Sumitomo Mitsui Financial Group Inc, Japan’s second-largest lender by assets, said on Tuesday it would buy a 74.9% stake in Fullerton India for $2 billion, as the bank expands its business elsewhere in Asia amid low-interest rates at home.
Given a slow-growing domestic market, Japanese banks including SMFG have sought business opportunities outside the country, which faces an aging and shrinking population.
Fullerton Financial, the parent of the Indian non-bank firm, is a unit of Singapore’s state investment fund Temasek Holdings Pte. It is a central bank-registered shadow lender that offers loans to individuals and small businesses.
“SMFG will gain a retail finance platform in India as it is essential for the expansion of its Asia franchise,” the Japanese lender said in a statement, adding that it plans to acquire the Indian credit firm from Fullerton Financial at a later stage.
Last month, SMFG agreed to invest about 10 billion yen ($90.26 million) in Philippine bank Rizal Commercial Banking Corporation, while the lender said in April it will invest up to 150 billion yen in Vietnam’s biggest non-bank lender FE Credit.