Sumitomo Trust considering takeover of two UFJ asset management units

Sumitomo Trust & Banking Co. is considering buying two asset management units of the UFJ banking group, Sumitomo Trust officials said Saturday.

The move is aimed at enhancing Sumitomo Trust’s planned management integration with UFJ Trust Bank by unifying related operations to improve asset management capability, the officials said.

The two units are UFJ Partners Asset Management Co. and UFJ Asset Management Co.

The officials have not disclosed the price tag of the proposed deal, likely to be tens of billions of yen.

Under the integration agreement announced last month, Sumitomo Trust plans to buy and transfer UFJ Trust’s operations, excluding loans to corporate borrowers, to a new subsidiary trust bank and establish a holding company for the integration of management.

In the course of assessing property of UFJ Trust, a core bank of UFJ Holdings Inc., Sumitomo Trust has also been looking into the possibility of acquiring the two asset management units whose operations are closely related to trust services, the officials said.

The most probable option is to transfer business rights of UFJ Partners and UFJ Asset Management to STB Asset Management Co., a Sumitomo Trust subsidiary, they said.

The UFJ group hopes to strengthen its capital base with the sale of the two asset management units, and Sumitomo Trust expects to enhance its comprehensive strength in its trust business, including the ability to develop investment trust products.

Pay cut for UFJ execs

The UFJ banking group plans to cut the compensation of its top executives by half from July through September to reflect their responsibility for incurring a 400 billion yen net loss for the banking group in fiscal 2003, group officials said Saturday.

The measure will affect all executives above the corporate officer level at UFJ Holdings Inc. and its two core banks — UFJ Bank and UFJ Trust Bank, the officials said.

Starting in October, directors with representative rights, including UFJ Bank President Takamune Okihara, will have their executive compensation cut by 30 percent, while compensation for directors without representative rights will be cut by 25 percent and that for corporate officers and auditors by 20 percent, they said.

The cuts will stay in place until the group’s business turnaround comes into sight, the officials said. The existing freeze on executive bonuses will remain in place as well.

As for summer bonuses for nonexecutive employees, UFJ Trust Bank is considering a 20 percent cut, a move already confirmed at UFJ Bank, they said.

UFJ Holdings is the second of Japan’s four mega-banking groups to cut wages amid corporate blues. Mizuho Financial Group Inc. unveiled a plan to cut wages in 2002.