The lender operates in 50 markets worldwide, 19 of which are in Asia-Pacific, including Hong Kong, mainland China, India and Vietnam. It serves many multinational and domestic companies, while Asia-Pacific contributes about 30 per cent of the revenue and profits of the bank.

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MUFG CEO Masakazu Osawa says bank bullish on China, Asia-Pacific

MUFG CEO Masakazu Osawa says bank bullish on China, Asia-Pacific

“There is uncertainty in the short term because people might feel insecure that property prices could go down in mainland China and Hong Kong, which would affect consumption to some extent. But MUFG Bank and many of our clients, especially those in Hong Kong, are optimistic about the recovery in 2024,” Osawa said.

“If we could choose the right investments at the right time, we believe that we can have more business and more growth in Hong Kong and mainland China.”

China’s exports fell for a fifth straight month in September, dropping by 6.2 per cent year on year, as shipments to major trading partners contracted. The country’s economy grew by 4.9 per cent in the third quarter, year on year, down from the 6.3 per cent year-on-year expansion it registered in the second quarter.

Osawa was among about 300 top global financiers who attended the Global Financial Leaders’ Investment Summit organised by the Hong Kong Monetary Authority earlier this week.

“Not many regulators in the world organise similar conferences regularly. This opportunity is really, really precious for so many financial institutions to exchange views,” he said.

“Asia-Pacific has great potential for our bank. We see this region as our second mother market. The GDP growth in the Asia-Pacific region is more promising than the rest of the world, while the inbound FDI (foreign direct investment) has been constantly improving in recent years,” Osawa said.

“The younger generations, especially those in Asean and India, will drive domestic consumption in the region.” Asean or the Association of Southeast Asian Nations, refers to the bloc of 11 Southeast Asian countries, including Singapore, Indonesia and Malaysia.

Covid-19, as well as tensions between China and the US, has led many companies to establish additional manufacturing bases in other Asian markets, a trend that Osawa says will create new business opportunities.

“We see a lot of new trade flow coming from not just Hong Kong and mainland China, but also other Asian countries such as South Korea and Japan towards many Asean countries and India. We can capture many new opportunities from that trend because we have operations in 19 markets in the region.”

“Hong Kong will be the epicentre of those new trends and new supply chains as people can easily travel to other Asian markets from the city.”

The bank can trace its roots in Hong Kong back to 1953. Currently, it has 773 staff in Hong Kong where it oversees assets of HK$335 billion (US$42.9 billion) and reported an operating profit of HK$2.2 billion for the year to March. It serves large Japanese corporations and multinationals as well as many large mainland and Hong Kong companies.

Osawa believes a key driver of future growth for the bank will be ESG (environmental, social and governance) financing, as many companies are transforming their business models to use more clean energy and cut down on pollution or the use of water.

MUFG helped its client CLP Power, Hong Kong’s largest power company, to raise 15 billion yen (US$99.3 million) through a samurai syndicated sustainability loan in March 2022, while it also handled a HK$20.7 billion (US$2.64 billion) syndicated sustainability loan for Sun Hung Kai Properties in June 2022. Samurai loans are yen-denominated, issued by foreign entities and distributed only in Japan.

“As one of the largest financial firms in Asia, MUFG Bank wishes to take the lead in that space. We will work with the Hong Kong government and regulators to promote ESG financing in the region.”