Japan’s megabanks dominate world lending

Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group, Inc. and Sumitomo Mitsui Financial Group Inc. have loaned a record US$515 million overseas.

Thomson Reuters said the trio was among the top four lead managers of global syndicated loans in the first half of this year.

An executive at Sumitomo Mitsui Banking Corporation said European banks hit by the debt crisis are cutting back on their lending globally, and Japanese banks are exploiting this decline.

Japan's three megabanks extended overseas loans amounting to US$515 billion in the first half, which is some US$12.7 billion higher than at the end of March 2009.

In this second quarter, Sumitomo Mitsui reported that 34% of its loan-derived profits came from overseas countries and regions. This was higher than its goal of 30% for the current fiscal year.

With low domestic interest rates, Japanese banks have become especially active in financing large-scale, long-term funding of infrastructure and other industrial projects. One estimate says US$8 trillion will be required for infrastructure development in the growing Asian region through 2020.