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Japan's MUFG forecasts profit to fall 10.7% this year, missing analyst estimates
[TOKYO] Japan's Mitsubishi UFJ Financial Group Inc (MUFG) on Monday forecast profit to fall 10.7 per cent in the current business year, missing analyst estimates, pulled down by weak domestic lending and bad loan costs.
MUFG follows peers in projecting a weak outlook, with Mizuho Financial Group Inc forecasting a double-digit percentage decline.
The banks have long suffered from weak demand for loans, while a central bank policy of driving down borrowing costs to spur lending and investment has failed to stimulate demand to any significant degree.
But MUFG is widely considered the least affected by domestic factors due to sizable overseas interests such as Union Bank in the United States and Bank of Ayudhya PCL in Thailand.
Nevertheless, low oil prices have forced MUFG to set aside more funds to cover potential losses on loans in the energy sector.
For the year through March 2017, MUFG forecast profit of 850 billion yen (S$10.7 billion), versus the 1.037 trillion yen average of 18 analyst estimates compiled by Thomson Reuters.
The country's largest lender by assets reported net profit for the year ended March 31 at 951.4 billion yen, down 8 per cent. That compared with the 1.036 trillion yen analyst view.