Best bank: MUFG
MUFG, Japan’s largest bank, had an excellent financial year in the 12 months to March 2024, setting new records for the group.
Net profit rose by an impressive 33% to ¥1.49 trillion ($9.5 billion), with income growing at the same pace. MUFG has set its sights on further growth, aiming to raise profits to more than ¥1.6 trillion by March 2027, the final year of its new medium-term business plan.
The banking giant’s net operating profit before provision surpassed its competitors, securing the top position among the three megabanks for the first time in six years – and the award for Japan’s best bank.
MUFG’s growth can be attributed to its structural reforms in a low interest rate environment. The bank has significantly reduced its domestic branch network from 515 in March 2018 to approximately 320 currently, while also taking a leading role in widening lending margins for businesses.
Beyond the numbers, MUFG has emerged as a frontrunner in the net-zero initiative. The bank has pledged to provide a cumulative ¥35 trillion in sustainable financing by 2030, with ¥14.5 trillion already achieved by 2021.
Best investment bank: Morgan Stanley
Morgan Stanley takes the award for Japan’s best investment bank this year in recognition of its position as a trusted adviser to some of the country’s most prominent clients. The firm’s ability to execute the largest and most significant deals, including those that shape Japan’s corporate landscape, sets it apart.
Morgan Stanley’s joint venture with MUFG combines a global knowledge base with extensive local relationships in Japan.
A prime example is the $836 million initial public offering of Kokusai Electric, where Morgan Stanley acted as the joint global coordinator and joint bookrunner on the international tranche, while Mitsubishi UFJ Morgan Stanley Securities acted as the joint bookrunner on the domestic tranche. Despite the challenging semiconductor cycle and capital market environment, the team’s compelling equity story, valuation logic and investor marketing strategy resulted in the largest global IPO in Japan since SoftBank in December 2018.
Morgan Stanley also showcased its expertise in the $678 million IPO of Rakuten Bank, successfully leading every aspect of the transaction, from crafting the equity story and educating investors to maximizing high-quality investor demand.
In the banking sector, Morgan Stanley spearheaded the $8.9 billion follow-on offering of Japan Post Bank – the largest offering in the country’s banking history.
The firm also worked on high-profile deals such as Hitachi divesting from its part supplier Hitachi Astemo, exemplifying Japanese corporates’ efforts to streamline their structure; and Nippon Express’s acquisition of Austria’s cargo-partner, signalling the return of Japanese conglomerates to the global stage.
Best international bank: Citi
In 2023, Citi saw operating revenues reach around ¥139 billion ($860 million) and total assets climb to ¥6,097 billion.
It worked on several key deals including the $14.9 billion acquisition of US Steel by Nippon Steel – the largest-ever acquisition in the steel industry, which boosts the firm to the third-largest steel producer worldwide. Citi served as the sole financial adviser in this transaction.
Citi was the only US bank selected as a marketing support for the Japanese government’s planned issue of ¥20 trillion of climate transition bonds over the next 10 years.
The bank is focused on offering new banking services for midsize companies in Japan, offering trade and working capital, cash management, global markets capabilities and advisory services.
Best digital bank: Rakuten Bank
In 2023 Rakuten Bank became the first digital bank in Japan to exceed 14 million customer accounts with deposits up fivefold since 2018 to ¥10 trillion ($61.9 billion). The bank has also doubled the proportion of customers using the bank for their primary account to 31.4%.
Rakuten Bank also became the first digital bank to offer reverse mortgages as one of its key products, addressing the issue of retirement funds in an aging society. The bank’s digital residual value mortgages allow customers to choose their own housing style in line with their stage in life.
The bank also took steps to improve its corporate banking offering, which helped its corporate loan business grow 28% in 2023.
Best bank for ESG: Morgan Stanley
Morgan Stanley worked on $3 billion worth of non-yen environmental, social and governance (ESG) bond deals in 2023 and ¥4 trillion ($24.8 billion) of yen issues. It has committed to mobilizing $1 trillion in sustainable finance by 2030, including $750 billion in low-carbon and green solutions.
Transactions included Kirin Holdings’ transition-linked loan, Mitsubishi Materials Corporation’s transition-linked loan, the formation of the HARE Bare private fund and project financing, Japan International Cooperation Agency’s sustainability bonds and a deal for East Japan Railway Company.
Morgan Stanley also organized conferences and events in 2023 to promote sustainable finance and offer market perspectives. These events included the annual Asia Pacific summit, the bi-weekly ESG research webcast and the annual global sustainable investing summit.
Best bank for corporates: MUFG
MUFG had a strong 2023, with net revenues up 5.7% to ¥4.8 trillion ($29.7 billion) and gross profits up 5.1% to ¥4.7 trillion. The bank completed the sale of US-based MUFG Union Bank in 2023 and made ¥700 billion of strategic investments in sustainable growth.
The bank focused on digital transformation, including the expansion of online channels, optimization of the branch network and the introduction of banking as a service.
In 2023, MUFG continued to support sustainable investment in Japan through clean energy development. It raised its social and sustainable finance targets from ¥35 trillion to ¥100 trillion by 2030.
