60 years and beyond with purpose: SMBC shapes a sustainable future with its customers, employees and the community

As it celebrates six decades in the city-state, Sumitomo Mitsui Banking Corporation continues to invest and create value across Asia

Published Wed, Dec 6, 2023 · 09:50 PM

Banking

AS Sumitomo Mitsui Banking Corporation (SMBC) marks its 60th anniversary in Singapore, it finds itself not just celebrating a milestone but shaping the future. A future where prosperity and sustainability go hand in hand.

Headquartered in Tokyo, SMBC's roots in Singapore trace back to 1963 when it opened its doors with a modest team of around 30 employees. In 2008, the Singapore branch ascended to its position as the Asia-Pacific headquarters where the bank - one of Japan's largest by assets - provides seamless connection and access to, from and within the region.

As the city-state developed into a top financial hub that draws investments from the world over, SMBC's Singapore office grew and expanded, too. It now hires over 1,300 employees and is the nexus for the group's diverse businesses and operations across the fast-growing region.

Says Akihiro Fukutome, president and CEO of SMBC: "SMBC has grown together with Singapore since we established our branch here 60 years ago."

In line with its drive to make sustainable change, SMBC relocated its Singapore office into a dual-location set-up at CapitaSpring and One @Changi City - both certified green buildings.

Looking ahead, he emphasises the key role the bank's Singapore operations play in advancing the goals outlined in SMBC's recent Medium-Term Management Plan, a roadmap that outlines the bank's strategic priorities, business goals and initiatives for the coming years.

Among the latest goals highlighted include greater support for clients' decarbonisation efforts in order to work towards achieving a carbon-neutral society.

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"We are committed to investing in and supporting local initiatives, especially in the areas of sustainability and nurturing local talent," adds Fukutome.

Contributing to Singapore's financial sector

Through partnerships with the Economic Development Board and the Agency for Science, Technology and Research, SMBC has, over the years, helped Japanese companies connect with stakeholders in Singapore through seminars and business matching programmes.

One of SMBC's notable contributions to Singapore's financial sector is its role as one of the founding members of the Singapore Green Finance Centre (SGFC). Established in 2020, it is the first centre of excellence for sustainable finance and is dedicated to building a new ecosystem for sustainable investments in Asia through research, education and talent development. SMBC's co-head for the Asia Pacific Division Rajeev Kannan serves as a member of the Advisory Board at the SGFC, while subject matter experts from SMBC regularly share insights at seminars and workshops organised at the centre.

SMBC co-organised the Finspiration Challenge with Junior Achievement Singapore earlier this year as part of its efforts to improve the financial literacy among youth.

Internally, SMBC employees receive regular updates and training on the latest sustainability trends and ESG (environmental, social and governance) concepts via a sustainability academy set up by the company to ensure that staff are well-versed in the field.

Says Yuichi Nishimura, CEO of the bank's Singapore branch and co-head of its Asia Pacific Division: "SMBC believes it is key to train a talent base that understands the role that ESG plays in society and among businesses."

Community at the core

Giving back to the community is another cornerstone of the bank's ethos.

As part of its 60th anniversary celebrations, SMBC is working with a youth-serving non-government organisation to promote financial literacy among the young. The bank provides sponsorships, while staff volunteer their time to mentor primary school students, ensuring that they have a good grasp of monetary concepts early in life.

In addition, SMBC staff also contribute a collective 600 hours outside working hours to uplifting the days of isolated seniors in the community. This is in addition to the monthly volunteering programmes organised by the bank.

An advocate of green efforts, the bank is contributing to the conservation of Singapore's marine diversity through the Garden City Fund's Plant-A-Coral, Seed-A-Reef programme.

Once a month, SMBC staff gather at Care Corner's Toa Payoh branch to spend time with elderly in the neighbourhood.

Coral nubbin workshops are among activities organised by SMBC to enable staff and their family members to be a part of Singapore's marine conservation efforts.

Tech and transformation

New technologies in artificial intelligence (AI) and digitalisation are helping to advance sustainability goals at the bank as well as drive transformation in its operations, ranging from loans, trade finance and cash management to securities and specialised areas such as real-estate, maritime, aircraft and clean energy financing.

For instance, the bank is the lead financial institution behind NovA!, the Monetary Authority of Singapore's AI-powered tool to help financial institutions assess the sustainability performance of the city-state's real estate sector.

Last year, Sustana - a digital solution that the bank developed to help customers and other stakeholders embark on or accelerate their decarbonisation journeys - won the Singapore Business Review's Digital Financial Services Award.

From digitalising the wholesale banking operations and growing the institutional investor business, to providing integrated solutions to clients, SMBC is focusing on cultivating new business opportunities and generating synergies amongst its partners.

"It is our collective commitment together with our customers, community and people to make each day count. We need to push our best selves forward every day in our pursuit of a greener and more prosperous future," says Nishimura.

Towards a sustainable tomorrow

In 2020, SMBC launched its GREEN x GLOBE 2030 initiative - a 10-year plan that sets out the key pillars and long-term goals to promote a sustainable world. Among other goals, the group has pledged a faster pullback of financing for the coal sector, reducing carbon emissions across the loan portfolio, and increasing loans available for sustainable financing to 50 trillion yen (S$452 billion) by 2030, up from an earlier target of 30 trillion yen.

In the Asia-Pacific region, SMBC's green and ESG loans totalled some US$6.9 billion (S$9.4 billion) in 2022, reinforcing its commitment to sustainable finance. SMBC Group aims to achieve net zero for its entire loan and investment portfolio by 2050.

Sustainable finance is playing a critical role in facilitating the global shift towards cleaner energy. From Singapore, SMBC is helping to finance a massive 1.3-gigawatt hybrid wind-solar project across three Indian states, the first internationally financed offshore wind project in South Korea, South-east Asia's largest floating solar plant and the largest wind power project that crosses the borders between Laos and Vietnam, being the only global bank involved.

In Singapore, the bank is financing the country's first hydrogen-ready power plant, which is currently being developed by Keppel. When ready, the new plant will reduce Singapore's greenhouse gas emissions by up to 220,000 tonnes per year. That's equivalent to taking about 47,000 cars off the road a year.

Says Kannan: "A better tomorrow is all about starting today. By adopting a holistic sustainability strategy that focuses on the right priorities and projects, SMBC is at the forefront of innovative financing solutions that create lasting social and environmental impact."

Earlier this year, SMBC co-founded the SMBC Asia Rising Fund, a US$200 million corporate venture fund (CVF) to invest in, support, and collaborate with the most promising startups in Singapore and across South-east Asia. These startups, according to SMBC, will likely work with the bank in areas like lending technology, payments and supply chain finance to create new businesses and contribute to the growth of the region's economy.

"With over 400 years of history in supporting our customers' journeys and success as SMBC Group and 60 years from Singapore, we are looking ahead to achieving more milestones together with our customers, our people and the local community," adds Fukutome.

60 years of growth in Singapore

A look at how SMBC in Singapore has evolved over the years into a cornerstone of the region's financial landscape

1963: Commencement of operations in Singapore

2008: Establishment as a regional hub for its Asia Pacific Division

2017: Set up of SMBC's Asia Innovation Centre in Singapore

2020: Founded Singapore Green Finance Centre with 8 other banks

2022: Strategic relocation of offices into certified green buildings

2023: Launched the US$200million (S$270million) SMBC Asia Rising Fund to support Asian start-ups