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Mitsubishi UFJ Financial Group, Inc. MUFG reported fiscal 2023 (ended Mar 31, 2024) diluted earnings per share of ¥124.33. This compared favorably with the ¥90.41 reported in the year-ago quarter.
Its profits attributable to the owners of the parent for fiscal 2023 of ¥1.5 trillion ($10.4 billion) increased from ¥1.12 trillion reported in the prior-year quarter. The improvement was driven by a rise in customer unit revenues, a change in Morgan Stanley’s accounting period and the impact of the depreciation of the yen.
Increased gross profits, a rise in net fees and commissions, and net trading profits acted as tailwinds. Also, a rise in loan and deposit balances and a decline in General and administrative (G&A) expenses were positive. On the flip side, a decline in net interest income (NII) was an undermining factor.
Revenues & Gross Profits Improve, G&A Expenses Fall
Net revenues for fiscal 2023 were ¥4.8 trillion ($32.14 billion), up 5.7% year over year.
Gross profits (before credit costs for trust accounts) were ¥4.7 trillion ($31.88 billion), up 5.1% from the prior-year period. The improvement was mainly driven by a rise in net fees and commissions.
Results reflected a 15.5% year-over-year decline in NII, which came in at ¥2.5 trillion ($16.55 billion) during the reported period. Trust fees, along with net fees and commissions, totaled ¥1.8 trillion ($12.26 billion), up 7.4% year over year. Mitsubishi UFJ’s net trading profits (including net other operating profits) were ¥454 billion ($3.06 billion) against a loss of ¥100 billion recorded in the prior-year period.
MUFG’s total credit costs were negative ¥498 billion ($3.35 billion), down from negative ¥675 billion witnessed a year ago.
G&A expenses decreased marginally year over year to ¥2,889 billion ($19.46 billion).
The expense ratio was 61%, down from 64.5% in the prior-year period. A decrease in this ratio indicates a rise in profitability.
Balance Sheet Position Strong
As of Mar 31, 2024, Mitsubishi UFJ reported loans of ¥116.83 trillion ($771.75 billion), up 7% year over year. Deposits rose 4.9% to ¥224.04 trillion ($1.48 trillion).
Total assets were ¥403.7 trillion ($2.67 trillion), up 4.4% from Mar 31, 2023.
Capital Distribution Update
The company increased the forecast for dividend per common stock to ¥50 from ¥41 in fiscal 2023.
Our Viewpoint
MUFG has a robust business model and solid capital ratios. Its strong liquidity position supports its inorganic growth strategies. However, high costs are likely to hurt the bottom line in the near term.
