Japan Megabanks Face Tricky Task Unwinding $15 Billion of StocksBy
Banks are expected to meet targets to sell cross-shareholdings
Gains from sales could bolster earnings as other sources wane
A soaring stock market and pressure from Prime Minister Shinzo Abe have eroded Japanese banks’ resistance to unwinding shareholdings in key corporate clients.
The largest lenders including Mitsubishi UFJ Financial Group Inc. pledged last month to sell as much as $15 billion of so-called cross-shareholdings, a long-awaited move that analysts say will benefit the banks and make companies more responsive to investors.
Now for the tricky part. To achieve the targets, the lenders will have to discuss the plans with clients who have long relied on them as friendly shareholders to ensure financing, fend off takeover threats and keep more demanding investors at bay. While banks have been trimming their cross-shareholdings for years, past efforts were born of necessity and they were reluctant to cut stakes in the most important customers…
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