TOKYO — Major Japanese banks and investment houses, fat with cash and apparently largely free of toxic investments, are spotting opportunity in the global financial mess and snapping up substantial holdings on Wall Street. With U.S. financial institutions still desperate for capital, analysts here say more major purchases are likely in coming days and weeks as the financial crisis churns on.
Nomura Holdings, Japan’s largest brokerage house, announced Tuesday it would buy for an undisclosed sum the 2,500-person European and Middle Eastern operation of the failed Lehman Brothers investment bank — one day after it had picked up Lehman’s Asia-Pacific franchise, employer of about 3,000 people, for $190 million. Lehman filed for bankruptcy protection two weeks ago.
“This is a once-in-a-generation opportunity,” Kenichi Watanabe, chief executive officer of Nomura, said in a statement. He added that “our ability to capitalize on this opportunity in spite of such volatile markets reflects our financial strength.”
Although Nomura has lost money in the past two quarters, it had assets of about $263 billion as of March 31, making the purchases relatively small.
Japan’s largest bank, Mitsubishi UFJ, said Monday it would acquire 10 to 20 percent of Morgan Stanley, a deal that could make the Tokyo bank the largest shareholder in a profitable company that is one of the biggest forces in global investing. The deal is valued at as much as $8.4 billion, a relative snack for a bank with about $1.8 trillion in total assets as of the end of June.
It spent about $10 billion in August to buy the remaining shares of California’s UnionBanCal.
Japan’s chance to buy up investment talent that its banks and brokerage firms have long coveted is, in part, a function of turmoil on Wall Street, where investment firms are desperate to cover bad wagers on subprime mortgages and other failed speculation.
It is also the culmination of the slow, stolid recovery of banks and other financial institutions from Japan’s market meltdown in the 1990s.
“We didn’t take part in the good growth of the worldwide economy in the 1990s, and now we are not getting hit by the downward trend,” said Oki Matsumoto, chief executive officer of Monex Group, one of Japan’s largest online brokers. “Japan has huge reserves of capital. We are much safer than any other country.”
Banks and brokerage houses here spent nearly two decades rebuilding, selling off bad debt and devouring each other in mergers.
Banks here have also changed their credit culture. Before they lent money on the basis of assets, much as U.S. lenders still do. Now, many banks here analyze the cash flow of their clients before they extend large amounts of credit.
