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Japan’s largest bank announced a tie up with OpenAI to accelerate its use of artificial intelligence, including in a new digital lender that’s set to open next fiscal year. Activities like account openings will be supported through AI chat and other methods, according to Mitsubishi UFJ Financial Group Inc. The firms will also create a […]
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Following reports of Japan-based MUFG picking up 20 per cent stake in HDB Financial Services, HDFC Bank without confirming plans to sell its stake, hinted that the proposal is being considered to meet listing requirements and the bank is exploring all options including the stake sale.
“Our investment in HDB Financial is a financial investment. We hold around 94.8 per cent stake. HDB is in the upper layer of NBFCs which means it needs to be listed by September 2025 under regulatory guidelines,” said HDFC Bank CFO Srinivasan Vaidyanathan.
“All possibilities will be evaluated to get to that end outcome, so we’ll have to be patient. There are several approaches to take there, and all possibilities are under evaluation,” he said in the bank’s earnings call.
The remaining 5 per cent shareholding in the company is by employees under an ESOP scheme.
MUFG is reportedly looking to acquire 20 per cent stake in HDFC Bank’s non-banking arm for around $2 billion, valuing the company at $9-12 billion, nearly five times the book value of HDB Financial. The transaction will be one of the largest deals in the NBFC sector.
In January 2024, Vaidyanathan had said that the bank is working to list the company and the preparatory work for the IPO would commence shortly.
HDB Financial‘s IPO will be the first public issue by the amalgamated entity following the merger of erstwhile HDFC with the HDFC Bank effective July 2023.
For FY23, HDB Financial reported total revenue from operations of ₹12,403 crore and profit after tax of ₹1,959 crore. The company primarily focuses on providing vehicle, small business, personal and gold, CV/CE and tractor loans and loans against property.
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Mitsubishi UFJ Financial Group is planning to leave its uptown office next summer after being in Charlotte for a few years.
The financial services firm’s parent company is based in Tokyo, and came to Charlotte in 2019 to open a center for technology, risk management and other functions for the Americas. But MUFG decided not to renew the lease for space at 201 S. College St. after it expires in July 2024, MUFG Bank (U.S.) managing director and chief communications officer Daniel Weidman told The Charlotte Observer in an email.
Weidman declined additional comment, and did not indicate what the impact would be on MUFG’s continued presence in Charlotte.
When MUFG announced plans for launching in Charlotte, the bank said it intended to employee 300 people, citing the city’s proximity to colleges and universities, and labor pool, as a way to recruit for jobs. The Charlotte Regional Business Alliance’s directory, MUFG exceeded hiring goals and was projecting closer to 400 employees.
The Charlotte location is one of many under MUFG’s Americas operation in the U.S., Latin America and Canada. Its work is focused on global corporate and investment banking, along with other services.
Some of those services including commercial banking, trust banking, credit cards, consumer finance and leasing. Its the seventh-largest financial institution in the world, according to S&P Global Market Intelligence, with assets of $2.9 trillion.
MUFG has 2,100 locations in more than 50 countries, with nearly 160,000 employees.
The company’s long and occasionally colorful history of banks and bank mergers that dates back to the 1600s.
That includes Mitsubishi Bank and Yokohama Specie Bank, which were created in 1880 by Iwasaki Yatarō, a former samurai. Yokohama was a forerunner of the Bank of Tokyo.
The Bank of Tokyo-Mitsubishi UFJ was created around in 2006.
Its MUFG Americas division was formed through mergers of a number of banks, the earliest of which was the Bank of California. After it was established in 1864 it helped provide money for the California Gold Rush.
Later in 2018, BTMU and its related groups were renamed MUFG Bank, Ltd.
This story was originally published October 10, 2023, 6:00 AM.
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