Bloomberg – Sumitomo Mitsui Financial Group Inc., Japan’s third-biggest bank by assets, this year plans to offer its customers managed fund of funds products, including riskier hedge and commodityinvestments, to boost fee income.
Sumitomo Mitsui, which paid 190 billion yen ($1.6 billion) in stock to make SMBC Friend Securities Co. a wholly-owned subsidiary last month, has applied for regulatory permission to manage client assets at the unit, said Terumasa Takahashi, who heads consumer business development at the bank.
“It’s important for banks to work with their brokerages to get a good grip on wealth, including the baby-boomers,” said Kyoko Narita, a Tokyo-based analyst at BNP Paribas. Still, they may struggle to profit swiftly from joint promotion, as “banks and brokerages in Japan remain two different cultures after a long period of separation.”
Sumitomo Mitsui is expanding asset management operations as it expects investments to boom with Japan’s economy set for its longest period of expansion since World War II. The Tokyo-based bank is also competing with rival firms and brokerages to tap the 130 trillion yen of assets held by the country’s `baby- boomers’ who will retire by 2009.
