Suckers wanted

8 August 2008 By Martin Hutchinson

Mitsubishi UFJ s purchase of the remaining minority stake in the US s Union Bank may look reasonable. But MUFJ lost the equivalent of five years of Union s profits on subprime. With better opportunities and stronger bank balance sheets in Asia, Japanese banks should focus there.

This content is for Subscribers only

Context News

Mitsubishi UFJ Group on August 12 offered $3bn to buy the remaining 35% of Union Bank of California that it does not own. UBC made $608m profit in 2007. The price of $63 a share represents two times book value.

Bank of Tokyo bought Union Bank from Standard and Chartered PLC in 1988 for $750m; it was merged with First California Bank, controlled by Mitsubishi Bank, when Bank of Tokyo and Mitsubishi merged in 1995.

Mizuho paid $1.2bn to Merrill Lynch for preferred shares in January and Sumitomo Mitsui invested $930m in Barclays in June.

Japanese banks reported losses of about $18bn from US subprime mortgages in the year to March 2008. Mitsubishi UFJ had $2.9bn of losses from subprime mortgages and other US securitised products. The three major banks all had capital ratios above 10% at March 2008.

Context News

Mizuho paid $1.2bn to Merrill Lynch for preferred shares in January and Sumitomo Mitsui invested $930m in Barclays in June.

Email a friend

Please complete the form below.

Required fields *