Sumitomo Mitsui Financial Group's Chief Executive Officer Jun Ohta, who pursued an aggressive expansion abroad during his four years at the helm of Japan's second-largest bank, has died. He was 65.
Ohta died on Saturday, the Tokyo-based lender said in a statement. The cause of death was pancreatic cancer, a spokesperson said on Monday.
Ohta's well-being attracted attention when he missed an earnings briefing earlier this month, with the bank citing health reasons, the first time it signaled something was wrong with the CEO. Deputy President Toru Nakashima has started acting in the role for the time being, and the company will select and announce a successor in a timely manner, it said.
Having worked in Singapore previously as a midlevel manager, Ohta became an advocate for developing full-banking services in key markets in Asia. He also oversaw an investment build up in Jefferies Financial Group to boost Sumitomo Mitsui's investment banking business in the U.S.
"Ohta-san was a true leader with great vision and courage, and a person with endless decency and kindness," Brian Friedman and Rich Handler, who are president and CEO of Jefferies respectively, said in a statement. "We cherish our friendship with him and will dedicate the ongoing success of our partnership with SMBC to his memory."
Ohta often used the phrase "banking is a GDP business" during interviews, meaning the fortunes of the company are tied to the economic growth of home countries.
To that end, Sumitomo Mitsui picked four Asian nations — Indonesia, India, Vietnam and the Philippines — as focus markets. The bank invested billions of dollars across the region under his watch as growth opportunities at home dwindled due to the country's slow economic expansion and bouts of deflation.
A former American football player at college, Ohta was known within industry circles for his frankness and unassuming character. He broke the mold for employees by introducing a more relaxed office dress code and encouraging younger workers to establish in-house startups.
That legacy will remain, according to Toyoki Sameshima, an analyst at SBI Securities in Tokyo.
"He was a straight-talker," Sameshima said. "Ohta's policy will be continued by whoever succeeds him."
Ohta was among the first Japanese bank executives to publicly voice the need to prepare for opportunities presented by rising interest rates. With inflation starting to take hold in Japan, bank shares have been surging on expectations that the central bank may soon scrap its seven-year negative interest-rate policy.
Shares of Sumitomo Mitsui have jumped 42% this year and are up more than 90% since Ohta became CEO in April 2019. The stock rose 2.1% on Monday in Tokyo, in line with peers.
Earnings prospects have contributed to the gains, also benefiting its main rivals Mitsubishi UFJ Financial Group and Mizuho Financial Group Inc. Sumitomo Mitsui this month raised its net income forecast to 920 billion yen ($6.2 billion) for the year ending March, which would be a record. The bank also unveiled plans to spend as much as 150 billion yen repurchasing stock.
The Japanese Bankers Association said Ohta's loss was deeply regrettable. "As a top manager of one of our biggest financial groups, he had been actively working for the success of the financial industry," the lobby group's Chairman Masahiko Kato, who is also CEO of Mizuho Bank, said in a statement.
One setback on Ohta's watch was a probe into block trading at SMBC Nikko Securities, the group's investment banking arm. The unit was found guilty of market manipulation earlier this year and some former executives remain on trial. Ohta took a pay cut for six months.
Meanwhile, Ohta made strides to boost the bank's digital efforts. He cemented an alliance with SBI Holdings by taking a stake in the operator of Japan's biggest online brokerage to woo younger, tech-savvy clients.
In March, Sumitomo Mitsui launched an all-in-one mobile app to attract users with reward programs. Once Japan's interest rates start rising, the scale of a bank and its deposits will provide a big advantage for its profits, Ohta said at the time.
"He took a step to court deposits and customers ahead of rivals with the Olive app," Sameshima said. "He had foresight."
