The ongoing deleveraging of European banks has helped boost bank lending in Japan, Fitch Ratings observed Thursday.
According to Fitch, the three "mega banking groups", namely Mitsubishi UFJ, Mizuho and Sumitomo Mitsui, have been the among the major beneficiaries of European bank deleveraging.
All three mega banking groups reported strong revenue and loan growth outside of Japan in financial 2012.
Fitch said it expects these banks to continue to search for growth by increasing their exposure outside of Japan, but through direct lending than large offshore investments, as their overseas subsidiaries are thinly capitalised.
It noted that Japanese banks' liquidity makes them particularly well placed to spread their wings. "The surplus liquidity, which derives from large deposit bases, can be deployed for lending overseas with the aspiration of boosting profit," the agency said.
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