Bulletin: Mitsubishi UFJ Financial Group To Keep Adequate Capitalization After Buying Australia Asset Management Firm Subsidiaries

TOKYO (S&P Global Ratings) Nov. 1, 2018--S&P Global Ratings today said that it expects Japan-based banking group Mitsubishi UFJ Financial Group Inc. (MUFG; A-/Positive/--) will maintain capitalization at the adequate level for the next year or two even after incorporating into our analysis the planned acquisition of a group of asset management companies announced Oct. 31. MUFG says it will wholly acquire the asset management subsidiaries under the Commonwealth Bank of Australia group for about A$4 billion (about ¥328 billion). We estimate that the expected goodwill and intangible fixed assets from the acquisition will push down MUFG's risk-adjusted capital (RAC) ratio by as much as about 20 basis points. However, we believe MUFG will maintain its capitalization at a level

...TOKYO (S&P Global Ratings) Nov. 1, 2018--S&P Global Ratings today said that it expects Japan-based banking group Mitsubishi UFJ Financial Group Inc. (MUFG; A-/Positive/--) will maintain capitalization at the adequate level for the next year or two even after incorporating into our analysis the planned acquisition of a group of asset management companies announced Oct. 31. MUFG says it will wholly acquire the asset management subsidiaries under the Commonwealth Bank of Australia group for about A$4 billion (about Ñ328 billion). We estimate that the expected goodwill and intangible fixed assets from the acquisition will push down MUFG's risk-adjusted capital (RAC) ratio by as much as about 20 basis points. However, we believe MUFG will maintain its capitalization at a level we view as adequate with its RAC ratio exceeding 7%, considering the group's size and capital level. In addition, the businesses that MUFG plans to acquire have relatively low asset risk and may stabilize the group's earnings,...

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