Japan’s biggest banks, flush with cash from a year-long stock market rally, are poised to benefit this year from a spurt in loan growth at home fuelled by the economic stimulus measures of Prime Minister Shinzo Abe.
Mitsubishi UFJ Financial Group Inc (8306.T), Mizuho Financial Group Inc (8411.T) and Mitsui Sumitomo Financial Group Inc (8316.T) all booked increased lending in the latest quarter, in a business that contracted before “Abenomics” kicked in at the beginning of 2013.
Domestic loans at major Japanese banks grew 2 percent in December for the quickest annual pace since 2009 and surpassed 200 trillion yen for first time in over three years, central bank data show.
Lending is likely to pick up as around a quarter of Japanese companies, according to a Reuters poll conducted last month, plan to increase capital expenditure in the financial year beginning in April.
In further positive signs, the central bank’s index of business sentiment reached its highest in six years in the latest quarter, and spending on machinery hit a five-year high.
Lending growth so far has been driven by funding for large-scale acquisitions. MUFG is part-financing drinks maker Suntory Holdings Ltd’s SUNTH.UL $13.6 billion purchase of U.S. whiskey maker Beam Inc.