Mitsubishi UFJ Financial Group Inc. (MTU) reported net income of ¥981.3 billion (US$12.5 billion) for fiscal year ended March 31, 2012 versus net income of ¥583.1 billion (US$6.8 billion) in the year-ago period. Diluted net income per common stock was ¥67.94 (86 cents) versus ¥39.89 (47 cents) in the prior-year period.
Results reflected a fall in G&A expenses and a significant decline in consolidated credit costs driven by a drop in credit costs. Moreover, loans and deposits growth were the positives for the period. Yet, the dip in gross profits and net interest income was on the downside.
Performance in Detail
Gross profits for the fiscal year ended were ¥3,502.0 billion (US$44.5 billion), down ¥20.4 billion (US$0.3 billion), or 0.6% from ¥3,522.5 billion (US$41.2 billion) reported in the prior year. Gross profits declined primarily due to lower consumer-finance income and dividend on preferred stock, partially offset by an increase in net gains on sales of debt securities and declined trading losses from securities subsidiary.
However, the period reflected ¥177.6 billion (US$2.26 billion) increase in trading income and other business profits, while ¥179.4 billion (US$2.28 billion) decrease in net interest income. For Mitsubishi UFJ, trust fees along with net fees and commissions totaled ¥1,061.1 billion (US$13.5 billion) compared with ¥1,079.8 billion (US$12.6 billion) as of March 31, 2011.
The balance of securitized products and related investments at the end of March 2012 increased to ¥1.66 trillion (US$0.02 trillion) in total, an increase of ¥0.20 trillion (US$2.54 billion) compared with the balance of ¥1.46 trillion (US$0.02 trillion) as of March 2011. The increase was mainly due to a rise in highly rated collateralized debt obligations (CLOs) and commercial mortgages asset-backed securities (CMBS).
Mitsubishi UFJ reported total credit costs of ¥193.4 billion (US$2.5 billion), down 45%, from ¥354.1 billion (US$4.1 billion) in the year-ago period. The decline was mainly due to accounting of reversal of general allowance for credit losses and reduced losses on loan write-offs.
Net losses on equity securities were ¥88.6 billion (US$1.1 billion), up from ¥57.1 billion (US$0.7 billion) in the prior-year period, mainly due to higher losses on write-down of equity securities and net losses on sales of equity securities. In fiscal year 2011, the stock market showed a weak performance based on negative sentiments, though it improved towards the end of the year.
For the fiscal year ended 2011, other non-recurring gains and losses were ¥310.7 billion (US$3.9 billion), up ¥684.4 billion (US$8.7 billion) year over year. The increase was attributed to the use of equity method accounting for investment in Morgan Stanley (MS) by completion of conversion of the convertible preferred stock into their common stock and decreased provision for losses on interest repayment.