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December 23, 2021

Sumitomo Mitsui eyes expansion via acquisitions and integration

By Shivam Mishra

Japan’s Sumitomo Mitsui Financial Group (SMFG) is actively looking to create a leading financial conglomerate in the Asian region through acquisitions and integration of its locally acquired operations.

Speaking to Reuters about the bank’s long term strategy CEO Jun Ohta said: “We have just planted seeds. We’re at the starting point.”

Japan’s second-largest lender is actively working to bolster its presence in Asia, with a focus on four countries India, Indonesia, Philippines, and Vietnam.

As part of its expansion plans, earlier this year, the bank signed a $2bn deal for a 74.9% stake in Fullerton India, a non-banking financial company.

In April, this year, SMBC Consumer Finance (SMBCCF), a consolidated subsidiary of SMFG brokered a deal to acquire a 49% equity stake in Vietnam’s VPBank Finance Company (FE Credit).

In the Philippines, SMFG acquired a nearly 5% stake in Rizal Commercial Banking Corporation for more than $90m.

Ohta told the publication that SMFG is will set up a team, which will be headquartered in Singapore and Tokyo, to work on post-merger integrations of the firms that the bank has invested in.

Speaking about SMFG’s overseas strategy, Ohta said “we are always in search (of opportunities) to grow further.”

The lender owns minority stakes in some companies and Ohta opines that it would have to foray into the securities business to achieve its goals.

The US investment banking market is also an area of focus for SMFG for it has very little presence in that space.

SMFG’s deal with Jefferies Financial Group is a step in that direction but Ohta feels that its needs to expand more.

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