The problems that have pummeled all parts of the financial services sector in Japan are causing participants to launch strategic reviews of their U.S. operations. As a case in point, SUMITOMO BANK, LTD. is exploring the sale of SUMITOMO BANK OF CALIFORNIA, a San Francisco-headquartered retail bank with 47 branches scattered through California and assets of $5.2 billion. The Osaka-based parent, which owns 85 percent of California's 11th-largest bank, also is weighing the sale of that part of its U.S. business that lends to midsize American companies. Sumitomo Bank's potential U.S. retrenchment does not include its own branch network, which operates out of New York City and focuses on wholesale commercial banking and capital market services for big corporate clients.
For the same reasons, SANWA SECURITIES (U.S.A.) CO., a Manhattan-based subsidiary of SANWA BANK, LTD., is in the process of ending unprofitable activities. Candidates for retreat include underwriting securities issued by U.S. government- related agencies and commercial paper. In the future, Sanwa Securities will focus on trading in bond futures and other money-making businesses rather than trying to be a full-line brokerage.
An exchange rate of ¥130=$1.00 was used in this report.