Bank of Tokyo-Mitsubishi grows value of corporate loans by more than ANZ and Westpac

By Gareth Vaughan

The Bank of Tokyo-Mitsubishi, which operates in New Zealand as a specialist lender to big companies, grew corporate loans by more than two of the country's big four banks in the December quarter.

And the bank, which operates as "the Auckland Branch" of Japan's Bank of Tokyo-Mitsubishi UFJ Ltd, has now grown assets to a level where it's bigger than SBS Bank, plus new banks Heartland Bank and the Co-operative Bank, with total assets of NZ$2.86 billion.

Bank of Tokyo-Mitsubishi's latest General Disclosure Statement (GDS) shows its corporate loans rose about NZ$221 million, or 10%, in the three months to December 2012 to NZ$2.506 billion.

The big four banks report a combined figure for corporate and rural loans in their GDSs. Of the four ASB grew by NZ$559 million, or 5%, to NZ$12.789 billion in the December quarter. BNZ grew by NZ$481 million to NZ$27.581 billion. ANZ's rose just NZ$86 million, and Westpac's just NZ$29 million.

Bank of Tokyo-Mitsubishi was revealed last week as the bank behind a new NZ$100 million five-year loan to Telecom The telco's most recent annual report shows Westpac as the bank its other NZ$400 million of bank loan facilities are with.

And Bank of Tokyo-Mitsubishi is also one of five banks, alongside ANZ, ASB, BNZ and Westpac, in talks with Treasury and Treasury's advisor Deutsche Bank over some NZ$300 million worth of unsecured bank loans to beleaguered State Owned Enterprise Solid Energy. Prime Minister John Key yesterday said his government wouldn't be letting Solid Energy's banks off Scott-free and they would "definitely" have to wear some losses.

Michael Ryff, general manager for the Bank of Tokyo-Mitsubishi's Auckland branch, told interest.co.nz last year the bank had grown lending strongly over the last few years, having expanded out from merely servicing Japanese companies operating in New Zealand to also targeting major local companies.

"Three to five years ago we just really targeted the top 20 (corporates) in terms of size and importance to the economy. We really started growing," Ryff said then. "Since then we've expanded that, but we're very much focussed on the better credit quality companies. That includes a lot of the electricity sector and companies in just about every other sector really."

The GDS shows total comprehensive income net of tax of NZ$4.4 million in the December quarter, up about NZ$354,000, or 9%, from the same period of the previous year.

And according to KPMG's Financial Institutions Performance Survey for the year to September 30, 2012, the Bank of Tokyo-Mitsubishi grew total assets by 25% and net profit after tax by 29% to NZ$17 million. However, its net interest margin fell to 0.55% in 2012 from 0.67% in 2011 and 0.96% in 2010, suggesting its competitive pricing on loans is coming at some cost.

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