- Sumitomo Mitsui Financial Group, Inc. (SMFG, holding company of Japanese Bank Sumitomo Mitsui Banking Corporation – SMBC group) and Fullerton Financial Holdings Pte Ltd. (FFH) reached an agreement for SMFG to acquire a 74.9% stake in Fullerton India Credit Company Limited (FICC) from FFH. SMFG will eventually acquire 100% of FICC.
- While the deal value was not disclosed, various media outlets reported the deal at around US $2 billion.
- Fullerton India Home Finance Co. Ltd., a housing finance company, will continue to be a wholly owned subsidiary of FICC.
Sumitomo Mitsui Financial Group, Inc.:
- SMFG is the holding company of SMBC group, one of the largest financial service group of Japan, offering a range of financial services, including commercial banking, leasing, securities and consumer finance with a history of 400 years.
- SMFG is a global systemically important bank (G-SIBs) and is listed on the Tokyo and New York (via ADR) Stock Exchanges with a market capitalization of approximately US$47.4 billion (as of 30 June 2021).
Fullerton India Credit Company Ltd:
- FICC is a NBFC registered in India and a wholly-owned subsidiary of FFH. FICC started its India operations in 2007 and has established a pan India presence across 600 towns and 58,000+ villages through 629 branches and 13000+ employees.
- Fullerton Financial Holdings Pte. Ltd. (FFH) is an independently-operated strategic and operating investor in financial and related services in emerging markets.
- SMFG has been striving to “Expand its franchise and strengthen its digital banking capabilities in Asia” in accordance with its Medium-term Business Plan covering the three-year period starting FY2020. The plan also considers expanding franchise in Asian countries through inorganic means.
- Fullerton India has a strong pan-India distribution network with around 650 branches and owns different brands for its four segments – Urban, Rural, Digital, and Housing Finance which makes it attractive to SMFG for expansion in Indian financial industry.
- Fullerton India’s operating income was INR 37.3 Bn in 2021 with a net profit of INR (-12.1) Bn. Fullerton had total assets of INR 277.7 Bn in 2021.
- Jun Ohta, President & Group CEO of SMFG commented that “India is one of our focus markets where we believe in its high growth potential and want to build a deeper presence. As a long-term investor, we believe that the FICC platform’s innate strengths of multi-product focus, pan-India distribution, and strong management will enable us to build a comprehensive financial service offering in India.” He further added that SMFG intends to leverage its expertise in Japan market as well as capabilities of its franchises across key emerging Asian markets.
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
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