Optional Cancellation of Interest Payments:

If SMFG determines that it is necessary to cancel payment of interest on the Notes at any time and in its sole discretion, SMFG may cancel payment of all or part of the interest accrued on the Notes on an Interest Payment Date (including additional amounts with respect thereto, if any). SMFG may cancel any payment of all or part of interest pursuant to the foregoing, even if no cancellation of interest is required or the amount so cancelled exceeds the amount SMFG is required to cancel pursuant to the mandatory interest cancellation provisions in the Indenture. If SMFG determines not to make an interest payment (or if SMFG determines to make a payment of a portion, but not all, of such interest payment) on any Interest Payment Date, such non-payment will be deemed to be an effective cancellation of such interest payment (or the portion of such interest payment not paid) without any further action being taken or any other condition being satisfied.

Mandatory Cancellation of Interest Payments:

SMFG will be prohibited from paying, and will cancel, all or part of the interest on the Notes on an Interest Payment Date (including additional amounts with respect thereto, if any), if, and to the extent that, on such Interest Payment Date, the amount of Distributable Amounts (as defined below) is less than the sum of (1) the aggregate amount of interest that should have been paid in respect of the Notes on such Interest Payment Date (disregarding the effect of any non-business day adjustments), (2) the aggregate amount of interest and dividends that should have been paid in respect of any Additional Tier 1 Instruments on the same date as such Interest Payment Date (disregarding the effect of any non-business day adjustments), and (3) the aggregate amount of interest and dividends paid in respect of the Notes and Additional Tier 1 Instruments, excluding amounts already deducted from Distributable Amounts, on or after the first day of the fiscal year of SMFG in which such Interest Payment Date falls and before such Interest Payment Date (disregarding the effect of any non-business day adjustments).

“Distributable Amounts” means, in respect of any Interest Payment Date of the Notes, SMFG’s distributable amounts (bunpai kano gaku) on such Interest Payment Date calculated in accordance with the Companies Act.

Effect of a Cancellation of Interest Payment; Dividend Stopper

Interest payments are non-cumulative, and any interest amount (including additional amounts with respect thereto, if any), the payment of which is cancelled (in whole or in part) either (i) in our discretion, as described above in “—Optional Cancellation of Interest Payments,” or (ii) because such cancellation is mandatory, as described above in “—Mandatory Cancellation of Interest Payments,” will be deemed not to have accrued and will not be due and payable at any time thereafter, and we shall be discharged and released from any and all of our obligations to pay such cancelled interest (and additional amounts with respect thereto, if any) on the notes. Non-payment of such cancelled interest (or additional amounts with respect thereto, if any) shall not constitute a breach, a default, an event of default or an event of acceleration under the terms of the notes or the Indenture. Accordingly, holders or beneficial owners of the notes will not have any claim therefor, whether or not interest is paid in respect of any other period. See “—No Events of Default or Rights of Acceleration.”

The Notes may be redeemed at the option of SMFG, in whole, but not in part, subject to prior confirmation of the FSA, if such confirmation is required under the Applicable Capital Adequacy Regulations, on December 5, 2036 or any subsequent Interest Rate Reset Date, and on giving not less than ten Business Days nor more than 60days’ notice of redemption to the holders of the Notes and to the trustee, at a redemption price equal to 100% of the Original Principal Amount of the Notes together with any accrued and unpaid interest (including additional amounts with respect thereto, if any), to (but excluding) the date fi xed for redemption; provided, however, that SMFG shall not have such option to redeem the Notes if the principal amount of the Notes has been subject to one or more Going Concern Write-Downs and such written down amount has not been reinstated in full on the date fixed for redemption.

Optional Regulatory Redemption:

The Notes may be redeemed at SMFG’s option, in whole, but not in part, subject to prior confirmation of the FSA, if such confirmation is required under the Applicable Capital Adequacy Regulations, at any time, on giving not less than ten Business Days nor more than 60 days’ notice of redemption to the holders of the Notes and to the trustee, at a redemption price equal to 100% of the Current Principal Amount of the Notes on the date fixed for redemption together with any accrued and unpaid interest (including additional amounts with respect thereto, if any) to (but excluding)the date fixed for redemption if SMFG determines after consultation with the FSA that there is more than an insubstantial risk that the Notes will be partially or fully excluded from SMFG’s Additional Tier 1 Capital under the applicable standards set forth in the Applicable Capital Adequacy Regulations and such exclusion cannot be avoided by SMFG through the taking of reasonable measures available to SMFG.