(Bloomberg) Sumitomo Mitsui Financial Group Inc.’s U.S. brokerage unit is hiring for its fixed-income sales and trading team, with the Japanese bank adding its first dedicated salesperson for asset-backed securities. The team has more than doubled to 18 since last year.
SMBC Nikko Securities America Inc. hired Stacey Kane Thursday to sell ABS, as the brokerage underwrote about $8.3 billion in debt in the U.S. so far this year, exceeding the total for all of 2015, according to Kei Tanaka, a Tokyo-based spokesman for SMBC Nikko Securities Inc. That figure includes investment-grade and high-yield bonds, together with asset-backed securities.
Japan’s three megabanks — Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group Inc. and SMFG — have underwritten a combined $42 billion in U.S. investment-grade debt so far this year, or about 6 percent of the market, according to data compiled by Bloomberg. In 2011, they accounted for about 1.4 percent, and the increase comes as Japanese banks have been taking market share while some European firms such as Royal Bank of Scotland Group Plc pull back overseas.
Japanese banks have been expanding lending and underwriting businesses overseas as the Bank of Japan’s policies squeezed yields they can earn from lending at home to almost zero. MUFG boosted credit costs by 58 percent to 255.1 billion yen ($2.5 billion) in the year ended March, citing higher charges related to oil and gas lending in the U.S., while SMFG said a deterioration in the debt quality of overseas resource-related borrowers had also pushed up credit costs.
Mizuho leads Japanese banks in managing about $19.6 billion in investment-grade bonds in the U.S. so far this year, followed by MUFG and then SMFG. Sumitomo Mitsui is already underwriting more corporate debt in the U.S. than in its home market, where sales in the corporate bond market last year totaled about $68.5 billion. Investment-grade and junk bond issuance in the U.S. was about $1.58 trillion for the same period.
SMBC Nikko already originates asset-backed securities from industries including automobiles, credit cards, and aircraft and is expanding that coverage, according to the company.