Sumitomo Mitsui Banking Corp, a member of Sumitomo Mitsui Financial Group, is planning to acquire 4.5% stake in Kotak Mahindra Bank, via the preferential route, for approximately JPY30bn.
Sumitomo Mitsui aims to bolster its businesses in India, one of the world’s fastest-growing economies, as part of its efforts to expand its overseas customer base.
Sumitomo Mitsui has already partnerships with domestic banks in Hong Kong, South Korea, Indonesia and other Asian markets, including a 15% stake in Vietnam Export Import Bank.
Other major Japanese banks are also interested to partner with local banks in Asia as growth prospects at home have become bleak.
According to Nikkei business daily, the Japan-based financial services group is likely to purchase shares in the India-based lender to strengthen its stock and bond underwriting for Japanese firms raising funds in India, and expand its line-up of Indian investments sold in Japan.
Earlier, Netherlands-based financial services group ING sold its entire 3.1% stake in Kotak Mahindra Bank.