Mufg slides fy2011_q3_e

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Mufg slides fy2011_q3_e

  1. 1. Mitsubishi UFJ Financial GroupIR Presentation February, 2012
  2. 2. This document contains forward-looking statements in regard to forecasts, targets and plans of Mitsubishi UFJ Financial Group, Inc. (“MUFG”) and its group companies (collectively, “the group”). These forward-looking statements are based on information currently available to the group and are stated here on the basis of the outlook at the time that this document was produced. In addition, in producing these statements certain assumptions (premises) have been utilized. These statements and assumptions (premises) are subjective and may prove to be incorrect and may not be realized in the future. Underlying such circumstances are a large number of risks and uncertainties. Please see other disclosure and public filings made or will be made by MUFG and the other companies comprising the group, including the latest kessantanshin, financial reports, Japanese securities reports and annual reports, for additional information regarding such risks and uncertainties. The group has no obligation or intent to update any forward-looking statements contained in this document. In addition, information on companies and other entities outside the group that is recorded in this document has been obtained from publicly available information and other sources. The accuracy and appropriateness of that information has not been verified by the group and cannot be guaranteed. The financial information used in this document was prepared in accordance with accounting standards generally accepted in Japan, or Japanese GAAP.Definitions of figures used in this document Consolidated Mitsubishi UFJ Financial Group (consolidated) Non- Bank of Tokyo-Mitsubishi UFJ (non-consolidated) + Mitsubishi UFJ Trust and Banking consolidated Corporation (non-consolidated) (without any adjustments) Commercial bank Bank of Tokyo-Mitsubishi UFJ (consolidated) consolidated 1
  3. 3. Contents Promoting a growth strategy 20 Outline of FY2011 Q3 Results Global 21 Americas strategy 22FY2011 Q3 key points 4 Asia strategy (1)~(3) 23Income statement summary 5 Transaction banking business 26Outline of results by business segment 6 Project finance 27Balance sheet summary 7 Global strategic alliance with 28Loans / deposits 8 Morgan StanleyDomestic deposit / lending rates 9 Investment product sales 29Loan assets 10 Global asset management strategy 30Holdings of investment securities 11 Addressing key issues 31FY2011 financial targets 12 Maintain and improve operational 32 efficiency / Reduce equity holdings Maintain and enhance capital base 33 Future Growth Capital policy 34 Aims of MUFG 35Management policy 14Key points 15 AppendixDomestic and overseas lending 16Exposures in European peripheral 17countriesConsumer finance 18Mitsubishi UFJ Securities Holdings 19 2
  4. 4. Outline of FY2011 Q3 Results Future growth 3
  5. 5. FY2011 Q3 key points Breakdown of net income*1 Overview FY11 full - Q1-3 net income totaled ¥815.8 bn (¥bn) year targets 900.0 with Morgan Stanley negative goodwill of ¥290.6 bn Negative FY11 - The achievement rate of FY11 earnings goodwill Q1-3 290.6 815.8 target (¥900.0 bn) is 90.6% Non-consolidated - In addition to the increase in net gains on Others ACOM [31.3] sales of debt securities, net fees and 16.9 commissions, mainly from overseas lending, 500.0 MUN [33.8] MUSHD 19.0 was firm 4.0 [16.9] - Meanwhile, losses on write-down of equity [(14.3)] securities increased, and deferred tax MUTB declined due to revisions to the corporate consolidated tax structure 72.6 [7.1] Subsidiaries - MUSHD, MU NICOS and ACOM returned to profit after recording large losses in the BTMU previous fiscal year. UB also strong. As a consolidated 381.0 result, consolidated / non-consolidated [(104.0)] differences were ¥144.7 bn except Morgan Stanley negative goodwill 0 *1 The above figures take into consideration the percentage holding in each subsidiary (after-tax basis) and figures in brackets [] are the change compared to FY10 Q1-3. 4
  6. 6. Income statement summary (Consolidated) Income statement (¥bn) Net business profits (Consolidated) FY10 FY11 Q1-3 Change from FY10 Q1-3 Gross profits decreased mainly due to lower consumer-finance 1 Gross profits 3,522.5 2,646.6 (85.8) income and dividend income on preferred stock, partially (before credit costs for trust accounts) offset by an increase in net gains on sales of debt securities. 2 Net interest income 2,020.0 1,378.0 (118.4) 3 Trust fees+Net fees and commissions 1,079.8 769.9 (9.3) Net business profits decreased due to lower gross profits, Net trading profits 4 422.6 498.7 41.9 despite a decrease in G&A expenses reflecting the progress in +Net other business profits an ongoing intensive corporate-wide cost reduction. 5 Net gains (losses) on debt securities 221.3 285.2 71.1 6 G&A expenses 2,020.8 1,473.3 (38.5) Total credit costs 7 Net business profits 1,501.6 1,173.3 (47.3) Non-consolidated credit costs remained almost unchanged. 8 Credit costs *1 (424.2) (137.6) 117.3 Meanwhile, consolidated credit costs significantly decreased 9 Net gains (losses) on equity securities (57.1) (155.0) (131.2) due to lower credit costs from other subsidiaries. 10 Other non-recurring gains (losses) *2 (373.7) 350.8 456.5 Net losses on equity securities 11 Ordinary profits 646.4 1,231.4 395.2 Increased mainly due to higher losses on write-down of 12 Net extraordinary gains (losses) (6.8) (17.8) (37.7) Total of income taxes-current equity securities reflecting weak stock performance in 13 and income taxes-deferred 175.4 (319.4) (41.5) general stock market. 14 Minority interests 119.0 (78.3) (52.0) 15 Net income (losses) 583.0 815.8 263.9 Other non-recurring gains (losses) Significantly improved due to a negative goodwill of 16 Total credit costs*3 (354.1) (90.7) 110.8 ¥290.6 bn recorded as a result of application of equity Change from method accounting for our investment in Morgan Stanley by (Non-consolidated) FY10 FY11 Q1-3 FY10 Q1-3 completion of conversion of their convertible preferred stock 17 Gross profits 2,337.5 1,811.8 52.9 (before credit costs for trust accounts) into their common stock and lower provision for loss on 18 G&A expenses 1,180.5 883.8 0.5 interest repayment. 19 Net business profits 1,156.9 927.9 52.4 Net income 20 Ordinary profits 762.6 640.7 (49.2) As a result, net income increased significantly. 21 Income before income taxes 776.3 635.6 (65.5) Both EPS and ROE also improved substantially. 22 Net income (losses) 714.7 380.6 (115.7) Change from 23 Total credit costs*3 (174.2) (43.0) 1.2 FY10 FY11 Q1-3 FY10 Q1-324 EPS 39.95 57.04 18.65 *1 Credit costs for trust accounts + Provision for general allowance for credit losses +Credit costs (included in non-recurring gains/losses)25 ROE*4 6.89% 11.30% 2.54% *2 Included Profits (losses) from investments in affiliates, provision for losses on interest repayment, *4 The one-time impact of Morgan Stanley becoming an equity-method affiliate of MUFG is adjusted Reversal of allowance for credit losses, Reversal of reserve for contingent losses included in credit                Net income X 4 ÷ 3 - Equivalent of annual dividends on nonconvertible preferred stocks costs and Gains on loans written-off. Reversal of allowance for credit losses, Reversal of reserve for       {(Total shareholders equity at the beginning of the period - Number of nonconvertible preferred stocks at the beginning ×100 contingent losses included in credit costs and Gains on loans written-off were recorded in Net              of the period×Issue price+Foreign currency translation adjustments at the beginning of the period) extraordinary gains (losses) at FY10     + (Total shareholders equity at the end of the period -Number of nonconvertible preferred stocks at the end of the period *3 Credit costs + Reversal of allowance for credit losses + Reversal of reserve for contingent losses             ×Issue price+Foreign currency translation adjustments at the end of the period)} / 2 included in credit costs +Gains on loans written-off 5
  7. 7. Outline of results by business segment (Consolidated) Net operating profits increased ¥23.2 bn compared to FY10 Q1-3. Higher net operating profits from “Global” and “Global Markets” were offset by “Retail”, “Corporate” and “Trust Assets” due to decrease in net interest income Net operating profits Breakdown of changes in net by segment*1 operating profits (¥bn) (¥bn)1,400 1,180 Global Markets and Others 1,144.9 1,168.1 43.5 1,168.11,200 1,170 276.1 1,160 Sum of above (20.3)1,000 306.2 Retail of which deposit income (21.7)*2 1,150 1,144.9 800 Corporate 310.3 312.2 (Domestic) 1,140 600 Global 16.6 176.4 1,130 159.9 Global 400 40.6 Trust 45.4 Trust Assets 1,120 Assets Global Markets Retail (4.9) 200 364.7 1,110 (30.1) Corporate 321.2 and Others (Domestic) (1.9) 0 0 1,100 FY10 Q1-3 FY11 Q1-3 FY10 Q1-3 FY11 Q1-3 *1 Consolidated net business profits on a managerial accounting basis *2 Deposit income is non-consolidated figures 6
  8. 8. Balance sheet summary (Consolidated)Loans Balance sheet (¥bn) End Dec 11 Change Change from End Mar 11 from End Sep 11 Increased from End Mar 11 and End Sep 11 1 Total assets 210,870.1 4,643.0 (5,077.0) mainly due to higher overseas loans. 2 Loans(Banking+Trust accounts) 80,981.2 838.8 1,316.5Investment securities 3 Loans(Banking accounts) 80,825.9 830.9 1,314.5 Increased from End Mar 11 mainly due to a higher Japanese government bonds. Decreased 4 Domestic corporate loans *1 43,552.1 (364.8) 468.3 from End Sep 11 mainly due to a lower foreign 5 Housing loans *1 16,901.1 (399.5) (81.6) bonds. *2 6 Overseas loans 18,267.6 1,845.4 1,126.8Deposits Investment securities Individual deposits increased from End Mar 11 7 72,620.4 1,596.7 (2,953.7) (banking accounts) and End Sep 11. Total deposits decreased from 8 Japanese government bonds 46,488.4 1,546.5 (774.4) End Mar 11 mainly due to lower deposits from 9 Foreign bonds 14,530.9 893.4 (1,782.7) corporate. Receivables under resale agreements and 10 8,049.4 (568.8) (2,366.6)Total net assets Receivables under securities borrowing transactions Increased from End Mar 11 mainly due to an 11 Total liabilities 199,661.9 4,249.2 (4,950.5) increase in retained earnings. Decreased from 12 Deposits 122,447.0 (1,697.3) 864.4 End Sep 11 mainly due to an increase in Individual deposits 13 66,101.6 1,717.0 1,224.8 negative impact of foreign currency translation (Domestic branches) adjustments associated with an appreciation of 14 Payables under repurchase agreements and Payables under securities lending transactions 16,366.2 1,877.8 (3,274.2) the Japanese yen. 15 Total net assets 11,208.2 393.8 (126.5)Non performing loans (“NPLs”) Deposit/lending spread NPL ratio slightly deteriorated from End Mar 11 16 (Domestic, non-consolidated) 1.24% (0.05% ) (0.01% ) and End Sep 11, but keeping at a low level. 17 FRL disclosed loans*1*3 1,516.6 85.9 52.7Net unrealized gains (losses) on *1 18 NPL ratio 1.77% 0.08% 0.02%securities available for sale Decreased from End Mar 11 and End Sep 11 19 Net unrealized gains (losses) 298.5 (29.0) (91.6) on securities available for sale mainly due to a deterioration of unrealized gains (losses) on domestic equity securities. *1 Non-consolidated+trust accounts *2 Loans booked in overseas branches, UnionBanCal Corporation and BTMU(China) *3 FRL=the Financial Reconstruction Law 7
  9. 9. Loans/deposits (Consolidated) (¥tn) Loans (Period end balance) *2 Loan balance ¥80.9 tn 100 88.2 85.0 5.2 79.3 80.1 79.6 80.9 (up ¥1.3 tn from End Sep 11) 3.1 2.8 2.5 2.4 2.2 48.1 47.7 Changes from End Sep 11: 50 43.5 43.9 43.0 43.5 Housing Loan (¥0.1 tn) 17.5 16.6 15.6 16.4 17.1 18.2 Overseas*1 +¥1.1 tn 17.3 17.4 17.4 17.3 16.9 16.9 Domestic corporate +¥0.4 tn 0 End Sep. End Mar. End Sep. End Mar. End Sep. End Dec. 09 10 10 11 11 11 Housing loan Overseas*1 Domestic corporate Others*1 Overseas branches + UnionBanCal Corporation + BTMU (China) *2 Sum of banking and trust accounts (¥tn) Deposits (Period end balance) Deposit balance ¥122.4 tn 122.0 123.8 122.2 124.1 121.5 122.4(up ¥0.8 tn from End Sep 11) 16.2 15.2 19.1 16.1 15.8 16.2 100 Changes from End Sep 11: 40.0 44.5 42.8 44.5 40.8 40.1 Individual +¥1.2 tn 50 Corporate, etc. (¥0.7 tn) 62.8 63.0 63.2 64.3 64.8 66.1 Others +¥0.3 tn 0 End Sep. End Mar. End Sep. End Mar. End Sep. End Dec. 09 10 10 11 11 11 Individual Corporate, etc Overseas branches & subsidiaries, etc 8
  10. 10. Domestic deposit/lending rates (Non-consolidated) Deposit/lending spread in FY11 Q3 slightly decreased mainly due to a decrease in lending rate Changes in domestic deposit/lending rates (non-consolidated) Interest rate changes2.0% November 4, 2008 November 4, 2008 Interest rate on ordinary deposits: 0.200% ⇒ 0.120%1.8% Interest rate on ordinary deposits: 0.200% ⇒ 0.120% November 20, 2008 November 20, 2008 Lending rate Lending rate Short-term prime rate: 1.875% ⇒ 1.675% Short-term prime rate: 1.875% ⇒ 1.675%1.6% December 22, 2008 December 22, 2008 Interest rate on ordinary deposits: 0.120% ⇒ 0.040% Interest rate on ordinary deposits: 0.120% ⇒ 0.040% 1.41% 1.40% January 13, 20091.4% 1.37% January 13, 2009 1.34% Short-term prime rate: 1.675% ⇒ 1.475% 1.31% Short-term prime rate: 1.675% ⇒ 1.475% 1.31%1.30% April 1, 2009 BOJ BOJ 1.29% April 1, 20091.2% O/N interest rate target O/N interest rate target 1.25% Variable rate on new housing loans : 1.24% Variable rate on new housing loans : ⇒ Changed based on the long-term lending rate linked Deposit/lending spread Deposit/lending spread ⇒ Changed based on the long-term lending rate linked to short-term prime rate as of March 1 0.50% to short-term prime rate as of March 11.0%0.4% July 1, 2009 0.30% Deposit rate July 1, 2009 Deposit rate Variable rate on existing housing loans : Variable rate on existing housing loans : ⇒ Changed based on the long-term lending rate ⇒ Changed based on the long-term lending rate0.8% linked to short-term prime rate as of April 10.2% 0.10% linked to short-term prime rate as of April 1 0.09% 0.08%0.08% 0.07% September 6, 2010 0.10% September 6, 2010 0~0.10% Interest rate on ordinary deposits: 0.040% ⇒ 0.020% 0%0.6% Interest rate on ordinary deposits: 0.040% ⇒ 0.020% FY07 H2 FY08 H1 FY08 H2 FY09 Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY10 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY11 Q1 FY11 Q2 FY11 Q3 9
  11. 11. Loan assets (Consolidated/Non-consolidated) NPL ratio increased 0.02% from End Sep 11 to 1.77%, but keeping at a low level Total credit costs were unchanged at ¥43.0 bn for Non-consolidated, but decreased significantly to ¥90.7 bn for Consolidated Balance of FRL disclosed loans Total credit costs*2 (Non-consolidated)(¥tn)4.0 3.33% (¥bn) Negative figure represents costs Non-consolidated 50 NPL ratio*1 3.00 2.07% (43.0) (50) (44.2) Consolidated3.0 1.68% 1.74% 1.77% (174.2) 0.27 1.46% 1.50% 1.15% 1.24% (90.7) (150) (361.6) (250) (201.5)2.0 1.40 1.82 (282.8) 0.15 (350) 1.43 1.46 1.51 Bankrupt/ (354.1) 1.32 1.34 0.11 De facto 0.13 0.11 (450) 0.74 0.11 1.18 0.19 Bankrupt 1.051.0 0.11 0.24 0.74 0.80 0.84 (550) 0.64 Doubtful 1.32 0.55 0.84 0.65 (587.1) 0.92 (650) Special 0.56 0.55 0.54 0.55 attention 0.38 0.29 0.30 (750)0.0 End End End End End End End End End (760.1) Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Sep 11 Dec 11 (850)Total Q1-3 Full year Q1-3 Full year Q1-3loans 87.2 86.2 89.2 91.9 95.2 89.6 85.0 83.7 85.5 FY09 FY10 FY11(¥tn) *1 Non performing loans / Total loans *2 Figures included gains on loans written-off 10
  12. 12. Holdings of investment securities (Consolidated) Total unrealized gains on securities available for sale decreased by ¥91.6 bn from End Sep 11, reflecting weak stock performance in general stock market Breakdown of securities available Unrealized gains (losses) on for sale (with market value) securities available for sale (¥tn) 0.01 Others 0.7 0.11 Domestic bonds (¥bn) Balance Unrealized gains(losses) Domestic equity securities End Dec 11 Change from End Dec 11 Change from 0.12 0.25 End Sep 11 End Sep 11 0.68 0.071  Total 68,955.3 (2,824.2) 298.5 (91.6) 0.35 0.15 0.19 0.47 0.28 0.20 0.08 0.18 Domestic equity 0.022 securities 2,924.6 (191.6) (73.7) (96.9) (0.18) (0.02) (0.07) (0.3) End End End End End End Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Dec 113 Domestic bonds 49,726.0 (862.5) 182.0 (27.6) Total unrealized gains (losses) ¥0.41 tn ¥0.81 tn ¥0.69 tn ¥0.32 tn ¥0.39 tn ¥0.29 tn Government4 bonds 45,863.4 (774.3) 115.5 (25.6) TOPIX: 909.84 978.81 829.51 869.38 761.17 728.61 JGB(10yrs): 1.30% 1.40% 0.93% 1.26% 1.02% 0.99%5 Others 16,304.6 (1,770.0) 190.2 32.9 JGB Duration*1 JGB Duration*1 (year) Foreign equity 56 securities 147.1 12.8 29.8 11.4 4 2.9 3.1 3.1 2.9 Foreign 3 2.5 2.7 2.5 2.57 bonds 14,530.9 (1,782.7) 244.6 (8.5) 2 18 Others 1,626.6 (0.1) (84.3) 29.9 0 End End End End End End End End Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Dec11 *1 Non-consolidated 11
  13. 13. FY2011 financial targets (Consolidated/Non-consolidated)<Financial Targets> <Consolidated> FY10 FY11 Q1-3 Full year Q1-3 Full year Progress in % (Results) (Results) (Results) (Targets) 1 Ordinary profits ¥836.1 bn ¥646.4 bn ¥1,231.4 bn ¥1,450.0 bn 84.9% 2 Net income ¥551.8 bn ¥583.0 bn ¥815.8 bn ¥900.0 bn 90.6% Net income (w/o MS 3 - - ¥525.1 bn - - negative goodwill) 4 Total credit costs ¥201.5 bn ¥354.1 bn ¥90.7 bn ¥170.0 bn 53.3% <Non-consolidated> 5 Net business profits ¥875.5 bn ¥1,156.9 bn ¥927.9 bn ¥1,130.0 bn 82.1% 6 Ordinary profits ¥689.9 bn ¥762.6 bn ¥640.7 bn ¥835.0 bn 76.7% 7 Net income ¥496.3 bn ¥714.7 bn ¥380.6 bn ¥490.0 bn 77.6% 8 Total credit costs ¥44.2 bn ¥174.2 bn ¥43.0 bn ¥80.0 bn 53.7% (Note) Total credit costs include gains on loans written-off 12
  14. 14. Outline of FY2011 Q3 Results Future growth 13
  15. 15. Management policyAccelerate growth strategy in final year of medium-term business plan FY2009 FY2010 FY2011 Risk management and enhancement of core Growth acceleration business fundamentals 1. Act on anticipated new 1. Pursue growth in priority regulatory capital business areas requirements 2. Improve operational 2. Maintain and improve efficiency operational efficiency 3. Reduce strategic equity 3. Reduce equity holdings holdings 4. Maintain stable shareholder 4. Maintain and enhance returns capital base 5. Increase shareholder value —Maintain stable shareholder returns/ Enhance shareholder returns 14
  16. 16. Key points Domestic and overseas lending Exposures in European peripheral countries Improvement in major subsidiaries Promoting a growth strategy Addressing key issues 15
  17. 17. Domestic and overseas lending Domestic demand for lending was weak partly due to a faster than expected recoveryin production, but declining trend seems to stop Overseas lending steadily expanded. Aiming for an increase in total lending balanceof domestic and overseas lending Overseas corporate lending/Spread Overseas corporate lending/Spread Domestic corporate lending/Spread Domestic corporate lending/Spread (Excl. UB) (Excl. UB) (Note) Exchange rates: Those adopted in our business plan ($/¥=95, etc.)(¥tn) (¥tn) 43 1.0% 18.0 1.2% Average loan balance 42 Average loan balance 17.5 Lending spread 41 Lending spread 17.0 1.1% 40 16.5 0.9% 39 16.0 1.0% 38 15.5 37 0.8% 15.0 0.9% 36 14.5 35 14.0 0.8% 34 0.7% 13.5 33 13.0 0.7% 32 31 12.5 30 0.6% 12.0 0.6% 2010 2011 2010 2011 Apr Apr Dec Apr Apr Dec 16
  18. 18. Exposures in European peripheral countriesExposures of BTMU consolidated in European peripheral countries were limitedcompared to consolidated total assets Exposures (BTMU consolidated) Exposures (BTMU consolidated) Limited exposures Limited exposures End Sep 11 End Dec 11 Exposures (BTMU consolidated) Spain Approx.$6.4 bn Approx.$5.7 bn ・ No exposures to sovereign borrowers Italy Approx.$5.4 bn Approx.$5.4 bn ・ More than 90% of exposures were to Ireland Approx.$0.3 bn Approx.$0.3 bn industrial corporations and structured finance Portugal Approx.$0.6 bn Approx.$0.5 bn - Exposures to Spain and Italy were mainly Greece Approx.$0.3 bn Approx.$0.3 bn towards infrastructure sector, such as Total Approx.$13.0 bn Approx.$12.2 bn electricity, gas and telecommunications ・ Limited exposures to financial institutions ・ Exposures including CDS hedge were Balance of sovereign bonds (MUFG) Balance of sovereign bonds (MUFG) approx.$11.5bn End Sep 11 End Dec 11 Balance of sovereign bonds (MUFG) Spain Approx.$0.9 bn Approx.$0.8 bn ・ No Greek or Irish government bonds Italy Approx.$3.2 bn Approx.$2.7 bn ・ Very small amount of Portuguese Ireland ‐ ‐ government bonds in a trading account, all of Portugal $0.0 bn $0.0 bn which were hedged Greece ‐ ‐ ・ Majority of our Spanish and Italian Total Approx.$4.1 bn Approx.$3.5 bn government bonds were held to maturity 17
  19. 19. Consumer finance Number of requests for interest repayment declining y-o-y for both MUN and ACOM Both companies turned profitable in FY11 1-3Q as planned Results of MU NICOS & ACOM Results of MU NICOS & ACOM Requests for interest repayment Requests for interest repayment <MU NICOS> (yoy %)s FY11 FY11 FY10 (¥bn) Q1-3 (plan) 60 1 Operating revenue 300.6 212.0 286.2 2 Card shopping 151.6 119.4 - 40 3 Operating expenses 381.7 189.0 258.8 20 4 G&A expenses 229.1 168.3 228.8 5 Credit related costs 46.3 20.6 30.0 0 6 Repayment expenses 106.3 0.0 0.0 7 Operating income (81.1) 23.0 27.4 ▲20 8 Underlying earnings(6+7) 25.2 23.0 27.4 9 Ordinary profits (80.5) 23.3 27.9 ▲40 MU NICOS 10 Net income (106.8) 22.4 27.2 ACOM ▲60 <ACOM> FY10 FY11 FY11 Apr-09 Oct-09 Apr-10 Oct-10 Apr -11 Oct-11 (¥bn) Q1-3 (plan) 1 Operating revenue 245.8 160.2 204.3 2 Operating expenses 430.6 111.9 158.1 Capital and allowance for interest repayment Capital and allowance for interest repayment 3 G&A expenses 86.4 53.6 73.6 Provision of allowance for (¥bn) 4 doubtful accounts 78.1 40.0 60.2 Allowance for interest repayment Provision for loss on 600 5 243.4 0.0 0.0 interest repayment 6 Operating income (184.7) 48.3 46.2 Capital 7 Underlying earnings(5+6) 58.7 48.3 46.2 400 185.7 8 Net income (202.6) 42.1 42.9 355.7*3 Guaranteed receivables 200 9 443.4 466.5 482.2 195.8*3 (Non-consolidated) 276.7 Unsecured consumer loans 93.2 73.4 10 (Non-consolidated) 878.7 798.5 742.6 0 ACOM Promise AIFUL 11 Share of loans*1 29.7% 31.2%*2 As of end of Dec 11 As of end of Dec 11 As of end of Sep 11 *1 ACOM unsecured consumer loan balance (non-consolidated)/Consumer finance industry loan balance *3 Including allowance for credit losses (applied to the principal) Source: Japan Financial Services Association *2 As of end of Nov 11 Source: Company disclosure 18
  20. 20. Mitsubishi UFJ Securities Holdings Posted ¥4.0 bn net income in FY11 Q1-3 with cost reduction and profit from sales of Kim Eng shares, partially offset by extraordinary losses (¥ 20.3 bn) with early retirement scheme at MUMSS Change business model and further reduce costs to adapt to harsh environment Results of MUSHD and MUMSS Results of MUSHD and MUMSS Structural reform of MUMSS Structural reform of MUMSS MUSHD*1 (¥bn) Building a lean structure through enhancing operational Consolidated FY10 FY11 Q1-3 efficiency and further cost reduction1 Net operating revenue*2 139.8 167.9 ・Achieved ¥18.6 bn in cost reduction, which exceeded the initial targets (y-on-y ¥10.0bn). Selling, general and2 254.8 177.5 ・Realizing cost reduction by completing the early retirement scheme, relocation administrative expenses of head office completed. Aim to further improve operational efficiency and cost3 Operating income (115.0) (9.5) reduction by streamlining the headquarters` organization and investment in system, etc.4 Ordinary profits (loss) (95.8) 19.15 Extraordinary income 16.4 (14.1) Strengthening profit base and transforming business model6 Net income (50.4) 4.0 ・Taking full advantage of MUFG customer base *1 Mitsubishi UFJ Securities Holdings Co., Ltd. *2 Operating revenue minus financial expenses ・Thorough implementation of “client transaction flow oriented” business model (¥bn) MUMSS*3 【MUMSS Non-consolidated quarterly base】 Non-consolidated FY10 FY11 Q1-3 FY10 FY111 Net operating revenue*2 61.4 119.0 (¥bn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Selling, general and 1 Net operating revenue*2 42.1 47.6 39.5 (67.9) 37.6 43.7 37.52 190.0 125.9 administrative expenses Selling, general and3 Operating income (128.5) (6.8) 2 46.9 50.6 46.9 45.4 43.6 42.9 39.2 administrative expenses4 Ordinary profits (126.7) (5.5) 3 Ordinary profits (3.3) (2.9) (7.2) (113.1) (5.5) 1.1 (1.1)5 Net income (144.9) (25.2) 4 Net income (5.4) (3.6) (9.8) (125.9) (5.4) 2.2 (22.1) *3 Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. 19
  21. 21. Promoting a growth strategy Corporate/Global North America, Asia Transaction banking business Project finance CIB ~Strategic alliance with Morgan Stanley Retail Segment-based strategy ~Investment product sales Trust Assets Global asset management 20
  22. 22. Commercial bankGlobal (consolidated)Gross profits and net operating profits increased in all regions compared to FY10 H1.Revenues from both Japanese and non-Japanese corporations grewLending also expanded in Europe, Americas and Asia. The main driver was increasedlending to non-Japanese corporations in Asia (Note) Exchange rates: Those adopted in our business plan ($/¥=95, etc.) Gross profits by regions*1 Average loan balance by regions(¥bn) (¥tn)400 356.7 341.5 19.6 313.6 12.3 Others 20.0 17.9 17.5 303.2 17.7300 4.6 UB 159.9 159.6 159.6 15.0 4.6 4.5 4.6 UB UB 139.6 151.6200 6.9 Asia 10.0 5.2 5.7 6.0 75.8 Asia 85.5 58.5 Japanese 64.2 68.1100 3.7 3.2 3.6 Americas 5.0 3.2 54.8 50.6 56.4 Americas 59.0 126.2 Non- Japanese 4.4 4.1 3.9 4.5 Europe 44.7 43.2 49.4 Europe 52.5 0 0.0 FY09 H2 FY10 H1 FY10 H2 FY11 H1 FY09 H2 FY10 H1 FY10 H2 FY11 H1 Net operating profits by regions*1*2 Average loan balance by segments(¥bn) (¥tn) 19.6 20.0200 177.9 17.9 17.5 17.7 176.4 4.6 UB 160.8 154.2 4.6 4.5 4.6 54.8 53.1 15.0 UB 52.1 54.6 5.1 Japanese 4.6 4.5 4.6100 50.4 57.0 10.0 42.1 Asia 44.2 35.9 36.7 32.6 Americas 5.0 9.9 Non- 27.3 8.7 8.4 8.5 Japanese 30.8 28.1 34.3 35.3 Europe 0 0.0 FY09 H2 FY10 H1 FY10 H2 FY11 H1 FY09 H2 FY10 H1 FY10 H2 FY11 H1 *1 Excl. CDS *2 Excl. expense of head office in Japan 21
  23. 23. Americas strategy Strong results achieved by UB. NPL ratio consistently lower than peers, due to long-term commitment to conservative credit management Continue to strengthen ties between BTMU and UB UB business performance UB business performance Key points of Americas strategy Key points of Americas strategy FY11 FY10(US$ mm) Q1 Q2 Q3 Q4Gross profits Stronger ties between BTMU and UB 3,347 858 854 791 791 3,294Noninterest ・Formed virtual holding company in Jul 2011 placing 2,372 615 578 603 619 2,415expenses BTMU Headquarters for the Americas and Union BankNet buiness 975 243 276 188 172 879 under its umbrella for unified business management in USprofitsProvision for ・Established a single leadership structure to increaseallowance for 182 (102) (94) (13) 7 (202) market share in corporate deposit and cash management,credit losses*1 and accelerate strengthening collaborationNet income 573 235 242 172 129 778*1 Negative figures are reversal ・No. 1 in project finance rankings in the Americas for Jan to Dec 2010 and for Jan to Dec 2011UB nonperforming loans/total loans*2UB nonperforming loans/total loans*2 Non-organic growth <Delinquencies in residential mortgage loan portfolio of 30+ days> End End End ・Actively consider quality investment opportunities Jun 11 Sep 11 Dec 115% UB UB 2.5% 2.2% 2.2% Central and South America Peer average Average in 4.63% California 9.8% 9.4% - ・Increased capital of our Brazilian and Mexican subsidiary,4% 3.98% improved structure aiming to strengthen credit3% 3.33% 3.53% management system and markets business2% 2.30% 2.79% 2.39% 2.34% ・11 locations in 8 countries after having established a 1.82% 1.68% representative office in Lima in Feb 20111% 1.03% 1.37% 1.34% 0.84% 1.12% 0.14%0% FY07 FY08 FY09 FY10 FY11 Q1 FY11 Q2 FY11 Q3 FY11 Q4*2 Excl. FDIC covered assets Source:SNL and company reports 22
  24. 24. Asia strategy(1)Solid increase in gross profits. Ensuring a good revenue balance in each regionPreparing for further growth – expanding network, strengthening marketproducts business and making alliances with Asian regional banks Gross profits*1*2*3 – Asia business Gross profits*1*2*3 – Asia business Organic strategies Organic strategies Expanding network(¥bn)140 Full Year ・Expanding branch network in China. Also plan to establish a representative office in Cambodia Q1-3 Promoting market products business in120 Bangkok and Mumbai, in addition to Singapore, Hong Kong, and Shanghai100 Alliances with Asian regional banks ・CIMB - Expand areas where we cooperate to include 80 securities and asset management (sales of investment trusts and ASEAN stocks, etc targeting Japanese investors) 60 Gross profits by regions in Asia*3 Gross profits by regions in Asia*3 40 CAGR+26% Korea Oceania 7% (excl. deposit income) 9% Greater China 20 India 37% 10% 0 FY07 FY08 FY09 FY10 FY11 ASEAN 37% *1 Gross profits excluding deposit income *2 Exchange rates: Those adopted in our business plan ($/¥=95, etc.) *3 Commercial bank (consolidated) 23
  25. 25. Commercial bank Asia strategy(2) (consolidated) Increased lending balance in each country through adopting strategy to the characteristics of each market China Hong Kong Singapore India (US$ bn) (US$ bn) (US$ bn) (US$ bn) 12 Non- 12 11.5 12.7 12 12 Japanese 11.3 12 Japanese 12 12 12 10.3 10 10 10 10 10 10 10 10 8.0 8.1 8 8 7.1 6.9 8 8 8 8 6.5 6.5 7.5 8 8 7.2 6.7 6.1 6.5 6.5 6.8 6.0 6.0 6.2 6.0 6 6 6 6 6 4.3 4 Loans 4 4 4.1 4 4 Loans 4 outstanding 4 Loans 4 2.9 outstanding 2 2 2 outstanding 2 Loans 2 2 2 2 outstanding 0 0 0 0 0 End Mar End Sep End Mar End Sep 0 End Mar End Sep End Mar End Sep 0 End Mar End Sep End Mar End Sep 0 End Mar End Sep End Mar End Sep 10 Mar 10 End 10 11 Mar 11 End 11 10 Mar 10 End 10 11 Mar 11 End 11 10 Mar 10 End 10 11 Mar 11 End 11 10 Mar 10 End 10 11 Mar 11 End 11 Thailand Indonesia Malaysia Korea (US$ bn) (US$ bn) (US$ bn) (US$ bn) 12 12 12 12 10 10 10 10 8 8 8 8 5.5 5.9 6 5.1 4.8 6 4.7 6 6 3.6 4.0 4.1 4.0 3.3 4 4 3.2 3.0 2.9 4 2.9 4 2.6 2.6 2 2 2 2 0 0 0 0 End Mar End Sep End Mar End Sep End Mar End Sep End Mar End Sep End Mar End Sep End Mar End Sep End Mar End Sep End Mar End Sep 10 10 11 11 10 10 11 11 10 10 11 11 10 10 11 11(Note) Loans outstanding on consolidated basis, counted by the nationality of each borrower for internal management purpose. Excl. financial institution. 24
  26. 26. Asia strategy(3) China Expanding business on the foundations of a strong Japanese customer base. Alreadyin the top rank among foreign banks in terms of net business profits Aiming to expand revenues by further expanding our network, strengthening marketproducts business, etc. BTMU China business performance BTMU China business performance Key points of Asia strategies Key points of Asia strategies(¥bn) Gross profits 43.3 Expanding business with non-Japanese Net business profits40 corporations 30.230 27.2 ・Leveraging MUFG’s network and know how to support 21.0 trade flows and accelerating overseas expansion of20 15.0 FY11 Chinese companies 11.9 Q1-310 30.2 FY11 Q1-3 Strengthening market products business 14.0 ・Actively launching new businesses and offering new 0 FY09 FY10 FY11 forecast products such as in derivatives business Comparison with foreign banks` Comparison with foreign banks` Taking active initiatives to internationalize subsidiaries in China (FY10) subsidiaries in China (FY10) RMB (¥bn) ・Transaction volumes steadily expanding after 70 64.8 implementing the first RMB trade settlement between Gross profits 60 Net business profits Japan and China. Japanese and overseas branches are actively cooperating to develop global RMB business 50 41.4 40 30.2 Expanding network 30 ・Opened Qingdao branch (Aug 2011), Beijing Economic- 20 15.8 Technological Development Area Sub-Branch (Dec 2011). 11.9 11.4 10 6.1 Currently have 16 locations including 2 locations where 1.3 0 we have acquired business establishment approvals. BTMU HSBC Citi JP Morgan Aiming for further expansion Source: Company disclosures Exchange rates: RMB/¥=14.03 25

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