Evolving trend of consolidation in the banking industry : strategies of Mitsubishi UJF Financial Group

Abstract

Consolidation in the financial industry has progressed rapidly in many countries. In the United States, large financial corporations, such as Citigroup and JP Morgan Chase, formed complex financial groups and conglomerate structures composed of a commercial bank, a securities company, and an asset management company. In recent years, the Japanese financial system has become increasingly deregulated. And many of the barriers to competition have been reduced or removed. These regulatory reforms have encouraged Japanese banking institutions to undertake major consolidations that have resulted in larger and more integrated financial conglomerates. In addition, the advent of Internet technology has enabled new entrants, such as Internet service companies, to conduct financial business. In these new circumstances, Mitsubishi Tokyo Financial Group (MTFG), Japan's third largest banking group, decided to integrate with UFJ Holdings, Japan's fourth largest banking group. This integration created the world's largest financial conglomerate (based on asset size) named Mitsubishi UFJ Financial Group (MUFG).

(cont.) This thesis discusses trends of consolidation in the U.S., European, and Japanese banking industries. It will analyze the strategic transformation of several financial conglomerates, including Citigroup, J.P. Morgan Chase, and Deutsche Bank. A second objective is to identify the financial and strategic positions of MUFG as they compare with the U.S., Europe, and other Japanese financial conglomerates.