SMBC sells half of stake in Barclays

Kyodo

Sumitomo Mitsui Banking Corp. says it has sold half of its shareholding in British banking giant Barclays PLC in overseas markets for around ¥40 billion.

While the sale reduced SMBC’s stake in Barclays to 0.66 percent from 1.3 percent, the two banks will continue their strategic alliance targeting wealthy clients, SMBC said Thursday.

SMBC invested around ¥106 billion in Barclays in 2008. The British bank needed to boost its capital amid the subprime mortgage crisis in the United States.

SMBC, however, was forced to book an impairment loss after Barclays’ stock price fell sharply following the collapse of Lehman Brothers Holdings Inc. that September, raising questions about the profitability of its investment.