SMBC pauses for breath after global deal spree
SMBC’s tie-up with Jefferies is only the latest in a series of acquisitions, partnerships and initiatives it has undertaken from India to Vietnam to Wall Street. Now, says president and chief executive Jun Ohta, it is time to make them work.
There have been few more active banks worldwide in the past 12 months than Japan’s Sumitomo Mitsui Banking Corporation (SMBC).
Over the course of 2021, it has announced investments in Vietnam, the Philippines and – a real landmark – India, while striking a potentially transformative deal with Jefferies and positioning itself in global blockchain initiatives.
“We do not expect any additional investment at this point,” says Jun Ohta, president and chief executive of Sumitomo Mitsui Financial Group (SMFG), the holding company within which SMBC resides. This is not surprising: there is a lot to integrate.
Ohta is attempting two strategies at once, but they both spring from the same source. Growth is exceptionally difficult to achieve in Japan, with its ageing and shrinking population and negative interest rates, and therefore banks must look overseas.
“Our international strategy has two stories,” he tells Euromoney.
“The first is an expansion of existing lines of business. Considering the current foreign currency funding market, we will increase assets to some extent, as we have sufficient capital. [SMBC will] leverage it to enhance the overseas securities business in the US, especially DCM business.”