22 / 62
Mitsui Banking Corporation (SMBC)
bought into auto finance companies
and Bank Tabungan Pensiunan
Nasional (BTPN) in Indonesia, as well
as Cambodia’s Acleda Bank. Mizhuo,
BTMU and SMBC have also invested in
Vietnamese banks. With these large-
scale investments, Japanese banking
majors are able to quickly tap into the
retail banking business, while opening
doors for other financial products,
such as insurance. Besides Southeast
Asia, Japanese banks are also looking
to expand in India as the country
strengthens its economic and political
ties with Tokyo; Mizuho opened its fifth
branch in Ahmedabad last year.
The growing presence of Japanese
banks is also evident in their oce
footprint across Asia, including regional
financial centers. BTMU has opened
a new 40,000 sf oce in Gurgaon
(in India) last year and Mizhuo has
expanded to a bigger facility in
Mumbai. Besides associating with
local financial institutions, Japanese
banks are also setting up a number
of representative oces in emerging
markets in Southeast Asia. Despite
being small and lacking licenses to
lend or take deposits, they act as a
bridge for Japanese manufacturers by
providing advisory services to venture
abroad.
REGIONAL BANKS,
ESPECIALLY ONES
FROM CHINA AND
JAPAN, ARE ON
THE RISE.
Japanese banks on overseas
lending spree
Unlike Chinese banks, growth of
Japanese banks has been largely driven
by business opportunities, especially
at a time when growth prospects back
home are bleak. Japanese banks are not
only lending to Japanese companies
expanding overseas, they are also
ramping up financing of foreign M&A
deals to diversify their revenue sources.
As such, overseas loans by .three
major Japanese banks (Bank of Tokyo–
Mitsubishi UFJ (BTMU), Mizuho and
Sumitomo Mitsui Banking Corporation
(SMBC)) have doubled over the past
six years. Last year, Japanese banks
were involved in more than half of
global M&A financial deals. The rise in
Japanese lending comes at the time
when US and European majors take a
pause to raise profitability to adhere to
strict capital bu¥er norms post-GFC.
Japanese banks were less impacted by
the crisis and so are able to lend more
freely. They are also awash with capital
raised from selling government bonds
over the last couple of years.
Japanese banks are expanding
aggressively through mergers and
acquisitions in Southeast Asia. Recent
deals include Bank of Tokyo – Mitsubishi
UFJ (BTMU) acquiring major stakes in
Security Bank of the Philippines and
Thailand’s Bank of Ayudhya. Sumitomo
22 ASIA PACIFIC BFSI OUTLOOK 2017