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Sumitomo Mitsui Financial Group and Jefferies Strengthen Alliance in Canada

Jefferies and SMFG expand strategic alliance to Canada, leveraging combined expertise in corporate and investment banking.

By Mackenzie Crow

4/4, 09:11 EDT
Jefferies Financial Group Inc.
Sumitomo Mitsui Financial Group Inc Unsponsored

Key Takeaway

  • Sumitomo Mitsui Financial Group and Jefferies expand their alliance to Canada, aiming to strengthen corporate and investment banking services.
  • Jefferies establishes a full-service investment bank in Toronto with over 40 employees, including key hires from Barclays Plc’s Canadian division.
  • The partnership, dating back to 2021, has grown with SMFG increasing its stake in Jefferies to 15%, indicating a deepening and successful global collaboration.

Strategic Alliance Expansion

Sumitomo Mitsui Financial Group Inc. (SMFG), a leading Japanese bank, and Jefferies Financial Group Inc., a prominent New York-based investment firm, have announced their plans to extend their collaboration into the Canadian market. This move aims to leverage both companies' strengths in corporate and investment banking deals. Jefferies, having established a full-service investment bank in Canada in December, has set up its operations in Toronto with an initial team of over 40 employees. This team includes several key figures from Barclays Plc’s Canadian division, notably Bruce Rothney, who has transitioned to become the CEO of Jefferies Canada.

Deepening Ties

The partnership between SMFG and Jefferies is not new; it dates back to 2021 when SMFG provided significant financial backing to Jefferies with $2.25 billion in financing and acquired approximately 4.5% of Jefferies' shares. This relationship was further solidified last year when SMFG increased its stake in Jefferies to 15%, marking a significant increase in economic ownership. The collaboration has seen the two entities working together across various regions, including Europe, the Middle East, and Africa, indicating a successful and expanding global partnership.

Synergistic Collaboration

The joint statement from the two banks highlights the complementary nature of their expertise. Jefferies brings to the table its extensive knowledge in industry-specific advisory, mergers and acquisitions (M&A), leveraged finance, and equity capital markets within Canada. On the other hand, SMBC Group, the commercial banking arm of Sumitomo Mitsui, contributes its deep banking and debt capital markets expertise, along with a robust balance sheet. This synergy is expected to enhance the service and support provided to clients in the Canadian market, leveraging the strengths of both institutions.