On behalf of my management team, I want to express our gratitude for your ongoing support of operations at MUFG, and to share our recent financial results.
For the first half of the fiscal year ending March 31, 2022 (“fiscal 2021”), profits attributable to owners of parent grew 380.6 billion yen year-on-year, to 781.4 billion yen. This growth is largely due to a stable increase in customer-segment revenues, the reversal of allowances for credit losses, and a greater contribution to profit by our investee Morgan Stanley. This result represents our highest first-half profit since MUFG was established, and is approximately 92% of our profit target (850.0 billion yen) for the entire fiscal year. In consideration of these results, we have revised our full-year target upward, to 1,050.0 billion yen.
In terms of financial-target indicators under the Medium-term Business Plan (MTBP), our ROE stood at 10.9%, while our Common Equity Tier 1 Capital Ratio – which represents financial soundness – came to 10.4% (finalized Basel III reforms basis, excluding net unrealized gains on available-for-sale securities).
We are focused on increasing shareholder returns by building on these robust operating results and our strong financial position. We have upwardly revised our forecast for year-end dividends by 1 yen per share from our initial forecast announced at the beginning of the fiscal year. This will bring our forecast for annual dividends to 28 yen per share, up 3 yen per share from the previous fiscal year. We will also execute share repurchases up to 150.0 billion yen.
Fiscal 2021 is the first year of this MTBP cycle, which we position as “three years of new challenges and transformation.” Looking back on the first six months of the MTBP, we are confident our progress is steady in regard to the plan’s three strategic pillars – Corporate Transformation, Strategies for Growth, and Structural Reforms.
Regarding the pillar of Corporate Transformation, we have pushed ahead with digital transformation, in collaboration with external partners; we have encouraged employees – through robust internal communication – to take the initiative on new challenges; and we are transitioning to “smart” workstyles, applying lessons from our recent dealings with the pandemic. These are among the ways we are adapting to changes in the external environment with flexibility and speed.
Regarding the pillars of Strategies for Growth and Structural Reforms, in September 2021 we announced our sale of MUFG Union Bank, a U.S.-based subsidiary, to U.S. Bancorp, a major bank in the United States. This decision was made with the perspective of optimally allocating our management resources, and we still consider the United States a key market region. Our local operations will focus on corporate transactions, a field where we can fully leverage the strength of MUFG. Simultaneously, we will pursue new opportunities for growth through a capital and business alliance with U.S. Bancorp.
To take action on our MUFG Carbon Neutrality Declaration, announced in May 2021, we are engaged in ongoing dialogue with our customers in a determined effort to support their decarbonization initiatives through finance activities.
We will continue to challenge the transformation by taking full advantage of MUFG’s comprehensive strengths, with the aim of serving our stated Purpose, Committed to empowering a brighter future. We ask for your continued support.
President & Group CEO