...March 28, 2023 TOKYO (S&P Global Ratings) March 28, 2023--SMBC Group's investments for growth may injure its stand-alone credit quality, in S&P Global Ratings view. This could occur if these investments prevent improvement in its capital ratio, as we define it. Sumitomo Mitsui Financial Group Inc. (SMFG; A-/Stable/--), the holding company of SMBC Group, named after lead bank Sumitomo Mitsui Banking Corp., said on March 27, 2023, it will make Vietnam Prosperity Joint Stock Commercial Bank (VPBank) an equity-method affiliate. It plans to spend about Ñ183.1 billion to acquire an equity stake in the major Vietnam-based commercial bank in the second half of 2023. We estimate the planned investment will cut just over 0.1 percentage point from SMBC Group's risk-adjusted capital (RAC) ratio. Our base-case scenario assumes the group's RAC ratio will improve to and remain slightly above 7.0% in the next one to two years. It can achieve this by adequately managing the balance between its risk-weighted...
