Mitsubishi UFJ Financial Group Inc. plans to expand a team of bankers serving rich clients as Japan’s largest lender seeks to draw more of its bank customers to higher-value services, according to a senior executive.

The lender may grow a recently created team dedicated to affluent clients to about 50 from 24, Akiko Matsubara, head of MUFG’s wealth management strategy division, said in an interview. The group was set up in April with staff across Tokyo, Osaka and Nagoya.

MUFG is trying to replicate the success of Morgan Stanley’s wealth management business, which has become a stable earner, balancing off more volatile trading and investment banking. Partners in a local joint venture, the U.S. bank is providing training and product development support to MUFG.

The Japanese bank’s push deeper into wealth management is a sign competition is heating up in a market that’s already fiercely contested. Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and MUFG itself have positioned the business as strategic in recent years, as ultra-low interest rates diminish profits from traditional lending. Japanese households have more than half of their 2 quadrillion yen ($14.7 trillion) of assets in cash and deposits, according to Bank of Japan data.

“Japanese financial institutions traditionally offer services and products in a uniform manner without regard to whether they are the affluent or not,” said Matsubara, who joined MUFG from UBS Group AG in 2019.  “Given diversifying needs of customers, we did segmentation and are now taking different approaches.” 

MUFG wants to personalize its offerings to its richest retail clients, while accelerating a digitization push so others can access conventional banking services online. A majority of customers are currently served by employees at the bank’s branches.

The wealth management business targets the richest 300,000 account holders, though the degree of engagement varies. At the top is a family office team, with about 10 bankers serving some 100 families, each with assets over 10 billion yen, according to team head Masatoshi Okada.

Given most of Japan’s rich are business owners, and the country is rapidly aging, services related to succession plans for their companies and family assets are among the drivers for the business, Matsubara said.

In addition to client-facing bankers, the lender has about 250 staff that specialize in products and consulting services for wealth management clients, she said. MUFG is also hiring specialists in areas such as tax to boost the team’s capabilities.

Alternative assets are another focus. The bank has seen strong demand for private equity fund investment and is expanding its offering to include infrastructure, venture capital and real estate funds, she said.

Matsubara started her career at Nomura, where she worked to cultivate wealthy clients at a branch in Tokyo. She then spent years on the UBS trading floor, before moving into wealth management there.

“In the US and Europe, adding alternative assets for portfolio diversification has been done for individual clients as well for years, especially when there is high volatility in traditional assets like now,” she said. “In Japan, we have not been able to offer such products. We are designing structures of products so that individual clients can buy.”

Source:
courtesy of BLOOMBERG

by Taiga Uranaka and Komaki Ito

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