2023-05-19 09:55:41
New episode in the sometimes thwarted love affair between Japanese banks and Wall Street. Sumitomo Mitsui Financial Group (SMFG) wants to grow in market activities in the United States, a country where it is mainly present in corporate banking.
«In the United States, we mainly carried out commercial banking activities focused on loanssaid Fumihiko Ito, chief financial and strategic officer of the bank, during a press conference relayed by Bloomberg. We will move into investment banking activities such as primary stocks and bonds and mergers and acquisitions advisory, commission-generating activities».
Skills sharing
SMFG made an impression at the end of April, announcing that it was going to triple its stake in the capital of Jefferies, as part of the expansion of its strategic alliance with the American investment bank. From 4.5%, this share constituted in 2021 is intended to rise to 15%. At current market prices, and counting the initial investment as well as $2.25 billion in financing provided at the time to Jefferies, this participation represents for Japan’s second largest banking group a stake of $3.4 billion. (3.1 billion euros).
The alliance supposes a common follow-up of large customers and a sharing of competences. SMFG subsidiary Sumitomo Mitsui Banking Corp will handle credit products and debt markets, while Jefferies will lead M&A and equity markets.
SMFG follows the strategy of its competitor MUFG, the first Japanese bank. This had provided support of 9 billion dollars to Morgan Stanley in the midst of the financial crisis in 2008, which led it to become the largest shareholder of the American bank with nearly 23% of the capital. On the other hand, Mizuho Financial has ruled out teaming up with an American bank, relying on its own resources to grow in the United States.
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