© Reuters. People queue inside a branch of the Mitsubishi UFJ (MUFJ) Financial Group’s bank of Tokyo-Mitsubishi UFJ in Tokyo, Japan, in this February 1, 2016 file photo. REUTERS/Yuya Shino/Files
TOKYO (Reuters) – Japan’s largest lender Mitsubishi UFJ (NYSE:) Financial Group Inc (MUFG) said on Monday it expects a 12% drop in net profit for the current financial year due to market volatility and an uncertain economic outlook, after scoring a record annual profit for the previous year.
MUFG joins Sumitomo Mitsui (NYSE:) Financial Group Inc (SMFG) and Mizuho Financial Group Inc, Japan’s No. 2 and No. 3 lenders respectively, in offering cautious outlooks.
MUFG, which owns about 20% of Wall Street bank Morgan Stanley (NYSE:), said it expects one trillion yen ($7.73 billion) in net income for the current business year. That is below analysts’ forecasts of 1.06 trillion yen, according to Refinitiv Eikon data.
For the previous year that ended in March 2022, MUFG posted a record annual of profit of 1.13 trillion yen ($8.73 billion) thanks to the release of cash from provisions that had been set aside to deal with a potential flood of pandemic-related bad loans.
However, the final quarter saw a 64.4% plunge in profit as MUFG set aside 140 billion yen to cover potential losses from its exposure to Russia.
That brought total Russian provisions by Japan’s top three banking groups to 312 billion yen.