Mitsubishi UFJ (MUFG) Stories Spectacular Earnings in Q3

Mitsubishi UFJ Monetary MUFG reported income attributable to homeowners of mum or dad for the third quarter of fiscal 2021 (ended Dec 31) of ¥1.07 billion ($9.42 billion), up 76.3% 12 months over 12 months.

Within the reported interval, elevated gross income, increased belief charges together with web charges, and commissions and decreased credit score prices drove the upside. Nevertheless, an increase normally and administrative bills and a decline in mortgage and deposit balances acted as headwinds.

Gross Earnings Rise, G&A Bills Escalate

Gross income (earlier than credit score prices for belief accounts) for the mentioned interval had been ¥2.95 trillion ($0.02 trillion), up marginally 12 months over 12 months. This upsurge was primarily on increased web curiosity earnings (NII) and belief charges, and web charges and commissions.

Outcomes mirror a 7.2% improve in NII, which got here in at ¥1.49 trillion ($13.12 billion). Internet buying and selling income (together with web different working income) had been ¥328.9 billion ($2.89 billion), lowering 41% 12 months over 12 months. Nonetheless, for Mitsubishi UFJ, belief charges together with web charges and commissions totaled ¥1.13 trillion ($9.95 billion), up 13.5%.

Mitsubishi UFJ’s whole credit score prices on the interval finish had been ¥27.2 billion ($239.36 million) in contrast with ¥343.6 billion witnessed a 12 months in the past. This was on account of an improved credit score high quality and reversal of the allowance and reversal of allowance for credit score losses related to the choice to promote all shares of MUFG Union Financial institution, N.A.

Internet features on fairness securities elevated considerably 12 months over 12 months to ¥194.8 billion ($1.71 billion). Different non-recurring losses totaled ¥31.5 million ($0.28 million) in comparison with of ¥97.2 million ($0.86 million) recorded within the prior-year interval.

G&A bills elevated 2.5% 12 months over 12 months to ¥2.02 trillion ($17.76 billion). From 2021, bills associated to bank cards, which had been beforehand recorded as G&A bills, are recorded as charges and commissions bills. The quantity of retroactive adjustment in third-quarter fiscal 2020 was ¥53.9 billion.

Expense ratio was 68.3%, up from 66.9% within the prior-year interval. A rise on this ratio signifies a fall in profitability.

Combined Capital Place

As of Dec 31, 2021, Mitsubishi UFJ reported period-end loans of ¥106.9 trillion ($0.93 trillion), down from ¥107.5 trillion as of Mar 31, 2021. This decline will be mainly attributed to a fall in home company loans.

Deposits dropped to ¥211.4 trillion ($1.836 trillion) from ¥211.5 trillion as of Mar 31, 2021, as demand for home and company, and so on. deposits in addition to abroad and others deposits decreased.

Whole property summed ¥365.78 trillion ($3.18 trillion), up from ¥359.47 trillion as of Mar 31, 2021. Internet unrealized features on securities out there on the market decreased to ¥2.47 trillion ($0.021 trillion) from ¥2.58 trillion as of Mar 31, 2021.

Furthermore, whole web property had been ¥18.62 trillion ($0.16 trillion), up from ¥17.72 trillion as of Mar 31, 2021. Non-performing mortgage ratio expanded 10 foundation factors from March 2021 to 0.95%, on rise in non-performing loans.


Mitsubishi UFJ expects consolidated income attributable to homeowners of mum or dad of ¥1050 billion for fiscal 2021 (ending Mar 31, 2022).

Administration expects to pay a complete dividend of ¥28 for the fiscal 2021.

Our Viewpoint

MUFG has a strong enterprise mannequin, a diversified product combine and strong capital ratios. Supported by a robust liquidity place, Mitsubishi UFJ stays poised for inorganic development. Nevertheless, MUFG continues going through challenges in controlling prices, that are hurting its backside line. Additionally, Japan’s strict rules are more likely to maintain its financials underneath stress.

Mitsubishi UFJ Monetary Group, Inc. Value, Consensus and EPS Shock

Mitsubishi UFJ Monetary Group, Inc. price-consensus-eps-surprise-chart | Mitsubishi UFJ Monetary Group, Inc. Quote

Mitsubishi UFJ at present carries a Zacks Rank #2 (Purchase). You possibly can see the entire checklist of at the moment’s Zacks #1 Rank (Robust Purchase) shares right here.

Efficiency of Different Banks

First Republic Financial institution’s FRC fourth-quarter 2021 earnings per share of $2.02 surpassed the Zacks Consensus Estimate of $1.91. Moreover, the underside line improved 26.3% from the year-ago quarter’s stage.

FRC’s quarterly outcomes had been supported by the next web curiosity earnings and non-interest earnings. Furthermore, First Republic’s balance-sheet place was sturdy within the quarter. Nevertheless, increased bills and elevated web mortgage charge-offs had been the offsetting components.

Citigroup Inc. C delivered an earnings shock of 5.04% in fourth-quarter 2021. Earnings from persevering with operations per share of $1.46 outpaced the Zacks Consensus Estimate of $1.39. Nevertheless, the reported determine declined 24% from the prior-year quarter’s stage.

Citigroup’s funding banking revenues jumped within the quarter underneath evaluation, pushed by fairness underwriting and development in advisory revenues. Nevertheless, fixed-income revenues had been down attributable to declining charges and unfold merchandise.

U.S. Bancorp USB reported fourth-quarter 2021 earnings per share of $1.07, which missed the Zacks Consensus Estimate of $1.11. Outcomes, nonetheless, examine favorably with the prior-year quarter’s determine of 95 cents.

Although decrease revenues and escalating bills had been disappointing components, credit score high quality was a tailwind. Development in mortgage and deposit steadiness, and a robust capital place had been additionally encouraging components. Furthermore, U.S. Bancorp closed the acquisition of San Francisco-based fintech agency TravelBank, which presents technology-driven price and journey administration options.

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