MUFG Set to Buy Deutsche US Property Loans Worth $3.7 Billion: Source

Photo: TOSHIFUMI KITAMURA | AFP | Getty Images

Mitsubishi UFJ Financial Group, Japan's largest lender by assets, is in advanced talks to buy U.S. commercial property loans from Deutsche Bank worth about $3.7 billion, a source familiar with the matter said on Monday.

The acquisition, which is likely to be agreed within a few days and will include Deutsche's team of bankers specializing in commercial real estate loans, comes amid an aggressive push by MUFG to ramp up its U.S. assets.

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MUFG, which has the largest U.S. presence among Japanese banks, has been acquiring local lenders and building up loans to corporations and infrastructure projects.

The acquisition will be made by MUFG's U.S. subsidiary UnionBank, said the source, who was not authorized to discuss the matter publicly. The San Francisco-based bank bought Pacific Capital Bancorp for about $1.5 billion last year.

A MUFG spokesman declined to comment. A spokesperson at Deutsche Bank Group in Tokyo also declined to comment.

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MUFG President Nobuyuki Hirano has said the bank wants to double the size of UnionBank, a move that would make it the 10th largest bank in the U.S.

Face with tepid loan demand at home, MUFG and rival Japanese banks have been aggressively expanding overseas in recent years, able to take advantage of their relatively healthy balance sheets as they have little exposure to Europe's troubled economy.

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In 2010, MUFG acquired a $6.4 billion project financing loan book from Royal Bank of Scotland.

The news was first reported by the Nikkei newspaper.