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Mitsubishi UFJ Might Lay Off Employees in Tokyo Equities Arm

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Mitsubishi UFJ Financial Group Inc. MUFG is mulling to lay off five to 10 employees from its securities joint venture with Morgan Stanley MS, based in Tokyo. The news was reported by Bloomberg.

Mitsubishi UFJ Morgan Stanley Securities Co. (MUMSS) is a joint venture of both the companies created in 2010 as a result of Mitsubishi UFJ's $9 billion investment in Morgan Stanley at the height of a financial crisis in 2008. It is a combination of investment banking operations of the banks.

The layoffs include several managers, per people with knowledge of the matter. Also, some research analysts are likely to exit the company as Mitsubishi UFJ is aiming to reduce costs in the equities business.

While it is seeking to cut expenses, it is also making strategic investments to bolster performance. It recently entered into an alliance with Grab Holdings, the leading super app in Southeast Asia. The company intends to match the growing digital needs and provide innovative financial services leveraging data and AI technology.

Mitsubishi UFJ intends to deepen synergies in its regional network, including its unique partner bank relationships in Southeast Asia and further capture business opportunities in the region.

Mitsubishi UFJ’s focus on other areas to drive its bottom line, as a persistent negative interest rate environment in the domestic economy has been making its lending business less profitable, seems impressive. However, rising costs might deter bottom-line growth.

Shares of the company have gained 1.2% in the past six months against 3.5% decline of the industry.

The company currently carries a Zacks Rank #3 (Hold).

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