TOKYO Japan's largest banking group Mitsubishi UFJ Financial Group (MUFG) will cut the pay of its CEO and five other executives following the breaching of "firewall" regulations at its banking and securities arms, it said on Friday.

In June, the Financial Services Agency (FSA) ordered MUFG's banking and securities units to submit business improvement plans in the highest profile financial regulatory action in Japan since the securities arm of rival Sumitomo Mitsui Financial Group was indicted on market manipulation charges in 2022.

The monthly salaries of Group CEO Hironori Kamezawa and five other executives will be cut by 30% for between two and five months, MUFG said in a statement.

It also demanded that three former directors at the group's banking unit and one at one of its securities arms return between 10% and 30% of three months’ worth of salary.

Kamezawa earned a total of ¥339 million (US$2.16 million or RM10.1 million) in the 12 months to the end of March 2024 in his capacity as group CEO and as a director at MUFG Bank, according to regulatory filings.

In mid-June, the FSA said it had found at least 26 cases in which confidential client information had been shared between MUFG Bank and one of the group's two securities tie-ups with Morgan Stanley between 2020 and 2023.

It also found that MUFG Bank had offered preferential lending rates to clients that did business with the two brokerages.

MUFG said it submitted a business improvement plan to the FSA on Friday.

In Japan, banks and securities companies in the same group are prohibited from sharing customer data with one another without the customer's consent.

  - Reuters