BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

WASHINGTON, 0. C. 20551

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

May 7, 2013

William Haney, Esq.
Joint General Manager and

General Counsel, Americas Division
Sumitomo Mitsui Banking Corporation
277 Park Avenue
New York, New York 10172

Dear Mr. Haney:

The Board of Governors (“Board”), has reviewed the election filed by
Sumitomo Mitsui Financial Group, Inc. (“SMFG”), and its subsidiary, Sumitomo Mitsui
Banking Corporation (“SMBC”), both of Tokyo, Japan, and both bank holding
companies within the meaning of the Bank Holding Company Act (“BHC Act”), to
become financial holding companies (“FHCs”) pursuant to sections 4(k) and 4(J) of the
BHC Act! and sections 225.82 and 225.91 of the Board’s Regulation Y.

SMFG and SMBC have certified that they are well capitalized and well
managed pursuant to section 4(/) of the BHC Act, as amended by section 606(a) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank
Act”).’ SMFG and SMBC have also certified that their U.S. depository institution
subsidiary, Manufacturers Bank, Los Angeles, California, meets the well-capitalized
standard of section 225.2(r)(2) and the well-managed standard of section 225.2(s) of
Regulation Y.*

The Board has reviewed the capital levels of SMFG and SMBC, as well as
the management of SMBC’s combined U.S. operations, the examination rating and
combined ROCA rating for those operations, and the relevant examination ratings

' 12 U.S.C. §§ 1843(k) and (J).
> 12 CFR 225.82 and 225.91.

> Pub. L. No. 111-203, 124 Stat. 1376. Section 606(a) of the Dodd-Frank Act amended
the BHC Act to require a bank holding company to be well capitalized and well managed
in order to become an FHC.

4 12 CER 225.2(1)(2) and 225.2(s).


Ds

received by Manufacturers Bank. The Board has also confirmed that SMFG’s and
SMBC’s home country supervisor, the Financial Services Agency of Japan, does not
object to SMFG’s and SMBC’s expansion of activities in the United States to include
activities permissible for an FHC.” The Board recently determined that SMFG and
SMBC are subject to comprehensive consolidated supervision by their home country
supervisor.®

In evaluating the capital levels and management of SMFG and SMBC, the
Board is required to apply standards comparable to those applied to U.S. companies
seeking to be financial holding companies, giving due regard to the principle of national
treatment and equality of competitive opportunity.’ This evaluation includes a review of
the factors set forth in section 225.92(e) of Regulation Y.*

Based on all the facts of record, the Board has determined that SMFG and
SMBC are well capitalized and well managed and that their elections to become FHCs
are effective as of the date of this letter. In taking this action, the Board relied on all the
representations and commitments that SMFG and SMBC made to the Board in
connection with their elections. These representations and commitments are conditions
imposed in writing and, as such, may be enforced under applicable provisions of law.

The Board’s determination is conditioned on compliance by SMFG,
SMBC, and any relevant subsidiary of either company with any future final rule
implementing section 606(a) of the Dodd-Frank Act. In addition, SMFG and SMBC may
continue to claim the benefits of FHC status as long as (i) all of SMFG’s and SMBC’s
U.S. depository institution subsidiaries remain well capitalized and well managed in
accordance with the standards set forth in section 225.2 of Regulation Y (12 CFR 225.2),
and (ii) SMFG and SMBC remain well capitalized and well managed in accordance with
the standards set forth in section 4(/) of the BHC Act, as amended by section 606(a) of
the Dodd-Frank Act. Accordingly, SMFG and SMBC must provide notice to the Federal
Reserve Bank of New York when they become aware that they or any U.S. depository
institution they control ceases to be well capitalized or well managed.? Moreover, SMFG
and SMBC may not commence any additional activities under sections 4(k) or 4(n) of the
BHC Act," or acquire control of a company engaged in activities under those sections, if

> See 12 CFR 225.90(c)(2).

§ See Sumitomo Mitsui Financial Group and Sumitomo Mitsui Banking Corporation
FRB Order No. 2012-11 (October 31, 2012).

7 12 US.C. § 1843(1)(3).

8 12 CFR 225.92(e).

° See 12 CFR 225.83(b).

10 12 U.S.C. §§ 1843(k) and (n).



3-

any U.S. insured depository institution subsidiary receives a rating of less than
“satisfactory” under the Community Reinvestment Act.'' SMFG and SMBC are required
to submit form FR Y-7Q quarterly.

Sincerely yours,

Margaret McCloskey Shanks
Deputy Secretary of the Board

cc: Ivan J. Hurwitz, Vice President
Federal Reserve Bank of New York

See 12 CFR 225.84.