* BTMU to charge euro time deposits of some corporate
* Ultra-low rates in Europe, Japan squeezing bank margins
* BTMU says no plan to introduce negative deposit rate in
(Adds details, background)
By Taiga Uranaka
TOKYO, May 2 Bank of Tokyo-Mitsubishi UFJ (BTMU)
will start charging negative interest rates on euro deposits
from dozens of its biggest European clients, a spokeswoman said,
the first Japanese bank to take such a step amid the ultra-low
Japanese banks, particularly smaller ones, have seen their
lending margins shrink after central banks in Europe and Japan
adopted negative interest rate policy to spur borrowing and
Japanese lenders have been reluctant to pass on the costs to
customers given potential public backlash, but some European
banks including UBS have started charging fees on large
BTMU, the core unit of Mitsubishi UFJ Financial Group
, is in talks with some of its biggest corporate clients
about charging their euro-denominated time deposits shorter than
12 months, spokeswoman Kana Nagamitsu said on Tuesday.
The clients consist of "a couple of dozens" that make
deposits at the bank's London branch, home to BTMU's biggest
European clients. The bank will not start charging without
The new rates will be applied to deposits beyond a certain
amount set by the bank. If clients refuse to comply, BTMU will
stop accepting their deposits above that amount, she said.
The bank decided to make the move now as it could no longer
tolerate profits being further squeezed by the European Central
Bank's negative interest rate policy, first introduced in 2014.
The Bank of Japan also introduced the negative interest rate
policy in February last year, but the BTMU spokeswoman said her
bank has no plan to charge negative rates on deposits in Japan.
BTMU CEO Takashi Oyamada has said charging negative rates
was too difficult for its Japanese clients to accept.
(Editing by Randy Fabi)