Sumitomo Mitsui Financial Group Inc. plans to increase income from individuals by ¥100 billion within three years by selling a wider array of financial products.
“Sales of personal pensions and investment trusts will continue to be growth areas,” Osamu Endo, deputy president of Tokyo-based Sumitomo Mitsui’s main banking unit, said in an interview Monday. “Those and sales of insurance, which will be fully deregulated in December, will be our three main strategic products.”
Sumitomo Mitsui, whose profit slumped 59 percent in the latest quarter, wants to team up with retailers to add customers, Endo said. The bank’s stock has fallen 32 percent this year, stung by credit losses and writedowns.
Gross profit, or earnings before sales expenses, at Sumitomo Mitsui’s retail operations reached ¥410 billion in the year that ended March 31, 30.5 percent of the total. That represented a ¥100 billion increase from five years earlier, Endo said.
Japanese banks are renovating branches and expanding alliances to attract consumers as the government deregulates the industry.
The Financial Services Agency said Nov. 6 it will allow banks to sell all kinds of insurance, including life coverage, starting Dec. 22. Until now, the insurance that banks have been able to offer was limited to such policies as annuities and sickness coverage on mortgages.
Sumitomo Mitsui is seeking alliances with other financial firms and car dealers to attract more customers, Endo said. “Alliances will increase as customers demand more advanced services, closer to them.”
The bank allied with NTT DoCoMo Inc. and Yahoo Japan Corp. to develop its online banking.
Loan to Vietnam
Sumitomo Mitsui Financial Group Inc. will lend $100 million to the Bank for Investment & Development of Vietnam, said Tran Bac Ha, chief executive officer of the Vietnamese bank.
“The loan will be for a three-year term with a reasonable interest rate,” Ha said in a telephone interview Tuesday from Hanoi. “We expect the loan to be given next month.”
State-owned BIDV, the country’s second-largest bank, is also raising funds through its first share sale, approved by the government for next year. The Hanoi-based bank is expanding its businesses into areas outside banking and is a shareholder in Vietnam’s first aircraft leasing company.
Australia & New Zealand Banking Group Ltd. arranged the loan, according to a statement from BIDV released Tuesday.
“We plan to use the loan to develop some energy projects, which we have had approved by the government,” Ha said without giving any further details on the projects.