Reported Integration Of Sumitomo Mitsui's And Resona's Regional Banks Likely To Have Limited Ratings Impact, Says S&PGR

TOKYO (S&P Global Ratings) Feb. 21, 2017-- Japan's media have reported that Sumitomo Mitsui Financial Group Inc. (SMFG) and Resona Holdings Inc. are in talks to integrate three of their regional banking subsidiaries. At this point, S&P Global Ratings holds the view that any integration would have a limited impact on its ratings on SMFG, Sumitomo Mitsui Banking Corp. (SMBC; A/Positive/A-1), and Resona Bank Ltd. (A/Stable/A-1). SMBC and Resona Bank are the main operating banks of SMFG and Resona Holdings, respectively. SMFG and Resona Holdings have denied the reports. However, if the integration materializes, we think it could somewhat nudge up SMFG's credit quality, depending on how the integration is structured. According to the media reports, SMFG is in talks

...TOKYO (S&P Global Ratings) Feb. 21, 2017-- Japan's media have reported that Sumitomo Mitsui Financial Group Inc. (SMFG) and Resona Holdings Inc. are in talks to integrate three of their regional banking subsidiaries. At this point, S&P Global Ratings holds the view that any integration would have a limited impact on its ratings on SMFG, Sumitomo Mitsui Banking Corp. (SMBC; A/Positive/A-1), and Resona Bank Ltd. (A/Stable/A-1). SMBC and Resona Bank are the main operating banks of SMFG and Resona Holdings, respectively. SMFG and Resona Holdings have denied the reports. However, if the integration materializes, we think it could somewhat nudge up SMFG's credit quality, depending on how the integration is structured. According to the media reports, SMFG is in talks to merge its Kansai-based consolidated subsidiaries, Kansai Urban Banking Corp. and Minato Bank Ltd., with Resona Holdings' Kinki Osaka Bank Ltd. The total assets of Kansai Urban Banking and Minato Bank account for less than 5% of...

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