Japan’s stable currency is helping the nation’s banks attract clients from abroad, especially those seeking funding to expand globally.
While European banks are in stand-by, affected by the continent’s ongoing crisis, Japanese banks are increasingly looking abroad for clients, in countries such as South Korea where giants like Samsung Electronics and Hyundai Motor need loans to expand.
Financial groups like Mitsubishi UFJ, Mizuho and Sumitomo have formed teams to research the potential in South Korea.
“We have been studying their business and capital expenditure plans and chasing potential deals,” said a top manager at Mizuho Corporate Bank. “As European lenders face hard times, the status of Japanese banks is on the rise.”
While outstanding loans by Japan’s top three banks on the domestic market remained flat in the year ended March 31, their loans in South Korea grew 28 percent to about Y1.07 trillion ($13.3 billion) in the same period.
“We expect loan demand by South Korean companies to grow further, though we already reached considerable amounts,” commented a representative of Sumitomo Mitsui Banking Corp. “Our next step is to expand into trade finance and cash management.”