(Bloomberg) -- Mitsubishi UFJ Financial Group Inc.’s profit slid to the lowest in a decade after Japan’s biggest bank added 100 billion yen ($937 million) in coronavirus-related charges for expected loan losses and on stock holdings hurt by volatile markets.Net income fell about 40% to 520 billion yen in the year ended March 31, a preliminary earnings statement showed Thursday. The virus-related charges come on top of 360 billion yen in already reported writedowns related to the lender’s holdings in three Southeast Asian banks.Read more on MUFG’s writedowns on Asian unitsBanks around the world are booking hefty provisions in anticipation of a wave of bad loans as the coronavirus cripples the global economy. S&P Global Ratings downgraded the outlook for Japan’s major banks including MUFG last week, saying the economic strain stemming from the pandemic will put prolonged pressure on their asset quality and revenue.“Creditworthiness of the three banking groups has come under pressure as credit costs rise, unrealized gains on marketable securities fluctuate, and impairment risk grows,” S&P analysts wrote.MUFG had previously forecast annual profit of 750 billion yen. The latest statement includes a 65 billion yen impairment on other stock holdings and about 35 billion yen in provisions for credit to customers hit by the pandemic.Tokyo-based MUFG maintained its dividend forecast of 12.5 yen a share.The statement was released after the close of stock trading in Tokyo. MUFG climbed 2.2%, paring this year’s decline to 27%.The bank is scheduled to announce its full results on May 15. Its biggest local rivals -- Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. -- are due to report on the same date.(Updates with shares in the seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

(Bloomberg) -- Japan’s top banks forecast the biggest bad-loan costs since the aftermath of the global financial crisis, joining other global lenders in bracing for the fallout from the coronavirus pandemic.Total credit costs at Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. will almost double to 1.1 trillion yen ($10.3 billion) in the year ending March 2021, the most in 11 years, the Tokyo-based lenders forecast Friday. They expect combined net income of 1.3 trillion yen, the lowest since the year ended March 2010.“Credit costs are the biggest concern,” Mizuho Chief Executive Officer Tatsufumi Sakai told reporters in a teleconference.Banks worldwide are setting aside billions of dollars to prepare for a wave of defaults as the coronavirus triggers potentially the worst global recession since the Great Depression. Interest-rate cuts around the world are compounding the misery for Japanese banks, which have been expanding loans abroad to make up for negative rates at home.For years, the nation’s lenders have relied on low credit costs to prop up earnings as rock-bottom rates erode lending profitability. They have also been booking gains from sales of shares held in corporate clients -- something that’s becoming tougher after equity markets plunged this year. Shares of the three banks themselves have tumbled at least 29% this year to trade at about a third of their book values.“I expect megabank stock prices to remain under downward pressure,” said Toyoki Sameshima, an analyst at SBI Securities Co. “It’s just impossible to determine whether their credit costs and other estimates are realistic or conservative, given how uncertain the outlook is in this unprecedented economic slowdown.”MUFG, Japan’s biggest bank, expects profit to climb about 4% this year, mainly because it booked massive writedowns on its Southeast Asian units last fiscal year. Mizuho forecasts a 29% drop, while Sumitomo Mitsui sees its earnings sliding 43%. All projections are lower than analysts’ estimates.The bleak outlook is increasing the impetus for cost cutting. Sumitomo Mitsui released a midterm business plan that involves reducing its headcount by 6,000 over the next three years through natural attrition, CEO Jun Ohta said. The bank has about 100,000 employees worldwide.At the same time, Ohta said his bank will persist with its strategy of expanding abroad and is seeking acquisition opportunities.MUFG will accelerate efforts to digitalize its operations as the coronavirus changes customer behavior, CEO Hironori Kamezawa said. Bright SignsOne bright sign for investors is the lenders all pledged to maintain dividend payments in the current fiscal year. That confirmed analysts’ expectations even after some overseas rivals were forced to curb or withhold payouts at the behest of regulators.Another is the prospect of Japan reopening parts of its economy as new virus cases decline. The government is lifting a state of emergency in most prefectures earlier than scheduled and will evaluate next week whether do the same in major cities including Tokyo, where nine new infections were found on Friday, according to broadcaster NTV.Sakai said Mizuho’s projections were based on the assumption that the economy will bottom out by the end of the next quarter. Similarly, MUFG’s forecast was based on a slow U-shaped recovery beginning in the July-September period.“To be honest, we don’t know whether credit costs are enough or not,” given the breadth of the Covid-19 crisis, Ohta said. “We would like to respond flexibly by watching the situation.”Data next week is likely to confirm that Japan is in a deep recession, with analysts estimating the economy shrank an annualized 4.5% in the first three months of the year. Gross domestic product is expected to plunge 21.5% in the current quarter.The banks are seeing strong loan demand, as businesses scramble to secure funding to weather the economic storm. Loans at major lenders grew the most since 2009 in April, Bank of Japan figures showed this week.That may not be sustained because companies will have little incentive to spend during the slump.“In the very short term, large corporates do have liquidity needs,” said Michael Makdad, an analyst at Morningstar Inc. in Tokyo. “You get a short-term boost, but after that things slow down.”(Updates with MUFG CEO comment in the 10th paragraph. An earlier version was corrected to remove an erroneous reference to Sumitomo Mitsui increasing this year’s dividend)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Mitsubishi UFJ Financial Group (MUFG) <8306.T> sold off its $85 million loan to Glencore's Wiggins Island Coal Export Terminal (WICET) in Australia to a hedge fund on Wednesday at about 52 cents on the dollar, two sources said. The costly decision at a time of extreme market volatility extinguishes MUFG's exposure to the coal-related asset ahead of the bank's financial year-end on March 31, the two sources and a third person told Reuters. A spokesman for Mitsubishi UFJ declined to comment.

Full-year profit forecasts from Japan's biggest banks on Friday fell short of analysts' estimates as the lenders predicted a surge in credit-related costs in the wake of the coronavirus outbreak. Japanese banks have already been struggling with ultra-low interest rates for years and said credit-related costs in the current year would reach levels not seen since the global financial crisis. Mitsubishi UFJ Financial Group Inc (MUFG), the country's largest lender by assets and owner of a 24% stake in Wall Street investment bank Morgan Stanley, said it expects 550 billion yen ($5.14 billion) in net income for the year ending in March 2021, compared with an average 762.6 billion forecast in a Refinitiv poll of analysts.

The banking arm of Mitsubishi UFJ Financial Group Inc is planning to reduce staffing levels by another 2,000 people by fiscal 2023, the Yomiuri daily reported on Sunday, highlighting its struggle to maintain profits amid ultra-low interest rates. Japan's largest lender by assets had announced in 2017 that it expected 6,000 job losses through attrition by fiscal 2023. "It's true the number of staff reductions has been progressing more than the initial plan," said MUFG spokeswoman Kana Nagamitsu, adding the report was not what the bank has announced.

Let's see if Mitsubishi UFJ Financial Group, Inc. (MUFG) stock is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks.

Japanese stocks advanced in line with their Wall Street and Asian peers and hit a two-and-a-half-month high on Tuesday, as encouraging early-stage data for a potential coronavirus vaccine boosted hopes for a swift reopening of the global economy. Data from Moderna Inc's COVID-19 vaccine, the first to be tested in the United States, showed it produced protective antibodies in a small group of healthy volunteers, the company said on Monday. MSCI's broadest index of Asia-Pacific shares outside Japan last traded up 1.6% in late Asian trade.

National Bank of Canada's (NTIOF) Q2 results are hurt by a substantial rise in provisions, lower interest rates and higher expenses.

Japanese retail customers' love affair with cash - and some extra free time while working at home - is keeping bank branches busy despite government calls for people to reduce contacts during the state of emergency to contain a coronavirus outbreak. Japan does not have a mandatory lockdown, but Prime Minister Shinzo Abe declared a state of emergency for seven prefectures including Tokyo on April 7, urging people to cut person-to-person contacts by 70% to 80% and work at home as much as possible. MUFG figures include ATMs, while SMFG numbers do not.

MUFG is pleased to announce today the appointment of two new members to its Global Advisory Board: Ms. Anne Le Lorier, former First Deputy Governor at Banque de France, and Ms. Emi Osono, professor at Hitotsubashi University Business School’s School of International Corporate Strategy.

Union Bank, a leading West Coast regional bank, announced today it will commit $3 million to support local communities affected by COVID-19. In addition, the bank announced several measures it is taking to lend additional support to clients and colleagues during this global health crisis.

(Bloomberg) -- Japan’s biggest banks are expected to project the highest bad-loan costs in a decade when they issue annual profit forecasts this week, joining global peers in bracing for the worst global recession since the Great Depression.Credit costs are likely to be the biggest factor impacting the earnings outlook of Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc., given their relatively small dependence on volatile trading and fee businesses.The coronavirus pandemic has prompted banks around the world to set aside billions in anticipation that companies and individuals will struggle to repay their debts. For Japanese lenders, the prospect is significant because for years they have been relying on low soured loans to prop up earnings that have sagged under the weight of rock-bottom interest rates.“There’s no doubt that the new year is the most challenging for megabanks since the global financial crisis a decade ago,” said Michael Makdad, an analyst at Morningstar Inc. in Tokyo. He sees this year’s bad-loan costs totaling about 800 billion yen ($7.4 billion).The three lenders are scheduled to report results for the year ended March 31 on Friday, along with their forecasts for the current fiscal year.MUFG and Mizuho have already published preliminary earnings in recent weeks, shifting attention to their projections for the new year. MUFG said last year’s net income sank to a decade low on writedowns of its holdings in Southeast Asian banks whose shares tumbled. Mizuho said its annual profit rose less than it anticipated after setting aside extra reserves for the impact of the outbreak.JPMorgan Chase & Co. analyst Rie Nishihara estimates credit costs at MUFG will jump to around 30 basis points of its total loans outstanding this fiscal year, or about 300 billion yen, the most since the aftermath of the 2008-2009 crisis. She also expects a big increase at the other two banks.Still, credit costs will remain much smaller than those posted during the global financial crisis because a slew of government aid programs will provide troubled borrowers with life support, according to Nishihara. “It’s not that the financial system is in trouble,” she said. “So, we expect a relatively quick economic recovery.”Makdad said he doesn’t expect the lenders will resort to raising equity capital, unlike during the financial meltdown.Analysts also predict the banks will avert large-scale writedowns on their shares held in Japanese corporate clients, because many local stocks are trading above levels that would trigger such charges, even after this year’s rout. The Nikkei 225 Stock Average is around 20,000 now, more than double where it was in the year ended March 2009.“Given the level now, it’s hard to expect stock writedowns of a similar scale,” said Toyoki Sameshima, an analyst at SBI Securities Co.Shares of the three banks themselves have been battered this year, falling at least 27%. That’s left them trading at about a third of the book value of their assets. Bloomberg Intelligence sees little upside given the persistent monetary easing by central banks.What Bloomberg Intelligence Says:Multiples may continue to languish at less than half their book values, while revenue headwinds may persist due to Bank of Japan easing and the U.S. Fed’s rate cuts.\--Shin Tamura, banks analystClick here for the researchOne bright sign is a pickup in domestic lending as companies tap credit to ride out the pandemic. Loans by major banks jumped 3.4% last month from a year earlier, the most since 2009, Bank of Japan figures showed Wednesday. Investors will also be looking for any guidance on shareholder payouts at this week’s briefings by bank executives. Unlike its counterparts in markets including Switzerland and the U.K., Japan’s Financial Services Agency has refrained from urging lenders to withhold dividends during the current crisis.“The Japanese FSA has been somewhat unique among major banking jurisdictions in not providing any explicit guidance on restrictions to shareholder distributions,” Makdad said. “So I am really watching to see how Japanese bank management approaches the question of future dividends and share buybacks.”(Updates with bank lending data in the third-to-last paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

(Bloomberg) -- About one out of seven children live under the poverty line in Japan, one of the highest figures among rich countries, and the coronavirus pandemic could worsen their situation.Daiwa Securities Group Inc. is trying to help, with a bond sale. The Japanese brokerage priced 75 billion yen ($698 million) of notes in two tranches targeted at individual investors on Tuesday, and a small portion of the funds raised -- 0.15% -- will be used to support poor kids.“The coronavirus situation has hit economically marginalized people in particular,” said Daiwa spokesman Yuji Kamioka. “We’ve noticed that children living in poverty are suffering, so we decided to take action.”Daiwa’s debt sale comes as borrowers globally issue bonds to fight the impact of the coronavirus, with $106 billion of funds raised so far, according to Bloomberg-compiled data. Chinese companies have sold the most so-called pandemic bonds, and Bank of America Corp. last week priced a $1 billion issue to fund relief efforts, the first sale from a U.S. financial institution that explicitly links all proceeds to tackling the virus.In Japan, Mitsubishi UFJ Financial Group Inc. plans to sell about 60 billion yen of sustainable bonds to be used for lending to small- and mid-sized companies whose profits are sagging due to the crisis.Daiwa is offering three-year notes with a 0.3% coupon and five-year notes at 0.5%, according to filings. Some of the funds that it raised will go to non-profit and non-governmental organizations specializing in supporting vulnerable kids who are often in single-parent households and setting up e-learning platforms for children, as well as providing food to children who aren’t in school.(Updates with bond pricing details)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Japanese shares rose on Monday as signs of a slowdown in coronavirus infections raised optimism that the government would soon ease restrictions in additional prefectures, although escalating U.S.-China trade tensions kept investors wary. The daily number of new coronavirus cases reported in Tokyo dropped to five on Sunday, the lowest since the capital was placed under a state of emergency on April 7. Japan lifted a state of emergency in large parts of the country on Thursday but said it would remain in place in Tokyo until the novel coronavirus was contained.

Mitsubishi UFJ (MUFG) reports disappointing earnings for fiscal 2019 (Mar 31, 2020), mainly affected by net extraordinary losses which resulted from one-time amortization of goodwill.

MUFG Americas Holdings Corporation, parent company of San Francisco-based MUFG Union Bank, N.A. (the Bank), today announced that effective March 16, 2020, the Bank's reference rate will be reduced to 3.25 percent from 4.25 percent.

Santander's last head of consumer banking followed his boss to Wells Fargo last month. Now, MUFG Union Bank's head of consumer banking is following his colleague to Santander.

Tokyo stocks edged higher on Monday as signs of a slowdown in coronavirus infections raised optimism that Japan would soon ease restrictions in additional prefectures, although escalating Sino-U.S. trade tensions kept investors wary. The daily number of new coronavirus cases reported in Tokyo dropped to five on Sunday, the lowest since the capital was placed under a state of emergency on April 7. Japan lifted a state of emergency in large parts of the country on Thursday but said it would remain in place in Tokyo until the novel coronavirus was contained.

Mitsubishi UFJ Financial Group Inc (MUFG), Japan's largest lender by assets, forecast on Friday a full year profit that fell short of analysts' expectations on coronavirus-related credit costs. MUFG, which owns 24% of Wall Street investment bank Morgan Stanley, expects 550 billion yen ($5.14 billion) in net income for the year ending in March 2021, compared with an average 762.6 billion forecast of 12 analysts polled by Refinitiv. Annual net profit for the year that ended in March was 528.2 billion yen, compared with analysts' estimate of 668.3 billion.

The MUFG Union Bank Foundation today announced the launch of WE CAN (Women's Entrepreneurship Capacity building, Advocacy support, Nurturing growth) Initiative. The two-year $500,000 women's entrepreneurship and small business effort will help build capacity for under-resourced Women Small Business Centers (WBCs) in California.