MUFG sells shares in US Bancorp
MUFG Bank, the core banking subsidiary of MUFG, has sold 24 million shares of U.S. Bancorp (“USB”) common stock it had additionally acquired in August 2023. The sale of USB shares was completed with consideration to MUFG’s regulatory capital efficiency.
In connection with the sale of MUFG Union Bank N.A. to USB in December 2022, MUFG acquired its initial investment of approximately 44 million shares in USB while also entering into a business collaboration agreement with USB, the 5th largest bank in the U.S. by asset size. In August 2023, MUFG acquired an additional 24 million shares in USB. The proceeds received by USB for this additional investment was paid to MUFG’s subsidiary, MUFG Americas Holdings Corporation, to reduce USB’s $3.5Bn outstanding obligation due within five years of the closing date of the sale of MUFG Union Bank N.A.
In accordance with the initial business collaboration agreement, MUFG and USB have been collaborating in providing banking services for certain Japanese retail customers in the U.S., and have an agreement for U.S. Bank N.A., USB’s banking subsidiary, to provide U.S. dollar liquidity support. Further, the two firms expect to expand strategic collaboration and joint business opportunities, leveraging each other’s strengths. These opportunities include collaboration in the digital field, corporate transactions, financial services for Japanese customers, global markets business, and more.
Following the announced sale, MUFG will continue to hold its initial investment of approximately 44 million shares given its intention of maintaining a long-term relationship with USB remains unchanged.
The Sale is not expected to have a material impact on the financial results of MUFG and MUFG Bank for the fiscal year ending March 2025.
Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. We invite you to also register for our short weekly digest, the “Japan FinTech Observer”, on Medium or on LinkedIn. Our global Finance & FinTech Podcast, “eXponential Finance” is also available through its own LinkedIn newsletter, or via our Podcast Page.
Should you live in Tokyo, or just pass through, please also join our meetup. In any case, our YouTube channel and LinkedIn page are there for you as well.
