Japan's largest lender, Mitsubishi UFJ Financial Group (MUFG), is preparing to slash its Asian investment banking workforce outside its home country by almost half.

Top executives in Tokyo have decided to make redundant as many as 90 of the 180 MUFG Securities staff in Hong Kong and Singapore, with employees to be notified next month, as per people in the know.

All investment banking divisions will be affected, with trading operations to be closed almost entirely and sales and back-office staff heavily cut and their responsibilities transferred to London. The Asian debt capital markets team will lose a few members but will remain largely intact. There are also discussions around cutting MUFG’s operations in London of 2,000 employees though details have not been finalized.

In June, 500 directors and managing directors at the bank were offered voluntary redundancy. The recent move comes as the Japanese lender is struggling with dwindling profits and a falling share price. Big drops in profit at the bank's international trading businesses amid volatile markets and slowing growth in Europe and China have led to a top-level debate about MUFG's workforce. The company’s shares have 20 percent in the past year, as Japan's banking industry is under pressure from ultra-low interest rates and demographic changes that are shrinking customer numbers.

While the bank responded by stating that it constantly reviews its business in all markets to ensure it remains competitive and relevant to clients, yet it is no secret that net operating profit in the global markets division plunged 26 percent to 251 billion yen (S$3.2 Bn last year, majorly because of a big fall in Europe and bank said struggled in customer business due to sluggish markets. 

MUFJ is not alone in its struggle. Earlier this year, Nomura cut 50 employees from its global trading division, with major cuts in Europe on account of a difficult year in volatile markets. Similarly, Deutsche Bank is reorganizing its investment bank in Asia by folding its financing and structured debt operations into the division and is continuing to slash jobs as part of the restructuring unveiled by CEO Christian Sewing a month ago that includes 18,000 job cuts by the end of 2022. The cuts mirror the wider struggling German banking sector that was once widely envied. As per a media report, last year, more than 32,000 jobs were slashed in the industry. These cuts have come on account of low interest rates in the eurozone, sluggish economic growth, and competition from new online platforms.