Mitsubishi UFJ Financial (MUFG) Q2 2023 Earnings Call Transcript

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Masahisa Takahashi

The time has come to start the Net Conference for Mitsubishi UFJ Financial Group. We will give the presentation for the first half of fiscal year ending March 31, 2023. My name is Takahashi of the IR Office of the Financial Planning Division. We are joined by analysts and institutional investors, various organizations and individual investors.

Let me give you the program today. Tetsuya Yonehana, Senior Managing Corporate Executive and the group CFO will give a 15-minute overview of the financial results, followed by a Q&A session. We will have a 50-minute meeting.

In this presentation, we may state forward-looking statements based on our 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 would now like to begin the presentation of the financial results.

Tetsuya Yonehana

My name is Yonehana. Thank you very much for joining us at this late hour for the MUFG Net Conference. Please refer to the materials entitled financial highlights under Japanese GAAP for the first half of fiscal year ending March 31, 2023. I would like to explain the financial results of the first half and discuss the performance targets and shareholder return policy, progress of our midterm business plan and our sustainability initiatives.

Page 7, an overview of profit and loss. The first line on the table on the left shows gross profit up by JPY 342.5 billion year-on-year. The second line and below are the breakdown of the gross profit, showing large increase and decreases depending on the item year-on-year. This is a result of the treasury operations using approximately JPY 490 billion in gains from the cancellation of [indiscernible] funds and gains from hedging derivatives to restructure the portfolio while cutting losses on foreign bonds. [indiscernible] fund cancellation gain is recorded in line 2 net interest income and gains in sales of foreign bonds is recorded in line 5 net gains in debt securities.

It may be difficult to understand the actual increase and decrease because of these factors, but the drivers of the increase in gross profit are increases in loan and deposit income due to higher overseas interest rate and the risk return improvement and an increase in foreign exchange gains and trading income, capturing opportunities from the market fluctuations.