Message from Management
Thank you for visiting MUFG’s website. I would like to outline MUFG’s business results for fiscal 2015, and explain how we will pursue sustainable growth going forward.
Fiscal 2015 business results
In the year to March 2016 the low interest rate environment continued and the yen strengthened, while from the latter half of the fiscal year the market environment became unstable. Reflecting these influences MUFG’s income from loans and deposits in Japan and overseas declined, while sales of investment products were subdued, resulting in gross profits of 4,143.2 billion yen, a year-on-year decline of 85.8 billion yen. Operating expenses were held broadly in line with the previous fiscal year as our efforts to control costs allowed us to offset increases in overseas regulatory compliance expenses and other areas. As a result, net business profits declined by 87.0 billion yen to 1,557.9 billion yen.
Total credit-related expenses increased by 93.5 billion yen to 255.1 billion yen, mainly related to large single company credits and declines in natural resource and energy prices. As a result, ordinary profits declined by 173.5 billion yen to 1,539.4 billion yen and profits attributable to owners of the parent declined by 82.3 billion yen to 951.4 billion yen.
Regarding our capital ratios, which are an indicator of our financial soundness, MUFG’s common equity Tier 1 ratio was 11.63% at the end of March 2016, maintaining a fully adequate level in terms of current financial regulatory requirements. Meanwhile, our NPL ratio continued to remain at a low level of 1.45%, an increase of 0.04 percentage points compared to the end of the previous fiscal year. Based on these results, as forecast, a final dividend of 9 yen per share will be paid, which together with the interim dividend of 9 yen per share makes a total fiscal 2015 dividend per share of 18 yen. Also, following on from the interim period share repurchase, MUFG has decided to implement a further share repurchase up to a maximum of 100 billion yen.
Progress of Medium-term Business Plan
Fiscal 2015 was the first year of MUFG’s medium-term business plan that commenced in April last year. Based on three strategic focuses-Customer Perspective, Group-driven Approach, and Productivity Improvements-we are transforming our business model in pursuit of sustained growth and enhanced productivity. In MUFG’s Retail and Corporate businesses we have further strengthened the collaboration framework between our banking and securities businesses and have already successfully grown our share of underwriting and of sales for large equity listings in Japan. Overseas, we invested in an approximately 20% stake in Security Bank in the Philippines, where continued strong economic growth is expected.
Towards sustained growth
MUFG’s operating environment is now more difficult than at the time we announced our medium-term business plan, affected by factors such as the slowdown in the growth of emerging economies impacted by slower growth in China, and the introduction of negative interest rates by the Bank of Japan. In order to deal effectively with this environment, we intend to fully activate MUFG’s strengths as a comprehensive group and further expand our business base and diversify our income sources by delivering proposals and services that accurately match customer needs. Further, while effectively utilizing Group resources we will steadily implement a range of measures to raise productivity, including cost reductions.
In pursuit of sustained growth, we are determined to transform MUFG and thereby to raise corporate value, and we look forward to your continued support.
President & Group CEO