• Kyodo, JIJI


The Bank of Tokyo-Mitsubishi UFJ, Japan’s largest bank, is considering shrinking its domestic branch network by up to 20 percent to boost profitability, a source said Sunday.

As more of the nation’s lenders struggle under extremely low interest rates, the core unit of Mitsubishi UFJ Financial Group Inc. is aiming to trim its network of about 480 branches and streamline operations.

The reorganization of the bank’s domestic branches will be part of its new three-year business plan starting next April.

The idea is to reduce labor and use more unmanned outlets by employing digital technology, the source said.

BTMU plans to automate tasks currently undertaken by its approximately 9,500 employees as part of cost-cutting measures.

Another mega-bank group, Mizuho Financial Group Inc., is planning a similar step.

This means the 32,500 people collectively employed by MUFG, Mizuho and Sumitomo Mitsui Financial Group Inc. will likely see their tasks reduced partly through automation.

The branch reduction and personnel redeployment comes at a time when online banking via smartphones and other digital devices is on the rise and visits to bank tellers are declining. Over the past 10 years, BTMU saw customer visits to its branches decline by about 40 percent.

A different source familiar with the matter has said Mizuho is considering cutting about 19,000 jobs in Japan and abroad over a 10-year period, which would account for a third of its entire labor force.

The source said the group’s workforce of around 60,000 is expected to drop to 40,000 after the move, and that the bank is unlikely to solicit applicants in Japan for early retirement.

While Mizuho is streamlining operations through IT solutions, it is also looking at job cuts. Compared with the other mega-banks, Mizuho has been affected more severely by the Bank of Japan’s negative interest rate introduced in February last year.

In the April-June quarter, its two group banks’ combined net profit from core operations tumbled over 60 percent from a year earlier to ¥57.4 billion.

For the whole of fiscal 2017 through next March 31, the group estimates an overall net profit of ¥550 billion, down 8.8 percent.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.