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Mitsubishi UFJ's (MUFG) Subsidiary Sells 24M U.S. Bancorp Shares
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Mitsubishi UFJ Financial Group, Inc.’s (MUFG - Free Report) core subsidiary, MUFG Bank, has announced the sale of 24 million shares of U.S. Bancorp’s (USB - Free Report) common stock. MUFG Bank acquired these shares of USB’s common stock on Aug 3, 2023, at a purchase price of approximately $936 million. The move came as MUFG plans to optimize its regulatory capital efficiency.
This transaction is not expected to impact the financial results of either MUFG or MUFG Bank for the fiscal year ending March 2025.
Followed by the sale of MUFG Union Bank N.A. to USB in December 2022, MUFG entered into a business collaboration agreement with U.S. Bancorp and initially acquired approximately 44 million shares of USB.
In August 2023, MUFG purchased an additional 24 million shares of USB. The proceeds from this additional investment were directed to MUFG’s subsidiary, MUFG Americas Holdings Corporation, to lessen USB’s outstanding obligation of $3.5 billion, which is due within five years of the closing date of the sale of MUFG Union Bank N.A.
Mitsubishi UFJ and U.S. Bancorp have collaborated to provide banking services for Japanese retail customers in the United States. The company also has an agreement with U.S. Bank N.A., U.S. Bancorp’s banking subsidiary, to offer U.S. dollar liquidity support. The two firms want to increase their strategic collaboration and joint business prospects by utilizing each other's strengths. Opportunities include collaboration in digital fields, corporate transactions, financial services for Japanese customers, worldwide marketplaces and more.
MUFG will retain its initial investment of 44 million shares in USB, indicating its commitment to a long-term relationship.
Mitsubishi UFJ has an impressive share repurchase history. In June 2024, it announced the progress of its previously declared share repurchase program. The company repurchased 37,026,800 shares of its common stock at an aggregate price of ¥59.8 billion between Jun 1, 2024, and Jun 21, 2024.
The share buybacks were carried out under the company’s ¥100-billion share repurchase program announced on May 15, 2024. The plan allows MUFG to repurchase up to 80,000,000 shares, representing 0.68% of the total shares outstanding, excluding treasury stock.
In total, MUFG repurchased 62.7 million shares since the authorization through Jun 21, 2024, for approximately ¥100 billion. Since May 2017, Mitsubishi UFJ has completed several share repurchase programs to strengthen investors’ confidence in the stock.
Similarly, in August, Enova International, Inc.’s (ENVA - Free Report) board of directors approved a new share repurchase plan. As part of the program, which expires on Dec 31, 2025, $300 million worth of shares are authorized for buyback.
ENVA repurchased roughly $201 million of shares during the first six months of 2024.
In the past three months, shares of MUFG have gained 6% on the NYSE against the industry’s decline of 9.6%.
Image: Bigstock
Mitsubishi UFJ's (MUFG) Subsidiary Sells 24M U.S. Bancorp Shares
Mitsubishi UFJ Financial Group, Inc.’s (MUFG - Free Report) core subsidiary, MUFG Bank, has announced the sale of 24 million shares of U.S. Bancorp’s (USB - Free Report) common stock. MUFG Bank acquired these shares of USB’s common stock on Aug 3, 2023, at a purchase price of approximately $936 million. The move came as MUFG plans to optimize its regulatory capital efficiency.
This transaction is not expected to impact the financial results of either MUFG or MUFG Bank for the fiscal year ending March 2025.
Followed by the sale of MUFG Union Bank N.A. to USB in December 2022, MUFG entered into a business collaboration agreement with U.S. Bancorp and initially acquired approximately 44 million shares of USB.
In August 2023, MUFG purchased an additional 24 million shares of USB. The proceeds from this additional investment were directed to MUFG’s subsidiary, MUFG Americas Holdings Corporation, to lessen USB’s outstanding obligation of $3.5 billion, which is due within five years of the closing date of the sale of MUFG Union Bank N.A.
Mitsubishi UFJ and U.S. Bancorp have collaborated to provide banking services for Japanese retail customers in the United States. The company also has an agreement with U.S. Bank N.A., U.S. Bancorp’s banking subsidiary, to offer U.S. dollar liquidity support. The two firms want to increase their strategic collaboration and joint business prospects by utilizing each other's strengths. Opportunities include collaboration in digital fields, corporate transactions, financial services for Japanese customers, worldwide marketplaces and more.
MUFG will retain its initial investment of 44 million shares in USB, indicating its commitment to a long-term relationship.
Mitsubishi UFJ has an impressive share repurchase history. In June 2024, it announced the progress of its previously declared share repurchase program. The company repurchased 37,026,800 shares of its common stock at an aggregate price of ¥59.8 billion between Jun 1, 2024, and Jun 21, 2024.
The share buybacks were carried out under the company’s ¥100-billion share repurchase program announced on May 15, 2024. The plan allows MUFG to repurchase up to 80,000,000 shares, representing 0.68% of the total shares outstanding, excluding treasury stock.
In total, MUFG repurchased 62.7 million shares since the authorization through Jun 21, 2024, for approximately ¥100 billion. Since May 2017, Mitsubishi UFJ has completed several share repurchase programs to strengthen investors’ confidence in the stock.
Similarly, in August, Enova International, Inc.’s (ENVA - Free Report) board of directors approved a new share repurchase plan. As part of the program, which expires on Dec 31, 2025, $300 million worth of shares are authorized for buyback.
ENVA repurchased roughly $201 million of shares during the first six months of 2024.
In the past three months, shares of MUFG have gained 6% on the NYSE against the industry’s decline of 9.6%.
Image Source: Zacks Investment Research
Currently, Mitsubishi UFJ sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.