◎ Management Targets ◎ Strategic Initiatives ◎ Financial Targets For the first three years of the second decade of the SMBC and  SMFG group, we set two management targets in order to accom- plish our basic policy of becoming a globally competitive financial  services group with the highest trust of our clients and stakeholders  by maximizing our strengths of “Spirit of Innovation,” “Speed” and  “Solution & Execution.” The first target is to achieve top quality in  strategic business areas, and the second target is to establish a solid  financial base and corporate infrastructure to be able to address the  new financial regulations and competitive business environment. In order to appropriately address the strengthening of financial regu- lations globally, we are required to focus further on enhancement of  risk-return and cost-return profiles and steadily expand bottom-line  profit. Therefore, we need to capture overseas business oppor- tunities especially in rapidly growing Asian markets in addition to  sustaining and further strengthening our solid business operations  in Japan. Having this in mind, we strive to achieve well-balanced and  steady improvement of “financial soundness,” “profitability” and  “growth,” and we have set the following four objectives for the next  three fiscal years: In order to achieve the aforementioned management and financial  targets, we have designated the following five business areas as  critical strategic businesses for management: The growth of these business areas will be driven under two main  initiatives of pursuing “synergies between SMBC and SMBC Nikko  Securities” and “global expansion.” We will execute these initiatives  on a group-wide basis, and also establish a solid financial base and  corporate infrastructure that support these initiatives. An “unpredictable,” “uncertain,” and “unstable” business environ- ment still remains, due mainly to the diverse implications of the  Great East Japan Earthquake to the Japanese economy, as well  as fiscal deficits in the developed countries and soaring commodity  prices. Furthermore, the global strengthening of financial regula- tions requires banks, in the private sector, to achieve more efficient  asset allocation, higher capital efficiency and more stringent liquidity  management. On the other hand, business opportunities are expanding rapidly  in emerging countries especially in Asia, where financial needs are  increasing as their economies substantially grow and Japanese  companies are developing their businesses. Against this backdrop, we will move forward responding  proactively and flexibly to the continuously evolving environment,  making every effort to increase our shareholders’ value and striving  to become a top-tier global financial services group. • Achieve sufficient Core Tier I ratio as required for a global player •  Enhance risk-return profile by improving asset quality •  Aim for top-level cost efficiency among global players • Expand overseas business by capturing growing business oppor- tunities especially in Asia •  Financial consulting for individuals •  Solution providing for corporations •  Commercial banking in emerging markets, especially in Asia •  Broker-dealer/Investment banking • Non-asset business such as payment & settlement services and  asset management SMFG  2011 4