MUFG to ramp up US Lending

In an effort to surpass Goldman Sachs Group Inc. this year in loans syndicated in the largest economy in the world, Mitsubishi UFJ Financial Group Inc. wants to speed up lending to international funds and other institutional investors in the US.

According to Fumitaka Nakahama, head of global corporate and investment banking at MUFG, Japan’s largest lender is seeking to increase its exposure to loans for these clients that are secured by property portfolios. According to him, the bank will be able to reallocate funds to the industry at a time when borrowing demand is increasing as a result of the $8 billion sale of regional lender MUFG Union Bank, which has a sizable mortgage portfolio.

“We need to watch the market carefully but we are discussing increasing our risk appetite,” Nakahama said. “We are trying to secure profits with traditional lending in this phase of interest rate hikes.”

The demand for loans to US corporations has increased since Nakahama, 56, took office from Masato Miyachi in April. According to recent statistics, the lender is on course to rank sixth overall for US loans this year, up two spots from 2021 and ahead of Goldman Sachs and Barclays Plc. With extremely low-interest rates and weak domestic loan demand, Japanese lenders have begun extending their reach into the US.

The bank intends to add roughly 10 coverage bankers and portfolio managers in the US in an effort to attract more business from institutional clients such as pension funds, private equity companies, and asset managers, according to Nakahama. To gain business with these clients, the lender is also thinking about employing roughly five managing directors and director-level bankers in Asia and about ten in Europe, though the timing would depend on how well the growth plans are going and the state of the market, he said.

Together with its smaller rival Mizuho Financial Group Inc., MUFG is stepping up its attempts to increase sales in the US. Masahiro Kihara, CEO of Japan’s third-largest bank, stated in an interview in April that Mizuho intends to add bankers to develop its businesses with non-investment grade companies and leveraged buyout finance, where returns are anticipated to be greater.

“There’s a growing need for loans,” said MUFG’s Nakahama, noting that a decline in the capital markets is increasing bank loan demand. “In the current environment, bond issuance is getting difficult.”