The Avanti Group is advising clients of opportunities in Mizuho Financial Group as the Japanese lender continues its cash rich search for acquisitions.
The Avanti Group the equities research house based in Tokyo, providing professional trading and investment research solutions to institutional and private investors across the globe have recently drawn their investor’s attention to
“As the Japanese central bank policy designed to curb inflation continues to limit lending margins for the countries banks, many are driven to look for investments overseas. The latest to do so, Mizuho Financial is reportedly eyeing two possibilities in Thailand and Japan with a $5 billion war chest to achieve their goals. The two banks are TMB Plc. of Thailand and PT Bank Pan Indonesia,” said Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.
The average net interest margin in Japan is a mere 1.09 percent, which is one third that of Thailand and only a sixth that of Indonesia, the highest in Asia. Despite the higher returns on offer from the Indonesian lender, most analysts favor the Thai TMB as the front-runner for Mizuho’s investment citing greater existing trade between the two countries as the deciding factor.
“Many of Mizuho’s Japanese clients are already doing business in Thailand with manufacturing concerns heavily represented and with the majority using TMB banking services to facilitate their banking requirements the acquisition makes for a natural synergy. It makes perfect sense to acquire a facility that already holds the client base you are wishing to target,” said Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.
TMB, the Thailand based banking facility has had a remarkable year to date with profits tripling for the period and a ROI of 60 percent for the same, analytical reports strongly indicate that the bank may further increase profits by 34 percent in 2014. Mizuho and other Japanese banks who feel they are hampered in their domestic markets by regulatory limits are fully aware of the benefits strong performing facilities like this offer there need for expansion. Despite these limits, Mizuho the second largest lender in its home country has achieved a similar ROI of 62 percent this year.
“Both TMB and Mizuho are quality concerns in their own right and their market value validates this. A combined entity however is a very appealing prospect for investment given the strong potential for further growth outside of Japan and the level of capitalization that would be available to such a concern. Both of these companies and their markets are familiar to The Avanti Group and our clients, we are monitoring potential developments closely as to best place our clients interests,” concluded Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.
The Avanti Group is an equity research house providing research and analysis outsourcing solutions for institutional financial traders worldwide, founded in early 2003.