MUFG Investors Day 2021 - Mitsubishi UFJ Financial Group, Inc - July, 2021
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MUFG Investors Day 2021
July, 2021
Mitsubishi UFJ Financial Group, Inc.
Contents
Retail & Commercial Banking (R&C) 3
Digital Service (DS) 10
Japanese Corporate & Investment Banking (JCIB) 16
Global Commercial Banking (GCB) 22
Global Corporate & Investment Banking (GCIB) 29
Global Markets 35
Asset Management & Investor Services (AM/IS) 42
Appendix 48
2
Retail & Commercial Banking Business Group
Atsushi Miyata, Group Head
3
R&C DS JCIB GCB GCIB Global Markets AM/IS
Review of the previous medium-term business plan
Results Achievements and challenges
FY17 FY20 Changes Accelerated cost structure reforms
Achieve- -Reduce expense by ¥90bn, or ¥110bn in gross, centered on
optimization of branches and personnel
Net operating ments
343.3 258.3 (85.0) Deepened cooperation between BK, TB and MUMSS
profits (¥bn)
Improve top line (strengthen profitability & profit structure)
-Asset management: Shift to advisory business model
Expense ratio 79% 82% +3ppt / Enhance shift from deposit to investment
Chal- -Corporate solutions: Medium- to long-term & fundamental
lenges issues / Enhance high-quality lending
Leverage digitalization to improve productivity
ROE 9% 5% (4ppt) -Reduce cost further and establish non face-to-face business
model
Changes in net operating profits Business environment
（¥bn） Decreases in asset management income and Aging population
negative effects of lower interest rates & COVID- Digital shift
& low birthrate
343.3 19 were not offset by expense reductions.
• Establishment of DS Business Group to • The era of the 100-
promote DX*2 by thoroughly dealing with year life
mass-market segments
• Increasing need for
Main customers TB MUMSS BK NICOS ACOM asset formation
258.3 Domestic retail • Shortage of successors
and corporates DS Business
(mass-market
segment)
R＆C Group
Domestic retail Business
and corporates Group Approach issues
relating to “value”
FY17 AM *1
JPY loans Card & Expenses FY20 FY20
（Ref.）FY20*3 R＆C DS and
NOP（¥bn） 65.0 175.0
results & deposits, Foreign results targets customer asset
etc. settlement Expense ratio 88% 77％
ROE 1.5% 2.5%
*1 Asset management (incl. investment product sales) *2 Digital Transformation
*3 Figures based on the new MTBP basis. The calculation method of RWA, etc. were changed. 4R&C DS JCIB GCB GCIB Global Markets AM/IS
Overview of the new medium-term business plan
Basic policy Financial targets
• Help to enrich people‘s lives, support and FY23 targets vs FY20
drive the growth and development of business
Net operating
Vision partners, and by extension, the continued 140.0 +75.0
prosperity of the Japanese economy profits（¥bn）
• Challenger for delivering value-added services
from a new perspective Expense ratio 77％ (11ppt)
ROE 5％ ＋3.5ppt
Key strategies
RWA（¥tn） 16.6
Strengthen 1 Expand retail value chain business
profitability
Unified promotion of corporates×WM*1 Path to achieve ROE target
-Business resilience 2 solution
Net profits＋¥60bn
Digital shift 3 WM digital platform
5％
Rebuild sales networks and
Cost reduction 4 optimization of personnel 1 Retail value chain
KPIs
（¥bn） FY20→FY23
Net operating profits in WM ＋41.0 WM profits
Cross transactions
1.5%
Gross profits in cross transactions +31.0
Gross profits in AM +17.0 2 Corporates×WM
solution
Base expenses (24.0) FY20 AM Inheri- Solution・ Domestic Deposits / Expenses Credit FY23
result tance・ M&A,etc. and Loans,etc. costs・ target
real estate foreign RWA,etc.
*1 Wealth management settlement / 5
FX,etc.R&C DS JCIB GCB GCIB Global Markets AM/IS
Strategy concept
Market opportunity MUFG total asset-base sales model
• Consulting on personal profiling assets of ¥100tn • Focusing on total assets of customers, approach
(potential for all high net-worth individuals/¥130tn in FY23) fundamental issues such as capital strategy,
• Capital value of ¥150tn held by corporate owners succession, real estate, asset management needs, etc.
• Pursuing value chain businesses by leveraging our
1 Retail value chain Group capability. Expand cross transactions
R&C client base AM advisory Personal real estate business Alliance
business model based on inheritance needs Affiliates partner
WM
High-End
Others BK
¥10tn
(over ¥2bn*1) Deposits・Loans
Potential Amount of profiling Potential Solution
Semi-
¥100tn Real Morgan
Retail
High-End Financial 200thd AM Stanley
(¥0.3-2bn) asset individuals estate
¥45tn ¥30tn
Affluent Treasury Profiling Primary
(¥0.1-0.3bn) stock
1.6mm
¥15tn Strengthen total market
Affiliates Affiliates
individuals
Alliance asset-base sales Alliance
Non-listed partner TB MUMSS partner
Listed ¥150tn clients in need of Real estate AM
Listed business succession
60thd
companies
Stock transfer agency Investment advice
Corporate
Market Market Total Testamentary trust Equity solution
capitali- capitalization net assets
zation M&A /IPO / PO / Debt
Non-listed
of owners ¥130tn
¥120tn Learning
¥20tn know-hows
from MS
Approach to management issues
200thd focusing on capital 3 Digital shift（WM digital platform, etc.）
companies
2 Corporates × WM solution 4 Cost reduction（Rebuild sales networks,
optimization of personnel, etc.）
*1 Identified asset criteria (with separate criteria according to the amount of financial assets held) 6R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (1) Expand retail value chain business
Advisory business model of asset management Retail real estate business based on inheritance needs
• Enhance stable source of profit by increasing stock balance of • Upward trend of gross profits from entruster of testamentary
investment assets trust through implementing total asset-base sales
• Further expand retail customer referrals (collaboration with • Expand gross profits from retail real estate business by
MUMSS) leveraging value-chain arising from inheritance needs
∎ AM from retail customers BK TB MUMSS ∎ Retail customer referrals*2 BK MUMSS ∎ Revenue model of testamentary trust ∎ Executional entrusted testamentary trust
Stock balance (\tn)*1 Gross profit (\bn) Entruster of testamentary trust BK TB
No. of account dealed (thd) of which, customer for total asset-base sales
Balance of investment assets (\tn) Balance of entrusted amount (\tn)
28.3 48.6
No. entruted cases (thd)
25.6 32
24.2 Further
22.5 25 expansion
20 38.9
Increasing +12 Current implementation 37.5
ratio of stock
36.0
ratio: 20%
balance
9.0 55 12.2
6.5 43 Double
6.3 5.4 33 revenue effect 10.0
30 8.8 9.3
Before Draw 2Y 3Y 4Y 5Y 6Y 7Y Exec- 9Y
FY18 FY19 FY20 FY23 FY18 FY19 FY20 FY23 up ution
FY18 FY19 FY20 FY23
∎ Policies for future initiatives ∎ Real estate business BK TB ∎ Policies for future initiatives
• Rebuild asset management business through establishing an Gross profits from retails (\bn) • Strengthen to find potential deals
advisory business model 12.9 from customer base of BK
Gross profits from corporates (\bn)
BK
Asset management advice chain Reinforcing
No. of effective information sharing
Strengthen origination
each engine
for WM real estate (thd) • Enhance capabilities to find needs
Investment Product Sales
Research 7.8 +12 • Support owners’ preparation for inheritance
strategy strategy strategy
Improve knowledge / skills of person in charge
6.3
Learning Enhance BK TB MUMSS
Strengthen core portfolio services
know-hows Increase quality
House View*3 ( BK funds that refer to House View） 4.9 20 of deals
from MS
GMAP*4 Highly selected
14 13
TB
Strengthen execution
product line-up 14
20 • Improve accuracy of real estate information
16 18 15
• Active support for deals under consultation
Expand AM base from cross Establish real estate dept. at TB’s branch
WM digital platform FY18 FY19 FY20 FY23
transactions Increase volume
of deals
*1 Products that generate profits in accordance with balance / period, such as investment trusts, fund wraps, and investment advice
*2 MUMSS on a basis after the merger with Mitsubishi UFJ Morgan Stanley PB Securities Co., Ltd.
*3 MUFG Wealth Management’s official position with regard to market outlook and investment trends *4 Global Macro & Asset allocation Perspectives 7R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (2) Unified promotion of corporates × WM solution
Approach to management issues focusing on capital Policies for future initiatives
• Targeting on “corporate value” and “owner assets” • Thoroughly pursuing synergies from corporate and
• Business succession projects have been successful by owner cross-relation and a group-wide approach under
intensive approach to owners in need of succession the enhancement of structure
solutions ∎ Relation matrix of corporate and owner
High
Corporate Corporate owner Ⅲ Begin from WM Corporate & WM Ⅳ
Relationship
with owner
B/S B/S Develop Maximize synergies
Assets Liabilities Assets Liabilities Inactive customers Begin from corporate
Financial
Loans
Financial
Loans
I Approach Develop Ⅱ
assets assets
Low Relationship with corporate High
Real estate Real estate
Equity Equity • Collaborate with BK to approach customers who have BK TB MUMSS
Treasury relationship with TB or MUMSS
Net assets Stocks
• Leverage TB’s function of corporate agency, and BK TB
IR/SR relationship
∎ Business / asset succession ∎ Gross profits of BK TB MUMSS
• Establish a strategic proposal organization to BK
BK TB cross transactions
(¥bn) strengthen capital business with inactive customers
Amount of entrusted testamentary (¥bn) Solution, M&A
trust from owner family Real estate ∎ Strengthen the promotion structure
Amount of LBOs related to Inheritance
business succession*1 Others • Improve the promotion structure gradually toward
Amount of loans related to 100
business succession unified promotion of corporates × WM solution
¥1.2tn WM FY22from
Corporate
70 70 +20 BK
WM-specialized BK
Corporate banking
64 front organization Unified promotion of div.
corporate × WM solution
220 75 MUMSS WM headquarters BK Branches
70 200 FY20
620 53 55 merged with
50 PB*2
470 480 Product Office
410 420 TB BK MUMSS
+10 Real estate・ WM
from
FY21 Asset management
320 testamentary trust
Specialized organization
FY18 FY19 FY20 FY18 FY19 FY20 FY23 Stock transfer agency for large-asset owners Primary market
*1 Amount of underwriting of LBOs related to business succession (including MBOs involved in funds)
*2 Mitsubishi UFJ Morgan Stanley PB Securities Co., Ltd. 8R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (3) Digital shift / (4) Cost structure reforms
Digital shift（WM digital platform） Cost structure reforms
(¥bn) Reduction of base expenses (24.0)
• Achieve total asset-based portfolio proposals based on a
goal-based approach through the use of digital platform (32.0)
530.2
Learning
∎ WM digital platform know-hows
from MS
Expenses for
business growth,
Expenses for cost Performance-linked
MUFG integrated structure reforms, expenses
CRM function deposit insurance
premium, etc.
1 Personnel
Made progress Holistic Strengthen integrated
in profiling operation of MUFG 2 Facility
View Change of behavior
expenses Others
of person in charge FY20 FY23
1.6mm
Others individuals
Customer ∎ Forecast of no. of personnel 1
Financial Real base of R&C TB BK MUMSS (thd) R&C
200thd Of which the Bank
assets estate 27
individuals
Persons in charge • Branch consolidation
Treasury 60thd 21
companies 17 through promoting
stock operational efficiency and
13
optimization of personnel
200thd by streamlining of head
Goal Next
companies
office organization
Propose portfolio based on
Planning goal based approach Best FY17
17年度 FY20
20年度 FY23
23年度
System Action ∎ No. of branches (the Bank non-consolidated basis) 2
Collaboration
Proposal tool based ④ ① Recommendation Branch specialized to features*1
with DS
on total assets Full-fledged branch
Review Profiling function 600
• Optimization of entire
400 channels
③ ② 515 Approx. through sophistication of
Action Plan 200 425 160 on-line channel and
Approx.
160 seamless collaboration
0
with physical channel
06年度
FY06 17年度
FY17 FY20 列2 FY23
*1 MUFG NEXT and consulting office, etc. 9Digital Service Business Group
Masakazu Osawa, Group Head
10R&C DS JCIB GCB GCIB Global Markets AM/IS
Overview of the new medium-term business plan
Basic policy Financial targets
FY23 targets vs FY20
Purpose Eliminate customers’ concerns about money
Net operating profits
205.0 +30.0
Become a financial / digital platform operator (¥bn)
Vision which customers always can depend on, Expense ratio 73% (4ppt)
as a financial services expert
ROE 4.5% +2ppt
RWA (¥tn) 9.2
Business environment Our strength
∎ Roadmap to achieve ROE target
Net profits +¥20bn
Expantion of Collective
Acceleration
the presence
of digital strength of
of emerging 4.5%
shift group companies Expense for
companies Optimization business growth,
of channel deposit insurance
2.5% network premium, etc.
Shift to Largest (DS portion)
Stong brand
digital Innovation / customer
(safety /
channel from Relaxation of base in
security) FY20 Gross チャネル
Expenseその他 Credit cost, RWA FY23
physical regulations Japan result profits 見直し効果 経費 etc. target
channel （DS分）
Acceleration of business model reforms
Other business groups and CCs
Promote digital shift of operations (P.12) Business Group
Support Group-wide
specializing in
Key Reform digital channel business models (P.13) digital transformation
mass segments
strategies Strengthen the group’s Multiple contact
capabilities to provide points with Promoting function of
customers Integration
financial services digital transformation
11R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (1) Promote digital shift of operations
Eliminate the need to ask customers to wait,
Steady progress in digital shifts Next-gen branch: fill out paper forms or bring anything
∎ Digital transaction ratio in various procedures*1 Reservation / 3 ATM etc. (tax bills etc.)
Reception Complete transactions
100% From around 40% Opening of account
Shorten waiting time through self-service devices.
to over 80% Various procedures Shorten processing time
80%
・Change of address
60% ・Re-registration of
4 TV monitor counter
security code etc.
40% ・Card replacement Remote access to
highly specialized
20% consultation services
FY20 FY23 2 Space for internet
∎ Ratio of money transfer via banking / tablet
∎ No. of IB*2 service users
(mm) IB*2 Complete transaction 5 Bank-counter
through tablet.
Shorten processing time Free many employees
Approx. doubled Approx. doubled from burdensome work
Over 7 63%
in 5 years in 5 years
Optimization of channel network (BK entity basis)
FY17 FY20 FY23
515 branches 425 branches Approx. 320
FY15 FY20 FY15 FY20 branches
Branch downsized
∎ No. of transactions at ∎ No. of responses via AI /specialized*4
bank-counter (mm) chatbot*3 (thd/per month) to features 5
Full-fledged
Almost halved in 5 years
56 branch
Approx. 160
515 420
Solution
14 33 Cost Cost Approx. 160
ratio
80% reduction*5 reduction
ATM outside ¥17bn ¥30bn Approx. 1,250
1,420
branches
FY15 FY20 20/4 21/3 1,658
*1 Procedures completed not at the bank-counter *2 Mitsubishi UFJ DIRECT: Internet banking for individual customers
*3 Number of cases of responding to inquiries regarding internet banking services via AI chatbot *4 MUFG NEXT and consulting office etc.
*5 Sum of cost reduction amount of personnel and facility (branches, ATMs) expenses
12R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (2) Reform digital channel business models
∎ Diversify and digitize points of contact with customers through
Strengthen capabilities to provide financial services of MUFG alliance
MUFG channel External channels
QR settlement Digital Online
account service factoring
EC Mobile Loyalty
website carrier program 210thd AirPAY 80mm Enhance contact
Personal financial Internet account members points with SME
management Banking
Data accumulation
∎
∎ Vision of data
Our vison marketing
of data marketing
Personalized recommendations Personalized recommendations
Personalize proposals and services
Improve UI / UX Provide BaaS
Sustainable
API platform Understanding of needs growth of
through data analysis Life Time Value
of customers
Data infrastructure that enables
Data marketing
(customer information, transaction history, dynamic data, etc.) the aggregation of large-scale and diversified data
(utilizing cloud computing)
New financial services utilizing digital technology (P.14)
∎ Digitalization of MUFG’s products and services
Advanced banking service company and JV with other companies
GO- (¥tn) FY20 YoY FY23 plan
JDD MUIP RMB Other
NET
Ratio of investment trust
sales via online*1 72% +13ppt 90%
Internal collaboration within MUFG, enhancement of products Ratio of electronic
housing loans contract 44% +25ppt 80%
TB/Securities BK NICOS/ACOM Balance of housing loan
(BK) 12.0 (0.1) 12.2
Investment trust Credit card Balance of card Via online
loan 100% 1.38 (0.11) 1.46
Housing loan Card loan
*1 Based on no. of application for periodical saving of investment trust 13R&C DS JCIB GCB GCIB Global Markets AM/IS
Group-wide digital transformation - History of Open Innovation
All business
Open Innovation Initiatives groups Target areas for investment in open innovation
• Current valuation is well in excess of its book value:
to be used for new business development and opportunities
MUFG Innovation Partners Payment/Wealth
Japan 6% management/ESG 5% Lending
Banking 42%
Investment in companies with potential
Framework to collaborate with MUFG
9%
US
of supporting Portfolio 41% SaaS*1 Portfolio
Israel
startup Value-up through collaboration 26% by country 13% by category
MUFG DIGITAL ACCELERATOR Marketplace
South East Asia 14% Blockchain
27% 16%
Support companies in early-stage
(31 companies in 5 Years) Initiatives as a separate entity within MUFG group
Promote the business under strong leadership by
professionals in each field
Investment record MUFG
Japan Digital Global Open Recruit
(Startups in Japan and abroad, funds, Innovation
Design Network Japan MUFG Business
digital related subsidiaries) Partners
Collaboration
via alliance / Over 40 Appraised
investment companies value
Investment
Over ¥120bn amount
Development of services
Nobutaka Shinji Eiji
through open innovation Yuko Kawai
Embedding Suzuki Tokunaga Natsume
Technologies Develop solutions Strategic Blockchain Payment
solutions and solutions Embedded more utilizing AI technology investment platform service
into MUFG of alliance than 10 services creating synergy
products / partners and in MUFG services Developing AI Invest ¥12.5bn Launched in Apr. Business
services investees recommendations in 18 companies Developing development of
for business (1st fund) high capacity electronic money:
matching and AI 9 cases of & speed next-gen coin+
screening models collaboration infrastructure
*1 Software as a Service 14R&C DS JCIB GCB GCIB Global Markets AM/IS
Group-wide digital transformation - Business Model Reforms
Initiatives Current situation Targets for FY23
Launched in December 2020.
1 ✓ Outstanding loan
Data-driven finance model Approx. 100 clients applied USD150mm～
balance
in the first 6 months
Creation of new businesses
Plan to establish a joint venture in this
✓ Purchased receivables
2 Online factoring for SMEs summer. ¥9bn
Alliance outstanding
Plan to launch the service next spring
Payment network service for credit card
Utilization of blockchain
started in April 2021. 7bn ✓ Number of transaction
3 platform in various
Plan to expand the services for vending transactions processed annually
fields
machines in this summer
Creation of digital First case of issuance is scheduled ✓ Accumulated
4 ¥100bn
securitization market in the first half of this year entrusted balance
Promotional campaign for individuals Over 1mm ✓ Accumulated no. of
5 Personal data trust bank
has started in July 2021 downloads app downloads
Start scanning seal forms and digitalizing
Seal form, ✓ Paperless for seal form,
Digitalizing balance statements (1st half of FY21) Reduction of
6 balance statement,
Start digitalizing loan agreements
balance statement,
paper documents 200mm pages loan agreement, etc.
loan agreement, etc.
(2nd half of FY21)
Began using AI for the areas in the
Voice recognition, chat, left column ✓ Working hours replaced
7 Utilizing AI OCR*1, etc. Proof of Concept is underway for
700thd hours
by AI (per year)
expanding to other areas
Digitalizing
Operational restructuring 1,050 FTEs (Full-Time-Equivalent) 2,100 FTEs*2 ✓ Workload reduction
8 corporate center/ through RPA, BPR, etc. workload reduction*2 in FY21 on FTE basis
service operations
A part of credit screening process will be Reduction of ✓ No. of cases of credit
Corporate Enhancement of internal consolidated into divisions in charge of 40thd cases screening (year)
9 customer business processes and channels credit (spring, 2022)
Opening of online account for corporate ✓ Ratio of account
related initiatives customers nationwide (spring, 2022) 75% opening via online
*1 Optical Character Recognition *2 VS end of FY17
15Japanese Corporate & Investment Banking Business Group
Naomi Hayashi, Group Head
16R&C DS JCIB GCB GCIB Global Markets AM/IS
Review of the previous medium-term business plan
Results Achievements and challenges
FY17 FY20 Changes • Established RM-PO model*1 (integrated management
of the Bank, the Trust Bank, MUMSS)
Achieve-
• Control of non-JPY loan-to-deposit gap and
Net operating ments
228.9 249.2 +20.2 improvement of non-JPY lending spread
profits (¥bn) • Achieved the reduction target of equity holdings
• Strengthen our ability to respond to customers’ new
management issues
Expense ratio 59% 57% (2ppt) Chal- • Thorough profit management with consideration for
lenges capital cost
• Build a sustainable business model under low interest
rate environment
ROE 10% 8% (2ppt)
Business environment
Changes in net operating profits Accelerated changes in the Growing importance of
social structure by corresponding ESG
(¥bn)
COVID-19
• Rebuilding of business • Transition
249.2 portfolio • Rise of ROE management
• Development of new • Revision of CGC*2,
228.9
businesses reorganization of TSE*3
• Digitalization
Business and management issues faced by large corporates
are becoming more sophisticated and complex
The necessity to respond to customers' new
FY17 Lending Trust Securi-Deposit Non- Expense 20年度…
17年度… FY20 FY20
20年度… management issues
results ties interest results targets
*1 RM: Relationship Manager, person in charge of sales. PO: Product Office, namely, business units and staff in charge of the planning, development and the
provision of products and services, RM-PO model: sales person of the Bank work with MUMSS and the Trust Bank as MUFG’s RM to respond quickly to customer 17
needs. *2 Corporate Governance Code *3 Tokyo Stock ExchangeR&C DS JCIB GCB GCIB Global Markets AM/IS
Overview of the new medium-term business plan
Basic policy Financial targets
• Growing together with customers by sharing FY23 targets vs FY20
business risk
Vision
• Realization of "staircase management": Steady Net operating
growth year-on-year, as we move up stairs 285.0 +45.0
toward the medium-term business plan three
profits (¥bn)
years from now.
Expense ratio 51% (5ppt)
Key strategies ROE 9% +4ppt
1 Establish a sustainable business model focusing on
ROE
RWA (¥tn) 30.0
2 Strengthen our risk-taking capabilities to meet new
needs of customer
3 Strengthen our ability to respond to new areas Path to achieve ROE target
9％
KPIs Net profits over +¥100bn
Lending spread*1*2 RWA*1(¥tn)
Non- 0.68%
32.4
JPY (2.4)
Turnaround
JPY 30.0
0.38% Over +0.1% 5％＊3 Steady year-on-year growth
"staircase management":
Results During MTBP
H1 H2 23年度 Unprofi-
FY21 FY22 FY23
FY20 FY23 FY20 Equity table
transac-
Risk- FY23 FY20
20年度 Credit
NOP NOP NOP RWA FY23
23年度
holdings tions, taking result cost target
etc. 実績 target target target 目標
*1 FY23 target of JCIB business group (the Bank) *2 Calculated as annual net interest income / average loan balance during the fiscal year
*3 RWA allocation amount for each business group was changed from the new MTBP. In addition, JCIB’s ROE for FY20 changed from 8% to 5%, due to the 18
change in the RWA calculation method from the current basis to the finalized Basel III reforms basis.R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (1) Establish a sustainable business model
focusing on ROE
Efforts to achieve ROE target Improve profitability by company group
• Visualizing profitability of approx. 1,500 company
Actions to achieve ROE target groups to improve profitability
Increase in • Improvement of base lending spread Ⅱ Ⅰ
gross profit • Enhancement of risk-taking R
O
• Establish efficient operations by taking R Focus area
advantage of COVID-19
Cost reduction A Center of
• Promotion of business reforms based on *2
gravity
VoE*1
Ⅲ Ⅳ
Efficient • Reduction of equity holdings and
operation of unprofitable transactions RWA
RWA • Input RWA to profitable assets
Reduction of equity holdings
• Accelerate the movement toward reduction more
than ever
∎ Historical performance (acquisition cost basis)*3
Establishment of a framework for each RM
to achieve ROE target Reduction of ¥300bn and more*4
Accelerate further
Upgrade of • Integration of accounting and
performance evaluation ROE ¥9.2tn
performance
evaluation • Performance evaluation linked to ROE ¥2.8tn
¥1.9tn
Improve • Visualize profitability by company group
profitability by
End Mar 02 End Mar 15 End Mar 21 End Mar 24
company group • Strengthen initiatives for focus area 6years 3years
*1 Voice of Employee *2 Return On Risk-Weighted Assets *3 Sum of the Bank and Trust Bank *4 Total amount of sale 19R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (2) Strengthen our risk-taking capabilities
to meet new needs of customer
Strengthening capital financing Strengthening real estate business
Examples of customer actions for restructuring 1
the business portfolio Group-wide CRE*4
Capital proposals
M&A Carve-out
reinforcement ESG initiatives
2 Enhancement of 3
Strengthening
risk-taking through loans
Enhancement of Providing group and equity value chain profit
risk-taking solutions
∎ Market environment
Promote real estate business as MUFG group
Amount of hybrid finance BK TB MUMSS
No. of domestic LBO deals＊1
executed in Japan＊2 • Non-recourse • Referral, consulting • M&A
136 loan • Custody
132 ¥3.9tn • FA*5
• REIT loan • Asset Management • Dealing in
• Equity • Equity private
2.0兆円
119 ¥1.6tn placement
Enhancement of risk-taking
Planning and umbrella organization
MUFG New
for real estate business
2018 2019 2020 FY18 FY19 FY20
∎ Real estate revenue plan (index)
∎ Examples
Finance revenue Fee revenue (Referral, FA etc.)
Green/hybrid bond*3 139
LBO Mezzanine Loan 119
underwriter 100 100
Competitive, stable Capital funding to
funding using support investment and (FY20=100) (FY20=100)
mezzanine financing development FY20 FY23 FY20 FY23
*1 Created by MUFG from materials announced by each company *2 Created by MUFG from materials announced by each company, as of April 1, 2021
(on the basis of the contract date and the determination date) *3 Hybrid bonds with green bond characteristics 20
*4 Corporate Real Estate *5 Financial AdvisorR&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (3) Strengthen our ability to respond to
new areas
Strengthening responses to social issues Efforts to climate change (transition & innovation)
MUFG sustainable finance target: ¥35tn
Create new businesses to solve social issues （Cumulative total for FY2019-FY2030,
through sharing business risks with customers of which ¥18tn for environment）
Development Implementation
of problem-
Incorporation
of business
Transition support through engagement
of external
solving human
knowledge
creation Engagement
resources program MUFG Customer
Sustainable Business Division (SBD) Expansion of engagement targets
Transportation/Iron and
• Newly create SBD by expanding the function of Energy/Utilities steel/Chemicals ・・・
Sustainable Business Office
Financial support for innovation
MURC*1 SBD New
• Follow-up on policy trends New businesses
Loan Mezzanine Equity
and new technologies and technologies
Overseas
Customer
branches • Business development
and provide solutions Issuance of Japan’s first Underwriting of Toyota Motor
transition bond by major Corporation's Woven Planet
shipping company bond
R MUMSS becomes MUMSS as
Track record
Public Involvement in Group companies M lead underwriter joint-lead
office, policy and SA＊2 underwriter
Industry consultations BK TB MUMSS etc.
group Offshore wind power Hydrogen fuel stations
generation business in business in U.S./debt finance
Akita/project finance First MUFG’s
financing that
Realize sustainable business by engaging with customers through the Bank specializes in a
the realization of policies and systems in public-private participated as hydrogen-related
partnerships, the promotion of corporate partnerships, etc. FA・MLA*3 business
*1 Mitsubishi UFJ Research and Consulting *2 Structuring Agent *3 Mandated Lead Arranger 21Global Commercial Banking Business Group
Takayoshi Futae, Group Head
22R&C DS JCIB GCB GCIB Global Markets AM/IS
Review of the previous medium-term business plan
Results Achievements and challenges
FY17 FY20 Changes Inorganic strategy
-ASEAN PB*2 network completed with consolidation of
Net operating Achieve- Bank Danamon
171.4 275.6 +104.3 ments Growth of Krungsri
profits (¥bn) -Growth centered on Retail and Consumer Finance (CF)
and rising to 3rd place in Thailand
Restructure MUB’s Regional Banking (RB) business
-While new framework and strategies have been put
Expense ratio 72% 65% (7ppt) in place, reconstruction is ongoing
Chal- Support the growth of Bank Danamon
-Support for growth path of newly consolidated Bank
lenges Danamon
ROE 6% 1% (5ppt) Strategies on entire ASEAN operations
-Business foundation across PBs have been established,
but concrete results are yet to come
Changes in net operating profits Business environment
(¥bn) • Decline of policy interest rates in countries where PBs reside in
Consolidation • Decrease in sales of new automobiles in Indonesia
275.6 • Recovery of the U.S. economy (Estimated FY 2021 GDP: +6.4%*3)
Rose to 3rd
place*1 per net [Table 1] Policy interest rates [Table 2] Forecast on sales of new
profits in automobiles in Indonesia
Thailand (2019 set as the standard)
6.00%
171.4 100% 95%
83%
Indonesia 3.50% 72%
60%
2.50% U.S. 90%
80%
1.75% 60%
0.50% 50% Motorcycle
FY17 MUAH KS BDI Others FY20 FY20 Thailand
0.25% Automobile
Results Results Target 19/1 19/7 20/1 20/7 21/1 2019 2020 2021 2022 2023
*1 Based on net profits. Ranking among domestic banks in Thailand, excluding government-funded financial institutions *2 Partner Bank 23
*3 IMF, World Economic Outlook Database, April 2021R&C DS JCIB GCB GCIB Global Markets AM/IS
Overview of the new medium-term business plan
Basic Policy Financial targets
FY23 targets vs FY20
“Committed to empowering a brighter Net operating
Vision +20.0
future for customers in ASEAN” 290.0
profits (¥bn) (+70.0 vs FY21)
Expense ratio 64% (1ppt)
Strategies for individual PBs and key initiatives
ROE 6% +5.5ppt
1 Support the growth of Bank Danamon
2 Restructure MUB’s RB businesses RWA (¥tn) 19.5
3 Strategies on entire ASEAN operations
Path to achieving the ROE target
Major cause
KPI (ROE*1 for each entity) • Decline in interest rates of PBs Net profits +¥70.0bn
residing countries
• Reduction of CF cap interest
6%
rate in Thailand
BDI • Stagnant automobile sales in
KS Indonesia
8.00%
7.5%
Credit costs
0.5% (¥100.0bn)
MUAH
-2.00% FY20 Credit FY21 MUAH KS BDI VTB/ FY23
FY20 FY21 FY22 FY23 result costs impact SBC, target
etc.
*1 ROE of MUAH is portrayed based on local managerial accounting basis. ROE of KS and BDI is portrayed based on information disclosed on local disclosure
standards.
24R&C DS JCIB GCB GCIB Global Markets AM/IS
MUFG Union Bank (MUB)
FY20 results*1 MUB new strategy: progress on priority areas
(¥bn)
FY19 FY20 YoY Basic Concept for “Back to Basic”
(US$1=¥103.50) Customer Focus on
One Team
Gross profits 563.1 559.3 (3.8) - Centric Profitability
Expenses Strengthen SME business
(Goodwill
595.4 470.9 (124.4)
impairment) (167.1) (36.9) ((130.1)) Progress
Segment Revenue
Net operating Loan origination NPS*5
profits (32.3) 88.4 +120.6 $2,000mm
Enhanced the capability for key industries;
(134.8) (125.3) ((9.5)) Commercial tech, health care, etc.
～
(Excl. impairment)
Banking $50mm Origination ＋17% #2 ⇒ #1
Credit cost 23.2 87.4 +64.3 Established the credit screening line for BB
$50mm
Business
Net profits (55.4) 1.0 +56.4
～
(Excl. impairment) (111.7) (37.9) ((73.8)) Banking $10mm
Origination +53% #7 ⇒ #3
Loans Internally hired 54 FTE SB specialist
9.0 8.3 (0.6) Small $10mm
End balance (¥tn)
Banking Origination +26% #5 ⇒ #3
～
New CEO’s review of current strategy
Enhance deposit quality at Regional Bank
In Mar 2021, Kevin Cronin was appointed as Regional Executive for Low cost deposit grew by introduction of new products and
the Americas. His experiences in BoA*2 and in 10-year Head of GCIB- collaboration with TB（Change from Mar 2020 to Mar 2021）
US will help strengthen SME business
Core Deposit $39.4bn $49.8bn (up by $10.4bn)
Prioritized Actions through 100 Days Plan
Cost of Funding 0.66% 0.13% (down by 0.53ppt)
１ Reigniting 2 Rewiring for
revenue growth operational efficiency Implement efficiency-related initiatives
3 Rebalancing 42 branches consolidation*6, all 22 PurePoint*7 FC closure,
portfolio of businesses non-core exit etc.
Two divestitures for TB*3 have been publicly released*4 ⇒Cost reduction to be realized by approx. $57mm per year
*1 U.S. GAAP, MUFG Union Bank, N.A. FFIEC031 *2 Bank of America *3 Transaction Banking *4 MUB Transaction Banking released two transactions;
(1) Jan 2021: Custody (deposit size : $1.2bn), (2) Apr 2021 : Home Owners Association (deposit size : $4.0bn) *5 Net Promoter Score ranking by Greenwich
Association (Peer comparison with the same trading areas from Mar 2020 to Mar 2021） *6 Record from Mar 2020 to Jun 2021 *7 MUB’s nationwide retail 25
financial services platform, which comprises retail internet banking and lightening branchR&C DS JCIB GCB GCIB Global Markets AM/IS
Krungsri (Bank of Ayudhya)
FY20 results*1 Establish a position in consumer finance
Retail revenue and share in the overall bank portfolio are
(¥bn) FY19 FY20 YoY growing
(THB1=¥3.44)
FY15 FY20
Gross profits 387.5 392.1 +4.7
Expenses 175.5 166.7 (8.7)
Net operating profits 212.0 225.3 +13.4 ¥276.5bn ¥392.1bn
Credit Cost 97.0 126.0 +29.0 Retail Retail
¥180.2bn ¥301.9bn
Net profits 91.7 79.2 (12.5) （65%） （77%）
+¥121.7bn
Loan Trends in domestic share (Domestic rank in parentheses)
End balance (¥tn)
6.3 6.3 +0.1
FY15 FY20
Auto loan 22% (2nd) 30% (1st) Leveraging MUFG’s
Krungsri rose to 3rd place on net profit basis relationship with
Personal loan 27% (1st) 30% (1st)
Low NPL ratio maintained*2 auto manufacturers
Credit card 15% (1st) 16% (1st)
Net profit trends (Local standard) Trends in NPL ratio (Peer comparison)
(THB bn) KS BBL SCB KTB KB FY15 FY21/1Q MUFG collaboration
60 3rd
in the
domestic KS 2.24% 1.99%
market
(0.25ppt)
M&A Finance ESG Finance
45
⚫ Acquisition of a ⚫ First government-
BBL 2.80% 3.70%
leading beverage issued ESG bond
SCB 2.89% 3.79% company in in ASEAN
30 Vietnam
KTB 3.20% 3.66% ⚫ Utilizing MUFG’s
⚫ M&A support ESG knowledge,
KB 2.70% 3.93% Bridge loan through bridge
Issuance Krungsri was
15 total*3 loans and bonds total*3 appointed as joint
Peer avg. 2.92% 3.77%
FY14 15 16 17 18 19 20 21 Approx. Approx. lead manager and
Includes affiliated company IPO profits +0.85ppt ¥550bn ¥100bn advisor
*1 Based on local disclosure standards under Thai GAAP. Net profits are net profit attributable to owners of the bank. FY19 excludes one-time gains on investments from the sales of shares 26
in certain subsidiary (¥20.9bn in net profit base). *2 The figures of other banks are Bangkok, Siam Commercial, Krungthai and Kasikorn *3 Shared lending / issuance with multiple banksR&C DS JCIB GCB GCIB Global Markets AM/IS
Bank Danamon
FY20 results*1 Enhancement of consumer finance
(¥bn) FY19 FY20 YoY Knowledge transfer of Krungsri and hiring of professional
(IDR1=¥0.0074)
Dan Harsono, who was KS’s Retail CF Head and the key
Gross profits 134.1 130.4 (3.7) person to KS’s growth has been appointed as MUFG Advisor
and Commissioner for Bank Danamon (Under application to local
Expenses 69.0 60.8 (8.2)
authorities)
Net operating profits 65.1 69.6 +4.5 ’90 GE Indonesia Director Knowledge
Dan Harsono ’94 GE・Astra JV (Largest
Credit cost 34.9 53.1 +18.2 (Native Indonesian)
finance company in Experience
Net profits 30.1 7.4 (22.7) New Advisor Indonesia) Commissioner
’07 KS Marketing Head
New Commissioner Network
Loan ’15 KS Head of Retail CF
1.0 1.0 (0.1)
End balance (¥tn)
Key initiatives to enhance CF （THB1=¥3.44）
Deepen MUFG collaboration １ End End
Collaboration PT KS
Mar-16 Mar-21
Housing with Bank Loan Change
⚫ Collaboration with MUFG is progressing steadily
loan Danamon and balance
(Notable deals from FY20 onwards)
Jakarta branch (¥tn)
0.6 1.0 +67%
Dealer finance etc. total of 10 deals Enhance relation with developers, Process
rate improvement contraction Cross-sell
Affiliated housing loans etc. total of 6 deals
Islamic finance Marketing Screening / Execution Business expansion
Islamic Finance for employees, etc. total of 11 deals
２ End End
⚫ Establishment of a new collaboration framework bridging Comprehensive KS
Mar-16 Mar-21
Bank Danamon and MUFG Bank Jakarta branch Auto Loan Change
approach to
loan balance
One Team (Virtual unit） ecosystem (¥tn)
0.9 1.4 +56%
MUFG Bank
MUFG Bank Bank
Transaction
Jakarta branch Danamon
Banking Div. Supplier Maker Dealer Consumer
One leader, common goal, collaboration incentive
27
*1 Impact from netting-off loss on restructuring has been accounted as credit costs in FY20R&C DS JCIB GCB GCIB Global Markets AM/IS
Comprehensive strategies for ASEAN / Credit costs
Grab collaboration Preceding case in Thailand Credit costs
Providing new digital financial services Expect a significant decrease in credit costs
Joint [Table 1] MUAH credit costs*1 [Table 2] MUAH historical average
(¥bn) depreciation and reserve ratio*2
development
Depreciation ratio Reserve
⚫ Financial knowledge of financial ⚫ Advanced technology 85.8
services M Normal Economic ratio
and expertise & dynamic data slump
U 1Q: (19.3) (FY13-19) (FY08-12) (FY21/1Q)
Providing small loans through Grab platform A 26.1 (YoY(71.4)) MUAH 0.1% 0.6% 157.4%
H Regional
0.3% 1.7% 153.2%
Food merchants App users banks
Drivers Big4 0.7% 2.5% 302.3%
From Sep. 2020 From Oct. 2020 Plan to start FY19 FY20 FY21 FY23
90thd cases distributed 10thd cases distributed
from 2021 [Table 3] KS credit costs*1
(accumulated total) (accumulated total) [Table 4] KS NPL ratio and reserve ratio
(¥bn)
Immediate borrowing with just a few taps NPL ratio
Financing 126.0 1Q: 25.8 Reserve
complete (YoY (7.8)) ratio
K 97.0 FY21/1Q vs FY15 (FY21/1Q)
Notice to
a pre- S
KS 2.0% (0.2%) 175%
approved
entity Other
banks*3
3.8% +0.8% 155%
FY19 FY20 FY21 FY23
Check Enter Immediate borrowing/
[Table 5] BDI credit costs*1 [Table 6] BDI risk monitored loan balance
borrowing limit borrowing Automatic repayment (¥bn)*4
on App amount from sales (¥bn) 1Q: 8.9 4,000
(YoY +0.1)
345.7
53.1
(vs20/4Q (9.2))
Acquisition of an un- Partner Bank Realization of digital B 243.3
214.8
banked customer base X
transaction lending D
34.9 2,000
I
Accelerate Partner 0
Bank's own DX FY19 FY20 FY21 FY23 20/2Q 20/4Q 21/1Q
*1 All figures are based on local financial statements converted into ¥. For FY19/FY20 are US$1=¥103.50, THB1=¥3.44, IDR1=¥0.0074 and FY21/1Q is
US$1=¥110.71, THB1=¥3.54, and IDR1=¥0.0077 *2 Figures for regional banks are the average of eight banks: Comerica, Huntington, M&T, Regions, Keybank,
Citizens, Fifth Third, and Truist. Big4 is the average of four banks: Citibank, Wells Fargo, Bank of America, and JPMorgan 28
*3 Figures for other banks are Bangkok, Siam Commercial, Krungthai and Kasikorn *4 Risk monitored loans are converted into ¥ at IDR1=¥0.0077Global Corporate & Investment Banking Business Group
Masato Miyachi, Group Head
29R&C DS JCIB GCB GCIB Global Markets AM/IS
Review of the previous medium-term business plan
Results Achievements and challenges
FY17 FY20 Change • Loan NIM improved through continuous
portfolio recycle
Achieve
Net operating • Non-JPY loan-to-deposit gap improved to
169.5 176.4 +6.9 -ments
profits (¥bn) stable liquidity level through disciplined asset
control and deposit increase
• Expand fee income under disciplined RWA control
Expense ratio 61% 63% +3ppt • Appropriate risk appetite
Chal- • Product neutral business promotion
lenges • Improve efficiency through streamlined and
ROE 7% 5% (2ppt) appropriate resource allocation aligned with
the target business portfolio
Changes in net operating profits Business environment
(¥bn) • Continuous headwind to interest income
Low • Expanding money flow intermediated by
interest institutional investors due to increase of
investment in-flow to asset managers*1
176.4 • Possibility of increasing business restructuring
169.5
Post- or M&A opportunities
COVID • Necessity of business strategy identifying
sector characteristics in post-COVID market
• Responding to support sustainability including
decarbonizing activities
ESG • Risks to credit costs or “stranded asset”
FY17
17年度 Loan
貸出金 Fees 手数料& Deposit
預金 Others
その他 Expense
経費 FY20
20年度 FY20
20年度
results
実績 JV ・JV収益
profits results
実績 targets
目標 increase due to a lack of ESG strategy
*1 Asset management company
30R&C DS JCIB GCB GCIB Global Markets AM/IS
Overview of the new medium-term business plan
Basic policy Financial targets
• Develop a sustainable business model
FY23 target vs FY20
delivering satisfactory portfolio returns in Net operating
Vision a dynamic business environment 180.0 +40.0
profits (¥bn)
• To be a global financial partner of clients
with world-class expertise and capabilities
Expense ratio 58% (8ppt)
ROE 7% +4ppt
Key strategies
1 GCIB & Global Markets RWA (¥tn) 21.8
2 Enhance sustainable business management
Path to achieve ROE target
KPIs
Net profits +¥95bn
FY20 FY23 7%
GCIB-Global Markets
combined ROE*1
3.6% 7.5% 0.2%
0.4%
*2
Non-interest income ratio 47.6% 51.5% 1.0%
0.4%
3%
Institutional investor portfolio
ratio*3
12% 20%
2.0%
Syndication/DCM wallet ranking
(the U.S. / NIG*4)*5
#17 #12
⚫ Realize profitability improvement by developing FY20 Credit
20年度 与信費用等 Interest
金利 Non-
非金利 Expense
経費 RWA
RWA FY23
23年度
product neutral business model through setting result cost, income interest target
実績 その他
others income 目標
common goals with Global Markets
*1 Targeted domains: Overall GCIB + Global Markets S&T (excl. Japanese Corporate sales) *2 After adjustment of one-time impacts 31
*3 Lending amount in managerial basis *4 Non-IG (Transactions with Non-Investment Grade companies) *5 Source: Dealogic (Calendar basis)R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (1) GCIB & Global Markets
Expansion of Non-B/S income through utilizing
B/S capacity Institutional investor business “Three focuses”
⚫ Institutional investor target clients：
GCIB & Global Markets revenue target*1
approx. 120 Gr.
• Approx. 90%: asset managers (AM)
(¥bn) 00 500
50 1,000
100 1,500
150 2,000
200 Approx. and financial sponsors (Sponsor)*3
3.1% 90% • Business promotion based on tailored
B/S account plan on a one MUFG basis
Loans 貸出
1
related Improving loan NIM by offering
9.0% income secured finances
貸出関連
Loan +5.1%
AM/
related fees
2 CAGR +5.1% Sponsor
手数料
2.9% Capturing flow products cross-
sell as a ancillary opportunities
Deposits 預金
3
7.3% Investment portfolio managed by funds
シンジケーション
Syndication/
4
DCM
DCM NIG
24.7% Real Infra- Loans / Listed
Private ・・・
estate structure Notes equity
証券化
Securitization 5 equity
4.2% Non-B/S income
(O&D/OtoD, cross-sell) Enhance O&D/OtoD of NIG business
FX FX
6
CAGR +5.8% leveraging strong relation with AM/Sponsor
5.2%
Flow
Rates/ Three focuses Profit recognition Profitability
7
Products
Credits
Improve loan NIM by
26.7% 1 2 5 8
Structured
Structured secured finances
8
Solutions
solutions ROE
Capture flow product 6 7 approx.
cross-sell
Equity
Equity 9 10%
Enhance O&D/OtoD
2 4
of NIG business
FY20*2*2
20年度 1 23年度
FY23 CAGR
*1 Targeted domains: Overall GCIB + Global Markets S&T (excl. Japanese Corporate sales)
*3 Financial sponsor companies such as private equity fund management companies
*2 After adjustment of one-time impacts 32R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (1) GCIB & Global Markets
Investment Banking business collaborating with
Portfolio optimization Morgan Stanley (MS)
⚫ Unique collaborative approach leveraging each strength
⚫ Expansion of institutional investor portfolio
marks good track records in IG space especially in large
(approx. ¥0.8tn*1) event finance deals
• Higher-return assets mainly from target clients ⚫ Develop further collaboration opportunities in institutional
High investor/NIG area
KPI FY20 FY23
Syndication・DCM
#12 #10
wallet ranking (IG*2)*3
Portfolio ratio: 2% Portfolio ratio: 34%
Profitability
Ave. ROE: 8.6% Ave. ROE: 8.3% 5 5 5
7 7 Defend
9 9 top10
Portfolio ratio: 14% Portfolio ratio: 50% 6
8
Ave. ROE: 1.8% Ave. ROE: 3.1% 10
12 12 11 11 12
Low-return monitoring area
• Raise the return threshold towards 2014 2015 2016 2017 2018 2019 2020 2023
the GCIB ROE target
MS MUFG
Low Profit amount High ⚫ For ECM/M&A advisor business, MS’s strong market presence
Portfolio Management based on quad analysis*1 contributes maximizing MUFG’s business efficiency in both
strategic and economic perspective*4
⚫ Portfolio recycle/low-return relationship ECM・M&A advisory wallet ranking (US$mm (%))*3
exits (approx. (¥1.4tn)*1)
ECM 2020 M&A Advisory 2020
• Enhance origination management through
disciplined deal screening and raising return 1 GS*5 3,070 (11.2%) 1 GS 2,473 (10.0%)
threshold
3 MS 2,351 (8.6%) 3 MS 1,851 (7.5%)
• Intensified return improvement monitoring and low-
return relationship exits (after monitoring period) - MUFG 33 (0.1%) - MUFG 1 (0.0%)
*1 Quad analysis divided by portfolio median of the profitability and profit amount. Portfolio ratio and average ROE are based on managerial basis.
Portfolio ratio is calculated by RWA 2 Investment grade *3 Source: Dealogic (Calendar basis) *4 Equity in earnings from MS is not attributed to GCIB
33
*5 Goldman SachsR&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (2) Sustainable Business Management
Appropriate risk appetite / challenge to higher Develop corporate value through sustainable
risk-return business
High
MARS League table 2020 (2019 in parenthesis)
Institutional investor Sustainable loan #2 Renewable #2
MLA (#4) energy finance (#2)
business area
Risk-return
O&D/OtoD
in NIG ⚫ Promote sustainable ⚫ Enhance portfolio
Secured finance management towards
Finance/ (Environment/social) “GHG*1 net-zero in 2050”
Securitization O&D/OtoD
⚫ Support new technology ⚫ Support transition through
in IG
for carbon neutralization strengthening customer
Take & hold
engagement
model in IG
Low ⚫ Develop appropriate targets and disclosure policy for the
Credit risk Marketable credit risk sustainable business activities
Expense Control
Account planning
(Individual client strategy) (¥bn)
263 Direct expense
249
Develop appropriate risk appetite
⚫ Focus on operating leverage
aligned with business strategy
36% ⚫ Optimize HR allocation
39% aligned with the business
Deal screening managed by Enhancement of marketable
strategy/portfolio
front/credit division jointly credit risk management
⚫ Challenge to higher risk-return 64% 61% Indirect expense
model/client base utilizing different credit
monitoring methodology backed by ⚫ Reshape business platforms
digital technologies collaborating with corporate
Digital tech- FY20
20年度 FY23
23年度 center
driven financing
⚫ Developing IRR 10%+ portfolio and
for startups consider expanding capital commitment Indirect Direct ⚫ Peak out of regulatory costs
from US$80mm (current) 間接費 直接費
expense expense
*1 Greenhouse Gas
34Global Markets Business Group
Shigeru Yoshifuji, Group Head
35R&C DS JCIB GCB GCIB Global Markets AM/IS
Review of the previous medium-term business plan
Results Achievements and challenges
FY17 FY20 Change ∎ Sales & trading
Net operating • Institutional investors business expanded
365.7 377.4 +11.7 Achieve-
profits (¥bn) through collaboration among business groups
ments
• Enhanced the GCIB collaborative approach
Expense ratio 42% 44% +1ppt
• Further expansion of institutional investors
business
Challenges • Develop appropriate risk appetite
ROE 7% 5% (2ppt) • Strengthen product offering capabilities
• Rebuild corporates business
Changes in net operating profits
∎ Treasury
(¥bn)
• Strengthened group treasury operations
Achieve-
ments • Diversified non-JPY funding
• Established group governance system
377.4
365.7
• Expansion of excess of deposits over loans
due to monetary easing
• Increase balance sheet’s profitability
Challenges
Globally low interest 0
Shrinking gap of long- and
rates environment short-term interest rates
Institutional Treasury Expense Others FY20 FY20
FY17
results
investors Corporates results targets 36R&C DS JCIB GCB GCIB Global Markets AM/IS
Overview of the new medium-term business plan
Basic Policy Financial targets
『Drive Growth and Transformation』 FY23 targets vs FY20
Vision Not only pursue growth but also challenge Net operating
ourselves to transform for sustainable growth 370.0 (25.0)
of customers as well as MUFG profits (¥bn)
Expense ratio 39% +2ppt
Key strategies
ROE 8% +2ppt
Digital ESG /
shift SDGs Economic capital
Product セールス&トレーディングビジネス戦略
3.9
Strengthen sales & trading （¥tn）
1 EFX develop-
business ment
Path to achieve ROE target
2 Further sophistication of
AI ESG
treasury business invest-
(Sales & trading)
8% 10% 11%
3 New investment business ments
6%
KPIs
(Treasury)
FY20 FY23 7%
5%
GCIB-Global Markets
3.6% 7.5%
combined ROE*1
Accumulation of
New investment business FY20 FY23 FY20 FY23
diversified portfolio
result target result target
*1 Targeted domains: Overall GCIB + Global Markets S&T (excl. Japanese Corporate sales) 37R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (1) Strengthen sales & trading business
Product strategy Expand the Trust Bank’s IS-related FX business
⚫ Expand stock-based FX transactions as a new stable source
Profitability*１ of profit
Expand cross-selling Develop solution business Customer needs Contract based FX flow chart
High for institutional investors on MUFG group basis
Outsourcing of FX operations
and focus on investment Best
operations Fund execution
• Expand FX transaction Structured data
in Japan
• Expand the Trust
Rates, solutions AM company the
Strength of the Trust Bank Trust Bank
Bank’s IS-related FX credit
IS business and high Automated
business
• Strengthen Asia business
Equity administrative capabilities execution of
with Japanese corporates (Data coordination with FX transaction
Normalization of Future direction
• Utilization of EFX IS subsidiaries)
market environment IS subsidiary
Size of the bubble
illustrates the
New stable profit model
FX revenue in FY20 Data
sharing
Stock-based FX profits
Revenue growth ratio*２
Low High
Develop solution business on MUFG group basis
⚫ Strengthen sourcing channels and distribution functions of
Expand FX transaction in Japan finance transactions by enhancing the bank-securities dual-
hat organization and sharing of solutions expertise
⚫ Provide high-value added products led by product offices
through integrated operations among business groups,
expansion of direct-deal customers, etc. Dual-
hat
∎ Direct deal
Customers Knowledge sharing Investors
Approx. 150 Approx. 270
customers customers
Securities
*1 Revenue per staff (FY20 results) *2 NOP growth rate from FY19 to FY20 38R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (1) Strengthen sales & trading business
P. 32 4 5 7 8 P. 32 6
Expand cross-selling for institutional investors Expand electronic transaction using EFX platform
⚫ Expand the range of products at both domestic and ⚫ Enhance business competitiveness by expanding products
overseas through development of appropriate risk appetite through further digitalization
and enhancement of collaboration on a global basis Domestic corporates
Domestic Margin Overseas
Domestic investors
Customer
Domestic market
retail
Financial institution trader customer
offering capabilities
Enhance foreign currency products
customer base
Origination leveraging domestic
Expand investors base
from JPY-denominated products
Strengthen cross-selling beginning
(including Asia)
Enhance product capabilities Provide JPY-
of JPY / non-JPY products denominated products
Customer
Strengthen collaboration
interface
on a global basis Internet Biz MUFG COMSUITE
MBP API
banking Forex FX Forex
Non-JPY products Expand customer base /
O&D / Structure enhance cross selling
EFX
Pricing system
Overseas market Overseas investors
Trading status monitoring, pricing adjustments
Strengthen Asian business with Japanese corporates
• Strengthen Asian business with Japanese corporates by allocating
resources to offices in Asia with higher growth potential EFX Desk
Digitalization ratio of FX
Focus on solution business area Ratio of online FX transaction
rate contracts*1
and strengthen capabilities 100% 100%
82%84% 85%
78% 76%
80% 80% 71% 72%
69%
57% 57%
60% 60%
Understand the sales
channel of clients and Approach potential deals
40% 40%
increase share by leveraging in high growth markets FY17 FY18 FY19 FY20 FY23 FY17 FY18 FY19 FY20 FY23
activities towards FX flow plan plan
*1 Internal transaction 39R&C DS JCIB GCB GCIB Global Markets AM/IS
Key strategies (2) Further sophistication of treasury business
Market risk management Flexible ALM management (BK treasury)
⚫ Manage market risk leveraging each expertise and investment ⚫ Flexible asset allocation and position management
style in 3 different operations among JPY rates, Non-JPY rates, equity, etc.
⚫ Focus on ESG investment while assessing the balance between
risk and return
∎ Illustrative asset allocation
Treasury
Risk-on Risk-off
New investment
the Bank the Trust Bank
business
Domestic
Flexible ALM Long-term, diversified Equity Domestic
Diversified investment bonds
management on a global basis portfolio management bonds
Equity
∎ History of unrealized gains and gross profits in Treasury*1
Gross profits in Treasury Unrealized gains*2 Foreign
(¥bn) Unrealized gains from AFS in Treasury *2 bonds
Approx. ¥1.1tn Foreign
1,500
15,000 (end Mar 2021) bonds
1,000
10,000
Gross profits in Treasury Balance sheet management
500
5,000 ¥315.7bn
⚫ JPY Balance Sheet
Expand investments in securities and promote
0 shifts from savings to investments amid an
12 13 14 15 16 17 18 19 20 (fiscal year) increase in the excess deposits
∎ (Reference) UST 10Y yield (as of each fiscal year end) ⚫ Non-JPY Balance sheet
3% Improve profitability by reduction of market
2% funding costs, while control liquidity risk stable
1%
0%
*1 Managerial accounting basis *2 Bonds, other securities and equity holdings managed by Global Markets business group 40You can also read
