Japan bank may look overseas for growth

Mitsubishi UFJ Financial Group President Nobuo Kuroyanagi said the world's biggest lender may buy an overseas financial company to improve profitability, as a revival in Japan's economy fails to spur domestic borrowing.

"We can't afford to just stay at home," Kuroyanagi said. "It's crucial to expand our banking business alongside economic development in China and Southeast Asia. We'll do it by ourselves if we can, but if an overseas company has services our clients want, we wouldn't rule out buying it."

Mitsubishi UFJ, which surpassed Citigroup as the world's biggest bank by assets last year, controls more than half the market for transactions with Japanese companies operating in the rest of Asia, Kuroyanagi said Monday.

Japan's biggest banks are emerging from more than a decade of economic downturn. While the stock market has surged and deflation appears close to an end, bank lending remains stagnant.

Mitsubishi UFJ derives 16 percent of its income from overseas. The lender holds a 63 percent stake in San Francisco-based UnionBanCal.

Contributions from the U.S. unit grew 2.5 percent from a year earlier, lagging behind the overall 8.9 percent rise in overseas earnings.

Kuroyanagi is looking to the higher growth offered by emerging Asian markets and said there are no plans to raise the stake in the U.S. bank.