April 9, 2019 / 11:15 AM / 17 days ago

Japan's MUFG considers scaling back overseas markets division: sources

FILE PHOTO: A man walks past a signboard of Mitsubishi UFJ Financial Group and MUFG Bank at its headquarters in Tokyo, Japan April 3, 2018. REUTERS/Toru Hanai/File Photo

TOKYO (Reuters) - Mitsubishi UFJ Financial Group is considering scaling back its bond and equity sales and trading operations in London and New York as part of a broader restructuring of its global markets division, two sources said on Tuesday.

MUFG, Japan’s biggest bank by assets, will also overhaul its Japanese equity business at home and overseas.

The move comes after Japanese brokerage Nomura Holdings last week said it would cut $1 billion in costs from its wholesale business and shut domestic retail branches.

MUFG has yet to finalize the plans, the sources said, declining to be identified because the information was not yet public. The size of the likely reductions was not clear. It was also unclear how many people are employed in the affected divisions.

A representative for MUFG said the bank was progressing in its structural reform plans but declined to comment further.

The bank aims to redeploy staff elsewhere, avoiding a material reduction in headcount, the sources said.

Under its mid-term plan announced last year, MUFG has been focused on strengthening the global markets business, which offers bonds, stocks, currencies and derivative sales and trading to institutional and corporate clients.

It has been working to bring the group, which falls under its core banking unit, under the same management as its Mitsubishi UFJ Morgan Stanley Securities joint venture and build its global presence.

However, MUFG’s ambitions have been stymied by tough competition from U.S. and European banks and, particularly for bond trading, a difficult market after years of low interest rates.

Reporting by Taro Fuse; Writing by David Dolan; Editing by Kirsten Donovan and David Goodman

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