UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the month of November 2022

Commission File No. 000-54189

 

 

MITSUBISHI UFJ FINANCIAL GROUP, INC.

(Translation of registrant’s name into English)

 

 

7-1, Marunouchi 2-chome, Chiyoda-ku

Tokyo 100-8330, Japan

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or

will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F      X      Form 40-F              

Indicate by check mark if the registrant is submitting the Form 6-K

in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K

in paper as permitted by Regulation S-T Rule 101(b)(7):

 

 

 

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT ON FORM F-3 (NO. 333-242048) OF MITSUBISHI UFJ FINANCIAL GROUP, INC. AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED TO THE U.S. SECURITIES AND EXCHANGE COMMISSION TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED WITH OR FURNISHED TO THE U.S. SECURITIES AND EXCHANGE COMMISSION.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 14, 2022

 

 

Consolidated Summary Report

<under Japanese GAAP>

for the six months ended September 30, 2022

November 14, 2022

 

Company name:		Mitsubishi UFJ Financial Group, Inc.
Stock exchange listings:		Tokyo, Nagoya, New York
Code number:		8306
URL		https://www.mufg.jp/
Representative:		Hironori Kamezawa, President & Group CEO
For inquiry:		Masahisa Takahashi, Managing Director, Head of Financial Accounting and Reporting, Financial Accounting Office, Financial Planning Division
		TEL 050-3613-1179
Quarterly securities report issuing date:		November 29, 2022
Dividend payment date:		December 5, 2022
Trading accounts:		Established
Supplemental information for quarterly financial statements:		Available
Quarterly investor meeting presentation:		Scheduled (for investors and analysts)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Data for the Six Months ended September 30, 2022

 

(1)	Results of Operations

 

		(% represents the change from the same period in the previous fiscal year)
		Ordinary Income								Ordinary Profits								Profits Attributable to Owners of Parent
		million yen				%				million yen				%				million yen				%
For the six months ended
September 30, 2022			4,314,217				45.8				591,094				(40.1	)			231,091				(70.4	)
September 30, 2021			2,958,419				(5.8	)			986,006				67.0				781,433				95.0

 

(*)	Comprehensive income

                September 30, 2022: 301,170 million yen,     (75.3) %                 ;         September 30, 2021: 1,221,301 million yen,     57.1%

 

		Basic earnings per share				Diluted earnings per share
		yen				yen
For the six months ended
September 30, 2022			18.50				18.33
September 30, 2021			60.87				60.69

 

(2)	Financial Conditions

 

		Total Assets				Total Net Assets				Equity-to-asset ratio (*)
		million yen				million yen				%
As of
September 30, 2022			391,800,530				17,850,938				4.3
March 31, 2022			373,731,910				17,988,245				4.6

(Reference) Shareholders’ equity as of     September 30, 2022: 16,821,316 million yen;     March 31, 2022: 17,023,773 million yen

 

(*)	“Equity-to-asset ratio” is computed under the formula shown below

(Total

net assets - Non-controlling interests) / Total assets

2. Dividends on Common Stock

 

		Dividends per Share
		1st quarter-end				2nd quarter-end				3rd quarter-end				Fiscal year-end				Total
		yen				yen				yen				yen				yen
For the fiscal year
ended March 31, 2022			—				13.50				—				14.50				28.00
ending March 31, 2023			—				16.00
ending March 31, 2023 (Forecast)											—				16.00				32.00

 

(*)	Revision of forecasts for dividends on the presentation date of this Consolidated Summary Report : None

3. Earnings Target for the Fiscal Year ending March 31, 2023 (Consolidated)

MUFG has the target of 1,000.0 billion yen of profits attributable to owners of parent for the fiscal year ending March 31, 2023. (There is no change to our earnings target released on May 16, 2022.)

MUFG is engaged in financial service businesses such as banking business, trust banking business, securities business and credit card/loan businesses. Because there are various uncertainties caused by economic situation, market environments and other factors in these businesses, MUFG discloses a target of its profits attributable to owners of parent instead of a forecast of its performance.

øNotes

 

(1)	Changes in significant subsidiaries during the period: No

 

(2)	Changes in accounting policies, changes in accounting estimates and restatements

(A) Changes in accounting policies due to revision of accounting standards: Yes

(B) Changes in accounting policies due to reasons other than (A): No

(C) Changes in accounting estimates: No

(D) Restatements: No

 

(3)	Number of common stocks outstanding at the end of the period

 

(A) Total stocks outstanding including treasury stocks:		September 30, 2022			13,281,995,120 shares
		March 31, 2022			13,281,995,120 shares
(B) Treasury stocks:		September 30, 2022			991,692,588 shares
		March 31, 2022			667,296,084 shares
(C) Average outstanding of total stocks:		Six months ended September 30, 2022			12,489,571,267 shares
		Six months ended September 30, 2021			12,838,768,042 shares

*This “Consolidated Summary Report” (Quarterly “Tanshin”) is outside the scope of the external auditor’s interim audit procedure.

*Notes for using forecasted information etc.

 

1.

This financial summary report contains forward-looking statements regarding estimations, forecasts, targets and plans in relation to the results of operations, financial conditions and other overall management of the company and/or the group as a whole (the “forward-looking statements”). The forward-looking statements are made based upon, among other things, the company’s current estimations, perceptions and evaluations. In addition, in order for the company to adopt such estimations, forecasts, targets and plans regarding future events, certain assumptions have been made. Accordingly, due to various risks and uncertainties, the statements and assumptions are inherently not guarantees of future performance, may be considered differently from alternative perspectives and may result in material differences from the actual result. For the main factors that may affect the current forecasts, please see Consolidated Summary Report, Annual Securities Report, Disclosure Book, Annual Report, and other current disclosures that the company has announced.

 

2.

The financial information included in this financial summary report is prepared and presented in accordance with accounting principles generally accepted in Japan (“Japanese GAAP”). Differences exist between Japanese GAAP and the accounting principles generally accepted in the United States (“U.S. GAAP”) in certain material respects. Such differences have resulted in the past, and are expected to continue to result for this period and future periods, in amounts for certain financial statement line items under U.S. GAAP to differ significantly from the amounts under Japanese GAAP. For example, differences in consolidation basis or accounting for business combinations, including but not limited to amortization and impairment of goodwill, could result in significant differences in our reported financial results between Japanese GAAP and U.S. GAAP. Readers should consult their own professional advisors for an understanding of the differences between Japanese GAAP and U.S. GAAP and how those differences might affect our reported financial results. We will publish U.S. GAAP financial results in a separate disclosure document when such information becomes available.

Mitsubishi UFJ Financial Group, Inc.

 

(Appendix)

Contents of Appendix

 

1. Consolidated Financial Statements and Notes			2
(1) Consolidated Balance Sheets			2
(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income			4
(3) Consolidated Statements of Changes in Net Assets			6
(4) Notes on Going-Concern Assumption			8
(5) Changes in Accounting Policies			8
(6) Additional Information			8
(7) Significant Subsequent Events			10

Supplemental Information:

“Selected Financial Information under Japanese GAAP For the Six Months Ended September 30, 2022”

 

(*)	The following is the schedule of internet conference and explanation for investors and analysts. You can confirm those contents over the internet.

 

Internet Conference:		November 14, 2022 (Monday)
Explanation for investors and analysts:		November 16, 2022 (Wednesday)

 

1

Mitsubishi UFJ Financial Group, Inc.

 

1. Consolidated Financial Statements and Notes

( 1) Consolidated Balance Sheets

 

(in millions of yen)		As of        March 31, 2022				As of     September 30, 2022
Assets:
Cash and due from banks			110,763,205				102,378,661
Call loans and bills bought			872,268				705,358
Receivables under resale agreements			12,308,310				13,421,653
Receivables under securities borrowing transactions			4,517,952				4,527,739
Monetary claims bought			6,466,822				8,125,509
Trading assets			17,704,455				20,919,894
Money held in trust			1,332,492				1,355,335
Securities			79,560,579				84,451,528
Loans and bills discounted			110,426,224				119,771,151
Foreign exchanges			2,300,859				2,544,114
Other assets			14,050,293				18,339,939
Tangible fixed assets			1,236,012				1,268,316
Intangible fixed assets			1,344,225				1,457,328
Net defined benefit assets			1,374,607				1,454,967
Deferred tax assets			213,922				357,866
Customers’ liabilities for acceptances and guarantees			10,481,838				11,893,956
Allowance for credit losses			(1,222,162	)			(1,172,792	)
Total assets			373,731,910				391,800,530
Liabilities:
Deposits			215,427,299				222,062,651
Negotiable certificates of deposit			10,938,831				13,819,636
Call money and bills sold			2,429,791				3,501,486
Payables under repurchase agreements			27,619,262				34,514,370
Payables under securities lending transactions			1,072,578				924,369
Commercial papers			2,108,531				3,090,731
Trading liabilities			12,397,702				16,072,218
Borrowed money			31,763,332				22,790,482
Foreign exchanges			2,182,400				2,361,195
Short-term bonds payable			1,316,803				1,298,997
Bonds payable			13,257,347				16,052,500
Due to trust accounts			12,811,123				9,125,969
Other liabilities			10,861,695				15,767,277
Reserve for bonuses			136,724				122,253
Reserve for bonuses to directors			1,866				2,891
Reserve for stocks payment			8,437				8,511
Net defined benefit liabilities			86,355				94,583
Reserve for retirement benefits to directors			812				733
Reserve for loyalty award credits			17,113				19,649
Reserve for contingent losses			232,291				182,605
Reserves under special laws			4,656				4,665
Deferred tax liabilities			492,451				145,604
Deferred tax liabilities for land revaluation			94,414				92,247
Acceptances and guarantees			10,481,838				11,893,956
Total liabilities			355,743,665				373,949,591

 

2

Mitsubishi UFJ Financial Group, Inc.

 

(in millions of yen)		As of        March 31, 2022				As of     September 30, 2022
Net assets:
Capital stock			2,141,513				2,141,513
Capital surplus			770,277				770,717
Retained earnings			11,998,157				12,047,913
Treasury stock			(451,288	)			(688,056	)
Total shareholders’ equity			14,458,659				14,272,088
Net unrealized gains (losses) on available-for-sale securities			1,615,060				330,322
Net deferred gains (losses) on hedging instruments			(81,145	)			(337,897	)
Land revaluation excess			140,628				138,567
Foreign currency translation adjustments			734,588				2,238,359
Remeasurements of defined benefit plans			193,865				172,652
Debt value adjustments of foreign subsidiaries and affiliates			(37,883	)			7,223
Total accumulated other comprehensive income			2,565,114				2,549,228
Non-controlling interests			964,471				1,029,621
Total net assets			17,988,245				17,850,938
Total liabilities and net assets			373,731,910				391,800,530

 

3

Mitsubishi UFJ Financial Group, Inc.

 

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

Consolidated Statements of Income

 

(in millions of yen)		For the six months ended     September 30, 2021				For the six months ended     September 30, 2022
Ordinary income			2,958,419				4,314,217
Interest income			1,260,434				2,363,604
Interest on loans and bills discounted			803,807				1,154,963
Interest and dividends on securities			271,233				874,150
Trust fees			71,607				71,411
Fees and commissions			822,700				859,244
Trading income			120,262				88,193
Other operating income			198,752				442,190
Other ordinary income			484,661				489,573
Ordinary expenses			1,972,413				3,723,123
Interest expenses			268,052				690,489
Interest on deposits			94,620				266,670
Fees and commissions			149,531				158,454
Trading expenses			2,516				937
Other operating expenses			72,815				998,359
General and administrative expenses			1,333,552				1,429,403
Other ordinary expenses			145,944				445,477
Ordinary profits			986,006				591,094
Extraordinary gains			115,676				7,783
Gains on disposition of fixed assets			17,439				7,783
Gains on change in equity			64,944				—
Gains on sales of shares of affiliates			29,053				—
Gains on sales of shares of subsidiaries			4,240				—
Extraordinary losses			45,742				65,132
Losses on disposition of fixed assets			4,598				5,172
Losses on impairment of fixed assets			21,484				6,838
Provision for reserve for contingent liabilities from financial instruments transactions			1				8
Losses on sales of shares of affiliates			—				29,401
Losses on change in equity			19,657				23,711
Profits before income taxes			1,055,941				533,744
Income taxes-current			153,153				202,010
Income taxes-deferred			72,592				58,800
Total taxes			225,745				260,810
Profits			830,195				272,934
Profits attributable to non-controlling interests			48,761				41,842
Profits attributable to owners of parent			781,433				231,091

 

4

Mitsubishi UFJ Financial Group, Inc.

 

Consolidated Statements of Comprehensive Income

 

(in millions of yen)		For the six months ended     September 30, 2021				For the six months ended     September 30, 2022
Profits			830,195				272,934
Other comprehensive income
Net unrealized gains (losses) on available-for-sale securities			67,776				(1,179,037	)
Net deferred gains (losses) on hedging instruments			(12,482	)			(267,240	)
Foreign currency translation adjustments			240,622				1,058,679
Remeasurements of defined benefit plans			(12,215	)			(21,755	)
Share of other comprehensive income of associates accounted for using equity method			107,405				437,589
Total other comprehensive income			391,106				28,236
Comprehensive income			1,221,301				301,170
(Comprehensive income attributable to)
Comprehensive income attributable to owners of parent			1,170,361				217,266
Comprehensive income attributable to non-controlling interests			50,939				83,904

 

5

Mitsubishi UFJ Financial Group, Inc.

 

(3) Consolidated Statements of Changes in Net Assets

For the six months ended September 30, 2021

 

		(in millions of yen)
		Shareholders’ equity																				Accumulated other comprehensive income
		Capital stock				Capital surplus				Retained earnings				Treasury stock				Total shareholders’ equity				Net unrealized gains (losses) on available- for-sale securities				Net deferred gains (losses) on hedging instruments
Balance at the beginning of the period			2,141,513				977,287				11,200,087				(502,794	)			13,816,094				2,583,417				131,566
Cumulative effects of changes in accounting policies											(6,617	)							(6,617	)
Restated balance			2,141,513				977,287				11,193,470				(502,794	)			13,809,476				2,583,417				131,566
Changes during the period
Cash dividends											(160,918	)							(160,918	)
Profits attributable to owners of parent											781,433								781,433
Repurchase of treasury stock															(8,521	)			(8,521	)
Disposal of treasury stock							(0	)							5,573				5,573
Reversal of land revaluation excess											7,434								7,434
Changes in subsidiaries’ equity							(2,560	)											(2,560	)
Net changes of items other than shareholders’ equity																							46,831				(9,755	)
Total changes during the period			—				(2,560	)			627,950				(2,948	)			622,441				46,831				(9,755	)
Balance at the end of the period			2,141,513				974,726				11,821,420				(505,742	)			14,431,918				2,630,249				121,811
		Accumulated other comprehensive income
		Land revaluation excess				Foreign currency translation adjustments				Remeasurements of defined benefit plans				Debt value adjustments of foreign subsidiaries and affiliates				Total accumulated other comprehensive income				Non- controlling interests				Total net assets
Balance at the beginning of the period			149,183				9,953				163,189				(50,832	)			2,986,478				913,684				17,716,257
Cumulative effects of changes in accounting policies																							(14	)			(6,632	)
Restated balance			149,183				9,953				163,189				(50,832	)			2,986,478				913,669				17,709,625
Changes during the period
Cash dividends																											(160,918	)
Profits attributable to owners of parent																											781,433
Repurchase of treasury stock																											(8,521	)
Disposal of treasury stock																											5,573
Reversal of land revaluation excess																											7,434
Changes in subsidiaries’ equity																											(2,560	)
Net changes of items other than shareholders’ equity			(7,434	)			357,343				(11,467	)			5,975				381,493				35,010				416,503
Total changes during the period			(7,434	)			357,343				(11,467	)			5,975				381,493				35,010				1,038,945
Balance at the end of the period			141,748				367,296				151,721				(44,856	)			3,367,971				948,680				18,748,570

 

6

Mitsubishi UFJ Financial Group, Inc.

 

For the six months ended September 30, 2022

 

		(in millions of yen)
		Shareholders’ equity																				Accumulated other comprehensive income
		Capital stock				Capital surplus				Retained earnings				Treasury stock				Total shareholders’ equity				Net unrealized gains (losses)  on available- for-sale securities				Net deferred gains (losses) on hedging instruments
Balance at the beginning of the period			2,141,513				770,277				11,998,157				(451,288	)			14,458,659				1,615,060				(81,145	)
Changes during the period
Cash dividends											(183,396	)							(183,396	)
Profits attributable to owners of parent											231,091								231,091
Repurchase of treasury stock															(238,655	)			(238,655	)
Disposal of treasury stock							0								1,887				1,887
Reversal of land revaluation excess											2,061								2,061
Changes in subsidiaries’ equity							440												440
Net changes of items other than shareholders’ equity																							(1,284,738	)			(256,751	)
Total changes during the period			—				440				49,756				(236,767	)			(186,570	)			(1,284,738	)			(256,751	)
Balance at the end of the period			2,141,513				770,717				12,047,913				(688,056	)			14,272,088				330,322				(337,897	)
		Accumulated other comprehensive income
		Land revaluation excess				Foreign currency translation adjustments				Remeasurements of defined benefit plans				Debt value adjustments of foreign subsidiaries and affiliates				Total accumulated other comprehensive income				Non- controlling interests				Total net assets
Balance at the beginning of the period			140,628				734,588				193,865				(37,883	)			2,565,114				964,471				17,988,245
Changes during the period
Cash dividends																											(183,396	)
Profits attributable to owners of parent																											231,091
Repurchase of treasury stock																											(238,655	)
Disposal of treasury stock																											1,887
Reversal of land revaluation excess																											2,061
Changes in subsidiaries’ equity																											440
Net changes of items other than shareholders’ equity			(2,061	)			1,503,770				(21,212	)			45,107				(15,886	)			65,150				49,263
Total changes during the period			(2,061	)			1,503,770				(21,212	)			45,107				(15,886	)			65,150				(137,307	)
Balance at the end of the period			138,567				2,238,359				172,652				7,223				2,549,228				1,029,621				17,850,938

 

7

Mitsubishi UFJ Financial Group, Inc.

 

(4) Notes on Going-Concern Assumption

None.

(5) Changes in Accounting Policies

(Implementation Guidance on Accounting Standard for Fair Value Measurement)

Accounting Standard Board of Japan (“ASBJ”) Implementation Guidance No. 31, “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ, June 17, 2021) (“Implementation Guidance for Fair Value Measurement”), has been applied from the beginning of the six-month period ended September 30, 2022. In accordance with the transitional treatment set forth in paragraph 27-2 of the Implementation Guidance for Fair Value Measurement, MUFG has applied new accounting policies based on the Implementation Guidance for Fair Value Measurement prospectively.

There is no impact on our consolidated financial statements as of the end of and for the six-month period ended September 30, 2022 due to the application of this Guidance.

(6) Additional Information

(Estimated impact of the COVID-19 pandemic and the Russia-Ukraine situation relating to allowance for credit losses)

The process of calculating allowance for credit losses in our principal consolidated domestic banking subsidiaries involves various estimates such as determination of counterparty credit ratings which are based on evaluation and classification of counterparties’ debt-service capacity, assessment of the value of collateral provided by borrowers, and adjustments for future loss projections and other factors to the loss rates calculated based on historical credit loss experience.

Among these, internal credit ratings are assigned to counterparties based on qualitative factors such as the current and expected future business environment of the industry to which they belong as well as their management and funding risks in addition to quantitative financial evaluations through an analysis of their financial results. In particular, the uncertain business environment caused by such factors as the prolonged COVID-19 pandemic and Russia-Ukraine situation has had a significant impact on the financial position and operating results of certain counterparties. Determination of internal credit ratings for these counterparties may be highly dependent on our assessment of the prospects of improvements in their operating results and their ability to continue as going concerns.

When calculating allowance for credit losses, MUFG Bank, Ltd. (“the Bank”), our principal consolidated domestic banking subsidiary, determines expected loss rates primarily by calculating a rate of loss based on a historical average of the credit loss rate or a historical average of the default probability derived from actual credit loss experience or actual bankruptcy experience and making necessary adjustments based on future projections and other factors. The subsidiary makes such adjustments based on future loss projections and other factors to loss rates calculated based on historical loss experience, when and to the extent such adjustments are deemed appropriate, by taking into account the rate of increase in the credit loss rate or the default probability in a more recent period, additional expected losses and other factors, especially in light of the COVID-19 pandemic and the Russia-Ukraine situation. The amount of impact of these adjustments was ¥67,098 million as of September 30, 2022 (¥77,572 million as of March 31, 2022).

In addition, certain overseas subsidiaries which apply Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) have adopted Accounting Standards Codification (“ASC”) Topic 326, “Financial Instruments—Credit losses,” issued by the Financial Accounting Standards Board and provide for allowance for credit losses by estimating credit losses currently expected for the remaining term of the relevant contracts. Expected credit losses are calculated using a quantitative model that reflects economic forecast scenarios based on macroeconomic variables. The calculation process includes determination of macroeconomic variables used in multiple economic forecast scenarios and the weightings applied to each economic forecast scenario. Expected credit losses are adjusted for qualitative factors to compensate for expected credit losses that are not reflected in a quantitative model. No allowance for credit losses was recorded for the loans reclassified as loans held for sale in connection with the execution of the Share Purchase Agreement pursuant to which all of the shares of MUFG Union Bank, N.A. (“MUB”) held by MUFG Americas Holdings Corporation (“MUAH”) will be sold to U.S. Bancorp (“USB”) because these loans are measured at fair value in accordance with ASC Topic 310, “Receivables”.

 

8

Mitsubishi UFJ Financial Group, Inc.

 

Significant assumptions used in our calculation of allowance for credit losses, including those described above, are subject to uncertainty. In particular, certain counterparties’ prospects of improvements in their operating results and expectations as to their ability to continue as going concerns, and adjustments to the rate of loss calculated based on actual experience for future projections and other factors, as well as determination of the macroeconomic variables used in, and the weightings applied to, multiple economic forecast scenarios, and adjustments thereto for qualitative factors, by certain subsidiaries which apply U.S. GAAP, are based on estimation relating to the economic environment with respect to which objective data are not readily available.

The outlook relating to the COVID-19 pandemic and the Russia-Ukraine situation, which are expected to further impact our counterparties’ operating environment and the economic environment, remains subject to significant uncertainty. Accordingly, we make certain assumptions, including that, although the impact of the COVID-19 pandemic will continue, restrictions on economic activity will be eased mainly in major economies, resulting in gradual decrease in the economic impact, and that the uncertainty in the business environment caused by the Russia-Ukraine situation will remain. The recorded allowance for credit losses represents our best estimation made in a manner designed to ensure objectivity and rationality.

For the six-month period ended September 30, 2022, the assumptions for making estimates relating to allowance for credit losses remained substantially unchanged because the observable changes subsequent to the end of the previous fiscal year in the factors and circumstances underlying the outlook relating to the COVID-19 pandemic and the Russia-Ukraine situation were not sufficiently significant to cause such change in the assumptions. However, these assumptions are highly uncertain and, as we continue to monitor risks, including the risk of a significant economic downturn, which may increase due to, for example, prolongation of high global inflation and acceleration of monetary tightening, significant additional provision for credit losses may be recognized for the nine-month period ending December 31, 2022 and subsequent reporting periods due to such and other developments affecting the financial performance of counterparties or the economic environment.

(Valuation losses of a foreign subsidiary which are reflected in MUFG’s consolidated financial statements as of the end of and for the first half of the fiscal year ending March 31, 2023, and which are expected to be reflected in MUFG’s consolidated financial statements as of the end of and for the third quarter of the fiscal year ending March 31, 2023)

In connection with the planned sale of the shares in MUB, MUAH recognized an aggregate of ¥631,861 million of losses for the six months ended June 30, 2022, primarily in accordance with ASC Topic 326, “Financial Instruments—Credit losses,” and ASC Topic 310, “Receivables,” issued by the FASB. The aggregate losses reflected ¥385,215 million of valuation losses related to securities held for sale recorded as Other operating expenses and ¥232,571 million of valuation losses related to loans held for sale recorded as Other ordinary expenses. All of the losses recognized by MUAH are reflected in MUFG’s consolidated financial statements as of the end of and for the first half of the fiscal year ending March 31, 2023.

In connection with the same transaction, it is currently estimated that MUAH will recognize an aggregate of approximately ¥410 billion of losses for the quarter ended September 30, 2022. It is also currently estimated that the aggregate estimated losses will reflect approximately ¥210 billion of valuation losses related to securities held for sale to be recorded as Other operating expenses and approximately ¥220 billion of valuation losses related to loans held for sale to be recorded as Other ordinary expenses. All of the losses recognized by MUAH are expected to be reflected in MUFG’s consolidated financial statements as of the end of and for the third quarter of the fiscal year ending March 31, 2023.

The closing of the sale of the shares in MUB is expected to occur on December 1, 2022, subject to the satisfaction of the remaining closing conditions. Any Gains on sale of shares in subsidiaries resulting from the sale of the shares in MUB are expected to be reflected in MUFG’s consolidated financial statements as of the end of and for the fourth quarter of the fiscal year ending March 31, 2023.

 

9

Mitsubishi UFJ Financial Group, Inc.

 

(7) Significant Subsequent Events

(Closing Date of the Sale of MUFG Union Bank, N.A. and Transfer of Certain Businesses of MUFG Union Bank, N.A.)

On September 21, 2021, MUAH, a subsidiary of MUFG whose financial statements as of the end of and for the six-month period ended June 30, 2022 have been consolidated with MUFG’s financial statements included in this report, entered into a Share Purchase Agreement with USB to sell all of the shares in MUB held by MUAH. All of the regulatory approvals necessary to complete the transfer of the MUB shares to USB (the Share Transfer) and related transactions contemplated by the Share Purchase Agreement have been obtained on or prior to October 19, 2022. Accordingly, the closing of the Share Transfer is expected to occur on December 1, 2022, subject to the satisfaction of the remaining closing conditions. Any Gains on sale of shares in subsidiaries resulting from the Share Transfer are expected to be reflected in MUFG’s consolidated financial statements as of the end of and for the fourth quarter of the fiscal year ending March 31, 2023.

The MUB businesses that will be transferred to USB through the Share Transfer exclude the GCIB (Global Corporate & Investment Banking) business (with certain exceptions as agreed to by the parties, including certain deposits of the GCIB business that will be retained by MUB), the Global Markets business to the extent related to the GCIB business, which consist of transactions with clients and investors, and certain assets and liabilities, etc. that are part of shared middle and back office functions, etc. Such businesses, and the customer assets and liabilities, etc. related to these businesses (including related transactions with such customers), are being transferred to the Bank and MUAH in phases prior to the Share Transfer for consideration paid in the form of cash.

(A) Business Divestiture

(a) Outline of the business divestiture

(i) Name of the acquiring entity

U.S. Bancorp

(ii) Description of the businesses to be divested

Retail and Commercial Banking businesses of MUB

(iii) Main objectives of the business divestiture

MUFG has viewed the U.S. regional banking business as an important business for the group’s strategy. At the same time, given MUB’s current business environment, including the need for increased technology investments as part of digital transformation, a certain scale is required to maintain and strengthen MUB’s competitiveness.

Under these circumstances, MUFG concluded that transferring MUB to USB, a major U.S. bank with a strong business foundation, is the most appropriate decision that is expected to lead to providing higher quality financial services to customers and communities and unlock MUB’s potential franchise value. From the perspective of MUFG’s optimization of management resources under the current medium-term business plan, MUFG determined that the sale of MUB and the shift of focus to corporate transactions in the United States are expected to maximize shareholder value through an increase in capital efficiency.

(iv) Date of the business divestiture

Expected to be effective on December 1, 2022

(v) Legal form of the business divestiture

Transfer of shares for consideration to be paid in the form of cash and shares

 

10

Mitsubishi UFJ Financial Group, Inc.

 

(b) Name of the reporting segment in which the businesses to be divested are mainly included

Global Commercial Banking Business Group

(c) Overview of continued involvement related to the business divestiture

MUFG expects to hold an investment in USB upon receipt of shares of USB as part of the consideration for the Share Transfer.

In addition, the Bank and USB will enter into a Transitional Service Agreement and a Reverse Transitional Service Agreement with an aim for both the Bank and MUB to be able to smoothly continue to provide high quality financial services even after the Share Transfer. The Bank is expected to provide and receive certain services based on such agreements.

In addition, the corporate credit card business for GCIB business customers and certain Japanese customers that is currently run by MUB is expected to be transferred from MUB to the Bank after the Share Transfer, subject to certain conditions precedent, including the receipt of regulatory approval.

(B) Transaction under Common Control

(a) Overview and objectives of the business transfer

The GCIB business (with certain exceptions as agreed to by the parties, including certain deposits of the GCIB business that will be retained by MUB), the Global Markets business to the extent related to the GCIB business, which consist of transactions with clients and investors, and certain assets and liabilities, etc. that are part of shared middle and back office functions, etc., are being transferred to the Bank and MUAH in phases prior to the Share Transfer.

The MUFG group will continue to view the U.S. market as a strategically important market after the Share Transfer and, through this transaction, aims to optimize management resources with a strategic focus on corporate transactions where the MUFG group believes it can leverage its strengths.

(b) Overview of the accounting treatment to be applied

The transaction will be treated as a transaction under common control under ASBJ Statement No. 21, “Accounting Standard for Business Combinations” (ASBJ, January 16, 2019), and ASBJ Implementation Guidance No. 10, “Implementation Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ, January 16, 2019).

 

11

 

 

Selected Financial Information

under Japanese GAAP

For the Six Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

Mitsubishi UFJ Financial Group, Inc.

Mitsubishi UFJ Financial Group, Inc.

[Contents]       

 

1.  Financial Results		[ MUFG Consolidated ]*1[ BK and TB Combined ]*2*3*4 [ BK Consolidated ][ BK Non-consolidated ] [ TB Consolidated ][ TB Non-consolidated ]			1
2.  Average Interest Rate Spread		[ BK Non-consolidated ][ TB Non-consolidated ] [ BK and TB Combined ]			7
3.  Notional Principal by the Remaining Life of the Interest Rate Swaps for Hedge-Accounting		[ MUFG Consolidated ][ BK Consolidated][ TB Consolidated ]			8
4.  Securities		[ MUFG Consolidated ] [ BK Non-consolidated ][ TB Non-consolidated ]			9
5.  ROE		[ MUFG Consolidated ]			12
6.  Risk-Adjusted Capital Ratio		[ MUFG Consolidated ][ BK Consolidated ][ TB Consolidated ] [ BK Non-consolidated ][ TB Non-consolidated ]			13
7.  Loans to Be Disclosed under the Banking Act and the Financial Reconstruction Act (the “FRA”)		[ MUFG Consolidated ][ BK and TB Combined including Trust Account ] [ BK Non-consolidated ][ TB Non-consolidated ] [ TB Non-consolidated : Trust Account ]			14
8.  Progress in Disposition of Problem Assets		[ BK Non-consolidated ] [ TB Non-consolidated including Trust Account ]			20
9.  Loans Classified by Type of Industry, Domestic Consumer Loans, Domestic Loans to Small/Medium-Sized Companies and Proprietors		[ BK and TB Combined including Trust Accounts ] [ BK Non-consolidated ][ TB Non-consolidated ] [ TB Non-consolidated : Trust Accounts ]			22
10.  Overseas Loans		[ BK Consolidated excl. MUAH, KS, BDI ]*5*6*7			26
11.  Loans and Deposits		[ BK and TB Combined ] [ BK Non-consolidated ][ TB Non-consolidated ]			27
12.  Domestic Deposits		[ BK and TB Combined ] [ BK Non-consolidated ][ TB Non-consolidated ]			28
13.  Status of Deferred Tax Assets		[ BK Non-consolidated ][ TB Non-consolidated ]			29
(Reference)
1.  Financial Statements		[ BK Non-consolidated ][ TB Non-consolidated ]			31

 

(*1)	“MUFG” means Mitsubishi UFJ Financial Group, Inc.

(*2)	“BK” means MUFG Bank, Ltd.

(*3)	“TB” means Mitsubishi UFJ Trust and Banking Corporation.

(*4)	“BK and TB Combined” means simple sum of “BK” and “TB” without consolidation processes.

(*5)	“MUAH” means MUFG Americas Holdings Corporation.

(*6)	“KS” means Bank of Ayudhya Public Company Limited.

(*7)	“BDI” means PT Bank Danamon Indonesia, Tbk.

Mitsubishi UFJ Financial Group, Inc.

 

1. Financial Results

MUFG Consolidated

 

		(in millions of yen)
		For the six months ended								Increase
		September 30, 2022 (A)				September 30, 2021 (B)				(Decrease)        (A) - (B)
Gross profits			2,323,442				1,980,900				342,541
Gross profits before credit costs for trust accounts			2,323,442				1,980,851				342,590
Net interest income			1,674,077				992,441				681,636
Trust fees			71,411				71,607				(196	)
Credit costs for trust accounts (1)			—				49				(49	)
Net fees and commissions			700,789				673,168				27,621
Net trading profits			89,420				117,746				(28,325	)
Net other operating profits			(212,257	)			125,936				(338,194	)
Net gains (losses) on debt securities			(497,177	)			70,598				(567,775	)
General and administrative expenses			1,428,165				1,343,287				84,878
Amortization of goodwill			10,223				8,896				1,327
Net operating profits before credit costs for trust accounts, provision for general allowance for credit losses and amortization of goodwill			905,500				646,460				259,039
Net operating profits before credit costs for trust accounts and provision for general allowance for credit losses			895,276				637,563				257,712
Provision for general allowance for credit losses (2)			45,158				—				45,158
Net operating profits*1			940,434				637,613				302,821
Net non-recurring gains (losses)			(349,340	)			348,393				(697,733	)
Credit costs (3)			(363,896	)			(73,096	)			(290,800	)
Losses on loan write-offs*2			(294,116	)			(68,856	)			(225,260	)
Provision for specific allowance for credit losses			(71,234	)			—				(71,234	)
Other credit costs			1,453				(4,240	)			5,694
Reversal of allowance for credit losses (4)			—				43,749				(43,749	)
Reversal of reserve for contingent losses included in credit costs (5)			27,960				5,444				22,515
Gains on loans written-off (6)			46,945				41,760				5,185
Net gains (losses) on equity securities			76,125				126,065				(49,940	)
Gains on sales of equity securities			147,037				145,337				1,699
Losses on sales of equity securities			(15,404	)			(14,072	)			(1,332	)
Losses on write-down of equity securities			(55,507	)			(5,200	)			(50,307	)
Equity in earnings of equity method investees			239,246				218,377				20,868
Other non-recurring gains (losses)*2			(375,720	)			(13,906	)			(361,814	)
Ordinary profits			591,094				986,006				(394,912	)
Net extraordinary gains (losses)			(57,349	)			69,934				(127,283	)
Net gains (losses) on disposition of fixed assets			2,611				12,840				(10,229	)
Losses on impairment of fixed assets			(6,838	)			(21,484	)			14,646
Net gains (losses) on sales of shares of affiliates			(29,401	)			29,053				(58,454	)
Net gains (losses) on change in equity			(23,711	)			45,286				(68,998	)
Gains on sales of shares of subsidiaries			—				4,240				(4,240	)
Profits before income taxes			533,744				1,055,941				(522,196	)
Income taxes-current			202,010				153,153				48,856
Income taxes-deferred			58,800				72,592				(13,792	)
Total taxes			260,810				225,745				35,064
Profits			272,934				830,195				(557,260	)
Profits attributable to non-controlling interests			41,842				48,761				(6,918	)
Profits attributable to owners of parent			231,091				781,433				(550,342	)
Profits attributable to owners of parent, taking into account gains on sale of shares in MUB*3			679,219				781,433				(102,214	)
Note:
*1.  Net operating profits = Banking subsidiaries’ net operating profits + Other consolidated entities’ gross profits - Other consolidated entities’ general and administrative expenses - Other consolidated entities’ provision for general allowance for credit losses - Amortization of goodwill - Inter-company transactions
*2.  In connection with the planned sale of the shares in MUFG Union Bank, N.A. (“MUB”), an aggregate of ¥631,861 million of losses were recognized primarily in accordance with Accounting Standards Codification (“ASC”) Topic 326, “Financial Instruments - Credit losses,” and ASC Topic 310, “Receivables.” These losses consist mainly of ¥385,215 million of valuation losses related to securities held for sale, which are included in Other non-recurring gains (losses), and ¥232,571 million of valuation losses related to loans held for sale, which are included in Losses on loan write-offs.
*3.  “Profits attributable to owners of parent, taking into account gains on sale of shares in MUB” reflects the above-described losses of ¥631,861 million recognized under accounting treatment applied in connection with the planned sale of the shares in MUB net of ¥448,127 million of extraordinary gains that are expected to be recorded in connection with the sale of the shares in MUB.
(Reference)
Total credit costs (1)+(2)+(3)+(4)+(5)+(6)			(243,832	)			17,906				(261,739	)
Number of consolidated subsidiaries			252				250				2
Number of affiliated companies accounted for under the equity method			54				53				1

 

1

Mitsubishi UFJ Financial Group, Inc.

 

BK and TB Combined

 

		(in millions of yen)
		For the six months ended								Increase
		September 30, 2022 (A)				September 30, 2021 (B)				(Decrease)        (A) - (B)
Gross profits			1,176,143				997,467				178,675
Gross profits before credit costs for trust accounts			1,176,143				997,418				178,725
Domestic gross profits			610,546				563,635				46,911
Net interest income			389,748				298,905				90,842
Trust fees			56,194				58,216				(2,021	)
Credit costs for trust accounts (1)			—				49				(49	)
Net fees and commissions			147,694				152,747				(5,053	)
Net trading profits			(16,365	)			3,430				(19,796	)
Net other operating profits			33,275				50,335				(17,060	)
Net gains (losses) on debt securities			(22,855	)			50,660				(73,516	)
Non-domestic gross profits			565,596				433,832				131,764
Net interest income			770,284				286,254				484,030
Net fees and commissions			116,969				81,709				35,259
Net trading profits			20,000				26,649				(6,648	)
Net other operating profits			(341,656	)			39,219				(380,876	)
Net gains (losses) on debt securities			(475,452	)			13,270				(488,722	)
General and administrative expenses			655,461				640,996				14,465
Personnel expenses			213,975				209,630				4,345
Non-personnel expenses			403,405				400,898				2,506
Taxes			38,080				30,467				7,613
Net operating profits before credit costs for trust accounts and provision for general allowance for credit losses			520,681				356,422				164,259
Provision for general allowance for credit losses (2)			—				—				—
Net operating profits			520,681				356,471				164,210
Net non-recurring gains (losses)			240,343				201,000				39,343
Credit costs (3)			(9,506	)			(10,916	)			1,410
Reversal of allowance for credit losses (4)			69,742				71,113				(1,370	)
Reversal of reserve for contingent losses included in credit costs (5)			26,840				6,090				20,750
Gains on loans written-off (6)			8,117				7,775				342
Net gains (losses) on equity securities			78,874				119,490				(40,615	)
Gains on sales of equity securities			144,102				137,993				6,109
Losses on sales of equity securities			(15,612	)			(14,411	)			(1,201	)
Losses on write-down of equity securities			(49,614	)			(4,091	)			(45,523	)
Other non-recurring gains (losses)			66,274				7,447				58,826
Ordinary profits			761,025				557,471				203,553
Net extraordinary gains (losses)			(9,518	)			3,345				(12,864	)
Net gains (losses) on disposition of fixed assets			359				11,119				(10,760	)
Losses on impairment of fixed assets			(4,747	)			(8,064	)			3,317
Losses on sales of shares of affiliates			(5,248	)			—				(5,248	)
Income before income taxes			751,506				560,817				190,689
Income taxes-current			141,589				98,244				43,344
Income taxes-deferred			68,893				51,843				17,049
Total taxes			210,482				150,088				60,393
Net income			541,024				410,728				130,295
(Reference)
Total credit costs (1)+(2)+(3)+(4)+(5)+(6)			95,194				74,111				21,083
Credit costs for trust accounts			—				49				(49	)
Provision for general allowance for credit losses			75,608				80,040				(4,432	)
Provision for special allowance for credit losses			(10,005	)			(7,251	)			(2,754	)
Allowance for credit to specific foreign borrowers			4,139				(1,676	)			5,815
Losses on loans write-offs			(6,180	)			(9,442	)			3,262
Provision for contingent losses included in credit costs			26,814				6,001				20,812
Gains on loans written-off			8,117				7,775				342
Losses on sales of other loans, etc.			(3,298	)			(1,384	)			(1,913	)
Net operating profits before credit costs for trust accounts and provision for general allowance for credit losses, excluding net gains (losses) on debt securities			1,018,990				292,490				726,499
Net operating profits before credit costs for trust accounts and provision for general allowance for credit losses, excluding net gains (losses) on debt securities and investment trusts cancellation			528,864				265,834				263,029

 

2

Mitsubishi UFJ Financial Group, Inc.

 

BK Consolidated

 

		(in millions of yen)
		For the six months ended								Increase
		September 30, 2022 (A)				September 30, 2021 (B)				(Decrease)        (A) - (B)
Gross profits			1,642,276				1,361,450				280,825
Net interest income			1,276,294				845,033				431,261
Trust fees			7,082				5,847				1,235
Net fees and commissions			391,557				341,612				49,944
Net trading profits			69,305				41,607				27,697
Net other operating profits			(101,964	)			127,349				(229,314	)
Net gains (losses) on debt securities			(276,365	)			72,284				(348,650	)
General and administrative expenses			985,397				912,711				72,686
Amortization of goodwill			3,749				3,180				569
Net operating profits before provision for general allowance for credit losses and amortization of goodwill			660,628				451,919				208,708
Net operating profits before provision for general allowance for credit losses			656,878				448,739				208,139
Provision for general allowance for credit losses (1)			42,919				—				42,919
Net operating profits*1			699,798				448,739				251,058
Net non-recurring gains (losses)			(541,407	)			154,006				(695,413	)
Credit costs (2)			(314,345	)			(37,870	)			(276,474	)
Losses on loan write-offs*2			(255,988	)			(33,630	)			(222,357	)
Provision for specific allowance for credit losses			(59,810	)			—				(59,810	)
Other credit costs			1,453				(4,240	)			5,694
Reversal of allowance for credit losses (3)			—				51,939				(51,939	)
Reversal of reserve for contingent losses included in credit costs (4)			27,960				5,379				22,580
Gains on loans written-off (5)			34,276				29,224				5,051
Net gains (losses) on equity securities			57,583				105,137				(47,554	)
Gains on sales of equity securities			126,250				123,294				2,956
Losses on sales of equity securities			(14,523	)			(13,968	)			(555	)
Losses on write-down of equity securities			(54,143	)			(4,187	)			(49,955	)
Equity in earnings of equity method investees			23,118				13,580				9,537
Other non-recurring gains (losses)*2			(370,000	)			(13,385	)			(356,615	)
Ordinary profits			158,391				602,746				(444,355	)
Net extraordinary gains (losses)			(32,721	)			35,214				(67,936	)
Net gains (losses) on disposition of fixed assets			1,413				11,120				(9,707	)
Losses on impairment of fixed assets			(4,149	)			(17,674	)			13,525
Net gains (losses) on sales of shares of affiliates			(29,985	)			29,053				(59,038	)
Gains on change in equity			—				8,419				(8,419	)
Gains on sales of shares of subsidiaries			—				4,295				(4,295	)
Profits before income taxes			125,669				637,961				(512,291	)
Income taxes-current			144,784				110,670				34,114
Income taxes-deferred			42,097				55,651				(13,554	)
Total taxes			186,881				166,322				20,559
Profits			(61,212	)			471,638				(532,851	)
Profits attributable to non-controlling interests			(17,352	)			21,119				(38,471	)
Profits attributable to owners of parent			(43,859	)			450,519				(494,379	)
Profits attributable to owners of parent, taking into account gains on sale of shares in MUB*3			404,268				450,519				(46,251	)
Note:
*1.  Net operating profits = Net operating profits of BK + Other consolidated entities’ gross profits - Other consolidated entities’ general and administrative expenses - Other consolidated entities’ provision for general allowance for credit losses - Amortization of goodwill - Inter-company transactions
*2.  In connection with the planned sale of the shares in MUB, an aggregate of ¥631,861 million of losses were recognized primarily in accordance with ASC Topic 326, “Financial Instruments—Credit losses,” and ASC Topic 310, “Receivables.” These losses consist mainly of ¥385,215 million of valuation losses related to securities held for sale, which are included in Other non-recurring gains (losses), and ¥232,571 million of valuation losses related to loans held for sale, which are included in Losses on loan write-offs.
*3.  “Profits attributable to owners of parent, taking into account gains on sale of shares in MUB” reflects the above-described losses of ¥631,861 million recognized under accounting treatment applied in connection with the planned sale of the shares in MUB net of ¥448,127 million of extraordinary gains that are expected to be recorded in connection with the sale of the shares in MUB.
(Reference)
Total credit costs (1)+(2)+(3)+(4)+(5)			(209,188	)			48,673				(257,862	)
Number of consolidated subsidiaries			116				115				1
Number of affiliated companies accounted for under the equity method			47				44				3

 

3