Exclusive: Mitsubishi UFJ hunts to acquire U.S. bank or branch network

NEW YORK Wed Jan 29, 2014 4:23pm EST

A woman stands near a signboard of a branch bank of Mitsubishi UFJ Financial Group in Tokyo July 31, 2013. REUTERS/Issei Kato

A woman stands near a signboard of a branch bank of Mitsubishi UFJ Financial Group in Tokyo July 31, 2013.

Credit: Reuters/Issei Kato

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NEW YORK (Reuters) - Mitsubishi UFJ Financial Group Inc (8306.T) is still on the hunt to acquire a bank or branch network to reach its goal of becoming one of the 10 largest U.S. banks by 2016, a senior bank official said on Wednesday.

"I am more than confident - 100 percent confident, we're 1,000 percent confident that my colleagues here in the States will achieve that goal within a couple of years," Masaaki Tanaka, deputy president of MUFG, told Reuters in an interview.

Tanaka, a key architect of the Japanese lender's expansion strategy, said MUFG does not have a particular target and did not say how big a deal it was prepared to fund. However, he said it is open to buying a bank on the West Coast, where its retail arm is based, or in other parts of the United States, to reach its top-10 target.

MUFG management "will provide capital if they need it, we will provide very strong support to the people who are running the show," said Tanaka.

MUFG has been trying to grow its footprint outside of Japan for several years because the country's aging population offers dimmer growth prospects than countries abroad.

Tanaka and Kyota Omori, who was then head of MUFG's U.S. operations, first set a goal of becoming a top-10 U.S. bank in 2007. MUFG has since made a series of acquisitions and developed strategic partnerships with Morgan Stanley (MS.N) in pursuit of that goal, which is internally dubbed "Project Leones."

Bankers and analysts have been predicting further consolidation in the U.S. banking sector for years, arguing that revenue pressure and new regulatory expenses will force smaller banks to merge or be acquired by larger rivals. However, few major deals have been struck since the 2007-2009 crisis, either because parties are wide apart on pricing, or because of regulatory scrutiny.

Beyond acquisitions, MUFG is looking to expand its corporate lending through a partnership with Morgan Stanley, and its middle-market lending through its San Francisco-based retail banking arm, called UnionBanCal Corp.

MUFG is in the process of integrating UnionBanCal with its MUFG Americas division, which is based in New York. Combined, the two entities would rank as No. 12 among the country's largest banks, behind large regional lenders like SunTrust Banks Inc (STI.N) and BB&T Corp (BBT.N), according to data provided by MUFG.

The UnionBanCal franchise alone had 420 U.S. branches, $80 billion worth of deposits and $106 billion in assets as of December 31, according to its web site.

(Editing by David Gregorio)

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