[Financial Results Preview] Mitsubishi UFJ's 1Q Rocket Start!? Rising interest rates are the catalyst for the highest profit for 2 consecutive terms

First announcement of results for the first year of the new medium-term management plan
This fiscal year, which aims for the highest profit for 2 consecutive terms, is also the first year of the new medium-term management plan until fiscal year 26. If the first quarter starts off with good results, there is a meaning that momentum will be given not only to this fiscal year but also to the mid-term plan for the next 3 years.
Note, in the mid-term budget, ROE (return on equity) is a target of around 9%, and operating net profit of 2.1 trillion yen or more (1 trillion842.9 billion yen for the fiscal year ending 24/3, target for the fiscal year ending 25/3 is 1 trillion950 billion yen), net profit 1.6 trillion yen or more (1 trillion490.8 billion yen for the fiscal year ending 24/3, target for the fiscal year ending 25/3 It is set at 1.5 trillion yen).Business performance is expected to rise steadily until fiscal year 26Doing it.

Rising interest rates are a strong tailwind
What seems to be a strong tailwind for Mitsubishi UFJ, which plans steady upward business results, is the rise in interest rates. Although the ratio is gradually declining, it is banks that still account for 50% or more of net profit for Mitsubishi UFJ.

For the Bank of Mitsubishi UFJ and Mitsubishi UFJ Trust and Banking, which are the core companies of the Group, the increase in profit margins associated with rising interest rates is a major factor boosting business results. At Mitsubishi UFJ,If policy interest rates and market interest rates rise 0.15% and then remain unchanged, there will be positive effects on earnings of 85 billion yen in the 1st year, 120 billion yen in the 2nd year, and 150 billion yen in the 3rd yearI'm looking forward to it.

The yield on 10-year government bonds has been on an upward trend since March, when the Bank of Japan lifted negative interest rates, and overall market interest rates have risen.The positive effects of the Bank of Japan's policy changes will have a big impact in the first quarterSeemably.

Also pay attention to the growth of the money management business
In the new mid-term plan up to fiscal year 26, “contribution to the realization of an asset management nation” is set as one of the growth strategies, and Mitsubishi UFJ Asset Management takes center stage. Mitsubishi UFJ was released in January '24,Establish the asset management (asset management) business as the “fourth pillar” after banks, trusts, and securitiesAn “asset management business strategy” aimed at this was announced.The group's organizational structure was changed in April, and Mitsubishi UFJ Asset Management was placed under the umbrella of Mitsubishi UFJ Trust Bank and directly hanging from Mitsubishi UFJ (MUFG)。
According to the Nihon Keizai Shimbun, Mitsubishi UFJ Asset Management has been at the top for 13 consecutive months until June in terms of fund inflows from additional stock investment trusts (excluding ETFs) from domestic public offerings. “eMAXIS Slim Global Stock (All Country),” called “Orcan,” which is attracting attention as an investment destination under the new NISA framework, is driving the inflow of funds.
Mitsubishi UFJ Asset Management is at the center of Mitsubishi UFJ's growth strategy along with the Asian businessAs can be said, attention is being paid to how much business performance will grow.

Be careful about the effects of scandals
The group Mitsubishi UFJ Bank and securities company 2 received a business improvement order from the Financial Services Agency on 6/24, claiming that private information on client companies was shared without permission. Mitsubishi UFJ and others submitted business improvement plans and reports on 7/19.
Furthermore, on 7/9, it became clear that an employee of Mitsubishi UFJ Bank was being investigated by the Securities and Exchange Surveillance Commission on suspicion of the Financial Instruments and Exchange Act due to suspicion of the Financial Instruments and Exchange Act on suspicion of conveying TOB information to relatives.
Despite the discovery of successive scandals, stock prices have not been greatly affected so far. Nonetheless, the impact on business results due to securities companies under the umbrella being removed as the main secretary for underwriting operations is called the “multi-billion yen” forecast, and it is expected that they will lose their status as the five major securities companies for the first time in July (Bloomberg on the 25th). Also, at the general shareholders' meeting held on 6/27, the approval ratio for President Hiroki Kamezawa's reappointment as a director remained at 64.58%, 10 points lower than 75.94% the previous year. In particular, there are large overseas investors who are sensitive to corporate governance issues, so it would be necessary to keep a close eye on trends.