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Mizuho Financial to shrink New York, London offices on WFH success

Bloomberg September 24 | Updated on September 24, 2020 Published on September 24, 2020

Traders working on the Mizuho Americas trading floor are reflected in a mirror in New York   -  Bloomberg

Employees may not need to come to office every day in future

Mizuho Financial Group Inc. plans to trim office space in New York and London in anticipation that some staff will keep working from home even when the coronavirus pandemic is over.

Employees in those financial centres won’t all need to come to the office every day in future, according to Hiroshi Nagamine, a senior executive at Japan’s third-largest bank. “We will reduce the space,” he said in an interview, adding that specific plans are yet to be ironed out.

Also read: Barclays, SocGen UK staff revert to home working

Nagamine said productivity hasn’t suffered while employees have been working remotely -- a view not shared by the chiefs of global financial titans from JPMorgan Chase & Co. and BlackRock Inc. to UBS Group AG, who have argued that it can be detrimental over time.

Financial firms around the world are grappling with what post-pandemic working life will be like, with some companies such as Nomura Holdings Inc. and Fifth Third Bancorp seeing opportunities to cut costly real estate by keeping a portion of staff at home.

Nagamine sees a scenario where offices are configured without personally assigned desks, allowing for less space. “So workplaces, not only ours but others as well, will resemble something closer to a free-address office,” he said.

Return of workers

Mizuho has postponed plans to return workers to buildings in New York’s midtown Manhattan district and the City of London, amid lingering concerns over Covid-19. Prime Minister Boris Johnson this week urged UK residents to work from home as his government tightened restrictions to combat a surge in virus cases.

Return PostponedIn London, where Mizuho has about 1,500 employees, it recently told them that only those performing “business-critical” roles can return to its office near St. Paul’s Cathedral, Bloomberg reported earlier this month. The bank had previously given staff the choice to return to Mizuho House, 30 Old Bailey as long as the building’s capacity didn’t exceed 50 per cent.

“The number of infections is rising again in the UK, France and Spain, so we’re a bit worried about our operations in Europe,” said Nagamine, who is head of Mizuho’s overseas business.

In the US, where 90 per cent of its 2,300 employees work remotely, Mizuho was seeking to start calling some bankers back after Labor Day, “but there is anxiety among our staff and things are working well enough now without returning to the office,” Nagamine said.

Different approach

Mizuho has taken a different approach in Japan, where a relatively low number of infections has allowed it to keep most bankers in the office. Only about 20 per cent of employees at the bank’s Tokyo headquarters are currently working from home.

Nagamine said he hasn’t seen any tangible impact of remote work on output, citing strong results from its US bond underwriting business last quarter as an example. Mizuho made dozens of emergency loans that many borrowers have since switched to bonds.

Mizuho isn’t worried about the credit quality of its “global 300” clients -- a group of blue-chip companies that the bank focuses on, Nagamine said. The energy sector has recovered from the market turmoil in March and Mizuho doesn’t have much exposure to airlines, he added.

The bank is seeking to expand lending in the US, including by going beyond investment-grade financings, according to Michal Katz, who leads investment banking at Mizuho Americas. “It’s not about sprinkling our balance sheet, it’s about strategic deployment,” Katz said Wednesday in a Bloomberg Television interview.

Nagamine said the bank is open to opportunities for deals like the one it did with Royal Bank of Scotland Group Plc in 2015, when Mizuho acquired the U.K. lender’s North American loan and credit line portfolio worth $36.5 billion.

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Published on September 24, 2020
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