The Straits Times
Published on Nov 09, 2012

Japan's big banks expand into global aircraft financing, leasing


TOKYO (REUTERS) - Cash-rich Japanese banks are rushing into aircraft finance in the hope of getting fatter profit margins than straight corporate loans.

Banks including Sumitomo Mitsui Financial Group (SMFG) and Mitsubishi UFJ Financial Group are also venturing into aircraft leasing as more airlines opt out of owning fleets in favour of leaner balance sheets.

"We see opportunities to earn spreads we cannot ever charge on corporate loans," said Mr Takeshi Sasaki, senior manager of structured finance at Sumitomo Mitsui Trust Bank, which set up an aircraft financing team last month.

Japanese banks are playing a bigger role in global finance - from trade credit to syndicated loans - as they diversify from a lacklustre home market. Japan's lenders, as entrants to aircraft financing, also stand a good chance of making their mark with their European rivals in retreat, Mr Sasaki said.