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Top Japan bank plans venture to redevelop shuttered branches

MUFG taps Mitsubishi Estate's experience as it halves traditional locations

Mitsubishi UFJ Financial Group aims to halve traditional branches for group banks and add slimmed-down locations.
Mitsubishi UFJ Financial Group aims to halve traditional branches for group banks and add slimmed-down locations.   © Reuters

TOKYO -- Japan's Mitsubishi UFJ Financial Group will launch a venture with real estate developer Mitsubishi Estate as soon as next month to advise the megabank on its effort to reduce and reshuffle its physical locations.

The new company will weigh options for the use of property to be freed up by consolidation among over 100 domestic locations -- mainly in properties owned by MUFG Bank -- as well as where to put branches. The parties are discussing a 60-40 ownership split in favor of MUFG, with the venture to be a subsidiary of the banking group.

Banks often open locations in prime station-front downtown areas or highly trafficked residential neighborhoods. The venture, drawing on Mitsubishi Estate's experience, will discuss how to keep areas thriving after branches are removed, such as by attracting commercial facilities or building apartment complexes.

MUFG Bank has announced plans to halve its count of traditional locations with tellers over the six years through fiscal 2023, switching them for slimmed-down or otherwise altered versions. Its parent group intends to create more joint branches incorporating lending, trust bank and brokerage units.

Japanese banks rarely partner with real estate developers for help reshuffling locations. In MUFG's case, the effort to relocate and downsize branches is already underway, and group member Mitsubishi UFJ Trust and Banking handles real estate agency operations. But the group likely decided it needed an experienced developer with knowledge of local trends and regional population shifts to carry out a large overhaul in a short time.

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