00:00First of all, it's not really why now for us. We've been operating in the U.S. market for over 100 years, so it's not new for us.
00:08But at the same time, we see more and more ties between the U.S. and the Japanese market, and it brings a lot of opportunities for us, Japanese banks.
00:19So where are the biggest opportunities? I'm thinking obviously every day about AI, data centers, this huge push because we don't really have the infrastructure.
00:28We don't really have the gear, and we need to buy it all and bring it in.
00:31I mean, Google's announcement that they're going to spend $185 billion this year just sort of highlights that.
00:37Of course, but the primary business of SMBC is to help corporate clients and perhaps active global sponsors operate and grow where they want to go.
00:50We are very focused on helping them in three core areas. One is AI. The other is private credit.
00:58And last is M&A. All three things are naturally advantageous for Japanese banks. AI, if you look at the Japanese market, there's a demographic challenge.
01:11And the Japanese government has been hugely pushing to support AI to improve and enhance productivity.
01:17So naturally, Japanese banks are in the middle of that shift. Private credit, there's strong demand for asset-backed financing.
01:25We have a global sponsor financing team and a structured financing that supports that.
01:30And also the fact that SMBC is a global player and all these customers operate very globally.
01:38And lastly, M&A is a huge area of opportunity for us, given that there is strong business ties between U.S. and Japan.
01:47And there's tremendous interest by the Japanese companies investing in the U.S. market.
01:52Can you give a sense of those different categories, just how big AI is as part of that?
01:58Is that like where the biggest growth is? Is that becoming the biggest part of the offering? Or is it still early innings?
02:05I think it's still early innings. But there's more demand and more growth in that sector.
02:11It's just not only data centers. There's a lot of business surrounding that data centers and infrastructure that needs to be built, whether it's energy, whether it's cables, whether it's cooling system.
02:24And all these industries are supported by Japanese companies that would like to hugely invest in the U.S. market.
02:29So I sort of key on to the last part of your triumvirate, which is the M&A push, because Japanese companies you say are so interested in investing in the U.S.
02:40So to Danny's question, there isn't really a sell America trade that you see as evident in terms of mergers and acquisitions, regardless of our huge national debt,
02:51which I know the Japanese have even an even bigger national debt to GDP, regardless of our, you know, concerns about an independent Fed,
03:00regardless of what's happening about Greenland or Minneapolis, you're still seeing Japanese companies want to invest here.
03:07Yes. Well, let's not forget the Japanese government was one of the first government to agree with the U.S.
03:14government on the tariff agreements, and they have committed to make a huge investment into the U.S.
03:19market. Not so much about the commitment itself. It's it's a proof of confidence.
03:27And if it's a proof of security that you can freely invest in the U.S.
03:32market for Japanese companies. And when you look at the Japanese market, it is a maturing market that you need to find areas of growth.
03:43So there's tremendous opportunity and interest for Japanese business to invest in the U.S.
03:49Passport investment going the other way, because it feels like every couple of weeks there's some big private capital firm that's like we're going
03:57into Japan, whether it's KKR, Blackstone or whoever. They're like, this is the big market opportunity because the stereotype of Japanese
04:03companies used to be they would not sell to private capital, especially American buyers. Has something changed?
04:10Yes. I would say that corporate governance have improved significantly in Japan. The Japanese government, the business leaders in the corporate
04:20space are very open to change and reform. So you're actually seeing that a lot in the Japanese market. And therefore, business leaders
04:29are very open for change and transformation. So you see a lot of activities in the corporate sector, whether it's privatization,
04:37spinoffs, mergers, acquisitions. And again, going back to a bank like SMBC, we can always be valuable in providing services when
04:47business transforms. So we're very excited about the Japanese market. And we can always be valuable to U.S. customers that are very
04:55interested in coming into the Japanese market. You point out that SMBC has been in business in America for over 100 years. And you've been
05:04there for a long time as well. There's been a couple of times in American history when immigration was tough. And right
05:12now is one of those times. How does how does that play out in terms of getting your employees in and out of this
05:18country in terms of getting visas to work for people who aren't American citizens that those things must be
05:23important to you as a business? Well, of course, the key to success in business is that you adhere to the local
05:32practices. So when you look at SMBC's office in New York, it's mostly localized. We do have expats coming
05:39from Japan and vice versa. We do have American citizens working in our Tokyo office as well. So there's an
05:47element of that. But overall, what is important is that we have people that are capable supporting the business.
05:53I would love to just finally get your thoughts on the competitive landscape because there are many banks
05:59and many of the big U.S. behemoths who have really, really an AI infrastructure and parts of the new
06:06economy are really making a push forward. Just just how competitive is it to win out some of these things?
06:10Yes. Again, we're not a U.S. bank. We are a Japanese bank. And that is what differentiate us compared to our
06:19competitors. We are in the middle of transformation in AI, given that we are a major bank, one of the
06:26largest banks in Japan. And we are right in the middle of that transformation. We are a bank that
06:33has a huge franchise in both markets, U.S. and Japan. And that gives an advantage over our competitors,
06:39given that there's many cross-border activities in M&A. So I would say that the fact that we are Japan
06:47and the fact that U.S.-Japan is a close ally gives us a huge advantage over our competitors to play a
06:53meaningful role.
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