SMFG Capital Ratio Information C. Other Retail Exposures (A) Rating Procedures (B) Portfolio GLYPH<129> “Other retail exposures” includes business loans such as apartment construction loans, standardized SME loans, and consumer  loans such as My Car Loan.  GLYPH<129> Business loans, standardized SME loans and consumer loans are rated as follows. a. Business loans and standardized SME loans are allocated to a portfolio segment with similar risk characteristics in terms of  (a) default risk determined using loan contract information, results of exclusive grading model and borrower category under  self-assessment executed in accordance with the financial inspection manual of the Japanese FSA, and (b) recovery risk  determined based on, for standardized SME loans, obligor attributes and, for business loans, LTV. PDs and LGDs are estimated  based on the default experience for each segment and taking into account the possibility of estimation errors.  b. Rating procedures for consumer loans depends on whether the loan is collateralized. Collateralized consumer loans are allocated  to a portfolio segment using the same standards as for mortgage loans of “A. Residential Mortgage Exposures.” Uncollateralized  consumer loans are allocated to a portfolio segment based on account history. PDs and LGDs are estimated based on the default  experience for each segment and taking into account the possibility of estimation errors. Further, the effectiveness of segmentation in terms of default risk and recovery risk is validated periodically.  Internal data are used to estimate and validate PDs and LGDs. The definition of default is the definition stipulated in the  Notification. Notes: 1. “Business loans” includes apartment construction loans and standardized SME loans. 2. “Others” includes loans guaranteed by employers. 3. “Delinquent” loans are past due loans and loans to obligors categorized as “Borrowers Requiring Caution” that do not satisfy the definition of default stipulated  in the Notification. Billions of yen Weighted average  PD Weighted average  LGD Weighted average  EL default Weighted average  risk weight Exposure amount March 31, 2011 Total On-balance  sheet assets  Off-balance  sheet assets  Business loans PD segment: Not delinquent Use model ......................... ¥ 917.8  ¥ 907.7  ¥10.1  0.80% 49.93% —% 44.07% Others ............................... 356.9 355.6 1.3 0.70 55.59 — 27.79 Delinquent ............................. 361.8 358.5 3.4 28.72 60.16 — 95.33 Consumer loans PD segment: Not delinquent Use model ......................... 211.2 209.6 1.6 1.42 47.80 — 52.62 Others ............................... 171.8 170.1 1.7 2.14 60.44 — 78.96 Delinquent ............................. 56.8 56.6 0.2 20.06 50.96 — 112.17 Default .......................................... 188.1 187.6 0.5 100.00 66.98 62.31 58.41 Total .............................................. ¥2,264.5 ¥2,245.8 ¥18.7 — — — — Billions of yen Weighted average  PD Weighted average  LGD Weighted average  EL default Weighted average  risk weight Exposure amount March 31, 2010 Total On-balance  sheet assets  Off-balance  sheet assets  Business loans PD segment: Not delinquent Use model ......................... ¥1,101.4 ¥1,088.4 ¥ 13.0 0.92% 53.50% —% 48.62% Others ............................... 360.3 359.2 1.1 0.61 57.28 — 26.55 Delinquent ............................. 456.4 453.2 3.2 33.13 63.32 — 88.08 Consumer loans PD segment: Not delinquent Use model ......................... 497.7 246.4 251.3 1.16 67.20 — 69.20 Others ............................... 193.4 191.6 1.8 1.76 62.66 — 77.85 Delinquent ............................. 51.2 51.0 0.2 22.36 54.27 — 124.64 Default .......................................... 140.9 140.8 0.2 100.00 66.53 62.29 53.05 Total .............................................. ¥2,801.3 ¥2,530.5 ¥270.8 — — — — SMFG  2011 187