Sumitomo Mitsui : Financial results for 3QFY2015

ec5f41d4-8dd3-47f3-8d90-4dcabcbe062e.pdf Sumitomo Mitsui Trust Holdings, Inc. (SuMi TRUST Holdings) Financial Results for the Nine Months Ended December 31, 2015 [Japanese GAAP](Consolidated)

Stock exchange listings: Tokyo and Nagoya (Code: 8309)

URL: http://www.smth.jp/en/index.html

Representative: Kunitaro Kitamura, President

Contact: Kiyomitsu Asahi, Executive Officer,

January 28, 2016

General Manager of Financial Planning Department TEL +81-3-3286-8354

Filing date of quarterly securities report (Shihanki Hokokusyo) (Scheduled): February 10, 2016 Specific trading accounts: Established

Dividend payment date: －

Explanatory material: Prepared

Briefing on financial results : Not scheduled

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results (for the Nine Months Ended December 31, 2015)

2. Operating Results (%: Changes from the same period in the previous fiscal year)

   
   

   Ordinary Income	Ordinary Profit	Net Income Attributable to Owners of the Parent
   Nine Months Ended	Millions of Yen %	Millions of Yen %	Millions of Yen %
   December 31, 2015	851,383 (4.9)	206,686 (11.1)	129,223 2.1
   December 31, 2014	895,043 (0.9)	232,561 20.3	126,511 15.9

   (Note) Comprehensive Income:

   Nine months ended December 31, 2015 ¥125,948 million, (59.1)%

   Nine months ended December 31, 2014

   ¥308,148 million, 40.1%

   
   

   Net Income per Share of Common Stock	Net Income per Share of Common Stock (Fully Diluted)
   Nine Months Ended	Yen	Yen
   December 31, 2015	33.53	33.52
   December 31, 2014	31.83	31.82

   
   

3. Financial Position




Total Assets	Net Assets	Net Assets to Total Assets Ratio
As of	December 31, 2015 March 31, 2015	Millions of Yen	Millions of Yen	%
		50,249,719	2,776,440	4.9
		46,235,949	2,716,973	5.2

(Reference) Shareholders' Equity:

As of December 31, 2015

As of March 31, 2015

¥2,446,063 million

¥2,389,824 million




(Notes) Net Assets to Total Assets Ratio = (Net Assets - Subscription Rights to Shares - Minority Interests) / Total Assets

Net Assets to Total Assets Ratio stated above is different from a capital adequacy ratio prescribed in the notification of the Financial Services Agency with respect to the capital adequacy ratio.




4. Cash Dividends per Share of Common Stock

   
   

   Annual Cash Dividends per Share of Common Stock
   1st Quarter- End		2nd Quarter- End	3rd Quarter- End		Fiscal Year- End	Total
   Fiscal Year	Ended March 31, 2015 Ending March 31, 2016	－ －	Yen	Yen	－ －	Yen	Yen	Yen
   				5.50			6.50	12.00
   				6.50
   Ending March 31, 2015 (Forecast)		6.50	13.00

   (Note) Revision of latest announced estimates for cash dividends per share of common stock: None

   
   

5. Consolidated Earnings Forecast (for the Fiscal Year Ending March 31, 2016)

   (%: Changes from the same period in the previous fiscal year)

   
   

   Ordinary Profit	Net Income Attributable to Owners of the Parent	Net Income per Share of Common Stock
   Fiscal Year Ending March 31, 2016	Millions of Yen % 280,000 (4.3)	Millions of Yen % 175,000 9.6	Yen 45.51

   * Notes

6. Changes in Significant Subsidiaries during the Nine Months Ended December 31, 2015: None

   (Changes in "specified subsidiaries" resulted in changes in the scope of consolidation)

   
   

7. Specific Accounting Treatments for the Preparation of the Quarterly Consolidated Financial Statements: Yes

   (For further details, please refer to "2. Matters Relating to Summary Information (Notes)" on page 2 of Accompanying Materials.)

   
   

8. Changes in Accounting Policies, Changes in Accounting Estimates, and Restatements

9. Changes in accounting policies due to the revision of accounting standards: Yes

10. Changes in accounting policies other than 1) above: Yes

11. Changes in accounting estimates: Yes

12. Restatements: None

SuMi TRUST Holdings' subsidiary, Sumitomo Mitsui Trust Bank, Limited ("SuMi TRUST Bank"), changed its depreciation method effective from the three months ended June 30, 2015, and this falls under "Changes in accounting policies that are difficult to distinguish from changes in accounting estimates." For further details, please refer to "2. Matters Relating to Summary Information (Notes)" on page 2 of Accompanying Materials.)




As of December 31, 2015	3,903,486,408 shares	As of March 31, 2015	3,903,486,408 shares
As of December 31, 2015	57,984,609 shares	As of March 31, 2015	40,446,221 shares
For the nine months ended December 31, 2015	3,854,180,684 shares	For the nine months ended December 31, 2014	3,902,106,734 shares

13. Number of Shares Issued (Common Stock)

1. Number of shares issued (including treasury stock):

2. Number of treasury stock:

3. Average number of outstanding issued shares:







Statement Concerning the Status of the Quarterly Review Procedures

These consolidated financial results for the nine months ended December 31, 2015, are out of the scope of the quarterly review procedures required by the Financial Instruments and Exchange Act. Therefore, the quarterly review procedures on the quarterly consolidated financial statements have not been completed at the time of disclosure of the consolidated financial results for the nine months ended December 31, 2015.




Explanation Concerning the Appropriate Use of the Forecasts for Results of Operations and Other Special Matters

The forecasts for results of operations presented in this report are based on the information currently available to SuMi TRUST Holdings and certain reasonable assumptions. Actual results may differ significantly from the forecasts due to various factors.

[Accompanying Materials]




Table of Contents




1. Qualitative Information Related to the Quarterly Consolidated Financial Statements -------- 2

2. Qualitative Information Related to the Consolidated Results of Operations -------- 2

3. Qualitative Information Related to the Consolidated Financial Position -------- 2

4. Qualitative Information Related to the Consolidated Earnings Forecasts -------- 2

5. Matters Relating to Summary Information (Notes) -------- 2

6. Specific Accounting Treatments for the Preparation of the Quarterly Consolidated Financial Statements

   -------- 2

7. Changes in Accounting Policies, Changes in Accounting Estimates, and Restatements -------- 2

8. Consolidated Financial Statements -------- 3

1. Consolidated Balance Sheets -------- 3

2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income -------- 5

   Consolidated Statements of Income -------- 5

   Consolidated Statements of Comprehensive Income -------- 6

3. Notes on Going Concern Assumptions -------- 7

4. Notes on Significant Change in Total Shareholders' Equity -------- 7

1. Qualitative Information Related to the Quarterly Consolidated Financial Statements

   
   

2. Qualitative Information Related to the Consolidated Results of Operations

   For the nine months ended December 31, 2015, Net Business Profit before Credit Costs (Note) decreased by ¥4.9 billion year on year to ¥ 227.9 billion. This was primarily due to a decrease in market-related revenue recorded by SuMi TRUST Bank, despite the growth in net fees and commissions and related profit that mainly asset management and property brokerage yielded.

   Ordinary Profit decreased by ¥25.8 billion year on year to ¥206.6 billion for the nine months ended December 31, 2015. This was mainly due to an increase in credit costs affected by the non-recurrence of the reversal of Allowance for Loan Losses, which was recorded for the nine months ended December 31, 2014, despite an increase in Net Gains on Stocks.

   Net Income Attributable to Owners of the Parent for the period increased by ¥ 2.7 billion year on year to ¥ 129.2 billion, mainly due to the effect of non-recurrence of banking IT system integration costs for SuMi TRUST Bank as Extraordinary Losses, which were recorded in the same period of the prior year.

   (Note) For further details of Net Business Profit before Credit Costs, please refer to the "Explanatory Material / 3rd Quarter of Fiscal Year Ending March 31, 2016."

   
   

3. Qualitative Information Related to the Consolidated Financial Position

   As of December 31, 2015, consolidated Total Assets increased by ¥4,013.7 billion to ¥50,249.7 billion and consolidated Total Net Assets increased by ¥59.4 billion to ¥2,776.4 billion from the end of the previous fiscal year.

   In particular, Loans and Bills Discounted increased by ¥1,260.8 billion to ¥26,810.9 billion, Securities increased by ¥1,555.8 billion to ¥6,369.2 billion, and Deposits increased by ¥244.3 billion to ¥25,324.0 billion from the end of the previous fiscal year.

   
   

4. Qualitative Information Related to the Consolidated Earnings Forecasts

There are no changes to the consolidated earnings forecasts for the fiscal year ending March 31, 2016 (Ordinary Profit: ¥280.0 billion, Net Income Attributable to Owners of the Parent: ¥175.0 billion), which were announced on November 12, 2015.




5. Matters Relating to Summary Information (Notes)




1. Specific Accounting Treatments for the Preparation of the Quarterly Consolidated Financial Statements

   (Income tax expenses)

   Income tax expenses of certain consolidated subsidiaries are calculated by reasonably estimating the effective tax rate based on the expected income before income tax (net of the effects of deferred taxes) for the fiscal year to which the nine-month period pertains, and multiplying income before income tax for the nine-month period by the estimated effective tax rate.

   
   

2. Changes in Accounting Policies, Changes in Accounting Estimates, and Restatements

(Changes in accounting policies)

SuMi TRUST Holdings applied the "Accounting Standard for Business Combinations" (Accounting Standard Board of Japan (ASBJ) Statement No. 21 of September 13, 2013), " Accounting Standard for Consolidated Financial Statements " (ASBJ Statement No. 22 of September 13, 2013), and the "Accounting Standard for Business Divestitures" (ASBJ Statement No. 7 of September 13, 2013) effective from the three months ended June 30, 2015. Under these accounting standards, differences arising from changes in SuMi TRUST Holdings ' ownership interests in its subsidiaries over which it retains control are recognized in Capital Surplus, and acquisition-related costs are expensed as incurred. For business combinations completed on or after the beginning of the three months ended June 30, 2015, the revised allocation of acquisition costs, due to the finalization of the tentative accounting treatment, is reflected in the quarterly consolidated financial statements for the quarterly period in which the business combination occurred. In addition, SuMi TRUST Holdings changed the presentation of Income before Income Taxes, and minority interests are now presented as non-controlling interests. The consolidated financial statements for the nine months ended December 31, 2014, and for the previous fiscal year have been reclassified in order to reflect these changes in the presentation.

For the application of these accounting standards, SuMi TRUST Holdings adopted the transitional provisions in item (4), paragraph 58-2 of the Accounting Standard for Business Combinations, item (4), paragraph 44-5 of the Accounting Standard for Consolidated Financial Statements, and item (4), paragraph 57-4 of the Accounting Standard for Business Divestitures effective from the beginning of the three months ended June 30, 2015. The effects of these changes on Ordinary Profit, Income before Income Taxes, Capital Surplus for the nine months ended and as of December 31, 2015, are immaterial.

(Changes in accounting policies that are difficult to distinguish from changes in accounting estimates)

SuMi TRUST Bank changed its depreciation method for tangible fixed assets (excluding lease assets) from the declining- balance method to the straight-line method effective from the three months ended June 30, 2015, except for buildings (excluding their accompanying facilities) acquired on or after April 1, 1998, which are depreciated using the straight-line method.

This change was made as a result of reviewing the depreciation method for tangible fixed assets after the completion of the banking IT system integration, in consideration for future investment plans, such as renovation of clerical centers, opening of new branches, and consolidation of branches with redundant functions. SuMi TRUST Bank's tangible fixed assets are expected to be used continuously over a long term, leading to a conclusion that the straight-line method, under which expenses are evenly distributed through the asset's useful life in line with its actual usage, allows the appropriate presentation of profit and loss.