Mitsubishi UFJ Financial Expected to Post 59% Drop in First-Quarter Net Profit — Earnings Preview

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By Kosaku Narioka

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Mitsubishi UFJ Financial Group Inc. is scheduled to report its first-quarter results on Tuesday. Here’s what you need to know:

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NET PROFIT FORECAST: Mitsubishi UFJ Financial Group is expected to post a 59% drop in net profit to 156.41 billion ($1.17 billion) for the quarter ended June 30, according to a poll of analysts by Quick. That’s compared with Y383.08 billion net profit a year earlier.

WHAT TO WATCH:

–BOND TRADING: The financial company booked a loss on debt securities of Y140.44 billion for the fiscal year ended March as US interest rates rose sharply in its fourth quarter. As global bond yields continued their ascent in the company’s first quarter, investors are paying attention to any further losses from bond trading.

–LANDING SP Mitsubishi UFJ’s lending spread for big Japanese companies rose to 0.46 percentage point in its fourth quarter from 0.43 percentage point a year earlier, while its overseas lending spread improved to 0.96 percentage point from 0.92 percentage point. Investors are focusing on any further improvement in lending spreads as interest rates have risen globally.

–OUTLOOK: The company said in May that it aimed to achieve fiscal-year net profit of Y1,000 trillion. Investors will focus on any changes that management may make to annual guidance.

Write to Kosaku Narioka at [email protected]

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Credit: www.marketwatch.com /

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