MUFG Bank to rebuild Tokyo headquarters for post-pandemic work

Tokyo

JAPAN'S largest bank will rebuild its 40-year-old headquarters in Tokyo's financial district as the lender prepares for a post-Covid world that will also see some compliance roles shift to India.

The new building will "significantly reduce" facility expenses for the financial group by bringing together about 19,000 workers who are currently located in nine different locations across the downtown area of the Japanese capital, said Junichi Hanzawa, chief executive officer (CEO) at MUFG Bank, a core unit of Mitsubishi UFJ Financial Group.

Plans for the knock-down and rebuild will include considerations around corporate life after the pandemic that may see staff working more from home or at satellite offices, he said. Currently, only about 40-50 per cent of its staff are working at the 24-storey building that was constructed in 1980; and Mr Hanzawa does not see a full return even after mass vaccinations.

"We will design the new headquarters with these new changes in mind," he said in an interview, adding that the bank plans to complete detailed designs by end of March 2023.

Banks across the world are grappling with planning for workers returning to offices after the pandemic. Wall Street has been unveiling plans to bring more bankers back in the coming months. Financial institutions in Singapore should use more no-touch technology and allow more space for each employee, recommended a recent study commissioned by the city's banking association.

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Cost control is one of the biggest challenges for Mr Hanzawa, having taken over a bank that has expanded aggressively through a string of major overseas acquisitions. In recent years, regulatory costs drove up its expenses, though compliance-related spending has now peaked in the financial year that ended in March, he said.

Separately, MUFG will transfer more compliance roles, including anti-money laundering projects, to Chennai, Tamil Nadu and Pune, Maharashtra, he said. The bank will initially move some of these operations from Asian countries to India, and may eventually move more compliance roles from the US and Europe as well, he said.

"We have built up what is necessary for compliance," said Mr Hanzawa. "We are now in a stage where we pursue efficiency." The bank has added US$1.3 trillion in total assets in the past 10 years to US$3.2 trillion.

Mr Hanzawa, a life-long Mitsubishi banker who joined the company in 1988 and has long been seen as candidate to lead the firm, said the days of targeting aggressive build-up in assets are over, especially in US and Europe, where low interest rates have hurt margins. BLOOMBERG