Japan’s top bank MUFG beats profit view, forecasts lower credit costs – About Your Online Magazine

TOKYO (Reuters) – Japan’s main lender, Mitsubishi UFJ Financial Group Inc (MUFG), on Monday reported a better-than-expected 47% increase in net income for the full year, after last year’s profit was hit by a reduction in the recoverable value of its units in Southeast Asia.

logo, calendar, company name: ARCHIVE PHOTO: A MUFG Bank plaque is seen in Tokyo

© Reuters / Toru Hanai
ARCHIVE PHOTO: A MUFG bank plaque is seen in Tokyo

Profit for the year ending in March was 777 billion yen ($ 7.11 billion) compared to 528.2 billion yen a year ago, MUFG said in a statement. This also compares to an average estimate of 708.9 billion yen from eight analysts surveyed by Refinitiv.

MUFG’s profit for the three months to March was 170 billion yen, compared to a loss of 56.1 billion yen in the same period last year, according to Reuters calculations based on the bank’s statement.

Japanese banks have seen an increase in loans as companies rushed to borrow amid the COVID-19 pandemic, while low interest rates and a declining population have eroded their profits. Bank loans in Japan increased 4.8% in April compared to the previous year, according to the Bank of Japan.

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MUFG, which owns about 20% of Wall Street bank Morgan Stanley, recorded 515.5 billion yen in credit-related costs in the last financial year, up from the 500 billion yen initially expected.

In the current business year ending in March 2022, the lender expects 850 billion yen in net revenue compared to an estimated 733 billion yen from eight analysts and predicts 350 billion yen in credit-related costs.

Smaller rivals Sumitomo Mitsui Financial Group Inc and Mizuho Financial Group Inc last week predicted a drop in credit-related costs this year, due to expectations that the economy will recover as vaccination continues.

($ 1 = 109,2200 yen)

(Reporting by Takashi Umekawa; Editing by Louise Heavens and; Muralikumar Anantharaman)

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