SUMITOMO MITSUI FINANCIAL GROUP, INC.

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Delayed Japan Exchange  -  08:18 2022-06-27 pm EDT
4084.00 JPY   +0.32%
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Japan's top lender MUFG expects profit fall after record year

05/16/2022 | 04:08am EDT

* Posts record annual profit

* Expects 12% drop in net profit this year

* To buy back 4.7% of own shares

TOKYO, May 16 (Reuters) - Japan's largest lender Mitsubishi UFJ Financial Group Inc (MUFG) said on Monday it expects a 12% drop in annual net profit due to market volatility and an uncertain economic outlook, after scoring a record profit for the previous year.

MUFG joins Sumitomo Mitsui Financial Group Inc (SMFG) and Mizuho Financial Group Inc, Japan's No. 2 and No. 3 lenders respectively, in offering cautious outlooks.

"The (business) environment will remain uncertain and tough," CEO Hironori Kamezawa told an earnings briefing, citing political risks and volatility in foreign exchange and interest rates.

"But we'll strive to become a company that can stably earn a profit of one trillion yen ($7.74 billion) or more in line with our midterm strategy," he said.

MUFG, which owns about 20% of Wall Street bank Morgan Stanley, said it expects one trillion yen in net income for the current business year, below analysts' average forecast of 1.06 trillion yen.

The banking group expects credit-related costs in Japan to dip, as corporate bankruptcies in Japan have remained low thanks to government subsidies.

"But we will closely watch how the situation in Russia and a weaker yen impact on companies," Kamezawa said.

For the previous year that ended in March 2022, MUFG posted a profit of 1.13 trillion yen, exceeding a previous record set seven years ago, thanks to the release of pandemic-related loan-loss provisions, gains in stock holdings and profits through its stake in Morgan Stanley.

However, the final quarter saw a 64.4% plunge in profit as MUFG set aside 140 billion yen to cover potential losses from its exposure to Russia.

That brought total Russian provisions by Japan's top three banking groups to 312 billion yen.

MUFG also said it would buy back up to 300 billion yen, or 4.7% of its own shares.

($1 = 129.2800 yen) (Reporting by Makiko Yamazaki; editing by Jason Neely and Susan Fenton)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
MITSUBISHI UFJ FINANCIAL GROUP, INC -0.08% 738 Delayed Quote.17.84%
MIZUHO FINANCIAL GROUP, INC. 0.00% 1536.5 Delayed Quote.4.48%
MORGAN STANLEY -0.49% 77.44 Delayed Quote.-20.72%
PSI 20 INDEX 0.41% 6054.94 Real-time Quote.8.28%
S&P 500 -0.30% 3900.11 Real-time Quote.-17.93%
SUMITOMO MITSUI FINANCIAL GROUP, INC. -0.92% 4084 Delayed Quote.4.21%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -0.51% 53.1 Delayed Quote.-28.47%
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Financials
Sales 2022 2 878 B 21 293 M 21 293 M
Net income 2022 689 B 5 099 M 5 099 M
Net Debt 2022 - - -
P/E ratio 2022 8,07x
Yield 2022 5,12%
Capitalization 5 581 B 41 292 M 41 292 M
Capi. / Sales 2022 1,94x
Capi. / Sales 2023 1,86x
Nbr of Employees 86 800
Free-Float 93,6%
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Last Close Price 4 071,00 JPY
Average target price 4 852,73 JPY
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Jun Ohta Executive President, CEO & Representative Director
Toru Nakashima Planning Manager
Takeshi Kunibe Chairman
Shoji Masuda Executive Officer
Tetsuro Imaeda Group Chief Compliance Officer