Japan’s No.1 bank Mitsubishi UFJ to cut down on branches, employees
23 Mar 2009
Japan's biggest bank Mitsubishi UFJ Financial Group (MUFJ), struggling to return to profit, said Monday that it would cut 1,000 jobs and close 50 branches over three years in a bid to cut costs. The restructuring follows its report of a net loss for the October-December quarter last year.
The group currently employs around 78,000 people and operates 670 outlets after the recent closure of 70 branches. It also plans to shut at least 200 automatic teller machine service corners throughout the country, where customers can be served by ones in nearby convenience stores.
The 1,000 job cuts will come over a period of three years from its headquarters, which has nearly 6,000 workers and all of them will come through natural attrition, the bank said.
The bank has been streamlining domestic operations since January 2006, when it was created through a merger between the Bank of Tokyo-Mitsubishi and UFJ Bank. The latest reductions are part of the ongoing post-merger consolidation rather than a reaction to deteriorating profits, Miwa said.
Mitsubishi UFJ said earlier in the month that its wholly owned subsidiary, MUFG Capital Finance 8 Ltd., has decided to issue about 97.4 billion yen of preferred securities, the proceeds of which would be used for strengthening the capital base of The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Although most Japanese banks weathered the sub-prime mortgages storm with smaller losses than their Western counterparts, they have been hit hard by the subsequent global financial crisis and tumbling stock markets. Many Japanese financial institutions have cross-shareholding arrangements with domestic companies, a practice fosters business ties but hurts banks' profits when share prices plunge.
MUFJ, which bought a large stake of troubled Wall Street titan Morgan Stanley last year, lost 42 billion yen ($437 million) in the nine months to December, hit by slumping stock markets and the credit crunch. (See: Mitsubishi UFJ to acquire 20 per cent in Morgan Stanley for $8.4 billion / Japanese banks to post loss in last quarter)
MUFJ's shares rose 4.7 per cent to 512 yen at the 3 p.m. close of trading in Tokyo.