UFJ Seeks Merger With Mitsubishi Tokyo

UFJ Holdings Inc., Japan’s fourth-largest banking group, said its board had decided to seek a merger with third-ranked Mitsubishi Tokyo Financial Group Inc., a combination that would surpass Citigroup Inc. as the world’s biggest bank.

The board has also agreed to scrap the planned sale of UFJ Trust Bank to Sumitomo Trust & Banking Co., it said.

Earlier, banking sources told Reuters that UFJ had started negotiations with MTFG, seeking a rescue after three years of losses.

UFJ had about $37 billion of bad loans as of March 31, the most among Japan’s four biggest banks.

Mitsubishi Tokyo Chairman Shigemitsu Miki said the bank was willing to consider a merger request from UFJ.