Japan mega-bank MUFG considers job cuts in overseas brokerage business

Mitsubishi UFJ Financial Group Inc. is considering job cuts at its securities operations overseas to keep them profitable.

The brokerage arm of Japan’s biggest bank may reduce its head count in the U.K. and the U.S., reflecting market conditions, Mitsubishi UFJ Securities Holdings Co. CEO Saburo Araki said, without giving details.

The firm had 605 employees in Europe and 469 in the Americas as of March.

“We will slide into the red all too soon if we have a large head count when the market is quiet,” Araki, 60, said in a recent interview in Tokyo. “We’re discussing which operations might be cut back and whether we should make some reductions in London and the Americas.”

Any overseas cuts would follow a period in which MUFG has steadily increased the number of employees at its securities arm in the U.S. and Europe.

Nomura Holdings Inc., Japan’s biggest brokerage, is also reviewing staff numbers in those markets to trim costs.

Mitsubishi UFJ Securities posted a 43 percent drop in pretax profit from overseas to ¥4.1 billion ($37 million) in the three months to March from a year earlier, due partly to a lack of volatility in European markets.

The firm’s securities business in Europe and the U.S. centers on credit, rates, equities and structured products, according to its website. Last year, it chose Amsterdam as a base for its European Union operations once the U.K. leaves the bloc.

Nomura is cutting at least 50 positions in London, including senior traders, and more than two dozen sales and trading staff in the U.S., Bloomberg has reported. It cut hundreds of staff in Europe and the U.S. two years ago in a bid to return to profit abroad.

Araki is also CEO of MUFG’s majority-owned Tokyo-based joint venture with Morgan Stanley.