MUFG Union Bank avoids closures with bare-bones branches

NEW YORK — Japanese-owned MUFG Union Bank will make more than 80% of its U.S. branches stripped-down locations to cut costs while maintaining its reach to customers, its newly appointed CEO said in an interview.

Union Bank will keep its current network of about 300 locations, but will have 45 locations serve as full-service anchor branches while the rest will be smaller limited-service branches, Kevin Cronin said.

The move comes as Union Bank’s parent Mitsubishi UFJ Financial Group is pushing ahead with its own shake-up back home. The core unit, MUFG Bank, is shrinking the number of physical locations through spring of 2024. Furthermore, about 160 branches — or half the remaining network — will have operations drastically simplified. Some of these locations will be advisory boutiques.

“The pandemic had an impact on consumers wanting to transact in a more digital environment, and there was less, quote, ‘traffic’ into our physical branches,” Cronin said.

For U.S. operations, cutting overhead costs has gained urgency as the Federal Reserve’s monetary easing has squeezed banks’ interest earnings. Union Bank’s reorganization will serve as a test case for MUFG’s shake-up in Japan.

Even prior to the pandemic, the number of bank branches in the U.S. decreased by 6% over five years through 2019, according to the Federal Deposit Insurance Corp. The total fell to 76,800 branches.

But Union Bank, which mainly operates along the West Coast, looks to avoid closing branches entirely.

MUFG Union Bank avoids closures with bare-bones branches

Kevin Cronin started serving as CEO of MUFG Americas Holdings Corporation and MUFG Union Bank in March. (Photo courtesy of MUFG)

“We’re happy with our network right now,” said Cronin, who added the lender is open to opening new locations if it sees the opportunity.

“There is a cost to that physical footprint, but it’s an investment that we’ve made, to serve our clients in the community — those that want to go to a physical location,” he added. An important measure of that business is “a broad-based relationship with a customer… the physical network really facilitates that.”

Under the reorganized structure, anchor branches will handle asset management advisory, small business banking as well as consumer banking services such as mortgages. Anchors could dispatch small business bankers, wealth advisers and mortgage consultants to help customers at the smaller branches.

The restructure will be 75% complete by the end of next year, and will be fully completed in 2026.

Cronin said that Union Bank is looking at reducing floor space for operations at its headquarters as well.

“We work in tall buildings,” Cronin explained. “That can be quite expensive. And so, if we can reduce our footprint, we would like to pursue that.”

Union Bank is transitioning employees who are working from home back to the office environment in a process that will run through September. Depending on the department, employees will be allowed to continue working from home a few days a week.

To accommodate part-time telecommuters, Union Bank will set up common areas for such associates to set up their laptops or other devices, according to Cronin. That way the company will not have to maintain as much dedicated workspace assigned to individual employees.

Cronin stepped in this March to take charge as CEO of both MUFG Americas Holdings and Union Bank. He first joined MUFG in 2011 to helm the group’s corporate and investment banking business in the U.S. Cronin previously served at Bank of America, leading the lender’s corporate banking business.

As the U.S. recovers from the pandemic, the next two years are expected to be a good period that is “very constructive,” according to Cronin.

“I think there will be strong demand that will be good for banks like MUFG.”


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