Standard&Poor's bases its ratings on SMFG on the company's "strong" business position, "moderate" capital and earnings, "adequate" risk position, "above average" funding, "strong" liquidity, and a "high" likelihood of government support. The SACP on the operating bank, SMBC, is 'a'. Our bank criteria use our BICRA economic risk and industry risk scores to determine a bank's anchor SACP, the starting point in assigning an issuer credit rating (ICR). Our anchor SACP for a bank operating only in Japan is 'a-'. The BICRA score is informed by our evaluation of economic risk. We view Japan as a developed and diverse economy with strong net external balance, which offsets the high level of government debt, and limited fiscal flexibility. With
