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MUFG Q3 profit down 20% on weak domestic lending, overseas growth costs
[TOKYO] Japan's largest lender Mitsubishi UFJ Financial Group (MUFG) posted a 20 per cent decline in net profit for the third quarter, hurt by a weak domestic lending business amid persistently low interest rates.
The bank said its profits were also hurt by an increase in operating costs as it aggressively expanded its overseas business.
MUFG posted a net profit of 236.5 billion yen (S$2.83 billion) for the October-December period, its smallest profit in three quarters. The lender's profit was the biggest among Japan's top three banks, but smaller rivals Sumitomo Mitsui Financial Group and Mizuho Financial Group booked a rise in quarterly profits.
For the full year through March, the bank kept its net profit forecast of 950 billion yen, up 2.5 per cent from the previous year and below an average estimate of 1.01 trillion yen in a poll of 14 analysts by Thomson Reuters.
MUFG and its peers have been trying to offset weak domestic lending by accelerating a buildup in their overseas businesses.
In December, MUFG said it had agreed with Temasek Holdings, Singapore's state investment arm, to buy 73.8 per cent of Indonesia's fifth-largest bank in three stages, adding that eventually it wants to make it wholly owned.
MUFG already holds stakes in Vietnam's VietinBank, Thailand's Bank of Ayudhya and Security Bank Corp of the Philippines.