Academic journal article Federal Reserve Bulletin

Orders Issued under Section 3 of the Bank Holding Company Act

Academic journal article Federal Reserve Bulletin

Orders Issued under Section 3 of the Bank Holding Company Act

Article excerpt

Mitsubishi UFJ Financial Group, Inc.

Tokyo, Japan

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Tokyo, Japan

UnionBanCal Corporation

San Francisco, California

Order Approving the Acquisition of a Bank Holding Company and the Merger of Bank Holding Companies FRB Order No. 2012-12 (November 14, 2012)

Mitsubishi UFJ Financial Group, Inc. ("MUFG") and its wholly owned subsidiaries, The Bank of Tokyo-Mitsubishi UFJ, Ltd. ("BTMU") and UnionBanCal Corporation ("UnionBanCal" and, collectively with MUFG and BTMU, "Applicants"), have requested the Board's approval under section 3 of the Bank Holding Company Act ("BHC Act") (1) to acquire Pacific Capital Bancorp ("Pacific Capital") and thereby indirectly acquire its subsidiary bank, Santa Barbara Bank & Trust, N.A. ("SBBT"), both of Santa Barbara, California. In addition, UnionBanCal has requested the Board's approval under section 3 of the BHC Act to merge with Pacific Capital. (2)

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (77 Federal Register 23249 (April 18, 2012)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 3 of the BHC Act.

MUFG, with total consolidated assets of approximately $2.8 trillion, is the largest banking organization in Japan. (3) MUFG engages in banking activities in the United States through BTMU and Mitsubishi UFJ Trust and Banking Corporation ("MUTB"), also of Tokyo. (4) BTMU controls UnionBanCal and operates branches, an agency, and representative offices in several states. (5) MUTB operates a branch and controls Mitsubishi UFJ Trust & Banking Corporation (U.S.A.) ("MUTB USA"), both of New York, New York. MUFG controls deposits of approximately $63.7 billion in the United States, (6) which represent less than 1 percent of the total amount of deposits of insured depository institutions in the United States. (7) MUFG and BTMU are qualifying foreign banking organizations and on consummation of the proposal would continue to meet the requirements for a qualifying foreign banking organization under Regulation K. (8)

UnionBanCal, with total consolidated assets of approximately $87.9 billion, is the 20th largest depository organization in the United States, controlling deposits of approximately $63.7 billion, which represent less than 1 percent of the total amount of deposits of insured depository institutions in the United States. Union Bank operates branches in California, Oregon, Texas, and Washington, and one branch in Illinois and in New York. Union Bank is the fourth largest insured depository organization in California, controlling deposits of approximately $53.4 billion, which represent 6.0 percent of the total amount of deposits of insured depository institutions in the state. (9)

Pacific Capital, with total consolidated assets of approximately $5.9 billion, controls SBBT, which operates only in California. SBBT is the 19th largest insured depository institution in California, controlling deposits of $4.7 billion, which represent less than 1 percent of the total amount of deposits of insured depository institutions in the state.

On consummation of the proposal, MUFG would control deposits of approximately $68.6 billion, which represent less than 1 percent of the total amount of deposits of insured depository institutions in the United States. Union Bank would become the 17th largest depository organization in the United States, with consolidated deposits of approximately $68.6 billion. In California, Union Bank would remain the fourth largest depository organization, controlling deposits of approximately $58.1 billion, representing approximately 6.6 percent of deposits of insured depository institutions in the state.

Competitive Considerations

Section 3 of the BHC Act prohibits the Board from approving a proposal that would result in a monopoly or would be in furtherance of any attempt to monopolize the business of banking in any relevant market. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.