Deals & MarketsTop Japanese banks interested in foreign acquisitions

Top Japanese banks interested in foreign acquisitions

Banks like Sumitomo Mitsui Financial Group are thought to be accelerating their foreign acquisitions in the US and Asia in order to deliver better shareholder returns and bigger profits.

Banks like Sumitomo Mitsui Financial Group are thought to be accelerating their foreign acquisitions in the US and Asia in order to deliver better shareholder returns and bigger profits, according to the Financial Times.

Alongside Sumitomo, Mitsubishi UFJ Financial Group (MUFG) are set to acquire large wholesale commercial banking or debt capital markets businesses and Mizuho are interested in asset management companies.

A source told the FT that this focus on business areas such as syndicated loans and debt capital markets is because profits are made regardless of the language or cultural differences between buyer and target.

Talks of the interest rate rise in the US could also provide a springboard for acquisitions, as analysts believe that this will cause global market turmoil but the Japanese are determined to identify risks beforehand and use this as an opportunity.

Japan has been attempting to balance their slow home market with acquisitions for many years and growing a business by purchasing abroad seems like a good option for Japanese insurers also, according to the FT.

Ken Takamiya, chief Japan banks analyst at Nomura says that foreign acquisitions should be done in countries that are receiving similar pressure for shareholder return from investors, like the US and other countries in Asia. “It is clear from their comments that the big banks are considering overseas acquisitions as an option. They would probably prefer deals of a size that comes within their cashflow generation, given strong pressure from investors for shareholder return,” said Takamiya.

Earlier this year, it was reported that Mizuho bought US loans from the Royal Bank of Scotland and MUFG bought a large stake in one of Thailand’s biggest lenders, Bank of Ayudhya for Y560 billion in 2013.

Related Articles

India-US trade corridor: Accelerating growth with reverse factoring

Deals & Markets India-US trade corridor: Accelerating growth with reverse factoring

3m Vinod Parmar
This week in treasury: Top 10 headlines you should know about

Brexit This week in treasury: Top 10 headlines you should know about

8m Victoria Beckett
GTreasury & Visual Risk announce partnership to focus on integrated treasury and new markets

Asia Pacific GTreasury & Visual Risk announce partnership to focus on integrated treasury and new markets

9m Guest Writer
Insurance M&A plunges in H1

Deals & Markets Insurance M&A plunges in H1

11m Victoria Beckett
Tokyo champions free trade through TPP revival

Asia Pacific Tokyo champions free trade through TPP revival

11m Miha Hribernik
Economies set for highest government debt since 2000: Fitch

Deals & Markets Economies set for highest government debt since 2000: Fitch

11m Victoria Beckett
Finastra launches from Misys-D+H union

Deals & Markets Finastra launches from Misys-D+H union

1y Alara Basul
Finastra becomes third-largest fintech company

Deals & Markets Finastra becomes third-largest fintech company

1y GTNews