Japanese mega banks grow in IndiaMizuho Bank, MUFG and Sumitomo Mitsui Banking Corp are looking to scale up their capabilities in India amid strengthening ties between the world’s fourth and fifth-largest economies. The Japanese mega banks are looking to capitalise on the robust growth they have achieved in the country in the past few years and are increasing their product offerings while also eyeing opportunities in capital markets. “We are looking to grow our product capability, headcount, and our customer base in India as the country is seeing a golden period,” said Piyush Agarwal, senior managing director of Mizuho Bank's Indian corporate banking department. “We want the advances and deposits to grow even faster than before [and are] looking at both inorganic and organic growth opportunities.” Mizuho Securities is hiring debt capital market specialists as it makes that push and MUFG is awaiting approval to set up a local DCM business. “Once operational, we will be able to finance M&A through all channels and in the most cost-efficient way,” said Shashank Joshi, deputy CEO of MUFG India. “As a bank which is playing in size, we want to have the rupee capabilities as the rupee market is becoming very liquid.” India’s inclusion this year in global bond indices and a booming private credit market, combined with its strong economic growth, have spawned a gold rush among debt market participants, especially international ones. MUFG is processing internal approvals for an asset-backed securitisation business in rupees and US dollars and is targeting its first deal this month, Joshi said. India's ABS market is expected to grow rapidly as it gives banks an alternative funding route when deposits are trailing credit growth. Joshi said MUFG is focusing on lending to large conglomerates and pursuing more complex transactions, such as structured deals, M&A financing and financial sponsor-driven deals. In the past, the bank had been more focused on state-owned enterprises. It's a similar story at SMBC and its non-banking financial company SMFG India Credit. “SMBC plans to expand its business by strengthening highly profitable products such as project finance and LBOs, as well as offshore business, while SMFG India Credit, which provides financial services to [small and medium-sized businesses] and individuals as a non-bank, plans to enhance its business in rural areas and housing finance, as well as by bolstering its product portfolio and digital solutions,” said Hiroyuki Mesaki, country head and CEO for India at SMBC. Besides supporting the rupee funding needs of Indian blue chips and Japanese customers operating in India, the bank offers foreign currency-denominated structured products and finance for projects, infrastructure and real estate to corporates with an increasing focus on sustainability and ESG principles, he said. Mizuho is also focusing on providing acquisition, structured and project finance for customers in India and has recently hired people to work on such deals. Mizuho Financial Group's four units – Mizuho Bank, Mizuho Securities, Mizuho Global Services and Mizuho Leasing – employ 1,000 people in India, up from fewer than 500 three years ago. MUFG's headcount has risen to 4,000, including MUFG Pension and Market Services, earlier named Link Group, which it acquired in May. SMBC's headcount in India has grown by 12% over the last fiscal year to almost 400. Committing more Japanese banks are expanding in India through multiple means, including taking stakes in local intermediaries, committing more capital or opening branches in Gujarat International Finance Tec-City, an offshore financial centre in prime minister Narendra Modi’s home state. In August, MUFG invested Rs27.99bn (US$333m) in DMI Finance, a digital financial services business. In February, Mizuho spent Rs12bn on a 15% stake in small business lender Kisetsu Saison Finance (India), a subsidiary o
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