January 21 - Japan's leading bank willing to spend $10 billion to be top 10 bank in the U.S., waiting for clarity on new capital requirements before making any acquisitions.
▲ Hide Transcript
▶ View Transcript
NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL
Top Japanese bank Mitsubishi UFJ is waiting for more clarity on stricter global banking rules before pursuing major acquisitions in the U.S. and Asia.
Already the biggest Japanese bank in America, MUFG wants to be in the top 10 in the U.S.
MUFG president Katsunori Nagayasu says the bank needs to spend about $10 billion in acquisitions to do this, but has to wait till it becomes clear how much capital needs to be set aside.
Under new Basel III rules, banks will have to set aside more capital reserves, with those seen as "too-big-to-fail" facing greater capital adequacy ratios and capital surcharges.
The final list of these Global Systematically Important Institutions (G-SIFIs) is expected only in mid-2011, with negotiations on specific capital reserve ratio targets to follow after that.
This means it could be at least a year before final agreement is reached by global financial regulators.
MUFG expects to be in this list, but does not anticipate any problems meeting the new capital requirements.
The Japanese bank owns California-based Union Bank, currently ranked 20th by assets in the U.S.
Nagayasu says the leap into the top 10 could happen with a single move.
MUFG is also studying possible buys in Asia and Australia, as the bank and rivals like Mizuho and Sumitomo Mitsui seek other sources of growth amid weak lending in domestic markets.
It paid $9 billion for a 21 percent stake in Morgan Stanley in 2008 at the height of the financial crisis. Last year, it bought about $5 billion in project finance loans from Royal Bank of Scotland.
Arnold Gay, Reuters
Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code