Retail News CRM

Tag: MUFG

  • MUFG will have more stake in Bank Danamon Indonesia to 40%

    MUFG will have more stake in Bank Danamon Indonesia to 40%

    Indonesian regulators have cleared Japanese lender Mitsubishi UFJ Financial Group’s plan to increase its stake in Bank Danamon to 40 percent, bringing it closer to completing what could be the biggest takeover of an Indonesian firm.

    The Financial Services Authority (OJK) approved MUFG’s planned purchase of a 20.1 percent stake from shareholder Asia Financial, MUFG said in a statement on Tuesday (31/07). The Japanese lender said it would complete the purchase of those shares “as soon as possible.”

    MUFG said in December that it was seeking a 73.8 percent stake in Bank Danamon, to build a foothold in Southeast Asia’s biggest economy.

    Japan’s largest lender had laid out a plan to buy Danamon shares in three stages.

    In the first stage, completed in December, MUFG bought 19.9 percent from Singapore state investor Temasek Holdings for Rp 15.875 trillion ($1.17 billion). At that price, Danamon was valued at around $6 billion.

    The Japanese bank would then raise its stake to 40 percent and seek approval to hold at least 73.8 percent in Indonesia’s fifth-largest bank by offering to buy out other shareholders.

    However, MUFG needs special permission from the OJK to take its holding above 40 percent – where foreign ownership of commercial banks is normally capped though exceptions are sometimes made.

    MUFG did not immediately reply to requests for comment on Tuesday on whether the Japanese lender had been granted approval for a 73.8 percent stake. The OJK declined to comment.

    If approved, this would mark a rare major purchase by an overseas lender in Indonesia’s banking sector after caps on foreign ownership of banks were introduced in 2012.

    An MUFG official said in January that Bank Danamon would be merged with another Indonesian bank, Nusantara Parahyangan (BNP) after MUFG’s 40 percent stake was approved.

    Danamon is the latest in a string of deals by the acquisitive MUFG, which already holds stakes in Vietnam’s Vietinbank, Thailand’s Bank of Ayudhya and Security Bank Corp of the Philippines.

    Danamon’s shares rose 5 percent on Tuesday to Rp 6,575, giving it a market value of around $4.5 billion.

    Lees ook:

  • MUFG to Buy $773 Million Stake in Philippines’ Security Bank

    MUFG to Buy $773 Million Stake in Philippines’ Security Bank

    Mitsubishi UFJ Financial Group, Japan’s biggest bank, agreed to buy a 20 percent stake in Philippine lender Security Bank Corp. for 36.9 billion pesos ($773 million) as it deepens its expansion in Southeast Asia.

    Security Bank accepted MUFG’s offer to buy 150.7 million newly issued common shares at 245 pesos each and 200 million preferred shares at 0.1 peso apiece, the Manila-based bank said in a filing Thursday. That represents an 81 percent premium on Security Bank’s Wednesday closing price of 135 pesos.

    The deal will be the largest equity investment in a Philippine financial institution by a foreign lender, allowing Security Bank to accelerate its growth strategy and expand its branch network, the Manila-based company said. Japan’s biggest lenders have expressed interest in investing in the Philippines after the country loosened its rules on foreign bank ownership in 2014. The nation’s central bank said after the announcement that it welcomes the entry of foreign bank investments.

    “Security Bank will benefit from the deal by having a bigger war chest to execute its strategy,” Charles William Ang, an analyst at COL Financial Group Inc., said by telephone. “The deal is also a sign that foreigners are still very bullish about our banking industry, which remains under-penetrated. There are more opportunities for growth and profit compared with Japan.”

    ‘Right Price’

    Ang said the transaction amount reflects the large size of the stake. MUFG is paying a 78 percent premium to Security Bank’s average price over the past month, the fourth highest among all bank acquisitions in Southeast Asia, according to data compiled by Bloomberg. The price of 245 pesos a share is 2.8 times book value, the data show.

    “People say that it’s expensive, but we believe this is the right price,” Go Watanabe, chief executive officer for Asia-Oceania at MUFG’s main lending unit, said at a briefing in Manila. “We believe this price is fair, calculating the intrinsic or future value of the bank.”

    Shares of Security Bank climbed 6.7 percent, the most since June 2013, to 144 pesos. MUFG dropped 2.4 percent in Tokyo as Asian equities resumed their New Year tumble.

    Second Biggest

    MUFG is comfortable with a 20 percent stake, Watanabe said. The investment will make its Bank of Tokyo-Mitsubishi UFJ Ltd. unit the second-biggest shareholder of Security Bank, behind the Dy family. The deal is expected to close in the middle of the year, and MUFG will appoint two directors to Security Bank’s board, according to the statement.

    Security Bank will target 500 branches by 2020 from the current 262, the company’s President Alfonso Salcedo told reporters. The investment will allow it to tap new markets through MUFG’s relationships with Japanese companies and its global network, according to the statement. Security Bank’s operations range from retail banking to brokerage services and leasing, its website shows.

    Investments by foreign lenders “further reinforce bank capitalization, introduce global best practices and know-how and expand markets,” Bangko Sentral ng Pilpinas Governor Amando Tetangco said in a mobile-phone message. “These also promote more job-creating foreign direct investments.”

    Indonesia and India remain missing parts in MUFG’s expansion in Asia, Watanabe said. The financial group has been expanding in the region as a declining population and near record-low interest rates constrain growth at home.

    Thailand, Vietnam

    It was among 12 firms that expressed interest in buying United Coconut Planters Bank from the Philippine government, people with knowledge of the matter said last June. MUFG owns 77 percent of Thailand’s Bank of Ayudhya and it bought a 20 percent stake in state-owned Vietnamese lender VietinBank in 2013.

    Sumitomo Mitsui Financial Group Inc., Japan’s second-biggest lender by market value, was the first foreign lender to get a license to operate in the Philippines under a 2014 law allowing full entry of overseas banks. Five more lenders have since received approval, President Benigno Aquino said Tuesday at the opening ceremony of Sumitomo Mitsui’s first branch in the Southeast Asian nation.

    Japan’s Mizuho Financial Group Inc. ended talks to buy San Miguel Corp.’s controlling stake in Philippine lender Bank of Commerce, people with knowledge of the matter said in October.

    Lees ook:

    Lees ook:

  • Japanese bank eyes bigger foothold in PH

    Japanese bank eyes bigger foothold in PH

    One of the more significant banking stories of the year is the acquisition of Bank of Tokyo Mitsubishi UFJ (BTMU) of a 20 percent share in a local bank. It’s a move that many predict will eventually lead to a larger ownership stake in the future.

    BTMU CEO Go Watanabe (Asia and Oceania Region) is not dismissing this possibility but one thing he is sure, if it should come to pass it will be a decision that both banks will reach at the same time, at the right time.

     

    WATANABE

    WATANABE

    Watanabe and officials of Security Bank Corp. announced in January this year of BTMU’s purchase of 20 percent of the bank for $782 million. BTMU, the investment banking arm of the Mitsubishi UFJ Financial Group, is Japan’s biggest bank while Security Bank is the sixth top bank in the Philippines.

    “I cannot disclose the details of the contract but at this moment, 20 percent is very comfortable. So, at this moment we have no plan to increase our share,” said Watanabe.

    The future though, is not set in stone. “(Do we want more share?) we don’t know yet,” he remarked. “Hopefully, our collaboration has been successfully expanding and if both sides will see further opportunity to change the ownership … in that case, we might think about it.”

    Watanabe said BTMU’s “purpose” in Security Bank is not just about making an investment. “We don’t have to limit ourselves to 20 percent as a collaboration. We have already started at 100 percent collaboration.”

    Watanabe said they value mutual agreements and their relationship with the owners of Security Bank and its management is “much more important”. “Due to the good relationship, I think if Security Bank or its owners will reduce their share (in the future), BTMU will be the best party to talk first.”

    Bigger market share

    BTMU is an ambitious bank, it wants global banking status soon and sees the Philippines as part of its plan of establishing a larger regional presence first before becoming one of Asia’s largest by 2020.

    For the Japanese bank, the Philippines is a high growth market based on sustained GDP expansion (66 quarters of above five percent growth), a developing infrastructure industry, a promising revival of the manufacturing sector, and a demographics profile that assures a tenable growth path for a long time.

    BTMU, in the Philippines since 1918, has one branch which they established in the 1970s.

    Watanabe said they have a strong client base here mostly Japanese corporations but their local clients are also growing. “We also have been working with a number of big deals with local conglomerates.” In 2015, its loan book in the Philippines amounted to $800 million.

    BTMU has been in business with Security Bank since 2011 as the latter has an expertise in cash management segment. When they bought shares in the bank – which was approved by the central bank in February this year – they quickly installed their representatives in the bank.

    During its recent annual stockholders’ meeting, and after ratifying the 20 percent equity infusion of BTMU, the Security Bank’s board elected three representatives from BTMU. One of them, Takahiro Onishi, is appointed executive vice president and head of alliance segment. This segment is a new position for exploring “opportunities for the growth of Japanese and related businesses for Security Bank.”

    Watanabe said the collaboration involves providing existing Japanese customers in the Philippines with services such as retail banking. “In addition, we can also provide global corporate business to local companies with services such as project finance, trade finance and tapping BTMU’s diversified global network.”

    “Our business collaboration is (mainly) based on corporate banking. We will be using Security Bank’s expertise in cash management for our Japanese clients (for payroll service, among others),” explained Watanabe.

    In BTMU’s current set up in the country it does not have retail banking. It is in this area that Security Bank will come in. “We are willing to collaborate, to walk together, to transfer our knowledge and support Security Bank’s retail banking.”

    And, since the Philippines is one of the “most important country” for BTMU’s plans to become a top Tier 1 bank in the region, Watanabe said they did not purchase their shares cheap, even offering a high premium. “Our investment is the biggest investment in the Philippine financial market,” he said.

  • Mitsubishi UFJ considers buying Asian bank similar to Thai unit

    Mitsubishi UFJ considers buying Asian bank similar to Thai unit

    Go Watanabe, CEO, Asia-Oceania at Mitsubishi UFJ said that we’re looking for a bank that is very strong in both corporate and retail consumer finance akin to Bangkok-based Bank of Ayudhya Pcl. Photo: Bloomberg

    Singapore: Two years after spending about $5 billion buying a Thai bank, Mitsubishi UFJ Financial Group Inc. is looking for a similar Asian investment.

    Japan’s biggest lender is considering acquiring a bank in Indonesia, the Philippines or India that has expertise in consumer banking, said Go Watanabe, chief executive officer (CEO) of the main lending unit’s Asia-Oceania arm.

    “We’re looking for a bank that is very strong in both corporate and retail consumer finance” akin to Bangkok-based Bank of Ayudhya Pcl, Watanabe, 56, said in an interview on Monday in Singapore. The company ideally wants a majority stake in a “relatively big-sized bank,” he said.

    Mitsubishi UFJ has been the most aggressive of Japan’s banks in seeking to tap Asia’s consumers as sluggish growth and shrinking loan margins hamper prospects at home. Regulators in Indonesia, the Philippines and India are at various stages of easing rules on ownership of their banks by foreign lenders.

    “Doing business with corporates isn’t enough,” Watanabe said. “Having a retail business is something we want, to capture the high growth of the Asian economy.”

    Asia excluding Japan is poised to expand 6.2% this year, compared with 0.9% in Japan, according to economist estimates compiled by Bloomberg.

    That growth is reflected in Bank of Tokyo-Mitsubishi UFJ Ltd’s loan book. Average loans outstanding in Asia to non-Japanese borrowers climbed 10% from a year earlier to ¥7.6 trillion ($62 billion) in the six months ended March, company data show. That excludes Bank of Ayudhya’s loans.

    Ownership rules

    Loosening of bank ownership restrictions may favour Watanabe’s aspirations to obtain a majority stake in one of the target countries.

    India now allows overseas holdings of as much as 74%, up from 49% previously. Indonesian regulators in June allowed South Korea’s Shinhan Bank to buy two lenders and merge them, providing an exception to a 40% foreign-ownership limit. The Philippines eased its rules last year to let international companies fully own a domestic bank.

    While Watanabe has spoken to relevant authorities, he said there is no discussion of specific targets. The acquisition plan, while part of the bank’s three-year strategy, may materialize after the period, he said.

    Mitsubishi UFJ is among 12 firms that expressed interest in buying United Coconut Planters Bank from the Philippine government, which is seeking more than $350 million for its 74% stake, people with knowledge of the matter said in June. Watanabe declined to comment on the sale.

    Long-term commitment

    The Japanese company is investing in foreign banks for the long term, Watanabe said. In Thailand, it gave up its banking license and merged its local unit into Bank of Ayudhya, the nation’s fourth-biggest bank by market value, to gain the central bank’s endorsement.

    “We are already committed,” he said. “There is no return.”

    Bank of Tokyo-Mitsubishi UFJ now owns 77% of Bank of Ayudhya, whose net income grew 19% last fiscal year to THB14.2 billion ($420 million). It bought a 20% stake in state-owned Vietnamese lender VietinBank in 2013.

    Watanabe moved to Singapore in July 2013 to take up his current role, reflecting a strategic shift at the Japanese bank, which previously ran all its Asian units from Tokyo. Singapore is now the regional headquarters for the 12 countries under Watanabe’s supervision, from Australia to India.

    Bank of Tokyo-Mitsubishi UFJ now has 1,200 employees in Singapore, 200 of whom are Japanese, Watanabe said. While the company is unlikely to add headcount in the city-state, it’s seeking to boost the number of local hires to cater for an increasingly international client base, he said.

    “The growth is now with non-Japanese companies, like European and US multinational companies that are growing in Asia,” he said. “That’s the business we’d like to expand.”

    Lees ook: