September 30, 2016
Sumitomo Mitsui Financial Group, Inc.
Sumitomo Mitsui Banking Corporation
SMBC Nikko Securities Inc.
SMBC Friend Securities Co., Ltd.
Execution of the Merger Agreement between
SMBC Nikko Securities and SMBC Friend Securities

Tokyo, September 30, 2016 --- Sumitomo Mitsui Financial Group, Inc. (SMFG, President:Koichi Miyata), Sumitomo Mitsui Banking Corporation (SMBC, President and CEO: Takeshi
Kunibe), SMBC Nikko Securities Inc. (SMBC Nikko, President and CEO: Yoshihiko Shimizu)
and SMBC Friend Securities Co., Ltd. (SMBC Friend, President: Koichi Danno, and togetherwith SMBC Nikko, the “Two Securities Companies”), having approved the proposed merger ofSMBC Nikko and SMBC Friend (the “Merger”), entered into a memorandum of understanding,and proceeded with further considerations and discussions regarding the Merger, as announced
in the press release “Memorandum of Understanding on the Merger between SMBC Nikko
Securities and SMBC Friend Securities” dated May 12, 2016 (the “MoU Press Release”),
hereby announce, as of today, that Two Securities Companies have executed a merger
agreement.

1. Objectives of the Merger
As announced in the MoU Press Release, the objective of the Merger is to fundamentallystrengthen the competitiveness by taking full advantage of synergies from the Merger while
capitalizing on the strengths of each of the Two Securities Companies.
Specifically, it is contemplated that the Merger will result in: (1) improved customer
satisfaction as a result of the increased product offering and product-related research, theenhancement of sales channels, and the reinforcement of consulting type sales, (2)enhancement of productivity through the optimization of sales personnel staffing as well as
the improvement of employee motivation from strengthening of competitiveness and betterindustry positioning, (3) streamlining of corporate management units which will allow us toachieve cost saving synergies resulting from the consolidation of management infrastructuresuch as overlapping functions, systems, sales channels and others.
In order to realize the synergies from an earlier stage, the implementation of personnel
secondments and the supply of certain SMBC Nikko’s products to SMBC Friend will beconsidered prior to the Merger.

2. Outline of the Merger(1)

Contemplated Schedule for the Merger
Execution date of the Merger AgreementEffective date

September 30, 2016
January 1, 2018 (tentative)(2)

Structure of the Merger
The structure of the Merger will be an absorption-type merger with SMBC Nikko
as the surviving company and SMBC Friend as the absorbed company. As
announced in the MoU Press Release, by October 2016, SMBC Nikko will become awholly owned direct subsidiary of SMFG.

(3)

Details of Allotment related to the Merger
Due to the fact that SMFG will own all outstanding shares in Two Securities
Companies as of the time immediately before the Merger becomes effective, there
will be no allotment of shares or any cash, etc. distributed to the shareholders ofSMBC Friend upon the Merger.

(4)

Preparation for the Merger
As previously announced in the MoU Press Release, in order to facilitate
preparations for the Merger, the “Merger Preparation Committee” has beenestablished. Sub-committees which have been established under the Merger
Preparation Committee conduct individual merger preparations such as front office
functions, planning, personnel, operations, system, risk management and complianceand others.

3. Status after the Merger
Company name:
Capital relationship:
Location of the head office:Business Profile:

SMBC Nikko Securities Inc.
Wholly owned subsidiary of SMFG
3-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo(Current location of SMBC Nikko’s head office)
Securities services

4. Corporate Profile of the Merged Companies(3) Title and Name ofRepresentative

3-1, Marunouchi 3-chome,
Chiyoda-ku, Tokyo
Yoshihiko Shimizu,
President and CEO(As of the end of June 2016)
SMBC Friend Securities Co.,Ltd.
7-12, Nihonbashi-Kabutocho,
Chuo-ku, Tokyo
Koichi Danno,
President(4) Business Profile

Securities services

Securities services(1) Company Name
(2) Location of Head Office

SMBC Nikko Securities Inc.

(5) Establishment

June 15, 2009

March 2, 1948

(6) Fiscal Year End

MarchMarch(7) Total Assets (Consolidated)

10,944,526 million yen

358,167 million yen(8) Net Assets (Consolidated)

696,471 million yen

214,549 million yen

8,944(as of the end of March 2016)
124 branches(as of September 30, 2016)

1,890(as of the end of March 2016)61 branches(58 branches, 3 satellites)(9) Number of Employees(10) Number of BranchesEnd.