MUFG Bank, Ltd. Announces Document Submission Details for Financial Services Agency Administrative Actions

MUFG Bank and MUMSS Address Financial Services Agency’s Business Improvement Orders and Reporting Requests

The Financial Services Agency (FSA) of Japan has issued business improvement orders to MUFG Bank and MUMSS under Articles 51, paragraph 2 and 51 of the Financial Instruments and Exchange Act, and has requested reporting from MUFG and MUFG Bank under Articles 52, paragraph 31-1 and 24, paragraph 1 of the Banking Act.

In response, MUFG, MUFG Bank, and MUMSS have submitted comprehensive documents, including detailed business improvement plans, to the FSA. We sincerely apologize for the inconvenience and concerns these issues have caused our customers and stakeholders.

We are committed to addressing these concerns with utmost seriousness and are implementing robust measures to prevent recurrence. Our goal is to restore trust by enhancing our customer-centric approach and leveraging the collective strengths of our Group.

Root Causes and Improvement Measures

1. Root Causes of Incidents The issues identified stem from inappropriate practices in the collaboration between MUFG Bank and MUMSS, including improper sharing of customer information, inadequate corporate information management, and unauthorized securities activities. Our analysis points to several key areas of concern:

• Overall Issue: Insufficient understanding and adherence to laws and regulations despite existing procedures and internal controls.
• Sales Divisions: Lack of risk ownership amidst the expansion of bank-securities collaboration.
• Risk Management Divisions: Inadequate development of internal controls and monitoring frameworks.
• Management: Failure to adequately recognize and address risks related to bank-securities collaboration.

1. Measures for Improvement To address the identified issues and prevent future occurrences, we are implementing the following improvement measures:

• Revise and Emphasize Procedures/Rules: Clarify rules for information sharing, establish guidelines for internal corporate information, and enhance integrated management of information.
• Enhance Training: Improve training programs to include specific case studies and practical examples, strengthen advisory functions, and ensure ongoing verification of training effectiveness.
• Review Performance Evaluations: Adjust performance evaluations to prevent inappropriate information coordination and reemphasize the objectives of group profitability management.
• Enhance Monitoring Framework: Expand and strengthen monitoring across all stages of projects and communications, and improve integrated management of risk.
• Enhance Management Framework: Commit to rigorous implementation and monitoring of remedial measures, strengthen training for executives, and enhance internal controls and penalties for legal violations.

1. Disciplinary Actions In light of the incidents, we are taking the following disciplinary actions against executives:

• MUFG:
  • Kanetsugu Mike, Member of the Board of Directors, Chairman: 30% of monthly compensation for 5 months
  • Hironori Kamezawa, Member of the Board of Directors, President & CEO: 30% of monthly compensation for 3 months
• MUFG Bank:
  • Naoki Hori, Chairman of the Board of Directors: 30% of monthly compensation for 2 months
  • Junichi Hanzawa, President & CEO: 30% of monthly compensation for 3 months
• MUMSS:
  • Saburo Araki, Deputy Chairman: 30% of monthly compensation for 2 months
  • Makoto Kobayashi, President & CEO: 30% of monthly compensation for 3 months
  Additionally, we have requested certain retired executives to return part of their compensation, which they have agreed to.

We are committed to implementing these measures effectively and will continue to update stakeholders on our progress.

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