Mitsubishi UFJ Financial Group Inc. is preparing major job cuts in London, another sign of the deepening troubles Japanese banks face at their overseas operations.
MUFG, Japan's largest lender, is offering voluntary redundancy packages to about 500 directors and managing directors in London, according to an emailed statement. That's roughly a quarter of its workforce in the city.
Financial firms in Japan have been expanding abroad to make up for a squeeze on profits stemming from rock-bottom interest rates and slow economic growth at home. Now they're in cost-cutting mode, with Nomura Holdings Inc. eliminating dozens of jobs in London this year as the nation's largest investment bank tries to return its overseas operations to profit.
"We have implemented this voluntary retirement program to enhance our competitiveness given the severe business environment, such as persistently low interest rates," Tokyo-based MUFG wrote in the statement. "We remain committed to London and the European region, and wish to make further contributions to this important market."
MUFG will accept applications until the end of July and the number of retirees will be decided on that basis, a person with knowledge of the matter said.
Financial News reported the plans earlier, saying that Brexit wasn't a factor in the decision. Still, it's another blow for London's financial industry as banks prepare to move hundreds of employees from the city to elsewhere in Europe in preparation for the U.K.'s exit from the bloc. MUFG has set up commercial banking and securities businesses in Amsterdam.
MUFG has about 2,000 employees in London, its base for operations in Europe, the Middle East and Africa. It offers services ranging from corporate finance to structured finance and capital markets. The region accounted for almost 6 percent of group revenue in the year ended March 2018, according to data compiled by Bloomberg.