Tokyo-Mitsubishi UFJ's decision to raise its stake in a Malaysian bank from 1.1 percent to 4.5 percent is a "blessing of the world's largest banking group", analysts said Friday.

Bumiputra-Commerce Holdings, the listed parent of Malaysia's second largest bank CIMB, announced on Thursday a deal to place 117 million new shares worth RM1.335 billion (US$381 million) with Tokyo-Mitsubishi UFJ.

Tokyo-Mitsubishi UFJ is the commercial banking arm of Mitsubishi UFJ Financial Group Inc which is the world's largest banking group.

"BTMU's acquisition is clearly a significant endorsement of the strong fundamentals of Bumiputra-Commerce," broking firm Hwang DBS Vickers said in a research note.

The latest development will expand business between the two banking groups after they signed a strategic alliance last October, it said.

Reduce borrowings

"We are positive on this development in anticipation of more business opportunities for Bumiputra-Commerce, especially from Japanese companies in Malaysia," Hwang DBS Vickers said.

Bumiputra-Commerce said in its statement Thursday that it will use proceeds from the share placement to reduce its borrowings.

"I believe this investment agreement will elevate the relationship between BCHB and BTMU to a significant new level," said Tatsuo Tanaka, chief executive of BTMU's Asia and Oceania operations.

"I am confident of further potential for a mutually rewarding partnership between us, both in Malaysia and in other parts of Southeast Asia," Tanaka said in a statement.