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Mitsubishi UFJ Expands Investment Banking Business in Europe


Mitsubishi UFJ Financial Group MTU has recruited about 180 employees to date for its investment banking offices in Europe, the Middle East and Africa, with a view to expand operations and boost income outside the domestic market.

The recruitments are also for expansion in other sectors such as telecommunications, media, technology and healthcare. It has also added senior investment bankers to compete better with other financial institutions across the three regions.

Per an article by Reuters, the Tokyo-based lender is planning to do some more hiring in the target region. Also, the company plans to open a new subsidiary in Amsterdam to keep providing uninterrupted services in the European region post Brexit.

Further, Mitsubishi UFJ is also mulling over opening an investment banking branch in Paris. With about 20 offices across Europe, the bank remains well positioned to face the fallouts of Brexit.

Mitsubishi UFJ sees this expansion as a chance to counter the slow growth of the economy of Japan by increasing overseas revenues.

Currently, profits from the target region make up 10% of the non-Japan profits. Mitsubishi UFJ is seeking to adopt the policy of making customers pay for additional products such as advice on deals, hedging and finance.

Recently, Mitsubishi UFJ’s core banking unit — The Bank of Tokyo-Mitsubishi UFJ, Ltd. — was in news for its plans to acquire 40% stake in Bank Danamon Indonesia. The ¥200 billion ($1.75 billion) buyout is an attempt by the Japanese banking behemoth to expand its footprint in Southeast Asia. The bank plans to sign an agreement this year and acquire the stake in its next financial year, commencing April 2018. (Read more: Mitsubishi UFJ to Acquire a 40% Stake in Bank Danamon)

Shares of Mitsubishi UFJ have gained 5.7% year to date, underperforming the 16.6% rally of the industry.

Currently, the stock carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same space are Erste Group Bank AG EBKDY and Shinhan Financial Group SHG, both sporting a Zacks Rank #1 (Strong Buy) and The Bank of N.T. Butterfield & Son Limited NTB carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

For Erste Group, over the past 60 days, the Zacks Consensus Estimate has been revised 16.6% upward for 2017.

Shinhan Financial has witnessed an upward earnings estimate revision of 7.6% for 2017, over the past 60 days.

Bank of N.T. Butterfield & Son has witnessed an upward earnings estimate revision of 2.2% for 2017, over the past 60 days.

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