Mitsubishi holds an balance sheet with a risk-adjusted weight of 11.18%, well above the required 8.00%. The well-capitalization gives MUFG a cushion for continued declining financial assets, while American and European competitors, such as Citi Financial, AIG, and UBS are forced to sell assets in order to maintain required capital ratios.
Mitsubishi infused $9 billion in capital into Morgan Stanley, in exchange for a 21% stake in the investment bank. Moreover, Mitsubishi $9 bln of preferred shares pay a 10% dividend. The attractive terms give MUFG an opportunity to grow its customers base and cross-sell financial services in the American markets.
Mitsubishi aims to expand its Asian operations outside of Japan. Already advising companies on expansion into the region and its long history of banking in Japan give Mitsubishi a competitive advantage over non-Asian banks that are trying to gain market share. Rapid GDP growth in countries like China and India translates to more opportunities to make money.