Sumitomo Mitsui Financial Group Essay

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The Sumitomo Mitsui Financial Group, Inc., (SMFG) is a financial services group established in December 2002 with ¥1.42 trillion in capital. In 2001 Sumitomo Mitsui Banking Corporation (SMBC) was created through the merger of Sumitomo Bank and Mitsui’s Sakura Bank with ¥1.277 trillion in capital. It was Japan’s second-largest bank. In Japanese, the corporate name is reversed to Mitsui Sumitomo Financial Group, a sign that Sumitomo was the stronger entity in the merged financial group.

SMFG is a holding company comprised of SMBC, Sumitomo Mitsui Card Company, Ltd., Sumitomo Mitsui Finance and Leasing Company, Ltd., the Japan Research Institute, Ltd., SMBC Friend Securities Co., Ltd., and is linked to Daiwa Securities SMBC Co., Ltd., Daiwa SB Investments Ltd., and Promise Co., Ltd. The Japan Research Institute was established in 2002 and the following year, two wholly owned subsidiaries were established: Sumitomo Mitsui Card (founded in 1967) and the SMBC Finance and Leasing Company (founded in 1963). From 2004, the SMFG formed an alliance with the Promise Co., Ltd. SMBC Friend Securities Co., Ltd., founded in 1948 as Meiko Securities Co., Ltd., became an SMFG subsidiary in 2006.

SMFG created a group corporate identity based on three strengths: the spirit of innovation, speed, and solutions and execution. The three strengths are said to be “the sources of our corporate value, on our way to becoming a team of professionals.” The group slogan is “Lead the Value,” which focuses on customers, shareholders and markets, and society in conjunction with the three strengths.

SMFG offers a wide variety of financial services including commercial and investment banking, credit card services, leasing, research, and securities. Specifically, SMBC offers services such as lending, deposit, securities retail sales and trading, investment trust sales, fund transfer, foreign exchange, corporate bond trustee and custody services, trust banking, and retail sales of insurance products. The Sumitomo Mitsui Finance & Leasing supports services such as corporate leasing and installment, rental business, international business, real estate leasing, finance, investment, and management support services. The Japan Research Institute offers services such as computer system development, information processing, consulting, and think tank services. Sumitomo Mitsui Card, which specializes in credit card services and credit financing, established in 2005 the Mitsui Sumitomo Card iD, a “wallet phone” service, in cooperation with NTT DoCoMo, Japan’s largest mobile phone network service provider. It allows customers to pay for goods and services with their mobile phone functioning as a credit card.

Background And Global Presence

SMFG traces its establishment back to the Sumitomo company founded in 1630 by Masatomo Sumitomo, who began by selling medicine and books near Kyoto. His brother-in-law, Riemon Soga, and his eldest son, Tomomochi Sumitomo, expanded their business and became the leading copper mining, smelting, and trading company. The company expanded through warehousing and banking with their first Sumitomo Bank established in 1895 by Teigo Iba. Sokubei Mitsui began as a sake and soy sauce merchant near Kyoto, and his son, Hachirobei Takatoshi Mitsui, established the House of Mitsui in 1673 as a dry goods store in Tokyo, the precursor to the Mitsukoshi Department Store. Hachirobei Mitsui is said to have opened his first bank in 1683, next to his dry goods store in Nihonbashi, Tokyo. The Mitsui Bank, Japan’s first private bank, was established in 1876 with ¥2 million in capital and headed by Takashi Masuda.

The Sumitomo Bank engaged in rapid expansion through the establishment of overseas offices. From 1916 to 1918, the Sumitomo Bank opened offices in Shanghai, Bombay, San Francisco, New York, London, and Hawaii. The company later expanded to South Korea, China, and Taiwan, and in 1952, it established the Sumitomo Bank of California. Today, the Sumitomo Mitsui Financial Group is active throughout the world, with 20,322 employees as of March 1, 2006.

Bibliography:

  1. Sumitomo Mitsui Banking Corporation, Corporate History, www.smbc.co.jp (cited March 2009);
  2. Sumitomo Mitsui Financial Group, Inc., www.smfg.co.jp (cited March 2009).

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