Mitsubishi UFJ Financial (MUFG) Q4 2023 Earnings Call Transcript

For the period ending March 31, 2023

May 16, 2023 7:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Masahisa Takahashi

Thank you for waiting. We will now begin the online conference call on financial highlights for the fiscal year ended March 31, 2023, of Mitsubishi UFJ Financial Group. I am Takahashi from Investor Relations Office, Financial Planning division and will serve as the moderator today. Tetsuya Yonehana, Senior Managing Corporate Executive and Group CFO, will give a 15-minute presentation on the financial highlights followed by a Q&A session. The entire session is scheduled to be about 50 minutes.

Before we begin, let me read the disclaimer. In this presentation, we may state 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 forecasts.

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

Tetsuya Yonehana

I am Yonehana. Thank you very much for joining us today at this late hour for MUFG's online conference call. Please look at the material titled Financial Highlights under JGAAP for the Fiscal Year Ended March 31, 2023. First, let me explain our financial results for FY '22, followed by our performance targets and shareholder return policy for FY '23.

Please skip to Page 7. I will start with the income statement summary. As shown in line 17 on the left table, profits attributable to owners of parent was ¥1.1164 trillion, roughly flat year-on-year, achieving the performance target of ¥1 trillion and the second highest after FY '21, which was the highest profit ever. As a result, ROE was 7.03% as shown in line 19.

Regarding the breakdown of the financial results, Line 1, gross profit was an increase of ¥539 billion year-on-year. Line 2 and below is the breakdown of gross profits, which shows a large year-on-year increase or decrease, depending on the item. This is a result of the treasury business using ¥555.7 billion in gains on cancellation of their fund and gains on derivative hedging to rebalance the portfolio centering on foreign bonds.

Gains on cancellation of the bear fund is included in Line 2, net interest income and the losses on the sale of foreign bonds is included in Line 5, net gains or losses on debt securities. Although it is difficult to see the actual increase or decrease due to these factors, the drivers of the increase in gross profits are an increase of overseas interest income of loans and deposits due to global interest rate hikes and improvement of lending spread, an increase in foreign exchange and trading income by capturing market fluctuations, and an increase in foreign loan-related fees.