Japan's Own Banking Crisis Informs Current Power Play

Segue to international market could bolster declining profits
By Ambreen Ali,  Newser User
Posted Oct 23, 2008 2:27 PM CDT
A couple walks past a signboard of Mitsubishi UFJ Financial Group, which bought 21% of Morgan Stanley with $9 billion.   (AP Photo/Shizuo Kambayashi)
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(Newser) – Japanese banks, which just years ago needed US investors to save them from bankruptcy, are using the current crisis to scoop up low-priced international firms. The timing is perfect for the Asian banks, desperate to bolster profits limited by a saturated domestic sector, the Financial Times reports. Though expansion may be challenging, institutional memory of banking crises will inform their moves.

Buying the shrinking and unstable banks is a bit risky, but even muted profits look attractive to the eager investors. Mitsubishi Financial Group gave Morgan Stanley $9 billion for a 21% share and Nomura nabbed the Asian and European operations of Lehman Brothers for a mere $227 million. “It would have taken about 10 years for us to build these platforms,” a Nomura executive says.