Resona to Partner With BNP Paribas Unit in First U.S. Foray

  • Deal to service Resona’s customers could be announced in May
  • Expands Japanese lender’s alliance network beyond Asia

Resona Holdings Inc. is poised to enter its first partnership with a U.S. bank as the Japanese lender expands alliances abroad to compete with its bigger rivals.

A deal to work with San Francisco-based Bank of the West, a unit of BNP Paribas SA, could be announced as early as this month, Resona President Kazuhiro Higashi said. The partnership will help the Tokyo-based bank serve mainly Japanese corporate clients that operate in the U.S., he said in an interview on Tuesday.

Japan’s sixth-largest lender by assets has been forming ties with peers throughout Asia to provide services such as local-currency loans in an effort to keep customers from moving to bigger competitors that are expanding abroad. Higashi, 59, said more than 2,800 of Resona’s clients, mostly small and mid-sized businesses, are already operating in the U.S., where economic growth is outpacing Japan’s.

“The U.S. economy is performing well and Japanese companies have strong needs for expanding their businesses there,” Higashi said.

Bank of the West is fully owned by France’s largest bank. Founded in 1874, the regional lender had $75.7 billion of assets, 600 offices and 10,416 employees as of December, according to its website.

In addition to supporting companies through Bank of the West, Resona plans to use the agreement to get involved in cross-border mergers and acquisitions, Higashi said, without elaborating. Mexico is a likely next target for further extending the bank’s reach overseas, he added.

Shares of Resona fell 0.6 percent in morning trading in Tokyo, extending this year’s decline to 28 percent. The Topix Banks Index gained 0.2 percent, bringing the year’s drop to 29 percent.

As well as a subsidiary in Indonesia and five representative offices, Resona has agreements with 15 banks in 13 countries in Asia including India’s Yes Bank Ltd., which it announced on May 11. With no banking licenses abroad, the Japanese lender typically introduces its customers to the partners to obtain local-currency loans.

Resona earned 9.1 billion yen ($83 million) from its overseas business in the year ended March, equivalent to 1.5 percent of gross profit. The lender is targeting net income of 160 billion yen this fiscal year, 13 percent lower than a year earlier.

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