Ken Takamiya

Ken Takamiya asked about the upward revision of MUFG's guidance and the 12% ROE target, specifically questioning if the assumptions were too conservative, the rationale behind the JPY 100 billion revision, and any changes in management's perspective on the ROE target given the evolving environment.

Answer

Jun Togawa, Group CFO, explained that the initial guidance was based on specific assumptions, but first-half progress exceeded expectations due to customer segment NOP, lower credit costs, Morgan Stanley's strong performance, and one-time gains. He detailed second-half assumptions including a strong yen and strategic expense allocation, justifying the JPY 100 billion revision as appropriate disclosure. Regarding the 12% ROE target, Togawa clarified it was set with assumptions like a 1% policy interest rate and no equity sale gains, and internal discussions now focus on investments contributing to this target.

Ken Takamiya asked about the upward revision of MUFG's guidance, questioning if the assumptions were too conservative given current market levels and the relatively small JPY 100 billion revision. He also inquired about any changes in management's perspective regarding the mid-to-long-term ROE target of 12%, especially concerning the clarified assumptions.

Answer

Jun Togawa (Senior Managing Corporate Executive and Group CFO, MUFG) explained that the first half exceeded expectations due to strong customer segment NOP, lower credit costs, Morgan Stanley's performance, and one-time gains. He addressed conservative assumptions, noting the yen forecast is not unreasonable and share price impact is minimal. Regarding the 12% ROE target, Togawa-san clarified that the assumptions (1% policy rate, no equity sale gains) were fundamental from the start, and the focus is now on investments contributing to this ROE.

Asked for the reasoning behind the JPY 400 billion share buyback and its implications for future capital policy, and why the full-year guidance was kept unchanged despite strong first-half performance.

Answer

The JPY 400 billion share buyback was decided based on the CET1 capital level and a more stable market environment compared to May. The capital management policy remains focused on a target range, with surplus capital allocated to growth or shareholder returns. The full-year guidance was maintained because Treasury profits were front-loaded in the first half, and the second half is expected to align with the initial plan. The positive impact from the weaker yen is being used to offset losses on foreign bonds to improve the balance sheet's profitability, and the JPY 1.3 trillion target is kept to ensure the 7.5% ROE goal is met.

Ken Takamiya of Nomura Securities inquired about the financial impact of recent system failures on performance and costs, and also asked for the rationale behind announcing a dividend increase at this specific time.

Answer

CFO Makoto Umemiya explained that a JPY 3 billion negative impact from system failures is factored into the revised plan, with related expenses potentially exceeding the initial JPY 18 billion budget due to further infrastructure needs. Regarding the dividend, he stated that management's increased confidence in achieving over JPY 500 billion in net income, despite market uncertainties, prompted the announcement in line with their 40% payout ratio policy.