Questions regarding Results for the Nine Months Ended December 31, 2009
Q
Please outline MUFG's results for Nine Months Ended December 31, 2009.
A
Consolidated gross profits were 2,689.8 billion yen, up by 196.9 billion yen compared to the nine months ended December 31, 2008, mainly due to consolidation of the profits of ACOM, which became a consolidated subsidiary at the end of December 2008, as well as increase in domestic and overseas lending income and market-related income. General and administrative expenses decreased due to an intensive corporate-wide cost reduction and the effect of the system integration. As a result, consolidated net business profits were 1,125.8 billion yen, up by 205.9 billion yen compared to the nine months ended December 31, 2008. Total credit costs increased by 194.2 billion yen due to the consolidation of ACOM and increase in costs from our overseas subsidiary. Net losses on equity securities, on the other hand, improved significantly by 306.2 billion yen due to better stock market conditions. As a result, consolidated net income was 217.0 billion yen, up by 259.1 billion yen compared to the nine months ended December 31, 2008.
Q
Please outline the status of loans and deposits.
A
Loans at the end of December 2009 were 85.3 trillion yen, 2.6 trillion yen lower than at the end of September 2009, mainly due to exclusion of The Senshu Bank from consolidation. Deposits decreased by 2.9 trillion yen compared to the end of September 2009 to 119.1 trillion yen, due to lower deposits at overseas branches and exclusion of The Senshu Bank from consolidation, while individual deposits increased.
Q
What is the situation regarding NPLs?
A
The total balance of FRL (Financial Reconstruction Law) disclosed loans (the sum of BTMU and MUTB) were 1,339.0 billion yen at the end of December 2009, up 93.1 billion yen from the end of September 2009. The NPL ratio still remained at the low level of 1.48% up by 0.10 percentage points from the end of September 2009.
Q
Please explain the status of your investments in securitized products, and the effects of these on your profits.
A
The balance of our investments in securitized products at the end of December 2009 decreased by approximately 62 billion yen compared to the end of September 2009 to 1.92 trillion yen, mainly due to sales and redemptions. Net unrealized losses were 149 billion yen, an improvement of 57 billion yen compared to the end of September 2009. The effect on the P/L for the nine months ended December 2009 was limited to a loss of approximately 14 billion yen, mainly due to losses on sales etc.
Questions regarding Results for the interim period of the year to March 2010
Q
Please outline MUFG's results for the interim period of the year to March 2010.
A
Consolidated gross profits were 1,813.2 billion yen, up by 116.6 billion yen compared to the first half of the previous fiscal year, mainly due to strong growth in domestic and overseas lending income and market-related income, as well as consolidation of the profits of Acom, which became a consolidated subsidiary at the end of last year. Operating expenses were reduced by 11.2 billion yen to 1,061.4 billion yen as integration synergies were realized and we pursued group-wide cost reduction initiatives. As a result, consolidated net business profits were 751.7 billion yen, up 127.9 billion yen compared to the first half of the previous fiscal year.
Credit costs increased by 109.3 billion yen due to the consolidation of Acom, increased costs at subsidiaries and other factors, but better stock market conditions led to an improvement in equity-related gains of 88.6 billion yen. As a result, consolidated net income was 140.9 billion yen, up 48.9 billion yen compared to the first half of the previous fiscal year.
Q
Please outline the status of loans and deposits.
A
Loans at the end of September 2009 were 88.0 trillion yen, 4.0 trillion yen lower than at the end of March 2009, mainly due to a decrease in corporate loans as direct finance markets for corporate bonds and equities normalized. Deposits increased by 1.8 trillion yen compared to the end of March 2009 to 122.0 trillion yen, partly due to a large increase in deposits at overseas branches.
Q
What is the situation regarding NPLs?
A
The total balance of FRL (Financial Reconstruction Law) disclosed loans (the sum of BTMU and MUTB) was 1,245.9 billion yen as of the end of September 2009, up 55.9 billion yen from the end of March 2009. The NPL ratio remained at the low level of 1.38%, up by 0.13 percentage points from the end of March 2009.
Q
Please tell us about the status of capital ratios.
A
MUFG's consolidated BIS capital ratio increased to 13.29%, up by 1.52 percentage points, compared to the end of March 2009. The Tier 1 ratio also rose by 1.36 percentage point to 9.13%. The main reasons for the improvement were the issuance of preferred securities and others as well as net unrealized losses on investment securities turning to net gains, that resulted in an increase in capital of 1.47 trillion yen compared to the end of March 2009. The "Core Tier 1" ratio, calculated by dividing "Core Tier 1" capital (Tier 1 capital after deducting preferred stock and preferred securities) by risk assets, was 6.83%, a 1.06 percentage point improvement from the end of March 2009.
Q
What are your earnings and dividend forecasts for the year ending March 2010?
A
We are targeting consolidated net income of 300 billion yen for the year to March 2010. Regarding the dividend on common shares, the interim dividend will be 6 yen per share, as initially forecast. We forecast a year-end dividend of 6 yen per share, so our forecast dividend per share for the fiscal year is 12 yen per share.
Q
Please explain the status of your investments in securitized products, and the effects of these on your profits.
A
The balance of our investments in securitized products as of the end of September 2009 decreased by approximately 310 billion yen compared to the end of March 2009 to 1.98 trillion yen, mainly due to sales and redemptions. Net unrealized losses were 206 billion yen, an improvement of 178 billion yen compared to the end of March 2009. The effect on the P/L for the six months ended September 2009 was limited to a loss of approximately 16 billion yen, mainly due to losses on disposal of products.
We have a preeminent retail customer base of approximately 40 million deposit accounts and approximately 60 trillion yen in individual deposits (Bank + Trust Bank). We aim to further strengthen our asset management business, including sales of investment products such as investment trusts and insurance annuities, as well as life insurance products, following the expected lifting of the ban on sale of such products via banks. Furthermore, by promoting an internet/mobile strategy, we also aim to increase our business with customers other than those of our bank or trust bank.
Q
What is your domestic corporate business strategy?
A
We have the largest corporate customer base in Japan and a comprehensive operational base, including banking, trust and securities businesses. We will strive to respont do the needs of all our corporate customers, ranging from large, listed conpanies to small- and midium-sized companies. We will strengthen our investment banking business by forging even closer ties between the commercial bank and the securities company, leveraging the conversion of Mitsubishi UFJ Securities into a wholly owned subsidiary of MUFG.
Q
What is your overseas corporate business strategy?
A
Overseas business is a major strength of MUFG, which has Japan's leading overseas banking network with a total of 459 branches and offices in more than 40 countries. Leveraging this network, we aim to strengthen our Asia business and business with non-Japanese companies in Europe and the Americas. In addition, by pursuing an equity participation and alliance strategy using our capital strength, we aim for overseas business to comprise around 20% of net operating profit in the medium term.
Q
What is your trust assets business strategy?
A
In the trust assets business, we will respond to customers' diversifying and increasingly advanced needs with a combination of advanced expertise and capabilities. In the pensions business, we position speciality fund management as a strategic domain, and aim to further strengthen profitability by enhancing our product lineup and other measures. In the high growth sector of investment trust business, we will further increase the size of assets under management through business with the Group's broad retail customer base.
Please discuss your policies related to shareholder returns.
A
MUFG's position is that shareholder return is a key issue. Our basic policy is to strive to continue to increase dividends while pursuing continued improvements in our corporate value and maintaining fully adequate equity capital.
Please give me an outline of Mitsubishi UFJ Financial Group, Inc.
A
Mitsubishi UFJ Financial Group, Inc. is established on October 1, 2005 after management integration of Mitsubishi Tokyo Financial Group, Inc. and UFJ Holdings, Inc. Please see "About MUFG > Company Overview" for an outline of the company.
Q
Please tell me about your management message and philosophy.
MUFG is a "premier comprehensive financial group" with high competitiveness and a strong presence in core financial business areas such as banking, trust business, securities, asset management, credit cards, consumer finance, and leasing. In the domestic market, MUFG's network is well-balanced geographically between the Tokyo, Nagoya and Osaka metropolitan areas, while in overseas markets we have the No.1 global network among Japanese banking groups. Utilizing this network, MUFG will quickly respond to the diverse needs of customers ranging from individual customers and small- and medium-sized companies to large companies.
Q
What is your corporate governance system for enhancing transparency of management?
A
Based on a system that combines directors and corporate auditors, Mitsubishi UFJ Financial Group, Inc. (the holding company) is establishing a stable and effective corporate governance structure that will include the voluntary introduction of a committee system as well as incorporating external viewpoints. Please see "About MUFG > Corporate Governance" for details.
When does Mitsubishi UFJ Financial Group report its earnings?
A
In accordance with Japan's banking laws, MUFG's financial year ends on March 31. Our full year and half year earnings reports are normally released towards the end of May and November respectively. From fiscal 2004, we have been releasing a "Consolidated Financial Information for the first / third quarter." in accordance with the disclosure requirements of the Tokyo Stock Exchange. For our full-year, half-year and quarterly reports, please see "Investor Relations > Financial Information".
Q
What are the credit ratings for the companies belonging to MUFG?
Where are MUFG's shares listed? What is the stock code number for the shares?
A
In Japan, our shares are listed on the Tokyo Stock Exchange, the Osaka Stock Exchange and the Nagoya Stock Exchange. Overseas, we are listed on the New York Stock Exchange (Delisted from the London Stock Exchange on June 2, 2006). The stock code number is 8306 (Tokyo Stock Exchange).
