MUFG Bank CEO to Take Pay Cut Over Safety Deposit Box Theft

(Bloomberg) — Mitsubishi UFJ Financial Group Inc. said its banking unit chief and other senior executives will take pay cuts to take responsibility for the theft of millions of dollars from customers’ safety deposit boxes.

Junichi Hanzawa, CEO of MUFG Bank Ltd., and Chairman Naoki Hori will have their compensation reduced by 30% for three months, the company said in a statement on Thursday. Other senior executives will take similar pay cuts.

Japan’s biggest bank said in November that it had fired an employee who allegedly stole money from the safe deposit boxes of dozens of customers. It now estimates ¥1.4 billion ($9 million) was taken, and it has so far paid about ¥700 million in compensation to 40 customers. 

“I apologize for the anxiety and troubles caused to customers,” Hanzawa told reporters on Friday morning. He said he will implement preventive measures to regain public trust.

Hanzawa said the bank is planning to make a decision on whether to keep the safety deposit box business by March. There is a certain level of customer needs for boxes given a recent spate of home invasion and robbery cases, but the bank also needs to consider the risks and profitability of managing them, he said.

The former employee, a 46-year-old woman, was arrested on Tuesday on suspicion of the theft. The bank said she used the stolen money mainly for foreign-currency investment. 

The incident was caused by failures in managing the boxes at branches, along with a lapse in oversight at the bank’s headquarters, MUFG said in the statement. It pledged to strengthen protocols, such as by bolstering monitoring of staff entering deposit box rooms.

MUFG will boost screening of staff before they are considered for promotion to managerial positions, including to find out whether they have been bankrupt or engaged in speculative investment such as FX trading. Those to be promoted will need to submit written pledges to maintain high ethical standards, the bank said. 

(Updates with comments from CEO in fourth and fifth paragraphs)

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