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We have had fruitful talks with the management of Sumitomo Mitsui Banking Corporation (SMBC), Finance Minister Mihály Varga announced on his Facebook page.
As he wrote: “SMBC has been a key partner of Hungary in debt management and successful samurai bond issues in recent years.
The financial institution now intends to further strengthen its activities in Hungary.”
He added that this is based on the fact that the Hungarian banking system has remained stable despite the Ukrainian war, and that the Hungarian economy will return to high growth next year. Furthermore, the government is steadily reducing public debt and the budget deficit.
The building of SMBC in Tokyo, Japan. Photo via Wikipedia
At the beginning of 2022, Hungary launched another foreign currency bond on the market. The Russian-Ukrainian conflict that was about to erupt at the time, put emerging markets in a difficult situation, but the so-called samurai bonds, sold in Japanese yen, were a surprising success with investors.
Despite the uncertain global environment, demand for the new bond remained strong, with institutional investors buying 16 billion yen of three-year maturities, 46.8 billion yen of five-year green bonds, 4.7 billion yen of seven-year green government bonds, and 7.8 billion yen of ten-year green government bonds. Most importantly,
the majority of the bonds are green bonds, meaning that their funds are earmarked for proven environmental and climate sustainability purposes.
As we reported earlier, there is a great potential of bilateral relations between the two countries. As Foreign Minister Péter Szijjártó stressed: “We are at the gateway to a new era in Hungarian-Japanese relations, and we have a lot of untapped potential.” Besides the successful financial cooperation, the Japanese automotive giant, Suzuki, is bringing an investment to Esztergom (northern Hungary). The investment aims to expand the company’s capacity and make very significant technological improvements in the fields of digitalization and automation. In addition, a nuclear industrial agreement has been reached as well between the two parties. The purpose of that is to ensure that nuclear energy remains a key element of the two countries.
Featured image via Facebook/Varga Mihály