MUFG is just the latest foreign bank to exit the US retail market in the past year following Leumi and BBVA.
Mitsubishi UFJ Financial Group (MUFG) looks to offload Union Bank subsidiary’s core regional franchises in California, Oregon and Washington to US Bancorp for $5.5 billion in cash and 44 million shares of common stock. The transaction does not include Union Bank’s global corporate and investment bank, certain back-office functions and other assets. If regulators approve the sale, MUFG will gain an approximately 2.9% interest in US Bancorp.
“We are very pleased to have reached this agreement, which will allow MUFG to focus and increase our resources on accelerating growth in our Americas’ wholesale businesses—specifically, our corporate and investment banking, global markets, Japanese corporate banking and transaction banking businesses,” Kevin Cronin, MUFG regional executive for the Americas and CEO of MUFG Americas Holdings and MUFG Union Bank, said in a statement.
MUFG is one of the latest banks to exit the US retail market in the past year. In late September, Israeli Bank Leumi announced the sale of its US subidiary to Valley National Bank for $1.15 billion in cash and stock. The transaction is the second acquistion that Valley National has made this year.
In June, Spanish bank BBVA completed the $11.5 billion sale of its BBVA USA subsidiary to PNC Financial Services. The deal has made PNC Financial the fifth-largest bank in the US.
in May, HSBC sold off its mass-market retail banking business to concentrate on its global wholesale and wealth management businesses. Citizens Bank and Cathay Bank each purchased a portion of HSBC’s business for an undisclosed amount.
“They are good businesses, but we lacked to the scale to compete,” said Noel Quinn, group chief executive of HSBC, at the time of the sale.