In Focus
RETAIL BANKING | Tony Chua, Japan

Japan's big 3 set to expand overseas

The lenders capitalizes on stronger yen in quest to seek growth abroad as expected boost to loan demand from March quake is yet to materialize.

Top Japanese banks are looking to expand their footprints in markets as far apart as Vietnam, Brazil and Malaysia as they seek to counter poor demand for loans at home and benefit from a strong currency.

Mizuho Financial Group, the nation's second-biggest lender, is set to seal a deal soon to buy as much as 20 percent of Vietnam's Vietcombank, sources said.

Mitsubishi UFJ Financial Group, Japan's No.1 bank, last month began talks with CIMB to expand their investment banking ties and take a bigger stake in the Malaysian lender. And Sumitomo Mitsui Financial Group teamed up with Brazil's BTG Pactual in April to offer project finance and advisory services in the Latin American nation.

The overseas focus is understandable. In a flagging economy, bank loans fell for the 19th consecutive month in June from a year earlier, data from the Bank of Japan shows.

The expected boost to loan demand from the March 11 earthquake and tsunami has yet to materialise.

While a surge in loan requests was seen in the immediate aftermath of disaster, it has not lead to an increase in actual lending because many clients approached lenders as a precaution against possible cash needs.

View the full story in Reuters.

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