DBS and Nishi-Nippon City Bank collaborate to support Japanese SMEs in Asia

DBS Bank and Nishi-Nippon City Bank (NCB) have signed a memorandum of understanding (MOU) to foster greater collaboration and support for Japanese SMEs in Asia in corporate banking account services, trade finance and capital market advisory solutions.

According to the MOU, both banks will act as primary advising banks to letters of credit issued by each party and offer discounting of export bills. DBS will also issue bank guarantees such as performance and bid bonds on the back of a counter bank guarantee from NCB. In addition, DBS will provide investment banking and corporate finance advisory services to NCB corporate customers who are seeking to raise funds either through a primary or secondary listing on the Singapore Exchange.

Small and mid-sized Japanese companies, the main customers of regional banks like NCB, are making bigger inroads overseas, particularly into ASEAN countries.

A whitepaper published by Japan’ s The Small and Medium Enterprise Agency, reveals that 42.8% of Japanese SMEs have increased their presence overseas in ASEAN in 2013, up from 25.5% in 2010. In the Japan Bank for International Co-operation (JBIC)’s survey in December 2015, 75.2% of small and mid-tier enterprises said that they would “strengthen and expand” their overseas business in the medium-term.

“We opened our representative office in Singapore last March and our mission is to meet the various needs of our customers conducting business overseas,” says Hiromichi Tanigawa, President of NCB. “As DBS has an extensive network across Asia and expertise in serving SMEs, the partnership with DBS will help us better serve our SME clients who are expanding their business in Asia.”

Sim S. Lim, Group Executive of DBS, adds, “We launched our securities business in Japan last August to act as an intermediary of investment flows between Asian corporates and Japanese investors. With this new alliance with NCB, we will be able to expand our Japanese client base to include small and medium enterprises with operations in Asia.”