The Bank of Tokyo-Mitsubishi UFJ is in discussions with several second-tiers about funding Australian home loans.
According to the Australian Financial Review, AMP
is currently in talks with the bank about its funding.
It's alleged The Bank of Tokyo-Mitsubishi UFJ will provide bank funding through a 'warehouse structure' which, according to the AFR, is "refinanced by issuing residential mortgage backed securities to institutional investors."
In theory, it could increase the lending power of second-tiers and increase competitiveness between the banks on home loan interest rates.
Japanese banks are increasingly interested in the Australian market.
In July, Sony Bank announced its intentions to launch in Australia following a 'feasibility' study.