SMFG, Japan's third largest bank, to invest in Goldman

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(Agencies)
Updated: 2008-09-24 11:25

TOKYO -- Sumitomo Mitsui Financial Group (SMFG), Japan's third-largest bank, plans to invest in Goldman Sachs Group Inc, Kyodo news agency reported on Wednesday.

SMFG's investment will total several hundred billion yen, Kyodo said.

Goldman spokesman Lucas van Praag, when reached by telephone, said he couldn't confirm the report while SMFG said it had no plans at this time to invest in Goldman.

The report comes after Goldman said Warren Buffett's Berkshire Hathaway Inc would invest $5 billion in it, in a major boost for the Wall Street bank from perhaps the world's best-known investor.

It also follows a string of Japanese financial firms snapping up U.S. assets. Nomura Holdings Inc agreed to buy bankrupt Lehman Brothers Holdings Inc's Asia, Europe and Middle East operations.

That came on the heels of Japan's top bank, Mitsubishi UFJ Financial Group Inc agreeing to buy up to 20 percent of Morgan Stanley.

Shares of Nomura rose 4.8 percent to 1,499 yen, compared with a 1.3 percent decline in Tokyo's TOPIX average

Share of Mitsubishi UFJ, Japan's top bank rose 3.5 percent after it said it would pay as much as $8.5 billion for up to 20 percent in Morgan Stanley.

"Nomura was able to buy Lehman after it filed for bankruptcy so I think investors think that Nomura got Lehman on the cheap," said Nana Otsuki, banking analyst at UBS in Tokyo.

"It kind of seems that MUFG might have been able to get Morgan Stanley cheaper if they waited a little," she added.

Japanese financial markets were closed on Tuesday for a national holiday.

Once considered too naive and cautious for the high-risk, high-return world of investment banking, cash-rich Japanese firms are once again aggressively pushing abroad.

Japanese financial firms have largely avoided the massive credit losses that tore through Wall Street. Unlike their Western rivals, Mitsubishi UFJ and others have largely shied away from riskier investments since their near-death several years ago, when they needed massive injections of public funds to stay afloat.