Fed Approval of Mitsubishi Purchases Paves Way for World's Biggest Bank

The Federal Reserve Board gave Mitsubishi Bank permission Friday to acquire the Bank of Tokyo's affiliates in this country, removing the last U.S. hurdle to creation of the world's largest bank.

The order allows the Tokyo-based Mitsubishi to combine Bank of California and Union Bank. The new San Francisco-based institution - to be renamed Union Bank of California - will be the third-largest commercial bank in the state, with $25 billion in assets.

The Fed also gave Mitsubishi permission to acquire two wholesale institutions: Bank of Tokyo Trust Co., New York, and the Chicago-Tokyo Bank, Chicago.

The central bank found that both Japanese institutions met their obligations under the Community Reinvestment Act, noting that all their U.S. affiliates received either "outstanding" or "satisfactory" grades.

The Fed also noted that the merging banks have pledged to lend 4.5% of their total assets each year for the next decade to assist inner-city small businesses and to meet their communities' housing needs.

The bank received permission to operate data processing, escrow, leasing, and mortgage services. It also can provide investment advice and custodial services.

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