Sumitomo Mitsui Forms Alliance With Garanti Bank in Turkey

Sumitomo Mitsui Financial Group Inc. signed an accord with Turkiye Garanti Bankasi AS, becoming the third Japanese megabank to tie up with a Turkish lender since September.

The lender’s Sumitomo Mitsui Banking Corp. unit and Garanti, Turkey’s largest bank by market value, will cooperate on export credit agency financing and advice on project and structured finance, Sumitomo Mitsui said in a statement today.

Japan’s second-biggest bank by market value joins Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. in allying with Turkish lenders to capitalize on the country’s credit demand. The three Tokyo-based megabanks are seeking to boost lending abroad as persistent deflation discourages borrowing at home.

Mizuho Corporate Bank Ltd. in September signed an agreement with Akbank TAS, the Turkish bank part-owned by Citigroup Inc., to cooperate in commercial and investment banking. Akbank and Mizuho will provide services to Japanese companies operating and investing in Turkey.

Bank of Tokyo-Mitsubishi UFJ Ltd. unveiled an accord with Turkiye Is Bankasi AS in October. The unit of Japan’s biggest banking group also won approval to set up a bank in Turkey with capital of $300 million, according to a decision by Turkish regulators published on Dec. 22.

To contact the reporter on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net