Sumitomo Mitsui Financial Group Inc.

S&P Global Ratings has stable outlooks on Japan-based SMBC Group's nonoperating holding company, Sumitomo Mitsui Financial Group Inc. (SMFG), its lead bank, Sumitomo Mitsui Banking Corp. (SMBC), and the group's core banking subsidiaries. The stable outlooks reflect our expectation that the entities will maintain stable credit profiles for the coming two years. This reflects our view that a likelihood of government support in times of need will underpin their creditworthiness despite likely downward pressure on their profitability amid the continuing impact of the pandemic. We might consider upgrading SMFG and its core banking subsidiaries if: We raise our sovereign credit rating on Japan and believe the group can maintain its asset quality and earnings buffer, or We raise our group

... in domestic market will likely support SMBC Group's revenue stability, in our view. We expect Sumitomo Mitsui Banking Corp. (SMBC) group, as the largest-class banking group in Japan, to maintain competitiveness in the domestic commercial banking and retail banking markets. In addition, the group has established a well-balanced business portfolio with an expansion of overseas business, and we expect it to maintain it. We expect the balance between the group's capital and risk assets to remain adequate in the next one to two years. The group's investments for growth will likely raise its risk-weighted assets. However, we expect the risk-adjusted capital (RAC) ratio for SMBC Group to remain adequate over the next year or two, thanks to constantly accumulated earnings. The group's asset quality will remain manageable, in our view. Credit costs have increased due to the COVID-19 pandemic. However, we expect them to return to close to their pre-pandemic...

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