While U.S. and European banks are tightening their wallets as a result of the recent credit crisis, big banks in Japan are expanding. With a conservative attitude born out of the fires of bad loans from the 1990’s through the earlier part of this decade, Japanese banks such as Mitsubishi UFJ Financial Group Inc. (MUFG), and Sumitomo Mitsui Financial Group Inc. (SMFG), have been posting rather slim losses from securities affected by the current plague of U.S. mortgage failings.
Thanks to thrifty Japanese savers, and the current position of many U.S. and European lenders, Japanese banks have been stepping in and approving some rather impressive loans. For MUFG, overseas lending has seen a 20% jump from the last quarter of 2007 – and is now sitting at a healthy $115 billion.
Japan’s big banks are hoping that their increased visibility in the loan market will eventually bring them closer to their Western counterparts in areas like investment banking. The newly appointed President of the Bank of Tokyo-Mitsubishi (UFJ) summed up Japan’s lending market succinctly when he revealed that his bank has a surplus of about 30 trillion yen per year between deposits and lending, which is around $290 billion. Should that be the norm for most of the big banks in Japan, we can expect their influence in the global market to expand rather quickly over the next few years.
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