Japan’s SMBC CEO is watching out for chances to expand US assets

7:13 am Monday, April 03rd, 2023

By Makiko Yamazaki and Ritsuko Shimizu

TOKYO (Reuters) -The new head of Sumitomo Mitsui Banking Corp (SMBC) said the Japanese bank is watching closely for chances to buy assets in the United States, adding that the latest banking crisis hasn’t dented its confidence in the world’s biggest capital market.

“The U.S. market will stay attractive” despite the financial turbulence triggered by the fall of Silicon Valley Bank, Akihiro Fukutome, who was promoted from senior managing officer to chief executive on Saturday, told Reuters in an interview.

Fukutome ruled out the possibility of buying a U.S. bank as a whole but said the Japanese group would be looking at assets that may be offered for sale and a team of bankers managing those assets.

Credit Suisse Group AG’s securitised products group last year, for instance, was among opportunities his team had explored, he said. U.S. buyout fund Apollo Global Management bought most of the business.

SMBC is a core banking unit of Sumitomo Mitsui Financial Group (SMFG), Japan’s second-largest banking group after Mitsubishi UFJ Financial Group.

In an effort to bolster its U.S. presence, SMFG has teamed up with Jefferies Financial Group Inc. SMFG bought nearly 5% of Jefferies shares in 2021 to boost its leveraged finance and cross-border M&A advisory businesses in the United States.

The CEO of SMFG, Jun Ohta, told Reuters recently that he intended to eventually raise his company’s stake in Jefferies.

Fukutome also said the implosion of Silicon Valley Bank and its fallout have highlighted the stability of Japanese banks in the United States. SMBC has already received some funding inquires from domestic U.S. and Japanese companies operating there, he said.

“We are expecting more opportunities to come ahead where we can provide solutions,” he said. “Clients we helped during the global financial crisis have stayed with us since,” he added, recalling the time around the Lehman Brothers bust, when he was working in New York.

Fukutome, 60, joined Mitsui Bank, one of SMBC’s predecessor banks, in 1985 and had a three-year stint as president at Toyota Motor Corp’s financial services unit from 2018, a rarity among Japanese bank chiefs.

(Reporting by Makiko Yamazaki and Ritsuko ShimizuEditing by Shri Navaratnam)