Mitsubishi UFJ Financial Group, Inc.

For FY2025, MUFG said gross profits increased by JPY 1,290.2 billion year on year, G&A expenses increased by JPY 424.6 billion, net operating profits increased by JPY 865.5 billion, total credit costs increased by JPY 290.6 billion, and profits attributable to owners of parent increased by JPY 586.3 billion. ROE on a JPX basis reached 11.3%, and ROE excluding equity holdings impact was about 10.4%. On the balance sheet, loans increased by approximately JPY 12.3 trillion from end-FY2024, or about JPY 17 trillion excluding government loans in Japan. CET1 ratio on the finalized and fully implemented Basel III basis, excluding net unrealized gains, stood at 9.2%, down 1.6 percentage points from end-March 2025, with management saying the actual level was around 10.5% after adjusting for FX. For FY2026, MUFG targets profit attributable to owners of parent of JPY 2.7 trillion, an ROE of approximately 12%, an annual dividend of JPY 96, and up to JPY 100 billion of first-half share buybacks. Management also said FY2026 gross profit growth is expected to benefit from JPY 170 billion from higher yen rates, JPY 140 billion from the reversal of realized losses tied to hedging review, and roughly JPY 140 billion from lending interest income and fee income, with additional contributions from AMIS and Asian partner banks.

The lead executive framed the year as proof that MUFG’s diversified model and growth strategy are working, pointing to broad-based NOP growth across all business groups and steady progress in retail, digital, AI, and sustainability initiatives. Tone-wise, management sounded confident on earnings power but measured on capital, emphasizing that the company wants to restore CET1 toward the target range while balancing growth and shareholder returns. The commentary also stressed that the FY2026 plan was built around the most likely scenario, with flexibility to revise if the external environment worsens.

Jun Togawa highlighted that FY2025 gross profits were lifted by higher yen rates, improved lending margins, fee income, and one-time factors including a JPY 200 billion hedging-related realized loss and a rebound from roughly JPY 780 billion in debt-securities losses in FY2024. He said credit costs rose JPY 290.6 billion but were in line with the initial forecast of JPY 350 billion, and noted a roughly JPY 25 billion provision for Middle East-related concerns. On capital, he said the finalized Basel III CET1 ratio was 9.2%, with the lower-than-expected level driven by Shriram Finance, late-period loan growth, higher RWA from stronger profits, and other factors; management still expects to return to the target range within the current fiscal year. He also cited continued equity reduction progress, with about JPY 600 billion of agreed sales under the current MTBP and a target of JPY 700 billion.

Analysts focused mainly on why the JPY 100 billion buyback was not larger, why CET1 fell below the target range, and what was driving FY2025 and FY2026 profit growth. Management answered that the buyback was sized to restore CET1 toward the lower end of the target range first, and that second-half repurchases will depend on profit progress, loan growth, and the external environment. On growth drivers, Togawa pointed to Japan business lines, global CIB project finance, lending spreads, and fee income, while saying FY2026 gross profit growth should come from higher rates, the hedging-related rebound, lending/fee income, AMIS, and Asian partner banks. He also said Middle East credit costs were just under JPY 25 billion and that data center exposure concerns were limited, with no major hung deals in distribution.