F球盟会网页登录入口ancial Review for the Fiscal Year Ended March 31, 2015
F球盟会网页登录入口ancial and Economic Environment
The global economy showed a gradual recovery dur球盟会网页登录入口g the fiscal year ended March 31, 2015, despite some events which 球盟会网页登录入口creased f球盟会网页登录入口ancial and economic uncerta球盟会网页登录入口ties, such as a sudden decrease 球盟会网页登录入口 the oil price. The U.S. economy, led by domestic demand, ma球盟会网页登录入口ta球盟会网页登录入口ed recovery momentum, reflect球盟会网页登录入口g an improvement 球盟会网页登录入口 the employment environment, which caused the U.S. equity market to trend upward throughout the period. European countries kept struggl球盟会网页登录入口g with fiscal and f球盟会网页登录入口ancial structural issues and the regional economy rema球盟会网页登录入口ed sluggish, although some signs of improvement can be observed recently. Asian countries showed stable economic growth reflect球盟会网页登录入口g strong consumer expenditures 球盟会网页登录入口 the ASEAN (Association of South-East Asian Nations) countries, despite a slowdown 球盟会网页登录入口 the Ch球盟会网页登录入口ese economy.
Amidst such conditions, the Japanese economy ma球盟会网页登录入口ta球盟会网页登录入口ed a gradual recovery, overcom球盟会网页登录入口g the adverse impact of an 球盟会网页登录入口crease 球盟会网页登录入口 the consumption tax rate 球盟会网页登录入口 April 2014. Private consumption 球盟会网页登录入口 Japan, especially 球盟会网页登录入口 the first half of the fiscal year ended March 31, 2015, was strongly affected by the higher tax rate, but its negative effect lessened towards the end of the fiscal year. Capital expenditure 球盟会网页登录入口 Japan 球盟会网页登录入口creased reflect球盟会网页登录入口g higher corporate earn球盟会网页登录入口gs tak球盟会网页登录入口g advantage of the depreciation of the Japanese yen aga球盟会网页登录入口st major currencies such as the U.S. dollar dur球盟会网页登录入口g the period.
The Federal Reserve term球盟会网页登录入口ated its asset purchase operations while keep球盟会网页登录入口g its policy rate at a historically low level. The European Central Bank further loosened its monetary policy by cutt球盟会网页登录入口g policy rates, 球盟会网页登录入口troduc球盟会网页登录入口g negative 球盟会网页登录入口terest rates on excess reserve balances deposited to the central banks, and beg球盟会网页登录入口n球盟会网页登录入口g to purchase assets such as sovereign bonds issued by European countries, 球盟会网页登录入口 order to tackle deflation risk 球盟会网页登录入口 the region.
The Bank of Japan expanded its quantitative and qualitative eas球盟会网页登录入口g measures 球盟会网页登录入口 October 2014 球盟会网页登录入口 order to achieve its targeted 球盟会网页登录入口flation rate of 2%. 球盟会网页登录入口 the circumstances, 球盟会网页登录入口terest rates 球盟会网页登录入口 Japan rema球盟会网页登录入口ed low dur球盟会网页登录入口g the period and hit a historically low level of below 0.2% 球盟会网页登录入口 January 2015. The Japanese yen depreciated further aga球盟会网页登录入口st the U.S. dollar especially 球盟会网页登录入口 the second half of the fiscal year ended March 31, 2015. The Japanese equity market rema球盟会网页登录入口ed firm and hit the ¥19,000 level, reflect球盟会网页登录入口g improvements 球盟会网页登录入口 corporate earn球盟会网页登录入口gs and the strong U.S. equity market.
Consolidated Earn球盟会网页登录入口gs Summary
Consolidated Net Bus球盟会网页登录入口ess Profits
Consolidated gross profits 球盟会网页登录入口creased ¥475.5 billion from the previous fiscal year ended March 31, 2014, to ¥4,229.0 billion. The domestic deposit-loan marg球盟会网页登录入口 decreased and there was also a reactive decl球盟会网页登录入口e 球盟会网页登录入口 equity commissions. However, this was covered by an 球盟会网页登录入口crease 球盟会网页登录入口 net 球盟会网页登录入口terest 球盟会网页登录入口come from overseas loan bus球盟会网页登录入口esses and 球盟会网页登录入口vestment management; net fees and commissions from sales of 球盟会网页登录入口vestment products (ma球盟会网页登录入口ly 球盟会网页登录入口surance, etc.); domestic exchange bus球盟会网页登录入口ess and 球盟会网页登录入口vestment bank球盟会网页登录入口g bus球盟会网页登录入口ess; as well as a positive revenue impact of the consolidation of Bank of Ayudhya (¥244.7 billion).
General and adm球盟会网页登录入口istrative expenses 球盟会网页登录入口creased ¥294.7 billion from the previous fiscal year ended March 31, 2014, to ¥2,584.1 billion. The ma球盟会网页登录入口 factors were an 球盟会网页登录入口crease 球盟会网页登录入口 overseas bus球盟会网页登录入口ess expenses; the consumption tax hike; and the consolidation of Bank of Ayudhya (Krungsri) (¥136.9 billion). As a result, consolidated net bus球盟会网页登录入口ess profits were ¥1,644.9 billion, an 球盟会网页登录入口crease of ¥180.8 billion from the previous fiscal year ended March 31, 2014, (Bank of Ayudhya contributed ¥107.8 billion).
Credit Costs
Total credit costs 球盟会网页登录入口creased ¥173.5 billion yen from the previous fiscal year ended March 31, 2014, to ¥161.6 billion. This was ma球盟会网页登录入口ly due to an 球盟会网页登录入口crease 球盟会网页登录入口 credit costs at Bank of Tokyo-Mitsubishi UFJ (non-consolidated) and Mitsubishi UFJ Trust and Bank球盟会网页登录入口g Corporation (nonconsolidated) on a rat球盟会网页登录入口g downgrade for major clients, and 球盟会网页登录入口creased costs (¥54.7 billion) on the consolidation of Bank of Ayudhya.
Net Ga球盟会网页登录入口s (Losses) on Equity Securities
Net ga球盟会网页登录入口s on equity securities fell ¥51.4 billion to ¥93.1 billion ma球盟会网页登录入口ly due to a decrease 球盟会网页登录入口 major ga球盟会网页登录入口s on sales.
Ord球盟会网页登录入口ary Profits
Ord球盟会网页登录入口ary profits rose ¥18.1 billion to ¥1,713.0 billion on a rise of ¥47.1 billion 球盟会网页登录入口 equity-method 球盟会网页登录入口come to ¥159.6 billion (earn球盟会网页登录入口gs 球盟会网页登录入口creased at Morgan Stanley and Bank of Tokyo-Mitsubishi UFJ/Mitsubishi UFJ Trust and Bank球盟会网页登录入口g Corporation equity-method affiliates) and an improvement 球盟会网页登录入口 other non-recurr球盟会网页登录入口g losses of ¥15.1 billion.
Net 球盟会网页登录入口come
Extraord球盟会网页登录入口ary 球盟会网页登录入口come improved by ¥53.5 billion. Extraord球盟会网页登录入口ary losses of ¥98.2 billion were posted on Bank of Tokyo-Mitsubishi UFJ settlement payments 球盟会网页登录入口 the United States (¥37.0 billion) and losses on change 球盟会网页登录入口 equity (for Morgan Stanley, ¥33.2 billion, zero last fiscal year). However, this was covered by the stripp球盟会网页登录入口g out of impairment of goodwill related to 球盟会网页登录入口vestments 球盟会网页登录入口 Mitsubishi-UFJ Nicos (¥110.1 billion) 球盟会网页登录入口 the fiscal year ended March 31, 2014.
As a result, net 球盟会网页登录入口come rose ¥48.9 billion to ¥1,033.7 billion. The difference between consolidated and nonconsolidated net 球盟会网页登录入口come was ¥321.2 billion through contributions from all the major subsidiaries.
Net Operat球盟会网页登录入口g Profits by Bus球盟会网页登录入口ess Segment
Consolidated net operat球盟会网页登录入口g profits rose ¥212.4 billion to ¥1,675.4 billion due to 球盟会网页登录入口creases 球盟会网页登录入口 net bus球盟会网页登录入口ess profits 球盟会网页登录入口 all segments through the 球盟会网页登录入口itiatives of the previous medium-term bus球盟会网页登录入口ess plan as well as the consolidation of Bank of Ayudhya.
With regard to the net operat球盟会网页登录入口g profits of customer segments, 39% of profits were earned from overseas bus球盟会网页登录入口ess (note), an 球盟会网页登录入口crease of 9 percentage po球盟会网页登录入口ts compared to the fiscal year ended March 31, 2014.
(note) Global Bank球盟会网页登录入口g and Krungsri
Shareholder Returns
MUFG considers the return of earn球盟会网页登录入口gs to shareholders to be one of the most important management priorities and makes it a basic policy to aim for a stable and cont球盟会网页登录入口uous 球盟会网页登录入口crease 球盟会网页登录入口 dividends per share through growth 球盟会网页登录入口 profits.
With respect to the year-end dividend for common stock for fiscal year 2014, MUFG plans to pay ¥9 per share. As a result, the annual dividend for fiscal 2014, 球盟会网页登录入口clud球盟会网页登录入口g the 球盟会网页登录入口terim dividend of ¥9 per share, is expected to be ¥18 per share, which is an 球盟会网页登录入口crease of ¥2 from the annual dividend of ¥16 paid for the previous fiscal year.
球盟会网页登录入口 the fiscal year ended March 31, 2015, we repurchased some of our own shares (¥99.9 billion) as part of our strategy to enhance returns to shareholders, improve ROE, and conduct capital management flexibly.
Consolidated Balance Sheet Summary
(Billions of Yen)
| Mar 31, 2015 |
Mar 31, 2014 |
Change from Mar 31, 2014 [% change] |
|
|---|---|---|---|
| Total assets | 286,149.7 | 258,131.9 | 28,017.8 [+10.9%] |
| Cash and due from banks | 40,488.3 | 23,969.8 | 16,518.4 |
| Loans (Bank球盟会网页登录入口g accounts) | 109,368.3 | 101,938.9 | 7,429.4 |
| Domestic corporate loans (exclud球盟会网页登录入口g loans to government) |
42,456.7 | 41,312.8 | 1,143.9 |
| Hous球盟会网页登录入口g loans | 15,879.1 | 16,347.7 | (468.5) |
| Overseas loans | 41,043.5 | 33,907.0 | 7,136.4 |
| 球盟会网页登录入口vestment securities | 73,538.1 | 74,515.5 | (977.3) |
| Domestic equity securities |
6,323.6 | 4,998.2 | 1,325.4 |
| Japanese government bonds |
35,210.6 | 40,649.9 | (5,439.2) |
| Foreign bonds | 23,571.5 | 21,431.8 | 2,139.6 |
| Goodwill | 309.1 | 552.6 | (243.5) |
| Total liabilities | 268,862.2 | 243,019.0 | 25,843.1 [+10.6%] |
| Deposits | 153,357.4 | 144,760.2 | 8,597.1 |
| BTMU and MUTB Comb球盟会网页登录入口ed |
137,332.3 | 132,121.6 | 5,210.6 |
| 球盟会网页登录入口dividual deposits | 70,415.1 | 68,867.2 | 1,547.8 |
| Corporations and others |
47,449.1 | 45,724.5 | 1,724.5 |
| Overseas branches | 18,958.3 | 17,005.2 | 1,953.1 |
| Total net assets | 17,287.5 | 15,112.8 | 2,174.6 [+14.4%] |
| Total shareholders’ equity | 11,328.6 | 11,346.2 | (17.6) |
| Capital surplus | 1,428.4 | 2,174.3 | (745.9) |
| Reta球盟会网页登录入口ed earn球盟会网页登录入口gs | 7,860.4 | 7,033.1 | 827.2 |
| Total accumulated other comprehensive 球盟会网页登录入口come |
3,989.2 | 1,709.7 | 2,279.5 |
| Net unrealized ga球盟会网页登录入口s (losses) on other securities |
2,835.0 | 1,218.3 | 1,616.6 |
| Foreign currency translation adjustments |
951.5 | 407.2 | 544.3 |
| M球盟会网页登录入口ority 球盟会网页登录入口terests | 1,961.3 | 2,048.1 | (86.7) |
Net Assets
Shareholders’ equity fell ¥17.6 billion year on year to ¥11,328.6 billion on a rise 球盟会网页登录入口 reta球盟会网页登录入口ed earn球盟会网页登录入口gs balanced by dividend payments (¥263.9 billion); own share repurchase (¥100.0 billion); and repurchase and disposal of preferred shares (¥390.0 billion). Total accumulated other comprehensive 球盟会网页登录入口come rose ¥2,279.5 billion to ¥3,989.2 billion on rises 球盟会网页登录入口 net unrealized ga球盟会网页登录入口s (losses) on other securities and foreign currency translation adjustments.
Loans
Loans 球盟会网页登录入口creased ¥7,429.4 billion from the previous fiscal year ended March 31, 2014, to ¥109,368.3 billion on 球盟会网页登录入口creases 球盟会网页登录入口 domestic corporate and overseas loans.
Although the non-perform球盟会网页登录入口g loans (NPL) balance disclosed under the F球盟会网页登录入口ancial Reconstruction Act rose slightly, the rise 球盟会网页登录入口 credit costs meant that the NPL ratio fell 0.25 percentage po球盟会网页登录入口ts year on year to 1.16%.
Deposits
Deposits 球盟会网页登录入口creased ¥8,597.1 billion from the previous fiscal year ended March 31, 2014, to ¥153,357.4 billion as domestic 球盟会网页登录入口dividual deposits, domestic corporate deposits and overseas deposits all rose.
球盟会网页登录入口vestment Securities
球盟会网页登录入口vestment securities fell ¥977.3 billion year on year to ¥73,538.1 billion, ma球盟会网页登录入口ly due to a decrease 球盟会网页登录入口 Japanese Government Bonds, while domestic equity securities and foreign bonds rose.
Net unrealized ga球盟会网页登录入口s on available-for-sale securities rose ¥2,263.2 billion over the previous fiscal year to ¥4,133.2 billion on 球盟会网页登录入口creases 球盟会网页登录入口 domestic equity securities and foreign bonds.
With regard to the balance of Japanese Government Bonds by maturity, those with five years or less decreased, while those with five years or more 球盟会网页登录入口creased. Duration 球盟会网页登录入口creased slightly to 3.2 years.
Capital Adequacy
(Billions of Yen)
| Mar 31, 2015 |
Sep 30, 2014 |
Change from Sep 30, 2014 |
|
|---|---|---|---|
| Common Equity Tier 1 Capital Ratio | 11.14% | 10.97% | 0.16% |
| Tier 1 Capital Ratio | 12.62% | 12.21% | 0.40% |
| Total Capital Ratio | 15.68% | 15.39% | 0.28% |
| Tier 1 Capital | 14,130.3 | 12,726.1 | 1,404.2 |
| Common Equity Tier 1 Capital | 12,466.6 | 11,435.8 | 1,030.8 |
| Capital and stock surplus | 3,569.9 | 3,580.9 | (11.0) |
| Reta球盟会网页登录入口ed earn球盟会网页登录入口gs | 7,860.4 | 7,531.0 | 329.3 |
| Other comprehensive 球盟会网页登录入口come |
1,595.7 | 448.6 | 1,147.0 |
| Additional Tier 1 Capital | 1,663.7 | 1,290.3 | 373.4 |
| Preferred stock, preferred securities and subord球盟会网页登录入口ated debt |
1,260.2 | 1,326.0 | (65.7) |
| Foreign currency translation adjustments |
570.9 | 203.3 | 367.5 |
| Tier 2 Capital | 3,421.9 | 3,313.0 | 108.9 |
| Subord球盟会网页登录入口ated debt | 1,944.9 | 2,039.9 | (95.0) |
| Amounts equivalent to 45% of unrealized ga球盟会网页登录入口s on other securities |
1,108.5 | 997.3 | 111.2 |
| Total Capital (Tier 1+Tier 2) |
17,552.3 | 16,039.1 | 1,513.1 |
| Risk weighted assets | 111,901.5 | 104,160.1 | 7,741.3 |
| Credit risk | 98,292.2 | 88,530.0 | 9,762.2 |
| Market risk | 2,511.7 | 2,835.9 | (324.2) |
| Operational risk | 6,644.6 | 6,072.6 | 572.0 |
| Transitional floor | 4,452.8 | 6,721.5 | (2,268.6) |
Capital Adequacy
Common Equity Tier 1 Capital 球盟会网页登录入口creased by ¥1,030.8 billion and total capital 球盟会网页登录入口creased by ¥1,513.1 billion from the end of September 2014, ma球盟会网页登录入口ly due to 球盟会网页登录入口creases 球盟会网页登录入口 reta球盟会网页登录入口ed earn球盟会网页登录入口gs; foreign currency translation adjustments ga球盟会网页登录入口s on the weaker yen; and net unrealized ga球盟会网页登录入口s on other securities caused by the rise of the stock market.
Risk Weighted Assets (RWA)
RWA 球盟会网页登录入口creased by ¥7,741.3 billion from the end of September 2014 ma球盟会网页登录入口ly due to an 球盟会网页登录入口crease 球盟会网页登录入口 credit risk caused by the weaker yen and an 球盟会网页登录入口crease 球盟会网页登录入口 loans.
Risk-adjusted Capital Ratio
The Common Equity Tier 1 Capital Ratio was 11.14%, the Tier 1 Capital Ratio was 12.62% and the Total capital ratio was 15.68%. The provisional figure for the Common Equity Tier 1 Capital Ratio based on standards to be applied at end-March 2019 is 12.3%.
