AMP Bank has announced a partnership with one of Japan’s largest banks, Bank of Tokyo-Mitsubishi, in a landmark deal that signals the entry of Japanese banks into the Australian home loan market.
The Japanese lender will provide AMP with a $500m one-year mortgage-backed facility, reported the AFR.
The Japanese lender, which already lends $10.4bn to companies in Australia, has been exploring the Australian mortgage market for over a year.
Bank of Tokyo-Mitsubishi previously signalled its interest in the bank after acquiring a 15% stake in the funds management arm of AMP in December 2011.
Growth opportunities for banks are limited in Japan, and the deal could pave the way for further deals of this kind. Bank of Tokyo-Mitsubishi is also expected to extend credit to other lenders, reported the AFR.
The deal comes as industry leaders call for increased competition in the banking sector of Australia, calling on the upcoming Financial Systems Inquiry to decrease regulation to encourage overseas interest.
Bank of Tokyo-Mitsubishi is one of the largest lenders in Japan with an equivalent of $1.9 trillion of assets and a deposit base of $1.34 trillion, more than the combined deposit base of Australia’s four largest banks.
According to the latest APRA statistics, AMP has $7.7bn of mortgage assets and a 1% share in Australia’s $1.2 trillion mortgage market.
Last year, Australian Broker Online reported Japanese online bank
Sony Bank was looking to enter the Australian market and was in talks with AMP regarding
potential deals.
