Mitsubishi UFJ Financial Group (Mufg) has secured regulatory approval to sell MUFG Union Bank to US Bank, National Association (US Bank). 

The stock and cash deal, valued at around $8bn, was first announced in September 2021. 

MUFG Union Bank, a subsidiary of MUFG, is controlled via MUFG Americas Holdings Corporation. 

MUFG announced that the Board of Governors of The Federal Reserve System, the Office of the Comptroller of the Currency (OCC), and The Federal Deposit Insurance Corporation have approved the sale. 

The deal will see Japan’s MUFG exit from the US retail banking industry.

It does not cover MUFG Union Bank’s Global Corporate & Investment Bank, some middle and back-office functions, and other assets.

Upon completion, US Bank is expected to have $679.6bn in total assets and $51.6bn in the capital, the OCC said in a statement. 

Through the merger, existing customers of both entities will benefit from a larger and more diversified banking footprint. 

Some of the conditions laid down by the OCC for the approval include among others, US Bank‘s identification of its business lines and portfolios that could be offloaded quickly in a stressful scenario and a plan to effectuate that separability.

OCC acting comptroller of the currency Michael Hsu said: “In reaching this decision, the OCC carefully considered the effect of the US Bank and MUFG Union Bank merger on communities, the banking industry, and the US financial system.  

“The OCC also took into account the important work initiated by our fellow regulators to evaluate and consider how best to ensure that large banks do not become the next class of too big to fail institutions.”