Under the deal, SMBC will buy 222 million new shares of BEA through private placements.
Weak loan demand and low interest rates in Japan have made the lender look for business expansion in other Asian countries.
The deal, which is subject to certain regulatory approvals, will allow SMBC to offer increased services to Japanese clients in Hong Kong through BEA’s 120 branches in mainland China.
Currently, SMBC has around 16 branches in the country.
In addition to SMBC, the BEA is 17.05% owned by Spain’s CaixaBank, 15% by Guoco Group and other stakeholders.
The latest deal comes approximately two years after SMBC invested $426m to almost double its stake in BEA from 4.73% to 9.5% by buying 111.57 million new shares.
Image: The Bank of East Asia branch in Hong Kong. Photo: courtesy of Monikazhen.
