3. Consolidated Capital Ratio Consolidated Capital Ratio 4. Dividend Policy 5. Deferred Tax Assets Deferred Tax Assets SMFG  2011 25 Millions of yen March 31 2011  (A) 2010 (B) Increase (decrease)  (A) – (B) Net deferred tax assets ................................................................................................. ¥624,219 ¥702,065 ¥(77,846) Net deferred tax assets / Tier I capital × 100 ................................................................ 9.9% 11.6% (1.7)% Millions of yen March 31 2011  (A) 2010 (B) Increase (decrease) (A) – (B) Tier I capital ................................................................................................................... ¥ 6,323,995 ¥ 6,032,280 ¥ 291,715 Tier II capital included as qualifying capital................................................................... 2,536,958 2,563,853 (26,895) Deductions .................................................................................................................... (428,082) (467,906) 39,824 Total capital ................................................................................................................... 8,432,871 8,128,228 304,643 Risk-adjusted assets ..................................................................................................... 50,693,696 54,084,471 (3,390,775) Consolidated capital ratio ............................................................................................. 16.63% 15.02% 1.61% Tier I capital ratio ........................................................................................................... 12.47% 11.15% 1.32% to ¥8,432.8 billion. This was due mainly to recording of  net income. Risk-adjusted assets, the denominator in the  equation, decreased by ¥3,390.7 billion year on year to  ¥50,693.6 billion due in part to a reduction in corporate  exposures. SMFG’s consolidated capital ratio as of March 31, 2011  was 16.63%, 1.61 percentage points higher than at March  31, 2010. Total capital, which is the numerator in the capital ratio  calculation equation, rose by ¥304.6 billion year on year  In view of the public nature of its business, SMFG has set a  fundamental policy of increasing profit distribution stably and  continuously through sustainable growth in enterprise value,  while enhancing the Group’s capital to maintain a sound  financial position. SMFG aims for a dividend payout ratio of  over 20% on a consolidated net income basis, and its funda- mental policy is to distribute dividends from retained earnings  twice a year in the form of an interim dividend and a yearend  dividend. An interim dividend can be declared by the Board  of Directors, with September 30 of each year as the recorded  date, but the approval of shareholders at the annual general  meeting is required to pay a yearend dividend.  After taking into account the fiscal 2010 business perfor- mance, SMFG has decided to pay a term-end dividend of  ¥100 per share of common stock for the fiscal year. SMFG will employ its retained earnings to increase its  enterprise value by aiming for top quality in strategic busi- ness areas, and establishing a solid financial base and cor- porate infrastructure enough to address the new financial  regulations and competitive environment. Net deferred tax assets decreased by ¥77.8 billion from the  end of the previous fiscal year to ¥624.2 billion. SMFG takes a conservative approach to recognizing  deferred tax assets in order to secure a sound financial  position.