Mitsubishi UFJ Financial Group, Inc. Q4 FY2022 earnings call

Income Statement Summary - Gross profits increased by ¥43 billion y-o-y. - Net interest income improved due to better lending spread in Japan and overseas. - Trust fees and net fees and commissions increased from domestic and overseas asset management. - Net gains and losses on debt securities decreased by over ¥250 billion y-o-y mainly due to loss on sales of foreign bonds. - G&A expenses increased by ¥74.6 billion y-o-y but decreased in real terms. - Net operating profits was ¥1,216.7 billion, down by ¥31.6 billion. - Total credit cost was ¥331.4 billion, an improvement of ¥184 billion y-o-y, mainly due to reversal of allowance for loan losses at MUFG Union Bank and ¥140 billion Russia-related allowance in Q4. - Net gains and losses on equity securities increased by ¥184 billion y-o-y. - Equity in earnings of equity method investees increased by ¥119.8 billion y-o-y mainly due to Morgan Stanley's strong performance. - Net extraordinary gains and losses: ¥47.7 billion full year loss due to new impairment loss recognition methodology. - Profits attributable to owners of parent was ¥1,130.8 billion, up by ¥353.8 billion y-o-y. ### Balance Sheet Summary - Loans and below increased by ¥3.9 trillion from previous fiscal year end, with ¥3.3 trillion due to weaker yen. - Deposits increased by ¥3.9 trillion, mainly due to ¥3.4 trillion increase in domestic individuals. ### Medium-Term Business Plan and Shareholder Returns - Net operating profits in customer segments up ¥170.8 billion y-o-y and profits attributable to owners of parent reached record high. - Expenses in RWA firmly controlled. - Dividend forecast for fiscal year '22 is ¥32 per share, up ¥4 y-o-y to achieve 40% dividend payout ratio during MTBP period. - Aim to repurchase up to ¥300 billion of own shares. ### Sustainability Initiatives - Progress made since MUFG Carbon-Neutral Declaration in May last year, established promotion system on group and global basis, compiled and published MUFG progress report in April.

In the customer segment, the GCB Business Group, which includes overseas banking subsidiaries affected by COVID-19 and low interest rates, saw a profit decline, but other business groups enjoyed higher profits. The customer segment's net operating profit increased by ¥170.8 billion year-on-year. In the Global Markets Business Group, profits decreased mainly due to loss on sales of foreign bonds in the fourth quarter, but was partially offset by gains on equity securities not included in net operating profit. Regarding revenue contribution, the customer segment's net operating profit increase contributed to overall results, while the Global Markets Business Group's profit change had an impact on the group's overall net operating profit.

- Aim to increase net operating profits to steadily improve performance towards fiscal year '23, the final year of the MTBP. ### - Expect credit cost to be almost the same level as fiscal year 2021, considering factors like decreasing gains of equity securities and bond valuation losses related to sale of MUFG Union Bank. ### - Set target of ¥1 trillion as profits attributable to owners of parent for current fiscal year. ### - Continue to face uncertain environment with COVID-19, international/geopolitical risks, interest rate and exchange rate fluctuations, but will continue to meet challenges of MTBP to become a company constantly earning ¥1 trillion of profits attributable to owners of parent.

- Lingering concerns against COVID-19 pandemic. ### - Heightened international and geopolitical risks. ### - Fluctuations in interest rates and exchange rates. ### - Global Markets Business Group has ¥850 billion unrealized losses on foreign bonds, need to manage interest rate fluctuation risk. ### - In Q4, recorded approximately ¥140 billion allowance related to Russia, including ¥35.2 billion for allowance for credit to specific foreign borrowers and ¥99.6 billion for allowance for specific portfolio.

Q: Accounting treatment of sales of shares of MUB and Russia-related allowance.

A: ¥120 billion related to MUB sale will fluctuate, recorded in P&L of group in Q1 but subject to change until closing. Russia-related allowance: ¥35.2 billion for specific foreign borrowers due to country rating downgrade, ¥99.6 billion for specific portfolio considered for broader impact.