Japan's largest bank, Mitsubishi UFJ Financial Group (MUFG), is in advanced talks with Deutsche Bank to purchase U.S. property related loans worth around $3.7 billion from its real estate unit, PB Capital Corp.
The deal is expected to materialize in the coming few weeks and the loans will be purchased by a subsidiary of MUFG, UnionBanCal Corp, reports The Washington Post. Details are not yet known as the deal is still a private matter.
According to Reuters, the deal is a part of MUFG's efforts to expand its lending activities in the country. Mitsubishi UFJ already has the largest presence in the country among all other Japanese banks. The President of MUFG said that they wanted to double the size and operations of Union Bank, which would make it the tenth largest financial operating institution in the U.S.
The deal also marks MUFG's efforts to counter weak lending in home markets as European banks are scaling back branches that place a huge burden on their balance sheets. Earlier in February, The European Banking Federation urged all the lenders to cut down on units that are capital bog-downs.
"Although the debt crisis has eased some, there is still a trend that European banks are cutting overseas assets. MUFG is looking for targets, but they're struggling to find good, big ones," Shinichiro Nakamura, analyst at SMBC Nikko Securities Inc, said in an interview with Businessweek.
Meanwhile, MUFG is playing big in the Asia-pacific market as well. Recently, Cachematrix, a leading global money market technology solutions provider, entered into a partnership deal with Union Bank to debut into the Asia-Pacific market.
"I am very excited about our new relationship with The Bank of Tokyo-Mitsubishi UFJ. This is an excellent growth opportunity for Cachematrix as we expand into the Asia and Pacific region," George Hagerman, Founder and CEO of Cachematrix said in an interview with MarketWatch.
"I can tell you that from our long standing and successful relationship with our partner Union Bank, I am not at all surprised to see their parent company leading the way in Asia with regard to technology solutions," he added.
