Japan's SMFG to boost private banking

By David Dolan and Taro Fuse

TOKYO (Reuters) - Sumitomo Mitsui Financial Group Inc (8316.T: Quote, Profile, Research, Stock Buzz) aims to boost its number of private banking clients by two-thirds to 5,000 by the end of March as it extends its reach beyond the ultra-wealthy.

The bank, Japan's third largest, is also using its corporate banking business to reach owners of small and mid-sized firms, who make up the bulk of Japan's wealthy.

SMFG, which launched its private banking business in 1999, originally concentrated on those with at least 2 billion yen ($17 million) in assets -- the very richest of Japan's wealthy, many of whom wanted advice on corporate succession or taxes.

While the bank has about 1,000 such customers, it has added another 2,000 clients since the spring by focusing on a wider slice of the market, those with investable assets of 500 million yen or more.

"Right now we have about 2,000 (new) customers and we'd like to hit 4,000 this (fiscal) year and keep increasing from there," Masahiro Kume, head of SMFG's private banking division, said at the Reuters Wealth Management Summit on Wednesday.

About 52,000 households in the world's second-largest economy had net assets of 500 million yen or more, according to a 2006 report by Nomura Research Institute Ltd.

The race to do business with wealthy Japanese is increasingly competitive, due in part to the entry of large foreign banks.

Financial giant Citigroup (C.N: Quote, Profile, Research, Stock Buzz) and London-based HSBC Holdings PLC (HSBA.L: Quote, Profile, Research, Stock Buzz) (0005.HK: Quote, Profile, Research, Stock Buzz) have both announced ambitious plans to target Japan's legions of "mass affluent", or those with liquid financial assets of 10 million yen or more.  Continued...