KBRA Affirms Ratings for Sumitomo Mitsui Financial Group, Inc.
17 Oct 2025 | New York
KBRA affirms the senior unsecured debt rating of A and the short-term debt rating of K1 for Sumitomo Mitsui Financial Group, Inc. (NYSE: SMFG)("the group"), an international financial services group. KBRA also affirms the deposit and senior unsecured debt ratings of A+ and the short-term deposit and debt ratings of K1 for Sumitomo Mitsui Banking Corporation. The Outlook for all long-term ratings is Stable. The ratings are in support of transactions rated by KBRA's Financial Institutions and CMBS teams.
| This credit rating is an unsolicited credit rating. | |
|---|---|
| With Rated Entity or Related Third-Party Participation | No |
| With Access to Internal Documents | No |
| With Access to Management | No |
The ratings reflect SMFG’s diversified business model and strong market position in Japan, supported by sound financial fundamentals, including healthy asset quality, solid capital, ample liquidity, and profitability historically above domestic peers. Revenue continues to be supported by SMFG’s diversified fee-based businesses. However, profitability remains modest relative to international peers reflecting the structure and competitive nature of the Japanese banking industry. As domestic interest rates begin to normalize, net interest margins are expected to widen following a brief adjustment period, which should further support earnings. SMFG’s diversified business model supports the group in navigating challenging global conditions. That said, KBRA expects earnings to remain pressured by elevated credit costs and a gradual, uneven recovery. SMFG has a solid funding profile, with a large base of stable domestic deposits. However, the group remains somewhat reliant on wholesale funding in foreign currencies to support its overseas operations. Despite an uncertain environment marked by geopolitical tensions, inflation, and domestic consumption pressures, KBRA expects SMFG’s asset quality to remain resilient, supported by diversified portfolios and conservative underwriting. SMFG’s capital position is solid and reflective of its risk profile. In addition to the group’s fundamental credit strengths, the ratings also reflect SMFG’s strong market position in Japan and the high likelihood of government support in the event of need.
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