Chapter 2
Enhancing Group Businesses

Sumitomo Mitsui Financial Group (SMFG) reinforced the group business, primarily through reorganizing group companies and increasing collaboration, while Sumitomo Mitsui Banking Corporation (SMBC) pressed ahead with its business model reform.

1. Enhancing SMBC Nikko Securities' wholesale business

As Nikko Cordial Securities (renamed SMBC Nikko Securities Inc. in April 2011) joined SMBC Group in October 2009, business enhancement programs for the wholesale business of SMBC Nikko Securities began. The programs also aimed to enhance banking-securities collaboration, in both wholesale and retail businesses. The programs prioritized such businesses as stock underwriting as well as sales and trading—particularly for the secondary stock and derivatives market—and also the cross-border M&A advisory business. In addition, overseas offices were set up.

To strengthen stock underwriting functions, SMBC Nikko Securities increased the relevant staff headcount in the Corporate Clients Division and bolstered cooperation between the Corporate Clients Division and the Investment Banking Division. In the area of sales and trading, while ensuring the steady progress of system development, the expansion of sales capabilities, including the launch of the Equity Research Department in August 2010, was another effort to provide professional information on an ongoing basis. The company also worked hard to increase institutional investors in and outside of Japan. For the cross-border M&A advisory business, SMBC Nikko Securities made efforts to work with overseas investment banks that handle major projects, and to recruit specialists in order to win contracts of cross-border M&A projects.

SMBC Nikko Securities started overseas business in London and New York in October 2010, Hong Kong and Shanghai in January 2011, and Singapore in October 2012. These overseas offices were engaged primarily in lower-risk businesses, such as Japanese stock brokerage, M&A advisory, and bond brokerage. The Shanghai subsidiary provided cross-border M&A advisory business. In October 2013, the U.S. subsidiary opened a branch in San Francisco. As a result, with the five local subsidiaries operating outside Japan, SMBC Nikko Securities established capabilities for global stock offerings by fiscal year 2013 (ended March 2014). Those offices began to offer bond brokerage, connecting overseas issuers and Japanese investors.