Japan's SMFG to Seeks to Widen Jefferies' alliance beyond U.S

According to its CEO, Sumitomo Mitsui Financial Group Inc (SMFG) of Japan intends to expand its alliance with Jefferies Financial Group Inc to Europe and Asia in order to strengthen its global investment banking business.

"There is no reason to limit our partnership to the United States," CEO Jun Ohta recently told.” We will cooperate anywhere we can," he said, referring to Jefferies' investment banking expertise and SMFG's massive balance sheet.

The second-largest Japanese lender bought nearly 5% of Jefferies stock last year to expand its leveraged finance and cross-border M&A advisory businesses in the United States. Six leveraged finance transactions have resulted from the collaboration thus far.

Ohta stated that SMFG and Jefferies have already worked together on transactions in Europe. He stated that cooperation in Asia would be possible in India, Hong Kong, Singapore, and Japan.

The Japanese "megabank" has long wished to establish itself in the United States and other major international capital markets. Its SMBC Nikko Securities unit, formerly Citigroup's Japanese broker and one of SMFG's key investment banking units acquired in 2009, has a limited international presence.

SMFG's larger domestic rival, Mitsubishi UFJ Financial Group Inc, expanded its U.S. presence in 2008 with a $9 billion investment in Morgan Stanley, giving MUFG a 20% stake in the Wall Street bank.

He stated that a stronger partnership would necessitate a higher ownership ratio, and he reiterated SMFG's intention to increase its stake in Jefferies. "I hope to eventually increase our stake so that it becomes our affiliated company," he said.

Since its banking arm was ordered to improve anti-money laundering measures in 2019, SMFG has agreed to refrain from major U.S. investments with the Federal Reserve.