General Electric's consumer finance arm plans to close 60% of its manned personal loan branches in Japan and shed up to 400 employees amid an industry-wide slump prompted by tighter regulation.
GE said on Thursday it would shut 73 of its 115 manned lending outlets within the year. It will also pull the plug on around 200 of its 1,342 ATM-like loan terminals and close 48 local collection offices.
The company said later on Thursday that if unmanned branches, similar to ATMs, were included in the total it will close 273 out of 1,457 locations or 18.7% being closed.
A new lending law approved by parliament in December will lower Japan's maximum legal interest rate to between 15% and 20%, depending on the size of the loan, from the current ceiling of 29.2%.
The change threatens revenues in the once-mighty consumer finance industry, already battered by scandals and borrower lawsuits over excessive interest charges.
In addition to closing branches, GE said it would introduce an early retirement program to reduce its workforce of 2,600 full-time employees by 300-400 in the second quarter of the year.
GE is the parent company of CNBC.
GE is not the only lender cutting back. Citigroup is closing most of its Japanese personal loan outlets amid heavy losses, Aiful is cutting its branch network in half and shedding more than 10% of its workforce, and Acom is cutting staff numbers by 17%.
On Tuesday another big consumer lender, Orient, said it expected to post a $4 billion net loss this year, prompting it to ask shareholders for new capital, cut 22% of its workforce and shrink its branch network to less than half its current size.