SMFG may invest 470 mln pounds into Barclays

TOKYO (Reuters) - Japan's Sumitomo Mitsui Financial Group (SMFG) (8316.T) is considering investing about 100 billion yen (470 million pounds) into Barclays (BARC.L), two sources familiar with the matter said on Friday.

Sumitomo Mitsui, Japan's third-largest bank, is also considering a business alliance with Barclays in Asia, according to the sources, who spoke on condition of anonymity as the deal has not been finalised.

The Nikkei business daily reported that SMFG would take a stake of several percent in Barclays through a private placement of shares, and look to form an alliance in Asia and the asset management business.

Barclays said earlier this week that it plans to sell billions of pounds worth of shares to new and existing shareholders, as it looks to strengthen its stretched balance sheet.

Barclays has lost just over $5 billion (2.5 billion pounds) from assets tarnished by the U.S. subprime housing crisis and credit crunch.

Sovereign wealth funds are expected to buy a large portion of the new shares. The Nikkei said SMFG would likely be the only foreign bank to invest into Barclays.

(Reporting by Taro Fuse, editing by Leslie Gevirtz)