Mitsubishi UFJ Readies for US Expansion (MTU)

Jun.28.06 | About: Mitsubishi UFJ (MTU)

Clint Riley of The Wall Street Journal (paid sub req) published an article on Mitsubishi UFJ Financial Group (NYSE:MTU) being in talks with the Federal Reserve about receiving "financial holding company" status. Fed approval represents huge potential for MUFG and its 62% owned subsidiary UnionBanCal Corp (UB) since MUFG could broaden its services offered into underwriting, insurance and investment banking, as the WSJ points out, and either or both MUFG and UB could "consolidate operations and potentially merge with or acquire other financial holding companies in the U.S."

Mitsubishi UFJ already has full-service branches in LA, SF, Seattle, Chicago, and NY among its 13 total locations. UnionBanCal is a regional bank that according to the article is the "21st largest bank in the U.S., with more than 300 branches, $49 billion in assets and a market value of $9.1 billion." Among UB clients are the Japanese-American community and Japanese companies with operations in the U.S.

Riley mentions that 11.5% of MUFG's fiscal year ended March 31st operating profit of 1.078 trillion yen ($9.27b) was earned in North America.

This is a smart move by MUFG and you have to applaud president and CEO Nobuo Kuroyanagi for not wasting any time after having just achieved a big milestone in paying back the public funds it owned the government from its bail out, the first of Japan's three mega banks to do so.

Recent related coverage of Mitsubishi UFJ on SeekingAlpha:

    Japanese Banks Improving but Lag in Profitability

    Banks Lead the Way in Hiring Japanese New Grads

    Still Waiting for Mitsubishi UFJ to Take Off

    Merrill Lynch Upgrades Japan’s Banking Sector, Mitsubishi UFJ Rallies

    Mitsubishi UFJ On Sale and Probably Going Lower

MUFG's ordinary shares (Tokyo: 8306) lost 0.65% Wednesday in Japan to close at 1,530,000 yen ($13,151) which is the equivalent of $13.15 for its ADRs, which closed yesterday down 0.84% at $13.05.

Mitsubishi UFJ Financial Group (MTU) 1-year chart: