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Asian banks gain most in latest global systemic importance scores

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Asian banks gain most in latest global systemic importance scores

Bank of China Ltd. and Mitsubishi UFJ Financial Group Inc. gained the most in overall scores of global systemic importance in the latest assessment by the Financial Stability Board, highlighting Asian lenders' growing interconnectedness with the global financial system.

Bank of China's overall score rose 34 basis points year over year in the latest assessment of global systemically important banks, or G-SIBs, based on 2018-end data, according to data compiled by S&P Global Market Intelligence. MUFJ's overall score increased 20 bps.

These two banks remain in so-called "bucket 2" of the list, meaning they have to hold an additional capital buffer of 1.5% of risk-weighted assets.

Bank of China was reportedly leading in a bidding race for Irish brokerage Goodbody Stockbrokers. The Chinese state-owned lender has also secured a regulatory approval to set up the country's first foreign-controlled asset manager with France's Amundi SA. It recently opened a branch in Bucharest, its first in Romania, and has plans to open its first branch in Greece.

Meanwhile, MUFJ has been expanding outside Japan due to low interest rates and sluggish loan growth at home. Its assets abroad include a 94.1% stake in PT Bank Danamon Indonesia, Tbk and a 76.88% interest in Thailand's Bank of Ayudhya PCL. MUFJ's CEO Kanetsugu Mike said in November 2019 the megabank would pursue new growth opportunities in Southeast Asian markets.

The overall score for each bank is calculated by taking an average of five category scores: size, interconnectedness, substitutability, cross-jurisdictional activity and complexity, according to the assessment methodology used by the Financial Stability Board.

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