Sumitomo Mitsui Financial Group Inc. plans to persist with its overseas expansion by boosting headcount and seeking acquisitions even as the coronavirus clouds the profit outlook for Japan’s second-largest bank.
The lender aims to add 500 staff overseas over the next three years, while reducing domestic headcount by 6,500 during the same period, a senior bank official said. It’s looking for opportunities to buy boutique mergers advisory firms in developed markets, the official said, asking not to be identified due to internal policy.
Chief Executive Officer Jun Ohta has signaled a willingness to seize growth opportunities outside of Japan even as Covid-19 hammers the global economy and causes bad-loan costs to swell. That’s in contrast with some lenders elsewhere in the world that are retreating to their home markets to serve struggling companies.
The overseas expansion is part of a midterm plan announced last week. Much of the staff increase will be in Asia, where it plans to expand business in countries including India, the official said. Other additions will be in compliance and risk management in the US and Europe.
It’s also seeking to add traders in London and New York, the person said. The bank’s sales and trading business in London and New York remains small and it needs to increase staff in rates and other areas, the official said, adding that it will consider expanding trading in bonds that are below investment grade.
Sumitomo Mitsui is interested in buying a US regional bank, although an acquisition is unlikely to happen in the near future because of regulatory hurdles and the need for a large war chest to complete the deal, the official said.
The Tokyo-based bank last week forecast a 43% drop in profit this fiscal year as it expects credit costs to jump to the highest since the global financial crisis.