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Mitsubishi UFJ looking for majority stake in an Asian consumer bank

Mitsubishi UFJ looking for majority stake in an Asian consumer bank

(2 July 2015 – Japan) Mitsubishi UFJ Financial Group is looking to acquire a bank in Indonesia, the Philippines or India, preferably with expertise in consumer banking, the lending unit’s Asia-Oceania chief executive Go Watanabe said.

“We’re looking for a bank that is very strong in both corporate and retail consumer finance” akin to their Bangkok-based Bank of Ayudhya Pcl, Watanabe said.

The company ideally wants a majority stake in a “relatively big-sized bank,” he said.

Mitsubishi UFJ has been quick to seek opportunities to take advantage of Asia’s growing middle class, especially as slowing economic growth and shrinking loan margins hamper prospects in Japan.

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

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.”

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.

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.”

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.

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