We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Mitsubishi UFJ (MUFG) Nine-Month Earnings Up Y/Y on Low Costs
Read MoreHide Full Article
Mitsubishi UFJ Financial (MUFG - Free Report) reported profits attributable to owners of parent for the first nine months of fiscal 2020 (ended Dec 31) of ¥607 billion ($3.7 billion), up 3.3% year over year.
In the reported period, lower general & administrative (G&A) expenses and higher deposits balance were tailwinds. Increased gross profits, higher net trading profits and a strong capital drove the upside. However, rise in credit costs and decline in loans balance acted as headwinds.
Gross Profits Up, G&A Expenses Fall
Gross profits for the period being reported were ¥3 trillion ($0.02 trillion), up 1.6% year over year. The upsurge was mainly due to increase in market related gains along with higher net interest income reflecting consolidation of Bank Danamon.
The results reflect marginal increase in net interest income, which came in at ¥1.4 trillion ($9.1 billion). Net trading profits were ¥278.4 billion ($1.8 billion), surging 30.6% year over year. Also, for Mitsubishi UFJ, trust fees, along with net fees and commissions, totaled ¥1.1 trillion ($6.5 billion), up slightly.
Mitsubishi UFJ’s total credit costs, at the period end, were ¥343.6 billion ($2.4 billion) compared with ¥84.2 billion witnessed a year ago. This was on account of rise in credit risk globally due to the pandemic and adoption of new accounting methodology in overseas subsidiaries.
Net gains on equity securities increased 35.9% year over year to ¥72.7 billion ($0.23 billion). Other non-recurring losses totaled ¥97.2 billion ($0.65 billion) against gains of ¥5.2 billion ($0.14 billion) recorded in the prior-year period.
G&A expenses declined 1.7% year over year to ¥1.35 trillion ($0.01 trillion). The fall was primarily due to a decline in domestic expense.
Expense ratio was 67.5%, down from 69.7% in the prior-year period. A decrease in ratio indicates an increase in profitability.
Strong Capital Position
As of Dec 31, 2020, Mitsubishi UFJ reported total loans of ¥106.8 trillion ($1.03 trillion), down from ¥109.5 trillion ($1.02 trillion) as of Mar 31, 2020. This decline can be chiefly attributed to fall in overseas loans.
Deposits escalated to ¥205.1 trillion ($1.91 trillion) from ¥187.6 trillion ($1.74 trillion) as of Mar 31, 2020, as demand for domestic individuals, corporate and overseas deposits increased.
Total assets summed ¥351.7 trillion ($3.3 trillion), up from ¥336.6 trillion ($3.13 trillion) as of Mar 31, 2020. Net unrealized gains on securities available for sale increased to ¥3.9 trillion ($0.03 trillion) from ¥2.9 trillion ($0.03 trillion) as of Mar 31, 2020.
Moreover, total net assets were ¥17.5 trillion ($0.16 trillion), up from ¥16.9 trillion ($0.16 trillion) as of Mar 31, 2020. Non-performing loan ratio expanded 15 basis points from March 2020 to 0.8%, on rise in non-performing loans.
Our Viewpoint
Though we are wary about the heightening competition, high credit costs, volatility in the Japanese economy and escalating expenses, Mitsubishi UFJ’s robust business model and diversified product mix look encouraging. Furthermore, increase in profits is a tailwind.
UBS Group AG (UBS - Free Report) reported fourth-quarter 2020 net profit attributable to shareholders of $1.71 billion, up significantly from $722 million in the prior-year quarter.
Deutsche Bank (DB - Free Report) reported fourth-quarter 2020 net income of €189 million ($225.4 million) against the year-ago quarter’s net loss of €1.5 billion. Also, the German lender reported profit before taxes of €175 million ($208.7 million) against a loss of $1.3 billion in the year-ago quarter.
Itau Unibanco Holding S.A. (ITUB - Free Report) posted recurring earnings of R$5.4 billion ($1 billion) in fourth-quarter 2020, significantly down 26.2% year over year. Including non-recurring items, net income came in at R$7.6 billion ($1.4 billion), up 1.5%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Image: Bigstock
Mitsubishi UFJ (MUFG) Nine-Month Earnings Up Y/Y on Low Costs
Mitsubishi UFJ Financial (MUFG - Free Report) reported profits attributable to owners of parent for the first nine months of fiscal 2020 (ended Dec 31) of ¥607 billion ($3.7 billion), up 3.3% year over year.
In the reported period, lower general & administrative (G&A) expenses and higher deposits balance were tailwinds. Increased gross profits, higher net trading profits and a strong capital drove the upside. However, rise in credit costs and decline in loans balance acted as headwinds.
Gross Profits Up, G&A Expenses Fall
Gross profits for the period being reported were ¥3 trillion ($0.02 trillion), up 1.6% year over year. The upsurge was mainly due to increase in market related gains along with higher net interest income reflecting consolidation of Bank Danamon.
The results reflect marginal increase in net interest income, which came in at ¥1.4 trillion ($9.1 billion). Net trading profits were ¥278.4 billion ($1.8 billion), surging 30.6% year over year. Also, for Mitsubishi UFJ, trust fees, along with net fees and commissions, totaled ¥1.1 trillion ($6.5 billion), up slightly.
Mitsubishi UFJ’s total credit costs, at the period end, were ¥343.6 billion ($2.4 billion) compared with ¥84.2 billion witnessed a year ago. This was on account of rise in credit risk globally due to the pandemic and adoption of new accounting methodology in overseas subsidiaries.
Net gains on equity securities increased 35.9% year over year to ¥72.7 billion ($0.23 billion). Other non-recurring losses totaled ¥97.2 billion ($0.65 billion) against gains of ¥5.2 billion ($0.14 billion) recorded in the prior-year period.
G&A expenses declined 1.7% year over year to ¥1.35 trillion ($0.01 trillion). The fall was primarily due to a decline in domestic expense.
Expense ratio was 67.5%, down from 69.7% in the prior-year period. A decrease in ratio indicates an increase in profitability.
Strong Capital Position
As of Dec 31, 2020, Mitsubishi UFJ reported total loans of ¥106.8 trillion ($1.03 trillion), down from ¥109.5 trillion ($1.02 trillion) as of Mar 31, 2020. This decline can be chiefly attributed to fall in overseas loans.
Deposits escalated to ¥205.1 trillion ($1.91 trillion) from ¥187.6 trillion ($1.74 trillion) as of Mar 31, 2020, as demand for domestic individuals, corporate and overseas deposits increased.
Total assets summed ¥351.7 trillion ($3.3 trillion), up from ¥336.6 trillion ($3.13 trillion) as of Mar 31, 2020. Net unrealized gains on securities available for sale increased to ¥3.9 trillion ($0.03 trillion) from ¥2.9 trillion ($0.03 trillion) as of Mar 31, 2020.
Moreover, total net assets were ¥17.5 trillion ($0.16 trillion), up from ¥16.9 trillion ($0.16 trillion) as of Mar 31, 2020. Non-performing loan ratio expanded 15 basis points from March 2020 to 0.8%, on rise in non-performing loans.
Our Viewpoint
Though we are wary about the heightening competition, high credit costs, volatility in the Japanese economy and escalating expenses, Mitsubishi UFJ’s robust business model and diversified product mix look encouraging. Furthermore, increase in profits is a tailwind.
Mitsubishi UFJ Financial Group, Inc. Price
Mitsubishi UFJ Financial Group, Inc. price | Mitsubishi UFJ Financial Group, Inc. Quote
Mitsubishi UFJ currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Competitive Landscape
UBS Group AG (UBS - Free Report) reported fourth-quarter 2020 net profit attributable to shareholders of $1.71 billion, up significantly from $722 million in the prior-year quarter.
Deutsche Bank (DB - Free Report) reported fourth-quarter 2020 net income of €189 million ($225.4 million) against the year-ago quarter’s net loss of €1.5 billion. Also, the German lender reported profit before taxes of €175 million ($208.7 million) against a loss of $1.3 billion in the year-ago quarter.
Itau Unibanco Holding S.A. (ITUB - Free Report) posted recurring earnings of R$5.4 billion ($1 billion) in fourth-quarter 2020, significantly down 26.2% year over year. Including non-recurring items, net income came in at R$7.6 billion ($1.4 billion), up 1.5%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>