| Financial Risk Management | 45
FINANCIAL RISK MANAGEMENT
The SMBC Group classifies risks into the following categories:
credit risk, market risk, liquidity risk and operational risk. This
note presents information about the SMBC Group’s exposure to
credit risk, market risk, and liquidity risk, and its policies and
processes for measuring and managing these risks.
Risk Management System
Top management plays an active role in the risk management process
out of recognition for the importance of risk management. The SMBC
Group-wide basic policies for risk management are determined by the
Management Committee before being authorized by the board of
directors.
In line with these basic policies for risk management, the
functions for managing major risks are consolidated within the Risk
Management Unit, which is independent from business units. In
addition, the Internal Audit Dept. conducts internal audits on the
status of risk management to verify that risk is appropriately
managed.
Risk management systems are in place at individual SMBC Group
companies that have been established based on the characteristics
of their particular businesses and in accordance with the basic
policies. Furthermore, the SMBC Group is strengthening SMBC
Group-wide risk management systems through the Group Chief Risk
Officer (“CRO”) Committee, which consists of the Group
CRO and risk management representatives from strategically
important SMBC Group companies.
The diagram below represents the risk management system of the SMBC
Group.
Risk Capital Management
In managing credit risk, market risk, and operational risk
affecting the entire SMBC Group, the SMBC Group applies a uniform
standard, risk capital based on value at risk (“VaR”),
for use in monitoring and managing risks. This standard is applied
while taking into account the characteristics of each risk and of
the businesses of SMBC Group companies. Specific risk capital
measures include setting upper limits for risk exposure based on
SMBC Group-wide and business unit risk appetite and SMBC Group-wide
management constitution. Each business unit operates business
operation within that limit. Through these precautions, the SMBC
Group practices management that maintains an appropriate balance
between risks and returns based on a comprehensive perspective and
secures sufficient financial soundness.
Credit Risk
Credit risk is the risk of incurring losses from decline or loss of
the value of an asset (including off-balance sheet items) that is
caused by a credit event including but not limited to the
deterioration of financial condition of a borrower. Overseas
credits transactions also entail country risk, which is closely
related to credit risk. Country risk is the risk of incurring
losses caused by changes in political or economic conditions.
Credit exposures arise primarily from lending activities such as
loans and advances, acquiring investment securities, derivative
transactions, and off-balance sheet transactions such as unused
portion of loan commitments.
Credit risk management system
Credit risk is the most significant risk to which the SMBC Group is
exposed. The purpose of credit risk management is to keep the
credit risk exposure to a permissible level relative to capital, to
maintain the quality of assets and to ensure returns commensurate
with risk.
At the SMBC Group, the Group CRO formulates credit risk management
policies each year on the basis of Group-wide basic policies for
risk management. The Credit & Investment Planning
Department, responsible for the comprehensive management of credit
risk, drafts and administers credit risk regulations including the
Group credit policies, manages non-performing loans
(“NPLs”), and performs other aspects of credit
portfolio management. Also, the Credit Risk Committee deliberates
on matters related to Group-wide credit portfolios. The SMBC Group
companies follow the fundamental principles established by the SMBC
Group to assess and manage credit risk. Each of SMBC Group
companies manages credit risk according to the nature of its
business, and assesses and manages the credit risks of individual
loans and credit portfolios quantitatively, using consistent
standards.
The following chart shows the credit risk management system of
SMBC, the SMBC Group’s significant banking subsidiary.
At SMBC, the Credit & Investment Planning Department
within the Risk Management Unit is responsible for the
comprehensive management of credit risk. This department drafts and
administers credit policies, the internal rating system, credit
authority guidelines, and credit application guidelines, and
manages NPLs, including impaired loans, and other aspects of credit
portfolio management. The department also cooperates with the
Corporate Risk Management Department in quantifying credit risk
(risk capital and risk-weighted assets) and controls SMBC’s
entire credit risk. Further, the Credit Portfolio Management
Department within the Credit & Investment Planning
Department strives to stabilize the credit portfolio and manage the
risk through credit derivatives, loan asset sales and other
instruments.
The credit departments of SMBC within each business unit conduct
credit risk management for loans handled by its unit and manage
portfolios of its unit. The credit limits they use are based on the
baseline amounts that the Credit & Investment Planning
Department establishes for each grading category, with particular
attention paid to evaluating and managing customers or loans
perceived to have particularly high credit risk. The Corporate
Research Department engages in research on industries and analyzes
the business and financial conditions of borrower enterprises to
detect early signs of problems or growth potential. The Credit
Administration Department is responsible for handling NPLs of
borrowers classified as potentially bankrupt or lower, and
formulates plans for workouts, including write-offs, and corporate
rehabilitation. The department closely liaises with SMBC Servicer
Co., Ltd., an SMBC Group company, which engages in related services
to efficiently reduce the amount of NPLs, including through the
sale of loans.
The Internal Audit Unit of SMBC, operating independently of the
business units, audits asset quality, accuracy of grading and state
of credit risk management, and reports the results directly to the
board of directors and the Management Committee.
SMBC has established the Credit Risk Committee to undertake control
of credit risk and to ensure the overall soundness of the loan
operations.
Credit risk management methods
To effectively manage the risk involved in individual loans as well
as the credit portfolio as a whole, the SMBC Group first
acknowledges that every loan entails credit risk, assesses the
credit risk posed by each borrower and loan using an internal
rating system, and quantifies that risk for control purposes.
Credit risk evaluation
At SMBC, the Credit & Investment Planning Department
manages an internal rating system for each asset control category
set according to portfolio characteristics. For example, credits to
commercial and industrial (“C&I”) companies,
individuals for business purposes (domestic only), sovereigns,
public sector entities, and financial institutions are assigned an
“obligor grade,” which indicates the borrower’s
creditworthiness, and/or “facility grade,” which
indicates the collectability of assets taking into account the
transaction conditions such as guarantee/collateral, and tenor. The
business units determine an obligor grade by first assigning a
financial grade using a financial strength grading model and data
obtained from the obligor’s financial statements, including
net worth and cash flows. The financial grade is then adjusted
taking into account the actual state of the obligor’s
financial position and qualitative factors to derive the obligor
grade. The qualitative factors mainly include the expected future
cash flows taking into account factors such as historical loss
information, the appropriateness of the borrower’s business
plan or operational improvement plan, the status of progress of its
plan, and the overall support from financial institutions. In the
event that the borrower is domiciled overseas, internal ratings for
credit are made after taking into consideration the country rank,
which represents an assessment of the credit quality of each
country based on its political and economic situation, as well as
its current account balance and external debt. Obligor grades and
facility grades are reviewed once a year and as otherwise
necessary, such as when there are changes in the credit situation.
The SMBC Group’s subsidiaries carry out credit risk
evaluations in line with SMBC.
The table below shows the corporate obligor grading system of
SMBC.
Obligor Grade
Definition
Borrower Category
Domestic (C&I), etc.
Overseas (C&I), etc.
J1
G1 Very high certainty of debt repayment Normal
J2
G2
High certainty of debt repayment
J3
G3
Satisfactory certainty of debt repayment
J4
G4
Debt repayment is likely, but this could change in
cases of significant changes in economic trends or business
environment
J5
G5
No problem with debt repayment over the short term,
but not satisfactory over the mid to long term, and the situation
could change in cases of significant changes in economic trends or
business environment
J6
G6
Currently no problem with debt repayment, but there
are unstable business and financial factors that could lead to debt
repayment problems
J7
G7
Close monitoring is required due to problems in meeting loan terms
and conditions, sluggish/unstable business, or financial
problems
Borrowers
J7R
G7R
Obligors with loans that are more than three months past due or
with restructured loans within the “Borrowers Requiring
Caution” category
Substandard
J8
G8
Currently not bankrupt, but experiencing business difficulties,
making insufficient progress in restructuring and highly likely to
go bankrupt
Potentially
J9
G9
Though not yet legally or formally bankrupt, has serious business
difficulties and rehabilitation is unlikely; thus, effectively
bankrupt
Effectively
J10
G10
Legally or formally bankrupt
Bankrupt
There are also grading systems for loans to individuals such as
housing loans and structured finance including project finance,
where the repayment source is limited to the cash flows generated
by a particular business or asset. For example, the obligor grade
of housing loans is determined taking into account various relevant
factors such as proportion of the repayment to revenue, proportion
of down payment to the value and past due information.
The Credit & Investment Planning Department of SMBC
centrally manages the internal rating systems, and designs,
operates, supervises and validates the grading models. It validates
the grading models (including statistical validation) of main
assets following the procedure manual once a year to ensure their
effectiveness and suitability.
Quantification of credit risk
At SMBC, credit risk quantification refers to the process of
estimating the degree of credit risk of a portfolio or individual
loan taking into account not just the obligor’s probability
of default (“PD”), but also the concentration of risk
in a specific customer or industry and the loss impact of
fluctuations in the value of collateral, such as real estate and
securities.
Specifically, the PD by grade, loss given default
(“LGD”), credit quality correlation among obligors, and
other parameter values are estimated using the historical data of
obligors and facilities stored in a database to calculate the
credit risk. Then, based on these parameters, SMBC runs a
simulation of simultaneous default using the Monte Carlo Simulation
to calculate SMBC’s maximum loss exposure to the estimated
amount of the maximum losses that may be incurred. Based on these
quantitative results, SMBC allocates risk capital.
Risk quantification is also executed for purposes such as to
determine the portfolio’s risk concentration or to simulate
economic movements (stress tests), and the results are used for
making optimal decisions across the whole range of business
operations, including formulating business plans and providing a
standard against which individual credit applications are
assessed.
Credit assessment
At SMBC, the credit assessment of corporate loans involves a
variety of financial analyses, including cash flows, to predict an
enterprise’s capability of loan repayment and its growth
prospects. These quantitative measures, when combined with
qualitative analyses of industrial trends, the enterprise’s
research and development capabilities, the competitiveness of its
products or services, and its management caliber, result in a
comprehensive credit assessment. The loan application is analyzed
in terms of the intended utilization of the funds and the repayment
schedule. In the assessment of housing loans for individuals, SMBC
employs a credit assessment model based on credit data amassed and
analyzed by SMBC over many years, taking into account various
relevant factors including proportion of the repayment to revenue,
proportion of down payment to the value and past due
information.
Credit monitoring
At SMBC, in addition to analyzing loans at the application stage,
the Credit Monitoring System is utilized to reassess obligor
grades, and review credit policies for each obligor so that
problems can be detected at an early stage, and quick and effective
action can be taken. The system includes annual monitoring that is
carried out each time the financial results of the obligor
enterprise are obtained, as well as ad-hoc monitoring that is
performed each time credit conditions change.
Credit portfolio management
Risk-taking within the scope of capital
To keep the credit risk exposure to a permissible level relative to
capital, the Corporate Risk Management Department of the Company
sets a credit risk capital limit for internal control purposes.
Under this limit, sub-limits are set for each business unit. The
Corporate Risk Management Department conducts monthly monitoring to
make sure that these limits are being followed.
Controlling concentration risk
As the SMBC Group’s equity capital may be materially impaired
in the event that the credit concentration risk becomes apparent,
the Credit & Investment Planning Department of the Company
therefore takes measures to manage concentration risks, such as
introducing large exposure limits and conducting intensive loan
reviews for obligors with large exposures, with an increased focus
on industrial sectors with an excessive concentration of credit
risk. Further, to manage country risk, SMBC’s Credit
Department of the International Banking Unit has credit limit
guidelines based on each country’s creditworthiness.
Toward active portfolio management
SMBC’s Credit Portfolio Management Department makes use of
credit derivatives, loan asset sales, and other instruments to
proactively and flexibly manage its portfolio to stabilize credit
risk.
Maximum exposure to credit risk before collateral held or
other credit enhancements
The following table shows the maximum exposure to credit risk
before taking into account any collateral held or other credit
enhancements at March 31, 2019 and 2018.
At March 31,
2019 2018
(In millions)
Credit risk exposures relating to assets on the consolidated
statements of financial position:
Deposits with banks ¥ 56,700,489 ¥ 53,992,931
Call loans and bills bought 2,465,745 1,881,880
Reverse repurchase agreements and cash collateral on securities
borrowed 10,345,994 8,491,703
Trading assets 2,480,903 2,841,148
Derivative financial instruments 3,382,574 3,885,271
Financial assets at fair value through profit or loss 2,620,686 1,528,921
Investment securities:
Debt instruments at amortized cost (At March 31, 2018:
Held-to-maturity investments) 318,914 372,459
Debt instruments at FVOCI (At March 31, 2018:
Available-for-sale financial assets) 13,333,221 14,282,706
Loans and advances 90,682,938 85,129,070
Other financial assets 3,609,129 3,598,642
Financial assets included in assets held for sale
— 3,099,888
Credit risk exposures relating to off-balance sheet
items (1)
Loan commitments 62,724,820 60,107,128
Financial guarantees and other credit-related contingent
liabilities 9,409,066 8,426,245
Total ¥ 258,074,479 ¥ 247,637,992
(1)
The off-balance sheet items represent the nominal
amounts of undrawn loan commitments, financial guarantees and other
credit-related contingent liabilities.
Based on the table above, excluding loan commitments (refer to Note
41 “Contingency and Capital Commitments”), the majority
of the total exposure to credit risk is derived from “Loans
and advances” and “Debt instruments at FVOCI (At
March 31, 2018: Available-for-sale financial
assets).”
Collateral and other credit enhancements
The SMBC Group considers the acquisition of collateral and
guarantees as a secondary repayment source to further enhance loan
recovery and minimize credit risk. Based on the assessment of a
borrower’s real financial condition and potential future cash
flows, the SMBC Group shall analyze the borrower’s repayment
ability and require sufficient collateral in the form of an asset
or third-party obligation. This serves to mitigate the inherent
credit risk in the exposure, by either improving recoveries in the
event of a default or transferring the borrower’s obligation
to guarantors. Collateral received is mainly segregated into
(1) financial collateral such as cash, deposits and
securities, (2) real estate collateral such as land and
buildings, and (3) guarantees received from sovereigns,
municipal corporations, credit guarantee corporations and other
public entities, financial institutions, and other companies.
The SMBC Group’s credit risk management is mainly based on an
analysis of the repayment ability from the cash flows of the
borrower’s business performance, and the collateral and other
credit enhancements are considered as secondary repayment sources
in the SMBC Group’s business practice. At the time of the
primary lending decision, the SMBC Group evaluates the collateral
on an individual borrower basis to consider its financial effect
for mitigating credit risk. The re-evaluation of the collateral and
other credit enhancements will be performed regularly, depending on
the borrower’s creditworthiness. In case there is a
significant change in the borrower’s repayment ability due to
a deterioration in its creditworthiness and/or its cash flows, the
SMBC Group may utilize the collateral and other credit enhancements
as a source of repayment.
The following table shows the financial effect of collateral and
other credit enhancements on impaired loans and advances at
March 31, 2019. The maximum collateral amounts included in the
disclosure are limited to the carrying value of loans and advances
where the credit exposure is over-collateralized.
At March 31, 2019
(In millions)
Impaired loans and advances ¥ 882,018
Financial effect of collateral and other credit enhancements 325,896
The following table shows the financial effect of collateral and
other credit enhancements on loans and advances for borrowers
requiring caution and impaired loans and advances at March 31,
2018. The maximum collateral amounts included in the disclosure are
limited to the carrying value of loans and advances where the
credit exposure is over-collateralized.
At March 31, 2018
(In millions)
Loans and advances for borrowers requiring caution and impaired
loans and advances ¥ 1,965,681
Financial effect of collateral and other credit enhancements 959,015
Concentration of risks of loans and advances with credit risk
exposure
An analysis of concentrations of credit risk from loans and
advances by geographical sector and industry sector at
March 31, 2019 and 2018 is shown below. The concentration by
geographical sector is measured based on the domicile of the
borrower.
Geographical sector
At
March 31,
2019 2018
(In millions)
Domestic ¥ 59,856,165 ¥ 57,830,627
Foreign:
Americas 12,382,463 11,221,244
Europe 5,988,133 4,949,471
Asia 9,720,884 8,423,747
Others 3,598,673 3,434,838
Total foreign 31,690,153 28,029,300
Gross loans and advances 91,546,318 85,859,927
Adjust: Unearned income, unamortized premiums—net and
deferred loan fees—net (258,392 ) (239,181 )
Less: Allowance for loan losses (604,988 ) (491,676 )
Carrying amount ¥ 90,682,938 ¥ 85,129,070
Industry sector
At
March 31,
2019 2018
(In millions)
Domestic:
Manufacturing ¥ 8,522,451 ¥ 7,961,620
Agriculture, forestry, fisheries and mining 288,099 145,957
Construction 918,617 947,765
Transportation, communications and public enterprises 5,596,935 5,424,054
Wholesale and retail 5,281,596 5,288,767
Finance and insurance 3,129,666 2,777,862
Real estate and goods rental and leasing 10,126,531 9,017,664
Services 4,328,173 4,255,228
Municipalities 866,373 1,000,286
Lease financing 9,030 14,629
Consumer (1) 16,187,195 16,363,489
Others 4,601,499 4,633,306
Total domestic 59,856,165 57,830,627
Foreign:
Public sector 360,875 372,008
Financial institutions 5,382,130 4,496,646
Commerce and industry 23,285,374 21,023,885
Lease financing 344,958 357,660
Others 2,316,816 1,779,101
Total foreign 31,690,153 28,029,300
Gross loans and advances 91,546,318 85,859,927
Adjust: Unearned income, unamortized premiums—net and
deferred loan fees—net (258,392 ) (239,181 )
Less: Allowance for loan losses (604,988 ) (491,676 )
Carrying amount ¥ 90,682,938 ¥ 85,129,070
(1)
The balance in Consumer mainly consists of housing
loans. The housing loan balances amounted to
¥11,216,711 million and ¥11,482,678 million at March
31, 2019 and 2018, respectively.
The following tables show a disaggregation of the structured
finance loans and advances balances, where the repayment source is
limited to the cash flows generated by a particular business or
asset, and the balances of secured or unsecured consumer loans at
March 31, 2019 and 2018. These loans and advances are included
in the preceding tables.
Structured finance:
At
March 31,
2019 2018
(In millions)
Real estate finance ¥ 2,493,748 ¥ 2,421,408
Project finance 3,978,779 3,976,222
Other structured finance 387,400 374,430
Total structured finance ¥ 6,859,927 ¥ 6,772,060
Consumer:
At
March 31,
2019 2018
(In millions)
Secured loans (1) ¥ 12,008,728 ¥ 12,255,845
Unsecured loans 4,178,467 4,107,644
Total consumer ¥ 16,187,195 ¥ 16,363,489
(1)
The secured loans and advances mainly represent
housing loans. The housing loan balances amounted to
¥11,216,711 million and ¥11,482,678 million at
March 31, 2019 and 2018, respectively.
Credit quality analysis
The following tables set out information about the gross carrying
amount of financial assets and the exposure to credit risk on loan
commitments and financial guarantee contracts by stage allocation
and internal rating grades of SMBC. Refer to Note 2 “Summary
of Significant Accounting Policies” for information on stage
allocation. Also refer to Note 45 “Financial Risk
Management” for information on obligor grading system of
SMBC.
At March 31,
2019
12-month
Lifetime ECL
Lifetime ECL credit-impaired Total
(In
millions)
Loans and advances at amortized cost:
Normal
J1-6 ¥ 38,708,431 ¥ 191,177 ¥ — ¥ 38,899,608
G1-6 24,350,586 508,277
— 24,858,863
Japanese government and local municipal corporations 3,137,657
—
— 3,137,657
Other (1) 22,876,865 75,598
— 22,952,463
Requiring caution
J7
— 460,319
— 460,319
G7
— 171,441
— 171,441
Other (1)
— 183,949
— 183,949
Impaired (2)
—
— 882,018 882,018
Gross loans and advances 89,073,539 1,590,761 882,018 91,546,318
Adjust: Unearned income, unamortized premiums—net and
deferred loan fees—net (258,392 )
Less: Allowance for loan losses (158,094 ) (92,446 ) (354,448 ) (604,988 )
Carrying amount ¥ 90,682,938
(1)
The balance of “Other” includes housing
loans, which amounted to ¥11,084,927 million and
¥28,018 million for the borrower category of Normal and
Requiring Caution, respectively.
(2)
“Impaired” refers to loans and advances
related to borrowers with obligor grades not higher than 7R.
Modified loans and advances that were subject to lifetime ECL
measurement amounted to ¥28,908 million for the fiscal
year ended March 31, 2019. The net modification gain or loss
is not material.
At March 31, 2019
12-month Lifetime ECL Lifetime ECL credit-impaired Total
(In
millions)
Loan commitments and Financial Guarantees (1) :
Gross carrying amount ¥ 28,842,267 ¥ 383,828 ¥ 13,435 ¥ 29,239,530
Allowance for off-balance sheet items 36,795 18,289 5,761 60,845
(1)
Loan commitments are the undrawn components of loan
commitments on which ECL can be separately identified from those on
the drawn components.
Movements in ECL allowance
The following tables show reconciliations from the opening balance
to the closing balance of the ECL allowance by class of financial
instrument.
For the fiscal year
ended March 31,
2019 2018
12-month
Lifetime ECL
Lifetime ECL credit-impaired Total Total
(In millions)
Loans and advances at amortized cost (1) :
Balance at April 1 ¥ 164,515 ¥ 130,701 ¥ 356,404 ¥
651,620 ¥ 680,456
Transfer to 12-month ECL 832 (805 ) (27 )
—
—
Transfer to lifetime ECL not credit-impaired (1,599 ) 4,845 (3,246 )
—
—
Transfer to lifetime ECL credit-impaired (1,966 ) (10,507 ) 12,473
—
—
Net transfers between stages (2,733 ) (6,467 ) 9,200
—
—
Provision (credit) for loan losses (2) (4,265 ) (31,744 ) 158,936 122,927 126,623
Charge-offs (3)
—
— 180,254 180,254 185,060
Recoveries
—
— 11,042 11,042 10,232
Net charge-offs
—
— 169,212 169,212 174,828
Others 577 (44 ) (880 ) (347 ) (140,575 )
Balance at March 31 ¥
158,094 ¥ 92,446 ¥ 354,448 ¥ 604,988 ¥ 491,676
(1)
“Loans and advances at amortized cost”
includes allowance for undrawn components of loan commitments
issued to retail customers which cannot be separately identified
from that for the drawn components.
(2)
The decrease of allowance of lifetime ECL not
credit-impaired is primarily due to certain large borrowers’
improvement of their financial performance.
(3)
Charge-offs for lifetime ECL credit-impaired are
primarily related to those for consumer loans.
For the fiscal year
ended March 31, 2019
12-month
Lifetime ECL
Lifetime ECL credit-impaired Total
(In millions)
Loan commitments and financial guarantees (1) :
Balance at April 1 ¥ 35,543 ¥ 23,311 ¥ 6,225 ¥
65,079
Net transfers between stages (28 ) (228 ) 256
—
Provision (credit) for off-balance sheet items
2,272 (4,794 ) (720 ) (3,242 )
Others (992 )
—
— (992 )
Balance at March 31 ¥ 36,795 ¥ 18,289 ¥ 5,761 ¥ 60,845
(1)
ECL allowance for loan commitments is that for the
undrawn components of loan commitments, which can be separately
identified from that for the drawn components.
Loans and advances by credit quality at March 31,
2018
Loans and advances are summarized as follows:
At
March 31,
2018
(In millions)
Neither past due nor impaired ¥ 84,856,335
Past due but not impaired 124,724
Impaired (1) 878,868
Gross loans and advances 85,859,927
Adjust: Unearned income, unamortized premiums—net and
deferred loan fees—net (239,181 )
Less: Allowance for loan losses (491,676 )
Carrying amount ¥ 85,129,070
(1)
Loans and advances to borrowers who are classified in
the borrower categories of substandard borrowers, potentially
bankrupt borrowers, effectively bankrupt borrowers, and bankrupt
borrowers described in the obligor grading system represent
impaired loans and advances.
Loans and advances neither past due nor impaired
The following tables show the credit quality of the portfolio of
loans and advances that were neither past due nor impaired, by
geography and by industry based on the corporate obligor grading
system of SMBC at March 31, 2018. Since the internal rating
system of SMBC’s consumer portfolio differs from the
corporate obligor grading system, the balances of loans and
advances to consumers are included in the grade category of
“Other.” Additionally, as the SMBC Group’s
subsidiaries are adopting various internal rating systems which
differ from SMBC, the grade category of “Other” also
includes some balances of loans and advances held by those
subsidiaries.
At March 31,
2018
Normal Requiring
Caution
J 1-3 J 4-6 Japanese Other J 7 Other Total
(In millions)
Domestic:
Manufacturing ¥ 4,275,861 ¥ 2,190,117 ¥ — ¥ 1,196,566 ¥ 199,616 ¥ 22,681 ¥ 7,884,841
Agriculture, forestry, fisheries and mining 81,900 42,892 13,973 207 599
— 139,571
Construction 319,394 468,222
— 119,439 26,779 459 934,293
Transportation, communications and public enterprises 4,069,995 1,066,246 86,932 133,132 46,657 148 5,403,110
Wholesale and retail 2,333,434 2,399,747
— 297,583 155,584 1,421 5,187,769
Finance and insurance 1,801,410 349,934 2,785 618,935 1,630 5 2,774,699
Real estate and goods rental and leasing 5,696,289 3,082,764 13,696 95,634 87,218 7 8,975,608
Services 1,599,011 2,355,545 37,693 94,218 96,498 115 4,183,080
Municipalities
—
— 1,000,286
—
—
— 1,000,286
Lease financing
—
—
— 14,629
—
— 14,629
Consumer (1)
— 234
— 15,900,425 1,669 73,180 15,975,508
Others 53,633 2,057,571 1,685,694 728,206 69,005 680 4,594,789
Total domestic 20,230,927 14,013,272 2,841,059 19,198,974 685,255 98,696 57,068,183
G 1-3 G 4-6
— Other G 7 Other Total
Foreign:
Public sector 191,678 81,448
— 97,890 30 941 371,987
Financial institutions 2,381,927 338,659
— 1,752,693
— 7,891 4,481,170
Commerce and industry 14,009,273 2,425,819
— 4,114,066 222,395 53,793 20,825,346
Lease financing 23,290
—
— 330,406
— 3,964 357,660
Others 1,194,334 161,795
— 383,463 9,964 2,433 1,751,989
Total foreign 17,800,502 3,007,721
— 6,678,518 232,389 69,022 27,788,152
Total ¥ 38,031,429 ¥ 17,020,993 ¥ 2,841,059 ¥ 25,877,492 ¥ 917,644 ¥ 167,718 ¥ 84,856,335
(1)
The balance in the grade category of
“Other” in Consumer includes housing loans, which
amounted to ¥11,302,350 million and
¥51,189 million for the borrower category of Normal and
Requiring Caution, respectively.
Loans and advances past due but not impaired
The SMBC Group assesses the credit quality of loans and advances
taking into account past due information on a borrower basis, and
does not comprehensively collate the data related to the age
analysis of loans and advances that were past due but not impaired
on an individual basis. The aggregate balances of loans and
advances of borrowers with one or more facilities, where any of the
facilities are past due for less than three months but not impaired
as at March 31, 2018 were ¥163,902 million,
respectively. Those aggregate balances therefore include individual
loans and advances which are not past due. Thus, in the tables
below, the SMBC Group provides the amount of loans and advances
where the final payment at contractual maturity is past due, by
geography and by industry, at March 31, 2018. For reference,
since all the loans and advances that are past due over three
months are treated as impaired, those loans and advances are not
included in the tables below.
At March 31,
2018
Past due up to Past due 1-2 months Past due 2-3 months Total
(In millions)
Domestic:
Manufacturing ¥ 476 ¥ 50 ¥ — ¥ 526
Agriculture, forestry, fisheries and mining
—
—
—
—
Construction 1 10 51 62
Transportation, communications and public enterprises 45
—
— 45
Wholesale and retail 2,240 318 21 2,579
Finance and insurance 65 76
— 141
Real estate and goods rental and leasing 73 44
— 117
Services 245
—
— 245
Lease financing
—
—
—
—
Consumer 55,020 10,298 3,378 68,696
Others 2,791 44 21 2,856
Total domestic 60,956 10,840 3,471 75,267
Foreign:
Financial institutions 11,934 165 1,548 13,647
Commerce and industry 14,822 2,705 13,554 31,081
Others 2,402 1,676 651 4,729
Total foreign 29,158 4,546 15,753 49,457
Total ¥ 90,114 ¥ 15,386 ¥ 19,224 ¥ 124,724
Impaired loans and advances
The following table shows the impaired loans and advances, by
geography and by industry, at March 31, 2018.
At March 31,
2018
(In millions)
Domestic:
Manufacturing ¥ 76,253
Agriculture, forestry, fisheries and mining 6,386
Construction 13,410
Transportation, communications and public enterprises 20,899
Wholesale and retail 98,419
Finance and insurance 3,022
Real estate and goods rental and leasing 41,939
Services 71,903
Lease financing
—
Consumer 319,285
Others 35,661
Total domestic 687,177
Foreign:
Public sector 21
Financial institutions 1,829
Commerce and industry 167,458
Lease financing
—
Others 22,383
Total foreign 191,691
Total impaired loans and advances before allowance for loan
losses 878,868
Less: Allowance for loan losses for impaired loans and advances (369,386 )
Net impaired loans and advances ¥ 509,482
Renegotiated loans and advances at March 31,
2018
The following table shows loans and advances at March 31 2018
that would otherwise be past due or impaired, but whose terms have
been renegotiated without providing any financial concessions.
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