Mitsubishi UFJ Financial (MUFG) Q4 2022 Earnings Call Transcript

For the period ending March 31, 2022

May 16, 2022 9:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

you very much for waiting. We will now begin the online conference on financial highlights for fiscal year ended March 31 2022 of Mitsubishi UFJ Financial Group. I am Takahashi from the Investor Relations office, Financial Planning division and will serve as the moderator for today's session. Tetsuya Yonehana, Groups CFO and Senior Managing Executive Officer will give a 15-minute presentation on the financial results summary followed by a Q&A session. We will use the remaining 35 minutes for Q&A. The entire session is expected to be approximately 50 minutes.

Before I begin, I'd like to make a few remarks. In this presentation, we may refer to forward-looking statements based on current expectations, all of which are subject to risks and uncertainties. Please be aware that actual results may differ materially from those discussed in the forward-looking statements.

We will now begin the presentation of financial results. Mr. Yonehana, please.

Tetsuya Yonehana

This is Yonehana. Thank you very much for joining MUFG's online conference today at this late hour. Please look at the document titled Financial Highlights under JGAAP for fiscal year ended March 31, 2022. First, let me explain our financial results for FY 2021 and then discuss our performance targets and shareholder return policy as well as the progress of our medium-term business plan and our sustainability initiatives.

Please turn to Page 5. I will begin with the income state summary. In the left table, line one, gross profits increased by ¥43 billion year-on-year. As for the breakdown of gross profits, line two, net interest income improved, thanks to the improvement of lending spread in Japan and overseas. And line three, trust fees and net fees and commissions increased, thanks to the increase in revenues from the domestic and the overseas asset management business.

On the other hand, line five, net gains and losses on debt securities decreased by over ¥250 billion year-on-year, mainly due to loss on sales of foreign bonds in the fourth quarter when US interest rate rose, as a result of portfolio realignment to improve profitability in the following fiscal years and beyond.

Next, line six, G&A expenses increased by ¥74.6 billion year-on-year, but decreased in real terms excluding foreign exchange effects. As a result, line seven, net operating profits was ¥1,216.7 billion down by ¥31.6 billion. Line eight, total credit cost was ¥331.4 billion, an improvement of ¥184 billion year-on-year, mainly due to reversal of the allowance for loan losses at MUFG Union Bank. In the fourth quarter, we recorded an allowance of approximately ¥140 billion related to Russia.