Users from MUFG and Sumitomo may soon be able to withdraw at both ATMs for free.
MUFG Bank and Sumitomo Mitsui Banking Corp are planning to share their ATM infrastructure by early 2019 in a bid to cut costs brought as part of their latest move to weather a crippling profit crunch, reports Japan Today.
Under the plan, users with accounts at either banks will be able to withdraw money from both ATMs free of charge on weekdays.
The two banks will start the infrastructure sharing initiative at over 2,000 ATMs, including unmanned machines installed outside of the banks' offices.
The initiative will allow the banks to phase out some hundreds of ATMs in total. Local media reports released last May claim that the phaseout of older ATM machines may begin near train stations.
The downsizing is part of the banking sector’s overall push to reduce costs amidst shrinking profitability which also includes a plan to trim branch network. MUFG earlier announced that it will be cutting its domestic branches by 20% over a six-year-period which will then be replaced by self service style branches. Mizuho Financial Group is also planning to shut down around 100 domestic locations by March 2025.
“Falling loan demand and a shift toward lower-risk deposits are pressuring the profitability and growth prospects of banks, and Japan's three megabanks have announced structural overhauls that will result in a reduction of their headcount by 32,000,” an earlier report from Moody’s Investors Service noted.
The protracted decline in Japanese bank earnings can also be traced to the country's rapidly shrinking labour force and consequent rise of retirees who tend to draw down in savings and less risky investment products.
“Banks facing shrinking core customer bases and weakening customer demand will increase their focus on cost rationalisation, particularly in branch operations and human resources,” Moody's said.
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