MUFG Seeks to Spend $900 Million on Acquisitions in U.S, Asia

  • First time banking unit CEO has said how much he may spend
  • Wants bigger scale in U.S.; also eyeing India, Indonesia

Mitsubishi UFJ Financial Group Inc.’s lending arm is seeking acquisitions of about 100 billion yen ($890 million) in Asia and the U.S. to bolster its global operations, its top executive said.

Bank of Tokyo Mitsubishi UFJ Ltd., to be renamed MUFG Bank in April, would consider taking majority stakes in banks in countries such as Indonesia or India in addition to the U.S., Chief Executive Officer Kanetsugu Mike said in an interview. 

Kanetsugu Mike

Photographer: Akio Kon/Bloomberg

While Japan’s biggest bank has previously signaled interest in buying lenders in the countries, it’s the first time a senior executive has indicated how much it might spend. Mike, 60, said any decision would be based on strategic fit, price and profitability, while noting that U.S. targets are “expensive” at the moment.

Japan’s biggest banks are expanding abroad to make up for declining loan profitability and a shrinking population at home. In the U.S., MUFG owns a bank with a heavy presence in California, and is the largest shareholder in Morgan Stanley. It bought stakes in banks in the Philippines, Thailand and Vietnam in recent years.

Overseas business remains “a driver of growth for both the bank and the group,” Mike told a group of reporters at the lender’s Tokyo headquarters.

‘Very Expensive’

Mike said the company needs to boost its scale in the U.S., where its MUFG Union Bank unit is only the 21st-largest holder of deposits, while adding that potential acquisition targets may be costly given the nation’s surging stock market.

“We need to be a little bigger from a competitive perspective,” said Mike, who was executive chairman of the group’s U.S. holding company until he took the current post in June. “But with the Dow Jones Index as high as it is, everything you look at is very expensive.”

MUFG took a stake in the lender known as VietinBank in 2012 and bought Thailand’s Bank of Ayudhya Pcl for more than $5 billion in 2013. It acquired 20 percent of Security Bank Corp. in the Philippines last year, and it plans to almost double its network there to 500 branches by 2020. 

At the same time, the Japanese lender has been reviewing its minority investments, selling its holding of CIMB Group Holdings Bhd. in Malaysia this year for about $610 million to improve capital efficiency.

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