SMFG Capital Ratio Information B. Specialized Lending (SL) (A) Rating Procedures (B) Portfolio a. Slotting Criteria Applicable Portion (a) Project Finance and Object Finance (b) High-Volatility Commercial Real Estate (HVCRE) b. PD/LGD Approach Applicable Portion, Other Than Slotting Criteria Applicable Portion (a) Object Finance GLYPH<129> “Specialized lending” is sub-classified into “project finance,” “object finance,” “commodity finance,” “income-producing real  estate” (IPRE) and “high-volatility commercial real estate” (HVCRE) in accordance with the Notification. Project finance is  financing of a single project, such as a power plant or transportation infrastructure, and cash flows generated by the project are the  primary source of repayment. Object finance includes aircraft finance and ship finance, and IPRE and HVCRE include real estate  finance (a primary example is non-recourse real estate finance). There were no commodity finance exposures as of March 31, 2011. GLYPH<129> Each SL product is classified as either a facility assigned a PD grade and LGD grade or a facility assigned a grade based primarily  on the expected loss ratio, both using grading models and qualitative assessment. The former has the same grading structure as  that of corporate, and the latter has ten grade levels as with obligor grades but the definition of each grade differs from that of the  obligor grade which is focused on PD. For the credit risk-weighted asset amount for the SL category, the former facility is calculated in a manner similar to corporate  exposures, while the latter facility is calculated by mapping the expected loss-based facility grades to the below five categories  (hereinafter the “slotting criteria”) of the Notification because it does not satisfy the requirements for PD application specified in  the Notification. Note: A portion of “Object finance” is calculated using the PD/LGD approach. Billions of yen Risk  weight 2011 2010 March 31 Project finance Object finance Project finance Object finance Strong: Residual term less than 2.5 years .................... 50% ¥ 120.1  ¥ 2.1  ¥ 125.6 ¥ 0.6 Residual term 2.5 years or more ...................... 70% 746.2 7.9 746.9 41.0 Good: Residual term less than 2.5 years .................... 70% 28.9 1.7 23.3 — Residual term 2.5 years or more ...................... 90% 224.9 3.1 169.9 4.1 Satisfactory .......................................................... 115% 13.7 — 42.1 — Weak ..................................................................... 250% 43.8 — 61.5 — Default .................................................................. — 29.2 — 18.0 — Total ...................................................................... ¥1,206.8 ¥14.9 ¥1,187.0 ¥45.7 Risk  weight Billions of yen March 31 2011 2010 Strong: Residual term less than 2.5 years .................... 70% ¥ — ¥ — Residual term 2.5 years or more ...................... 95% — — Good: Residual term less than 2.5 years .................... 95% 31.0  32.5 Residual term 2.5 years or more ...................... 120% 74.3  10.8 Satisfactory .......................................................... 140% 96.1  152.9 Weak ..................................................................... 250% 20.0  11.1 Default .................................................................. — 2.1  6.5 Total ...................................................................... ¥223.5  ¥213.6 Billions of yen Exposure amount Weighted average CCF Weighted average PD Weighted average LGD Weighted average EL default Weighted average  risk weight March 31, 2011 Total On-balance  sheet assets  Off-balance  sheet assets  Undrawn amount G1-G3 .................................. ¥116.0 ¥ 91.7 ¥24.3 ¥1.2 75.00% 0.39% 22.67% —% 37.81% G4-G6 .................................. 27.6 21.0 6.6 7.3 75.00 3.06 9.21 — 29.41 G7 (excluding G7R) ............. 10.9 10.9 0.0 0.1 75.00 18.75 27.05 — 155.72 Others .................................. — — — — — — — — — Default (G7R, G8-G10) ........ 9.9 9.6 0.3 — — 100.00 58.20 51.63 82.12 Total ..................................... ¥164.5 ¥133.3 ¥31.2 ¥8.5 — — — — — SMFG  2011 184