Summary
Shares in Promise Corporation soared Friday on an interim announcement of the replacement of longstanding President Hiroki Jinnai with Deputy President Ken Kubo, a former Sumitomo Mitsui Bank Corporation executive with extensive consumer lending experience. The change in management signals a turning point in the company's transition from back-alley lender to full fledged megabank affiliate.
Analysis
Friday's announcement erases any doubt as to the Sumitomo Mitsui Financial Group commitment to its equity method affiliate Promise Corporation in the face of increased regulatory pressure and unrelenting requests for refund of overpaid interest. The move increases speculation that SMFG may seek to raise its stake in Promise to 40% and make the unit a consolidated subsidiary. President Hiroki Jinnai, who hails from Promise Corporation's founding family, will become honorary Chairman with no powers as a Representative Director, an indication that his role will be entirely symbolic.
Daniel Lintz consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
