Japan’s top bank MUFG forecasts lower credit costs, beats profit view
Japan's top lender Mitsubishi UFJ Financial Group Inc (MUFG) posted on Monday a better-than-expected 47 per cent rise in full-year net profit, after last year's earnings were hit by an impairment charge on its units in Southeast Asia.
Profit for the year ended in March came in at 777b yen ($7.11b) compared with 528.2b yen a year ago, MUFG said in a statement. That also compared with an average estimate of 708.9b yen from eight analysts surveyed by Refinitiv.
MUFG's profit in the three months through March was 170 billion yen, compared to a 56.1b yen loss in the same period a year earlier, according to Reuters' calculations based on the bank's statement.
Japanese banks have seen an increase in lending as companies rushed to borrow amid the Covid-19 pandemic, while low interest rates and a shrinking population have eroded their profits. Bank lending in Japan rose 4.8 per cent in April from a year earlier, according the Bank of Japan.
MUFG, which owns about 20 per cent of Wall Street bank Morgan Stanley, booked 515.5b yen of credit-related costs in the last financial year, up from an initially expected 500b yen. In the current business year ending in March 2022, the lender expects 850b yen in net income compared to the 733b yen estimate of eight analysts, and predicts 350b yen of credit-related costs.
Smaller rivals Sumitomo Mitsui Financial Group Inc and Mizuho Financial Group Inc last week forecast a drop in credit-related costs this year on expectations the economy will recover as vaccination proceeds.
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