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Mitsubishi UFJ (MUFG) Earnings Improve Y/Y in Fiscal 2023
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Mitsubishi UFJ Financial Group, Inc. (MUFG - Free Report) reported fiscal 2023 (ended Mar 31, 2024) diluted earnings per share of ¥124.33. This compared favorably with the ¥90.41 reported in the year-ago quarter.
Its profits attributable to the owners of the parent for fiscal 2023 of ¥1.5 trillion ($10.4 billion) increased from ¥1.12 trillion reported in the prior-year quarter. The improvement was driven by a rise in customer unit revenues, a change in Morgan Stanley’s accounting period and the impact of the depreciation of the yen.
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 and a decline in General and administrative (G&A) expenses were positive. On the flip side, a decline in net interest income (NII) was an undermining factor.
Revenues & Gross Profits Improve, G&A Expenses Fall
Net revenues for fiscal 2023 were ¥4.8 trillion ($32.14 billion), up 5.7% year over year.
Gross profits (before credit costs for trust accounts) were ¥4.7 trillion ($31.88 billion), up 5.1% from the prior-year period. The improvement was mainly driven by a rise in net fees and commissions.
Results reflected a 15.5% year-over-year decline in NII, which came in at ¥2.5 trillion ($16.55 billion) during the reported period. Trust fees, along with net fees and commissions, totaled ¥1.8 trillion ($12.26 billion), up 7.4% year over year. Mitsubishi UFJ’s net trading profits (including net other operating profits) were ¥454 billion ($3.06 billion) against a loss of ¥100 billion recorded in the prior-year period.
MUFG’s total credit costs were negative ¥498 billion ($3.35 billion), down from negative ¥675 billion witnessed a year ago.
G&A expenses decreased marginally year over year to ¥2,889 billion ($19.46 billion).
The expense ratio was 61%, down from 64.5% in the prior-year period. A decrease in this ratio indicates a rise in profitability.
Balance Sheet Position Strong
As of Mar 31, 2024, Mitsubishi UFJ reported loans of ¥116.83 trillion ($771.75 billion), up 7% year over year. Deposits rose 4.9% to ¥224.04 trillion ($1.48 trillion).
Total assets were ¥403.7 trillion ($2.67 trillion), up 4.4% from Mar 31, 2023.
Capital Distribution Update
The company increased the forecast for dividend per common stock to ¥50 from ¥41 in fiscal 2023.
Our Viewpoint
MUFG has a robust business model and solid capital ratios. Its strong liquidity position supports its inorganic growth strategies. However, high costs are likely to hurt the bottom line in the near term.
Mitsubishi UFJ Financial Group, Inc. Price, Consensus and EPS Surprise
UBS Group AG (UBS - Free Report) reported a first-quarter 2024 net profit attributable to shareholders of $1.75 billion, which surged 70.6% from the year-ago quarter.
UBS’s results benefited from a rise in total revenues, driven in part by the acquisition of Credit Suisse. However, an increase in operating expenses, along with a significant rise in credit loss expenses, is a near-term concern.
Deutsche Bank (DB - Free Report) reported a first-quarter 2024 profit attributable to its shareholders of €1.3 billion ($1.41 billion), up 10.1% year over year. The Germany-based lender reported a profit before tax of €2 billion ($2.17 billion), up 10% year over year.
DB’s results were positively impacted by higher net revenues and lower expenses. However, higher provision for credit losses was an offsetting factor.
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Mitsubishi UFJ (MUFG) Earnings Improve Y/Y in Fiscal 2023
Mitsubishi UFJ Financial Group, Inc. (MUFG - Free Report) reported fiscal 2023 (ended Mar 31, 2024) diluted earnings per share of ¥124.33. This compared favorably with the ¥90.41 reported in the year-ago quarter.
Its profits attributable to the owners of the parent for fiscal 2023 of ¥1.5 trillion ($10.4 billion) increased from ¥1.12 trillion reported in the prior-year quarter. The improvement was driven by a rise in customer unit revenues, a change in Morgan Stanley’s accounting period and the impact of the depreciation of the yen.
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 and a decline in General and administrative (G&A) expenses were positive. On the flip side, a decline in net interest income (NII) was an undermining factor.
Revenues & Gross Profits Improve, G&A Expenses Fall
Net revenues for fiscal 2023 were ¥4.8 trillion ($32.14 billion), up 5.7% year over year.
Gross profits (before credit costs for trust accounts) were ¥4.7 trillion ($31.88 billion), up 5.1% from the prior-year period. The improvement was mainly driven by a rise in net fees and commissions.
Results reflected a 15.5% year-over-year decline in NII, which came in at ¥2.5 trillion ($16.55 billion) during the reported period. Trust fees, along with net fees and commissions, totaled ¥1.8 trillion ($12.26 billion), up 7.4% year over year. Mitsubishi UFJ’s net trading profits (including net other operating profits) were ¥454 billion ($3.06 billion) against a loss of ¥100 billion recorded in the prior-year period.
MUFG’s total credit costs were negative ¥498 billion ($3.35 billion), down from negative ¥675 billion witnessed a year ago.
G&A expenses decreased marginally year over year to ¥2,889 billion ($19.46 billion).
The expense ratio was 61%, down from 64.5% in the prior-year period. A decrease in this ratio indicates a rise in profitability.
Balance Sheet Position Strong
As of Mar 31, 2024, Mitsubishi UFJ reported loans of ¥116.83 trillion ($771.75 billion), up 7% year over year. Deposits rose 4.9% to ¥224.04 trillion ($1.48 trillion).
Total assets were ¥403.7 trillion ($2.67 trillion), up 4.4% from Mar 31, 2023.
Capital Distribution Update
The company increased the forecast for dividend per common stock to ¥50 from ¥41 in fiscal 2023.
Our Viewpoint
MUFG has a robust business model and solid capital ratios. Its strong liquidity position supports its inorganic growth strategies. However, high costs are likely to hurt the bottom line in the near term.
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 #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
UBS Group AG (UBS - Free Report) reported a first-quarter 2024 net profit attributable to shareholders of $1.75 billion, which surged 70.6% from the year-ago quarter.
UBS’s results benefited from a rise in total revenues, driven in part by the acquisition of Credit Suisse. However, an increase in operating expenses, along with a significant rise in credit loss expenses, is a near-term concern.
Deutsche Bank (DB - Free Report) reported a first-quarter 2024 profit attributable to its shareholders of €1.3 billion ($1.41 billion), up 10.1% year over year. The Germany-based lender reported a profit before tax of €2 billion ($2.17 billion), up 10% year over year.
DB’s results were positively impacted by higher net revenues and lower expenses. However, higher provision for credit losses was an offsetting factor.