Japan-based Sumitomo Mitsui Financial Group ((SMFG) is looking to boost its stake in American investment bank Jefferies Financial Group, Nikkei has reported quoting SMFG president and CEO Jun Ohta.
With the move, SMFG seeks to enhance its global brokerage business as the conventional banking is seeing a downturn in Japan, added the publication.
Ohta did not elaborate on the magnitude or timeline of the additional investment, but hinted that such options would be considered after having deliberations with Jefferies and regulators in the US.
However, he noted that Jefferies would be made an equity-method affiliate of SMFG.
Ohta was quoted by the publication as saying: “I have a wish to move toward increasing our holdings.”
In July 2021, SMFG bought less than 5% of Jefferies’ outstanding shares for nearly JPY40bn ($302m) as part of a capital tie-up plan.
The deal was carried out through Sumitomo Mitsui Banking.
In the US, both SMFG and Jefferies have undertaken a number of joint initiatives in various fields, including merger and acquisition advisory services. Recently, both the firms carried out joint deals in Europe.
The companies also have plan to explore Asian markets like India.
Ohta added: “We’ll reach customers by combining our banking customer base and balance sheet with Jefferies’ securities know-how.”
Representatives from SMFG and Jefferies refused to offer any comment on the matter, reported Bloomberg.
In a previous interview with Bloomberg News, Ohta said: “Our balance sheet is attractive, and, for us, their investment-banking capability is attractive.
He added: “I think there are strong possibilities in Europe as well. Our investment-banking capability is weak there.”
