Mitsubishi UFJ Financial (MUFG) has set aside $8bn to buy more retail banks in the US and Asia to make up for weak prospects in Japan due to an aging population.
Currently, the Japanese lender has too much cash and hence does not generate good enough shareholder returns, Financial Times has reported.
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The move is part of the bank’s strategy to become one of the top 10 US bank, which will allow it to make use of more dollar deposits.
Masaaki Tanaka, the group’s deputy president, said the details of a new three-year plan had yet to be finalised, but the priority would be to boost return on equity to at least 8% to 9% through a combination of acquisitions and returning capital to shareholders.
"JOPY 0.8 trillion [$7.6 billion] would be possible for an acquisition," Tanaka told the Financial Times.
MUFG’s domestic competitors, including Sumitomo Mitsui Financial Group and Mizuho Financial Group, are also expanding their international business.
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By GlobalDataMUFG has a history in overseas acquisitions. It has a 22% stake in Morgan Stanley, and a year ago, it paid US$5 billion for a majority stake in Thailand’s Bank of Ayudhya.
