SMFG to acquire 9.9% stake in Bank ofEast Asia

Japan based Sumitomo Mitsui Financial Group and Sumitomo Mitsui Banking Corporation are set to acquireup to 9.9% of the shares of Hong Kong based Bank of East Asia (BEA). Acquisition in the bank, which has also been approved by the US Federal Reserve System, is a part of Sumitomo Mitsui's strategy toboost its presence in Beijing, as reported by The Financial Times. The banking group already held 4.5% stake in the HongKong based bank and the increase in percent of the voting shares will not enablethem to exercise a controlling influence over BEA or any of its subsidiaries. Japanese banks are trying to recover from the effect of natural disaster, which struckthe country last year by strengthening their presenceand streamlining their operations in other Asian countries. Bank of East Asia had Rmb1.3bn in net profit and assets of Rmb153bn ($24.5bn) as of the end of 2011, according to KPMG. Bank of China currently holds a small stake in BEA, which recently sold its Canadian and US branches to ICBC. The Hong Kong bank engages primarily in retail and commercial banking, wealth management, and insurance services in People's Republic of China, North America, the UK, and Southeast Asia.