Interview transcript: Koichi Miyata, President and CEO, Sumitomo Mitsui Financial Group, Part 1
Koichi Miyata, President and CEO of SMFG discusses the five main goals of SMFG, managing the group’s treasury functions, and the three major differences separating SMFG from western financial institutions. August 30, 2012 | Editorial1. The five main goals of SMFG Emmanuel Daniel (ED): Given the global economic slowdown and the situation in Japan at the moment, what are some of the most important plans that Sumitomo Mitsui Financial Group (SMFG) has, in terms of growing your business both domestically and internationally? Koichi Miyata (KM): I would like to begin with five important points. First of all, how we maintain the quality of the portfolio and balance sheet. In 2001, our non performance loans (NPL) were more than 8%. But the asset quality had been controlled so that NPL is now at 1%. Secondly, it is critical to maintain the strength of our assets and liquidity of our bank in order to attract deposit from our customers. Under Basel III, the equity ratio that would be required for our global balance sheet is something that we have already realised. In terms of liquidity, our loan to deposit ratio now stands at 68%. We have high quality assets and a high level of liquidity. With these two elements in place, I believe it will have good effect on the course of our bank. Thirdly, we have a good sense of risk. In 2007, the problem relating to loan related assets had been totally disposed of by our bank. We have a good sense of risk management, which I would want to maintain in years to come as well. In the 1990s, with the collapse of the real estate bubbles in the Japanese economy, the Japanese banks suffered and I think we have learned a very important lesson from this. Fourthly, we have very strong relationship with our customers and it is critical for us to preserve and protect these relationships. Japanese banks are really commercial banks. They operate on commercial bank based business models, which is based on the extent that we can reinforce a relationship with our customers. The fifth point is as a commercial bank, we require diversification of our business portfo... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
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