Yamaguchi Financial Group Inc., headquartered in Shimonoseki on Japan’s largest island, is ramping up efforts to recruit market specialists by offering salaries comparable to those at the nation’s largest banks. As Japan’s central bank adjusts interest rates upwards, creating heightened market volatility, competition among financial institutions to secure bond traders and other experts is escalating.
Salaries for positions such as bond and foreign exchange traders and sales roles at major Japanese banks can reach up to ¥13 million ($80,500), according to recruitment platforms like doda and Kotora.
“We want to ensure that compensation is not a deterrent,” said Keisuke Mukunashi, CEO of Yamaguchi Financial Group, in an interview. “We are prepared to offer salaries on par with Japan’s largest banks.”
Regional banks across Japan are seeking to diversify revenue streams through securities investments, given the challenges posed by an aging and declining population in their local markets. However, a shortage of experienced market professionals within these banks heightens the risk of investment losses.
This year has seen notable investment setbacks within Japan’s banking sector. Aozora Bank Ltd. reported its first loss in 15 years due to losses on foreign bonds and troubled US office property loans. Meanwhile, Norinchukin Bank’s announcement of selling $63 billion in low-yielding US and European government bonds surprised global markets.
Yamaguchi Financial Group itself faced a ¥13 billion net loss in the fiscal year ending March 2022, triggered by rising interest rates in the US and Europe, leading to the divestment of foreign bonds and mutual funds. In response, the bank established a risk management committee comprising external experts.
Despite these challenges, the value of the bank’s securities holdings rebounded to approximately ¥2 trillion by end-March, up from around ¥1.34 trillion two years earlier. The bank anticipates achieving a record-high consolidated net income of ¥33 billion in the current fiscal year, driven by robust lending revenues and improved investment income from securities.
Securing skilled human resources remains a critical hurdle for Japanese financial institutions, particularly for regional banks located outside major urban centers like Tokyo. Yamaguchi Financial, situated in Shimonoseki, approximately 800 kilometers from Tokyo, is addressing this by recruiting mid-career professionals, including two from major Japanese banks for its Tokyo-based market division. The bank aims to hire a total of 85 mid-career employees this fiscal year, in addition to the 152 new graduates hired in April through the traditional Japanese recruitment cycle.
“In the future, we aim to balance our recruitment between mid-career professionals and new graduates,” Mukunashi noted. The bank plans to outline the timeline for achieving this goal in its upcoming mid-term plan starting next April.
