Global Markets Business

We promote market-related business (bonds, forex, equities, derivatives) and are responsible for Asset Liability Management (ALM) (note).

(note) ALM: Integrated management of liquidity risk and interest rate risk inherent in assets (loans, etc.) and liabilities (deposits, etc.)

Naoto Hirota Senior Managing Executive Officer Group Head, Global Markets Business Group

Our target is the creation of new synergies through the integrated MUFG Group and we aim to provide services that exceed customer expectations.

Naoto Hirota

Senior Managing Executive Officer

Group Head, Global Markets Business Group

Fiscal 2014 Earnings Summary

Gross Profits ¥609.4 billion up 8% Net Operating Profits ¥418.1 billion up 8%

Gross profits rose 8% year on year (¥46.2 billion) to ¥609.4 billion. Net operating profits were up 8% year on year (¥31.4 billion) to ¥418.1 billion. Net interest income on bonds fell given the prolonged period of low interest rates; however, this was more than covered by securities trading profits amid high stock prices and low interest rates, and also by robust performance in sales and trading as the yen depreciated and stocks rose from summer.

Gross Profits and Net Operating Profits

ALM

Net Interest Income Down but Investment Management Revenues Strong

Interest rates trended low in fiscal 2014 in Japan, Europe and the United States on additional monetary easing by BOJ, the falling oil price and the Greek crisis. As a result, the contraction in long-short spreads caused a decline in net interest income. On the other hand, equity trading profits were strong on the buoyant stock market and investment management revenues reached the highest level since MUFG’s establishment. The market valuation of bonds also improved on lower interest rates, bringing some unrealized gains.

Yen and US Dollar Interest Rate Trend Unrealized Gains or Losses on JGB and Foreign Bonds Available for Sale

Sales and Trading

Revenue Rising for Three Consecutive Years

Volatility was extremely low in the first half of fiscal 2014 on concerns over a potential hike in the United States Federal Fund Target Rate and various geopolitical risks such as Ukraine. However, customer transaction volume picked up from summer onward as the yen depreciated and on movement in various markets. Sales and trading revenues therefore rose.

Sales and Trading Gross Profits

TOPICS

Top J-MONEY Ranking for Ninth Consecutive Year

As a result of positive feedback from customers, Bank of Tokyo-Mitsubishi UFJ was ranked first overall for the ninth consecutive year in the financial magazine J-MONEY’s survey of the Tokyo forex market.

Our Long-Term Vision

Development of Optimal Group-Wide Formation of Market Operations; Enhancing MUFG’s Brand Presence

Business Environment MUFG Strategy

Projected Business Environment and Management Strategy

With economic growth and corporate activity picking up, especially in Asia, we expect to see an increase in crossborder commercial and money flows. Since the 2008 financial crisis, financial regulations on risk management have become tighter. At the same time, higher compliance standards are required for markets business. Accordingly, companies are placing greater emphasis on personnel and system infrastructure to meet these regulations and standards.
In this environment, MUFG’s Group-wide ALM is establishing the control systems necessary for a Global Systemically Important Financial Institution (G-SIFI). We pursue Group-wide management of Bank of Tokyo- Mitsubishi UFJ and the domestic and overseas securities subsidiaries under Mitsubishi UFJ Securities Holdings with a view to strengthening our sales and trading business. We are also working to enhance MUFG’s brand presence, especially in the domestic and Asian markets.

Asian economic growth→Expansion of cross-border commercial and money flows

Medium-Term Business Plan (Fiscal 2015-2017)

We are pursuing the following strategy, in line with the basic policies below:

  1. 1. Strengthen sales and trading business
  2. 2. More sophisticated balance sheet management
  3. 3. Build system infrastructure to comply with regulations and enhance operational efficiency
Sales and Trading Gross Profits

Strategy Focus

Group-wide management of Bank of Tokyo-Mitsubishi UFJ and Mitsubishi UFJ Securities Holdings’ sales and trading business
Review of ALM management stance
Strengthen Group-wide risk management; respond to global financial regulations
Construct Group-wide market-related core systems

FOCUS

Enhancing the MUFG brand

We aim for more competitive pricing and more attractive products and solutions for our customers as we integrate our forex and interest rate transaction flows and coordinate banking and securities functions. Meeting the needs and gaining the confidence of customers who range from corporations to institutional investors, we are working to enhance the penetration of the MUFG brand in global markets.

Enhancing the MUFG brand

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