Major job cuts are sweeping across the Asia-Pacific theater's banking industry due to rising negative rates and a slowing economy. This is not good news to people at Mitsubishi UFJ Financial Group Inc., who have been informed Thursday that many of them might lose their jobs.
Some 60 personnel of Japan's largest financial institution will be given the pink slip. The workforce cut will come from the bank's securities division, comprising around 41 percent of employees at its Singapore, Hong Kong, and Sydney offices.
Another batch of workers also faces the possibility of termination if they decline offers to be transferred to other branches, a source who requested anonymity, said.
The cuts come on the heels of an evaluation made after MUFG CEO Kanetsugu Mike disclosed that the bank's trading arm and worldwide profits were not bringing in the positive results and required a serious look. The Japanese group is the latest global financial company to undergo retrenchments as worsening interest rates hamper its profitability.
The layoffs will affect core units including structured products, credit trading and equities, based on an inter-office correspondence released by Bloomberg. MUFG will thus cut off its G3 Rates services to clients outside Japan, except for its currency, the memo noted.
The banking conglomerate had already been sending securities employees to other offices in the Asia-Pac region. It transferred its Hong Kong trading functions to London just recently, saying the unit was no longer efficient to operate in the city while it offers the same services in Japan.
MUFG is also reducing the number of workforce in Europe, disclosing two months earlier than it was considering to let go 50 managerial posts in London. The bank has put in place a securities branch in Amsterdam in response to the Brexit issue.
Banks around the globe have terminated nearly 60,000 personnel in the last few months, with a huge chunk coming from European lending firms. Japan's big banks have also been subjected to internal burdens brought about by falling rates, not to mention a declining population.
While the retrenchments have forced operational and cost reductions, it has also pushed lending companies to venture in new locations that offer the bigger potential for growth, such as Southeast Asia.
