Japan

When Asiamoney asked one bank executive to name the best private bank in Japan, his response was telling: there is only one. In truth, some of the world’s biggest private banks offer services to Japanese clients. But Mitsubishi UFJ Morgan Stanley PB Securities, led by Satoru Adachi, stands out from the crowd.

Morgan Stanley has an enviable position in Japan, being the only international bank to have a joint venture with a large local player.

Corporate social responsibility still does not appear to be a big priority for Japanese financial institutions. On a recent trip to Japan, Asiamoney was struck by how many bankers shrugged when asked how much their institution was doing to promote CSR, or about the related priorities of environmental, social and governance (ESG) issues.

Japan is a country where small and medium-sized enterprises (SMEs) can too often be overlooked. The gargantuan balance sheets of the country’s three biggest banks, which hold more than $6 trillion of assets between them, ensure only the biggest corporate clients can make a dent on revenues.

Mitsubishi UFJ Financial Group (MUFG) has been far and away the most aggressive of Japan’s megabanks when it comes to expanding overseas.

Japanese banks are facing a difficult future, being forced to choose between a domestic market that offers few obvious sources of growth and an international market that is cluttered with competition.

The country’s lenders face depressing conditions in their home market, with negative interest rates, razor-thin net interest margins and an ageing population. If they want to lift profits, they have little choice but to expand offshore, despite numerous hurdles.

Two former debt bankers – one a globetrotter, the other a lifelong Japan specialist – head Barclays’ Japanese investment banking business and present a formidable double act. Rivals may snipe at Barclays’ diminishing presence in Japan, but Kentaro Kiso and Tetsuya Kodama tell Asiamoney how they intend to play to their strengths.

Japan