Japanese Banks Stand by Adani Group; Jefferies, Barclays Review Ties

Despite the trouble surrounding US bribery charges, Japanese banks are set to retain their ties with billionaire Gautam Adani, while Jefferis and Barclays are introspecting their relationship with the Indian conglomerate.

Mizuho Financial Group Inc believes that the ongoing trouble is unlikely to have any long-lasting impact on their relations. Moreover, Sumitomo Mitsui Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. are placing their trust on the group and are also ready to outlay fresh finances if need be, sources said.

While reiterating lenders’ risk tolerance following the Asian financial crisis, Ben Charoenwong, an assistant finance professor at Insead said, “Drawing from their experiences in Southeast Asia in the ‘90s, Japanese banks have developed sophisticated frameworks for evaluating emerging-market risks.”

He added, “Banks like MUFG and SMBC, which view India as a crucial growth market, are unlikely to substantially reduce their overall India exposure.”

Notably, Barclays is freezing disbursals of new loans. The British lender has also already taken a cautious note following Hindenburg's report that accused the Adani Group of indulging in corrupt practices.

Meanwhile, Jefferies hasn’t made any decision pertaining to its upcoming dealings with the business conglomerate. The investment banking company is awaiting a concrete outcome from the charges before it can jump into any conclusion.