TOKYO -- Japanese megabank parents Mizuho Financial Group and Mitsubishi UFJ Financial Group are reshuffling operations in Europe to hedge against possible fallout involving Britain's vote to leave the European Union. Mizuho will augment functions at its Dutch arm and give the unit a new moniker that reflects the wider European perspective, possibly by the end of 2016. The unit operates bank branches in Austria, Spain and Belgium, among other offices, and provides typical services such as deposits and lending. The Dutch unit also ensures "passport rights" to operate freely across the EU without obtaining separate licenses. But having a Dutch bank do business in several countries presents a set of unknowns, a person close to Mizuho said. Mizuho also will promote a location in Madrid from a representative office to a full branch and add more staff as early as this year. MUFG changed the name of its Netherlands unit to MUFG Bank (Europe) in May and put the branch in Brussels under that affiliate's umbrella. The financial group plans to reorganize more eurozone locations under MUFG Bank (Europe). Both Mizuho and MUFG run branches under their core banks' direct control in London, Paris and other European economic centers. The City of London, Britain's Wall Street, may see its influence fade now that voters have elected the leave the EU. But neither Japanese bank looks to overhaul its London operations. "With regard to London, we have no choice but to watch and wait for the time being," a Mizuho executive said. Sumitomo Mitsui Banking Corp. likely will face the biggest Brexit impact among the three Japanese megabanks. The Sumitomo Mitsui Financial Group unit established its European arm in London, where it gained EU passport rights. The bank is mulling its next move, which may include obtaining the passport outside of the U.K. Japanese megabanks are looking to their overseas businesses as domestic operations are predicted to shrink under the Bank of Japan's negative-rate policy. With the slowdown among developing economies, especially in Asia, Europe has emerged as a key region. (Nikkei)
Mizuho Financial Group and Mitsubishi UFJ Financial Group (MUFG) are set to restructure their operations throughout Europe in the wake of Britain's vote to leave the EU. The two Japanese banks will sell off a number of businesses including asset management businesses, retail banking operations, investment banking, wealth management, corporate finance and insurance businesses. MUFG will place its Brussels branch under its Netherlands unit MUFG Bank (Europe) and plans to reorganise further euro zone locations under its affiliates umbrella.