Message from Management
Thank you for visiting MUFG’s website. First of all, I would like to begin by extending my deepest gratitude for your ongoing support of our operations.
Performance Results for the First Half of Fiscal 2016
During the six months from April 1 to September 30, 2016, the global economy was less than robust, especially in emerging countries. In addition to the ongoing appreciation of the yen and a prolonged and widespread trend toward low interest rates around the world, the introduction of negative interest rate policy in Japan contributed to an ever harsher domestic operating environment. Reflecting the circumstances, net interest income from deposits and loans decreased in Japan and overseas, while investment product sales were stagnant. As a result, gross profits totaled 1,969.4 billion yen, down 139.7 billion yen year on year. General and administrative expenses decreased 44.9 billion yen year on year, thanks to the across-the-board cost reduction efforts and the impact of yen appreciation. Consequently, net operating profits totaled 725.4 billion yen, down 94.8 billion yen compared with the same period of the previous fiscal year.
Total credit costs were 57.6 billion yen, up 26.6 billion yen year on year. Taking these factors into account, profits attributable to owners of parent for the first half amounted to 490.5 billion yen, down 108.7 billion yen compared with the same period of the previous fiscal year.
As of September 30, 2016, MUFG’s capital adequacy ratio (Common Equity Tier1 Capital ratio) was 12.20%, maintaining the capital adequacy ratio required under current financial regulations. Although the non-performing loan (NPL) ratio, that is, the ratio of risk-monitored loans to total loans increased 0.01 percentage points to 1.47% compared with March 31, 2016, MUFG continued to maintain its NPL ratio at a low level.
Based on the aforementioned performance results, as forecast, MUFG will pay interim dividends of 9 yen per share for the six months ended September 30, 2016. Also, MUFG has decided to implement a share repurchase up to a maximum of 100 billion yen.
To Achieve Sustainable Growth
Looking at the outlook for the second half of fiscal 2016, MUFG anticipates the harsh business environment to prevail due to such factors as ongoing stagnation in the macro economy and market environments as well as continued ultra-low interest rates owing to the current negative interest rate policy. However, we are committed to realizing “Evolution and reform to achieve sustainable growth for MUFG” in line with our basic policy announced in the medium-term business plan. To that end, we are focusing on the customer perspective, taking a Group-driven approach and making productivity improvements. In these ways, we will expand our profit base by steadily promoting the transformation of our business model. For example, with regard to our approach to domestic individual customers, we will facilitate a shift from savings to asset building, assisting with customers’ medium- to long-term asset formation. For corporate customers, we employ MUFG’s comprehensive strengths to propose solutions with genuine value, helping them resolve management issues they’re confronting. We will also step up initiatives to boost fee and commission income mainly in countries overseas, with the aim of enhancing asset and capital efficiency. Moreover, we will fully leverage our Sales & Trading* business structure, the resources of which have recently been integrated within the commercial banking and securities units, to provide one-stop services with even higher quality. At the same time, we will push forward with exhaustive cost reduction efforts, placing strong emphasis on enhancing profitability and efficiency in our domestic and overseas operations. By doing so, we will achieve greater productivity.
As we have been doing since our inception, we will deal decisively with any adversity as it occurs and thus overcome the harsh operating environment now surrounding us. We are determined to continue taking on the challenge of transforming ourselves to be the world’s most trusted financial group. I sincerely ask for your continued support of our initiatives.
* Collective term for sales operations that provide financial products and solutions, such as foreign currency exchange and derivatives, as well as trading operations to trade market products on inter-bank markets or at exchanges
Director, President & Group CEO