Strong business position backed by its leading market position in Japan Strong liquidity and stable funding backed by a large retail deposit base High likelihood of receiving government support Continued decline in its net interest margins for domestic loans, particularly those to small and midsize enterprises (SMEs) Limited ability to secure stable foreign-currency funding with competitive rates constrains overseas expansion S&P Global Ratings' outlooks on Sumitomo Mitsui Financial Group Inc. (SMFG) and the group's core banking subsidiaries are positive. The outlooks reflect our view that SMFG will continue to improve its capital level relative to risk-weighted assets (RWAs) over the medium term. We see a one-in-three chance of raising our ratings by one notch in the next two years or
