MUFG eyes cooperation, hirings in China

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Mitsubishi UFJ Financial Group (MUFG) is looking to cooperate with regional banks in China, as well as hire more risk and compliance staff, in a bid to navigate the country’s tighter regulatory environment.

MUFG is one of the world's largest comprehensive financial groups and the biggest in Japan.

Beijing has launched a slew of new regulations this year to reduce leverage across the financial sector, from rules to rein in risky off-balance sheet bank lending to halting new licenses for micro-loan firms.

“We have to meet such requirements and we need more talented people,” Eiichi Yoshikawa, a senior managing executive officer at Japan’s largest bank by assets, told Reuters on Friday.

In order to “provide more diversified financial services” to meet the changing needs of customers, MUFG will “need partner banks in China,” Yoshikawa added.

He did not give any details on prospective partners nor existing cooperation agreements.

MUFG’s clients in China previously aim to export their products but now they are looking to sell more in the domestic market, he said, as soaring disposable income drives up demand in the country.

This means customers are increasingly looking for cash collection services, dealer finance, supply chain finance, all of which can be better provided through cooperation with regional banks, Yoshikawa added.

Deputy President of the Bank of Tokyo-Mitsubishi UFJ Eiichi Yoshikawa is pictured during an interview with Reuters in Shanghai, China, November 24, 2017./Reuters photo

MUFG needs “talented, resourceful Chinese people” for risk management and compliance, Yoshikawa said, but added the bank would not increase its headcount in the country.

MUFG’s current headcount in China is 2,400.

Faced with sluggish growth at home, due to lower returns from lending under the Bank of Japan’s monetary easing, MUFG has been trying to expand its presence overseas.

In Southeast Asia, MUFG already holds stakes in Vietnam’s Vientinbank, Thailand’s Bank of Ayudhya (BAY.BK) and Security Bank Corp of the Philippines.

The Japanese lender’s next plan is to invest in Bank Danamon Indonesia, sources have told Reuters.

While Yoshikawa did not confirm the news that MUFG was in talks to buy a 40 percent stake in Danamon for around $1.75 billion, he said MUFG was interested in investing in Indonesia.

Source(s): Reuters