This document contains “forward-looking statements” (as defined in the U.S. Private Securities Litigation Reform Act of 1995), regarding the intent, belief or current expectations of Sumitomo Mitsui Financial Group, Inc. (the “Company”) and its management with respect to the Company’s future financial condition and results of operations. In many cases but not all, these statements contain words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “probability,” “risk,” “project,” “should,” “seek,” “target,” “will,” and similar expressions. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those expressed in or implied by such forward-looking statements contained or deemed to be contained herein. The risks and uncertainties which may affect future performance include: deterioration of Japanese and global economic conditions and financial markets; declines in the value of the Company’s securities portfolio; incurrence of significant credit-related costs; the Company’s ability to successfully implement its business strategy through its subsidiaries, affiliates and alliance partners; and exposure to new risks as the Company expands the scope of its business. Given these and other risks and uncertainties, you should not place undue reliance on forward-looking statements, which speak only as of the date of this document. The Company undertakes no obligation to update or revise any forward-looking statements. Please refer to the Company’s most recent disclosure documents such as its annual report on and other documents submitted to the U.S. Securities and Exchange Commission, as well as its earnings press releases, for a more detailed description of the risks and uncertainties that may affect its financial conditions, its operating results, and investors’ decisions.

The following table presents the growth rates of Japanese gross domestic product (“GDP”) from the third quarter of the fiscal year ended March 31, 2023, through the second quarter of the fiscal year ending March 31, 2025, based on data published in December 2024 by the Cabinet Office of the Government of Japan.

Japanese GDP increased by 0.5% and 0.3% on a basis, for the first and second quarters, respectively, of the fiscal year ending March 31, 2025. This was primarily due to an increase in private consumption, supported by gradual improvements in the employment and income conditions.

The employment situation, as a whole, improved gradually. The active job ratio published by the Ministry of Health, Labour and Welfare of Japan remained almost unchanged for the six months ended September 30, 2024. According to the statistical data published by the Statistics Bureau of Japan, the unemployment rate in September 2024, was 2.4%, a decrease of 0.2 percentage points from March 2024. Further, the compensation of employees increased by 0.7% and 0.2% on a basis, for the first and second quarters, respectively, of the fiscal year ending March 31, 2025.

Thereafter, the BOJ announced the introduction of a new policy framework, “quantitative and qualitative monetary easing with yield curve control” in September 2016. Under this policy framework, the BOJ would keep short-term interest rates down by maintaining its policy of applying a negative interest rate of minus 0.1% to certain excess reserves of financial institutions held at the BOJ. Moreover, the BOJ indicated it would purchase Japanese government bonds so that the yield of the Japanese government bonds would be close to around 0% to control long-term interest rates. In March 2021, the BOJ made clear that the target range of the Japanese government bonds yield fluctuations would be between plus and minus 0.25%. In December 2022, in light of increased observed volatility in overseas financial and capital markets that affected markets in Japan, the BOJ expanded the range of Japanese government bonds yield fluctuations to between plus and minus 0.5%. In October 2023, the BOJ announced adjustments to its yield curve control policy and would regard the upper bound of 1.0% for Japanese government bonds yields as a reference in its market operations. Thereafter, in March 2024, the BOJ announced its conclusion that the policy frameworks of “quantitative and qualitative monetary easing with yield curve control” and the negative interest rate policy to date have fulfilled their roles based on its outlook toward the price stability target. In addition, the BOJ stated that it would encourage the uncollateralized overnight call rate to remain at around 0% to 0.1%, continue its long-term Japanese government bonds purchases with broadly the same amount as before and make nimble responses by further purchases of long-term Japanese government bonds in case of a rapid rise in long-term interest rates. On June 14, 2024, the BOJ announced that it would reduce its purchase amount of long-term Japanese government bonds after the July 2024 Monetary Policy Meeting. This is to ensure that long-term interest rates would be formed more freely in financial markets. Subsequently, on July 31, 2024, the BOJ stated that it would encourage the uncollateralized overnight call rate to remain at around 0.25% and had decided on a plan to reduce its monthly purchases of long-term Japanese government bonds by about ¥400 billion each calendar quarter, in principle, from about ¥5.7 trillion in July 2024 to about ¥3 trillion in January-March 2026. In addition, the BOJ will conduct an interim assessment of its reduction plan at the June 2025 Monetary Policy Meeting. Under such circumstances, the uncollateralized overnight call rate, which is the benchmark for short-term interest rates, was around 0.2% at September 30, 2024. The yield on newly issued Japanese government bonds, which is the benchmark for long-term interest rates, was around 0.9% at September 30, 2024.

The Nikkei Stock Average, which is a price-weighted average of 225 stocks listed on the Tokyo Stock Exchange, rose from ¥40,369.44 at March 29, 2024, to an high of ¥42,224.02 at July 11, 2024. It subsequently dropped to ¥37,919.55 at September 30, 2024.

During the first half of the fiscal year ending March 31, 2025, the global economy, as a whole, recovered gradually, although certain countries’ economies remained weak. The U.S. economy continued to recover during the first half of the fiscal year ending March 31, 2025, primarily due to an increase in private consumption supported by easing inflation, and favorable employment and income conditions. The European economy showed some signs of picking up during the first half of the fiscal year ending March 31, 2025, primarily due to an increase in private consumption supported by easing inflation. In Asia, the Chinese economy slowed down during the first half of the fiscal year ending March 31, 2025, primarily due to the sluggish momentum in the real estate market and a decrease in private consumption resulting from the sluggish employment situation, although exports of goods and services increased. Asian economies other than China, continued to recover gradually during the first half of the fiscal year ending March 31, 2025, primarily due to an increase in exports of goods.

Each year, the Financial Stability Board (“FSB”) publishes a list of global financial institutions that it has identified as Global Systemically Important Banks based on the methodology issued by the Basel Committee on Banking Supervision (“BCBS”). included on the list are required to maintain an amount of Common Equity Tier 1 (“CET1”) capital above the Basel III minimum requirement and applicable capital conservation buffer to discourage such financial institutions from becoming even more systemically important. This is commonly known as the capital surcharge.

The capital surcharge ranges from 1% to 2.5% of additional CET1 capital as a percentage of risk-weighted assets based on the organization’s size, interconnectedness, substitutability, complexity and cross-jurisdictional activity as determined by the FSB.

We have been included in the list of each year since the initial list was published in November 2011 and were included on the list published in November 2024. Based on that list, the additional CET1 capital as a percentage of risk-weighted assets we are currently required to maintain is 1%.

Concurrently with the stock split, we implemented a change in the ratio of American Depositary Shares (“ADSs”) to common stock, in order to minimize impacts on the trading market for ADS holders by maintaining the ADS unit price. Effective October 1, 2024, the ratio changed from 1 ADS: 0.2 shares of common stock to a new ratio of 1 ADS: 0.6 shares of common stock.

On August 30, 2024, Shozo Yamazaki, a member of our board of directors, passed away. Shozo Yamazaki was an outside director who served on the audit committee as an “audit committee financial expert” within the meaning of Item 16A of Form As a result, the audit committee does not currently have an “audit committee financial expert.” However, our audit committee as presently constituted includes members who have experience in finance and accounting through financial operations and corporate management.