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Mitsubishi UFJ's (MUFG) Nine Months Earnings Increase Y/Y
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Mitsubishi UFJ Financial Group, Inc. (MUFG - Free Report) reported profits attributable to the owners of the parent for the first nine months of fiscal 2024 (ended Dec 31, 2023) of ¥1.3 trillion ($8.72 billion), up from ¥343.1 million in the prior-year quarter.
Increased gross profits, a rise in net fees and commissions, and net trading profits acted as tailwinds. Also, a rise in loan and deposit balances was a positive. On the flip side, a decline in net interest income (NII) was a dampener.
Gross Profits Improve, G&A Expenses Down
Gross profits (before credit costs for trust accounts) for the nine-month period were ¥ 3.62 trillion ($24.34 billion), up 1.1% from the prior-year period's level.
The results reflect a 22.2% year-over-year decline in NII, which came in at ¥1.80 trillion ($12.10 billion) during the reported period. Trust fees, along with net fees and commissions, totaled ¥1.29 trillion ($8.64 billion), up 3% year over year. Mitsubishi UFJ’s net trading profits (including net other operating profits) were ¥534 billion ($3.59 billion), up from ¥18.1 billion recorded in the prior-year period.
Mitsubishi UFJ’s total credit costs were ¥263.6 billion ($1.77 billion), down 45.6% from the first nine months of fiscal 2023.
General and administrative (G&A) expenses decreased 4.5% year over year to ¥2,098.8 billion ($14.11 billion).
The expense ratio was 57.9%, down from 61.4% in the prior-year period. A decrease in this ratio indicates a rise in profitability.
Balance Sheet Position Strong
As of Dec 31, 2023, Mitsubishi UFJ reported loans of ¥115.28 trillion ($775.17 billion), up 4.4% from that as of Mar 31, 2023. Deposits rose 1.2% to ¥216.26 trillion ($1.45 trillion).
Total assets summed ¥397.06 trillion ($2.67 trillion), up 2.7% from Mar 31, 2023.
Our Viewpoint
MUFG has a robust business model and solid capital ratios. However, high costs may hurt the bottom line in the near term. Supported by a strong liquidity position, Mitsubishi UFJ is poised for inorganic growth.
Mitsubishi UFJ Financial Group, Inc. Price, Consensus and EPS Surprise
Barclays (BCS - Free Report) is scheduled to report fourth-quarter and full-year 2023 results on Feb 20.
Over the past month, the Zacks Consensus Estimate for BCS’ 2023 earnings has moved 1.3% south to $1.57 per share, indicating growth of 3.3% from the prior-year quarter's figure.
HSBC Holdings (HSBC - Free Report) is slated to announce fourth-quarter and full-year 2023 results on Feb 21.
Over the past seven days, the Zacks Consensus Estimate for HSBC’s 2023 earnings has remained unchanged at $6.47 per share, implying a 74.9% jump from the prior-year reported number.
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Mitsubishi UFJ's (MUFG) Nine Months Earnings Increase Y/Y
Mitsubishi UFJ Financial Group, Inc. (MUFG - Free Report) reported profits attributable to the owners of the parent for the first nine months of fiscal 2024 (ended Dec 31, 2023) of ¥1.3 trillion ($8.72 billion), up from ¥343.1 million in the prior-year quarter.
Increased gross profits, a rise in net fees and commissions, and net trading profits acted as tailwinds. Also, a rise in loan and deposit balances was a positive. On the flip side, a decline in net interest income (NII) was a dampener.
Gross Profits Improve, G&A Expenses Down
Gross profits (before credit costs for trust accounts) for the nine-month period were ¥ 3.62 trillion ($24.34 billion), up 1.1% from the prior-year period's level.
The results reflect a 22.2% year-over-year decline in NII, which came in at ¥1.80 trillion ($12.10 billion) during the reported period. Trust fees, along with net fees and commissions, totaled ¥1.29 trillion ($8.64 billion), up 3% year over year. Mitsubishi UFJ’s net trading profits (including net other operating profits) were ¥534 billion ($3.59 billion), up from ¥18.1 billion recorded in the prior-year period.
Mitsubishi UFJ’s total credit costs were ¥263.6 billion ($1.77 billion), down 45.6% from the first nine months of fiscal 2023.
General and administrative (G&A) expenses decreased 4.5% year over year to ¥2,098.8 billion ($14.11 billion).
The expense ratio was 57.9%, down from 61.4% in the prior-year period. A decrease in this ratio indicates a rise in profitability.
Balance Sheet Position Strong
As of Dec 31, 2023, Mitsubishi UFJ reported loans of ¥115.28 trillion ($775.17 billion), up 4.4% from that as of Mar 31, 2023. Deposits rose 1.2% to ¥216.26 trillion ($1.45 trillion).
Total assets summed ¥397.06 trillion ($2.67 trillion), up 2.7% from Mar 31, 2023.
Our Viewpoint
MUFG has a robust business model and solid capital ratios. However, high costs may hurt the bottom line in the near term. Supported by a strong liquidity position, Mitsubishi UFJ is poised for inorganic growth.
Mitsubishi UFJ Financial Group, Inc. Price, Consensus and EPS Surprise
Mitsubishi UFJ Financial Group, Inc. price-consensus-eps-surprise-chart | Mitsubishi UFJ Financial Group, Inc. Quote
Mitsubishi UFJ currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates of Other Foreign Banks
Barclays (BCS - Free Report) is scheduled to report fourth-quarter and full-year 2023 results on Feb 20.
Over the past month, the Zacks Consensus Estimate for BCS’ 2023 earnings has moved 1.3% south to $1.57 per share, indicating growth of 3.3% from the prior-year quarter's figure.
HSBC Holdings (HSBC - Free Report) is slated to announce fourth-quarter and full-year 2023 results on Feb 21.
Over the past seven days, the Zacks Consensus Estimate for HSBC’s 2023 earnings has remained unchanged at $6.47 per share, implying a 74.9% jump from the prior-year reported number.