MUFG Bank expects over 25% growth in India biz; to focus on large cos

Shashank Joshi, MUFG's deputy chief executive officer and head of global corporate and investment banking in India, said the bank has an exposure of about $15 billion in India

MUFG Bank plans to grow its India exposure – onshore and offshore lending - by over 25 per cent annually and take it to over $25 billion in the medium term, a top executive of the Japanese banking major said here on Wednesday.

Shashank Joshi, MUFG's Deputy CEO and head of global corporate and investment banking in India, said the bank had about $15 billion exposure in India.

Of the $15 billion exposure, $7-8 billion is through the GIFT City branch. This (GIFT city) is the largest exposure by a foreign bank, Joshi said in response to media queries on the sidelines of Global Fintech Fest 2024.

The bank is predominantly funding (lending) large Indian companies and conglomerates. At present, it is focussing on 5-6 large groups with business presence across sectors, he added. 

He did not elaborate on which business groups were using credit facilities from MUFG Bank. MUFG India focuses on short-term trade-related advances, bill discounting, and packing credit

India Ratings while assigning issuer rating “AAA” for MUFG India’s branches said MUFG India’s capitalisation remained strong, with a common equity Tier-I ratio of 21.89 per cent at FYE24. The Japanese banking major had infused Rs 3,000 crore in MUFG India during FY22 to augment the latter’s corporate business growth, demonstrating the strong support from the head office.

Its loan growth was expected to remain healthy, driven by the bank’s sustained focus on large and high-rated corporates with interests in the Indo-Japan trade corridor, along with other multinational corporates and higher-rated Indian corporates.

This, despite being a competitive landscape, offers a growth opportunity for the bank. Overall, India Ratings expects the bank to maintain its asset quality, with no significant slippages likely in the near term, owing to its conservative underwriting approach.