Mitsui Trust Holdings Inc. is planning to close seven branches of its subsidiary Chuo Mitsui Trust and Banking Co. in response to a recent order by the Financial Services Agency to improve management, officials at the financial holding company said Thursday.
Chuo Mitsui Trust will close the branches by the end of fiscal 2004, bringing its branch network to 65, or less than 40 percent of the number during its operating peak, the officials said.
Two of the seven branches will be shut down in fiscal 2003, with the first to close its doors being a branch in Toyota, Aichi Prefecture, on Friday.
The selection of the six branches — other than the Toyota branch, whose operations will be taken over by a branch near JR Nagoya Station — is being carefully considered, the officials said.
Mitsui Trust decided on the branch closures after being lumped in with 14 other banks that were ordered earlier this month by the FSA to boost earnings.
The 15 banks, which also include Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and UFJ Holdings Inc., have received public funds in the past to shore up their capital.
The planned branch closures will be included in an earnings improvement plan Mitsui Trust will submit to the FSA on Aug. 29.
While Mitsui Trust reduced its cost ratio by 6 percent in fiscal 2002 from the previous year through bald restructuring, it still suffered a consolidated net loss of 96.7 billion yen due to bad-loan writeoffs and stock-related losses.
Failing to achieve profit targets in its initial management improvement plan presented to the FSA, Mitsui Trust decided to step up operational restructuring in the wake of the agency’s latest order.