Mitsubishi UFJ blames one-off reasons for its first-quarter earnings decline

Tuesday, Japan’s largest lender by assets, Mitsubishi UFJ Financial Group Inc (MUFG), reported a 70.3% decline in first-quarter net income, citing a one-time loss linked with the sale of MUFG Union Bank.

Mitsubishi UFJ Financial Group Inc (MUFG), Japan’s largest lender by assets, announced a 70.3% drop in first-quarter net income on Tuesday, citing a one-time loss associated with the sale of MUFG Union Bank.

Mitsubishi UFJ (NYSE:MUFG), which owns 21.5 percent of Wall Street bank Morgan Stanley (NYSE:MS), announced an April-June net profit of 113.7 billion yen ($869.1 million), compared to 383.1 billion yen a year earlier.

The earnings decline was attributable to valuation losses of 254 billion yen on bonds and other assets owned by MUFG Union Bank, a necessary accounting treatment prior to the $8 billion sale of the U.S. retail banking subsidiary to U.S. Bancorp later this year.

When the transaction is finalized, the previously reported losses will be largely offset, and the overall impact on full-year net income is anticipated to be about 200 billion yen, according to the bank.

As a result of a global economic rebound fueled by the lifting of pandemic restrictions, Mitsubishi UFJ has seen an increase in loans for corporate expansions and investments.

The bank maintained its full-year profit prediction of 1 trillion yen, a decline of 12 percent from the previous year’s record-breaking earnings. The prediction compares to the average estimate of 1.05 trillion yen from thirteen analysts surveyed by Refinitiv.

When they reported last week, the two other Japanese megabanks, Sumitomo Mitsui (NYSE:SMFG) Financial Group and Mizuho Financial Group, similarly reaffirmed their full-year profit projections.

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