC and other consolidated subsidiaries may request the customers to pledge collateral such as premises and securities at the time of the contracts, and take necessary measures such as monitoring customers’ financial positions, revising contracts when such need arises and securing claims after the contracts are made.

 

*10

Land revaluation excess

SMBC, a consolidated subsidiary of the Company, revalued their own land for business activities in accordance with “Act on Revaluation of Land” (the “Act”) (Act No. 34, effective March 31, 1998) and “Act for Partial Revision of Act on Revaluation of Land” (Act No. 19, effective March 31, 2001). The income taxes corresponding to the net unrealized gains are reported in “Liabilities” as “Deferred tax liabilities for land revaluation excess,” and the Company’s share of the net unrealized gains, net of deferred taxes, are reported as “Land revaluation excess” in “Net assets.”

Certain equity method affiliates also revalued its own land for business activities in accordance with the Act. The Company’s share of the net unrealized gains, net of deferred taxes, are reported as “Land revaluation excess” in “Net assets.”

Date of the revaluation

SMBC: March 31, 1998 and March 31, 2002

Certain equity method affiliates: March 31, 1999 and March 31, 2002

Method of revaluation (stipulated in Article 3-3 of the Act)

SMBC: Fair values were determined by applying appropriate adjustments for land shape and timing of appraisal to the values stipulated in Article 2-3, 2-4 or 2-5 of “Order for Enforcement of Act on Revaluation of Land” (Cabinet Order No. 119 effective March 31, 1998).

Certain equity method affiliates: Fair values were determined based on the values stipulated in Articles 2-3 and 2-5 of “Order for Enforcement of Act on Revaluation of Land” (Cabinet Order No. 119 effective March 31, 1998).

 

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*11

Accumulated depreciation on tangible fixed assets

Accumulated depreciation on tangible fixed assets at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
   March 31, 2020      September 30, 2020  

Accumulated depreciation

   ¥              783,544      ¥              811,509  

 

*12

Subordinated borrowings

The balance of subordinated borrowings with the special clause specifying that the repayment order of the borrowing subordinate to other borrowings included in “Borrowed money” at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
   March 31, 2020      September 30, 2020  

Subordinated borrowings

   ¥              249,000      ¥              249,000  

 

*13

Subordinated bonds

The balance of subordinated bonds included in “Bonds” at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
   March 31, 2020      September 30, 2020  

Subordinated bonds

   ¥           2,216,743      ¥           2,274,718  

 

*14

Borrowings from trust account in relation to covered bonds issued by trust account

The amount of borrowings from trust account in relation to covered bonds issued by trust account included in “Due to trust account” at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
   March 31, 2020      September 30, 2020  

The amount of borrowings from trust account in relation to covered bonds issued by trust account

   ¥              432,135      ¥              563,354  

 

*15

Guaranteed amount to privately-placed bonds

The amount guaranteed by SMBC and its banking subsidiaries to privately-placed bonds (stipulated by Article 2-3 of the Financial Instruments and Exchange Act) in “Securities” at March 31, 2020 and September 30, 2020 were as follows:

 

     Millions of yen  
   March 31, 2020      September 30, 2020  

Guaranteed amount to privately-placed bonds

   ¥           1,603,941      ¥           1,559,137  

 

—25—


Table of Contents

(Notes to interim consolidated statements of income)

 

*1

Other income

“Other income” for the six months ended September 30, 2019 and 2020 included the following:

 

Six months ended September 30, 2019

     Millions of yen       

Six months ended September 30, 2020

     Millions of yen    

Gains on sales of stocks

   ¥       90,574      Gains on sales of stocks    ¥       57,370  

 

*2

General and administrative expenses

“General and administrative expenses” for the six months ended September 30, 2019 and 2020 included the following:

 

Six months ended September 30, 2019

     Millions of yen       

Six months ended September 30, 2020

     Millions of yen    

Salaries and related expenses

   ¥     306,629      Salaries and related expenses    ¥     310,260  

Depreciation

     87,940      Depreciation      90,104  

 

*3

Other expenses

“Other expenses” for the six months ended September 30, 2019 and 2020 included the following:

 

Six months ended September 30, 2019

     Millions of yen       

Six months ended September 30, 2020

     Millions of yen    

Write-off of loans

   ¥       43,918      Provision for reserve for possible loan losses    ¥     140,724  

Provision for reserve for possible loan losses

     24,771      Write-off of loans      54,347  
      Expenses related to equity derivatives      40,025  

 

*4

Extraordinary gains

“Extraordinary gains” for the six months ended September 30, 2019 and 2020 were as follows:

 

Six months ended September 30, 2019

     Millions of yen       

Six months ended September 30, 2020

     Millions of yen    

Gains on step acquisition

   ¥       21,997      Gains on disposal of fixed assets    ¥            407  

 

*5

Extraordinary losses

“Extraordinary losses” for the six months ended September 30, 2019 and 2020 included the following:

 

Six months ended September 30, 2019

     Millions of yen       

Six months ended September 30, 2020

     Millions of yen    

Losses on impairment of fixed assets

   ¥         1,441      Losses on impairment of fixed assets    ¥          3,983  

Losses on disposal of fixed assets

     755        

 

*6

Losses on impairment of fixed assets

The differences between the recoverable amounts and the book value of the following assets are recognized as “Losses on impairment of fixed assets,” and included in “Extraordinary losses” for the six months ended September 30, 2019 and 2020.

 

Six months ended September 30, 2019

             Millions of yen  

Area

  

Purpose of use

  

Type

   Impairment
loss
 

Tokyo metropolitan area

   Idle assets (43 items)    Land and buildings, etc.    ¥         642  

Kinki area

   Branches (1 item)    Land and buildings, etc.      156  
   Idle assets (24 items)         269  

Other

   Branches (1 item)    Land and buildings, etc.      0  
   Idle assets (7 items)         372  

Six months ended September 30, 2020

             Millions of yen  

Area

  

Purpose of use

  

Type

   Impairment
loss
 

Tokyo metropolitan area

   Branches (4 items)    Land and buildings, etc.    ¥ 811  
   Idle assets (30 items)         2,536  

Kinki area

   Idle assets (12 items)    Land and buildings, etc.      582  

Other

   Idle assets (5 items)    Land and buildings, etc.      53  

 

—26—


Table of Contents

As for land and building, etc., at SMBC, a consolidated subsidiary of the Company, a branch, which continuously manages and determines its income and expenses, is the smallest unit of asset group for recognition and measurement of impairment loss. Assets such as corporate headquarters facilities, training facilities, data and system centers, and health and recreational facilities which do not produce cash flows that can be attributed to individual assets are treated as corporate assets. As for idle assets, impairment loss is measured individually. At other consolidated subsidiaries, a branch or other group is the smallest asset grouping unit as well.

The carrying amounts of idle assets at SMBC are reduced to their recoverable amounts, and the decreased amounts are included in “Extraordinary losses” as “Losses on impairment of fixed assets,” if there are indicators that the invested amounts may not be recoverable.

The recoverable amount is calculated using net realizable value which is basically determined by subtracting the expected disposal cost from the appraisal value based on the Real Estate Appraisal Standard.

 

—27—


Table of Contents

(Notes to interim consolidated statements of changes in net assets)

Six months ended September 30, 2019

1. Type and number of shares issued and treasury stock

 

     Number of shares         
     At the beginning
of the period
     Increase      Decrease      At the end
of the period
     Notes  

Shares issued

              

Common stock

       1,399,401,420          272,536          26,502,400            1,373,171,556                  1, 2          
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     1,399,401,420          272,536          26,502,400          1,373,171,556       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Treasury stock

              

Common stock

     3,800,918          26,512,865          26,615,055          3,698,728                  3, 4          
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     3,800,918                 26,512,865                 26,615,055          3,698,728       
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Notes:

 

1.

  The increase of 272,536 shares in the total number of shares issued was due to issuance of new stock as stock-based compensation.
 

2.

  The decrease of 26,502,400 shares in the total number of shares issued was due to cancellation of treasury stock.
 

3.

  The increase of 26,512,865 shares in the number of treasury common stock comprises the increase of 10,465 shares due to purchases of fractional shares and the increase of 26,502,400 shares due to purchases of treasury stock.
 

4.

  The decrease of 26,615,055 shares in the number of treasury common stock comprises the decrease of 112,655 shares due to sales of fractional shares as well as exercise of stock options and the decrease of 26,502,400 shares due to cancellation of treasury stock.

2. Information on stock acquisition rights

 

           

Number of shares

  Millions of yen      
   

Details of stock
acquisition rights

 

Type of
shares

 

At the beginning
of the period

 

  Increase  

 

Decrease

 

At the end

of the period

  At the end
of the period
   

Notes

The Company

  Stock acquisition
rights as stock
options
  —     —     —     —     —     ¥ 2,214      
 

 

 

 

 

 

 

   

 

Consolidated subsidiaries

  —         —           1,851      
 

 

 

 

 

 

 

   

 

Total

              ¥         4,065      
             

 

 

   

3. Information on dividends

 

(1)   Dividends paid in the period

        Millions of yen, except per share amount

Date of resolution

  Type of shares   Cash dividends   Cash dividends
per share
  Record date   Effective date

Ordinary General Meeting of Shareholders
held on June 27, 2019

    Common stock     ¥        132,582   ¥        95   March 31, 2019   June 28, 2019

 

(2)   Dividends to be paid after the period

 

        Millions of yen, except per share amount

Date of resolution

  Type of shares   Cash
 dividends 
  Source of
dividends
  Cash dividends
per share
  Record date   Effective date

Meeting of the Board of Directors
held on November 12, 2019

    Common stock     ¥  123,252   Retained

earnings

  ¥        90    September 30, 2019     December 3, 2019 

 

—28—


Table of Contents

Six months ended September 30, 2020

1.  Type and number of shares issued and treasury stock

 

     Number of shares       
     At the beginning
of the period
   Increase    Decrease    At the end
of the period
   Notes  

Shares issued

              

Common stock

       1,373,171,556          868,505          —            1,374,040,061                  1          
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total

     1,373,171,556          868,505          —          1,374,040,061       
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Treasury stock

              

Common stock

     3,645,043                        45,986                        81,280          3,609,749                  2, 3          
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total

     3,645,043                    45,986                        81,280                 3,609,749       
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

 

Notes:

 

1.

  

The increase of 868,505 shares in the total number of shares issued was due to issuance of new stock as stock-based compensation.

 

2.

  

The increase of 45,986 shares in the number of treasury common stock comprises the increase due to purchases of fractional shares and acquisition of restricted stocks without compensation under the Stock Compensation Plans.

 

3.

  

The decrease of 81,280 shares in the number of treasury common stock comprises the decrease due to sales of fractional shares as well as exercise of stock options.

2.  Information on stock acquisition rights

 

           

Number of shares

  Millions of yen      
   

Details of stock

acquisition rights

 

Type of

shares

 

At the beginning of

the period

 

Increase

 

Decrease

 

At the end of

the period

  At the end of
the period
   

Notes

The Company

  Stock acquisition
rights as stock
options
  —     —     —     —     —     ¥ 1,808      
 

 

 

 

 

 

 

   

 

Total

              ¥         1,808      
     

 

 

   

3.  Information on dividends

 

(1)   Dividends paid in the period

Date of resolution

      Millions of yen, except per share amount
  Type of shares   Cash dividends   Cash dividends
per share
  Record date   Effective date

Ordinary General Meeting of Shareholders
held on June 26, 2020

    Common stock     ¥        136,952   ¥      100   March 31, 2020   June 29, 2020

 

(2)   Dividends to be paid after the period

 

        Millions of yen, except per share amount

Date of resolution

  Type of shares   Cash
dividends
  Source of
dividends
  Cash dividends
per share
  Record date   Effective date

Meeting of the Board of Directors
held on November 13, 2020

    Common stock     ¥  130,190   Retained
earnings
  ¥        95    September 30, 2020     December 3, 2020 

 

—29—


Table of Contents

(Notes to interim consolidated statements of cash flows)

 

*1

The reconciliation of balance of “Cash and cash equivalents” at the end of the period and the amounts listed on the interim consolidated financial statements

 

     Millions of yen  

Six months ended September 30

   2019      2020  

Cash and due from banks

    ¥     57,733,385          ¥ 68,474,446     

Interest earning deposits with banks
(excluding the deposit with the Bank of Japan)

     (4,563,140)          (5,134,114)    
  

 

 

    

 

 

 

Cash and cash equivalents

    ¥     53,170,244          ¥     63,340,332     
  

 

 

    

 

 

 

(Notes to lease transactions)

1. Finance leases

 

(1)

Lessee side

 

  1)

Lease assets

 

  (a)

Tangible fixed assets

Tangible fixed assets mainly consisted of branches and equipment.

 

  (b)

Intangible fixed assets

Intangible fixed assets are software.

 

  2)

Depreciation method of lease assets

Depreciation method of lease assets is reported in “(Significant accounting policies for preparing interim consolidated financial statements) 4. Accounting policies (4) Depreciation.”

 

(2)

Lessor side

 

  1)

Breakdown of lease investment assets

 

     Millions of yen  
          March 31, 2020           September 30, 2020  

Lease receivables

   ¥         258,052           ¥         261,362       

Residual value

     47,285             53,757       

Unearned interest income

     (85,604)            (89,073)      
  

 

 

    

 

 

 

Total

   ¥         219,733           ¥ 226,046       
  

 

 

    

 

 

 

 

  2)

The scheduled collections of lease payments receivable related to lease investment assets are as follows:

 

     Millions of yen  
          March 31, 2020           September 30, 2020  

Within 1 year

   ¥         26,938           ¥         28,686       

More than 1 year to 2 years

     26,318             29,918       

More than 2 years to 3 years

     23,880             18,709       

More than 3 years to 4 years

     16,453             12,578       

More than 4 years to 5 years

     13,612             13,727       

More than 5 years

     150,848             157,741       
  

 

 

    

 

 

 

Total

   ¥         258,052           ¥         261,362       
  

 

 

    

 

 

 

 

—30—


Table of Contents

2. Operating leases

 

(1)

Lessee side

Future minimum lease payments on operating leases which were not cancelable were as follows:

 

     Millions of yen  
        March 31, 2020           September 30, 2020  

Due within 1 year

   ¥        42,384           ¥ 41,185       

Due after 1 year

     247,206             235,631       
  

 

 

    

 

 

 

Total

   ¥         289,591           ¥         276,817       
  

 

 

    

 

 

 

 

(2)

Lessor side

Future minimum lease payments on operating leases which were not cancelable were as follows:

 

     Millions of yen  
        March 31, 2020           September 30, 2020  

Due within 1 year

   ¥ 31,498           ¥ 29,113       

Due after 1 year

     72,655             63,780       
  

 

 

    

 

 

 

Total

   ¥         104,154           ¥           92,894       
  

 

 

    

 

 

 

 

—31—


Table of Contents

(Notes to financial instruments)

Matters concerning fair value of financial instruments and breakdown by input level

The amounts on the interim consolidated balance sheet (the amounts on the consolidated balance sheet) and the fair value of financial instruments as well as the difference between them are as follows.

The amounts shown in the following tables do not include stocks with no market price, etc., and investments in partnerships (refer to Note 3).

The fair values of financial instruments are classified into the following three levels depending on the observability and significance of the input used in the fair value measurement.

Level 1: Fair value determined based on the (unadjusted) quoted price in an active market for the same asset or liability

Level 2: Fair value determined based on directly or indirectly observable inputs other than Level 1 inputs

Level 3: Fair value determined based on significant unobservable inputs

If multiple inputs with a significant impact are used for the fair value measurement of a financial instrument, the financial instrument is classified to the lowest priority level of fair value measurement in which each input belongs.

 

(1)

Financial assets and liabilities at fair value on the interim consolidated balance sheets (consolidated balance sheet)

 

     Millions of yen  

March 31, 2020

   Consolidated balance
sheet amount
 

Monetary claims bought

   ¥ 718,948     

Trading assets

  

Securities classified as trading purposes *1

     2,687,362     

Money held in trust

     353     

Securities

  

Other securities *1

     24,838,288     
  

 

 

 

Total assets

   ¥ 28,244,952     
  

 

 

 

Trading liabilities

  

Trading securities sold for short sales *1

   ¥ 1,927,964     
  

 

 

 

Total liabilities

   ¥ 1,927,964     
  

 

 

 

Derivative transactions *2, 3

  

Interest rate derivatives

   ¥ 826,249     

Currency derivatives

     (27,773)    

Equity derivatives

     (301)    

Bond derivatives

     9,174     

Commodity derivatives

     2,181     

Credit derivative transactions

     2,856     
  

 

 

 

Total derivative transactions

   ¥ 812,386     
  

 

 

 

 

  *1

The amount of investment trusts for which transitional measures are applied in accordance with Paragraph 26 of ASBJ Guidance No.31, “Implementation Guidance on Accounting Standard for Fair Value Measurement” (hereinafter, “Guidance for Application of Fair Value Measurement”) are not included in the table above. The amount of such investment trusts on the consolidated balance sheet includes financial assets of ¥711,938 million and financial liabilities of ¥84,511 million.

  *2

The amounts collectively represent the derivative transactions which are recorded on “Trading assets,” “Trading liabilities,” “Other assets” and “Other liabilities.” Debts and credits arising from derivative transactions are presented on a net basis, with a net debt presented in square brackets.

  *3

As for derivative transactions applying hedge accounting, ¥294,816 million is recorded on the consolidated balance sheet.

 

—32—


Table of Contents
     Millions of yen  
     Interim consolidated balance sheet amount  

September 30, 2020

   Level 1     Level 2     Level 3      Total  

Monetary claims bought

   ¥     ¥ 891,508     ¥ 452,234      ¥ 1,343,743  

Trading assets

                                                                                                             

Securities classified as trading purposes *1

     2,033,994       417,993       472        2,452,460  

Money held in trust

           333              333  

Securities

         

Other securities *1

     18,462,991       8,687,202       47,727        27,197,921  
  

 

 

   

 

 

   

 

 

    

 

 

 

Total assets

   ¥ 20,496,985     ¥ 9,997,038     ¥ 500,434      ¥ 30,994,458  
  

 

 

   

 

 

   

 

 

    

 

 

 

Trading liabilities

         

Trading securities sold for short sales *1

   ¥ 1,599,166     ¥ 92,446     ¥      ¥ 1,691,612  
  

 

 

   

 

 

   

 

 

    

 

 

 

Total liabilities

   ¥ 1,599,166     ¥ 92,446     ¥      ¥ 1,691,612  
  

 

 

   

 

 

   

 

 

    

 

 

 

Derivative transactions *2, 3

         

Interest rate derivatives

   ¥ 23,483     ¥ 784,086     ¥ 581      ¥ 808,150  

Currency derivatives

     118       (12,880     2,019        (10,742

Equity derivatives

     (18,590     1,926       14,581        (2,082

Bond derivatives

     (116     45       9        (61

Commodity derivatives

     (184     1,928              1,744  

Credit derivative transactions

           (3,129     865        (2,264
  

 

 

   

 

 

   

 

 

    

 

 

 

Total derivative transactions

   ¥ 4,710     ¥ 771,976     ¥ 18,057      ¥ 794,744  
  

 

 

   

 

 

   

 

 

    

 

 

 

 

  *1

The amount of investment trusts for which transitional measures are applied in accordance with Paragraph 26 of the Guidance for Application of Fair Value Measurement are not included in the table above. The amount of such investment trusts on the interim consolidated balance sheet includes financial assets of ¥676,309 million and financial liabilities of ¥14,747 million.

  *2

The amounts collectively represent the derivative transactions which are recorded in “Trading assets,” “Trading liabilities,” “Other assets” and “Other liabilities.” Debts and credits arising from derivative transactions are presented on a net basis, with a net debt presented in square brackets.

  *3

As for derivative transactions applying hedge accounting, ¥474,705 million is recorded on the interim consolidated balance sheet.

 

—33—


Table of Contents
(2)

Financial assets and liabilities which are not stated at fair value on the interim consolidated balance sheet (consolidated balance sheet)

Cash and due from banks, Call loans and bills bought, Receivables under resale agreements, Receivables under securities borrowing transactions, Foreign exchanges, Call money and bills sold, Payable under repurchase agreements, Payable under securities lending transactions, Commercial papers, and Short-term bonds payable are not included in the following tables since they are mostly short-term, and their fair values approximate their carrying amounts.

 

     Millions of yen  

March 31, 2020

   Consolidated balance
sheet amount
     Fair value      Net unrealized
gains (losses)
 

Monetary claims bought *

   ¥ 3,837,831         ¥ 3,869,321         ¥ 31,490     

Securities

                                                                                               

Bonds classified as held-to-maturity

     282,379           282,519           140     

Loans and bills discounted

     82,517,609           

Reserve for possible loan losses *

     (301,752)          
  

 

 

    

 

 

    

 

 

 
     82,215,856           84,118,833           1,902,976     
  

 

 

    

 

 

    

 

 

 

Lease receivables and investment assets *

     219,548           218,858           (690)    
  

 

 

    

 

 

    

 

 

 

Total assets

   ¥ 86,555,615         ¥ 88,489,532         ¥ 1,933,917     
  

 

 

    

 

 

    

 

 

 

Deposits

   ¥ 127,042,217         ¥ 127,049,743         ¥ 7,526     

Negotiable certificates of deposit

     10,180,435           10,187,496           7,060     

Borrowed money

     15,210,894           15,254,734           43,839     

Bonds

     9,235,639           9,360,807           125,167     

Due to trust account

     1,811,355           1,824,319           12,964     
  

 

 

    

 

 

    

 

 

 

Total liabilities

   ¥ 163,480,542         ¥ 163,677,101         ¥ 196,558     
  

 

 

    

 

 

    

 

 

 

 

  *

The amounts do not include general reserve for possible loan losses and specific reserve for possible loan losses. The reserve for possible loan losses on “Monetary claims bought” and “Lease receivables and investment assets” are deducted directly from consolidated balance sheet amount since they are immaterial.

 

—34—


Table of Contents

September 30, 2020

  Millions of yen  
  Fair Value     Interim consolidated
balance sheet amount
    Net unrealized
gains (losses)
 
  Level 1     Level 2     Level 3     Total  

Monetary claims bought *

  ¥ —        ¥ —        ¥ 2,784,723        ¥ 2,784,723        ¥ 2,750,824        ¥ 34,899     

Securities

                                                                                                                                                                                 

Bonds classified as held-to-maturity

    22,287          —          —          22,287          22,300          (12)    

Loans and bills discounted

            84,516,005       

Reserve for possible loan losses *

            (391,036)      
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    —          —          86,114,210          86,114,210          84,124,968          1,989,241     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Lease receivables and investment assets *

    —          —          227,423          227,423          225,351          2,071     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

  ¥ 22,287        ¥ —        ¥ 89,126,357        ¥ 89,148,644        ¥ 87,123,444        ¥ 2,025,200     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Deposits

  ¥ —        ¥ 137,914,883        ¥ —        ¥ 137,914,883        ¥ 137,912,817        ¥ 2,066     

Negotiable certificates of deposit

    —          10,248,583          —          10,248,583          10,237,691          10,891     

Borrowed money

    —          16,074,320          —          16,074,320          16,011,392          62,928     

Bonds

    —          8,797,784          825,623          9,623,417          9,204,155          419,262     

Due to trust account

    —          1,983,572          —          1,983,572          1,967,293          16,278     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

  ¥ —        ¥ 175,019,145        ¥ 825,632        ¥ 175,844,778        ¥ 175,333,349        ¥ 511,428     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

  *

The amounts do not include general reserve for possible loan losses and specific reserve for possible loan losses. The reserve for possible loan losses on “Monetary claims bought” and “Lease receivables and investment assets” are deducted directly from interim consolidated balance sheet amount since they are immaterial.

 

—35—


Table of Contents
(Note 1)

Description of the valuation techniques and inputs used to measure fair value

Assets

Monetary claims bought

The fair values of subordinated trust beneficiary interests related to securitized housing loans among monetary claims bought, are determined by estimating future cash flows using the probability of default, loss given default and prepayment rate, and assessing the value by deducting the value of senior beneficial interests, etc. from the value of underlying housing loans.

The fair values of other transactions are, in principle, based on methods similar to the methods applied to Loans and bills discounted.

These transactions are mainly classified into Level 3.

Trading assets

The fair values of bonds and other securities held for trading purposes are, in principle, based on their market prices at the end of the period.

The fair values of such bonds and other securities are mainly classified into Level 1 depending on the level of market activity. When fair value is determined based on either the prices quoted by the financial institutions, or future cash flows discounted using observable inputs such as interests, spreads, and others, they are classified into Level 2.

Money held in trust

The fair values of money held in trust are, in principle, fair values of securities held in trust calculated by the same method for securities that the Company owns. They are classified into Level 2.

Securities

In principle, the fair values of stocks (including foreign stocks) are based on the market price as of the end of the period. They are mainly classified into Level 1 depending on the level of market activity. The fair values of securities with market prices other than stocks are based on the market price as of the end of the period. Japanese Government bonds are classified into Level 1 and other securities are classified into Level 2.

The fair values of privately-placed bonds with no market prices are based on the present value of estimated future cash flows, taking into account the borrower’s probability of default, loss given default, etc. Those present values are discounted by a rate comprising a risk free interest rate and an adjustment. However, the fair values of bonds, such as privately-placed bonds issued by bankrupt borrowers, effectively bankrupt borrowers and potentially bankrupt borrowers are based on the bond’s book value after the deduction of the expected amount of a loss on the bond computed by using the same method applied to the estimation of a loan loss.

These transactions are classified into Level 2.

Loans and bills discounted, and Lease receivables and investment assets

Of these transactions, considering the characteristics of these transaction, the fair values of overdrafts with no specified repayment dates are their book values as they are considered to approximate their fair values.

For short-term transactions, the fair values are also their book values as they are considered to approximate their fair values.

The fair values of long-term transactions are, in principle, based on the present value of estimated future cash flows taking into account the borrower’s probability of default, loss given default, etc. Those present values are discounted by a rate comprising a risk free interest rate and an adjustment. At certain consolidated subsidiaries of the Company, the fair values are calculated based on the present values of estimated future cash flows, which is computed based on the contractual interest rate. Those present values are discounted by a rate comprising a risk-free rate and a credit risk premium.

Regarding claims on bankrupt borrowers, effectively bankrupt borrowers and potentially bankrupt borrowers, expected losses on such claims are calculated based on either the expected recoverable amount from disposal of collateral or guarantees, or the present value of expected future cash flows. Since the claims’ interim consolidated balance sheet amounts (consolidated balance sheet amounts) minus the expected amount of loan losses approximate their fair values, such amounts are considered to be their fair values.

These transactions are classified into Level 3.

 

—36—


Table of Contents

Liabilities

Trading liabilities

The fair values of bonds sold for short sales and other securities for trading purposes are, in principle, based on their market prices as of the end of the period. They are mainly classified into Level 1.

Deposits, Negotiable certificates of deposit, and Due to trust account

Out of these transactions, the fair values of demand deposits and deposits without maturity are their book values. The fair values of transactions with a short-term remaining maturity are also based on their book values, as their book values are regarded to approximate their fair values. The fair values of transactions with a long-term remaining maturity are, in principle, based on the present value of estimated future cash flows discounted by the interest rate assuming that the same type of deposit is newly accepted until the end of the remaining maturity.

The fair values of borrowings from the trust account related to covered bond issued by the trust account are based on the amount calculated in accordance with the price quoted by industry associations, etc.

These transactions are classified into Level 2.

Borrowed money and Bonds

The fair values of short-term transactions are based on their book values, as their book values are considered to approximate their fair values. For long-term transactions, their fair values are based on the present value of estimated future cash flows calculated using the refinancing rate applied to the same type of instruments for the remaining maturity.

For transactions with the price quoted by industry associations, etc., fair value is based on the amount calculated by using the published price data, yield data, etc.

These transactions are mainly classified into Level 2.

Derivative transactions

The fair values of listed derivatives are based on their closing prices. The fair values of over-the-counter derivative transactions are based on the present value of the future cash flows, option valuation models, etc., using inputs such as interest rate, foreign exchange rate, stock, commodity price, etc.

Over-the-counter derivative transactions takes into account the counterparty and the Company’s credit risks, and the liquidity risks of the unsecured lending funds. Listed derivative transactions are mainly classified into level 1. Over-the-counter derivative transactions are classified into Level 2 if observable inputs are available or impact of unobservable inputs to the fair values is not significant. If impact of unobservable inputs to the fair values is significant, they are classified into Level 3.

 

—37—


Table of Contents
(Note 2)

Quantitative information about financial assets and liabilities measured and stated on the interim consolidated balance sheet (consolidated balance sheet) at fair value and classified in Level 3

 

  1)

Quantitative information on significant unobservable inputs

 

   Valuation technique    Significant unobservable inputs    Range

 

  

 

  

 

  

 

Monetary claims bought    Discounted cash flow    Probability of default    0.1% — 100.0%
      Loss given default    0.0% — 52.7%
      Prepayment rate    2.0% — 7.5%
Trading assets:         

Securities classified as trading purposes

   Option model    Correlation between interest rates    28.5%
      Correlation between interest rate and foreign exchange rate    16.5% — 49.7%
      Equity volatility    31.6% — 97.4%

Securities:

        

Other securities

   Discounted cash flow    Probability of default    8.0% — 100.0%
      Loss given default    0.0% — 78.7%

 

  

 

  

 

  

 

Derivative transactions:         

Interest rate derivatives

   Option model    Correlation between interest rates    14.9% — 97.9%
      Correlation between interest rate and foreign exchange rate    60.7%

Currency derivatives

   Option model   

Correlation between

interest rates

   27.0% — 97.9%
      Correlation between interest rate and foreign exchange rate    16.5% — 49.7%
      Foreign exchange rate volatility    9.1% — 14.1%

Equity derivatives

   Option model    Correlation between equities    30.9% — 92.7%
      Correlation between foreign exchange rate and equity    (30.4)% — (11.8)%
      Equity volatility    17.1% — 65.5%

Bond derivatives

   Option model    Bond option volatility    1.4% — 1.6%

Credit derivatives

   Credit default model    Correlation between foreign exchange rate and CDS* spread    15.0% — 90.0%

 

  *

Credit Default Swap

 

—38—


Table of Contents
  2)

Reconciliation between the beginning and ending balance, and net unrealized gains (losses) recognized in the earnings of the period

 

     Millions of yen  
     Monetary
claims
bought
    Trading
assets
    Securities     Derivative transactions     Total  

                                 

  Interest rate     Currency      Equity     Bond     Credit
derivative
 

Beginning balance

   ¥ 451,033     ¥ 152     ¥ 33,251     ¥ 4,280     ¥ 1,721      ¥ 32,865     ¥     ¥ 2,240     ¥ 525,544  

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Earnings of the period

           1,355       (1,210     (3,728     235        (18,629     (0     (1,375     (23,353

Other comprehensive income

     1,756             (1,055                                    700  

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Purchase

     7,177       114       94       185              2,068       9             9,650  

Sale

           (1,155     (3,592     (155            (1,723                 (6,627

Settlement

     (7,732           (7,211                                    (14,943

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Transfer to Level 3 *1

           6       27,555                                      27,562  

Transfer from Level 3 *2

                 (105           62                          (42

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance

     452,234       472       47,727       581       2,019        14,581       9       865       518,491  

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net unrealized gains (losses) on financial assets and liabilities held at interim consolidated balance sheet date among the amount recognized in the earnings of the period:

 

           337       (1,481     (146     316        (4,758     (0     (1,315     (7,047
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

*1

 

Transfer from Level 2 to Level 3 due to an increase in the impact on the fair value of unobservable inputs for privately-placed bonds etc. The transfer was made at the beginning of the six months ended September 30, 2020.

*2

 

Transfer from Level 3 to Level 2 due to a decrease in the impact on the fair value of unobservable inputs for privately-placed bonds etc. The transfer was made at the beginning of the six months ended September 30, 2020.

 

  3)

Description of the fair value valuation process

At the Company, the middle division establishes policies and procedures for the calculation of fair value, and the front division develops valuation models in accordance with such policies and procedures. The middle division verifies the reasonableness of the fair value valuation models, the inputs used, and the appropriateness of the fair value classification.

Observable data is utilized as much as possible for the valuation model. If quoted prices obtained from third parties are used, those values are verified by comparison with results recalculated by the Company using the inputs for the valuation.

 

—39—


Table of Contents
  4)

Description of the sensitivity of the fair value to changes in significant unobservable inputs

Probability of default

Probability of default represents the likelihood that the default will occur, and is calculated based on actual defaults in the past. A significant increase (decrease) in the default rate would result in a significant decrease (increase) in a fair value.

Loss given default

Loss given default is the proportion of estimated losses in the event that default occurs to the total balance of bonds or loans and bills discounted, and is calculated based on actual defaults in the past. A significant increase (decrease) in loss given default would result in a significant decrease (increase) in a fair value.

Prepayment rate

Prepayment rate is the proportion of principals of estimated prepayment in each period. In general, a significant change in prepayment rate would result in a significant decrease (increase) in a fair value according to the contractual terms and conditions of the financial instruments.

Volatility

Volatility is an indicator that represents the estimation of severity of change over a certain period in values of inputs and market prices. Volatility is estimated based on actual results in the past, information derived from third parties and other analysis approach. Volatility is mainly used in valuation of derivatives that refer to potential changes of interest rate, foreign exchange rate, stock price, etc. A significant increase (decrease) in volatility would generally result in a significant increase (decrease) in a fair value.

Correlation

Correlation is an indicator of the relation of variables such as interest rate, foreign exchange rate, Credit Default Swap (CDS) spread and stock price. Correlation is estimated based on actual results in the past, and is mainly used in valuation technique of complex derivatives, etc. A significant change in correlation would generally result in a significant increase or decrease in a fair value according to the contractual terms and conditions of the financial instrument.

 

(Note 3)

Interim Consolidated balance sheet amounts (Consolidated balance sheet amounts) of stocks with no market prices, etc. and investments in partnership, etc. are as follows. In accordance with Paragraph 5 of ASBJ Guidance No.19, “Implementation Guidance on Disclosures about Fair Value of Financial Instruments,” these amounts are not included in “Trading assets” and “Securities” stated on the tables disclosed in “Matters concerning fair value of financial instruments and breakdown by input level:

 

     Millions of yen  
          March 31, 2020          September 30, 2020  

Stocks with no market prices, etc.*1, 2

   ¥ 174,347           ¥ 176,475        

Investments in partnership, etc.*2

     242,674            253,273       
  

 

 

   

 

 

 

Total

   ¥         417,022          ¥         429,749       
  

 

 

   

 

 

 

 

*1

 

Unlisted stocks are included in stocks with no market prices, etc.

*2

 

Stocks with no market prices and investments in partnership totaling ¥22,903 million and ¥12,169 million were written-off in the fiscal year ended March 31, 2020 and in the six months ended September 30, 2020, respectively.

 

—40—


Table of Contents

(Notes to securities)

The amounts shown in the following tables include negotiable certificates of deposit classified as “Cash and due from banks,” and beneficiary claims on loan trust classified as “Monetary claims bought,” in addition to “Securities” stated in the interim consolidated balance sheet (consolidated balance sheet).

1. Bonds classified as held-to-maturity

 

                                           
    Millions of yen  

March 31, 2020

      Consolidated balance    
sheet amount
        Fair value             Net unrealized    
gains (losses)
 

Bonds with unrealized gains:

  Japanese government bonds    ¥ 260,079          ¥ 260,286          ¥ 206       
  Japanese local government bonds     2,000           2,001           1       
  Japanese corporate bonds     —           —           —       
  Other     —           —           —       
   

 

 

   

 

 

   

 

 

 
  Subtotal     262,079           262,287           208       
   

 

 

   

 

 

   

 

 

 

Bonds with unrealized losses:

  Japanese government bonds     —           —           —       
  Japanese local government bonds     20,300           20,232           (67)      
  Japanese corporate bonds     —           —           —       
  Other     —           —           —       
   

 

 

   

 

 

   

 

 

 

                                                                      

  Subtotal     20,300           20,232           (67)      
 

 

 

   

 

 

   

 

 

 

Total

   ¥      282,379          ¥      282,519          ¥           140       
 

 

 

   

 

 

   

 

 

 
    Millions of yen  

September 30, 2020

      Interim consolidated    
     balance sheet amount    
              Fair value                    Net unrealized    
gains (losses)
 

Bonds with unrealized gains:

  Japanese government bonds    ¥ —          ¥ —          ¥ —       
  Japanese local government bonds     6,000           6,015           15       
  Japanese corporate bonds     —           —           —       
  Other     —           —           —       
   

 

 

   

 

 

   

 

 

 
  Subtotal     6,000           6,015           15       
   

 

 

   

 

 

   

 

 

 

Bonds with unrealized losses:

  Japanese government bonds     —           —           —       
  Japanese local government bonds     16,300           16,272           (27)      
  Japanese corporate bonds     —           —           —       
  Other     —           —           —       
   

 

 

   

 

 

   

 

 

 

                                                                      

  Subtotal     16,300           16,272           (27)      
 

 

 

   

 

 

   

 

 

 

Total

   ¥        22,300          ¥        22,287          ¥        (12)      
 

 

 

   

 

 

   

 

 

 

 

—41—


Table of Contents

2. Other securities