Sumitomo Mitsui, S. Korea's Kookmin close to tie-up deal.
Sumitomo Mitsui Banking Corp. and major South Korean commercial bank Kookmin Bank have entered the final phase of talks to strike a comprehensive tie-up, including the joint provision of large international loans, sources close to the talks said Friday.
Sumitomo Mitsui Banking President Masayuki Oku will fly to Seoul possibly by the end of next week to sign a contract regarding the terms of the tie-up agreement, the sources said.
Following the signing procedure, the two large banks will announce the accord, they said. The deal also calls for them to introduce customers to each other.
Sumitomo Mitsui Banking, the core banking unit under Sumitomo Mitsui Financial Group Inc., wants to enhance its international lending operations on the strength of a tie-up with the major South Korean bank, the sources said.
Sumitomo Mitsui is aware of trends in the South Korean market where loan demands are on the rise with real estate prices following an upward path in recent years, they said.
The two banks will also consider providing credit and other financial services jointly to Japanese companies that have established, or are establishing, business bases in South Korea.
The Sumitomo-Kookmin agreement will motivate Japanese megabanks to place greater emphasis on cashing in on their international lending and other cross-border operations, the sources said.
The envisioned Sumitomo-Kookmin arrangement follows on the heels of the establishment of a U.S. financial holding company by Mizuho Financial Group Inc., a Sumitomo Mitsui Financial Group archrival, they said.
Mizuho Financial Group also concluded capital tie-up agreements with two South Korean lenders -- including Shinhan Financial Group Inc. -- last year.
Kookmin Bank is one of the largest South Korean banks. Its assets total 195 trillion won, or 23 trillion yen. Although the bank was in talks to acquire Korea Exchange Bank under the wings of U.S. investment fund Lone Star, it halted the talks following the start of a criminal investigation by South Korean public prosecutors into Lone Star.
|Printer friendly Cite/link Email Feedback|
|Publication:||Japan Weekly Monitor|
|Date:||Mar 13, 2007|
|Previous Article:||Forward foreign exchange quotations.|
|Next Article:||LEAD: Tokyo stocks up in morning on U.S. shares rise, Jan. machinery data.|