LA bank to buy US commercial banking unit from Japan's SMBC

• Key insight: Hope Bancorp in Los Angeles expects to further its strategy of serving Asian-American entrepreneurs with the acquisition of the Japanese bank's U.S. commercial banking unit.
• Supporting data: Los Angeles-based Hope is projecting that the deal will drive 20% earnings-per-share accretion in 2027.
• Expert quote: "We view the commercial banking unit as a natural extension of Hope's franchise." — Piper Sandler analyst Matthew Clark

Less than three months after disclosing plans to shutter its digital-only Jenius Bank division,  Japan's Sumitomo Mitsui Banking Corp. is moving to sell its California-based commercial lending operation.

Hope Bancorp has agreed to acquire the unit in a deal that's expected to close in the second half of 2026. The planned sale aligns with SMBC's intent to focus its U.S. operations on wholesale and institutional banking. It should also bolster Los Angeles-based Hope's strategy to broaden its appeal among Asian-American entrepreneurs and Asian multinational companies that do business in the U.S.

The SMBC Manubank commercial banking team serves Japanese-owned small to midsize businesses. It also offers Small Business Administration loans, franchise loans and commercial real estate loans. In all, Hope is acquiring eight Los Angeles-area branches, $2.5 billion of loans and deposits totaling $2.7 billion.

The $18.5 billion-asset Hope, the nation's largest Korean-American bank, did not provide an aggregate deal price. It said it will purchase assets and assume liabilities on a net book value basis.

"The addition of the Japanese Banking Division complements our Korean Subsidiary Banking Group and positions us to drive strategic growth in cross-border middle market banking across the continental United States and Hawaii," Hope Chairman and CEO Kevin Kim said in a press release. 

Hope is projecting 20% earnings-per-share accretion in 2027, a target that Piper Sandler analyst Matthew Clark termed "very doable."

"We view the commercial banking unit as a natural extension of Hope's franchise," Clark wrote in a research note Wednesday.

Timothy Coffey, who covers Hope for Brean Capital, upgraded his rating on the company from "neutral" to "buy" on Wednesday, describing its post-deal earnings power in a research note as "superior to peers."

Investors appeared to agree. Hope shares were trading up more than 5% at $11.78 on Wednesday afternoon.

SMBC Manubank was founded as Manufacturers Bank in Los Angeles in 1962. Japan's Mitsui Bank acquired the bank in 1981 to provide a vehicle for expanding its U.S. commercial presence and better serving Japanese businesses in California.

After Mitsui merged with Sumitomo, Manufacturers became part of the SMBC Group. It rebranded as SMBC Manubank in 2023.

SMBC launched Jenius the same year. The goal was to layer a national digital-only consumer business onto the bank's existing commercial platform.

Jenius succeeded in attracting deposits, quickly surpassing the $1 billion mark, and the additional funding helped SMBC Manubank to grow its loans. But the added revenue fell far short of covering the costs of a rapidly expanding new business line, resulting in a surge of red ink.

SMBC Manubank lost approximately $170 million in both 2024 and 2025. It agreed to sell Jenius' deposits to the $28.2 billion-asset Axos Financial in February.

Now, after jettisoning Jenius, SMBC has opted to exit SMBC Manubank's historical strong suit, small and middle-market commercial lending.

"We are confident that Bank of Hope, backed by a strong and experienced team, is well positioned to drive continued growth and provide stability and continuity for customers," SMBC Americas Division CEO Hirofumi Otsuka said in Hope's press release.

For Bank of Hope, which has built a substantial business serving Korean-American entrepreneurs, layering on a Japanese-focused lending team is complementary. The acquisition should sharpen its ability to serve Asian multinational businesses.

"We look forward to partnering with SMBC and serving the retail and commercial banking needs of Japanese clients operating in the U.S.," Kim said in the press release.

Hope's pending purchase of the Japanese bank's U.S. commercial banking unit comes a year after it completed its purchase of Territorial Bancorp in Honolulu. That deal was valued at $78.6 million when it was announced.

Hope adopted its current brand name in 2016, around the time that it completed a merger of equals with Los Angeles-based Wilshire Bancorp, another leading Korean-American bank. Prior to reaching the deal to merge with Wilshire, Hope did business as BBCN Bank.