How safe are the European asset
finance arms of Japanese banks and financial organisations? Last
month, Mitsubishi UFJ Financial Group, part of the Mitsubishi
Group, raised a further ¥97.4 billion ($745 million) to improve its
capital base as the value of its shareholdings eroded. This follows
its regulatory filing in February that it would issue retails bonds
totalling ¥350 billion.
These fundraisings by Mitsubishi will
help shore up its considerable leasing assets, which include a
business ran out of AIB’s International Centre in Dublin as well as
a host of assets in the Far East.
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Meanwhile, Sumitomo Mitsui Financial,
which has a significant leasing portfolio, including SMBC Leasing
(which last year signed a £223 million (€244 million) joint venture
with National Australia Bank to finance overground trains for the
2012 Olympics East London line extension), has also been
fundraising as it faces a similar erosion of capital.
The fundraising will help them add
strength to their Tier 1 capital ratio, a key measure of bank’s
financial strength and their level of reserves they have in place
in order to lend.
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