Mitsubishi UFJ Financial Group, Inc.

FY25 profits attributable to owners of parent increased by JPY 586.3 billion year on year. Gross profits increased by JPY 1,290.2 billion, while G&A expenses increased by JPY 424.6 billion and net operating profits increased by JPY 865.5 billion. Total credit costs increased by JPY 290.6 billion year on year, and ROE on a JPX basis reached 11.3%; ROE excluding equity holdings impact was approximately 10.4%. The CET1 ratio on a finalized and fully implemented Basel III basis, excluding net unrealized gains, stood at 9.2%, down 1.6 percentage points from the end of March 2025. For FY26, MUFG targets JPY 2.7 trillion in profit attributable to owners of parent, approximately 12% ROE, an annual dividend of JPY 96, and up to JPY 100 billion of common stock repurchases in the first half.

Togawa framed FY25 as evidence that MUFG’s core businesses are improving, pointing to broad NOP growth across business groups, stronger domestic and overseas lending spreads, expanding fee income, and continued progress in digital and AI initiatives. He said the group is aiming to become an AI native company, with current MTBP AI investment expected to exceed JPY 70 billion and nearly JPY 40 billion of benefits expected to materialize early by FY26. His tone was confident but cautious, repeatedly emphasizing uncertainty in the external environment while stressing diversified growth and disciplined capital management.

On the financials, Togawa highlighted the JPY 1,290.2 billion increase in gross profits, including the benefit from higher yen rates, lending growth, fee expansion, and special factors tied to hedging and securities gains/losses. He noted that G&A rose by JPY 424.6 billion, partly from acquisitions and strategic investment, and that total credit costs rose by JPY 290.6 billion but were still in line with the initial forecast of JPY 350 billion. On capital, he said the 9.2% CET1 ratio reflected Shriram Finance, loan growth, and RWA increases, and he expects the ratio to return to the target range within the current fiscal year through profit accumulation while balancing shareholder returns and growth.

Analysts focused heavily on why the CET1 ratio fell below the target range and whether the JPY 100 billion buyback was too conservative. Management replied that it wanted to restore the ratio to the lower end of the target range first, and that the second-half buyback would depend on profit progress, lending growth, and the external environment. Questions also probed the FY26 profit plan and interest-rate assumptions; Togawa said the plan assumes a BOJ hike around June to July, with a 25 bp move contributing about JPY 100 billion in the first year. On credit risk, he said MUFG recorded just under JPY 25 billion of Middle East-related provisions and described private credit exposure as limited.