Message from Management
First of all, I would like to begin by extending my deepest gratitude for your ongoing support of our operations. Let me explain our performance results for the first half of fiscal 2017 and future initiatives.
Performance Results for the First Half of Fiscal 2017
During the first half of the fiscal year ending March 31, 2018, domestic interest income declined due to a prolonged trend toward low interest rates. Due to the effect of the depreciation of the yen, however, gross profits totaled 2,008.1 billion yen, up 38.7 billion yen year on year. At the same time, general and administrative expenses rose 63.3 billion yen compared with the same period of the previous fiscal year. This was mainly attributable to increases in regulation-related costs for overseas operations and personnel expenses as well as the impact of foreign exchange rates. Consequently, net operating profits totaled 700.7 billion yen, down 24.6 billion yen year on year.
Making a net reversal, total credit costs improved 60.7 billion yen year on year, to 3.1 billion yen. Net gains on equity securities totaled 55.0 billion yen, up 10.9 billion yen. Taking these factors into account, ordinary profits stood at 864.0 billion yen, up 69.1 billion yen year on year, and profits attributable to owners of parent amounted to 626.9 billion yen, up 136.4 billion yen compared with the same period of the previous fiscal year.
As of September 30, 2017, MUFG's capital adequacy ratio (Common Equity Tier1 Capital ratio) was 12.14%. The non-performing loan (NPL) ratio, that is, the ratio of risk-monitored loans to total loans, stood at 1.26%, down 0.14 of a percentage point year on year.
Given these operating results, MUFG's fiscal 2017 interim cash dividends will be 9 yen per share, as was estimated at the beginning of the fiscal year. Moreover, MUFG will execute a share repurchase for the seventh consecutive semi-annual period, expending a total of 100.0 billion yen. Plans call for cancelling all of the shares acquired through the aforementioned repurchase, just as we did for the shares acquired through the previous repurchase conducted in May 2017.
Our Initiatives toward Sustainable Growth
MUFG aims to secure sustainable growth by enhancing profitability and productivity through the pursuit of future-oriented structural reforms. The MUFG Re-Imagining Strategy, announced in May 2017, is designed to help us achieve this aim through the pursuit of the following four pillars.
- (1) Strengthening our management approach based on customer- and business-based segments
- (2) Business transformation through the use of digital technology
- (3) Initiatives to improve productivity
- (4) Reorganization of MUFG group management structure
Since the announcement of this strategy, efforts have been under way to implement such concrete measures as the establishment of Japan Digital Design, Inc. (JDD) in October 2017, a move aimed at promoting business transformation through the use of digital technology. Founded upon the platform of the Innovation Lab, a former MUFG business unit, JDD is currently striving to develop innovative services and propose technologies that help reduce social cost by recruiting external engineers and collaborating with regional financial institutions. Furthermore, the Group is looking to reorganize the management structure, integrating corporate loan-related businesses of The Bank of Tokyo-Mitsubishi UFJ and Mitsubishi UFJ Trust and Banking in April 2018. As such, we will unceasingly carry out a number of structural reform measures to build a robust foundation for our upcoming medium-term business plan, which is projected to commence in April 2018.
We are committed to continuously moving forward toward becoming the world's most trusted financial group. Looking ahead, we ask for your continued support.
Director, President & Group CEO