4-5-33, Kitahama Chuo-ku
Sumitomo Trust & Banking is one of many companies that bear the name Sumitomo. Sumitomo, originally a copper producer, was one of Japan's conglomerates. By subsidizing new ventures with existing operations, Sumitomo branched into numerous businesses, including transport and warehousing, insurance, engineering, and banking.
Sumitomo established a successful banking subsidiary in 1912. The Sumitomo Bank was eager to enter trust banking, but was prevented by financial regulations from doing so. Sumitomo circumvented the regulations by creating another subsidiary, the Sumitomo Trust Company.
Established in 1925, the Trust was actually a spinoff of the Sumitomo Bank, staffed at first with bank personnel. Although technically it was an independent corporation, Sumitomo Trust was controlled by other companies in the Sumitomo group. As a "captive" subsidiary, it functioned as the group's private trust bank, becoming an important link in an increasingly complex financial organization that included commercial banking, insurance, and corporate finance.
Sumitomo Trust benefited greatly from Japan's strong industrial growth during the 1930s. But at the same time the government was ruled by a military clique which, threatened by the power of huge industrial groups like Sumitomo, favored their dissolution. This inclination, however, was strongly tempered by the government's reliance on their industrial might for its massive armament program.
During World War II, Sumitomo Trust was forced to obey strict instructions from the government. When the war ended in 1945, the occupation authority ordered a complete breakup of the Sumitomo group. This meant that Sumitomo Trust's ties with other group companies had to be cut completely. Each company was purged of managers who overtly supported the war, and each was forced to change its name.
The Sumitomo Trust returned to business in 1948 as the Fuji Trust & Banking Company. As a result of new financial regulations, primarily the Commercial Banking Law, Fuji Trust was also permitted to engage in limited banking activities. In 1950 the company was authorized to deal in foreign exchange, and the following year started trusteeships for investment trusts.
In 1952 industrial laws were liberalized and the company was allowed to change its name back to Sumitomo. In addition, the former Sumitomo companies were permitted to hold minority shares in each other and to conduct regular strategy meetings.
In an effort to maintain leadership in the industry, Sumitomo Trust consistently pioneered new forms of trust management. In 1952 it introduced loan trusts, and in 1957 began pension-trust management.
The company grew steadily during the 1960s, just as it had in its early years. The Trust had many profitable middle-market clients, but its primary sources of business were affiliated Sumitomo companies; it was again, in many ways, the private trust bank for the Sumitomo group.
In 1973, after setting up foreign offices in New York, London, and Los Angeles, Sumitomo Trust opened an international department to gather intelligence on capital markets. The establishment of this department marked the beginning of Sumitomo Trust's interest in developing a solid international financial network. This was later expanded, with offices in Europe, the Middle East, Australia, and elsewhere in Asia and the Americas.
It was not until the early 1980s, however, that Sumitomo Trust became highly active in international markets, becoming more aggressive in marketing its services to third parties with little or no association with other Sumitomo companies. The Trust's business expanded accordingly, and by 1987 it was the second-largest trust and banking company in Japan.
The company soon outgrew the limited opportunities of its close association with the Sumitomo group, and during the late 1980s it began to forge new relationships with foreign banks and securities dealers. In spite of an impending liberalization of Japanese financial laws, Sumitomo has not yet announced plans to develop any capabilities of its own in securities dealing.
Sumitomo Trust & Banking is bound to remain closely associated with the Sumitomo group (its four largest shareholders are Sumitomo companies). It will, however, take on an increasingly high profile in international finance. Its greatest assets are its highly efficient management structure and membership in the Sumitomo group.
Principal Subsidiaries: Sumitomo Trust International Limited; Sumitomo Ivory & Sime Limited; Sumitomo Trust Finance (Switzerland) Limited; Sumitomo Trust & Banking (Deutschland) AG; Sumitomo Trust & Banking (Luxembourg) S.A.; The Sumitomo Trust Finance (H.K.) Limited (Hong Kong); STB Financial Futures (Singapore) Pte. Limited; Sumitomo Trust & Banking Co. (U.S.A.); Sumitrust Security Pacific Investment Managers, Inc. (U.S.A.).
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