TOKYO -- Sumitomo Mitsui Banking Corp. and financial services group Orix will each invest an additional 10 billion yen ($81.9 million) or so in Cambodia's biggest bank, deepening ties with a local lender boasting an extensive branch network.
An announcement is expected as early as Monday.
SMBC will acquire 6% of Acleda Bank's shares, and Orix 6.25%, in separate deals next month with a unit of Hong Kong-based conglomerate Jardine Matheson Holdings. Together, the Japanese duo will acquire all of the unit's stake in Acleda.
These follow-up investments will raise SMBC's stake to 18.25%, making it the Cambodian bank's third-largest shareholder, and leave Orix tied for fourth place at 12.25%. SMBC and Orix first bought into Acleda last year.
The bank will become an equity-method affiliate of SMBC parent Sumitomo Mitsui Financial Group and Orix, boosting their annual group pretax earnings by an estimated 2.5 billion yen and nearly 2 billion yen, respectively.
Orix will nominate a director at Acleda after raising its stake. An SMBC appointee already sits on the bank's board.
Established in 1993, Acleda has 256 domestic branches and also operates in neighboring Laos and Myanmar. The local development association that founded Acleda and the bank's employee stock ownership program will retain majority ownership after the additional Japanese investments.
Cambodia, endowed with a youthful population, has caught Japanese manufacturers' eye as a Southeast Asian production base beyond Thailand. SMBC will provide Acleda with know-how in handling payments for Japanese-owned business. Orix will help with leasing services for small and midsize enterprises, seeking inroads into the growing Cambodian market.