Sumitomo Mitsui Financial Group Inc (SMFG) plans to speed expansion in Asia via its non-banking units like consumer finance and credit, hoping to lure the region's retail clients, the head of Japan's third-largest lender by assets said.
"What we have in mind is sales finance for cars, air conditioners and TVs in Southeast Asia. It does not have to be (done by our core bank) SMBC. We can use a vehicle best suited for the purpose," Koichi Miyata, president of SMFG, told Reuters in an embargoed interview conducted on Friday.
SMFG and other top Japanese banks anticipate that strong growth in Asia will fill the void left by the retreat of troubled European rivals. Japanese banks' overseas activities have so far been limited to corporate finance work like lending to blue-chip companies and infrastructure projects. Retail businesses remain a major challenge for those banks given their lack of branch networks outside Japan.
Executives say they need full-scale retail operations in Asia if they are to enjoy real growth potential in the region's emerging economies. Non-banking units - financial institutions that do not take deposits and are therefore subject to less rigorous regulation - are able to enter markets more nimbly, they say. SMFG has a card and shopping credit unit, Cedyna. Motorcycle loans in Southeast Asia are among areas of growing interest for Japanese banks, given the region's huge bike market and the dominance of Japanese manufacturers like Honda Motor.
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