According to S&P Global Market Intelligence, deposit growth at Japan’s largest megabanks is failing to keep pace with loan expansion, a divergence that could ultimately restrict their lending capacity and securities investments. Financial data from the final quarter of 2025 highlights this widening gap. Sumitomo Mitsui Financial Group (SMFG) recorded a 2.7% year-on-year increase in deposits against a 3.4% rise in loans, while MUFG saw an even larger discrepancy, with deposits growing by 2.5% compared to a robust 5.1% surge in lending.
Market analysts anticipate that this trend will persist. Hideo Oshima, a senior economist at the Japan Research Institute, noted that the growth gap between deposits and loans is unlikely to narrow anytime soon.
At the same time, corporate appetite for funding shows no signs of slowing down. Masahiro Ichikawa, chief marketing strategist at Sumitomo Mitsui DS Asset Management, emphasized that capital demand remains exceptionally high, and banks are highly motivated to lend. This lending momentum is heavily supported by a booming domestic deal market; data from M&A advisory firm Recof reveals that mergers and acquisitions involving Japanese corporations climbed 8.8% in 2025, reaching a total of 5,115 transactions.
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