(Bloomberg) -- Mitsubishi UFJ Financial Group Inc. is preparing major job cuts in London, another sign of the deepening troubles Japan's banks face at their overseas operations.
MUFG, the country'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.
Japanese financial firms have been expanding abroad to make up for a squeeze on profits 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.
Read more on Japanese banks' struggles abroad
“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 said 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, the base for its 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% of group revenue in the year ended March 2018, according to data compiled by Bloomberg.
To contact the reporters on this story: Taiga Uranaka in Tokyo at turanaka@bloomberg.net;Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net
To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Russell Ward, Katrina Nicholas
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