The late group CEO of Sumitomo Financial Group led the continued expansion of the Japanese «megabank’s» presence in emerging markets in Asia, particularly in the Southeast region where he previously had work experience in Singapore.
On November 25, Sumitomo Mitsui Group's (SMFG) president and group CEO Jun Ohta passed away at the age of 65 due to pancreatic cancer. Concerns about Ohta’s well-being were first spotlighted earlier this month after the bank cited health-related reasons for his absence in an earnings briefing.
Interestingly, Southeast Asia played a relatively prominent role in Ohta's professional life. In the latter half of his 41-year career at SMFG, the ASEAN region became a key strategic focus. In addition to acquisitions and onshore expansion by the Japanese bank, Ohta himself also obtained experience on the ground two decades ago.
Singapore in 2002
In 2002, Ohta was seconded to Singapore as a mid-level manager. He joined a department of 50 staff, which included only four Japanese and local employees from over 10 nationalities. According to a statement he made in the bank’s 2023 annual report, this was a learning experience about working in an environment with a deep mix.
«The team was truly diverse in terms of culture and mindset. At first, I struggled to build consensus in such a diverse team,» Ohta recalled.
«However, I soon experienced firsthand that combining various ways of thinking leads to the creation of new ideas, which in turn leads to results that exceed expectations. Under the strong commitment of the senior management team, the promotion of diversity and inclusion at SMBC Group will be accelerated.»
«Multi-Franchise Strategy»
While SMFG has had a presence in Southeast Asia for many decades, it decided to expand commercial banking in 2011 after witnessing a post-GFC recovery in the region that outpaced others. It deployed a «multi-franchise» strategy with the concept of creating a «second and a third SMBC Group in the Asian emerging market countries over the medium term».
«[W]e will offer full line commercial banking services in countries with strong growth potential and which are very close to Japan geographically and culturally, such as Indonesia and Vietnam» said ex-SMFG president Koichi Miyata during a conference in 2013.
Focus Markets
When Ohta was appointed group CEO in 2019, he would continue to extend the legacy of the multi-franchise strategy. He specifically chose Indonesia, Vietnam,the Philippines and India as focus markets for the bank to tap future growth.
Under his leadership, SMFG in 2021 acquired a 49 percent stake in Vietnamese consumer financier FE Credit, a 74.9 percent stake in SME non-bank lender Fullerton India and a 4.99 percent investment in Philippines commercial bank RCBC. Earlier this year in March, it inked a $1.5 billion deal to buy a 15 percent stake in Vietnam’s VPBank.
«Energy and Vibrancy»
According to Ohta, the realization of a «J-curved» growth trajectory for SMFG is one of his top ambitions. And he believed that this could be done with growth driven by emerging markets in Asia.
«When I visit the developing economies of Asia, I am met with energy and vibrancy. Scenes that remind me of Japan when I was a child,» he commented, referencing three decades of rapid economic expansion back at home after his birth in 1958.
«I believe a country’s financial sector is closely correlated with its GDP, and for some time now I have wanted to realize ‘J-curve’ growth in our revenue by establishing a second and third SMBC Group in Asia’s developing economies so that we can share in the benefits of their rapid growth.»
