Mitsubishi UFJ Financial Group Inc. said Wednesday its MUFG Bank unit plans to expand its scaling back of domestic branches to cut fixed costs, and is now eyeing a 40 percent reduction to around 300 branches by March 2024 compared with its 515 as of March 2018.
MUFG Bank initially planned a 20 percent reduction and then revised the target to 35 percent a year ago. It is undergoing major structural reforms at a time when the Bank of Japan's prolonged monetary easing policy is squeezing profitability in the banking sector.
With customer visits to the branches also declining, the major Japanese bank said it will focus on increasing users of its online banking services by enhancing its smartphone applications.
The number of branches offering full banking services will be slashed to some 170, or about one-third of the March 2018 total.
The remaining branches will be mostly staff-free outlets equipped with ATMs where customers will also be able to receive consulting services on housing loans and other issues by videolink.
Branches specializing in certain services, such as personal asset management advice, meanwhile, will be increased.
The latest plan comes as MUFG Bank plans to slash its domestic workforce by around 8,000 employees by March 2024, up from its earlier planned reduction of 6,000, a source close to the matter said last month.
The bank will implement the increased labor force reduction, equal to 20 percent of its some 40,000 employees as of fiscal 2017, through natural attrition, the source said.
Rival Sumitomo Mitsui Financial Group Inc., which has also been implementing restructuring steps, said Tuesday it will downsize 300 of its 400 domestic branches by March 2023 to specialize in asset management consulting, resulting in a reduction of its workforce by 6,000 to 97,000.
It hopes to generate 100 billion ¥ ($928 million) through the cost-cutting measures, including the downsizing of branches, in the three years through March 2023 and allocate it for investments in information technology and overseas expansion.
Mizuho Financial Group Inc., meanwhile, aims to cut costs by reducing its future pension payouts for those 53 years old or younger among its some 35,000 employees starting from October 2020, another source close to the matter said earlier.
It is also set to abolish automatic wage hikes for some 5,000 managers at its group firms including Mizuho Bank Ltd. and Mizuho Trust & Banking Co. from July 2021, the source said.