Akio Utsumi

Director, Mitsubishi Tokyo Financial Group

Nationality: Japanese.

Born: September 7, 1942.

Career: Mitsubishi Trust and Banking Corporation: 1991–1993, director; 1993–1995, managing director; 1995–1998, senior managing director; 1998–1999, deputy president; 1999–, president; Mitsubishi Tokyo Financial Group: 2001–2004, director, chairman, and co–chief executive officer; 2004–, director.

Address: Mitsubishi Tokyo Financial Group, 5 Floor Yurakucho Building, 4-1 Marunouchi 2-Chome Chiyoda-Ku, 100-6326 Tokyo, Japan; http://www.mtfg.co.jp/english/.

■ Akio Utsumi was cofounder, director, chairman, and co-CEO of the Mitsubishi Tokyo Financial Group (MTFG), a holding company that, at its inception in April 2001, was Japan's fourth-largest banking group. MTFG was conceived in 2000 when Mitsubishi Trust and Banking, of which Utsumi had been president since 1999, and Bank of Tokyo–Mitsubishi (a.k.a. Tokyo Trust Bank) agreed to integrate their operations. The two banks became MTFG's directly held subsidiaries. In a second stage of the integration, a merger agreement with Nippon Trust Bank, a subsidiary of the Bank of Tokyo–Mitsubishi, brought Nippon under MTFG's management umbrella. Assets of the three firms totaled 90.1 trillion yen (US $866 billion) at the end of 1999, making the stock-for-stock exchange alliance the world's fifth-richest following the mega-mergers of several other Japanese banks. As of 2004 MTFG provided trust and banking services in more than 40 countries, including the United States, where it owned approximately two-thirds of Union Bank of California. MTFG was one of approximately 30 companies that were part of the Mitsubishi group. Before World War II these companies shared common ownership, but they began operating independently after the war.


By the late twentieth century, Japanese bank loans exceeded 100 percent of the nation's GDP, compared with 40 percent in the United States. When the bubble economy of the 1990s burst late in the decade, Japan's banking industry suffered immensely from a huge number of bad debts that amounted to well over a trillion U.S. dollars. Commenting on the subsequent mergers and alliances in Japan's banking sector, analysts wrote in the Economist : "These mergers or as they call it 'restructuring' are largely the product of the 'Big-Bang' style financial deregulation plan initiated by the government, and the effect of the banking sector's continuing debt problems. These bank mergers are dramatically reshaping the landscape of one of the world's most important financial centers" (May 27, 2000).


Rather than merging, as so many other financial institutions were doing, Mitsubishi Trust and Banking and Bank of Tokyo–Mitsubishi formed a holding company and undertook a management integration program that allowed each institution to maintain its individual identity and function autonomously under a common owner and coordinated strategy. According to the Economist , in a briefing to journalists Utsumi admitted that the idea of being able to maintain that independence was what allowed him to consider an alliance. Another reporter quoted Utsumi as saying, "We could lose our identity if we chose to do a merger. The precondition for our alliance was to leave Mitsubishi Trust and Banking as an individual entity" ( Yomiuri Shimbun—Daily Yomiuri Online ).

With the Bank of Tokyo–Mitsubishi already a major commercial banking operation domestically and internationally, and Mitsubishi Trust and Banking a leader in services such as trust, personal investment, real estate, personal estates, and wills in Japan, Asia, the United States, and Europe, the integration enabled the holding company to go well beyond the limitations imposed on each individual company. Combined, they could provide a complete range of financial services to each bank's domestic, international, individual, and corporate customers alike. While Bank of Tokyo–Mitsubishi serviced many thousands of individuals each day through their hundreds of branches in Japan, Mitsubishi Trust Bank had few branches nationwide. Once integrated under the holding company, Bank of Tokyo–Mitsubishi could introduce its daily branch customers to Mitsubishi Trust Bank's products and provide a central arena for a wide range of customer services.

The group also launched new services, such as discounted fees for customers who maintained specified minimum balances—a service that quickly became extremely popular. An international card allowed customers quick access to their accounts at cooperating banks around the world, and Japanese expatriates could readily manage their accounts through Internet banking links. MTFG considered Union Bank of California—their only major retail operation outside Japan—a valuable resource for tracking trends and cutting-edge personal financial services, allowing MTFG to implement these in other countries. And while most Japanese banks were cutting back their international operations, Utsumi and his senior management team considered their global network one of their core strengths.

Expanding on his decision to form a holding company rather than to merge, Utsumi told the Yomiuri Shimbun : "If we had only a tie-up with Bank of Tokyo–Mitsubishi, we would only distribute documents to their branches and sales offices, and simply instruct them to pass on jobs to Mitsubishi Trust and Banking. Through the integration, both Bank of Tokyo–Mitsubishi and Mitsubishi Trust and Banking will be forced to produce profits together." He firmly believed the alliance meant that each bank would contribute to the other's performance, which in turn would increase the company's competitive edge.


For Utsumi, creating and maintaining a competitive edge in the market-driven industry was an important consideration in creating the holding company. According to a May 24, 2001, news release posted on the MTFG Web site, the overall strategy was to "pursue further development as part of a highly competitive, diversified financial services group." When asked during the Yomiuri Shimbun interview how he planned to invest the money slated for information technology development—an area in dire need of upgrading in the Japanese banking industry in general—Utsumi stressed the importance of avoiding investment duplication. "Most of our share of IT investment, totaling 50 billion yen for the next three years, will be spent on the investment and management of entrusted funds. We won't invest it in our banking business because we can use Bank of Tokyo–Mitsubishi's infrastructure," he commented.

Utsumi and other MTFG senior management officials believed that the holding company created three particular areas of strength: a quality clientele, a global network more extensive than any other Japanese bank's, and a sound balance sheet.

MTFG management claimed that their institution was the only large Japanese bank able to manage its problem loans independent of government assistance. As of March 2002, MTFG's total liabilities were $691.3 billion; $3.94 billion in bad loans was slated to be sold to a government-backed debt-collection agency by the end of that year. The company posted a $1.1 billion loss for the fiscal year ended March 2002, but by September 2003 it reported a net profit for the fiscal half year of $2.43 billion.


On March 19, 2004, the Wall Street Journal reported that MTFG announced it would bring Japan's second-largest consumer financing company, Acom, into its operations. Acom targeted in particular the "lucrative market for high-margin consumer lending as corporate business dries up," the article said. In the early 2000s, finance providers such as Acom mushroomed by providing easy-access, high-interest loans—even through ATM machines—to individuals and owners of small businesses in need of quick cash. Quick to see the financial potential, MTFG became the first of Japan's "big four" financial institutions to incorporate a finance provider into its operations. MTFG agreed to purchase some 20 million Acom shares, including new shares, for 140 billion yen. A joint statement published on Channel NewsAsia's Web site read: "MTFG and Acom have agreed on a business and capital tie-up in order to strengthen our competitiveness in the retail sector … by making use of each other's know-how and operation bases as much as possible" (March 23, 2004).

At an April 28, 2004, meeting of MTFG's board of directors, it was announced that Utsumi's position as chairman and co-CEO would end on June 29 that year. Utsumi and MTFG's president and co-founder, Shigemitsu Miki, chose to retire from their positions due to strengthened earnings and the anticipation of being in the black by year-end March 31, 2004. Both said they would remain with the company as directors.

By the close of fiscal 2004, the company's balance sheet showed a gain of 72.9 billion yen, compared with a 538.7 billion yen loss the previous year. The improvement was attributed to lower-than-expected costs for reducing nonperforming loans, an upswing in Japan's stock market that increased MTFG's share value, and an out-of-court settlement between the Tokyo government and major banks.

sources for further information

"Big Bang: Bank's Chiefs Outline Strategy Behind Integration Plan," Yomiuri Shimbun—Daily Yomiuri Online , http://www.yomiuri.co.jp/intview/0502dy21.htm .

"Japan's MTFG Ties Up With Acom Consumer Finance Firm," March 23, 2004. Channel NewsAsia, http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/76864/1/.html .

"Japan's Troubled Bank Mergers," Economist , May 27, 2000, http://www2.gol.com/users/coynerhm/japans_troubled_bank_mergers.htm .

"Mitsubishi Tokyo Financial Group, Inc. May Increase Stake in Acom—WSJ," March 19, 2004, http://news.moneycentral.msn.com/ticker/sigdev.asp?Symbol=MTF .

"The Mitsubishi Trust and Banking Corporation, Nippon Trust Bank Limited and Tokyo Trust Bank, Ltd. Sign Merger Agreement," May 24, 2001, http://www.btm.co.jp/english/press/news2001/pdf/news_104e.pdf .

—Marie L. Thompson

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