Japanese bank converts into full-service unit
Tokyo- based Sumitomo Mitsui Banking Corp. (SMBC) obtained the green light from the Bangko Sentral ng Pilipinas to open a branch in the Philippines.
BSP deputy governor Nestor Espenilla issued Circular 2016038 informing all banks and non-bank financial institutions about the closure of SMBC’s representative office after obtaining approval to put up a full-fledged branch in the Philippines.
SMBC was the first foreign bank to secure a license to operate in the Philippines last September after President Aquino signed RA 10641, which allowed the full entry of foreign banks in the Philippines” in July 2014.
Foreign banks under the new law have also been allowed to own as much as 100 percent of any local bank, removing the previous cap of 60 percent.
The BSP has so far given six foreign banks the green light to operate in the Philippines after the moratorium on the entry of foreign banks into the country was lifted.
Aside from SMBC, the BSP has also approved the applications of Shinhan Bank of South Korea, Cathay United Bank of Taiwan, the Industrial Bank of Korea, Yuanta Bank of Taiwan, and the United Overseas Bank Ltd. of Singapore.
The SMBC Group goes back more than 400 years with an extensive global network of customers including the largest Japanese enterprise groups such as the Sumitomo Group and Mitsui Group.
A wholly-owned subsidiary of Sumitomo Mitsui Financial Group Inc., SMBC is one of the biggest investment holding companies in Japan.
SMBC and its group companies offer a broad range of financial services centered on banking. They are also engaged in the leasing, securities, credit card, investment, mortgage securitization, venture capital and other credit related businesses.
At least three Asian banks have pending applications with the BSP to establish its presence in the Philippines after the country lifted the limit on the entry of foreign banks.
Security Bank Corp. received P36.9 billion from The Bank of Tokyo Mitsubishi UFJ Ltd. (BTMU), completing a strategic partnership deal signed last January. In exchange, BTMU received 150.71 million common shares and 200 million preferred shares equivalent to a 20 percent stake in Security Bank.
Latest data from the BSP showed the number of banks operating in the country reached 632 last year or lower than the 648 in 2014 given the continued consolidation of banks as well as the exit of weaker players in the banking system.
Total resources of the Philippine financial system increased by 7.4 percent to P12.4 trillion last year. As a percent of GDP, the country’s banking resources stood at 93.4 percent.