The surge in the financial market, especially in the banking sector has prompted Sumitomo Mitsui Financial Grp, Inc. (ADR)(NYSE:SMFG) to invest in Columbia State Bank. As per the reports, the firm made an announcement on Monday stating that it would 8.84% stake in Financiera de Desarrollo Nacional SA, a well-known Colombian state-run development bank.
What’s Next For Sumitomo:
In order to execute this investment deal in a hassle-free way, Sumitomo has signed an equity purchase contract with the International Financial Corporation. The primary objective of this deal is to enhance the financial support for developmental activities, especially in the infrastructure field. The condition of infrastructural development in this Latin American country is not as good as others, which creates an opportunity for a cash-rich firm like Sumitomo Mitsui Financial Grp, Inc.
Through this investment deal, Sumitomo Mitsui looks forward to strengthening project financing in Colombia with a core objective of extending financial support for the development of the infrastructure sector. As per the terms and conditions of this deal, Sumitomo will send one of its executives to Colombia for becoming a member of the board of directors of Financiera de Desarrollo Nacional SA. The contract has taken almost nine months to get executed. Both the firms came together last July and initiated talks concerning the infrastructural development in Colombia.
Colombia is going through a transition phase; hence, taking up a range of government led projects for the development of infrastructure. The Japanese megabank is known for having expertise in fund procurement methods, and it will look forward to helping Colombia diversify its funds in the best possible way. The management teams of both the firms look forward to initiating the procedure to explore the endless possibilities that are up for grabs. Further information about this investment deal will be unveiled at a future stage.