Chugoku Bank Ltd. wants to get into the global airline debt market after loans to local businesses fell for a fourth straight year.
"It's the same everywhere: loans aren't increasing and margins aren't good," Eriko Manabe, who works on the bank's overseas lending, said in an interview from the city of Okayama. "We're looking for our first aircraft financing deal."
Manabe's bank isn't the only regional lender trying to get a piece of the aircraft financing market valued at $104 billion last year after Sumitomo Mitsui Financial Group Inc.'s $7.3 billion purchase of Royal Bank of Scotland Group's aviation division in 2012. While unprecedented Bank of Japan monetary easing is spurring lenders to take more risk, little of that is in domestic loans due to record low margins and weak demand.