Message from Management
Thank you for visiting MUFG's website. I would like to outline MUFG’s business results for the first half of fiscal 2014, and explain our business strategy.
MUFG’s consolidated net income for the first half of fiscal 2014 was 578.7 billion yen representing 60.9% of our full year target of 950.0 billion yen.
In our domestic business for individual customers investment product sales were flat, reflecting a subdued trend in the stock market compared to the previous year. However, the number of NISA accounts and customer assets each showed strong growth, which demonstrates strengthened our business platform and should lead to further growth in customer business in the future.
In domestic corporate business, while the low interest rate environment continued, investment banking profits including M&A financing fees and related income was strong. And although the economic outlook is somewhat clouded by the negative effects of factors such as the increase in the consumption tax rate, corporate lending is gradually increasing as we capture lending opportunities.
Overseas, in some areas the environment for MUFG businesses has been tough, affected by sources of instability including increasing political risk in Ukraine and the Middle East, stagnation in the European economy and slower growth in Asia. However, overall profit from our overseas businesses increased, thanks to a strong performance in the Americas driven by a recovering economy and the contribution to profits from Bank of Ayudhya, which became MUFG’s subsidiary in 2013.
From the perspective of financial health, MUFG achieved common equity Tier 1 ratio of 10.97%, which is fully adequate with respect to current financial regulations. Our non-performing loan ratio also remained at a low level of 1.18% reflecting appropriate credit management and the improvement in business results at companies in Japan.
In light of these strong results, we have decided to increase our fiscal 2014 dividend by 1 yen for both the interim dividend and the term-end forecast dividend compared to initial forecasts, making a dividend of 18 yen for the full year (a year on year increase of 2 yen). We also decided to conduct up to 100.0 billion yen of share repurchases. We will aim to further improve our capital efficiency and enhance shareholder returns.
This fiscal year marks the final year of our three year medium-term business plan, and the Group will advance to achieve the plan’s targets in the second half of the fiscal year. Hitherto MUFG has worked to achieve sustained growth by strengthening its business platform both in Japan and overseas. In Japan we have deployed a wide range of products and services that aim to help individuals steadily build their financial assets and to generate lending demand of corporations as we seek to contribute to the revitalization of Japan’s economy from a financial perspective. As a result, we have achieved some progress in areas such as the aforementioned number of NISA accounts and corporate lending balances. By working to strengthen our business base and providing even higher quality service to our customers, we aim for further growth in MUFG’s profits.
Overseas, Bank of Tokyo-Mitsubishi UFJ’s Bangkok Branch and the Bank of Ayudhya are scheduled to merge in January 2015. We will strive to achieve a successful integration, expand our unique range of products and services, and realize integration synergies.
Recently the importance of companies’ communication with shareholders and investors to help achieve sustained corporate growth, together with a focus on corporate governance, have been attracting attention. MUFG has introduced external directors, established a Governance Committee and has been improving its proactive disclosure. Looking ahead, we will work to achieve sustained growth in MUFG’s corporate value through strengthening our business capabilities, enhancing disclosure, and further developing our governance system.
MUFG will continue to actively endeavour to meet the expectations of its stakeholders and reward their trust by aiming to be the world's most trusted financial group. Thank you for your continued support and goodwill.
President & CEO