Sumitomo Mitsui Financial Group Inc, Japan’s second-largest lender by assets has said that it would acquire a 74.9% stake in Fullerton India for $2 billion, as the bank expands its business elsewhere in Asia amid low-interest rates at home, marking the first entry into the South Asian country’s retail financial business by a Japanese bank. Japan’s second-largest lender will eventually acquire the rest of the Indian credit firm from Fullerton Financial Holdings Pte at a later stage, it said in a statement, without providing terms of the transaction, reported Mint.
Fullerton India began operations in 2007. The company is a wholly-owned subsidiary of FFH, which itself is fully owned by Singapore state investment firm Temasek. It operates in verticals including personal and business loans, SME loans, and housing finance. It has more than 14,000 employees who serve over 3.6 million customers across the country.
SMFG offers a diverse range of financial services, including commercial banking, leasing, securities, and consumer finance, in Japan. It is listed on the Tokyo and New York Stock Exchanges and had a market capitalization of about $47.4 billion as of June 30.
Given a slow-growing domestic market, Japanese banks including SMFG have sought business opportunities outside the country, which faces an aging and shrinking population. The bank took control of Indonesian lender PT Bank Tabungan Pensiunan Nasional in 2019 after acquiring a minority stake earlier. Sumitomo Mitsui is looking for targets in Vietnam, the Philippines, and India, Chief Executive Officer Jun Ohta said in an interview in December.
Sumitomo Mitsui in April agreed to buy a 49% stake in Vietnamese consumer lender FE Credit. Last month, the bank said it will buy a 4.99% stake in Rizal Commercial Banking Corp. of the Philippines for 4.48 billion pesos ($91 million).