March 3 (The following statement was released by the rating agency)
The Mitsubishi UFJ Financial Group (MUFG) recently announced that all of its
Americas banking activities will be consolidated under UnionBanCal Corporation,
which will be re-named to the MUFG Americas Holdings Corporation on July 1, 2014. The
consolidation has been a long term project for Union Bank and its parent companies.
According to Fitch Ratings, the consolidation of U.S. banking activities under a single holding
company makes the company well-positioned to comply with the Federal Reserve's foreign banking
rules ahead of schedule. That said, full compliance with the Federal Reserve's
new regulation will require MUFG to move its U.S. Broker Dealer under the MUFG
Americas Holdings Corporation umbrella.
In addition to creating an intermediate holding company, BTMU has integrated
operations of its U.S. branch banking operations with Union Bank N.A. Although
the operations have been integrated, the branch and the U.S. bank remain
While there is no expected rating impact from the announcement, Fitch views the
organizational changes for the U.S. companies favorably. Early adoption of the
Federal Reserve's rules helps mitigate regulatory risks. Further, Fitch views
this operational consolidation of the U.S. branch and the bank as beneficial
over the longer term to earnings, which currently lag its regional bank peers.