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TOKYO - Sumitomo Mitsui Financial Group Inc, Japan's second-largest lender by assets, said on Tuesday it would buy a 74.9% stake in Fullerton India for $2 billion, as the bank expands its business elsewhere in Asia amid low interest rates at home.
Given a slow-growing domestic market, Japanese banks including SMFG have sought business opportunity outside the country, which faces an ageing and shrinking population.
Fullerton Financial, parent of the Indian non-bank firm, is a unit of Singapore's state investment fund Temasek Holdings Pte. It is a central bank-registered shadow lender that offers loans to individuals and small businesses.
"SMFG will gain a retail finance platform in India as it is essential for the expansion of its Asia franchise," the Japanese lender said in a statement, adding that it plans to acquire the Indian credit firm from Fullerton Financial at a later stage.
Last month, SMFG agreed to invest about 10 billion yen ($90.26 million) in Philippine bank Rizal Commercial Banking Corporation, while the lender said in April it will invest up to 150 billion yen in Vietnam's biggest non-bank lender FE Credit.
($1 = 110.7900 yen)
(Reporting by Takashi Umekawa; Editing by Kim Coghill and Sherry Jacob-Phillips) ((Takashi.Umekawa@thomsonreuters.com;))