Mitsubishi UFJ Financial Group Inc., Japan's biggest lender, plans to increase loans to energy and utility industries in the U.S. to capitalize on a recovery in the world's largest economy, President Nobuyuki Hirano said.
The bank, whose San Francisco-based UnionBanCal Corp. unit this week agreed to acquire $3.7 billion of U.S. property-loan assets from Deutsche Bank AG, is still looking to buy another lender in the country, Hirano, 61, said in an April 8 interview.
Mitsubishi UFJ is stepping up acquisitions in the U.S. as a rebound in the housing market and increasing demand for its natural gas brighten growth prospects. The Tokyo-based lender, Morgan Stanley's largest shareholder, bought UnionBanCal in 2008 and Santa Barbara-based Pacific Capital Bancorp last year as persistent deflation inhibits loan demand at home.
"We want to accumulate project-finance loans in the energy and utility sectors on top of our commercial and corporate banking operations to bridge our businesses on the west and east coasts," said Hirano. "By unifying those platforms, we can further increase our presence in the U.S."
Hirano, who has worked at Mitsubishi UFJ and its predecessors for 39 years, became president this month, succeeding Katsunori Nagayasu. He takes the reins of a bank that expanded overseas lending last year by 20 percent to 21.9 trillion yen ($221 billion) as of Dec. 31.
Shares of Mitsubishi UFJ rose 0.2 percent to 673 yen in Tokyo yesterday, the highest level since May 2009. The benchmark Nikkei 225 Stock Average fell 0.5 percent.
The U.S. is poised to become a net exporter of liquefied petroleum gas for the first year ever as shale-based energy production jumps, prompting new orders for specialized ships to haul propane and butane. The boom in natural gas and oil production helped the U.S. meet 84 percent of its energy needs in 2012, the most since 1991, government data show.
Mitsubishi UFJ is still seeking to buy a regional bank on the west coast to strengthen commercial lending at UnionBanCal, Hirano said.
"The regional banks that we've been looking at recently are mostly small ones with a market value in the 100 million to multi-hundred million dollar range," he said, without elaborating. "We want to buy something that can bring about geographical synergy."
In an interview last April, Hirano said the Japanese bank was considering spending "several billion" dollars to buy a U.S. lender.
The Americas generates about 60 percent of Mitsubishi UFJ's revenue outside Japan, according to presentation materials posted on its website. The bank aims to increase gross profit from the region by 30 percent in the year ending April 2015 from three years earlier, it said.
UnionBanCal will acquire a commercial real estate lending portfolio from Deutsche Bank's PB Capital Corp., it said in a statement on April 7. About 35 percent of the loans are from New York, while Los Angeles makes up 9 percent and Chicago 8 percent, according to the statement.
Sales of new U.S. houses in February capped the best back- to-back months in more than four years, Commerce Department figures show. The economy's expansion probably accelerated to a 3 percent annual rate last quarter from 0.4 percent at the end of 2012, according to the median forecast of economists surveyed by Bloomberg.
"No other market is bigger or deeper than the U.S.," said Hirano, who served on Morgan Stanley's board for two years until May 2011. "The chance to grow our businesses there remains high."
