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INVESTMENT BANKING | Staff Reporter, Japan
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Major Japanese bank to expand overseas lending by 32%

Sumitomo Mitsui Trust Holdings, Inc looks to invest a massive amount on a European buying spree.

Japan’s fourth-biggest bank by market value plans to increase its overseas loans by 32% this year to purchase assets from European lenders and provide infrastructure loans in Asia.

Sumitomo Mitsui intends to invest US$11.4 billion to attain this aim. Of this amount US$7.5 billion will be lent to foreign customers (including the proposed buyout of assets held by European banks) while the balance will go to Japanese clients operating abroad.

The bank has lent a total of US$35 billion abroad as of March 31 and has US$285 billion in loans outstanding as of the same date. Lending abroad made up about 12% of the total, with the balance from retail and corporate clients in Japan.

Japanese banks are filling the vacuum in Asia left by European banks who have withdrawn from the region to build- up capital to survive a dangerous sovereign debt crisis that has undermined confidence in the Euro

Japanese banks including Mitsubishi UFJ Financial Group, Inc. and Mizuho Financial Group, Inc. are acquiring assets and market share from European banks. Sumitomo Mitsui wants to meet demand for project financing in Asia and lend to Japanese companies expanding on the continent.

“We’ve received a slew of offers for assets from Europe including corporate loans and project financing,” said Shigeki Tanaka, general manager of wholesale business planning for Sumitomo Mitsui.

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