Signs with MUFJ (Mitsubishi-UFJ Bank) logos in Chuo-ku, Tokyo.
Customers entrust their money and other valuables to banks because they have faith in their integrity. Recently, however, a scandal at a major Japanese bank betrayed that trust. Now the scandal threatens to shake the foundations of the bank's business. The case in question involved large-scale theft from customer safe deposit boxes by an employee of Mitsubishi UFJ Bank (abbreviated as MUFG). MUFG is also the largest bank in Japan in terms of total assets.
According to the bank, customers who used safe deposit boxes at two MUFG branches in Tokyo were victimized over about four and a half years from April 2020 to October 2024.
It is estimated that the total losses suffered come to several billion yen at the current market value. However, there are also fears that the losses could increase further.
Thefts Over Four Years
A female bank employee in her 40s who was in charge of counter operations stole money and valuables from customers. She has since been dismissed for disciplinary reasons.
This bank employee misused spare keys kept at the bank to open the deposit boxes. The bank had strict management rules in effect and had introduced a system of regular checks by a third party. However, in practice, these did not function as intended. MUFG must now implement further control measures, such as centralizing the management of duplicate keys at its headquarters.
Nonetheless, there is no denying that MUFG's system for preventing fraud was far from rigorous.
At a December 16 press conference, MUFG president Junichi Hanzawa said, "We take this very seriously as it undermines the foundations of the banking business ー trust and good faith ー and we offer our sincerest apologies."
Excavating the Root of the Problem
However, bank management cannot so easily escape responsibility for allowing the conditions that made the wholesale theft possible.
This latest scandal is not the only matter of concern. Not too long ago, the bank was found to have violated other laws and regulations. For example, it shared nonpublic information about client companies with two affiliated securities companies without obtaining permission from the customers concerned. As a result, in June the Financial Services Agency ordered MUFG Bank to improve its business practices.
Neither of these issues should be trivialized as abnormal individual actions. If bank employees are losing their sense of ethics, that would pose a serious problem. As a next step, the bank must identify the root cause of this series of scandals. Then it must make every effort to restore trust, including by reeducating all employees regarding professional ethics.
The Tip of the Iceberg
Moreover, these issues are not limited to this one bank. Financial firms are expected to have high ethical standards. However, they have recently been hit by a series of unfortunate incidents.
A former employee of Nomura Securities who was assigned to its Hiroshima branch has been charged with armed robbery and attempted murder of a customer, as well as arson. Also, a former manager at Sumitomo Mitsui Trust Bank was fired after it was discovered that he had engaged in insider trading.
Regardless, this is not a trivial matter. It is absolutely unacceptable to betray someone's trust for the sake of one's own desires. More than anything else, trust is the lifeblood of financial institutions. All stakeholders in the industry need to bear that in mind.
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(Read the editorial in Japanese.)
Author: Editorial Board, The Sankei Shimbun
