Japanese banks in Southeast Asia expansion bid to tap regional growth
BTMU seeks to finalise a proposed $5.75b acquisition in Thailand’s Bank of Ayudhya, in a move widely expected to boost both banks’ retail and corporate banking endeavours. July 05, 2013 | Magessan RajOn July 2nd 2013, Bank of Tokyo-Mitsubishi UFJ (BTMU), a subsidiary of Mitsubishi UFJ Financial Group (MUFG), announced that it had reached an agreement with GE Capital to purchase the latter’s 25.3% stake in Bank of Ayudhya, as it sought to finalise a proposed $5.75 billion (75% stake) acquisition in Thailand’s fifth-largest bank. In what would be the largest acquisition by a Japanese bank in Southeast Asia, the deal is still subject to regulatory approval, with Thailand’s finance ministry capping foreign ownership in domestic banks at 49%. However, MUFG has reported that it believes Bangkok would “take a favourable view” towards the acquisition and is considering merging BTMU’s Bangkok branch with Bank of Ayudhya to comply with the country’s single presence policy on bank ownership. This isn’t MUFG’s first foray into Southeast Asia, as it agreed to purchase a 20% stake in VietinBank from the Vietnamese government for around $720 million in 2012. Indeed, MUFG’s purchase of Bank of Ayudhya comes less than two months after banking rivals Sumitomo Mitsui Financial Group and Mizuho Financial Group made similar forays into the region, as the former struck a deal to pay around $1.5 billion for a 40% stake in Indonesia’s Bank Tabungan Pensiunan Nasional, while the latter bought a 15% stake in Vietnam’s Vietcombank for $760 million. The recent spate of bank acquisitions by Japanese banks in Southeast Asia serves to highlight the region’s explosive growth and attractiveness, as the Japanese market continues to stagnate and population growth at home shrinks. Unlike their Western peers however, Japanese banks have relatively robust balance sheets and cash to spare for overseas expansion. In BTMU and Bank Ayudhya’s case, by mutually complementing each other, both are expected to provide more comprehensive financial services for various local customers and multi-national corporate customers. Bank of Ayudhya, one of the ... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Auto-financing, Retail Banking, Trade Finance, Transaction BankingAuto-financing,retail,Trade Finance,Transaction Banking, Auto-financing,Retail Banking,Trade Finance,Transaction Banking, Keywords:BTMU, MUFG, Bank Of Ayudhya, SMFG, Mizuho Financial Group, VietinBank, Bank Tabungan Pensiunan Nasional, Vietcombank, Corporate Banking BTMU, MUFG, Bank of Ayudhya, SMFG, Mizuho Financial Group, VietinBank, Bank Tabungan Pensiunan Nasional, Vietcombank, Corporate Banking
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