MUFG is establishing a Riyadh subsidiary by October.
Japan’s mega banks are strengthening their footholds in Saudi Arabia, the country’s top diplomat said in an interview with Arab News.
MUFG will establish a full-fledged subsidiary in Riyadh by October this year, according to Japanese Ambassador Tsukasa Uemura.
Sumitomo Mitsui Banking Corp has already established a consulting business subsidiary in the Middle Eastern country in March whilst Mizuho Bank has long been operating in the Kingdom since 2009.
“Saudi-Japan Vision 2030 has mapped out the outlines of the strategic partnership under which the two countries will establish 46 government-level projects,” he told Arab News, as the two countries ramp up investments and joint projects to support businesses.
Japanese banks have been steadily tapping on overseas markets in a bid for survival amidst unfavourable business environments in their home turf brought about by ultra low interest rates engineered by the central bank.
“Falling loan demand and a shift toward lower-risk deposits are pressuring the profitability and growth prospects of banks, and Japan's three megabanks have announced structural overhauls that will result in a reduction of their headcount by 32,000,” credit rating agency Moody’s said in a report. “And faced with ultralow interest rates, both banks and insurers continue to seek opportunities for growth abroad."
Photo from Morio - Own work, CC BY-SA 3.0
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