Mitsubishi UFJ is said to mull over further share buybacks, acquisitions

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Mitsubishi UFJ Financial Group (NYSE:MUFG) is considering repurchasing more of its common stock as well as pursue acquisitions in Asia and the U.S., Bloomberg reported Thursday, citing the Japanese lender's CEO in a recent interview.

The potential moves come in the wake of the bank's growing cash pile thanks in large part to the recently closed sale of MUFG Union Bank, MUFG's U.S. regional lender, to U.S. Bancorp (USB). As of September, MUFG has $707.38M in cash and equivalents, down from $811.42M in the prior quarter and $890.33M a year before, according to its balance sheet.

“Unfortunately, buying our own shares is a very good investment, because they are cheap,” MUFG CEO Hironori Kamezawa told Bloomberg on December 16.

Still, MUFG jumped nearly 16% in the past five sessions alone, in a move mostly triggered by the Bank of Japan's decision on December 20 to broaden its yield curve control tolerance range. The unexpected move by the BOJ, which has pledged for many years to keep rates at ultra-low levels, prompted speculation that Japanese lenders' interest income could see some improvement.

For the acquisitions, Kamezawa noted MUFG is taking stakes in technology startups in Asia and wants to roll out a fund that offers financing to Japanese startups in fiscal 2023, Bloomberg reported.

Previously, (Oct. 12) U.S. Bancorp, MUFG Union Bank to sell three MUFG branches to HomeStreet Bank.