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MUFG buys U.S. land loan business

JIJI, Kyodo

The Mitsubishi UFJ Financial Group Inc. will acquire a U.S. real estate loan business from Deutsche Bank through California subsidiary Union Bank, sources said Monday.

The target’s commercial real estate loan claims and other assets are estimated to be worth $3.7 billion, or about ¥360 billion. The megabank wants to expand Union Bank’s operations not only in California, but elsewhere in the United States.

Subject to the acquisition are so-called nonrecourse loans for office building projects, mainly in New York and Chicago. The loans will be repaid through income from real estate management.

While European banks are selling noncore assets amid the debt crisis in Europe, Japanese banks have stronger bases, raising the possibility that more overseas acquisitions are in store.

They are focusing on overseas expansion because no significant growth is expected in the shrinking domestic market.