SMFG ready to invest 100-300 bil. yen in Goldman Sachs: sources

TOKYO, Sept. 24 Kyodo - Sumitomo Mitsui Financial Group Inc. is willing to invest 100 billion to 300
billion yen in Goldman Sachs if so requested by the largest investment bank in
the United States, industry sources said Wednesday.
The Japanese banking group apparently intends to bolster its investment banking
operations both at home and abroad by providing massive funds to Goldman, which
is embroiled in the global financial turmoil, the sources added.
Goldman appears to have sounded SMFG out about its proposed investment and SMFG
will likely agree to the proposal upon receiving a formal request from the U.S.
financial services firm, the sources said.
The specifics of the proposed investment have yet to be worked out but SMFG
will likely take a stake of several percent in Goldman, according to the
sources.
SMFG has close business ties with Goldman while prioritizing its push into
overseas markets. This summer, the Japanese bank holding company, for example,
purchased a stake of about 2 percent in British bank Barclays Plc.
The Japanese financial services firm aims to collaborate in fields such as
corporate mergers and acquisitions, as well as investment banking with Goldman,
according to the sources.
Former Sumitomo Bank, one of the predecessor entities that now constitute SMFG,
invested in Goldman before it went public. In 2003, Goldman came to the rescue
of the Japanese banking group, which was struggling with huge problem loans, by
acquiring 150 billion yen of its preferred stock.
Meanwhile, Goldman said Tuesday it will sell $5 billion of preferred stock in a
private offering to Berkshire Hathaway Inc. led by high-profile investor Warren
Buffet.
Goldman has also said it aims to raise $2.5 billion in the open securities
markets.
Mitsubishi UFJ Financial Group Inc. said Monday it will acquire between 10 to
20 percent of common shares in the second-largest U.S. investment bank, Morgan
Stanley, becoming its leading shareholder.
With Nomura Holdings Inc. also buying the European operations of failed Lehman
Brothers Holdings Inc., Japanese financial institutions will likely boost their
presence in the United States and European markets because they have not been
hit as badly as their Western counterparts by the ongoing subprime mortgage
fiasco, industry watchers say.