Mitsubishi UFJ Targets Becoming Top-Three Asian Bank

Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest bank, targets becoming one of Asia’s three biggest lenders by profit through making acquisitions, funding infrastructure projects and expanding retail banking.

The company set up a team of about 10 people last year to explore takeovers in Asia and the U.S., Deputy President Tatsuo Tanaka, who oversees global operations for the Tokyo-based lender, said in an interview in Hong Kong on Jan. 11. The bank also wants to expand its retail lending, private banking and asset management businesses, with a special focus on China, India, Indonesia and Australia, he said.

Japan’s biggest banks aim to tap credit demand in Asia’s fastest-growing economies as the European sovereign debt crisis threatens to cut short their home market’s recovery from the record earthquake in March. Mitsubishi UFJ’s profits from Asia may climb about 12-13 percent annually without acquisitions, Tanaka said.

Bank of Tokyo-Mitsubishi UFJ Ltd., the group’s main banking unit, has also brought together a 20-member team in China to search for projects to fund, Tanaka said.

Tanaka declined to say how much Mitsubishi UFJ may spend on acquisitions, or provide details on assets it may buy.

“It’s good timing because it’s not so easy for a lot of European and U.S. banks to go into the acquisition market,” Tanaka said. “We have a strong intention to go into non-organic growth in Asia.”

RBS Assets

Shares of Mitsubishi UFJ rose 0.6 percent to 335 yen at 2:39 p.m. in Tokyo. The benchmark Topix Index advanced 0.9 percent.

Mitsubishi UFJ agreed in November to buy Royal Bank of Scotland Group Plc’s Australia-based infrastructure advisory business. That deal followed the Tokyo-based lender’s 3.9 billion-pound ($6 billion) acquisition in 2010 of RBS’s project financing assets in Europe, the Middle East and Africa.

Last month, Mitsubishi UFJ’s trust banking unit clinched a deal to buy a 15 percent stake in AMP Ltd. (AMP)’s Australian asset management business.

More than 70 percent of Bank of Tokyo-Mitsubishi UFJ’s profit in Asia comes from non-Japanese companies, whereas in the past the company did business overseas mainly to provide credit to Japanese companies operating abroad, Tanaka said. In the U.S. and Europe, the bank earns more than 80 percent of income from non-Japanese companies or projects, he said.

Between 2010 and 2020, Asia needs to invest about $8 trillion in national infrastructure, according to a study by the Asian Development Bank Institute. Sumitomo Mitsui Financial Group Inc. President Koichi Miyata said last month that his bank is also interested in acquiring loans for projects in Asia and North America.

To contact the reporters on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net; Shigeru Sato in Tokyo at ssato10@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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