Sumitomo's (TYO:8053) Sumitomo Mitsui Finance and Leasing has sufficient capitalization to support its investment in US aircraft leasing company Air Lease, which in turn will bolster its transportation segment, S&P Global Ratings said in a Thursday release.

The investment will provide increased competitive advantage to the transportation division given more steady equipment procurement activity, S&P said.

The rating agency expects the investment burden on the Japan-based company's equity capital to hover within the adequate range of its current capital and earnings assessment.

The investment will slash the company's risk-weighted capital ratio by about 1.4 percentage points from 10.1% at end-March, S&P said.

However, the aircraft leasing activity may be directly hampered by geopolitical risk and global economic dynamics, which will raise the volatility of the group's business performance once the segment's share in its overall portfolio increases, according to S&P.