TOKYO, Dec 16 (Reuters) - Sumitomo Mitsui Financial Group (SMFG) said on Friday it has appointed Takeshi Kunibe, chief of its core banking unit, to the newly created position of group CEO, a major shift in the power structure of Japan’s third-largest lender.
Kunibe said the management reshuffle coincides with the planned reorganisation of the group’s structure, which will give the holding company stronger control over its operating units, including the core commercial bank, Sumitomo Mitsui Banking Corp (SMBC).
“As head of the banking unit, I have been chosen to become president of the holding company and group CEO to ensure smooth transition to the new structure,” Kunibe told a news conference.
The promotion of Kunibe, 62, ends power-sharing between two banks that merged to create SMFG 15 years ago.
As president of Sumitomo Mitsui Banking Corp since 2011, Kunibe, a Sumitomo banker, had shared equal authority over the group with SMFG President Koichi Miyata, a Mitsui banker.
In the management reshuffle effective on April 1, Miyata will step down and become chairman of both the holding company and the bank.
The move comes as SMFG and rival Japanese banks are struggling in the face of diminishing returns from lending, which has been made worse by the Bank of Japan’s decision to introduce negative interest rates in February.
To make up for weak loan demand at home, Japanese lenders have been aggressively building up overseas businesses and taking advantage of a retreat by U.S. and European rivals badly hurt in the global financial crisis.
SMFG’s total assets grew by over 30 percent in the past five years to 186.6 trillion yen ($1.58 trillion), driven by acquisitions and loan growth overseas.
But bank officials said the pace of asset build-up is likely to slow down in coming years, as stricter global bank capital rules are making it costly to have big balance sheets, adding further pressure on management to seek new revenue generators beyond traditional lending.
“It’s getting harder for financial institutions to make profits,” said Makoto Takashima, SMBC senior managing director, who was appointed to replace Kunibe as president of the banking unit.
Takashima’s appointment was a surprise to many in and outside the bank. The 58-year-old banker rose through the ranks mostly in international banking, whereas Japanese bank chiefs usually have experience in various fields.
$1 = 118.0900 yen Reporting by Taiga Uranaka; Editing by Elaine Hardcastle