TOKYO :Mitsubishi UFJ Financial Group (MUFG) posted a 2.2 per cent rise in first-quarter net profit on Monday as loan demand in Japan and abroad rode out market volatility over the quarter, after stripping out a one-time item.
The results from Japan’s largest banking group round off a robust showing for the country’s three “megabanks”, each of which grew profits in the first quarter despite market swings and fears of a global economic slowdown.
MUFG remains on track to hit its record 2 trillion yen profit forecast for this financial year – a target set in May and that accounted for the wave of uncertainty triggered by the announcement of tariffs by U.S. president Donald Trump in April.
Including the one-time item – due to a change in the accounting period of a subsidiary – MUFG’s net profit was down 1.8 per cent.
Net profit reached 546 billion yen ($3.7 billion) in the April-June quarter, compared with 555.9 billion over the same period a year earlier.
Persistent inflation in Japan after decades of deflation has triggered a wave of borrowing among Japanese firms looking to invest for growth, demand for which held up despite the uncertainty.
MUFG’s domestic loan balance rose to 75.8 trillion yen at the end of June from 72.7 trillion at the end of June last year.
The prospect of tariffs has had limited effect on customer behavior so far, MUFG said.
“The customers expressing concerns about financing or delaying investment are limited,” Takayuki Hara, head of MUFG’s corporate planning division, told a press briefing.
“The effect on companies’ earnings will become apparent little by little in the second half of the year,” Hara said.
Meanwhile the end of negative interest rates in March last year, followed by two hikes since, has finally pushed up lending margins in Japan’s long-suffering banking sector.
MUFG’s domestic deposit and lending yield differential rose to 0.95 per cent in the April-June quarter from 0.86 per cent in the same period last year.
Last Thursday smaller rival Sumitomo Mitsui Financial Group also maintained its record earnings forecast of 1.3 trillion yen, while number three player Mizuho Financial Group hiked its forecast by 15 per cent to 1.02 trillion yen.
($1 = 147.6200 yen)
