Bank of China Redeems 60 Billion Yuan in Tier-2 Capital Bonds

Bank of China has redeemed 60 billion yuan in Tier-2 capital bonds. Bank of China is a major Chinese banking group with a global network of over 11,485 branches, offering a range of financial services including corporate banking, retail banking, market banking, insurance, and investment banking.

Sumitomo Mitsui Financial Group Inc. (SMFG) has initiated discussions to increase its investment in U.S. securities giant Jefferies Financial Group Inc., aiming to make SMFG an equity-method affiliate and establish a joint venture for investment banking. The goal is to provide comprehensive financing support for Japanese companies, including initial public offerings (IPOs), both domestically and internationally.

SMFG intends to raise its stake in Jefferies to 20% from the current 14.5%, according to sources. Given Jefferies' market capitalization of approximately $13.7 billion (about ¥2 trillion), this would require an investment of at least ¥110 billion to acquire the additional 5.5% stake Japan’s SMFG Set to Form Joint Investment Banking Venture with U.S. Securities Giant Jefferies Financial Group^[1].

Following this, SMFG subsidiary SMBC Nikko Securities Inc. will form a joint venture with Jefferies, with SMBC Nikko holding the majority stake. The new entity will transfer a portion of SMBC Nikko's investment banking business, focusing on financing support services such as IPOs and capital increases through stock issuance.

The additional investment and establishment of the joint venture are subject to approval from Japanese and U.S. financial authorities. This move aligns with SMFG's objective to strengthen its investment banking capabilities.

According to the Financial Times, Jefferies ranks among the top 10 globally in terms of receiving funds from stock issuance and consulting services for mergers and acquisitions, trailing only firms like Goldman Sachs in the United States Japan’s SMFG Set to Form Joint Investment Banking Venture with U.S. Securities Giant Jefferies Financial Group^[1].