MUFG's profit dives on credit costs

Tokyo

MITSUBISHI UFJ Financial Group (MUFG), Japan's largest lender by assets, said on Tuesday its first-quarter net profit more than halved as credit-related costs ballooned due to the coronavirus pandemic.

MUFG, which owns 24 per cent of Wall Street investment bank Morgan Stanley, reported a profit of 183.5 billion yen (S$2.38 billion) for the three-month period ended June 30, against 389.2 billion yen a year earlier. The bank retained its full-year profit forecast of 550 billion yen.

Japanese banks have been struggling with ultra-low interest rates for years, and the three major lenders - MUFG, Sumitomo Mitsui Financial Group and Mizuho Financial Group - have said credit-related costs this year would reach levels not seen since the global financial crisis.

MUFG's credit-related costs in the first quarter came in at 145 billion yen, while the lender's bottom line was buoyed in the same period last year by reversal of bad debt reserves.

The lender in May estimated 450 billion yen of credit-related costs for the current financial year. In contrast, its net interest income came in at 469.1 billion yen for the quarter, up 5.6 per cent year-on-year. REUTERS