* MUFG aims to close 60 bln yen deal for 20 pct stake in H1
* MUFG is last of Japan's three large banks to buy into
* Vietnam banking sector hit by slowing growth, rising debt
* Japan's cash-rich banks looking to SE Asia for growth
By Taiga Uranaka and Emi Emoto
TOKYO, Dec 13 Japan's Bank of Tokyo-Mitsubishi
UFJ plans to buy 20 percent of VietinBank from the
Vietnamese government for about 60 billion yen ($720 million), a
source close to the deal said, as Japan's cash-rich big banks
expand into fast-growing Southeast Asian markets.
The deal by the core retail and commercial bank of
Mitsubishi UFJ Financial Group Inc (MUFG) for a stake
in Vietnam's second-largest partly private lender will mean all
three of Japan's megabanks have a stake in Vietnam's wobbly
It also highlights an overseas buying spree by Japanese
firms fuelled by a strong yen, abundant cash and limited growth
opportunities at home. Japanese firms have spent a record $83.8
billion on outbound mergers and acquisitions this year, one
fifth more than a year ago and the highest in Asia, according to
Thomson Reuters data.
Bank of Tokyo-Mitsubishi UFJ hopes to complete the deal in
the first half of next year, the source said.
In April, a senior executive of the bank told Reuters in an
interview that it may spend more than $12 billion in the next
three years on overseas acquisitions to diversify from a slowing
BANKING UNDER STRAIN
VietinBank, or Vietnam Joint Stock Commercial Bank for
Industry and Trade, said on Wednesday its 2012 gross profit may
fall 11 percent to 7.5 trillion dong ($360 million) instead of
rising 7 percent as earlier forecast.
Four years of economic volatility and sky-high inflation,
coupled with tumbling asset prices, have put the Vietnamese
banking system under strain.
Banking reform has stalled as the authorities focus on
tackling a slowdown in economic growth, despite worries that
many of the country's banks are in poor financial health.
The decline in growth, which the government recently
forecast at 5.1 percent this year compared with a prior target
of 6.0 to 6.5 percent, has saddled businesses with rising debt
and boosted the banking system's bad-debt ratio to 8.82 percent
as of end-September.
The VietinBank deal follows Mizuho Financial Group Inc's
$760 million acquisition last year of 15 percent of
Vietcombank, or The Bank for Foreign Trade of Vietnam, and
Sumitomo Mitsui Financial Group Inc's $225 million
purchase of a 15 percent stake in Vietnam Export Import Bank in
Faced with weak prospects in Japan, the big banks are
looking to growing markets in Asia, especially in Southeast
Asia, where political risks are perceived as less than those in