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 February 2023

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FROM THE DATE ON WHICH THIS REPORT IS FURNISHED TO THE U.S. SECURITIES AND EXCHANGE COMMISSION TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED WITH OR FURNISHED TO THE U.S. SECURITIES AND EXCHANGE COMMISSION.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: February 2, 2023

 

Consolidated Summary Report

<under Japanese GAAP>

for the nine months ended December 31, 2022

February 2, 2023

 

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:		February 14, 2023
Dividend payment date:		-
Trading accounts:		Established
Supplemental information for quarterly financial statements:		Available
Quarterly investor meeting presentation:		None

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

1. Consolidated Financial Data for the Nine Months ended December 31, 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 nine months ended
December 31, 2022			6,793,767				55.7				848,932				(39.1	)			343,175				(67.9	)
December 31, 2021			4,362,918				(2.9	)			1,393,611				65.8				1,070,398				76.3

 

(*)	Comprehensive income

                    December 31, 2022:  458,855 million yen,  (66.1) % ;                     December 31, 2021: 1,354,948 million  yen, 25.5 %

 

		Basic earnings per share				Diluted earnings per share
		yen				yen
For the nine months ended
December 31, 2022			27.69				27.42
December 31, 2021			83.44				83.16

 

(2)	Financial Conditions

 

		Total Assets				Total Net Assets				Equity-to-asset ratio (*)
		million yen				million yen				%
As of
December 31, 2022			391,386,575				17,693,281				4.3
March 31, 2022			373,731,910				17,988,245				4.6

(Reference) Shareholders’ equity as of    December 31, 2022: 16,656,904 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.

ø Notes

 

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

 

(2)	Adoption of any particular accounting methods for quarterly consolidated financial statements: No

 

(3)	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

 

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

 

(A) Total stocks outstanding including treasury stocks:		December 31, 2022			12,863,068,820 shares
		March 31, 2022			13,281,995,120 shares
(B) Treasury stocks:		December 31, 2022			754,628,058 shares
		March 31, 2022			667,296,084 shares
(C) Average outstanding of total stocks:		Nine months ended December 31, 2022			12,392,140,124 shares
		Nine months ended December 31, 2021			12,828,619,616 shares

ø This “Consolidated Summary Report” (Quarterly “Tanshin”) is outside the scope of the external auditor’s quarterly review procedure.

ø 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. To date, we have published U.S. GAAP financial results only on a semiannual and annual basis, and currently do not expect to publish U.S. GAAP financial results for the period reported in this financial summary report.

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) Notes on Going-Concern Assumption			6
(4) Notes for Material Changes in Shareholders’ Equity			6
(5) Changes in Accounting Policies			6
(6) Changes in Presentation of Financial Information			6
(7) Additional Information			7
(8) Significant Subsequent Events			9

Supplemental Information:

“Selected Financial Information under Japanese GAAP For the Nine Months Ended December 31, 2022”

 

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 December 31, 2022
Assets:
Cash and due from banks			110,763,205				104,314,618
Call loans and bills bought			872,268				954,016
Receivables under resale agreements			12,308,310				13,794,210
Receivables under securities borrowing transactions			4,517,952				4,050,188
Monetary claims bought			6,466,822				7,960,603
Trading assets			17,704,455				21,679,701
Money held in trust			1,332,492				1,393,766
Securities			79,560,579				82,443,754
Loans and bills discounted			110,426,224				119,232,825
Foreign exchanges			2,300,859				2,391,345
Other assets			14,050,293				17,879,539
Tangible fixed assets			1,236,012				1,268,825
Intangible fixed assets			1,344,225				1,462,257
Net defined benefit assets			1,374,607				1,474,489
Deferred tax assets			213,922				509,673
Customers’ liabilities for acceptances and guarantees			10,481,838				11,681,491
Allowance for credit losses			(1,222,162	)			(1,104,733	)
Total assets			373,731,910				391,386,575
Liabilities:
Deposits			215,427,299				220,385,436
Negotiable certificates of deposit			10,938,831				14,052,200
Call money and bills sold			2,429,791				5,474,724
Payables under repurchase agreements			27,619,262				33,808,984
Payables under securities lending transactions			1,072,578				535,048
Commercial papers			2,108,531				2,902,782
Trading liabilities			12,397,702				16,412,069
Borrowed money			31,763,332				22,766,781
Foreign exchanges			2,182,400				2,752,337
Short-term bonds payable			1,316,803				1,083,799
Bonds payable			13,257,347				15,508,025
Due to trust accounts			12,811,123				10,090,460
Other liabilities			10,861,695				15,549,713
Reserve for bonuses			136,724				139,990
Reserve for bonuses to directors			1,866				3,710
Reserve for stocks payment			8,437				8,834
Net defined benefit liabilities			86,355				95,320
Reserve for retirement benefits to directors			812				774
Reserve for loyalty award credits			17,113				19,938
Reserve for contingent losses			232,291				175,372
Reserves under special laws			4,656				4,660
Deferred tax liabilities			492,451				149,063
Deferred tax liabilities for land revaluation			94,414				91,771
Acceptances and guarantees			10,481,838				11,681,491
Total liabilities			355,743,665				373,693,293

 

2

Mitsubishi UFJ Financial Group, Inc.

 

(in millions of yen)		As of March 31, 2022				As of December 31, 2022
Net assets:
Capital stock			2,141,513				2,141,513
Capital surplus			770,277				502,606
Retained earnings			11,998,157				11,962,825
Treasury stock			(451,288	)			(529,145	)
Total shareholders’ equity			14,458,659				14,077,799
Net unrealized gains (losses) on available-for-sale securities			1,615,060				356,521
Net deferred gains (losses) on hedging instruments			(81,145	)			(559,104	)
Land revaluation excess			140,628				138,608
Foreign currency translation adjustments			734,588				2,443,770
Remeasurements of defined benefit plans			193,865				166,187
Debt value adjustments of foreign subsidiaries and affiliates			(37,883	)			33,122
Total accumulated other comprehensive income			2,565,114				2,579,104
Non-controlling interests			964,471				1,036,377
Total net assets			17,988,245				17,693,281
Total liabilities and net assets			373,731,910				391,386,575

 

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 nine  months ended December 31, 2021				For the nine  months ended December 31, 2022
Ordinary income			4,362,918				6,793,767
Interest income			1,887,228				3,777,403
Interest on loans and bills discounted			1,208,048				1,962,953
Interest and dividends on securities			397,420				1,152,253
Trust fees			107,925				107,390
Fees and commissions			1,245,749				1,384,135
Trading income			176,842				411,522
Other operating income			268,460				376,637
Other ordinary income			676,711				736,678
Ordinary expenses			2,969,306				5,944,835
Interest expenses			395,989				1,445,092
Interest on deposits			135,630				531,575
Fees and commissions			223,068				243,550
Trading expenses			2,970				19,077
Other operating expenses			113,393				1,310,837
General and administrative expenses			2,006,496				2,206,193
Other ordinary expenses			227,387				720,083
Ordinary profits			1,393,611				848,932
Extraordinary gains			126,805				10,097
Gains on disposition of fixed assets			21,701				10,097
Gains on change in equity			64,601				—
Gains on sales of shares of affiliates			27,870				—
Gains on transfer of businesses			8,391				—
Gains on sales of shares of subsidiaries			4,240				—
Extraordinary losses			64,209				74,664
Losses on disposition of fixed assets			7,791				9,837
Losses on impairment of fixed assets			36,756				11,709
Provision for reserve for contingent liabilities from financial instruments transactions			4				3
Losses on sales of shares of affiliates			—				29,401
Losses on change in equity			19,657				23,711
Profits before income taxes			1,456,207				784,365
Income taxes-current			270,579				373,662
Refund of income taxes			(14,170	)			(49,569	)
Income taxes-deferred			69,919				57,430
Total taxes			326,327				381,524
Profits			1,129,879				402,841
Profits attributable to non-controlling interests			59,481				59,665
Profits attributable to owners of parent			1,070,398				343,175

 

4

Mitsubishi UFJ Financial Group, Inc.

 

Consolidated Statements of Comprehensive Income

 

(in millions of yen)		For the nine  months ended December 31, 2021				For the nine  months ended December 31, 2022
Profits			1,129,879				402,841
Other comprehensive income
Net unrealized gains (losses) on available-for-sale securities			(90,033	)			(1,101,118	)
Net deferred gains (losses) on hedging instruments			(65,601	)			(489,208	)
Foreign currency translation adjustments			267,237				1,101,845
Remeasurements of defined benefit plans			(17,113	)			(28,379	)
Share of other comprehensive income of associates accounted for using equity method			130,580				572,874
Total other comprehensive income			225,069				56,014
Comprehensive income			1,354,948				458,855
(Comprehensive income attributable to)
Comprehensive income attributable to owners of parent			1,303,978				359,186
Comprehensive income attributable to non-controlling interests			50,969				99,669

 

5

Mitsubishi UFJ Financial Group, Inc.

 

(3) Notes on Going-Concern Assumption

None.

(4) Notes for Material Changes in Shareholders’ Equity

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 on Fair Value Measurement”), has been applied from the beginning of the nine-month period ended December 31, 2022. In accordance with the transitional treatment set forth in paragraph 27-2 of the Implementation Guidance on Fair Value Measurement, MUFG has applied new accounting policies based on the Implementation Guidance on Fair Value Measurement prospectively.

There is no impact on our consolidated financial statements as of the end of and for the nine-month period ended December 31, 2022 due to the application of this Guidance.

(6) Changes in Presentation of Financial Information

“Refund” of income taxes, which was previously included in “Income taxes” on a net basis for the nine months ended December 31, 2021 is presented separately on a disaggregated basis from the nine months ended December 31, 2022 due to the increased significance in the recorded amount. In order to reflect this change in presentation, the consolidated financial statements for the nine months ended December 31, 2021 have been reclassified.

As a result, “Income taxes” of ¥256,408 million previously presented in the consolidated statements of income for the nine months ended December 31, 2021 has been disaggregated and reclassified into “Current” of ¥270,579 million and “Refund” of ¥(14,170) million.

 

6

Mitsubishi UFJ Financial Group, Inc.

 

(7) 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 ¥63,673 million as of December 31, 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,” 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”.

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.

 

7

Mitsubishi UFJ Financial Group, Inc.

 

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 nine-month period ended December 31, 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 significant monetary tightening in various countries as well as cumulative effects of these developments, significant additional provision for credit losses may be recognized for the fiscal year ending March 31, 2023 and subsequent reporting periods due to such and other factors 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 third quarter 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 fourth 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 ¥1,044,886 million of losses for the nine months ended September 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 ¥594,782 million of valuation losses related to securities held for sale recorded as Other operating expenses and ¥449,547 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 third quarter 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 ¥100 billion of gains for the quarter ended December 31, 2022. It is also currently estimated that the aggregate estimated gains will reflect approximately ¥40 billion of valuation gains related to securities held for sale to be recorded as an adjustment to reduce Other operating expenses and approximately ¥50 billion of valuation gains related to loans held for sale to be recorded as an adjustment to reduce Other ordinary expenses. All of the gains recognized by MUAH 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.

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.

 

8

Mitsubishi UFJ Financial Group, Inc.

 

(8) Significant Subsequent Events

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

On December 1, 2022, MUAH, a subsidiary of MUFG whose financial statements as of the end of and for the nine-month period ended September 30, 2022 have been consolidated with MUFG’s financial statements, completed the sale of all of the shares in MUB held by MUAH to USB (hereinafter referred to as the “Share Transfer”).

The MUB businesses that were transferred to USB through the Share Transfer excluded the GCIB (Global Corporate & Investment Banking) business (with certain exceptions as agreed to by the parties, including certain deposits of the GCIB business that are retained by MUB), the Global Markets business to the extent related to the GCIB business, which consisted of transactions with clients and investors, and certain assets and liabilities, etc. that were 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) were transferred to the Bank and MUAH 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 divested businesses

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, would be the most appropriate decision that was 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 would help maximize shareholder value through an increase in capital efficiency.

(ix) Date of the business divestiture

December 1, 2022

(x) Legal form of the business divestiture

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

(b) Overview of the accounting treatment expected to be reflected in the consolidated financial statements as of the end of and for the fourth quarter of the fiscal year ending March 31, 2023

While all amounts are currently under determination, current estimates are as follows.

(i) Amount of gains or losses on the Share Transfer

Gains on sales of shares of subsidiaries: Approximately ¥700 billion

(ii) Amounts of assets and liabilities related to the divested businesses

Assets: Approximately ¥13,640 billion (including loans of approximately ¥7,570 billion and securities of approximately ¥3,120 billion)

Liabilities: Approximately ¥12,980 billion (including deposits of approximately ¥11,800 billion)

 

9

Mitsubishi UFJ Financial Group, Inc.

 

(iii) Accounting treatment

The difference between the sale price and the consolidated book value of the transferred shares will be recorded in extraordinary gains as gains on sales of shares of subsidiaries.

(c) Name of the reporting segment in which the divested businesses were mainly included

Global Commercial Banking Business Group

(d) Approximate amount of income or loss related to the divested businesses recorded in the consolidated statement of income for the nine-month period ended December 31, 2022

Total income: ¥360,721 million

Loss before income taxes: ¥968,110 million

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

MUFG received shares of USB as part of the consideration for the Share Transfer.

In addition, the Bank and USB have entered 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 provides and receives certain services based on such agreements.

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

Information on the transaction under common control which occurred in the current fiscal year is also stated in “Significant Subsequent Events” as follows.

(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 are retained by MUB), the Global Markets business to the extent related to the GCIB business, which consisted of transactions with clients and investors, and certain assets and liabilities, etc. that were part of shared middle and back office functions, etc., were transferred to the Bank and MUAH prior to the Share Transfer by the end of November 2022.

The MUFG group continues 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 applied

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

(c) Amounts of assets and liabilities transferred to the Bank in connection with the business transfer

Assets: ¥3,298,438 million (including loans of ¥2,729,179 million)

Liabilities: ¥503,791 million (including acceptances and guarantees of ¥337,944 million)

 

10

 

 

 

 

Selected Financial Information

under Japanese GAAP

For the Nine Months Ended December 31, 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 Non-consolidated ][ TB Non-consolidated ]			1
2. 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 ]			5
3. Securities		[ MUFG Consolidated ] [ BK Non-consolidated ][ TB Non-consolidated ]			6
4. ROE		[ MUFG Consolidated ]			9
5. Average Interest Rate Spread		[ BK and TB Combined ] [ BK Non-consolidated ][ TB Non-consolidated ]			10
6. Loans and Deposits		[ BK and TB Combined ] [ BK Non-consolidated ][ TB Non-consolidated ]			11
7. Statements of Trust Assets and Liabilities		[ TB Non-consolidated ]			12

 

(*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.

Mitsubishi UFJ Financial Group, Inc.

 

1. Financial Results

MUFG Consolidated

 

		(in millions of yen)
		For the nine months ended								Increase (Decrease) (A) -  (B)
		December 31, 2022 (A)				December 31, 2021 (B)
Gross profits			3,579,828				2,950,895				628,933
Gross profits before credit costs for trust accounts			3,579,828				2,950,846				628,982
Net interest income			2,313,738				1,491,350				822,387
Trust fees			107,390				107,925				(535	)
Credit costs for trust accounts (1)			—				49				(49	)
Net fees and commissions			1,140,584				1,022,681				117,903
Net trading profits			392,691				173,871				218,820
Net other operating profits			(374,575	)			155,066				(529,642	)
Net gains (losses) on debt securities			(572,392	)			66,188				(638,581	)
General and administrative expenses			2,198,305				2,017,815				180,489
Amortization of goodwill			15,637				13,147				2,490
Net operating profits before credit costs for trust accounts, provision for general allowance for credit losses and amortization of goodwill			1,397,161				946,177				450,983
Net operating profits before credit costs for trust accounts and provision for general allowance for credit losses			1,381,523				933,030				448,492
Provision for general allowance for credit losses (2)			78,461				—				78,461
Net operating profits*1			1,459,984				933,079				526,904
Net non-recurring gains (losses)			(611,052	)			460,531				(1,071,583	)
Credit costs (3)			(660,826	)			(117,703	)			(543,123	)
Losses on loan write-offs*2			(546,999	)			(110,646	)			(436,352	)
Provision for specific allowance for credit losses			(118,502	)			—				(118,502	)
Other credit costs			4,675				(7,056	)			11,732
Reversal of allowance for credit losses (4)			—				25,874				(25,874	)
Reversal of reserve for contingent losses included in credit costs (5)			23,208				2,511				20,696
Gains on loans written-off (6)			74,641				61,971				12,670
Net gains (losses) on equity securities			203,113				194,899				8,213
Gains on sales of equity securities			237,258				220,027				17,231
Losses on sales of equity securities			(21,183	)			(19,232	)			(1,950	)
Losses on write-down of equity securities			(12,962	)			(5,894	)			(7,067	)
Equity in earnings of equity method investees			357,673				324,508				33,165
Other non-recurring gains (losses)*2			(608,862	)			(31,531	)			(577,330	)
Ordinary profits			848,932				1,393,611				(544,678	)
Net extraordinary gains (losses)			(64,566	)			62,595				(127,162	)
Net gains (losses) on disposition of fixed assets			259				13,910				(13,650	)
Losses on impairment of fixed assets			(11,709	)			(36,756	)			25,047
Net gains (losses) on sales of shares of affiliates			(29,401	)			27,870				(57,272	)
Net gains (losses) on change in equity			(23,711	)			44,944				(68,655	)
Gains on transfer of businesses			—				8,391				(8,391	)
Gains on sales of shares of subsidiaries			—				4,240				(4,240	)
Profits before income taxes			784,365				1,456,207				(671,841	)
Income taxes-current			373,662				270,579				103,083
Refund of income taxes			(49,569	)			(14,170	)			(35,398	)
Income taxes-deferred			57,430				69,919				(12,488	)
Total taxes			381,524				326,327				55,196
Profits			402,841				1,129,879				(727,037	)
Profits attributable to non-controlling interests			59,665				59,481				184
Profits attributable to owners of parent			343,175				1,070,398				(727,222	)
Profits attributable to owners of parent, taking into account gains on sale of shares in MUB*3			1,144,926				1,070,398				74,528
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 ¥1,044,886 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 ¥594,782 million of valuation losses related to securities held for sale, which are included in Other non-recurring gains (losses), and ¥449,547 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 ¥1,044,886 million recognized under accounting treatment applied in connection with the planned sale of the shares in MUB net of ¥801,751 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)			(484,515	)			(27,296	)			(457,219	)

 

1

Mitsubishi UFJ Financial Group, Inc.

 

BK and TB Combined

 

		(in millions of yen)
		For the nine months ended								Increase (Decrease) (A) -  (B)
		December 31, 2022 (A)				December 31, 2021 (B)
Gross profits			1,756,589				1,448,889				307,699
Gross profits before credit costs for trust accounts			1,756,589				1,448,840				307,749
Net interest income			1,482,251				856,492				625,759
Trust fees			83,944				87,733				(3,788	)
Credit costs for trust accounts (1)			—				49				(49	)
Net fees and commissions			426,543				369,496				57,047
Net trading profits			(16,618	)			41,908				(58,527	)
Net other operating profits			(219,532	)			93,258				(312,790	)
Net gains (losses) on debt securities			(571,159	)			55,934				(627,094	)
General and administrative expenses			984,733				976,980				7,752
Net operating profits before credit costs for trust accounts and provision for general allowance for credit losses			771,855				471,859				299,996
Provision for general allowance for credit losses (2)			—				—				—
Net operating profits			771,855				471,908				299,947
Net non-recurring gains (losses)			386,573				209,454				177,119
Credit costs (3)			(10,627	)			(16,048	)			5,420
Reversal of allowance for credit losses (4)			72,026				16,915				55,111
Reversal of reserve for contingent losses included in credit costs (5)			22,312				4,068				18,244
Gains on loans written-off (6)			14,679				12,075				2,604
Net gains (losses) on equity securities			202,037				186,425				15,611
Gains on sales of equity securities			230,158				210,878				19,279
Losses on sales of equity securities			(21,051	)			(19,375	)			(1,675	)
Losses on write-down of equity securities			(7,069	)			(5,076	)			(1,992	)
Other non-recurring gains (losses)			86,144				6,017				80,127
Ordinary profits			1,158,429				681,362				477,066
Net extraordinary gains (losses)			(1,643	)			4,947				(6,591	)
Income before income taxes			1,156,785				686,310				470,475
Income taxes-current			260,060				186,958				73,101
Refund of income taxes			(41,847	)			(12,965	)			(28,881	)
Income taxes-deferred			82,732				25,062				57,669
Total taxes			300,945				199,055				101,889
Net income			855,840				487,255				368,585
(Reference)
Total credit costs (1)+(2)+(3)+(4)+(5)+(6)			98,391				17,059				81,331
Credit costs for trust accounts			—				49				(49	)
Provision for general allowance for credit losses			85,812				137,340				(51,527	)
Provision for special allowance for credit losses			(19,557	)			(118,736	)			99,179
Allowance for credit to specific foreign borrowers			5,771				(1,688	)			7,459
Losses on loans write-offs			(7,028	)			(12,361	)			5,332
Provision for contingent losses included in credit costs			22,260				3,928				18,331
Gains on loans written-off			14,679				12,075				2,604
Losses on sales of other loans, etc.			(3,547	)			(3,547	)			0
Net operating profits before credit costs for trust accounts and provision for general allowance for credit losses, excluding net gains (losses) on debt securities			1,343,015				415,925				927,090
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			802,518				365,011				437,506

 

2

Mitsubishi UFJ Financial Group, Inc.

 

BK Non-consolidated

 

		(in millions of yen)
		For the nine months ended								Increase (Decrease) (A) -  (B)
		December 31, 2022 (A)				December 31, 2021 (B)
Gross profits			1,474,911				1,163,716				311,195
Net interest income			1,119,468				718,767				400,700
Net fees and commissions			355,299				298,974				56,324
Net trading profits			54,642				35,085				19,556
Net other operating profits			(54,498	)			110,887				(165,386	)
Net gains (losses) on debt securities			(328,855	)			69,653				(398,509	)
General and administrative expenses			838,585				837,077				1,508
Amortization of goodwill			1,526				1,170				356
Net operating profits before provision for general allowance for credit losses and amortization of goodwill			637,853				327,809				310,043
Net operating profits before provision for general allowance for credit losses			636,326				326,638				309,687
Provision for general allowance for credit losses (1)			—				—				—
Net operating profits			636,326				326,638				309,687
Net non-recurring gains (losses)			350,466				178,153				172,312
Credit costs (2)			(10,575	)			(15,908	)			5,333
Reversal of allowance for credit losses (3)			71,913				16,654				55,259
Reversal of reserve for contingent losses included in credit costs (4)			22,312				4,068				18,244
Gains on loans written-off (5)			14,679				12,054				2,624
Net gains (losses) on equity securities			165,465				156,429				9,035
Gains on sales of equity securities			190,217				178,138				12,078
Losses on sales of equity securities			(19,285	)			(17,632	)			(1,652	)
Losses on write-down of equity securities			(5,466	)			(4,076	)			(1,390	)
Other non-recurring gains (losses)			86,670				4,855				81,815
Ordinary profits			986,792				504,792				482,000
Net extraordinary gains (losses)			674				6,045				(5,371	)
Income before income taxes			987,466				510,838				476,628
Income taxes-current			225,362				150,843				74,518
Refund of income taxes			(41,677	)			(10,416	)			(31,260	)
Income taxes-deferred			74,840				19,232				55,607
Total taxes			258,525				159,659				98,866
Net income			728,941				351,178				377,762
(Reference)
Total credit costs (1)+(2)+(3)+(4)+(5)			98,329				16,868				81,461
Provision for general allowance for credit losses			85,699				137,081				(51,381	)
Provision for special allowance for credit losses			(19,557	)			(118,738	)			99,181
Allowance for credit to specific foreign borrowers			5,771				(1,688	)			7,459
Losses on loans write-off			(7,028	)			(12,361	)			5,333
Provision for contingent losses included in credit costs			22,312				4,068				18,244
Gains on loans written-off			14,679				12,054				2,624
Losses on sales of other loans, etc.			(3,547	)			(3,547	)			0
Net operating profits before provision for general allowance for credit losses, excluding net gains (losses) on debt securities			965,182				256,985				708,196
Net operating profits before provision for general allowance for credit losses, excluding net gains (losses) on debt securities and investment trusts cancellation			680,793				208,311				472,482

 

3

Mitsubishi UFJ Financial Group, Inc.

 

TB Non-consolidated

 

		(in millions of yen)
		For the nine months ended								Increase (Decrease) (A) -  (B)
		December 31, 2022 (A)				December 31, 2021 (B)
Gross profits			281,677				285,173				(3,495	)
Gross profits before credit costs for trust accounts			281,677				285,123				(3,446	)
Trust fees			83,944				87,733				(3,788	)
Credit costs for trust accounts (1)			—				49				(49	)
Net interest income			362,782				137,724				225,058
Net fees and commissions			71,244				70,521				722
Net trading profits			(71,261	)			6,822				(78,083	)
Net other operating profits			(165,033	)			(17,629	)			(147,403	)
Net gains (losses) on debt securities			(242,303	)			(13,718	)			(228,585	)
General and administrative expenses			146,147				139,902				6,244
Net operating profits before credit costs for trust accounts and provision for general allowance for credit losses			135,529				145,221				(9,691	)
Provision for general allowance for credit losses (2)			—				—				—
Net operating profits			135,529				145,270				(9,740	)
Net non-recurring gains (losses)			36,107				31,300				4,806
Credit costs (3)			(51	)			(139	)			87
Reversal of allowance for credit losses (4)			112				260				(147	)
Reversal of reserve for contingent losses included in credit costs (5)			—				—				—
Gains on loans written-off (6)			0				20				(20	)
Net gains (losses) on equity securities			36,571				29,996				6,575
Gains on sales of equity securities			39,940				32,739				7,200
Losses on sales of equity securities			(1,765	)			(1,743	)			(22	)
Losses on write-down of equity securities			(1,603	)			(1,000	)			(602	)
Other non-recurring gains (losses)			(525	)			1,162				(1,688	)
Ordinary profits			171,637				176,570				(4,933	)
Net extraordinary gains (losses)			(2,317	)			(1,098	)			(1,219	)
Income before income taxes			169,319				175,472				(6,153	)
Income taxes-current			34,527				33,566				961
Income taxes-deferred			7,891				5,830				2,061
Total taxes			42,419				39,396				3,023
Net income			126,899				136,076				(9,176	)
(Reference)
Total credit costs (1)+(2)+(3)+(4)+(5)+(6)			61				190				(129	)
Credit costs for trust accounts			—				49				(49	)
Provision for general allowance for credit losses			113				258				(145	)
Provision for special allowance for credit losses			(0	)			1				(1	)
Allowance for credit to specific foreign borrowers			—				—				—
Losses on loans write-offs			(0	)			—				(0	)
Provision for contingent losses included in credit costs			(51	)			(139	)			87
Gains on loans written-off			0				20				(20	)
Losses on sales of other loans, etc.			—				—				—
Net operating profits before credit costs for trust accounts and provision for general allowance for credit losses, excluding net gains (losses) on debt securities			377,833				158,939				218,893
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			121,724				156,700				(34,975	)

 

4