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Union Bank Buys PB Capital's CRE Portfolio

Zacks Equity Research

San Francisco-based Union Bank, N.A., the primary subsidiary of UnionBanCal Corporation announced the completion of the acquisition of PB Capital Corporation’s commercial real estate (:CRE) loan division. Notably, PB Capital Corporation is a wholly-owned subsidiary of Deutsche Bank AG (DB).

UnionBanCal Corp. is a fully-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group Inc. (MTU), also known as MUFG. Moreover, Union Bank is a leader in providing financial services to individuals, small businesses, middle-market companies and major corporations. With the aim of expanding its geographic footprint, the bank forayed into the abovementioned deal.

Headquartered in New York, PB Capital’s CRE loan unit has roughly $3.5 billion worth of loans on properties in key metropolitan areas across the U.S. Besides augmenting Union Bank’s CRE presence in the U.S., the acquisition offers a premium CRE loan origination and servicing platform, an attractive client base, diversified assets along with an experienced management panel to Union Bank.

Management at Union Bank expects the recent strategic acquisition to be beneficial as it combines the present CRE lending platform with the expertise and diverse client relationships of PB Capital. Moreover, it will boost additional business prospects for Union Bank.

Union Bank has been on an acquisition spree. In Oct 2012, it closed the acquisition of Atlanta-based Smartstreet, a financial services division of PNC Financial Services Group Inc. (PNC). Later in December, Union Bank announced the completion of the acquisition of Santa Barbara-based Pacific Capital Bancorp for $1.5 billion.

The completion of the latest acquisition will ensure the offering of a wide and improvised array of products, which will lead to industry-wide growth.

Currently, MUFG carries a Zacks Rank #1 (Strong Buy). Other foreign banks that are worth considering include Sumitomo Mitsui Financial Group Inc. (SMFG) with a Zacks Rank #1.

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