TOKYO (Reuters) – Japan’s Mizuho Financial Group Inc (8411.T) sees a pickup in overseas lending after a slowdown last year in the United States, where a recently enacted corporate tax cut is widely expected to spur mergers and acquisitions (M&As).
Major Japanese banks are placing increased emphasis on lending abroad, particularly in busy M&A markets such as the U.S., as they seek more means of growth while their domestic lending businesses suffer persistently low interest rates.
“We expect companies that become cash-rich from the tax cut to accelerate acquisitions,” said Akira Sugano, head of overseas business at Japan’s third-biggest bank by market value. “There are actually companies planning such moves among our clients.”
Mizuho is already working with U.S. clients to provide finance for billion-dollar deals, Sugano said.
On Mizuho’s own M&A strategy, Sugano said his bank might take a different approach to Japanese peers when expanding in Asia’s emerging economies.
Bigger lenders Mitsubishi UFJ Financial Group Inc (8306.T) and Sumitomo Mitsui Financial Group Inc (8316.T) have bought into Indonesian banks and are seeking to turn their interests into majority stakes.
“We’ve also been following opportunities in the past five, six years but haven’t done any deals. Why? Because they are expensive,” Sugano said.
“We’ve been thinking about the acquisition of a local bank, but now think there could be another means of market entry,” he said. “One idea is to team up with a local big business and provide (financial services) using digital technology.”
($1 = 106.4300 yen)
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