07 Jul 2021
Posted in Business Fundamentals
Sumitomo Mitsui Asian expansion strategy gets new push with Fullerton India, says GlobalData
Following the news that Japan-based Sumitomo Mitsui Financial Group (SMFG) has agreed to buy 74.9% equity stake in Fullerton India Credit Company Ltd (FICC) for US$2bn;
Aurojyoti Bose, Lead Analyst at GlobalData, a leading data and analytics company, offers his view:
“Despite the COVID-19 pandemic, SMFG continues its acquisition spree as predicted by GlobalData in June 2021, when it acquired 5% stake in the Philippines-based Rizal Commercial Banking Corp. We may also see SMFG making some more such strategic investments.
“Fullerton, a non-banking finance company will benefit from SMFG’s expertise in digitizing and building franchises network while SMFG’s Asian expansion strategy will get a new push by getting a foothold in India’s retail financial business.
“Owing to limited growth prospects in domestic market, SMFG shifted its focus towards inorganic growth strategy keeping an eye on emerging Asian markets such as India, the Philippines and Vietnam.
“An analysis of GlobalData’s Financial Deals database reveals that apart from the current acquisition of stake in Fullerton, SMFG also undertook several such acquisitions in the recent past.
“Besides acquiring 5% stake in Rizal Commercial Banking, the Japan’s second-largest lender also made another strategic investment in Singapore-based blockchain trade platform Contour PTE Limited in June 2021. Earlier in April, it announced plans to acquire 49% stake in Vietnam-based FE Credit.”