Mitsubishi UFJ looks overseas for salvation

Japan’s biggest bank intends to generate some 40% of its profit overseas from the present 28%.

Takashi Morimura, head of global banking, said the bank also plans to hire up to 3,000 people abroad over the next three years to expand its overseas retail banking business. MUFJ seeks to open branches and offices in China, India and Indonesia, among others.

The bank’s latest hiring plans intend to increase the workforce at its global division by 15% from about 20,000.

MUFJ is seeking stakes in Hong Kong, China and Taiwan banks to help accelerate overseas profit growth to 10% annually over the next three years from an average of 7% for the past three years. Some 6% of the bank’s revenue comes from Asia, excluding Japan.

MUFJ is expanding in Asia and North America to compensate for moribund growth in Japan that is being compounded by persistent deflation and low interest rates that bleed profit margins. In 2011, Japan’s three biggest banks, including MUFJ, took their largest share of the Asian loan market in more than a decade as European banks withdrew to cope with the Eurozone debt crisis.

One analyst believes MUFJ will aggressively add personnel and deposits outside of Japan in the years ahead before European banks recover. This will enable MUFJ to capture more deposits, boost overseas lending and prepare to invest in Asian banks.