◎ Two main initiatives for strategic business areas • Initiatives to pursue synergies between SMBC and SMBC Nikko Securities • Initiatives for global expansion SMFG  2011 6 Specifically in the wholesale business, we are enhancing the  capabilities of SMBC Nikko Securities to accommodate the needs  of Japanese corporate clients for tapping into global capital markets  and cross-boarder M&As by increasing its overseas staff, while  improving its sales and trading capabilities for institutional investors  in Japan, other Asian countries, the U.S. and Europe. Concurrently, we are accelerating the alignment of SMBC  and SMBC Nikko Securities through the redeployment of human  resources and greater collaboration, in order to respond to the grow- ing and diversifying need for wealth management of Japanese indi- vidual clients and provide advanced financial solutions for Japanese  corporate clients. We strive to further strengthen our solid business  operations in Japan by implementing these initiatives. SMBC Nikko Securities, which is the principal business operation  of our securities business, has been consistently earning profits  from its established retail business and increasing its market share  in the wholesale business. While strengthening its cross-sell with  SMBC, SMBC Nikko Securities has fortified its wholesale business  by installing a market transaction system, enhancing its equity sales  capabilities targeting institutional investors by establishing the Equity  Research Division and developing its overseas operations by com- mencing business operations in London, New York, Hong Kong and  Shanghai.  We will continue to strengthen the wholesale capabilities of  SMBC Nikko Securities and promote its cooperation with other  group companies including SMBC. Our competitors of top-tier financial institutions develop their  business operations globally, while sustaining their solid business  operations in their home countries. We similarly strive to develop a  platform for achieving top quality in commercial banking operations  in emerging markets mainly in Asia where higher growth is expected  to capture expanding business opportunities, while sustaining and  further strengthening our solid business operations in Japan. Through such initiatives, we strive to increase our overseas  banking profit ratio to 30% in fiscal 2013 from 23% in fiscal  2010 and grow our banking profits in Asia by 50% in fiscal 2013  compared with fiscal 2010. Specifically, we are strengthening our business operations by  enhancing our channel network and allocating human resources  focusing on Asia. We will also proactively respond to the needs for  deposits, foreign exchange and other services related to payment  and settlement which are expected to grow in emerging countries  experiencing high economic growth and to the increasing demand  for infrastructure financing in emerging countries. We are also  expanding the collaboration of business operations and redeploy- ment of human resources between SMBC’s domestic and overseas  offices in order to effectively and quickly accommodate the needs of  our corporate clients in Japan for their global business expansion.  *Managerial accounting basis.  Sum of SMBC and its overseas subsidiaries. Fiscal 2004 2005 2006 2007 2008 2009 2010 2013 23% 7% 30% ■ Banking profit at the International Banking Unit* (left) ■ Overseas banking profit ratio (right) (JPY bn) 150.0 30% 0% 10% 20% 0 50.0 100.0 Strengthen wholesale securities business of SMBC Nikko Securities Strengthen cross-sell among SMBC Nikko Securities, SMBC and other group companies ● Increase overseas personnel and business operations ✔ Global offerings ✔ Cross-border M&As, etc. ● Strengthen sales and trading capabilities for institutional investors in Japan, other Asia countries, the U.S. and Europe Meeting clients’ diversifying needs