HSBC could buy finance arm of UFJ

GLOBAL banking giant HSBC, reportedly already in negotiations to take over Japan's consumer finance firm Takefuji Corp, has been shortlisted to snap up beleaguered bank UFJ's consumer finance unit Aplus.

Its rival bidders include Shinsei Bank and US fund Lone Star. Aplus, Japan's fourth-ranked consumer finance firm, is expected to fetch about 100bn yen (£490.8m).

Shinsei, majority-owned by US buyout fun Ripplewood, is believed to be the front runner, with local reports saying a deal had already been struck. But insiders say that, while Shisei may be favourite, a deal is still up in the air, with UFJ weighing up final proposals.

But the bank, burdened by 3.95 trillion yen in non-performing loans, wants to settle the matter quickly in order to clear the decks for a takeover tussle between stronger rivals Mitsubishi Tokyo Financial Group and Sumitomo Mitsui Financial Group.

Aplus, which has an annual turnover of some 1.72 trillion yen, owes UFJ's core units UFJ Bank and UFJ Trust Bank around 200bn yen.

Meanwhile, today is D-Day for UFJ's court battle to unblock a deal with Mitsubishi Tokyo for a rescue merger that would create the world's largest financial services group.

A court last week froze negotiations, saying UFJ could not walk away from a previous agreement with Sumitomo to sell its trust banking business.

UFJ has appealed the decision.