Mizuho may bid for Citi’s Japan units
Mizuho Financial Group Inc, Japan’s second-largest bank by revenue, said it may consider buying Citigroup Inc’s local brokerage and asset-management units.
By Bloomberg |
TOKYO: Mizuho Financial Group Inc, Japan���s second-largest bank by revenue, said it may consider buying Citigroup Inc���s local brokerage and asset-management units.
���I think it���s worth considering,��� said Yasuhiro Sato, 56, who will be promoted to chief executive officer of Mizuho���s corporate banking unit on April 1. The Nikko Cordial brokerage has a strong distribution network, and Nikko Asset Management Co is highly coveted and likely to attract many bidders, he said. Acquiring the units would help Mizuho tap more of the almost 1,500 trillion yen ($17 trillion) in Japanese household assets. Citigroup, which was forced to accept $45 billion of US government rescue funds, said January 16 that the Japanese units are among assets it may sell.
Sato, currently deputy president of Mizuho Corporate Bank, is more interested in Nikko Asset than Nikko Cordial because it is harder to value the brokerage, he said in an interview in Tokyo.
Citigroup paid 1.6 trillion yen to acquire companies including Nikko Cordial and Nikko Asset last year. The brokerage managed 28.2 trillion yen in client assets as of September 30, while the fund manager had 10.8 trillion yen.
Sato didn���t say how much Mizuho or others would be likely to bid for the companies.
���Mizuho is weak on the consumer side and in private banking, so that���s probably why they want Nikko Asset,��� said Edwin Merner, president in Tokyo of Atlantis Investment Research Corp, which manages about $3.1 billion.
Mizuho lost $8 billion on subprime-related investments since the global credit crunch began, more than any bank in Asia. On January 16, it said Takashi Tsukamoto would replace Terunobu Maeda as chief executive officer of the Mizuho group, also effective April 1. The company will report third-quarter earnings on January 30.
Japan���s largest banks have still suffered less than their global rivals, as governments bailed out lenders in the US and Europe and the UK nationalized companies including Northern Rock Plc. Mizuho may seek alliances and acquisitions with overseas asset-management firms and Asian financial institutions to increase its product range, according to Sato. ���There���s no doubt there���s a chance to go on the attack, but it���s not a time to bet the bank���s financial base doing so,��� he said.
���It���s important to maintain a strong financial base now and manage the bank soundly.��� The company invested $1.2 billion last year in Merrill Lynch & Co and $120 million in Evercore Partners Inc, the investment bank started by former US Deputy Treasury Secretary Roger Altman.
���I think it���s worth considering,��� said Yasuhiro Sato, 56, who will be promoted to chief executive officer of Mizuho���s corporate banking unit on April 1. The Nikko Cordial brokerage has a strong distribution network, and Nikko Asset Management Co is highly coveted and likely to attract many bidders, he said. Acquiring the units would help Mizuho tap more of the almost 1,500 trillion yen ($17 trillion) in Japanese household assets. Citigroup, which was forced to accept $45 billion of US government rescue funds, said January 16 that the Japanese units are among assets it may sell.
Sato, currently deputy president of Mizuho Corporate Bank, is more interested in Nikko Asset than Nikko Cordial because it is harder to value the brokerage, he said in an interview in Tokyo.
Citigroup paid 1.6 trillion yen to acquire companies including Nikko Cordial and Nikko Asset last year. The brokerage managed 28.2 trillion yen in client assets as of September 30, while the fund manager had 10.8 trillion yen.
Sato didn���t say how much Mizuho or others would be likely to bid for the companies.
���Mizuho is weak on the consumer side and in private banking, so that���s probably why they want Nikko Asset,��� said Edwin Merner, president in Tokyo of Atlantis Investment Research Corp, which manages about $3.1 billion.
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Citigroup said last month it agreed to sell its entire stake in NikkoCiti Trust & Banking Corp to Mitsubishi UFJ Financial Group Inc for about 25 billion yen. The US bank also agreed to sell shares in its Japanese private-banking unit Nikko Antfactory KK to Norinchukin Bank and other investors. Mizuho lost $8 billion on subprime-related investments since the global credit crunch began, more than any bank in Asia. On January 16, it said Takashi Tsukamoto would replace Terunobu Maeda as chief executive officer of the Mizuho group, also effective April 1. The company will report third-quarter earnings on January 30.
Japan���s largest banks have still suffered less than their global rivals, as governments bailed out lenders in the US and Europe and the UK nationalized companies including Northern Rock Plc. Mizuho may seek alliances and acquisitions with overseas asset-management firms and Asian financial institutions to increase its product range, according to Sato. ���There���s no doubt there���s a chance to go on the attack, but it���s not a time to bet the bank���s financial base doing so,��� he said.
���It���s important to maintain a strong financial base now and manage the bank soundly.��� The company invested $1.2 billion last year in Merrill Lynch & Co and $120 million in Evercore Partners Inc, the investment bank started by former US Deputy Treasury Secretary Roger Altman.
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