Chapter 6
Preparing for the Next Decade

1. Revising the banking-securities collaboration framework

In January 2009, Citigroup announced business restructuring plans including the sell-off of assets. Sell-offs included major businesses of Nikko Citi Holdings, a Japanese base of the U.S. investment bank. Sumitomo Mitsui Financial Group (SMFG) acquired these businesses, including Nikko Cordial Securities, through competitive bidding, for which an agreement was signed in May 2009.

Following the announcement of an agreement on Nikko Cordial Securities joining the Group, Sumitomo Mitsui Banking Corporation (SMBC) resumed negotiations with Daiwa Securities Group to enhance the existing partnership. While SMBC was seeking to enhance the banking-securities collaboration framework, Daiwa Securities Group preferred to focus only on maintaining the previous complementary operations rather than pursuing new collaboration strategies. Their negotiations failed to reconcile the difference in basic objectives, resulting in each company making a public announcement in September 2009 about dissolving the relevant joint venture.

In October 2009, Nikko Cordial Securities became a wholly owned subsidiary of SMBC, and the two companies pursued a close partnership to effectively develop banking-securities collaboration strategies. On April 1, 2011, Nikko Cordial Securities changed its name to SMBC Nikko Securities Inc., looking to establish broader recognition as a member of SMBC Group.