Mitsubishi UFJ Financial Group has weighed up close to €100bn of European bank asset portfolios that shrinking rivals are seeking to offload, according to the man in charge of the Japanese group’s global expansion.
Takashi Morimura, head of the group’s global banking operations, told the Financial Times that the bank had received approaches to buy more than Y10tn ($119.6bn) of mostly eurozone assets, as banks in France, Germany, Spain, Italy and the UK have sought buyers for unwanted assets.
“If we find interesting project finance and securitisation portfolios in the eurozone, that would be very good,” Mr Morimura said. But he cautioned that the bulk of the assets he had been offered would most likely be rejected. “We have the risk appetite for deals in Germany and northern Europe but not in southern Europe,” he said. “But that means only a small percentage of what we have been offered is appealing.”
Europe’s banks are shrinking following a drying-up of commercial financing, especially dollar-denominated funds, and as they build capital levels ahead of a June deadline for hitting higher ratios imposed by the European Banking Authority.
MUFG has yet to take part in the latest wave of European portfolio deals, though rival Sumitomo Mitsui Financial Group recently bought RBS Aviation Capital for $7.3bn.
MUFG’s most recent European deal was in 2010, when it bought a project finance portfolio from RBS, the part-nationalised UK lender.
The Japanese group’s push into Europe, where it already employs about 2,500 people out of its total 120,000 headcount, is part of a strategy to diversify away from a slow growing domestic Japanese market.
Mr Morimura said the plan to buy up asset portfolios was one of three strategic priorities for MUFG’s global business. Also key would be to expand the bank’s US commercial banking franchise, and build out its Asian presence outside Japan.
MUFG this week acquired a small US bank, Pacific Capital, which will bulk out its existing Californian subsidiary Union Bank of California, in a $1.5bn deal struck with US billionaire Gerald J Ford.
In Asia, Mr Morimura said the bank wanted to build its presence in markets beyond China, Hong Kong and Malaysia, where it has stakes in local banks. Indonesia and India were a priority, he said.
The upbeat ambitions of MUFG, and of SMFG, are in stark contrast to the retrenchment at Japanese rival Nomura, which has a far bigger global investment banking operation that it has been shrinking aggressively over the past year.
Nomura has shed about 2,000 of its 6,000 European workforce over the past year.
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