Mitsubishi UFJ Financial Group, Inc.

Mitsubishi UFJ Financial Group Inc. delivered a solid result and managed an all-around beat last quarter. The company saw notable progress in key financial metrics, including significant gross profits from overseas interest income, lending spread improvement, and trading income. Despite increased G&A expenses, the company managed to rebound in terms of NOP, reaching a level before the introduction of negative interest rates. While credit costs saw some increases, the overall performance aligned with the performance target, reflecting an increase in NOP, particularly in customer segments. Amid uncertainties in the global economic environment, the company is focused on continued growth, strategic investments, and digital transformation, as highlighted in its efforts to capture emerging digital financial needs in Asia and enhance its financial platform operator role. In addition, they partnered with FinDev Canada, a development finance institution, and a consortium consisting of several United Nations partners and platform-based initiatives. This collaboration aims to establish a climate and hybrid finance platform with a total value of $1.5 billion. We give Mitsubishi UFJ Financial Group Inc. a ‘Hold’ rating with a revised target price.