The Japanese lender will exit U.S. retail banking amid increasing competition from the country's biggest banks.
Mitsubishi UFJ Financial Group (MUFG) has reached a deal to sell MUFG Union Bank (MUB) in an $8 billion cash and share deal with U.S. Bancorp, it announced in a statement on Tuesday.
«Given MUB’s current business environment, including the need for increased technology investments as part of digital transformation, a certain scale is required to maintain and strengthen competitiveness,» MUFG explained.
MUFG acquired Union Bank in 2008 for $3.5 billion. It currently has about 300 branches and more than $16 billion in equity capital, or book value, according to data from the Federal Deposit Insurance Corp. The deal will would give the U.S. Bancorp about $664 billion in assets, solidifying its status as the fifth-largest retail bank in the country.
Bancorp Stake
In addition, MUFG will take a 2.9 percent stake in U.S. Bancorp, and is in discussions with the Minneapolis-based bank on further business alliances.
«The MUFG group continues to view the U.S. market as important, even after the Share Transfer, and will aim to achieve new growth through the share ownership and business alliance with USB, as well as the concentration of management resources on corporate transactions that can leverage MUFG’s strengths,» the bank said in the announcement.
