Message from Management

On behalf of all our colleagues at MUFG, I wish to express our sincere gratitude for your ongoing support of our operations.

 

I’m pleased to report that MUFG recorded record-high gross profits in the fiscal year ended March 31, 2023 (“fiscal 2022”)—the second year of our Medium-Term Business Plan (“MTBP”). These results were due mainly to growth in net interest income from loans and deposits, on the back of overseas interest-rate hikes, and to an improvement in lending spread. Also, general and administrative (G&A) expenses, excluding the impact of yen depreciation and other extraordinary factors, trended down.

 

As a result, net operating profits—an indicator of the earning power of our mainstay operations—grew 377.5 billion yen year-on-year, to 1,594.2 billion yen. We have thus brought this indicator back to its level before the negative interest-rate policy was introduced. Profits attributable to owners of parent stood at 1,116.4 billion yen, virtually on par with the record high posted in the previous fiscal year. This was thanks to robust net operating profits despite the one-off recording of losses and expenses in connection with the sale of MUFG Union Bank (“MUB”). For two years in a row, we have met our MTBP target of earning profits attributable to owners of parent of 1 trillion yen or more, and have done so in a stable manner.

 

As announced previously, we will pay year-end dividends of 16 yen per share. Along with interim dividends, this will bring the amount of annual dividends to 32 yen per share, a year-on-year increase of 4 yen per share. We have also repurchased our own shares at a record-high expenditure of 450.0 billion yen. Our forecast for fiscal 2023 annual dividends is set at 41 yen per share, up 9 yen per share. This represents the largest annual increase in dividends in our history and is in line with our MTBP dividend payout ratio target of 40%.

 

We have positioned the current MTBP period as “3 years of new challenges and transformation.” As we aim to “Be the premier business partner that pioneers the future through the power of finance and digital services,” we are proceeding with various initiatives to help us perform to these standards. In fiscal 2022, for example, we chose to invest in several players in the digital finance field in Asia, including Home Credit, Akulaku, and DMI Finance, in line with our multilateral approach of seizing opportunities arising from growing financing needs in the region. We are also accelerating financing support extended to startups, through Mars Growth Capital, MUFG Ganesha Fund, and MUIP Garuda Fund.

 

In accord with our September 2021 announcement, we completed the sale of MUB and its transfer to U.S. Bancorp in September 2022, to help optimize our allocation of management resources. Looking ahead, we will focus our local management resources on wholesale business, an area of strength for MUFG. We will step up collaboration among the Bank, the Trust Bank, and the Securities, and continue enhancing our alliance with Morgan Stanley. In these and other ways, we will continue developing our operations in the Americas.

 

We have made major progress in initiatives to realize carbon neutrality. For example, we have formulated reduction targets for greenhouse gas (GHG) emissions from our financed portfolio, as well as GHG emissions from our own operations, with the ultimate goal of achieving net zero in both. We also continue disclosing results of our reduction efforts as they progress. 

Furthermore, we provide financing and various other supportive services to customers pursuing decarbonization, we play a proactive role in international rulemaking, and we share our insights on carbon neutrality by distributing them robustly through productive channels.

 

The current business environment remains harsh due to interest-rate hikes in Europe and the United States, and there are concerns that the bankruptcy of some overseas financial institutions may have a spillover effect on the real economy. Despite these and other negative factors, however, we are confident in our ability to accommodate a variety of customer needs, as our business models are resilient and diligently developed, both at home and abroad, through structural reforms and other measures.

 

In fiscal 2023, we will do our utmost to successfully conclude our current MTBP cycle and strive for a steady stream of solid outcomes from initiatives we have underway. We will take on new challenges in diverse areas and achieve our targets for profits attributable to owners of parent and ROE, which are set at record-high 1,300.0 billion yen and 7.5%, respectively.

 

We ask for your continued support.