Japan's SMBC agrees to raise stake in Bank of East Asia

TOKYO, Sept 5 Fri Sep 5, 2014 5:03am EDT

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TOKYO, Sept 5 (Reuters) - Japan's Sumitomo Mitsui Banking Corp said on Friday it has agreed to raise its stake in Hong Kong's Bank of East Asia Ltd to 17.5 percent from the current 9.6 percent in a deal worth $950 million.

In a statement, Japan's third-largest lender by assets said it will buy shares in a private placement by Bank of East Asia.

The terms of the deal are yet to be determined as the transaction is pending approval by regulators, the bank said. Based on Friday's share price, the deal is worth about 100 billion yen ($950 million).

SMBC said the deal is designed to boost the alliance with Bank of East Asia and take advantage of its vast network in mainland China.

SMBC is core banking unit of Sumitomo Mitsui Financial Group Inc.

($1 = 105.23 Japanese yen) (Reporting by Taiga Uranaka; Editing by Matt Driskill)

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