Sumitomo Mitsui to buy majority stake in Fullerton India for $2 bn
06 July 2021
Sumitomo Mitsui Financial Group Inc, Japan's second largest lender by assets, is buying a majority stake in Indian non-bank financial company, Fullerton India, from Temasek Holdings, for about $2 billion in a bid to capture growth in India's financial services.
Sumitomo Mitsui Financial Group Inc said on Tuesday it would buy 74.9 per cent stake in Fullerton India for $2 billion, as the bank expands its business elsewhere in Asia amid low interest rates at home, marking the first entry into the South Asian country’s retail financial business by a Japanese bank.
Fullerton Financial Holdings Pte is wholly owned by Singapore investment firm Temasek.
Sumitomo Mitsui said it plans to eventually acquire 100 per cent of the Indian financial company.
Sumitomo Mitsui said Fullerton India had a strong pan-India distribution network of more than 650 branches and offers loans to small and medium-sized enterprises, the self-employed and mass-market customers.
Sumitomo Mitsui said that through this investment, it can gain a retail finance platform in India, which is essential for its expansion strategy in Asia.
Faced with weak growth prospects at home, Sumitomo Mitsui has been allocating resources to Asia’s emerging markets in recent years. The bank took control of Indonesian lender PT Bank Tabungan Pensiunan Nasional in 2019 after acquiring a minority stake earlier. Sumitomo Mitsui is looking for targets in Vietnam, Philippines and India, CEO Jun Ohta said in an interview in December.
Sumitomo Mitsui in April agreed to buy a 49 per cent stake in Vietnamese consumer lender FE Credit. Last month, the bank said it will buy a 4.99 per cent stake in Rizal Commercial Banking Corp. of the Philippines for 4.48 billion pesos ($91 million).