Japan’s megabanks bolstering services in Southeast Asia, betting on jolt to regional growth
BANGKOK — Japan’s three megabanks — MUFG Bank, Mizuho Bank and Sumitomo Mitsui Banking Corp. (SMBC) — are ramping up services for local companies and Japan-affiliated firms in Southeast Asia amid expectations economic activity in the region will get a shot in the arm from the abolition, in principle, of tariffs among members of the Association of Southeast Asian Nations this year.
The megabanks’ approach also reflects forecasts that the trend of businesses shifting factories from China to Asean members as a spillover effect of U.S.-China trade friction will accelerate.
On Wednesday, MUFG held a “business matching fair” that brought together corporate clients in Bangkok. There is strong appetite among the service sector as it expects expanding domestic demand due to the growth of Thailand’s middle class.
More than 200 firms, including ones from countries such as Thailand, Cambodia, Myanmar and Laos, and Japan-affiliated companies and businesses, participated in the fair, making it the largest such event the bank has held overseas.
At the event, the bank introduced clients and brought them together.
“This business practice is exactly what would be expected in the Asia region, where face-to-face, direct business talks are considered so important,” said Makoto Kobayashi, a managing executive officer at the bank.
Although the business matching fair will not directly lead to profits for MUFG, the megabank aims at uncovering future demand for funds by using its growing network in Southeast Asia created through the acquisition of local banks and other investments.
Thailand has been expanding its investment in countries such as Cambodia, Laos, Myanmar and Vietnam.
On Nov. 26, Mizuho signed a memorandum of understanding on a business tie-up with the state-owned Export-Import Bank of Thailand. Mizuho will support Thai companies seeking to expand business within the Asean region. With credit enhancement provided by the Thai bank, Mizuho also will promote the lending of funds for future growth to local small and midsize firms.
SMBC has tightened its cooperation with local authorities in Myanmar and Cambodia and held seminars that provide the latest information to companies and investors as it seeks to attract more funds for investment.
In November, Myanmar dropped restrictions on foreign-affiliated banks loaning money to local companies. SMBC also plans to increase the strength of its brand in Thailand by issuing bonds denominated in baht.
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