2. Multi-Franchise Strategy

The emerging-market economies, especially those in Asia, recovered from the global financial crisis earlier than the rest of the world. Against this backdrop, SMBC decided to expand its commercial banking business in emerging markets, especially in Asia, as one of the five strategic business areas set forth in the medium-term management plan started in fiscal year 2011. SMBC enhanced its business foundation in Asia by expanding office networks and increasing staff in the region.

SMBC deployed a Multi-Franchise strategy, the concept of which was to create a second and a third SMBC Group in the Asian emerging-market countries over the medium term. This strategy was based on three key policies: full banking, localization, and commitment, which means that the bank commits to promoting the local economy once it establishes an institution with a full set of banking businesses. In accordance with this strategy, SMBC acquired a stake (24.26%) in Bank Tabungan Pensiunan Nasional (BTPN), a mid-sized Indonesian bank, in May 2013, and bought an additional stake in March 2014 to raise its ownership in the bank to 40%.

While development of the Multi-Franchise strategy stagnated temporarily due to the slowdown of emerging-market economies from mid-2015 onward, BTPN merged with Bank Sumitomo Mitsui Indonesia to form Bank BTPN in February 2019. Sumitomo Mitsui Financial Group (SMFG) and SMBC announced a series of new investments in nonbanks and commercial banks in Vietnam, the Philippines, and India in 2021.