SMFG buys small stake in S.Korea's KB Financial

SEOUL, Dec 31 (Reuters) - Sumitomo Mitsui Financial Group (8316.T: Quote, Profile, Research), Japan's third-largest bank, bought a small stake in South Korea's KB Financial Group (105560.KS: Quote, Profile, Research) for about $46 million from KB's banking arm Kookmin, Kookmin said on Wednesday.

SMFG agreed in October to buy a 2 percent stake in KB from Kookmin by the end of June, 2009, in four tranches.

The first transaction for a 0.5 percent stake, or 1.78 million shares, was made on Tuesday at a price of 32,142 won per share, a 4.6 percent discount from Tuesday's closing price, a Kookmin Bank spokesman said.

Kookmin is selling stakes it owns in the parent firm to meet local banking rules and boost its capital ratio. ($1=1255.4 Won) (Reporting by Rhee So-eui)