TOKYO: Mitsubishi UFJ Financial Group Inc (MUFG) will buy a stake in US Bancorp for US$936mil (RM4.26bil), deepening an alliance after selling its regional banking business to the US lender last year.
The deal effectively swaps debt owed by US Bancorp to Japan’s biggest bank when it bought MUFG Union Bank in December 2022, according to statements by the companies. The proceeds will be used to repay some of the US$3.5bil (RM16bil) US Bancorp borrowed, with the rest due by December 2027.
Japanese banks have been expanding in the United States and other regions in recent years as rock-bottom interest rates and weak economic growth stymie opportunities at home.
MUFG sold Union Bank for US$8bil (RM36bil) to focus on building its corporate and investment banking business in the United States. It will continue with that strategy, a senior official said at a briefing on the deal yesterday.
Purchasing the 24 million shares will increase MUFG’s shareholding in US Bancorp to 4.39%.
The banks said the transaction will strengthen a strategic relationship that took hold when the Union Bank deal was completed.
“These opportunities would include digital, corporate transactions, financial services for Japanese customers, and global markets business,” MUFG said in its statement. — Bloomberg
Source: thestar.com.my
