SMFG Notes to Consolidated Financial Statements SMFG  2011 132 Merged company: CF (Shopping credit business and general credit business) Merged company: QUOQ (Shopping credit business  and general credit business) (1) Company  profiles 1. Outline of the business combination A merger of credit card companies A consolidated subsidiary, QUOQ Inc. (“QUOQ”) and equity  method affiliates, Central Finance Co., Ltd. (“CF”) and OMC Card,  Inc. (“OMC Card”) merged on April 1, 2009. The new company was  named Cedyna Financial Corporation and became an equity method  affiliate of SMFG. The outline of the merger is as follows: <Business combination of subsidiaries> The information mentioned above has not been audited by  KPMG AZSA & Co. The approximate amounts were calculated retroactively to the  commencement date of the fiscal year based on the amounts  stated in Biwako Bank’s statement of income for the period from  April 1, 2009 to February 28, 2010, including the amount of  amortization of goodwill for the same period and are different  from results of operation if the business combination had been  completed on the commencement date of the fiscal year. Note: Ordinary income is presented as counterparts of sales of companies in other  industries. (2) Calculation method of the approximate amounts and material  assumptions (1) The difference between the ordinary income and other income  data estimated, assuming that the business combinations had  been completed on the commencement date of the fiscal year  and the actual ordinary income and other income data that are  recorded in the consolidated statement of income is as follows: Millions of yen Ordinary income ................................................. ¥25,832 Ordinary profit .................................................... 705 Net income ......................................................... 183 7. Approximate amounts of impact on the consolidated statement of  operations for the fiscal year ended March 31, 2010, assuming that  the business combinations had been completed on the commence- ment date of the fiscal year (2) Liabilities Millions of yen Total liabilities .................................................... ¥1,078,769 Deposits .............................................................. 1,033,256 4. Merger ratio, calculation method, number of shares delivered and  valuation (a) Common stock (b) Preferred stocks (Type 1 and Type 2) Surviving company: OMC Card (Credit card business) (2) Reasons for the business combination The credit card market is growing steadily, propelled by the  expansion into new areas of settlement, such as for small  purchases, the growing popularity of reward point programs,  and other developments. Further substantial growth of the  industry is anticipated with the greater use of credit cards to  pay for public services charges and in other fields. At the same  time, the business environment surrounding the industry is  changing dramatically — development of new technologies  and new services, such as electronic money; investment  in systems that can respond to customers’ needs for more  in-depth, sophisticated and diverse services; enactment of  (1) Assets 6. Amounts of assets and liabilities acquired on the day of the busi- ness combination (3) Method and term to amortize goodwill Straight-line method over 20 years (2) Reason for recognizing goodwill SMFG accounted for the difference between the acquisition  cost and the equivalent amount of SMFG’s interests in Biwako  Bank as goodwill. (1) Amount of goodwill ¥11,056 million 5. Goodwill, reason for recognizing goodwill, amortization method  and amortization period (3) Number of shares delivered and value In order to ensure the fairness of the merger ratio, KUBC  and Biwako Bank appointed Daiwa Securities Capital  Markets Co. Ltd. and The Goldman Sachs Group, Inc.,  respectively, as their financial advisors and requested  them to calculate the merger ratio of common stock.  After conducting negotiations and discussions taking into  account factors such as their financial conditions, asset  quality and future prospects, the analysis of the merger  ratio provided by each financial advisor and results of due  diligence they carried out on each other, the 2 banks agreed  and decided on the above merger ratio of common stock as  being appropriate. Market prices of preferred stocks (Type 1 and Type 2) issued  by Biwako Bank were not available (in contrast to common  stock which market price was available). KUBC therefore  decided to set the same conditions as those of Biwako Bank’s  preferred stocks on KUBC’s newly-issued preferred stocks,  taking the merger ratio of common stock into account. (2) Basis for calculation of the merger ratio (1) Merger  ratio Common stock KUBC 1 : Biwako Bank 0.75 Preferred stock (Type 1) KUBC 1 : Biwako Bank 1 Preferred stock (Type 2) KUBC 1 : Biwako Bank 1 Number of shares delivered Common stock of KUBC 103,532,913 shares Preferred stock of KUBC (Type 1) 27,500,000 shares Preferred stock of KUBC (Type 2) 23,125,000 shares Value  Common stock of KUBC  ¥12,803 million  Preferred stock of KUBC (Type 1)  ¥19,025 million  Preferred stock of KUBC (Type 2)  ¥16,500 million Millions of yen Total assets .......................................................... ¥1,113,801 Loans and bills discounted ................................... 795,445 Securities ............................................................. 89,968