Ken Matsuda

Ken Matsuda questioned the sustainability of the strong net fees and commissions growth observed in the first half, asking if further growth is expected. He also sought clarification on the 40 basis points decline in the CET1 ratio due to exchange rates in the first half, inquiring about the specific drivers and the potential for improvement from a weak yen environment.

Answer

Jun Togawa, Group CFO, confirmed expected continued growth in fee revenues, citing acquisitions (WealthNavi, MPMS, NICOS) contributing JPY 48 billion, GCIB's OND initiatives, domestic loan-related fees, solution-related fees, and steady growth in asset management AUM. Regarding the CET1 ratio decline, Togawa explained it was primarily due to the impact of US MUA and yen appreciation from December to June, with hedging measures implemented later. He affirmed that a weak yen environment would generally contribute to lifting the CET1 ratio.

Ken Matsuda asked if the strong net fees and commissions in the first half were temporary or indicative of continued growth, considering the current pipeline. He also questioned why the exchange rate impact caused a 40 basis point CET1 ratio deterioration in the first half when the yen didn't significantly appreciate, and if a continued weak yen would improve the ratio.

Answer

Jun Togawa (Senior Managing Corporate Executive and Group CFO, MUFG) explained that fee revenues included about JPY 48 billion from acquisitions, citing continued growth from GCIB's OND initiatives, domestic loan-related fees, solution-related fees, and steady growth in AUM for asset management and investor services. Regarding the CET1 ratio, Togawa-san clarified the deterioration was mainly due to the impact of U.S. MUA and the yen appreciating by about JPY 14 between December and June, confirming a weak yen would generally lift the CET1 ratio.