Mitsubishi UFJ proves banks still have access to market capital
Large U.S. banks have raised money to improve their capital position this year, in some cases because the government required them to do so. Bank analysts have worried that a wave of write-downs on commercial real estate and credit card debt might require some big financial firms to go back to the funding well. That raises the question of whether institutional investors still have any appetite for putting money into global banks.
Those concerns about bank funding may have been allayed a bit. Mitsubishi UFJ (MTU), the largest bank in Japan and a major investor in Morgan Stanley (MS), is raising $11 billion. The firm has already filed papers with Japan's Ministry of Finance to sell common shares.
Mitsubishi is a truly international bank. It put over $9 billion into Morgan Stanley at the peak of the American credit crisis. Some experts believe that Mitsubishi's investment kept Morgan from following Lehman into bankruptcy.
Mitsubishi looks a great deal like the largest American banks, at least in the way it is organized. It has significant corporate lending, consumer finance, investment bank and money management arms. The money it is raising will ensure it has a capital base that could withstand future write-downs, but the money will also allow the bank to expand, and some of that expansion is likely to be outside Japan.
Banks have raised a lot of money since the start of the financial crisis. It looks like they can still raise more.
Douglas A. McIntyre is an editor at 24/7 Wall St.