BIZCHINA / Overseas Investment
Mizuho to incorporate, seek more lending in China
By Mariko Yasu and Ichiro Suzuki (China Daily)
Updated: 2006-12-05 09:39
Mizuho Financial Group Inc will incorporate and expand in China, aiming
to win more business from Japanese manufacturers who have tripled
investments in the world's fastest-growing major economy.
"A domestic charter may make it easier to get permission to expand market
and investment-banking operations," Masahiko Yano, Mizuho Corporate Bank
Ltd's joint general manager for Asia, said in a Hong Kong interview on
November 24. The bank will apply as early as this month, he added.
Mizuho, Japan's second-biggest financial firm, must broaden operations in
China to meet corporate banking head Hiroshi Saito's goal of doubling to
40 per cent the overseas share of total revenue.
"Japanese banks are chasing the nation's manufacturers, who have been
expanding in Asia for years," said Atsuto Sawakami, who manages US$1.7
billion as president of Sawakami Asset Management Inc.
Seventy per cent of nearly 20,000 Japanese companies operating in China
plan expansion within two years, according to the Japan External Trade
Organization, which said Japanese direct investment in China rose to
US$6.6 billion in 2005 from US$2.2 billion five years earlier.
"We plan to earn more fees by arranging structured and project financing,
which are among our strongest businesses," Yano said. Mizuho aims to
expand lending to Japanese and local companies in China; it has no
immediate plan to offer retail banking, he added.
Yano said Mizuho is preparing to open a branch office in Tianjin. The
bank has branches in Beijing, Dalian, Shanghai, Shenzhen and Wuxi, and
aims to double its Chinese outlets within five years, he said.
Japanese banks including Mizuho are looking to other markets in Asia as
earnings slow at home. Lending by the nation's biggest banks fell 0.4 per
cent in October, the third straight month of slowdown after a spate of
borrowing before July when the Bank of Japan raised interest rates for
the first time in six years.
Mizuho's net income slid 2.1 per cent in the three months ended on
September 30 as higher rates stalled loan demand.
China, which will eliminate restrictions on overseas banks to meet World
Trade Organization commitments, decided banks not locally incorporated
must set aside twice as much capital per branch, won't be allowed to
issue credit and can accept only large deposits. The restrictions will
limit the ability of banks without a local charter to amass funds and
grow through lending.
The rules, issued on November 15, prompted London-based Standard
Chartered Plc to apply for local incorporation the following day. HSBC
Holdings Plc, which has operated in the nation for a century and a half,
has said it will also do so.
(For more biz stories, please visit Industry Updates)
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