The discussion below should be read together with “Item 3.A. Selected Financial Data” and our consolidated financial statements and related notes included elsewhere in this annual report. Unless otherwise indicated, we present our information on a consolidated basis. OVERVIEW Operating Environment Our results of operations and financial condition are significantly affected by developments in Japan as well as the global economy. The Japanese economy as a whole, recovered during the fiscal year ended March 31, 2026, primarily due to an increase in private consumption, supported by gradual improvements in the employment and income conditions, although heightened tensions in the Middle East increased uncertainty over the economic outlook toward the end of the fiscal year. Japanese gross domestic product (“GDP”) increased by 0.8% for the fiscal year ended March 31, 2026, compared with an increase of 0.5% in the previous fiscal year, based on data published in June 2026 by the Cabinet Office of the Government of Japan. The consumer price index for Japan (all items, less fresh food) (“CPI”) for the fiscal year ended March 31, 2026, showed an increase of 2.7% which is the same as the previous fiscal year, and the CPI in March 2026 increased by 1.8% compared to March 2025, based on data published in April 2026 by the Statistics Bureau of Japan. The following table presents the quarter-on-quarter growth rates of Japanese GDP for the fiscal years ended March 31, 2025 and 2026. For the fiscal year ended March 31, 2025 2026 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Japanese GDP (0.0 %) 0.7 % 0.3 % 0.5 % 0.3 % (0.6 %) 0.2 % 0.5 % 67 Table of Contents Japanese GDP increased by 0.3% on a quarter-on-quarter basis for the first quarter of the fiscal year ended March 31, 2026, primarily due to an increase in private consumption supported by gradual improvements in the employment and income conditions, and an increase in exports of IT-related goods. However, it decreased by 0.6% on a quarter-on-quarter basis for the second quarter of the fiscal year ended March 31, 2026, primarily due to a decrease in private residential investments, and a decrease in exports of goods and services reflecting the introduction of higher U.S. tariffs, which were partially offset by an increase in private consumption. Japanese GDP increased by 0.2% on a quarter-on-quarter basis for the third quarter of the fiscal year ended March 31, 2026. This was primarily due to an increase in capital investments by businesses, supported by demand for AI- and labor saving-related investments. Japanese GDP increased by 0.5% on a quarter-on-quarter basis for the fourth quarter of the fiscal year ended March 31, 2026, primarily due to an increase in exports of goods and services. The employment situation as a whole, improved gradually. The active job openings-to-applicants ratio published by the Ministry of Health, Labour and Welfare of Japan remained almost unchanged for the fiscal year ended March 31, 2026. According to the statistical data published by the Statistics Bureau of Japan, the unemployment rate was 2.7% in March 2026, an increase of 0.2 percentage points from the same month of the previous year. The compensation of employees increased by 0.7% for the fiscal year ended March 31, 2026. Further, according to Teikoku Databank, a research institution in Japan, there were approximately 10,400 corporate bankruptcies in Japan for the fiscal year ended March 31, 2026, an increase of 3.5% from the previous fiscal year, involving approximately ¥1.6 trillion in total liabilities, a decrease of 31.0% from the previous fiscal year. Interest rates in Japanese financial and capital markets are affected by the monetary policy measures of the Bank of Japan (“BOJ”). In January 2016, in addition to the existing provision of ample funds, the BOJ announced the introduction of “quantitative and qualitative monetary easing with a negative interest rate.” Thereafter, the BOJ announced the introduction of a new policy framework, “quantitative and qualitative monetary easing with yield curve control” in September 2016. Under this policy framework, the BOJ would keep short-term interest rates down by maintaining its policy of applying a negative interest rate of minus 0.1% to certain excess reserves of financial institutions held at the BOJ. Moreover, the BOJ indicated it would purchase Japanese government bonds so that the yield of the 10-year Japanese government bonds would be close to around 0% to control long-term interest rates. In December 2022, in light of increased observed volatility in overseas financial and capital markets that affected markets in Japan, the BOJ expanded the range of 10-year Japanese government bonds yield fluctuations to between plus and minus 0.5%. In October 2023, the BOJ announced adjustments to its yield curve control policy and would regard the upper bound of 1.0% for 10-year Japanese government bonds yields as a reference in its market operations. Thereafter, in March 2024, the BOJ announced its conclusion that the policy frameworks of “quantitative and qualitative monetary easing with yield curve control” and the negative interest rate policy to date had fulfilled their roles based on its outlook toward the price stability target. In addition, the BOJ stated that it would encourage the uncollateralized overnight call rate to remain at around 0% to 0.1%, continue its long-term Japanese government bonds purchases with broadly the same amount as before and make nimble responses by further purchases of long-term Japanese government bonds in case of a rapid rise in long-term interest rates. In June 2024, the BOJ announced that it would reduce its purchase amount of long-term Japanese government bonds after the July 2024 Monetary Policy Meeting. This was to ensure that long-term interest rates would be formed more freely in financial markets. Subsequently, in July 2024, the BOJ stated that it would encourage the uncollateralized overnight call rate to remain at around 0.25% and had decided on a plan to reduce its monthly purchase amount of long-term Japanese government bonds by about ¥400 billion each calendar quarter, in principle, from about ¥5.7 trillion in July 2024 to about ¥3 trillion in January-March 2026. In January 2025, the BOJ stated that it would encourage the uncollateralized overnight call rate to remain at around 0.5%. On June 17, 2025, the BOJ stated that it had decided on a plan to reduce its monthly purchase amount of long-term Japanese government bonds by about ¥200 billion each calendar quarter, in principle, from April-June 2026, so that it would be about ¥2 trillion in January-March 2027. On December 19, 2025, the BOJ stated that it would encourage the uncollateralized overnight call rate to remain 68 Table of Contents at around 0.75%. Under such circumstances, the uncollateralized overnight call rate, which is the benchmark for short-term interest rates, was around 0.7% at March 31, 2026. The yield on newly issued 10-year Japanese government bonds, which is the benchmark for long-term interest rates, was around 2.3% at March 31, 2026. On June 16, 2026, the BOJ stated that it would encourage the uncollateralized overnight call rate to remain at around 1.0% and that the amount of its monthly purchases of long-term Japanese government bonds would be about ¥2 trillion from April 2027. The yen depreciated against the U.S. dollar from ¥149.14 at March 31, 2025 to ¥159.63 at March 31, 2026, according to the statistical data published by the BOJ. The Nikkei Stock Average, which is a price-weighted average of 225 stocks listed on the Tokyo Stock Exchange, rose from ¥35,617.56 at March 31, 2025, to ¥51,063.72 at March 31, 2026 and subsequently rose to ¥71,250.06 at June 19, 2026. According to a report published by the Ministry of Land, Infrastructure, Transport and Tourism of Japan, the average residential land price and the average commercial land price in Japan increased by 2.1% and 4.3%, respectively, in the calendar year 2025. During the fiscal year ended March 31, 2026, the global economy as a whole, recovered gradually, although certain countries’ economies remained weak, reflecting increased uncertainty over the economic outlook toward the end of the fiscal year caused by heightened tensions in the Middle East. The U.S. economy recovered during the first half of the fiscal year ended March 31, 2026, primarily due to an increase in private consumption supported by higher asset values, such as rising stock prices. However, the pace of the recovery slowed down in the second half of the fiscal year, primarily due to a decrease in government spending resulting from the U.S. federal government shutdown and stagnant private consumption affected by worsening employment conditions, although capital investments by businesses increased, supported by AI-related demand. The European economy continued to recover during the fiscal year ended March 31, 2026, primarily due to an increase in private consumption supported by favorable employment and income conditions, although exports of goods and services decreased due to the introduction of higher U.S. tariffs. In Asia, the Chinese economy slowed down during the fiscal year ended March 31, 2026, primarily due to stagnant private consumption resulting from the gradually diminishing effects of government consumption stimulus and the continued sluggish momentum in the real estate market, although exports of goods and services to Asia increased. Asian economies other than China, continued to recover gradually during the fiscal year ended March 31, 2026, primarily due to an increase in exports of IT-related goods. In addition to economic factors and conditions, we expect that our results of operations and financial condition will be significantly affected by regulatory trends such as Japanese TLAC Standards, the Basel III reforms and the Dodd-Frank Act. For further information on regulations to which we are subject, risks associated with regulatory development and our management policy under this environment, see “Item 3.D. Risk Factors—Risks Related to Our Business,” “Item 4.B. Business Overview—Regulations in Japan, Regulations in the United States, Regulations in Other Jurisdictions and Description of Operations and Principal Activities—Management Policies.” Factors Affecting Results of Operation Income (Loss) The major sources of our operating income are net interest income and net fee and commission income, alongside net income from trading, net income from financial assets and liabilities at fair value through profit or loss and net income from investment securities. 69 Table of Contents Net Interest Income. Net interest income, or the difference between interest income and interest expense, is determined by: • the amount of interest-earning assets and interest-bearing liabilities; • the interest spread; • the general level of interest rates; and • the proportion of interest-earning assets to interest-bearing liabilities. Our principal interest-earning assets are loans and advances, investment securities, and deposits with banks. Our principal interest-bearing liabilities are deposits, borrowings and debt securities in issue. The interest income and expense on trading assets and liabilities, and financial assets and liabilities at fair value through profit or loss are not included in net interest income. Our net interest income is earned mainly by SMBC. SMBC controls its exposure to interest rate fluctuations through asset and liability management operations. SMBC, like other banks in Japan, makes most domestic loans based on a short-term interest rate, the TIBOR, or a short-term prime rate, which are generally intended to reflect the cost of short-term yen funding and significantly affected by the monetary policy of the BOJ. For further information, see “Overview—Operating Environment.” The following table sets forth SMBC’s short-term prime rate, three-month TIBOR, ordinary deposit rate, long-term prime rate and ten-year swap rate, at the dates indicated: At March 31, 2026 2025 2024 Short-term prime rate 2.125 % 1.875 % 1.475 % Three-month TIBOR 1.269 0.821 0.261 Ordinary deposit rate 0.300 0.200 0.001 Long-term prime rate 2.800 2.350 1.600 Ten-year swap rate 2.204 1.374 0.903 It is difficult to earn a wide interest spread when interest rates are at a low level, as they currently are in Japan. When interest rates rise from low levels, interest spreads at commercial banks generally increase. However, interest spreads may temporarily decrease immediately after an increase in interest rates because it may take time for banks to increase lending rates correspondingly, in contrast to their funding rates. After an adjustment period, lending rates generally also increase, and banks are able to secure a wider interest spread than in a low interest rate environment. Conversely, interest spreads may temporarily increase immediately after a decrease in interest rates because it may take time for banks to decrease lending rates correspondingly, in contrast to their funding rates. After an adjustment period, lending rates generally also decrease, and banks generally are not able to maintain a wide interest spread. Net Fee and Commission Income. We earn fees and commissions from a variety of services. The primary components of SMBC’s net fee and commission income are fees and commissions related to money remittances and transfers, investment trusts sales, loans (such as loan commitment fees and loan syndication fees for arranging loans), securities transactions (such as bond trustee fees and bond recording agency fees), and guarantees and acceptances. Other fees and commissions include fees from investment banking and electronic banking. In addition, we earn a significant amount of fees on transactions in our credit card businesses, conducted through Sumitomo Mitsui Card, and fees and commissions on transactions in our securities businesses, conducted through SMBC Nikko Securities. The principal components of Sumitomo Mitsui Card’s fees are membership fees from retailers and annual cardholders, while those of SMBC Nikko Securities’ fees and commissions are subscription and agent commissions from investment trusts sales and underwriting fees. 70 Table of Contents The principal factors affecting fees and commissions are the demand for the services provided, the fees charged for those services and fees charged by competitors for similar services. The volume of services provided also affects profitability, as our fee businesses have significant economies of scale. In order to diversify sources of revenue and enhance return on assets, we are expanding our fees and commissions businesses, including sales of investment trusts and life insurance products, and investment banking businesses. Net Income from Trading, Net Income from Financial Assets and Liabilities at Fair Value Through Profit or Loss and Net Income from Investment Securities. We undertake significant trading activities involving a variety of financial instruments, including derivatives. Our income from these activities is subject to volatility caused by, among other things, changes in interest rates, foreign exchange rates, equity prices or other market variables. Any unexpected change in interest rates could affect the fair value of our interest rate derivative positions and our net income from trading activities. Net trading income consists of margins made on market-making and our customer business as well as changes in fair value of trading assets and liabilities and derivative financial instruments. It also includes net interest and dividend income on these instruments. We have a variety of financial assets and liabilities at fair value through profit or loss including investment trusts and hybrid instruments. Net income from financial assets and liabilities at fair value through profit or loss includes gains and losses arising from sales, redemptions and changes in the fair value of these financial instruments, and net interest and dividend income on these instruments. The fair values of those instruments such as investment trusts and hybrid instruments are subject to volatility caused by changes in equity prices and interest rates. We have substantial investments in debt instruments measured at fair value through other comprehensive income. In particular, Japanese government bonds represent a significant part of our bond portfolio. We also own debt securities denominated in foreign currencies, principally the U.S. dollars. We also have investments in equity instruments measured at fair value through other comprehensive income, which consist primarily of our equity holding investments in stocks issued by our customers. Net investment income includes the gains and losses arising from the sales or redemptions of debt instruments measured at fair value through other comprehensive income and the dividend income earned from equity instruments measured at fair value through other comprehensive income. Increases in interest rates or declines in equity prices could substantially decrease the fair value of those instruments. Expenses Impairment Charges on Financial Assets. We use the expected credit losses (“ECL”) model for the recognition of impairment loss under IFRS 9 “Financial Instruments.” The ECL model requires that impairment losses be measured by using reasonable and supportable information including forecasts of future economic conditions and in an unbiased and probability-weighted manner. Our impairment charges are recorded primarily due to impairment on loans and advances. Impairment charges on loans and advances are affected by the economic environment and financial conditions of borrowers. During periods of economic slowdown, corporate and individual borrowers are generally more likely to suffer credit rating downgrades, or become delinquent or default on their borrowings. The slowdown in the domestic or global economy may increase credit costs relating to a wide range of industries. General and Administrative Expenses. General and administrative expenses consist primarily of personnel expenses (salaries and related expenses), depreciation and amortization expenses, and other expenses (outsourcing expenses, publicity and advertising expenses, and communication expenses). Unrealized Gains or Losses on Investment Securities Portfolio Changes in the fair value of domestic and foreign investment securities result in an increase or a decrease in unrealized gains or losses on investment securities measured at fair value through other comprehensive income. 71 Table of Contents Unrealized gains or losses arising from changes in the fair value of the debt instruments in these securities are recognized directly in equity, until they are derecognized or impaired. Unrealized gains or losses arising from changes in the fair value of the equity instruments in these securities are recognized directly in equity, and amounts presented in equity are not subsequently transferred to profit or loss. Most of our domestic equity instruments consist of publicly traded Japanese stocks. The Nikkei Stock Average decreased by 11.8% from ¥40,369.44 at March 29, 2024, to ¥35,617.56 at March 31, 2025, and increased by 43.4% to ¥51,063.72 at March 31, 2026. At March 31, 2026, we had net unrealized gains on domestic equity securities of ¥2,907,306 million, an increase of ¥571,950 million from ¥2,335,356 million at March 31, 2025. For further information, see “Item 5.A. Operating Results—Financial Condition—Investment Securities.” Equity Capital In response to the imposition of more stringent regulatory capital requirements, we have been taking a proactive approach to managing our risk-weighted capital ratio by focusing on managing qualifying capital, including by building up our retained earnings, identifying risks, and controlling risk-weighted assets. Foreign Currency Fluctuations The average exchange rate used to convert dollars to yen in the consolidated financial statements included elsewhere in this annual report for the fiscal year ended March 31, 2026 was ¥150.67 per $1.00, compared to the previous fiscal year’s average exchange rate of ¥152.62 per $1.00. The percentage of revenue we earned from our foreign operations for the fiscal years ended March 31, 2026 and 2025 was 57% and 71%, respectively. For further information, see “Item 4.B. Business Overview—Revenues by Region.” New and Amended Accounting Standards and Recent Accounting Pronouncements See “New and Amended Accounting Standards Adopted by the Group” and “Recent Accounting Pronouncements” under Note 2 “Summary of Material Accounting Policies” to our consolidated financial statements included elsewhere in this annual report. 5.A. OPERATING RESULTS For discussion about our operating results for the fiscal year ended March 31, 2024, including certain comparative discussion of the fiscal years ended March 31, 2025 and 2024, please refer to “Item 5. Operating and Financial Review and Prospects—5.A. Operating Results” in our annual report on Form 20-F filed on June 27, 2025. Under the economic and financial circumstances described in “Item 5. Operating and Financial Review and Prospects—Overview—Operating Environment,” we made a profit through our commercial banking and other financial services businesses. Our total operating income increased by ¥1,001,618 million from ¥3,840,165 million for the fiscal year ended March 31, 2025 to ¥4,841,783 million for the fiscal year ended March 31, 2026, primarily due to increases in net interest income and net income from financial assets and liabilities at fair value through profit or loss. Our net profit increased by ¥678,516 million from ¥516,444 million for the fiscal year ended March 31, 2025 to ¥1,194,960 million for the fiscal year ended March 31, 2026, due to the increase in total operating income described above, which was partially offset by increases in operating expenses and income tax expense. Our total assets increased by ¥17,038,571 million from ¥292,165,070 million at March 31, 2025 to ¥309,203,641 million at March 31, 2026, primarily due to increases in loans and advances and other assets. 72 Table of Contents Our total liabilities increased by ¥15,238,171 million from ¥275,676,476 million at March 31, 2025 to ¥290,914,647 million at March 31, 2026, primarily due to an increase in deposits. Our total equity increased by ¥1,800,400 million from ¥16,488,594 million at March 31, 2025 to ¥18,288,994 million at March 31, 2026, primarily due to increases in retained earnings and other reserves. Operating Results The following table presents information as to our income, expenses and net profit for the fiscal years ended March 31, 2026 and 2025. For the fiscal year ended March 31, 2026 2025 (In millions, except per share data) Interest income ¥ 6,928,743 ¥ 6,716,741 Interest expense 4,096,058 4,202,307 Net interest income 2,832,685 2,514,434 Fee and commission income 1,805,095 1,631,319 Fee and commission expense 287,328 314,931 Net fee and commission income 1,517,767 1,316,388 Net trading loss (84,067 ) (186,688 ) Net income from financial assets and liabilities at fair value through profit or loss 332,654 43,524 Net investment income 20,686 78,969 Net losses arising from derecognition of financial assets at amortized cost (8,884 ) (32,179 ) Other income 230,942 105,717 Total operating income 4,841,783 3,840,165 Impairment charges on financial assets 392,157 411,278 Net operating income 4,449,626 3,428,887 General and administrative expenses 2,672,149 2,421,732 Other expenses 354,743 495,587 Operating expenses 3,026,892 2,917,319 Share of post-tax profit of associates and joint ventures 132,296 142,678 Profit before tax 1,555,030 654,246 Income tax expense 360,070 137,802 Net profit ¥ 1,194,960 ¥ 516,444 Profit attributable to: Shareholders of Sumitomo Mitsui Financial Group, Inc. ¥ 1,137,557 ¥ 478,132 Non-controlling interests 7,535 6,676 Other equity instruments holders 49,868 31,636 Earnings per share(1): Basic ¥ 296.05 ¥ 122.40 Diluted 295.99 122.36 (1) As resolved by the board of directors on May 15, 2024, we implemented a stock split of our common stock with an effective date of October 1, 2024, whereby each share of common stock owned by shareholders listed or recorded in the closing register of shareholders on the record date of September 30, 2024 was split into three shares. Basic and diluted earnings per share are calculated based on the assumption that the stock split had been implemented at the beginning of the fiscal year ended March 31, 2025. 73 Table of Contents Total operating income increased by ¥1,001,618 million, or 26%, from ¥3,840,165 million for the fiscal year ended March 31, 2025 to ¥4,841,783 million for the fiscal year ended March 31, 2026, primarily due to increases in net interest income of ¥318,251 million and net income from financial assets and liabilities at fair value through profit or loss of ¥289,130 million. In addition, due to a decrease in impairment charges on financial assets, net operating income also increased by ¥1,020,739 million from ¥3,428,887 million for the fiscal year ended March 31, 2025 to ¥4,449,626 million for the fiscal year ended March 31, 2026. Net profit increased by ¥678,516 million from ¥516,444 million for the fiscal year ended March 31, 2025 to ¥1,194,960 million for the fiscal year ended March 31, 2026, as a result of the increase in net operating income described above, which was partially offset by increases in general and administrative expenses and income tax expense. Net Interest Income The following tables show the average balances of our statement of financial position items, related interest income, interest expense, net interest income and average rates for the fiscal years ended March 31, 2026 and 2025. For the fiscal year ended March 31, 2026 2025 Average balance(3) Interest income Average rate Average balance(3) Interest income Average rate (In millions, except percentages) Interest-earning assets: Interest-earning deposits with banks: Domestic offices ¥ 58,101,742 ¥ 328,551 0.57 % ¥ 61,132,777 ¥ 150,660 0.25 % Foreign offices 11,031,069 452,467 4.10 % 10,322,330 501,381 4.86 % Total 69,132,811 781,018 1.13 % 71,455,107 652,041 0.91 % Call loans and bills bought, reverse repurchase agreements and cash collateral on securities borrowed: Domestic offices 9,981,520 150,164 1.50 % 11,815,659 128,943 1.09 % Foreign offices 17,048,641 553,821 3.25 % 11,631,865 442,859 3.81 % Total 27,030,161 703,985 2.60 % 23,447,524 571,802 2.44 % Investment securities(1): Domestic offices 19,467,551 361,339 1.86 % 19,139,502 300,019 1.57 % Foreign offices 9,492,293 304,143 3.20 % 9,152,913 325,716 3.56 % Total 28,959,844 665,482 2.30 % 28,292,415 625,735 2.21 % Loans and advances(2): Domestic offices 76,587,748 1,489,431 1.94 % 73,086,292 1,281,714 1.75 % Foreign offices 52,991,275 3,288,827 6.21 % 51,599,922 3,585,449 6.95 % Total 129,579,023 4,778,258 3.69 % 124,686,214 4,867,163 3.90 % Total interest-earning assets: Domestic offices 164,138,561 2,329,485 1.42 % 165,174,230 1,861,336 1.13 % Foreign offices 90,563,278 4,599,258 5.08 % 82,707,030 4,855,405 5.87 % Total ¥ 254,701,839 ¥ 6,928,743 2.72 % ¥ 247,881,260 ¥ 6,716,741 2.71 % 74 Table of Contents For the fiscal year ended March 31, 2026 2025 Average balance(3) Interest expense Average rate Average balance(3) Interest expense Average rate (In millions, except percentages) Interest-bearing liabilities: Deposits: Domestic offices ¥ 112,948,167 ¥ 466,809 0.41 % ¥ 108,149,837 ¥ 326,413 0.30 % Foreign offices 48,594,255 1,751,133 3.60 % 43,249,557 1,914,192 4.43 % Total 161,542,422 2,217,942 1.37 % 151,399,394 2,240,605 1.48 % Call money and bills sold, repurchase agreements and cash collateral on securities lent: Domestic offices 16,733,338 328,056 1.96 % 15,175,662 400,440 2.64 % Foreign offices 13,917,244 582,356 4.18 % 10,225,014 520,983 5.10 % Total 30,650,582 910,412 2.97 % 25,400,676 921,423 3.63 % Borrowings and other interest- bearing liabilities: Domestic offices 11,016,561 85,124 0.77 % 15,203,665 104,439 0.69 % Foreign offices 1,832,758 114,969 6.27 % 1,601,867 105,820 6.61 % Total 12,849,319 200,093 1.56 % 16,805,532 210,259 1.25 % Debt securities in issue: Domestic offices 12,125,495 552,462 4.56 % 11,013,058 607,210 5.51 % Foreign offices 3,725,675 151,938 4.08 % 2,644,393 130,912 4.95 % Total 15,851,170 704,400 4.44 % 13,657,451 738,122 5.40 % Premiums for deposit insurance and others: Domestic offices — 29,097 — — 28,639 — Foreign offices — 34,114 — — 63,259 — Total — 63,211 — — 91,898 — Total interest-bearing liabilities: Domestic offices 152,823,561 1,461,548 0.96 % 149,542,222 1,467,141 0.98 % Foreign offices 68,069,932 2,634,510 3.87 % 57,720,831 2,735,166 4.74 % Total ¥ 220,893,493 ¥ 4,096,058 1.85 % ¥ 207,263,053 ¥ 4,202,307 2.03 % Net interest income and interest rate spread ¥ 2,832,685 0.87 % ¥ 2,514,434 0.68 % (1) Taxable investment securities and non-taxable investment securities are not disclosed separately because the aggregate effect of these average balances and interest income would not be material. In addition, the yields on tax-exempt obligations have not been calculated on a tax equivalent basis because the effect of such calculation would not be material. (2) Loans and advances include impaired loans and advances. The amortized portion of net loan origination fees is included in interest income on loans and advances. (3) Average balances are generally based on a daily average. Weekly, month-end or quarter-end averages are used for certain average balances where it is not practical to obtain applicable daily averages. The allocations of amounts between domestic and foreign are based on the location of the office. 75 Table of Contents The following tables show changes in our interest income, interest expense and net interest income based on changes in volume and changes in rate for the fiscal year ended March 31, 2026 compared to the fiscal year ended March 31, 2025. Fiscal year ended March 31, 2026 compared to fiscal year ended March 31, 2025 Increase / (decrease) Volume Rate Net change (In millions) Interest income: Interest-earning deposits with banks: Domestic offices ¥ (7,939 ) ¥ 185,830 ¥ 177,891 Foreign offices 32,801 (81,715 ) (48,914 ) Total 24,862 104,115 128,977 Call loans and bills bought, reverse repurchase agreements and cash collateral on securities borrowed: Domestic offices (22,189 ) 43,410 21,221 Foreign offices 183,322 (72,360 ) 110,962 Total 161,133 (28,950 ) 132,183 Investment securities: Domestic offices 5,231 56,089 61,320 Foreign offices 11,754 (33,327 ) (21,573 ) Total 16,985 22,762 39,747 Loans and advances: Domestic offices 63,312 144,405 207,717 Foreign offices 94,619 (391,241 ) (296,622 ) Total 157,931 (246,836 ) (88,905 ) Total interest income: Domestic offices 38,415 429,734 468,149 Foreign offices 322,496 (578,643 ) (256,147 ) Total ¥ 360,911 ¥ (148,909 ) ¥ 212,002 76 Table of Contents Fiscal year ended March 31, 2026 compared to fiscal year ended March 31, 2025 Increase / (decrease) Volume Rate Net change (In millions) Interest expense: Deposits: Domestic offices ¥ 14,965 ¥ 125,431 ¥ 140,396 Foreign offices 219,139 (382,198 ) (163,059 ) Total 234,104 (256,767 ) (22,663 ) Call money and bills sold, repurchase agreements and cash collateral on securities lent: Domestic offices 38,104 (110,488 ) (72,384 ) Foreign offices 165,651 (104,278 ) 61,373 Total 203,755 (214,766 ) (11,011 ) Borrowings and other interest-bearing liabilities: Domestic offices (31,248 ) 11,933 (19,315 ) Foreign offices 14,683 (5,534 ) 9,149 Total (16,565 ) 6,399 (10,166 ) Debt securities in issue: Domestic offices 80,331 (135,079 ) (54,748 ) Foreign offices 44,692 (23,666 ) 21,026 Total 125,023 (158,745 ) (33,722 ) Premiums for deposit insurance and others: Domestic offices 458 — 458 Foreign offices (29,145 ) — (29,145 ) Total (28,687 ) — (28,687 ) Total interest expense: Domestic offices 102,610 (108,203 ) (5,593 ) Foreign offices 415,020 (515,676 ) (100,656 ) Total ¥ 517,630 ¥ (623,879 ) ¥ (106,249 ) Net interest income: Domestic offices ¥ (64,195 ) ¥ 537,937 ¥ 473,742 Foreign offices (92,524 ) (62,967 ) (155,491 ) Total ¥ (156,719 ) ¥ 474,970 ¥ 318,251 Interest Income Our interest income increased by ¥212,002 million, or 3% from ¥6,716,741 million for the fiscal year ended March 31, 2025 to ¥6,928,743 million for the fiscal year ended March 31, 2026, primarily due to an increase in interest income at domestic offices. Interest income on deposits with banks increased by ¥177,891 million at domestic offices, primarily due to an increase in interest income on deposits with the Bank of Japan, reflecting a higher short-term policy rate. Interest income on loans and advances increased by ¥207,717 million at domestic offices, whereas it decreased by ¥296,622 million at foreign offices, resulting in an overall decrease of ¥88,905 million. The increase at domestic offices was primarily due to rising market interest rates. The decrease at foreign offices was primarily due to a decrease in market interest rates, although the spread has improved, reflecting the reduction of low-margin assets and a selective approach to loan origination focused on profitability. 77 Table of Contents Interest Expense Our interest expense decreased by ¥106,249 million, or 3%, from ¥4,202,307 million for the fiscal year ended March 31, 2025 to ¥4,096,058 million for the fiscal year ended March 31, 2026, primarily due to decreases in interest expenses on debt securities in issue and deposits. Our interest expense on debt securities in issue decreased by ¥33,722 million reflecting a decrease in market interest rates. Our interest expense on deposits increased by ¥140,396 million at domestic offices reflecting an increase in the average rate on deposits, whereas it decreased by ¥163,059 million at foreign offices reflecting a decrease in the average rate, resulting in an overall decrease of ¥22,663 million. Net Interest Income Our net interest income increased by ¥318,251 million, or 13%, from ¥2,514,434 million for the fiscal year ended March 31, 2025, to ¥2,832,685 million for the fiscal year ended March 31, 2026. This was primarily due to increases in interest income on interest-earning deposits with banks, and on loans and advances at domestic offices, which were partially offset by a decrease in interest income on loans and advances at foreign offices and an increase in interest expense on deposits at domestic offices. From the fiscal year ended March 31, 2025 to March 31, 2026, the average rate on loans and advances at domestic offices increased by 0.19 percentage points from 1.75% to 1.94%. The average rate on loans and advances at foreign offices decreased by 0.74 percentage points from 6.95% to 6.21%, resulting in the total for loans and advances decreasing by 0.21 percentage points from 3.90% to 3.69%. On the other hand, the average rate on deposits at domestic offices increased by 0.11 percentage points from 0.30% to 0.41%. Net Fee and Commission Income The following table sets forth our net fee and commission income for the periods shown. For the fiscal year ended March 31, 2026 2025 (In millions) Fee and commission income from: Loans ¥ 212,445 ¥ 212,346 Credit card business 516,078 483,815 Guarantees 89,169 83,104 Securities-related business 296,832 245,651 Deposits 18,985 18,971 Remittances and transfers 165,314 159,024 Safe deposits 3,639 4,025 Trust fees 11,722 9,734 Investment trusts 223,376 191,689 Agency 8,280 8,636 Others 259,255 214,324 Total fee and commission income 1,805,095 1,631,319 Fee and commission expense from: Remittances and transfers 37,183 31,672 Others 250,145 283,259 Total fee and commission expense 287,328 314,931 Net fee and commission income ¥ 1,517,767 ¥ 1,316,388 Fee and commission income increased by ¥173,776 million, or 11%, from ¥1,631,319 million for the fiscal year ended March 31, 2025 to ¥1,805,095 million for the fiscal year ended March 31, 2026. Primary sources of 78 Table of Contents fee and commission income are fees and commissions obtained through our credit card business, securities-related business and investment trusts, loan transaction fees, and remittance and transfer fees. The increase in fee and commission income was primarily due to increases in fees from securities-related business and investment trusts, driven by the steady performance of the wealth management business, reflecting favorable market conditions. Fee and commission income from the credit card business also increased due to an increase in cashless payments. Fee and commission expense was ¥287,328 million for the fiscal year ended March 31, 2026, a decrease of ¥27,603 million from ¥314,931 million for the fiscal year ended March 31, 2025. As a result, net fee and commission income increased by ¥201,379 million from ¥1,316,388 million for the fiscal year ended March 31, 2025 to ¥1,517,767 million for the fiscal year ended March 31, 2026. Net Loss from Trading, Net Income from Financial Assets and Liabilities at Fair Value Through Profit or Loss, Net Income from Investment Securities and Net Losses Arising from Derecognition of Financial Assets at Amortized Cost The following table sets forth our net loss from trading, net income from financial assets and liabilities at fair value through profit or loss, net income from investment securities and net losses arising from derecognition of financial assets at amortized cost for the periods shown. For the fiscal year ended March 31, 2026 2025 (In millions) Net trading loss: Interest rate ¥ (50,501 ) ¥ (35,575 ) Foreign exchange (21,593 ) (188,913 ) Equity (3,880 ) 38,780 Credit (6,153 ) (2,237 ) Others (1,940 ) 1,257 Total net trading loss ¥ (84,067 ) ¥ (186,688 ) Net income from financial assets and liabilities at fair value through profit or loss: Net income from financial assets mandatorily at fair value through profit or loss: Net income from debt instruments ¥ 320,985 ¥ 37,829 Net loss from equity instruments (5,268 ) (2,573 ) Net income from financial liabilities designated at fair value through profit or loss 16,937 8,268 Total net income from financial assets and liabilities at fair value through profit or loss ¥ 332,654 ¥ 43,524 Net investment income: Net loss from disposal of debt instruments ¥ (107,335 ) ¥ (45,357 ) Dividend income 128,021 124,326 Total net investment income ¥ 20,686 ¥ 78,969 Net losses arising from derecognition of financial assets at amortized cost ¥ (8,884 ) ¥ (32,179 ) 79 Table of Contents Net trading loss, which includes income and losses from trading assets and liabilities and derivative financial instruments, decreased by ¥102,621 million from a net loss of ¥186,688 million for the fiscal year ended March 31, 2025 to a net loss of ¥84,067 million for the fiscal year ended March 31, 2026. The decrease was primarily due to a decrease in net trading losses from foreign exchange transactions. We have carried out hedging transactions mainly to hedge the interest rate risk of financial assets and liabilities and the foreign exchange risk of foreign currency denominated assets and liabilities. Of those hedges, economic hedges are economically effective for risk management but are not accounted for as hedge accounting under IFRS. As for the economic hedges against interest rate risk, hedged items include loans and deposits and hedging instruments are derivative financial instruments such as interest rate swaps. As for the economic hedges against foreign exchange risk, hedged items are foreign currency denominated assets and liabilities and hedging instruments are currency derivatives. Economic hedge transactions may lead to accounting mismatches (i.e., when the gains or losses on the hedged items and hedging instruments do not arise at the same time, or the hedged items and hedging instruments do not offset each other either in profit or loss, or in other comprehensive income), and may result in significant fluctuations in net trading loss. Net income from financial assets and liabilities at fair value through profit or loss increased by ¥289,130 million from a net income of ¥43,524 million for the fiscal year ended March 31, 2025 to a net income of ¥332,654 million for the fiscal year ended March 31, 2026. This was primarily due to an increase in net gains from changes in the fair value of equity index-linked investment trusts. Net investment income decreased by ¥58,283 million from ¥78,969 million for the fiscal year ended March 31, 2025 to ¥20,686 million for the fiscal year ended March 31, 2026. This was primarily due to an increase in net losses from sales of bonds. Net losses arising from derecognition of financial assets at amortized cost decreased by ¥23,295 million from a net loss of ¥32,179 million for the fiscal year ended March 31, 2025 to a net loss of ¥8,884 million for the fiscal year ended March 31, 2026. The decrease was primarily due to a decrease in the net loss from the sales of certain low-profit loans. Impairment Charges on Financial Assets The following table sets forth our impairment charges (reversals) on financial assets for the periods shown. For the fiscal year ended March 31, 2026 2025 (In millions) Loans and advances ¥ 384,150 ¥ 378,791 Loan commitments (4,877 ) 18,162 Financial guarantees (247 ) 14,030 Investment securities 13,131 295 Total impairment charges on financial assets ¥ 392,157 ¥ 411,278 Our impairment charges on financial assets consist of losses relating to loans and advances, loan commitments, financial guarantee contracts, and investment securities. Impairment charges on these financial assets are mainly affected by the economic environment and financial conditions of borrowers. Impairment charges on financial assets decreased by ¥19,121 million from ¥411,278 million for the fiscal year ended March 31, 2025 to ¥392,157 million for the fiscal year ended March 31, 2026. The decrease was 80 Table of Contents primarily due to a reversal of the provision for loan commitments, which more than offset the increases in impairment charges on loans and advances. For further information on provision for loan losses, see “—Financial Condition—Allowance for Loan Losses.” General and Administrative Expenses The following table sets forth our general and administrative expenses for the periods shown. For the fiscal year ended March 31, 2026 2025 (In millions) Personnel expenses ¥ 1,205,985 ¥ 1,128,120 Depreciation and amortization 300,732 292,363 Building and maintenance expenses 10,040 8,849 Supplies expenses 17,982 19,389 Communication expenses 35,075 32,853 Publicity and advertising expenses 263,264 203,347 Taxes and dues 127,508 115,639 Outsourcing expenses 145,557 124,878 Office equipment expenses 87,551 79,115 Others 478,455 417,179 Total general and administrative expenses ¥ 2,672,149 ¥ 2,421,732 General and administrative expenses increased by ¥250,417 million, or 10%, from ¥2,421,732 million for the fiscal year ended March 31, 2025 to ¥2,672,149 million for the fiscal year ended March 31, 2026. The increase was primarily due to inflation and increases in expenses related to business development, as well as higher variable marketing costs in the payment business. Share of Post-tax Profit of Associates and Joint Ventures Share of post-tax profit of associates and joint ventures decreased by ¥10,382 million from ¥142,678 million for the fiscal year ended March 31, 2025 to ¥132,296 million for the fiscal year ended March 31, 2026, primarily due to a decrease in the share of profit of associates and joint ventures engaged in the leasing business. Income Tax Expense Income tax expense increased by ¥222,268 million from ¥137,802 million for the fiscal year ended March 31, 2025 to ¥360,070 million for the fiscal year ended March 31, 2026. The increase was primarily due to a decrease in deferred tax benefit related to investment securities. Business Segment Analysis Our business segment information is prepared based on the internal reporting system utilized by our management to assess the performance of our business segments under Japanese GAAP. We have four main business segments: the Wholesale Business Unit, the Retail Business Unit, the Global Business Unit and the Global Markets Business Unit, with the remaining operations recorded in Head office account and others. Our organizational charts are provided in “Item 4.C. Organizational Structure.” Since figures reported to management are prepared under Japanese GAAP, the segment information does not agree to the figures in the 81 Table of Contents consolidated financial statements under IFRS. This difference is addressed in Note 4 “Segment Analysis—Reconciliation of Segmental Results of Operations to Consolidated Income Statements” to our consolidated financial statements included elsewhere in this annual report. Segmental Results of Operations The following tables show our results of operations by business segment for the fiscal years ended March 31, 2026 and 2025. For the fiscal year ended March 31, 2026: Wholesale Business Unit Retail Business Unit Global Business Unit Global Markets Business Unit Head office account and others Total (In billions) Consolidated gross profit(1) ¥ 1,253.4 ¥ 1,555.6 ¥ 1,550.9 ¥ 697.8 ¥ (213.0 ) ¥ 4,844.7 General and administrative expenses (407.9 ) (1,134.6 ) (1,063.4 ) (228.5 ) 182.9 (2,651.5 ) Others(2) 151.6 6.7 168.3 39.4 (228.3 ) 137.7 Consolidated net business profit ¥ 997.1 ¥ 427.7 ¥ 655.8 ¥ 508.7 ¥ (258.4 ) ¥ 2,330.9 For the fiscal year ended March 31, 2025: Wholesale Business Unit Retail Business Unit Global Business Unit Global Markets Business Unit Head office account and others Total (In billions) Consolidated gross profit(1) ¥ 931.3 ¥ 1,377.3 ¥ 1,344.9 ¥ 636.6 ¥ (163.4 ) ¥ 4,126.7 General and administrative expenses (328.1 ) (1,110.3 ) (903.3 ) (196.0 ) 135.7 (2,402.0 ) Others(2) 126.0 6.8 150.4 33.9 (322.5 ) (5.4 ) Consolidated net business profit ¥ 729.2 ¥ 273.8 ¥ 592.0 ¥ 474.5 ¥ (350.2 ) ¥ 1,719.3 (1) Consolidated gross profit = (Interest income – Interest expenses) + Trust fees + (Fee and commission income – Fee and commission expenses) + (Trading income – Trading losses) + (Other operating income – Other operating expenses). (2) “Others” includes share of profit or loss of equity-method associates and joint ventures and cooperated profit and loss, that is, profit and loss double counted within our business segments in the managerial accounting. The following are explanations of our results of operations by business segment for the fiscal year ended March 31, 2026. It also includes the changes from the previous year, which are adjusted by eliminating the impact of factors such as changes in interest rates and exchange rates that may distort the comparison. Wholesale Business Unit Consolidated gross profit for the fiscal year ended March 31, 2026 was ¥1,253.4 billion and increased by ¥230.2 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. This was primarily due to increases in SMBC’s interest income on loans and deposits, reflecting loan growth and wider spreads, as well as fees and commission income. General and administrative expenses for the fiscal year ended March 31, 2026 was ¥407.9 billion and increased by ¥27.2 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. Others for the fiscal year ended March 31, 2026 was ¥151.6 billion. As a result, consolidated net business profit for the fiscal year ended March 31, 2026 was ¥997.1 billion and increased by ¥213.5 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. 82 Table of Contents Retail Business Unit Consolidated gross profit for the fiscal year ended March 31, 2026 was ¥1,555.6 billion and increased by ¥200.2 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. This was primarily due to increases in interest income on deposits and income from the wealth management and payment businesses. General and administrative expenses for the fiscal year ended March 31, 2026 was ¥1,134.6 billion and increased by ¥62.4 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. This was primarily due to an increase in the variable marketing costs of the payment business. Others for the fiscal year ended March 31, 2026 was ¥6.7 billion. As a result, consolidated net business profit for the fiscal year ended March 31, 2026 was ¥427.7 billion and increased by ¥139.4 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. Global Business Unit Consolidated gross profit for the fiscal year ended March 31, 2026 was ¥1,550.9 billion and increased by ¥110.1 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. This was primarily due to increases in interest income on loans and loan-related fees. General and administrative expenses for the fiscal year ended March 31, 2026 was ¥1,063.4 billion and increased by ¥107.4 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. This was primarily due to increases in expenses related to overseas business development and response to regulations. Others for the fiscal year ended March 31, 2026 was ¥168.3 billion. As a result, consolidated net business profit for the fiscal year ended March 31, 2026 was ¥655.8 billion and increased by ¥16.3 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. Global Markets Business Unit Consolidated gross profit for the fiscal year ended March 31, 2026 was ¥697.8 billion and increased by ¥56.7 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. This was primarily due to nimble portfolio management in the volatile market environment. General and administrative expenses for the fiscal year ended March 31, 2026 was ¥228.5 billion and increased by ¥23.2 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. Others for the fiscal year ended March 31, 2026 was ¥39.4 billion. As a result, consolidated net business profit for the fiscal year ended March 31, 2026 was ¥508.7 billion and increased by ¥39.0 billion on an adjusted basis compared to the fiscal year ended March 31, 2025. 83 Table of Contents Financial Condition Assets Our total assets increased by ¥17,038,571 million from ¥292,165,070 million at March 31, 2025 to ¥309,203,641 million at March 31, 2026. The increase was primarily due to increases in loans and advances and other assets. Our assets at March 31, 2026 and 2025 were as follows. At March 31, 2026 2025 (In millions) Cash and deposits with banks ¥ 74,362,135 ¥ 76,669,401 Call loans and bills bought 7,885,057 5,200,789 Reverse repurchase agreements and cash collateral on securities borrowed 25,468,742 22,076,009 Trading assets 6,890,217 6,176,613 Derivative financial instruments 10,093,100 8,313,016 Financial assets at fair value through profit or loss 2,705,113 2,902,969 Investment securities 33,537,857 33,546,133 Loans and advances 130,516,241 125,190,819 Investments in associates and joint ventures 1,913,920 1,588,820 Property, plant and equipment 1,370,570 1,319,002 Intangible assets 1,242,460 1,091,194 Other assets 13,065,937 7,983,972 Current tax assets 57,766 43,157 Deferred tax assets 94,526 63,176 Total assets ¥ 309,203,641 ¥ 292,165,070 Loans and Advances Our main operating activity is the lending business. We make loans and extend other types of credit principally to corporate and individual customers in Japan and to corporate customers in foreign countries. At March 31, 2026, our loans and advances were ¥130,516,241 million, or 42% of total assets, representing an increase of ¥5,325,422 million, or 4%, from ¥125,190,819 million at March 31, 2025. Our loans and advances at domestic offices increased as we captured the steady demand for financing amid robust business activities, along with the acquisition of large financings. Our loans and advances at foreign offices slightly increased primarily due to our efforts to meet corporate customers’ financing needs reflecting the decrease in the market interest rates, which was partially offset by the reduction of low-margin assets and a selective approach to loan origination focused on profitability. 84 Table of Contents Domestic Through SMBC and other banking and non-bank subsidiaries, we make loans to a broad range of industrial, commercial and individual customers in Japan. The following table shows our outstanding loans and advances to customers whose domiciles are in Japan, classified by industry, before deducting the allowance for loan losses, and adjusting unearned income, unamortized premiums-net and deferred loan fees-net at the dates indicated. At March 31, 2026 2025 (In millions) Manufacturing ¥ 13,931,412 ¥ 12,299,303 Agriculture, forestry, fisheries and mining 311,089 254,820 Construction 1,271,543 1,118,001 Transportation, communications and public enterprises 7,182,198 6,795,140 Wholesale and retail 7,315,429 6,413,857 Finance and insurance 4,149,868 3,962,719 Real estate and goods rental and leasing 19,246,697 18,144,037 Services 5,618,473 5,277,710 Municipalities 1,002,243 583,750 Lease financing 16,878 21,154 Consumer(1) 17,214,182 16,806,507 Others(2) 711,735 1,563,164 Total domestic ¥ 77,971,747 ¥ 73,240,162 (1) The balance in Consumer mainly consists of housing loans. The housing loan balances amounted to ¥10,857,602 million and ¥11,120,139 million at March 31, 2026 and 2025, respectively. (2) The balance in Others includes loans and advances to the Government of Japan. Foreign The following table shows the outstanding loans and advances to our customers whose domiciles are not in Japan, classified by industry, before deducting the allowance for loan losses, and adjusting unearned income, unamortized premiums-net and deferred loan fees-net at the dates indicated. At March 31, 2026 2025 (In millions) Public sector ¥ 940,526 ¥ 664,085 Financial institutions 12,694,870 12,415,685 Commerce and industry 31,880,801 32,682,288 Lease financing 257,665 300,322 Others 8,610,614 7,521,732 Total foreign ¥ 54,384,476 ¥ 53,584,112 Allowance for Loan Losses We calculate the allowance for loan losses using the latest assignment of obligor grades (our internal credit rating) and supplementary data such as the borrowers’ operating cash flows, realizable value of collateral and recent economic conditions. In respect of additional ECL adjustments, we decided to make ECL adjustments for the portfolios affected by the situation in the Middle East, inflation overseas driven by high U.S. tariffs on trading partners and the 85 Table of Contents Russia-Ukraine situation. At March 31, 2026, the additional adjustments to the ECL allowance for the portfolios affected by inflation overseas driven by high U.S. tariffs on trading partners was ¥45,300 million. Further, the additional ECL adjustments for the portfolios affected by the situation in the Middle East and Russia-Ukraine were ¥30,849 million and ¥64,088 million respectively. For the fiscal year ended March 31, 2026, the allowance for loan losses increased by ¥134,317 million, or 12.2%, from ¥1,102,522 million at beginning of the period to ¥1,236,839 million at end of period. The balance of the allowance for loan losses increases when a provision for loan losses is recognized and decreases when charge-offs are recognized through the sales of loans and write-offs. As we recorded a provision for loan losses of ¥384,150 million and charge-offs of ¥274,513 million for the fiscal year ended March 31, 2026, the provision for loan losses exceeded charge-offs and the overall allowance for loan losses increased. The provision for loan losses increased by ¥5,359 million to ¥384,150 million for the fiscal year ended March 31, 2026, as compared to ¥378,791 million for the fiscal year ended March 31, 2025. The increase was primarily due to the allowance for lifetime ECL on credit-impaired assets, which increased by ¥191,167 million for the fiscal year ended March 31, 2026. This was mainly attributable to the provision for loan losses related to some large overseas corporate borrowers that became credit-impaired. This increase was partially offset by a decrease in the ECL allowance for portfolios affected by the situation in Russia and Ukraine. Charge-offs increased by ¥9,829 million from the previous fiscal year to ¥274,513 million for the fiscal year ended March 31, 2026. Charge-offs of domestic loans and advances decreased by ¥5,418 million compared to the previous fiscal year to ¥116,659 million for the fiscal year ended March 31, 2026. Charge-offs of foreign loans and advances increased by ¥15,248 million compared to the previous fiscal year to ¥157,855 million for the fiscal year ended March 31, 2026. The following tables show our allowance for loan losses for each of the periods indicated. At March 31, 2026 12-month ECL Lifetime ECL not credit- impaired Lifetime ECL credit- impaired Total (In millions) Allowance for loan losses: Balance at April 1, 2025 ¥ 295,352 ¥ 251,680 ¥ 555,490 ¥ 1,102,522 Net transfers between stages (17,196 ) (16,926 ) 34,122 — Provision (Credit) for loan losses 45,154 (47,170 ) 386,166 384,150 Charge-offs(1) — — 274,513 274,513 Recoveries — — 22,014 22,014 Net charge-offs — — 252,499 252,499 Others(2) (28,075 ) 7,363 23,378 2,666 Balance at March 31, 2026 ¥ 295,235 ¥ 194,947 ¥ 746,657 ¥ 1,236,839 86 Table of Contents At March 31, 2025 12-month ECL Lifetime ECL not credit- impaired Lifetime ECL credit- impaired Total (In millions) Allowance for loan losses: Balance at April 1, 2024 ¥ 196,325 ¥ 257,542 ¥ 525,133 ¥ 979,000 Net transfers between stages (11,743 ) (20,651 ) 32,394 — Provision for loan losses 109,536 17,264 251,991 378,791 Charge-offs(1) — — 264,684 264,684 Recoveries — — 18,553 18,553 Net charge-offs — — 246,131 246,131 Others(3) 1,234 (2,475 ) (7,897 ) (9,138 ) Balance at March 31, 2025 ¥ 295,352 ¥ 251,680 ¥ 555,490 ¥ 1,102,522 (1) Charge-offs consist of the reduction of the allowance through the sales of loans and write-offs. (2) Others mainly include the exclusion of the allowance for loans and advances of SMBC MANUBANK, which were reclassified as assets held for sale, and foreign exchange transactions during the fiscal year ended March 31, 2026. (3) Others mainly include foreign exchange translations for the fiscal years ended March 31, 2025. Impaired Loans and Advances A portion of the total domestic and foreign loans and advances consists of impaired loans and advances, which are comprised of “potentially bankrupt, virtually bankrupt and bankrupt (loans and advances),” “past due three months or more (loans),” “restructured (loans)” and “other impaired (loans and advances).” The loans and advances for which management has serious doubts about the ability of the borrowers to comply in the near future with the repayment terms are wholly included in impaired loans and advances. “Potentially bankrupt, virtually bankrupt and bankrupt (loans and advances)” comprise loans and advances to borrowers that are perceived to have a high risk of falling into bankruptcy, may not have been legally or formally declared bankrupt but are essentially bankrupt, or have been legally or formally declared bankrupt. Loans classified as “past due three months or more (loans)” represent those loans that are three months or more past due as to principal or interest, which are not included in “potentially bankrupt, virtually bankrupt and bankrupt (loans and advances).” The category “restructured (loans)” comprises loans not included above for which the terms of the loans have been modified to grant concessions because of problems with the borrower. “Other impaired (loans and advances)” represent impaired loans and advances, which are not included in “potentially bankrupt, virtually bankrupt and bankrupt (loans and advances),” “past due three months or more (loans),” or “restructured (loans),” but are classified by management as impaired loans and advances due to certain information about credit problems. The following table shows the distribution of impaired loans and advances by “potentially bankrupt, virtually bankrupt and bankrupt (loans and advances),” “past due three months or more (loans),” “restructured (loans)” and “other impaired (loans and advances)” at March 31, 2026 and 2025 classified by domicile and type of industry of the borrowers. At March 31, 2026, gross impaired loans and advances were ¥1,583,138 million, an increase of ¥292,326 million from ¥1,290,812 million at March 31, 2025. The ratio of gross impaired loans and advances to the outstanding loans and advances before deducting the allowance for loan losses, and adjusting unearned income, unamortized premiums-net and deferred loan fees-net was 1.2% at March 31, 2026, an increase of 0.2 percentage points from 1.0% at March 31, 2025. 87 Table of Contents At March 31, 2026 2025 (In millions) Potentially bankrupt, virtually bankrupt and bankrupt (loans and advances): Domestic: Manufacturing ¥ 75,073 ¥ 58,528 Agriculture, forestry, fisheries and mining 156 1,672 Construction 6,671 5,929 Transportation, communications and public enterprises 16,676 20,515 Wholesale and retail 70,787 48,317 Finance and insurance 3,322 5,563 Real estate and goods rental and leasing 22,008 28,680 Services 46,627 50,698 Consumer 168,855 148,529 Others 6,515 7,984 Total domestic 416,690 376,415 Foreign: Financial institutions 2,480 150 Commerce and industry 523,547 318,411 Others 97,745 93,244 Total foreign 623,772 411,805 Total 1,040,462 788,220 Past due three months or more (loans): Domestic 31,003 23,411 Foreign 20,262 51,051 Total 51,265 74,462 Restructured (loans): Domestic 263,392 229,075 Foreign 157,862 75,184 Total 421,254 304,259 Other impaired (loans and advances): Domestic 68,761 121,936 Foreign 1,396 1,935 Total 70,157 123,871 Gross impaired loans and advances 1,583,138 1,290,812 Less: Allowance for loan losses for impaired loans and advances (746,657 ) (555,490 ) Net impaired loans and advances ¥ 836,481 ¥ 735,322 In addition to the discussion in this section, see Note 47 “Financial Risk Management—Credit Risk” to our consolidated financial statements included elsewhere in this annual report. Investment Securities Our investment securities, including debt instruments at amortized cost, debt instruments at fair value through other comprehensive income and equity instruments at fair value through other comprehensive income, totaled ¥33,537,857 million at March 31, 2026, a decrease of ¥8,276 million, or 0%, from ¥33,546,133 million at March 31, 2025. The decrease in our investment securities was primarily due to a decrease in our holdings of Japanese government bonds, which was partially offset by an increase in our holdings of U.S. Treasury and other U.S. government agency bonds. 88 Table of Contents Our bond portfolio is principally held for asset and liability management purposes. It mostly consisted of Japanese government bonds, U.S. Treasury securities and bonds issued or guaranteed by foreign governments, government agencies or official institutions. Our debt instruments at amortized cost amounted to ¥4,763,716 million at March 31, 2026, an increase of ¥4,396,719 million, or 1,198%, from ¥366,997 million at March 31, 2025, primarily due to an increase in our holdings of Japanese government bonds. Domestic debt instruments at fair value through other comprehensive income amounted to ¥6,653,719 million at March 31, 2026, a decrease of ¥5,995,525 million, or 47%, from ¥12,649,244 million at March 31, 2025. The decrease was primarily due to a decrease in our holdings of Japanese government bonds. As for our foreign debt instruments at fair value through other comprehensive income, we had ¥16,614,983 million at March 31, 2026, which was an increase of ¥1,255,947 million, or 8%, from ¥15,359,036 million at March 31, 2025. Most of our foreign debt instruments, including mortgage-backed securities, are issued or guaranteed by foreign governments, government agencies or official institutions. The increase was primarily due to an increase in our holdings of U.S. Treasury and other U.S. government agency bonds. Net unrealized losses on our domestic debt instruments amounted to ¥264,651 million at March 31, 2026, as compared to net unrealized losses of ¥145,707 million at March 31, 2025. This was primarily due to a decrease in the fair value of the domestic debt instruments held, reflecting an increase in interest rates in Japan. Net unrealized losses on our foreign debt instruments amounted to ¥338,631 million at March 31, 2026, as compared to net unrealized losses of ¥492,699 million at March 31, 2025. This was primarily due to an increase in the fair value of the foreign debt instruments held, reflecting a decline in U.S. interest rates. We had ¥3,840,059 million of domestic equity instruments and ¥1,665,380 million of foreign equity instruments at March 31, 2026, for which we made an irrevocable election at initial recognition to present subsequent changes in fair value in other comprehensive income under IFRS 9. Our domestic equity instruments, which consisted principally of publicly traded Japanese stocks and included common and preferred stocks issued by our customers, increased by ¥477,063 million, or 14%, from ¥3,362,996 million at March 31, 2025 to ¥3,840,059 million at March 31, 2026. Net unrealized gains on our domestic equity instruments increased by ¥571,950 million, or 24%, from ¥2,335,356 million at March 31, 2025 to ¥2,907,306 million at March 31, 2026. The increase was primarily due to an increase in the fair value of publicly traded Japanese stocks. Net unrealized gains on our foreign equity instruments decreased by ¥224,895 million, or 17%, from ¥1,345,439 million at March 31, 2025 to ¥1,120,544 million at March 31, 2026. The decrease was primarily due to a decrease in the fair value of publicly traded foreign stocks. We have no transactions pursuant to repurchase agreements, securities lending transactions or other transactions involving the transfer of financial assets with an obligation to repurchase such transferred assets that are treated as sales for accounting purposes. 89 Table of Contents The following tables show the amortized cost, gross unrealized gains and losses, and fair value of our investment securities, which are classified as debt instruments at amortized cost, debt instruments at fair value through other comprehensive income and equity instruments at fair value through other comprehensive income at March 31, 2026 and 2025. At March 31, 2026 Amortized cost(1) Gross unrealized gains Gross unrealized losses Fair value (In millions) Debt instruments at amortized cost: Domestic: Japanese government bonds ¥ 4,420,130 ¥ — ¥ 173,519 ¥ 4,246,611 Japanese municipal bonds 151,898 — 4,263 147,635 Japanese corporate bonds 12,987 — 376 12,611 Total domestic 4,585,015 — 178,158 4,406,857 Foreign: Bonds issued by governments and official institutions excluding U.S. Treasury and other U.S. government agency bonds 83,011 290 402 82,899 Mortgage-backed securities 14,933 189 6 15,116 Other debt instruments 80,757 9 72 80,694 Total foreign 178,701 488 480 178,709 Total ¥ 4,763,716 ¥ 488 ¥ 178,638 ¥ 4,585,566 Debt instruments at fair value through other comprehensive income: Domestic: Japanese government bonds ¥ 5,596,277 ¥ 64 ¥ 119,913 ¥ 5,476,428 Japanese municipal bonds 734,404 — 51,369 683,035 Japanese corporate bonds 587,167 — 93,433 493,734 Other debt instruments 522 — — 522 Total domestic 6,918,370 64 264,715 6,653,719 Foreign: U.S. Treasury and other U.S. government agency bonds 6,945,643 14,900 151,508 6,809,035 Bonds issued by governments and official institutions excluding U.S. Treasury and other U.S. government agency bonds 5,385,830 8,275 79,181 5,314,924 Mortgage-backed securities 3,526,662 17,436 151,190 3,392,908 Other debt instruments 1,095,479 3,085 448 1,098,116 Total foreign 16,953,614 43,696 382,327 16,614,983 Total ¥ 23,871,984 ¥ 43,760 ¥ 647,042 ¥ 23,268,702 Equity instruments at fair value through other comprehensive income: Domestic equity instruments ¥ 932,753 ¥ 2,919,880 ¥ 12,574 ¥ 3,840,059 Foreign equity instruments 544,836 1,165,692 45,148 1,665,380 Total ¥ 1,477,589 ¥ 4,085,572 ¥ 57,722 ¥ 5,505,439 90 Table of Contents At March 31, 2025 Amortized cost(1) Gross unrealized gains Gross unrealized losses Fair value (In millions) Debt instruments at amortized cost: Domestic: Japanese government bonds ¥ 109,550 ¥ — ¥ 1,893 ¥ 107,657 Japanese municipal bonds 151,882 — 3,980 147,902 Japanese corporate bonds 12,982 — 300 12,682 Total domestic 274,414 — 6,173 268,241 Foreign: Bonds issued by governments and official institutions excluding U.S. Treasury and other U.S. government agency bonds 66,896 172 339 66,729 Mortgage-backed securities 13,876 12 224 13,664 Other debt instruments 11,811 — — 11,811 Total foreign 92,583 184 563 92,204 Total ¥ 366,997 ¥ 184 ¥ 6,736 ¥ 360,445 Debt instruments at fair value through other comprehensive income: Domestic: Japanese government bonds ¥ 11,232,788 ¥ 120 ¥ 52,362 ¥ 11,180,546 Japanese municipal bonds 864,378 — 41,803 822,575 Japanese corporate bonds 697,264 — 51,662 645,602 Other debt instruments 521 — — 521 Total domestic 12,794,951 120 145,827 12,649,244 Foreign: U.S. Treasury and other U.S. government agency bonds 5,770,587 14,684 246,220 5,539,051 Bonds issued by governments and official institutions excluding U.S. Treasury and other U.S. government agency bonds 4,649,220 7,557 125,158 4,531,619 Mortgage-backed securities 4,382,645 24,871 169,465 4,238,051 Other debt instruments 1,049,283 1,827 795 1,050,315 Total foreign 15,851,735 48,939 541,638 15,359,036 Total ¥ 28,646,686 ¥ 49,059 ¥ 687,465 ¥ 28,008,280 Equity instruments at fair value through other comprehensive income: Domestic equity instruments ¥ 1,027,640 ¥ 2,355,292 ¥ 19,936 ¥ 3,362,996 Foreign equity instruments 462,421 1,397,871 52,432 1,807,860 Total ¥ 1,490,061 ¥ 3,753,163 ¥ 72,368 ¥ 5,170,856 (1) “Amortized cost” for equity instruments at fair value through other comprehensive income represents the difference between the fair value and gross unrealized gains or losses. 91 Table of Contents The following tables show the fair value and gross unrealized losses of our investment securities, aggregated by the length of time that the individual securities have been in a continuous unrealized loss position at March 31, 2026 and 2025. At March 31, 2026 Less than twelve months Twelve months or more Total Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses (In millions) Debt instruments at amortized cost: Domestic: Japanese government bonds ¥ 4,153,649 ¥ 171,908 ¥ 92,962 ¥ 1,611 ¥ 4,246,611 ¥ 173,519 Japanese municipal bonds — — 147,635 4,263 147,635 4,263 Japanese corporate bonds — — 12,611 376 12,611 376 Total domestic 4,153,649 171,908 253,208 6,250 4,406,857 178,158 Foreign: Bonds issued by governments and official institutions excluding U.S. Treasury and other U.S. government agency bonds 27,413 322 17,210 80 44,623 402 Mortgage-backed securities 461 5 646 1 1,107 6 Other debt instruments 31,906 72 — — 31,906 72 Total foreign 59,780 399 17,856 81 77,636 480 Total ¥ 4,213,429 ¥ 172,307 ¥ 271,064 ¥ 6,331 ¥ 4,484,493 ¥ 178,638 Debt instruments at fair value through other comprehensive income: Domestic: Japanese government bonds ¥ 3,908,203 ¥ 109,424 ¥ 1,268,285 ¥ 10,489 ¥ 5,176,488 ¥ 119,913 Japanese municipal bonds 733 42 682,297 51,327 683,030 51,369 Japanese corporate bonds 503 18 493,218 93,415 493,721 93,433 Other debt instruments — — — — — — Total domestic 3,909,439 109,484 2,443,800 155,231 6,353,239 264,715 Foreign: U.S. Treasury and other U.S. government agency bonds 1,679,913 10,674 2,568,983 140,834 4,248,896 151,508 Bonds issued by governments and official institutions excluding U.S. Treasury and other U.S. government agency bonds 3,011,385 9,452 405,480 69,729 3,416,865 79,181 Mortgage-backed securities 687,568 4,527 1,335,634 146,663 2,023,202 151,190 Other debt instruments 191,613 394 9,946 54 201,559 448 Total foreign 5,570,479 25,047 4,320,043 357,280 9,890,522 382,327 Total ¥ 9,479,918 ¥ 134,531 ¥ 6,763,843 ¥ 512,511 ¥ 16,243,761 ¥ 647,042 Equity instruments at fair value through other comprehensive income: Domestic equity instruments ¥ 2,905 ¥ 1,399 ¥ 23,777 ¥ 11,175 ¥ 26,682 ¥ 12,574 Foreign equity instruments 131,913 38,916 3,306 6,232 135,219 45,148 Total ¥ 134,818 ¥ 40,315 ¥ 27,083 ¥ 17,407 ¥ 161,901 ¥ 57,722 92 Table of Contents At March 31, 2025 Less than twelve months Twelve months or more Total Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses (In millions) Debt instruments at amortized cost: Domestic: Japanese government bonds ¥ 30,483 ¥ 495 ¥ 77,174 ¥ 1,398 ¥ 107,657 ¥ 1,893 Japanese municipal bonds 25,725 586 122,177 3,394 147,902 3,980 Japanese corporate bonds 7,814 175 4,868 125 12,682 300 Total domestic 64,022 1,256 204,219 4,917 268,241 6,173 Foreign: Bonds issued by governments and official institutions excluding U.S. Treasury and other U.S. government agency bonds 12,925 244 20,613 95 33,538 339 Mortgage-backed securities 9,663 173 1,595 51 11,258 224 Other debt instruments — — — — — — Total foreign 22,588 417 22,208 146 44,796 563 Total ¥ 86,610 ¥ 1,673 ¥ 226,427 ¥ 5,063 ¥ 313,037 ¥ 6,736 Debt instruments at fair value through other comprehensive income: Domestic: Japanese government bonds ¥ 9,203,842 ¥ 5,573 ¥ 1,458,266 ¥ 46,789 ¥ 10,662,108 ¥ 52,362 Japanese municipal bonds 2,027 57 820,537 41,746 822,564 41,803 Japanese corporate bonds — — 645,589 51,662 645,589 51,662 Other debt instruments — — — — — — Total domestic 9,205,869 5,630 2,924,392 140,197 12,130,261 145,827 Foreign: U.S. Treasury and other U.S. government agency bonds 1,100,245 11,191 2,644,357 235,029 3,744,602 246,220 Bonds issued by governments and official institutions excluding U.S. Treasury and other U.S. government agency bonds 2,748,057 20,580 380,055 104,578 3,128,112 125,158 Mortgage-backed securities 1,044,244 9,339 903,629 160,126 1,947,873 169,465 Other debt instruments 365,688 718 9,923 77 375,611 795 Total foreign 5,258,234 41,828 3,937,964 499,810 9,196,198 541,638 Total ¥ 14,464,103 ¥ 47,458 ¥ 6,862,356 ¥ 640,007 ¥ 21,326,459 ¥ 687,465 Equity instruments at fair value through other comprehensive income: Domestic equity instruments ¥ 38,342 ¥ 6,251 ¥ 20,913 ¥ 13,685 ¥ 59,255 ¥ 19,936 Foreign equity instruments 82,893 20,619 50,446 31,813 133,339 52,432 Total ¥ 121,235 ¥ 26,870 ¥ 71,359 ¥ 45,498 ¥ 192,594 ¥ 72,368 93 Table of Contents Trading Assets The following table shows our trading assets at March 31, 2026 and 2025. Our trading assets were ¥6,890,217 million at March 31, 2026, an increase of ¥713,604 million from ¥6,176,613 million at March 31, 2025. The increase was primarily due to an increase in our holdings of U.S. Treasury and other U.S. government agency bonds. At March 31, 2026 2025 (In millions) Debt instruments ¥ 6,476,194 ¥ 5,511,465 Equity instruments 414,023 665,148 Total trading assets ¥ 6,890,217 ¥ 6,176,613 Financial Assets at Fair Value Through Profit or Loss The following table shows the fair value of our financial assets at fair value through profit or loss at March 31, 2026 and 2025. The fair value was ¥2,705,113 million at March 31, 2026, a decrease of ¥197,856 million from ¥2,902,969 million at March 31, 2025. The decrease was primarily due to a decrease in our holdings of investment funds. At March 31, 2026 2025 (In millions) Debt instruments ¥ 2,620,759 ¥ 2,820,665 Equity instruments 84,354 82,304 Total financial assets at fair value through profit or loss ¥ 2,705,113 ¥ 2,902,969 Liabilities Our total liabilities increased by ¥15,238,171 million from ¥275,676,476 million at March 31, 2025 to ¥290,914,647 million at March 31, 2026, primarily due to an increase in deposits. The following table shows our liabilities at March 31, 2026 and 2025. At March 31, 2026 2025 (In millions) Deposits ¥ 201,930,427 ¥ 190,022,742 Call money and bills sold 3,656,737 4,378,277 Repurchase agreements and cash collateral on securities lent 24,176,556 27,791,101 Trading liabilities 4,130,591 4,838,439 Derivative financial instruments 11,472,444 9,303,258 Financial liabilities designated at fair value through profit or loss 661,424 597,846 Borrowings 10,551,657 12,697,699 Debt securities in issue 16,576,423 14,387,415 Provisions 355,063 333,301 Other liabilities 16,767,384 10,821,441 Current tax liabilities 338,018 239,190 Deferred tax liabilities 297,923 265,767 Total liabilities ¥ 290,914,647 ¥ 275,676,476 94 Table of Contents Deposits We offer a wide range of standard banking accounts through the offices of our banking subsidiaries in Japan, including non-interest-bearing demand deposits, interest-bearing demand deposits, deposits at notice, time deposits and negotiable certificates of deposit. Domestic deposits, 71% of total deposits, are our principal source of funds for our domestic operations. The deposits in the domestic offices of our banking subsidiaries are principally from individuals and private corporations, governmental bodies (including municipal authorities), and financial institutions. SMBC’s foreign offices accept deposits mainly in U.S. dollars, but also in yen and other currencies, and are active participants in the Euro-currency market as well as the United States domestic money market. Foreign deposits mainly consist of stable types of deposits, such as deposits at notice, time deposits, and negotiable certificates of deposit. Our deposit balances at March 31, 2026 were ¥201,930,427 million, an increase of ¥11,907,685 million, or 6%, from ¥190,022,742 million at March 31, 2025, due to an increase in deposits at domestic offices as well as foreign offices. The increase in deposits at domestic offices was primarily due to an increase in time deposits from corporate customers, including large deposits, as well as an increase in deposits from individual customers through acquisition initiatives. The increase in deposits at foreign offices was primarily due to an increase in time deposits, reflecting our efforts to expand our stable foreign currency funding sources. The following table shows a breakdown of our domestic and foreign offices’ deposits at the dates indicated. At March 31, 2026 2025 (In millions) Domestic offices: Non-interest-bearing demand deposits ¥ 28,069,136 ¥ 29,902,509 Interest-bearing demand deposits 75,696,259 74,165,956 Deposits at notice 598,846 593,258 Time deposits 25,381,678 21,825,843 Negotiable certificates of deposit 2,985,452 4,264,295 Others 11,292,205 10,222,280 Total domestic offices 144,023,576 140,974,141 Foreign offices: Non-interest-bearing demand deposits 3,337,095 3,032,855 Interest-bearing demand deposits 7,904,003 6,204,646 Deposits at notice 16,981,820 14,062,549 Time deposits 16,761,066 12,656,739 Negotiable certificates of deposit 12,681,680 12,911,097 Others 241,187 180,715 Total foreign offices 57,906,851 49,048,601 Total deposits ¥ 201,930,427 ¥ 190,022,742 Borrowings Borrowings include unsubordinated borrowings, subordinated borrowings, liabilities associated with securitization transactions of our own assets, and lease liabilities. At March 31, 2026, our borrowings were ¥10,551,657 million, a decrease of ¥2,146,042 million, or 17%, from ¥12,697,699 million at March 31, 2025. The decrease was primarily due to a decrease in unsubordinated borrowings. 95 Table of Contents The following table shows the balances with respect to our borrowings at March 31, 2026 and 2025. At March 31, 2026 2025 (In millions) Unsubordinated borrowings ¥ 8,972,906 ¥ 11,043,243 Subordinated borrowings 98,556 130,971 Liabilities associated with securitization transactions 1,108,260 1,129,695 Lease liabilities 371,935 393,790 Total borrowings ¥ 10,551,657 ¥ 12,697,699 Debt Securities in Issue Debt securities in issue at March 31, 2026 were ¥16,576,423 million, an increase of ¥2,189,008 million, or 15%, from ¥14,387,415 million at March 31, 2025, primarily due to increases in unsubordinated bonds and commercial paper. At March 31, 2026 2025 (In millions) Commercial paper ¥ 4,151,356 ¥ 3,571,097 Unsubordinated bonds 10,723,099 9,541,764 Subordinated bonds 1,701,968 1,274,554 Total debt securities in issue ¥ 16,576,423 ¥ 14,387,415 For further information, refer to Note 20 “Debt Securities in Issue” to our consolidated financial statements included elsewhere in this annual report, which sets forth summaries of debt securities in issue with their contractual interest rates and currencies. In the normal course of business, we enter into contractual obligations that require future cash payments. “Item 5.B. Liquidity and Capital Resources — Contractual Obligations” sets forth a summary of our contractual cash obligations at March 31, 2026. Total Equity Our total equity increased by ¥1,800,400 million from ¥16,488,594 million at March 31, 2025 to ¥18,288,994 million at March 31, 2026, primarily due to increases in retained earnings and other reserves. The increase in retained earnings mainly reflected our net profit. The increase in other reserves was primarily due to increases in the financial instruments at fair value through other comprehensive income reserve reflecting a rise in fair value of domestic equity instruments and the exchange differences on translating the foreign operations reserve reflecting the depreciation of the yen. 96 Table of Contents For further information, refer to Note 25 “Shareholders’ Equity” and Note 26 “Equity Attributable to Other Equity Instruments Holders” to our consolidated financial statements included elsewhere in this annual report. At March 31, 2026 2025 (In millions) Capital stock ¥ 2,346,888 ¥ 2,345,961 Capital surplus 635,731 663,063 Retained earnings 8,585,195 7,836,548 Treasury stock (48,851 ) (38,512 ) Equity excluding other reserves 11,518,963 10,807,060 Other reserves 4,337,932 3,663,135 Equity attributable to shareholders of Sumitomo Mitsui Financial Group, Inc. 15,856,895 14,470,195 Non-controlling interests 179,253 150,022 Equity attributable to other equity instruments holders 2,252,846 1,868,377 Total equity ¥ 18,288,994 ¥ 16,488,594 Reconciliation with Japanese GAAP Our consolidated financial statements are prepared in accordance with IFRS as summarized in Note 2 “Summary of Material Accounting Policies” to our consolidated financial statements included elsewhere in this annual report. These policies differ in some respects from Japanese GAAP. For reporting under the Financial Instruments and Exchange Act of Japan (“FIEA”) and Japanese banking regulations, we prepare our annual financial results in accordance with Japanese GAAP. To show the major reconciling items between our IFRS and Japanese GAAP consolidated financial statements, we have provided below, with respect to our most recent fiscal year, a reconciliation of consolidated net profit and total equity under IFRS with those amounts under Japanese GAAP. At and for the fiscal year ended March 31, 2026 Total equity Net profit (In millions) IFRS ¥ 18,288,994 ¥ 1,194,960 Differences arising from different accounting for: 1. Scope of consolidation 120,495 (8,445 ) 2. Derivative financial instruments (154,762 ) 286,353 3. Investment securities (625,106 ) 418,128 4. Loans and advances 629,526 71,679 5. Investments in associates and joint ventures (147,640 ) (80,229 ) 6. Property, plant and equipment (1,198 ) 1,461 7. Lease accounting 7,914 374 8. Defined benefit plans 669,187 105,023 9. Deferred tax assets (152,707 ) (35,525 ) 10. Foreign currency translation — 55,313 11. Classification of equity and liability (2,280,495 ) (56,186 ) Others (241,315 ) (96,775 ) Tax effect of the above (179,748 ) (271,316 ) Japanese GAAP ¥ 15,933,145 ¥ 1,584,815 97 Table of Contents The explanations below summarize certain differences between IFRS and Japanese GAAP that may be material. The paragraphs below refer to the corresponding items as set forth in the table above. 1. Scope of consolidation Under Japanese GAAP, we consolidate an entity when we effectively control the decision-making body of the entity’s operating and financing policies. Control is generally presumed to exist when we own more than half of the voting power, or own from 40% to 50% of the voting power and certain facts exist indicating control. Certain entities established for securitization are presumed not to be controlled. Under IFRS, we consolidate an entity when we control the entity. Control is generally presumed to exist when we are exposed, or have rights, to variable returns from our involvement with the entity and have the ability to affect those returns through our power over the entity. The existence and effect of potential voting rights that are deemed to be substantive are taken into account when assessing the control. When assessing control of an entity under IFRS, we apply a single consolidation model to all types of entities, irrespective of their nature. This results in a difference in the scope of consolidation between Japanese GAAP and IFRS. Most significantly, certain entities designed for special purpose such as securitization, usually in the form of trusts under the Trust Act of Japan, are not consolidated under Japanese GAAP but consolidated under IFRS. Accordingly, both the cumulative gains on transfers of financial assets to these securitization vehicles and amortization of our retained subordinate interest under Japanese GAAP were not recognized under IFRS due to consolidation of such vehicles. 2. Derivative financial instruments Under Japanese GAAP, an embedded derivative is separately accounted for when the host contract may suffer losses arising from the embedded derivative. Also, an entity may separately account for an embedded derivative if the entity manages it separately, even though the criteria for separation are not fully met. Under IFRS, when a hybrid contract contains a host that is not a financial asset, an embedded derivative is separated from the host contract and accounted for as a derivative if, and only if, its economic characteristics and risks are not closely related to those of the host contract. The separation of the embedded derivatives from the host contract is adjusted so as not to result in any gain or loss at initial recognition under IFRS. On the other hand, under IFRS, when a hybrid contract contains a host that is a financial asset, an embedded derivative is not separately accounted for from the host. We apply hedge accounting under Japanese GAAP. However, the qualifying criteria for certain hedge accounting under IFRS are more rigorous than those under Japanese GAAP. Therefore, except for fair value hedge accounting and hedge accounting for net investments in foreign operations we apply under IFRS, the effects of hedge accounting under Japanese GAAP have been reversed under IFRS. 3. Investment securities Under Japanese GAAP, stocks and financial instruments similar to stocks that are not traded in an active market, such as unlisted stocks, are measured at cost if they are classified as available-for-sale, whereas, under IFRS, those are measured at fair values determined by using valuation techniques. Under Japanese GAAP, the changes in fair value of available-for-sale financial assets are recognized in other comprehensive income and subsequently transferred to profit or loss on their disposal. Under IFRS, we made an irrevocable election for some equity instruments to present subsequent changes in fair value in other comprehensive income. The changes in fair value of those equity instruments presented in other comprehensive income are not subsequently transferred to profit or loss. Some available-for-sale financial assets under Japanese GAAP, including investment funds, are classified as financial assets measured at fair value through profit or loss, and therefore the changes in their fair values are recognized in profit or loss under IFRS. 98 Table of Contents 4. Loans and advances Under Japanese GAAP, the allowance for loan losses is calculated based on credit assessments at the end of the reporting period. A collective allowance is calculated using historical loss experience based on historical results according to the obligor grade, adding forward looking information as appropriate. The allowance for specifically identified significant loans is calculated by the discounted cash flow (“DCF”) method, which is based on the present value of reasonably estimated cash flows discounted at the original contractual interest rate of the relevant loan. For the remaining loans, an individual allowance is calculated based on the estimated uncollectible amount considering historical loss experience and the recoveries from collateral, guarantees and any other collectible cash flows. Under IFRS, measurement of ECL depends on whether the credit risk on the financial asset has increased significantly since initial recognition. If there is not a significant increase in credit risk on that financial asset since initial recognition, an allowance is measured at an amount equal to 12-month expected credit losses. Otherwise, an allowance is measured at an amount equal to lifetime expected credit losses. The allowance for loan losses for individually significant impaired loans is calculated by the DCF method based on the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate, which differs from the calculation of the DCF method under Japanese GAAP. The scope of loans that are subject to the DCF method under IFRS is wider than that under Japanese GAAP. ECL are measured in a way that reflects not only past events, but also current conditions and forecasts of future economic conditions. Under Japanese GAAP, loan origination fees and costs are generally recognized in the consolidated income statement as incurred. Under IFRS, loan origination fees and costs that are incremental and directly attributable to the origination of a loan are deferred and thus, included in the calculation of the effective interest rate. Under both Japanese GAAP and IFRS, undrawn loan commitments are off-balance sheet. Provisions for undrawn loan commitments are measured in a way similar to those for loans drawn down in accordance with each standard. Under Japanese GAAP, all guarantee contracts are accounted for by accruing both asset and liability accounts at the nominal guarantee amount. A provision for the credit risk of the guarantee is calculated using the same method as the reserve for possible loan losses. Under IFRS, financial guarantees are initially recognized at fair value and subsequently measured at the higher of the amount of the loss allowance determined in accordance with ECL or the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of IFRS 15 “Revenue from Contracts with Customers.” 5. Investments in associates and joint ventures Under Japanese GAAP, although goodwill related to investments in associates and joint ventures is included in the carrying amount of the investments, we are required to recognize and measure impairment losses only on goodwill separately from the investments if impairment indicators for the goodwill are identified. Under IFRS, for investments in associates and joint ventures, if we identify objective evidence of impairment, the entire carrying amount of the investment is tested for impairment since goodwill is not separately recognized on the initial acquisition of the investment. Additionally, the net profit of associates and joint ventures is adjusted for differences between Japanese GAAP and IFRS in accordance with our accounting policy prior to applying the equity method under IFRS. 6. Property, plant and equipment For certain assets that are depreciated using the declining balance method under Japanese GAAP, we apply the straight-line method of depreciation to those assets under IFRS as we consider that the straight-line method most closely reflects the expected pattern of consumption of the future economic benefits embodied in those assets. Additionally, under IFRS, residual values of assets are reviewed at least at the end of each reporting period. After reviews of all categories of property, plant and equipment, the residual values of assets are considered to be zero under IFRS, whereas residual values are assigned to certain assets under Japanese GAAP. 99 Table of Contents Furthermore, under IFRS, when any indication that assets may be impaired exists, the recoverable amount of an asset shall be determined. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset shall be reduced to its recoverable amount and an impairment loss is recognized to the extent that the carrying amount of the asset exceeds its recoverable amount. On the other hand, under Japanese GAAP, when there is an indicator of impairment, whether impairment exists shall be determined by comparing the carrying amount of the asset to the undiscounted future cash flow. Then, if the undiscounted cash flows are lower than the carrying amount, the carrying amount is not considered to be recoverable and an impairment loss is recognized for the difference between the carrying amount and the recoverable amount. 7. Lease accounting Under Japanese GAAP, a lease transaction as a lessee is classified as either a finance lease or an operating lease. Finance leases are recognized as assets and liabilities in statements of financial position, so there is no significant difference from IFRS. On the other hand, a lessee does not recognize assets and liabilities for operating leases. Operating lease payments are recognized in the consolidated income statements on a straight-line basis over the lease term. Under IFRS, a single lessee accounting model, whereby a lessee accounts for all leases in the same way, requires a lessee to recognize a right of use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments at the commencement date. After the commencement date, a right of use asset is measured applying the straight-line method of depreciation, and a lease liability is measured by increasing the carrying amount to reflect interest and reducing the carrying amount to reflect the lease payments. 8. Defined benefit plans Under Japanese GAAP, the present value of the defined benefit obligation is measured using the market yields of long-term Japanese government bonds as discount rates. Additionally, the discount rates for the previous reporting period can be used for the current reporting period, if the change in the present value of the defined benefit obligation caused by a change in the discount rates from the previous reporting period to the current reporting period is less than 10%. Under IFRS, the present value of the defined benefit obligation is measured by discounting the estimated timing and amount of benefit payments using the discount rates reflecting market yields on high quality corporate bonds at the end of each reporting period. Furthermore, when the net defined benefit asset, which is the fair value of plan assets less the present value of the defined benefit obligation, is in surplus, the recognized asset is limited to the present value of any economic benefits available, whereas there is no such a specific requirement under Japanese GAAP. Under Japanese GAAP, the expected rates of return on plan assets for the previous reporting period can be used for the current reporting period, unless the impact of the profit or loss for the current reporting period is considered to be significant. Under IFRS, the interest cost and expected return on plan assets are replaced with a net interest amount which is calculated by applying the discount rate to the net defined benefit liability (asset). Under Japanese GAAP, the actuarial gains and losses are recognized in other comprehensive income, and are amortized using the straight-line method. Under IFRS, actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in the year, and return on plan assets excluding interest income are recognized in other comprehensive income and are never reclassified to profit and loss. Under Japanese GAAP, past service costs are recognized in other comprehensive income and are amortized using the straight-line method. Under IFRS, past service costs are recognized immediately in the consolidated income statement. 100 Table of Contents 9. Deferred tax assets Under Japanese GAAP, we recognize deferred tax assets to the extent that the realization of the tax benefit is highly probable based on the schedule. Under IFRS, deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. For example, deferred tax assets for deductible temporary differences relating to impairment of financial instruments of which the timing of the reversal is difficult to estimate cannot be recognized under Japanese GAAP, whereas they can be recognized under IFRS to the extent that it is probable that future taxable profit will be available. 10. Foreign currency translation Under Japanese GAAP, the income statement items of certain foreign operations are translated into Japanese yen, our presentation currency, using the (spot) closing rate, whereas under IFRS they are translated into the presentation currency using the exchange rate at the dates of the transactions or, if the exchange rates do not fluctuate significantly, at average exchange rates. In addition, under Japanese GAAP, certain foreign operations’ monetary items denominated in foreign currencies are translated into Japanese yen using the exchange rate at the end of the reporting period. However, under IFRS the monetary items for which settlement is neither planned nor likely to occur in the foreseeable future are translated using the exchange rates at the dates of initial transactions. 11. Classification of equity and liability Under Japanese GAAP, a financial instrument is generally classified as an equity instrument or a financial liability in light of its legal form. Under IFRS, a financial instrument or its component parts are classified as equity instruments or financial liabilities in accordance with the substance of the contractual arrangement and the definitions of financial liabilities and equity instruments. A financial instrument is classified as a financial liability if there is a contractual obligation to deliver cash or another financial asset other than a fixed number of equity shares in exchange for a fixed amount of cash or another financial asset. In the absence of such a contractual obligation, the financial instrument is classified as an equity instrument. 5.B.  LIQUIDITY AND CAPITAL RESOURCES We consistently endeavor to enhance the management of our liquidity profile and strengthen our capital base to meet our customers’ loan requirements and deposit withdrawals and respond to unforeseen situations such as adverse movements in equity, foreign currency, interest rate and other markets, or changes in general domestic or international conditions. Liquidity We derive funding for our operations both from domestic and international sources. Our domestic funding is derived primarily from deposits placed with SMBC by its corporate and individual customers, and also from call money (inter-bank), bills sold (inter-bank promissory notes), repurchase agreements, borrowings, and negotiable certificates of deposit issued by SMBC to domestic and international customers. Our international sources of funds are principally from deposits from corporate customers and foreign central banks, negotiable certificates of deposit, bonds, commercial paper, and also from repurchase agreements and cash collateral on securities lent. We closely monitor maturity gaps and foreign exchange exposure in order to manage our liquidity profile. As shown in the following table, total deposits increased by ¥11,907,685 million, or 6%, from ¥190,022,742 million at March 31, 2025 to ¥201,930,427 million at March 31, 2026. The balance of deposits at March 31, 2026 exceeded the balance of loans and advances by ¥71,414,186 million, primarily due to the stable deposit base in Japan. Our loan-to-deposit ratio (total loans and advances divided by total deposits) in the same period was 65%, which contributed greatly to the reduction of our liquidity risk. Our balances of large- 101 Table of Contents denomination domestic yen time deposits are stable due to the historically high rollover rate of our corporate customers and individual depositors. At March 31, 2026 2025 (In millions) Loans and advances ¥ 130,516,241 ¥ 125,190,819 Deposits 201,930,427 190,022,742 We have invested the excess balance of deposits against loans and advances primarily in marketable securities and other highly liquid assets, such as Japanese government bonds. SMBC’s Global Markets Business Unit actively monitors the movement of interest rates and maturity profile of its bond portfolio as part of SMBC’s overall risk management. The bonds can be used to enhance liquidity. When needed, they can be used as collateral for call money or other money market funding or short-term borrowings from the BOJ. Secondary sources of liquidity include short-term debts, such as call money, bills sold, and commercial paper issued at an inter-bank or other wholesale markets. We also issue long-term debts, including both senior and subordinated debts, as additional sources of liquidity. With short- and long-term debts, we can diversify our funding sources, effectively manage our funding costs and enhance our capital adequacy ratios when appropriate. We source our funding in foreign currencies primarily from financial institutions, general corporations, and institutional investors, through short- and long-term financing. Even if we encounter declines in our credit quality or that of Japan in the future, we expect to be able to purchase foreign currencies in sufficient amounts using the yen funds raised through our domestic customer base. As further measures to support our foreign currency liquidity, we hold foreign debt securities, maintain credit lines and swap facilities denominated in foreign currencies, and pledge collateral to the U.S. Federal Reserve Bank. We maintain management and control systems to support our ability to access liquidity on a stable and cost-effective basis. For further information, see “Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk—Market Risk and Liquidity Risk—Framework for Market and Liquidity Risk Management.” We believe we are able to access such sources of liquidity on a stable and flexible basis by keeping credit ratings at a high level. The following table shows credit ratings assigned to the Company by Moody’s Japan K.K. (“Moody’s”), S&P Global Ratings Japan Inc. (“S&P”) and Fitch Ratings Japan Limited (“Fitch”) at May 31, 2026: At May 31, 2026 Moody’s S&P Fitch Long-term Outlook Short-term Long-term Outlook Short-term Long-term Outlook Short-term A1 S P-1 A- S — A- S F1 The following table shows credit ratings assigned to SMBC by Moody’s, S&P and Fitch at May 31, 2026: At May 31, 2026 Moody’s S&P Fitch Long-term Outlook Short-term Long-term Outlook Short-term Long-term Outlook Short-term A1 S P-1 A S A-1 A S F1 We are assigned credit ratings by major domestic and international credit rating agencies. Credit ratings do not constitute recommendations to purchase, sell or hold a security, and rating agencies may review or indicate an intention to review ratings at any time. While the methodology and rating system vary among rating agencies, 102 Table of Contents credit ratings are generally based on information provided by us or independent sources, and can be influenced by the credit ratings of Japanese government bonds and broader views of the Japanese financial system. Any downgrade in or withdrawal of these credit ratings, or any adverse change in these ratings relative to other financial institutions, could increase our borrowing costs, reduce our access to the capital markets and otherwise negatively affect our ability to raise funds, which in turn could have a negative impact on our liquidity position. The guidelines published by the Financial Services Agency of Japan (“FSA”) for liquidity coverage ratio (“LCR”) and net stable funding ratio (“NSFR”) applicable to banks and bank holding companies with international operations are based on the full text of the LCR and NSFR standard issued by the Basel Committee on Banking Supervision (“BCBS”) in January 2013 and October 2014, respectively. Under these guidelines, banks and bank holding companies with international operations must maintain LCRs and NSFRs of at least 100% on both a consolidated basis and a nonconsolidated basis. The following tables show the Company’s and SMBC’s LCRs for the three months ended March 31, 2026 and NSFRs at March 31, 2026. Each figure is calculated based on our financial statements prepared in accordance with Japanese GAAP, as required by the FSA’s LCR and NSFR guidelines. Liquidity coverage ratio: For the three months ended March 31, 2026(1) SMFG (consolidated) 141.1 % SMBC (consolidated) 148.2 % SMBC (nonconsolidated) 152.1 % (1) Under the FSA’s LCR guidelines, the LCR for the three months ended March 31, 2026 is set as the three-month average of daily LCRs for the same three months, which is calculated by dividing the balance of high-quality liquid assets by the total net cash outflows on a daily basis for the same three months. Net stable funding ratio: At March 31, 2026(1) SMFG (consolidated) 114.2 % SMBC (consolidated) 121.5 % SMBC (nonconsolidated) 121.5 % (1) Under the FSA’s NSFR guidelines, the NSFR is calculated by dividing the available amount of stable funding by the required amount of stable funding. For further information, see “Item 4.B. Business Overview—Regulations in Japan—Regulations Regarding Capital Adequacy and Liquidity—Liquidity Requirement.” Capital Management With regard to capital management, we strictly abide by the capital adequacy guidelines set by the FSA. Japan’s capital adequacy guidelines are based on the Basel Capital Accord, which was proposed by the BCBS for uniform application to all banks which have international operations in industrialized countries. The current international standard is the Basel III framework, published by the BCBS in December 2010. Finalized Basel III regulatory reforms were published in December 2017. The FSA has adopted capital adequacy guidelines for banking organizations in Japan in line with the Basel III framework and the finalized Basel III regulatory reforms. The FSA’s capital adequacy guidelines may be different from those of central banks or supervisory bodies of other countries because they have been designed by the FSA to suit the Japanese banking environment. Our banking subsidiaries outside of Japan are also subject to local capital ratio requirements. 103 Table of Contents Each figure for the FSA capital adequacy guidelines is calculated based on our financial statements prepared under Japanese GAAP. The FSA capital adequacy guidelines permit Japanese banks to choose from the standardized approach, the foundation internal ratings-based (“IRB”) approach and the advanced IRB approach for measuring credit risk. Banks are permitted to calculate the Internal Loss Multiplier (“ILM”) using internal loss data for measuring operational risk, provided that specific conditions are met. To be eligible to adopt the foundation IRB approach or the advanced IRB approach for measuring credit risk, and to calculate the ILM with internal loss data for measuring operational risk, a Japanese bank must establish advanced risk management systems and receive prior approval from the FSA. We and SMBC have adopted the advanced IRB approach for measuring credit risk since March 2009 and the standardized measurement approach by using the ILM for measuring operational risk since March 2024. Under the FSA capital adequacy guidelines, which reflect the Basel III framework, banks and bank holding companies with international operations are required to maintain a minimum Common Equity Tier 1 capital ratio of 4.5%, a minimum Tier 1 capital ratio of 6%, and a minimum total capital ratio of 8%. Moreover, bank holding companies with international operations are required to hold a capital conservation buffer of 2.5% to withstand future periods of stress. As a result, taking the capital conservation buffer into account, the minimum Common Equity Tier 1 capital requirement, the minimum Tier 1 capital requirement and the minimum total capital requirement for bank holding companies with international operations are 7%, 8.5% and 10.5%, respectively. Furthermore, a countercyclical buffer within a range of 0% to 2.5% of common equity or other fully loss-absorbing capital has been implemented according to national circumstances and we are required to hold a countercyclical buffer of 0.19% at March 31, 2026. In addition to the above-mentioned minimum capital requirements and capital buffer requirements under Basel III, organizations identified by the FSB as G-SIBs, which includes us, are required to maintain an additional 1% to 2.5% of Common Equity Tier 1 capital as a percentage of risk-weighted assets based on the organization’s size, interconnectedness, substitutability, complexity and cross-jurisdictional activity as determined by the FSB. The amount of G-SIB capital surcharge that applies to us based on the FSB’s determination is 1%. The FSB updates its list of G-SIBs on an annual basis. We also abide by the leverage ratio guidelines set by the FSA, which are based on the leverage ratio framework and disclosure requirements issued by the BCBS. Under the BCBS leverage ratio framework, the minimum leverage ratio is set at 3%. In addition, G-SIBs are required to maintain a leverage ratio buffer, which takes the form of a Tier 1 capital buffer set at 50% of the applicable G-SIB capital surcharge. In June 2020, the FSA published and implemented amendments to its guidelines for the leverage ratio, which mainly exclude deposits with the BOJ from the denominator for the calculation of the leverage ratio in order to maintain harmonization with the monetary policy implemented by the BOJ and the prudential regulations for banks and other financial institutions. Furthermore, in November 2022, the FSA published amendments to its guidelines for the leverage ratio, which provided that, effective from April 1, 2024, the minimum leverage ratio was increased from 3% to 3.15% and the leverage buffer applicable to G-SIBs is increased by 0.05%, while continuing to exclude amounts of deposits with the BOJ from the total exposure, taking into account exceptional macroeconomic conditions and other circumstances. 104 Table of Contents The table below presents our risk-weighted capital ratios, total capital, risk-weighted assets and leverage ratio under Japanese GAAP at March 31, 2026, based on the Basel III rules. At March 31, 2026 (In billions, except percentages) SMFG Consolidated: Total risk-weighted capital ratio 15.69 % Tier 1 risk-weighted capital ratio 14.49 % Common Equity Tier 1 risk-weighted capital ratio 12.41 % Total capital (Common Equity Tier 1 capital + Additional Tier 1 capital + Tier 2 capital) ¥ 15,865.9 Tier 1 capital (Common Equity Tier 1 capital + Additional Tier 1 capital) 14,655.9 Common Equity Tier 1 capital 12,544.0 Risk-weighted assets 101,078.2 The amount of minimum total capital requirements(1) 8,086.3 Leverage ratio 5.00 % (1) The amount of minimum total capital requirements is calculated by multiplying risk-weighted assets by 8%. Common Equity Tier 1 capital consists primarily of capital stock, capital surplus and retained earnings relating to common shares, unrealized gains and losses included in accumulated other comprehensive income, and non-controlling interests that meet the criteria set forth in the FSA capital adequacy guidelines for inclusion in Common Equity Tier 1 capital. Non-controlling interests arising from the issue of common shares by a fully consolidated subsidiary of a bank may receive recognition in Common Equity Tier 1 capital only if: (1) the instrument giving rise to the non-controlling interest would, if issued by the bank, meet all of the criteria set forth in the FSA capital adequacy guidelines for classification as common shares for regulatory capital purposes; and (2) the subsidiary that issued the instrument is itself a bank or other financial institution subject to similar capital adequacy guidelines. Regulatory adjustments such as goodwill and other intangibles, deferred tax assets, investments in the common equity capital of banking, financial and insurance entities and defined benefit pension fund assets and liabilities are applied mainly to the calculation of Common Equity Tier 1 capital in the form of a deduction. Additional Tier 1 capital consists primarily of perpetual subordinated bonds. Tier 2 capital consists primarily of subordinated debt securities. Our capital position and SMBC’s capital position depend in part on the fair market value of our investment securities portfolio, since unrealized gains and losses are included in the amount of regulatory capital and have been fully counted as Common Equity Tier 1 capital since March 2018. Since our other securities (including money held in trust) with a readily ascertainable market value included unrealized gains and losses, substantial fluctuations in the Japanese stock markets may affect our capital position and the capital position of SMBC. 105 Table of Contents Set forth below is a table of risk-weighted capital ratios, total capital, risk-weighted assets and leverage ratio of SMBC at March 31, 2026 on a consolidated and nonconsolidated basis. At March 31, 2026 (In billions, except percentages) SMBC Consolidated: Total risk-weighted capital ratio 17.34 % Tier 1 risk-weighted capital ratio 15.42 % Common Equity Tier 1 risk-weighted capital ratio 12.32 % Total capital (Common Equity Tier 1 capital + Additional Tier 1 capital + Tier 2 capital) ¥ 15,173.6 Tier 1 capital (Common Equity Tier 1 capital + Additional Tier 1 capital) 13,497.5 Common Equity Tier 1 capital 10,779.1 Risk-weighted assets 87,476.2 The amount of minimum total capital requirements(1) 6,998.1 Leverage ratio 4.96 % SMBC Nonconsolidated: Total risk-weighted capital ratio 15.83 % Tier 1 risk-weighted capital ratio 13.62 % Common Equity Tier 1 risk-weighted capital ratio 10.22 % Total capital (Common Equity Tier 1 capital + Additional Tier 1 capital + Tier 2 capital) ¥ 12,565.6 Tier 1 capital (Common Equity Tier 1 capital + Additional Tier 1 capital) 10,806.7 Common Equity Tier 1 capital 8,114.7 Risk-weighted assets 79,331.8 The amount of minimum total capital requirements(1) 6,346.5 Leverage ratio 4.63 % (1) The amount of minimum total capital requirements is calculated by multiplying risk-weighted assets by 8%. Our securities subsidiary in Japan, SMBC Nikko Securities is also subject to capital adequacy requirements under the FIEA described in “Item 4.B. Business Overview—Regulations in Japan—Regulations Regarding Capital Adequacy and Liquidity.” At March 31, 2026, the capital adequacy ratio was 317.4% for SMBC Nikko Securities, and sufficiently above 140%, below which level it would be required to file daily reports with the Commissioner of the FSA. Off-Balance Sheet Arrangements To meet our customers’ financial needs, we engage in various types of off-balance sheet arrangements in the ordinary course of business. Our arrangements include loan commitments, financial guarantees and other credit-related contingent liabilities. Loan commitment contracts on overdrafts and loans are agreements to lend up to a prescribed amount to customers, as long as there is no violation of any condition established in the contracts. Financial guarantees are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of the debt instrument. Other credit-related contingent liabilities include performance bonds, which are contracts that provide compensation if another party fails to perform the contractual obligation. 106 Table of Contents The table below shows the nominal amounts of undrawn loan commitments, and financial guarantees and other credit-related contingent liabilities at March 31, 2026 and 2025. At March 31, 2026 2025 (In millions) Loan commitments ¥ 100,314,339 ¥ 91,810,227 Financial guarantees and other credit-related contingent liabilities 17,033,173 15,139,799 Total ¥ 117,347,512 ¥ 106,950,026 The nominal amounts of these off-balance sheet instruments generally represent the maximum potential amounts of future payments without consideration of possible recoveries under recourse provisions or from collateral held. For example, since many of these loan commitments are expected to expire without being drawn down, the total amount of unused commitments does not necessarily represent an actual future cash flow requirement. Many of these loan commitments include clauses under which we can reject an application from customers or reduce the contract amounts in cases where economic conditions change, we need to secure claims, or some other significant event occurs. In addition, we may request the customers to pledge collateral such as premises and securities at the time of the contracts, and take necessary measures such as monitoring customers’ financial positions, revising contracts when the need arises and securing claims after the contracts are made. We regularly review the credit quality of the customer based on our risk management system as set forth in “Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk” and Note 47 “Financial Risk Management” to our consolidated financial statements included elsewhere in this annual report. In addition to the above-mentioned off-balance sheet arrangements, some of the SMBC Group’s off-balance sheet arrangements are related to activities of structured entities. For further information, refer to Note 50 “Structured Entities” to our consolidated financial statements included elsewhere in this annual report. Contractual Obligations In the normal course of business, we enter into contractual obligations that require future cash payments. The following table sets forth a summary of our contractual cash obligations at March 31, 2026. At March 31, 2026 Due in one year or less Due from one year to three years Due from three years to five years Due after five years Total(1) (In millions) Time deposits ¥ 37,650,209 ¥ 2,582,508 ¥ 810,225 ¥ 1,141,261 ¥ 42,184,203 Negotiable certificate of deposits 15,317,233 130,619 219,280 — 15,667,132 Financial liabilities designated at fair value through profit or loss 78,850 91,540 108,011 456,090 734,491 Borrowings 4,840,033 3,446,820 606,363 1,310,165 10,203,381 Debt securities in issue 6,369,879 2,726,254 3,733,556 4,101,011 16,930,700 Lease liabilities 80,220 114,229 69,869 137,378 401,696 Purchase obligation(2) 76,428 113,515 23,724 16,961 230,628 Total ¥ 64,412,852 ¥ 9,205,485 ¥ 5,571,028 ¥ 7,162,866 ¥ 86,352,231 (1) The amount of interest on debt instruments is not included in the maturity table above due to its insignificance. (2) Purchase obligation in the above table includes the contractual commitments to purchase goods or services of construction and information technology that are binding on us for the payment of more than ¥100 million. 107 Table of Contents 5.C. RESEARCH, DEVELOPMENT, PATENTS AND LICENSES We did not conduct any significant research and development activities for the fiscal year ended March 31, 2026. However, there are certain research and development activities for our information system infrastructure. 5.D. TREND INFORMATION Our trend information is contained elsewhere in this annual report, including but not limited to “Item 4.B. Business Overview,” and “—A. Operating Results,” and “—B. Liquidity and Capital Resources” in this Item. 5.E. CRITICAL ACCOUNTING ESTIMATES For information about our critical accounting estimates, refer to Note 3 “Critical Accounting Estimates and Judgments” to our consolidated financial statements included elsewhere in this annual report.