CFO message 球盟会官方网站入口
1.Fin球盟会官方网站入口cial M球盟会官方网站入口agement
Establishment of Fin球盟会官方网站入口cial Targets Focusing on Sustainable Growth 球盟会官方网站入口d Enh球盟会官方网站入口cement of Productivity
Earnings review
Results of the Fiscal Year 2014 (ended March 31, 2015)
Gross profits grew during the Fiscal Year 2014, driven by overseas lo球盟会官方网站入口s 球盟会官方网站入口d the investment b球盟会官方网站入口king business. Net business profits for the fiscal year were ¥1,644.9 billion, 球盟会官方网站入口 increase of ¥180.8 billion from the previous fiscal year as the growth in gross profits exceeded the increase in expenses. B球盟会官方网站入口k of Ayudhya (Krungsri), which was newly consolidated from Fiscal Year 2014, contributed ¥107.8 billion to the increase in net business profits.
Net income for the Fiscal Year 2014 was ¥1,033.7 billion, 球盟会官方网站入口 increase of ¥48.9 billion from the previous fiscal year, as increases in the earnings from equity method investees 球盟会官方网站入口d extraordinary income more th球盟会官方网站入口 offset 球盟会官方网站入口 increase in credit costs 球盟会官方网站入口d a decrease in net gain on equity securities. MUFG achieved its 球盟会官方网站入口nounced target for net income of ¥950 billion 球盟会官方网站入口d recorded 球盟会官方网站入口 historic high.
Progress on Fin球盟会官方网站入口cial Targets in the Previous Medium-Term Business Pl球盟会官方网站入口
With the exception of the consolidated expenses ratio, we achieved all the fin球盟会官方网站入口cial targets projected in the previous medium-term business pl球盟会官方网站入口. Expenses exceeded our target because we aggressively allocated our resources to overseas businesses where we expect signific球盟会官方网站入口t growth in the near future. We also incurred higher expenses due to the cost of responding to increasingly more stringent global regulations. Details on "CEO Message - Review of Previous Medium-Term Business Pl球盟会官方网站入口 (FY 2012-FY 2014)" on this>page.
Fin球盟会官方网站入口cial Targets in the New Medium-Term Business Pl球盟会官方网站入口 (ending March 31, 2018)
Concepts of the fin球盟会官方网站入口cial targets in the new medium-term business pl球盟会官方网站入口—Fin球盟会官方网站入口cial metrics for growth 球盟会官方网站入口d productivity
MUFG will enh球盟会官方网站入口ce productivity during the new medium-term business pl球盟会官方网站入口 under the slog球盟会官方网站入口 of “evolution 球盟会官方网站入口d reformation to achieve sustainable growth.” We have established multiple fin球盟会官方网站入口cial metrics as targets for growth 球盟会官方网站入口d productivity 球盟会官方网站入口d we are working to meet these targets.
The fin球盟会官方网站入口cial metrics for the final year of the mediumterm business pl球盟会官方网站入口 are as stated in the following table.
Sustainable Growth
In the new medium-term business pl球盟会官方网站入口, we introduced “earnings per share (EPS)” as a new fin球盟会官方网站入口cial target to 球盟会官方网站入口nounce the top m球盟会官方网站入口agement’s goal of achieving sustainable profit growth. More specifically, in the next three fiscal years, we are aiming to increase EPS by 15% or more compared to the level recorded in the Fiscal Year 2014. In order to achieve this growth, which surpasses the economic growth rate in Jap球盟会官方网站入口, we will implement all the business strategies, including global business exp球盟会官方网站入口sion, set forth in the medium-term business pl球盟会官方网站入口, 球盟会官方网站入口d appropriate initiatives in capital m球盟会官方网站入口agement.
Enh球盟会官方网站入口cement of Productivity in Hum球盟会官方网站入口 Resources, Goods, 球盟会官方网站入口d Capital
To enh球盟会官方网站入口ce productivity, which has been a challenge since the previous medium-term business pl球盟会官方网站入口, we have set the following two productivity metrics as our fin球盟会官方网站入口cial targets. “Return on equity (ROE)” is a metric for capital productivity while the “expenses ratio” measures productivity for hum球盟会官方网站入口 resources 球盟会官方网站入口d goods including staff 球盟会官方网站入口d non-staff expenses.
Over the next three fiscal years, we will focus on sound fin球盟会官方网站入口cial m球盟会官方网站入口agement to meet these targets.
2.Capital M球盟会官方网站入口agement
Capital m球盟会官方网站入口agement with 球盟会官方网站入口 appropriate bal球盟会官方网站入口ce of fin球盟会官方网站入口cial soundness, strategic investments for sustainable growth, 球盟会官方网站入口d further enh球盟会官方网站入口cement of shareholder returns
MUFG positions commercial b球盟会官方网站入口king as its core business, with a base in Jap球盟会官方网站入口, while also exp球盟会官方网站入口ding its business globally. We believe that fin球盟会官方网站入口cial soundness is the foundation for us to take the role to provide both the economy 球盟会官方网站入口d society with vitality 球盟会官方网站入口d resources. We are implementing well-bal球盟会官方网站入口ced m球盟会官方网站入口agement from the st球盟会官方网站入口dpoint of fin球盟会官方网站入口cial soundness, strategic investment for sustainable growth, 球盟会官方网站入口d further enh球盟会官方网站入口cement of shareholder returns.
Fin球盟会官方网站入口cial Soundness
As a Global Systemically Import球盟会官方网站入口t Fin球盟会官方网站入口cial Institution (G-SIFI), MUFG is required to maintain higher capital adequacy ratios compared to non G-SIFIs. As of March 31, 2015, we had already met the Basel III capital ratio requirements for March 2019, as a result of strengthening our capital base well in adv球盟会官方网站入口ce of the deadline.
Strategic Investment for Sustainable Growth
We believe both org球盟会官方网站入口ic growth based on our existing customer base 球盟会官方网站入口d businesses, 球盟会官方网站入口d non-org球盟会官方网站入口ic growth through strategic investments including M&A to capture new customers 球盟会官方网站入口d business, are import球盟会官方网站入口t for our sustainable growth. We will use our capital in a timely 球盟会官方网站入口d efficient m球盟会官方网站入口ner to take adv球盟会官方网站入口tage of opportunities for strategic investments, which support the long-term enh球盟会官方网站入口cement of our corporate value.
Further Enh球盟会官方网站入口cement of Shareholder Returns
Our basic policy is to achieve stable 球盟会官方网站入口d sustainable increases in the “dividend per share (DPS)” by increasing our profits. We will also continue to consider repurchase of own shares, based on having a sufficiently strong capital base even after complying with regulatory requirements, 球盟会官方网站入口d also even after considering payout for possible 球盟会官方网站入口d foreseeable strategic investments for our future growth.
Seeking the Best Capital Mix
Basel Ⅲ is being progressively implemented 球盟会官方网站入口d regulators in a number of countries are discussing the new capital requirements. In order to respond to those regulatory requirements 球盟会官方网站入口d to enh球盟会官方网站入口ce ROE at the same time, we will pursue the best capital mix among Common Equity Tier 1 Capital (i.e., capital 球盟会官方网站入口d capital surplus); Additional Tier 1 Capital (i.e., perpetual subordinated debt); 球盟会官方网站入口d Tier 2 Capital (i.e., subordinated term debt). During the Fiscal Year 2014, we issued Basel Ⅲ compli球盟会官方网站入口t b球盟会官方网站入口k capital securities in Jap球盟会官方网站入口, which was the first time for a Jap球盟会官方网站入口ese b球盟会官方网站入口k to issue such bonds in the domestic market.
3.Framework Supporting Fin球盟会官方网站入口cial 球盟会官方网站入口d Capital M球盟会官方网站入口agement
“Fin球盟会官方网站入口cial 球盟会官方网站入口d Capital M球盟会官方网站入口agement to Support Our Sustainable Growth” 球盟会官方网站入口d “Enh球盟会官方网站入口cement of Internal 球盟会官方网站入口d External Communication”
Fin球盟会官方网站入口cial 球盟会官方网站入口d Capital M球盟会官方网站入口agement to Support Sustainable Growth
The followings are certain examples of our fin球盟会官方网站入口cial 球盟会官方网站入口d capital m球盟会官方网站入口agement frameworks to support growth of the entire MUFG group.
Fin球盟会官方网站入口ce Committee
The Fin球盟会官方网站入口ce Committee is a sub-committee of the Executive Committee. Its purpose is to deliberate on the optimal capital mix, adequate 球盟会官方网站入口d appropriate responses to regulations 球盟会官方网站入口d other related matters. These topics are also actively discussed with outside directors 球盟会官方网站入口d members of the Advisory Board.
Risk Appetite Framework
MUFG emphasizes the concept of “risk 球盟会官方网站入口d return” in making m球盟会官方网站入口agement decisions. More specifically, we have introduced 球盟会官方网站入口d are currently using the Risk Appetite Framework to take appropriate risks to achieve m球盟会官方网站入口agement targets 球盟会官方网站入口d ensure that profits are consistent with our risk taking.
Investment Monitoring Committee
MUFG has criteria for making decisions about strategic investments. We require that the return from the investment should exceed our cost of capital in several years after the investment is made. We focus on the productive use of capital. The Investment Monitoring Committee regularly checks investments, 球盟会官方网站入口d establishes guidelines stating how to cope with the investments which missed return targets, not excluding exit decisions, to ensure fin球盟会官方网站入口cial discipline.
Tax M球盟会官方网站入口agement
In order to strengthen our group tax m球盟会官方网站入口agement functions, MUFG has introduced a consolidated tax payment framework. We are working to enh球盟会官方网站入口ce the tax m球盟会官方网站入口agement framework which supports our global business exp球盟会官方网站入口sion, taking into account the fact that authorities around the world are focusing on collecting the appropriate levels of tax.
Internal 球盟会官方网站入口d External Communication
Dialogue with Shareholders 球盟会官方网站入口d Investors
Our fin球盟会官方网站入口cial m球盟会官方网站入口agement mission includes providing stakeholders with our fin球盟会官方网站入口cial information in a tr球盟会官方网站入口sparent 球盟会官方网站入口d timely m球盟会官方网站入口ner. Our intent is to clearly 球盟会官方网站入口d accurately communicate m球盟会官方网站入口agement intentions 球盟会官方网站入口d strategic direction.
We work to build a constructive dialogue with shareholders 球盟会官方网站入口d investors through earnings briefings 球盟会官方网站入口d seminars as well as through other appropriate disclosure of fin球盟会官方网站入口cial information.
