Japan’s Mitsubishi UFJ Financial Group (MUFG) is hiring staff in London in a drive to expand its investment banking operations across Europe, the Middle East and Africa (EMEA) and boost income outside its home market, a senior executive said.
The plan by Japan’s biggest bank is a filip for London, at a time when many banks are considering moving jobs out of the city ahead of Britain’s departure from the European Union.
MUFG has hired 180 staff in London since April 1 and plans “a few dozen” more hirings in EMEA, Sebastien Rozes, head of corporate banking for the region, told Reuters in an interview.
“We want to continue to deepen MUFG‘s relevance for our clients as a major European and global fixed income powerhouse, as well as one of the region’s principal corporate and investment banks,” he said.
Around 10,000 finance jobs will be shifted out of Britain or created overseas in the next few years if the country is denied access to Europe‘s single market, according to a Reuters survey in September.
MUFG, which now employs around 2,100 staff in London, said in September it would set up a new subsidiary in Amsterdam to ensure it can continue to serve European clients even if Britain loses access to the single market.
The bank said it is also considering opening an investment banking branch in Paris and has said it will move a few dozen staff from London to either Amsterdam and potentially other European locations. The lender already has more than 20 offices across Europe already and is well positioned to cope with the impact of Brexit, Rozes said.
MUFG plans to use its lending muscle and strength in structured finance to expand its capital markets business, Rozes said, at a time when some European banks are shrinking their business.
The hirings include expanding the bank’s coverage of sectors such as telecommunications, media, technology and healthcare, Rozes said, and adding more senior investment bankers to win business from financial institutions across the EMEA region.
Since Rozes joined in September 2015 from RBS, the bank has hired amongst others a new head in Germany, TMT and Healthcare coverage bankers, a new head of financial institutions EMEA and and a new head of CEE and Africa.
With interest rates still at historic lows across the euro zone, standalone bank lending is largely unprofitable and investment banks in the region have focused in recent years on persuading borrowers to pay for additional products such as advice on deals, hedging, and finance.
MUFG will in pursuing this strategy also expand the number of countries in which it operates, Rozes said, opening a branch in Saudi Arabia next year to benefit from the deal activity associated with the country’s privatisation plans.
The EMEA region currently contributes around 10 percent of MUFG‘s non-Japan profits, which in turn comprise 30 percent of the lender’s overall profits. More than half the non-Japan revenues come from the United States, where MUFG has a retail banking business in addition to its investment bank.
The expansion into the EMEA region forms part of a broader drive by MUFG to combat sluggish growth in Japan by increasing the income from the 50 countries in which it operates.
The lender is also in talks to buy a 40 percent stake in Bank Danamon Indonesia, sources told Reuters earlier this month, having earlier bought bank stakes in other Southeast Asian countries including Vietnam, Thailand and the Philippines.