| BTM, UFJ move towards integration |
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| Friday,August 19,2005 Posted: 10:41 BJT(0241 GMT) China Daily |
BEIJING, Aug. 19 -- Bank of Tokyo Mitsubishi (BTM) is stepping up efforts to merge with UFJ in China in order to tap into this huge market, raising expectations that the move will push their revenue to exceed Citigroup and HSBC, insiders revealed.
The Shanghai branch companies of BTM and UFJ are both among the top five in terms of revenue last year, according to statistics from the Shanghai Banking Regulatory Commission.
"In that case, we are likely to be No 1 after integration," a BTM division leader surnamed Xu told China Daily.
As the third and fourth largest banks respectively in Japan, BTM and UFJ signed a contract this February to form Mitsubishi UFJ Financial Group (MUFG) in October.
The total assets of MUFG are expected to hit US$1.7 trillion, making it the largest financial group in the world.
"The integration of the banking business, which is comparatively more difficult due to the digital disposal system, is expected to be completed early next year," Xu said. "But the integration of the security and insurance business will move smoothly and will be completed around October."
At the moment, both BTM and UFJ have branch companies in Beijing, Shanghai, Shenzhen, Dalian and Tianjin.
"Our main business is from the Yangtze River Delta region since most of our customers are there," explained Xu.
The integration of BTM and UFJ will definitely strengthen their competitiveness in China, but their rivals are mainly Japanese banks rather than Citigroup or HSBC.
"As some 70 per cent to 80 per cent of our customers are Japanese, we are not competing with those big names from Western countries," said Xu.
But he predicted that after MUFG begins to run a personal banking business, it might pose a challenge to those big names.
"The competition will be mainly on brand, products and services," Xu said. "And brand awareness is especially important for the retailing banking business."
Currently, BTM mainly focuses on large-scale enterprises and has no retailing banking business but BTM is taking a close look as the profit from retail banking business is increasing.
"The integration with UFJ can also sharpen our advantage," Xu added. "UFJ excels at retail banking business and its target customers are mostly small-and-medium enterprises. Therefore, we can be complementary to each other."
According to the plan from BTM's headquarters, MUFG will trim the number of employees to about 6,000. The number of overseas branches of BTM and UFJ is expected to drop to 80, with about 30 expected to close.
However, no lay-offs are expected in China.
(Source: China Daily)
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