UFJ Holdings Inc, Japan's fourth-largest lender, said it's considering a hostile bid from Sumitomo Mitsui Financial Group Inc, increasing pressure on Mitsubishi Tokyo Financial Group Inc to win investor support for its offer.
The bank is seeking outside advice regarding Sumitomo Mitsui's offer, while sticking to a plan to merge with Mitsubishi Tokyo to form the world's largest bank, Osaka-based UFJ said in a statement.
The Sumitomo Mitsui proposal, which includes more than ?500 billion (US$4.23 billion) in funding to UFJ, sets the stage for the first bidding contest in Japan's banking industry. UFJ reported a ?91.6 billion first-quarter loss on Friday and is trying to boost capital to reduce bad loans equivalent to more than one-tenth of total lending.
Sumitomo Mitsui's bid "will force Mitsubishi Tokyo to come up with numbers and to beat those numbers and there's going to be a fight with shareholders on this issue," said Kirby Daley, a strategist at Societe Generale Securities' Fimat division.
Mitsubishi Tokyo spokesman Susumu Niitsuma said Sumitomo Mitsui's proposal had ``no impact'' on its negotiations with UFJ that began last month. He said the bank hasn't made an offer of financial support to UFJ.
UFJ, which has more bad loans than any other bank in Japan, last week rejected Sumitomo Mitsui's merger proposal, saying it wants to push forward with its talks with Mitsubishi Tokyo.
ABN Amro Asset Management's Patrick Lemmens, a UFJ shareholder, wrote to the bank last week asking the lender to consider Sumitomo Mitsui's bid. Competition will result in the best terms for investors, he said.
"We are considering the content of the [Sumitomo Mitsui] proposal to show that we are committed to shareholder value and our clients," UFJ spokesman Minoru Soutome said.
UFJ's first-quarter loss compares with net income of ?132.2 billion a year earlier. Its bad loans rose 17 percent during the quarter to ?4.62 trillion, the highest in Japan, while costs to write off or provide against overdue credits at UFJ's two main units surged to ?306 billion.
"The normal reaction after the earnings could be acceleration of the merger process with Mitsubishi Tokyo," said Giovanni Brambilla, who owns UFJ shares among US$362 million of Asian equities he manages at Milan-based Anima SA.
"Mitsubishi Tokyo is the only one with the financial means to inject money into UFJ," Brambilla said.
UFJ's capital adequacy ratio, an important measure of a bank's financial health, fell to 9.01 percent from 9.24 percent in March. Regulators in Japan require banks with international operations to have enough capital to cover 8 percent of their lending.
The lender needs to boost its capital to offset additional bad-loan write-offs in its fiscal second-quarter ending Sept. 30.
"UFJ has to raise capital as soon as it can," said Nana Otsuki, a credit analyst at Standard & Poor's that rates UFJ's main bank unit BBB.
"It urgently has to deal with bad loans and the lack of capital is limiting its lending," Otsuki said.
Talks between UFJ and Mitsubishi Tokyo stalled after a Tokyo court ruled last month they couldn't include UFJ's profitable trust unit in the negotiations.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
CRITICAL MOVE: TSMC’s plan to invest another US$100 billion in US chipmaking would boost Taiwan’s competitive edge in the global market, the premier said The government would ensure that the most advanced chipmaking technology stays in Taiwan while assisting Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in investing overseas, the Presidential Office said yesterday. The statement follows a joint announcement by the world’s largest contract chipmaker and US President Donald Trump on Monday that TSMC would invest an additional US$100 billion over the next four years to expand its semiconductor manufacturing operations in the US, which would include construction of three new chip fabrication plants, two advanced packaging facilities, and a research and development center. The government knew about the deal in advance and would assist, Presidential
RSS