Sumitomo Mitsui Financial Group Inc., Japan's second-largest bank by market value, may spend as much as $5 billion buying a stake in a U.S. commercial lender in the next three years, a top executive said.
"We can't overlook the U.S. market in terms of stable returns and size," said Hiroshi Minoura, head of international banking at Sumitomo Mitsui Banking Corp. "We need to push forward with investments, including acquisitions, that allow us to capture a large volume of assets."
Sumitomo Mitsui, which agreed to invest in India's Kotak Mahindra Bank Ltd. last month, is studying about 20 U.S. banks, Minoura said in an interview Wednesday. An acquisition in the world's largest economy would support Sumitomo Mitsui President Teisuke Kitayama's goal of getting 30% of banking profit from overseas clients within three years, up from 20% last fiscal year.
Minoura said Sumitomo Mitsui will not be able to meet that target "organically." He said he will likely target banks in the Midwest or on the East Coast, but declined to name any companies.
While Sumitomo Mitsui is not in any detailed talks now, the size of an investment would probably be $1.5 billion to $5 billion, depending on the target's size, Minoura said.