Japan’s top three megabanks—Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG), and Mizuho Financial Group—are riding a wave of record profits and excess cash. As they capitalize on divestments and high earnings, these banking giants are aggressively expanding their global footprint, particularly focusing on the US and India. Their aim: leverage these booming economies for growth while making strategic investments to boost shareholder value and enhance their market positions.
While these banks have had a presence in both the US and India for decades, 2024 marks a new phase of aggressive investment and expansion. The US, with its established financial markets, and India, with its rapid economic growth, represent two key areas of focus for their global strategy.
In India, Japan’s megabanks are tapping into the country’s burgeoning demand for loans and capital, driven by the nation’s fast-growing economy and rising consumer base. In the US, the focus is on strengthening corporate and investment banking services, including strategic acquisitions and partnerships.
Why India is the Hotspot for Japanese Banks
India is currently one of the world’s most attractive markets, thanks to its dynamic economic growth. MUFG has identified India as a cornerstone of its Asian growth strategy, targeting key sectors like infrastructure, consumer lending, and IPOs. The bank is actively pursuing ties with major Indian conglomerates, including Reliance Industries and the Adani Group, and plans to double its loan exposure in the country to $30 billion.
MUFG isn’t alone in eyeing India. Mizuho and SMFG are also making significant moves, particularly in retail lending and consumer finance. For example, SMFG took full control of Fullerton India Credit Co. in March 2024 for $700 million, focusing on housing and auto loans. Likewise, Mizuho is expanding its footprint by acquiring a 15% stake in Kisetsu Saison Finance India Pvt. Ltd., which specializes in consumer finance.
Both MUFG and SMFG see massive growth potential in India’s expanding middle class, which is driving demand for credit in areas like home and vehicle purchases. The country’s IPO market is also attracting attention, with Mizuho and Nomura Holdings vying to buy a controlling stake in Avendus Capital, one of India’s largest investment banks.
Beyond traditional banking, MUFG is making strategic investments in digital finance across Asia. In 2024, the bank invested nearly $600 million in fintech firms in Thailand and the Philippines, signaling a broader shift towards the digital economy in the region. With plans to expand in emerging markets, MUFG is positioning itself to tap into the region’s tech-driven growth, particularly in digital payments and f
While India captures the attention of Japanese banks in terms of growth and lending opportunities, the US remains a key focus for corporate and investment banking. Japanese megabanks are deepening their presence in M&A advisory, bond underwriting, and other high-fee services.
MUFG has led the way in this area with its long-standing partnership with Morgan Stanley, focusing on mid-market deals, loans, and IPOs. Mizuho followed suit, acquiring Greenhill & Co. in 2023 to bolster its investment banking capabilities. The bank aims to break into the top 10 corporate and investment banks in the Americas, with notable gains in US corporate bond and loan markets.
SMFG is also expanding in the US, collaborating with Jefferies Financial Group to enhance its corporate banking offerings. The partnership has been fruitful, with both banks working on over 130 deals in the past year alone.
Despite their ambitious global strategies, Japan’s megabanks face challenges in managing a truly globalized business model. The ability to attract and retain local talent, especially in the US, remains a key hurdle. Additionally, the megabanks’ global ambitions have not been without setbacks—MUFG’s sale of its US regional lender, Union Bank, in 2021 highlighted the difficulties of competing in the fast-paced, capital-intensive US banking market.
As Japanese megabanks focus on expanding their overseas operations, mergers and acquisitions (M&A) will continue to play a central role in their strategies. Whether in India’s dynamic retail market or the US’s corporate banking sector, these banks are looking for opportunities to deploy their capital into high-growth ventures.
“We will keep allocating necessary resources to capture high economic growth,” said Yoshihiro Hyakutome, co-head of Sumitomo Mitsui’s global banking unit. With billions in cash reserves and a determined push for international growth, Japan’s top banks are set to continue reshaping the global banking landscape.
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