Latest news with #SMFG
The Hindu
27-05-2025
- Business
- The Hindu
Yes Bank stake sale to SMFG may pave way for more foreign banks' entry to India: Fitch Ratings
Yes Bank stake sale to Sumitomo Mitsui Financial Group (SMFG ) would set the stage for more foreign banks investing in mid-sized banks in India, according to a commentary by Fitch Ratings. 'Acquiring banks would benefit from access to a broader branch network, enabling franchise growth despite India's intensely competitive financial landscape, while the acquired banks could also benefit from the potential provision of funding and capital over the medium term,' Fitch said in its statement. The ratings agency also said that currently foreign banks hold 3% Indian customers' loans and 6% of assets. While Fitch sees a possibility of an increase in such foreign investment in banks in the system, regulatory issues in the mid-sized banks may keep them cautious, Fitch added in its commentary but added that foreign investment may come with increased oversight and governance. Reserve Bank of India regulations do not allow foreign banks to have more than 26% of voting rights and 15% of the ownership in India banks. 'The YES BANK transaction will be the first significant acquisition by a foreign bank and would give SMFG significant control over YES BANK as the largest shareholder with two board appointees. It could pave the way for future transactions, if the Reserve Bank of India's (RBI) approval for the transaction sets a precedent,' the Fitch release read. 'This is the third acquisition after DBS take over of Lakshmi Vilas Bank, Fair fax's stake purchase of Syrian Catholic Bank and now the SMFG stake takeover from Yes Bank. Next on line could be IDBI,' according to Karan Gupta, Senior Analyst at India Ratings, adding that cap on 15% ownership may be reconsidered by the RBI as seen in few other cases. 'Setting up branches is difficult and taking over franchises is easier for foreign banks if they want to build a network in India,' he added.
Economic Times
27-05-2025
- Business
- Economic Times
SMFG stake buy in Yes Bank to pave way for other foreign entrants in Indian banking sector: Fitch
Fitch Ratings on Tuesday said Sumitomo Mitsui Financial Group's (SMFG) 20 per cent stake buy in Yes Bank could pave way for other foreign entrants in the Indian banking sector. India's foreign investment norms cap voting rights for investors in banks at 26 per cent and investments by financial institutions in Indian banks at 15 per cent, which have deterred such stake sales, its said. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Fitch Ratings on Tuesday said Sumitomo Mitsui Financial Group's (SMFG) 20 per cent stake buy in Yes Bank could pave way for other foreign entrants in the Indian banking sector. India's foreign investment norms cap voting rights for investors in banks at 26 per cent and investments by financial institutions in Indian banks at 15 per cent, which have deterred such stake sales, its said."The Yes Bank transaction will be the first significant acquisition by a foreign bank and would give SMFG significant control over Yes BANK as the largest shareholder with two board appointees. It could pave the way for future transactions, if the Reserve Bank of India's (RBI) approval for the transaction sets a precedent," Fitch said in a increase in the 26 per cent cap on voting rights, or the 15 per cent investment threshold could encourage foreign bank investors."We anticipate that there could be opportunities for investments in India's mid-sized banks by foreign banks looking to expand their presence in India, although we believe the RBI's preference is for foreign banks with strong performance and governance to acquire stakes larger than 26 per cent through wholly-owned Indian subsidiaries regulated in India," Fitch May 9, Yes Bank announced that SMBC will acquire a 20 per cent stake from its shareholders, including the State Bank of India and several Indian banks, which had participated in the banks' reconstruction scheme in 2020, for around Rs 13,480 crore."The announced sale of a 20 per cent stake in Yes Bank to Sumitomo Mitsui Financial Group, Inc, could pave the way for other foreign entrants in the Indian banking sector," says Fitch Ratings."It also reflects Yes Bank's significant recovery following its 2020 regulatory rescue," Fitch banks hold about 6 per cent of India's banking assets though their loan share is significantly lower at about 3 per cent. In contrast, India's top 10 banks account for about 77 per cent of the sector's loans and sees investor interest in Indian banks driven by significant growth potential, with expected GDP growth of over 6 per cent in the financial year ending March 2027 (FY27), manageable risks from trade disruptions, and stronger financial performance amid regulatory improvements addressing past asset quality issues."However, significant losses due to notable accounting discrepancies and management changes at a mid-sized private bank in the quarter ended March 31, 2025 indicate ongoing governance and oversight challenges."Increased global bank involvement could enhance governance standards and practices in India's financial sector, aligning with the RBI's efforts," Fitch sector IndusInd Bank has reported occurrence of accounting frauds estimated at Rs 3,400 crore in its March quarter results. The bank board suspects involvement of former key management personnel and some employees in the fraud.
Asahi Shimbun
15-05-2025
- Business
- Asahi Shimbun
Japan's megabanks forecast more record profits despite tariff uncertainty
The signboards of three megabanks in Tokyo (Asahi Shimbun file photo) Japan's three largest banking groups posted record annual net profit in the last financial year, benefitting from increased corporate activity due to the end of deflation in Japan. The banks also expect to increase earnings this financial year--forecasting record profits once again--even though the economic outlook has been muddied by U.S. President Donald Trump's sweeping global tariffs. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group booked net profits of 1.86 trillion yen ($12.76 billion), 1.18 trillion yen and 885 billion yen, respectively, in the 12 months ended March 2025. The banks said the impact of the tariffs and the resulting uncertainty was already being felt, and was accounted for in their forecasts. Japan's largest lender MUFG cited a global economic slowdown, continued market volatility and lost trust in the U.S. dollar among risk factors, but nevertheless forecast a record net profit this financial year of 2 trillion yen. SMFG projected net profit of 1.3 trillion yen and Mizuho 940 billion yen, including downward adjustments of 100 billion yen and 110 billion yen, respectively, to account for continued uncertainty. Mizuho's pipeline of equity capital markets and mergers and acquisitions deals is currently backed up as shifting business conditions make decision making on large-scale investment challenging, Chief Executive Masahiro Kihara told a press briefing in Tokyo. But the banks expect Japanese companies to keep investing and each has extensive overseas operations across different financial services including retail and investment banking, asset management and wealth management. "We have operations across Japan, Asia and the Americas with varied sources of profit, so we are strong in any business environment," MUFG Chief Executive Hironori Kamezawa told a press briefing. MUFG owns 24% of U.S. bank Morgan Stanley, a business alliance that began in 2008. The holding contributed more than a quarter of MUFG's annual net profit. Asia has also been a growth market for the banks. Most recently, SMFG announced last week its acquisition of a 20% stake in Indian private lender Yes Bank. But the tariff uncertainty means SMFG too is holding off on further acquisitions, CEO Toru Nakashima said on Wednesday. Japan's banks have been among the largest beneficiaries of the end of deflation in Japan, which has encouraged Japanese companies to borrow to invest at home and abroad and carry out mergers and acquisitions. The return of inflation also pushed the Bank of Japan to end its policy of negative interest rates in March 2024 and hike rates twice thereafter, raising lending margins for Japanese banks.
Gulf Today
15-05-2025
- Business
- Gulf Today
Japan's three largest banks make record annual profits
Japan's three largest banking groups posted record annual net profit in the last financial year, benefitting from increased corporate activity due to the end of deflation in Japan. The banks also expect to increase earnings this financial year - forecasting record profits once again - even though the economic outlook has been muddied by US President Donald Trump's sweeping global tariffs. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group booked net profits of 1.86 trillion yen ($12.76 billion), 1.18 trillion yen and 885 billion yen, respectively, in the 12 months ended March 2025. The banks said the impact of the tariffs and the resulting uncertainty was already being felt, and was accounted for in their forecasts. Japan's largest lender MUFG cited a global economic slowdown, continued market volatility and lost trust in the US dollar among risk factors, but nevertheless forecast a record net profit this financial year of 2 trillion yen. SMFG projected net profit of 1.3 trillion yen and Mizuho 940 billion yen, including downward adjustments of 100 billion yen and 110 billion yen, respectively, to account for continued uncertainty. Mizuho's pipeline of equity capital markets and mergers and acquisitions deals is currently backed up as shifting business conditions make decision making on large-scale investment challenging, Chief Executive Masahiro Kihara told a press briefing in Tokyo. But the banks expect Japanese companies to keep investing and each has extensive overseas operations across different financial services including retail and investment banking, asset management and wealth management. 'We have operations across Japan, Asia and the Americas with varied sources of profit, so we are strong in any business environment,' MUFG Chief Executive Hironori Kamezawa told a press briefing. MUFG owns 24 per cent of US bank Morgan Stanley, a business alliance that began in 2008. The holding contributed more than a quarter of MUFG's annual net profit. Asia has also been a growth market for the banks. Most recently, SMFG announced last week its acquisition of a 20 per cent stake in Indian private lender Yes Bank. But the tariff uncertainty means SMFG too is holding off on further acquisitions, CEO Toru Nakashima said on Wednesday. Japan's banks have been among the largest beneficiaries of the end of deflation in Japan, which has encouraged Japanese companies to borrow to invest at home and abroad and carry out mergers and acquisitions. The return of inflation also pushed the Bank of Japan to end its policy of negative interest rates in March 2024 and hike rates twice thereafter, raising lending margins for Japanese banks. PayPay CEO Ichiro Nakayama, SoftBank Corp CEO Junichi Miyakawa, Sumitomo Mitsui Financial Group CEO Toru Nakashima and Sumitomo Mitsui Card President Yukihiko Onishi pose attended a press conference in Tokyo, Japan, on Thursday. Meanwhile talk of big fiscal spending and a subsequent spike in super-long yields are raising questions over just how quickly the Bank of Japan can taper its bond purchases, adding to the challenges it faces in removing remnants of its massive monetary stimulus.
Business Times
15-05-2025
- Business
- Business Times
Japan's megabanks forecast more record profits despite tariff uncertainty
[TOKYO] Japan's three largest banking groups posted record annual net profit in the last financial year, benefitting from increased corporate activity due to the end of deflation in Japan. The banks also expect to increase earnings this financial year – forecasting record profits once again – even though the economic outlook has been muddied by US President Donald Trump's sweeping global tariffs. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group booked net profits of 1.86 trillion yen (S$17.8 billion), 1.18 trillion yen and 885 billion yen, respectively, in the 12 months ended March 2025. The banks said the impact of the tariffs and the resulting uncertainty was already being felt, and was accounted for in their forecasts. Japan's largest lender MUFG cited a global economic slowdown, continued market volatility and lost trust in the US dollar among risk factors, but nevertheless forecast a record net profit this financial year of two trillion yen. SMFG projected net profit of 1.3 trillion yen and Mizuho 940 billion yen, including downward adjustments of 100 billion yen and 110 billion yen, respectively, to account for continued uncertainty. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Mizuho's pipeline of equity capital markets and mergers and acquisitions deals is currently backed up as shifting business conditions make decision making on large-scale investment challenging, chief executive Masahiro Kihara told a press briefing in Tokyo on Thursday (May 15). But the banks expect Japanese companies to keep investing and each has extensive overseas operations across different financial services including retail and investment banking, asset management and wealth management. 'We have operations across Japan, Asia and the Americas with varied sources of profit, so we are strong in any business environment,' MUFG chief executive Hironori Kamezawa told a press briefing. MUFG owns 24 per cent of US bank Morgan Stanley, a business alliance that began in 2008. The holding contributed more than a quarter of MUFG's annual net profit. Asia has also been a growth market for the banks. Most recently, SMFG announced last week its acquisition of a 20 per cent stake in Indian private lender Yes Bank. But the tariff uncertainty means SMFG too is holding off on further acquisitions, CEO Toru Nakashima said on Wednesday. Japan's banks have been among the largest beneficiaries of the end of deflation in Japan, which has encouraged Japanese companies to borrow to invest at home and abroad and carry out mergers and acquisitions. The return of inflation also pushed the Bank of Japan to end its policy of negative interest rates in March 2024 and hike rates twice thereafter, raising lending margins for Japanese banks. REUTERS
