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1、Integrated ReportMUFG Report 2024Committed to empowering a brighter future.ValuesPurposeVisionCode of ConductSo as to continuously be chosen by our customers in an era of accelerating changes.Every employee will take on challenging endeavors with a sense of ownership of the MUFG Way with the new MUF
2、G Value of“agility,”with all playing the leading role.Challenge and AgilityMUFG Way serves as the basic policy in conducting our business activities,and provides guidelines for all group activities.MUFG Way also is the foundation for management decisions,including the formulation of management strat
3、egies and management plans,and serves as the core value for all employees.Whats MUFG Way MUFG Way PurposeCommitted to empowering a brighter future.ValuesIntegrity and ResponsibilityProfessionalism and TeamworkChallenge and AgilityVisionBe the worlds most trusted financial groupCode of ConductMUFG Wa
4、yCompanyPurpose/Values/VisionPersonal definitions of the MUFG WayMUFG Way Bringing it to lifeMy WayIndividualbeliefsand valuesMUFG Report 202402Officer in Charge of IR Collaborates on ESGCollaborates on debt IR*1 Collaborates on SR*2 Collaborates on governance disclosure*1 IR for bond investors *2 S
5、hareholder Relations:Response to shareholdersGroup CEOInvestor Relations OfficeSustainability OfficeOffice of the CFOGroup CFOFinancial PlanningDivisionCorporate PlanningDivisionCorporate AdministrationDivisionGroup CSOInstitutional investors,individual investors,publications Response to institution
6、al investors and analysts Response to rating agencies Response to bond investors,debt IR Overseas SR ESG Holding seminars Response to individual investors,holding seminars Publications such as Integrated ReportsGovernanceFinancialEnvironmentalSocialESG Data BookAnnual ReportClimate ReportHumanRights
7、ReportHumanCapitalReportCorporateGovernanceReportTransitionWhite PaperTNFDReportTCFDReportAsiaTransitionWhite PaperIntegrated ReportSustainability ReportHumanEditorial OverviewEditorial StructureInformation Disclosure SystemDisclaimerThis report contains forward-looking statements with regard to the
8、 expectations,forecasts,targets and plans of Mitsubishi UFJ Financial Group,Inc.and its subsidiaries and affiliates.These forward-looking statements are based on information currently available to the Group and are stated in this document on the basis of the outlook at the time that this document wa
9、s produced.In producing these forward-looking statements,certain assumptions(premises)have been utilized that are subjective and may prove to be incorrect.Should any underlying assumption prove to be incorrect,actual results in the future may vary materially from some of the forward-looking statemen
10、ts in this document.The Group has no obligation or intent to update any forward-looking statements contained in this document.In addition,information on companies and other entities outside the Group that is included in this document has been obtained from publicly available information and other so
11、urces.The accuracy and appropriateness of that information has not been verified by the Group and cannot be guaranteed.All figures contained in this report are calculated according to generally accepted accounting principles in Japan,unless otherwise noted.Reporting PeriodApril 1,2023 to March 31,20
12、24(The report includes some information pertaining to activities undertaken up to July 2024.)Editorial OverviewTo best explain our efforts to create sustained value to our investors and other stakeholders,we,Mitsubishi UFJ Financial Group,or MUFG,have compiled this integrated report,MUFG Report 2024
13、,with reference to such guidelines as the International Framework recommended by the IFRS Foundation as well as the Guidance for Collaborative Value Creation issued by the Ministry of Economy,Trade and Industry.Further details on our financial status and sustainability initiatives are available on o
14、ur website.In addition,our plans call for issuing the MUFG Sustainability Report 2024,a publication detailing our response to sustainability issues,in September 2024 or later.MUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corpora
15、te ValueData Section03CONTENTSDefinitions of figures used in this documentConsolidated:Mitsubishi UFJ Financial Group(consolidated)Non-consolidated:Simple sum of MUFG Bank(non-consolidated)and Mitsubishi UFJ Trust&Banking Corporation(non-consolidated)the Bank(consolidated):MUFG Bank(consolidated)DS:
16、Digital Service R&C:Retail&Commercial BankingR&D:Retail&DigitalCWM:Commercial Banking&Wealth ManagementJCIB:Japanese Corporate&Investment BankingGCIB:Global Corporate&Investment BankingGCB:Global Commercial BankingAM/IS:Asset Management&Investor ServicesMUFG:Mitsubishi UFJ Financial Groupthe Bank(BK
17、):MUFG Bankthe Trust Bank(TB):Mitsubishi UFJ Trust&Banking Corporationthe Securities HD(SCHD):Mitsubishi UFJ Securities HoldingsMUMSS:Mitsubishi UFJ Morgan Stanley SecuritiesMSMS:Morgan Stanley MUFG SecuritiesMS:Morgan StanleyNICOS:Mitsubishi UFJ NICOSMUAH:MUFG Americas Holdings CorporationMUB:MUFG
18、Union Bank KS:Bank of Ayudhya(Krungsri)Bank Danamon(BDI):Bank Danamon IndonesiaFSI:First Sentier Investors MUFGs Corporate ValueManagement Message 2 MUFG Way 3 Editorial Overview 4 CONTENTS 13 A Guide to Quickly Understanding Where MUFG Is Now 14 Regarding the Administrative Action by the Financial
19、Services Agency 15 Message from the CFO 22 MUFGs Corporate Value 23 Medium-to Long-Term Vision 24 Value Creation Model 25 Trajectory of MUFGs Corporate Value Enhancement 26 MUFGs consolidated strength for Creating Corporate Value 27 Business Portfolio Supporting MUFG Growth 28 Top Management Dialogu
20、e between MUFG and Morgan Stanley 5 CEO MessageStrategies to Improve Corporate Value 33 Strategies to Improve Corporate Value 34 Review of the Previous Medium-Term Business Plan(MTBP)35 Medium-Term Business Plan(FY2024FY2026)36 Expand&Refine Growth Strategies 38 (1)Strengthen Domestic Retail Custome
21、r Base 39 (2)Strengthen Corporate WM Business 40 (3)Evolve GCIB-GM Integrated Business Model 41 (4)Strengthen APAC Business and Platform Resilience 42 (5)Contribute to Making Japan a Leading Asset Management Center 43 (6)Support Value Chain in Green Transformation(GX)44 (7)Challenge to Build a New B
22、usiness Portfolio 45 Results by Business Group 46 Drive Social&Environmental Progress 47 CSuO Message 32 Asia x Digital Platform Supporting the MUFGEconomic Sphere 48 (1)Sustainable Society 49 Promoting Sustainable Business 50 Responses to Climate Change 30 Building MUFGs Economic Sphere in Asia 52
23、(2)Vibrant Society 53 Startup Support 54 (3)Resilient Society 55 Accelerate Transformation&Innovation 56 CHRO Message 59 (2)Enhance Human Capital 60 (3)Enhance AI/Data Infrastructure 61 (4)Increase System Development Capability 62 Experienced Hire Round Table 58 (1)Acceleration of Agility Transforma
24、tion 65 Highlights of TransformationFoundation Supporting the Corporate Value 66 Foundation Supporting the Corporate Value 67 Messages from Outside Directors 69 Corporate Governance 77 Risk Management/Cyber Security 78 Compliance/Internal Audit 79 Initiatives for Practicing a Customer-Oriented Appro
25、ach 80 Ten-Year Summary of Major Financial Data 81 Performance Comparison with Competitors 82 Company OverviewMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section04CEO MessageManagement MessageUnleashing Pot
26、ential,Honoring Our PurposeHironori KamezawaPresident&Group CEOMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section05CEO Message“Mr.Kamezawa?”As I was taking a walk in my neighborhood last autumn,a jogger ap
27、proached and ran past me.He then turned around suddenly and called my name.“I think MUFG has changed.I just wanted to tell you.”It caught me off-guard and I wasnt sure what he meant.But he explained with a smile that he was a former MUFG employee who now works for an overseas corporation.He was vali
28、dating a belief I expressed in these pages last year:MUFG is changing for the better and people are noticing.If a former employee familiar with our company observes from Management Messageoutside that weve evolved in a positive way,perhaps we truly have.In fact,this was the third time something like
29、 this had recently happened.Our speed of decision-making,the atmosphere of our internal discussions,the expansion of our overseas online network all these elements and a number of others have been elevated at MUFG.They seem to have translated into material improvements that our stakeholders notice.H
30、owever,we still get our share of negative feedback;some of it works its way through the organization to reach me but likely just a small percentile.So as I resumed my walk,I found myself wondering,has my own experience at MUFG changed accordingly?My daily work life has a procedural rhythm.I arrive a
31、t the office about the same time on most days.My workstyle,meetings,interactions,even business dinners,all seem to fit a familiar pattern.I have to wonder how much status quo remains static throughout our company.Organizational inertia is not unique to MUFG,but the fact is we have too many meetings,
32、including meetings to prepare for meetings.Some of our policies and procedures remain ossified.Important aspects of our organization continue to move forward,but the core is hard to budge.I initiated fundamental reforms when assuming the role of CEO four years ago reforms in Culture,Business,and Pro
33、cess to propel our transformation forward.Today,we see progress,although in my estimation were considerably less than halfway toward our goal so the real work lies ahead if we are to set into motion a virtuous cycle of perpetual improvement.This means doubling down on our commitment to cultural refo
34、rm at MUFG.This commitment therefore pervades our new Medium-Term Business Plan(MTBP)that launched in April 2024.And in the following pages,I wish to explain why and how,beginning with the current environment and global economic trends.First,our current environment.We live in an era of unprecedented
35、 division among societal sectors,including nationalities,economies,policies,cultures,communities,and individuals divisions that can be traced in some cases to decentralization caused by diversifying needs and values across the globe.Nations witnessing the US and China locked in a historic power stru
36、ggle are adopting distinct and often unique positions on global affairs,including the Middle East conflict and the war in Ukraine.The international order is growing more fragmented and chaotic,and its tensions will not be resolved soon.We must factor this into our business considerations.Digital tec
37、hnology has fueled diversification in significant ways,placing power in individual hands to instantly fulfill personalized needs.This“power to the person”makes ultimate democracy more than a theoretical possibility,and has even given rise to such movements as the Decentralized Autonomous Organizatio
38、n.At the same time,despite divisions it helped create,digital technology also makes it much easier for people to connect and create new virtual communities linked through shared values that transcend borders of all kinds.These complex developments rife with contradictions have momentum that shows no
39、 end.Generative AI is making inroads into everyday lives and will be a game-changer that transforms,Has MUFG really changed?Notice to Stakeholders:The Financial Services Agency has taken administrative action regarding inappropriate handling of customer information and solicitation concerning MUFG G
40、roups banking-securities collaborative business.We sincerely apologize for the inconvenience and concern this has caused our stakeholders.We take this administrative action very seriously and have established an improvement plan focused on more effective and specific measures to reinforce internal c
41、ontrol systems.Details appear on page 14.We will diligently execute the improvement plan as a Group and implement measures to prevent recurrence.Our priority is to restore any compromised trust as swiftly as possible and remain fully committed to sustainable growth.Challenges arising from our enviro
42、nment and economic trends.MUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section06Management Messageeven upends,more than a few business models very soon.Indeed,2024 marks the advent of the generative AI era*1
43、,an inflection point on societys path to a digitalized future.MUFG must be a vital player in that future.Regarding the global economy,as inflationary trends settle in the US and Europe,monetary policy will ease and interest rates will seek equilibrium.In Japan,a normalized interest-rate environment
44、is emerging as the prolonged regime of low interest,low inflation,and low wages finally abates.Businesses will pursue higher returns and feel a stronger need for asset-value growth to surpass inflation,assuming reasonable interest payments and costs.And customers will have higher expectations for as
45、set formulation and investment returns.This presents a significant opportunity for the Japanese economy,which has been stagnant for three decades.I believe that as Japans largest financial institution,MUFG has a duty and ability to help restore a growth trajectory to its mother market.In developing
46、our MTBP,we dove deeply into topics including the macroeconomic environment,our strengths and weaknesses,our competitors activities,social trends,and our vision for finance in five to ten years.We shared a rich variety of perspectives at our Management Focus Meeting,a periodic gathering of about 20
47、leaders we began a few years ago.This body includes the C-Suite*3,business-group heads,and top management from the Bank,Trust Bank,and Securities,and functions as my“Cabinet.”I always urge these participants to share honest opinions on Medium-to Long-term Vision*2CEO MessageC o l u m n 1With the eme
48、rgence of generative AI,weve entered an era that could be called the“DX of human thinking”marked by outsourcing elements of human thought essentially relegating part of the process to digital“minds.”Working in tandem with intelligent learning devices can deepen our comprehension,interactions,and pro
49、ductivity in ways beyond our current imagination.Im not alone in envisioning a world on a fast-approaching horizon where AI is incorporated into all manner of products and services.As generative technologies become refined,and their costs decrease through intense competition,issues like so-called ma
50、chine“hallucinations”of false results will resolve,and generative AI will become faster,safer,and more accurate a game-changer not just for business but society as a whole.Let me put on my mathematical sciences hat for a moment,to share how shocked I was recently to hear a university professor speci
51、alizing in artificial intelligence claim that“Generative AI is now capable of deductive reasoning.”This was stunning news.Generative AI has until now been deemed capable only of inductive reasoning,analyzing massive volumes of data to reach a probable conclusion using the large-language model.It was
52、 considered incapable of solving mathematical problems requiring deductive reasoning.But AI recently solved a proof problem in geometry by combining a language model with a symbolic deduction engine that derives conclusions by applying logical rules to symbols.Programming is a way of logical reasoni
53、ng,so AIs ability to write its own program to solve a proof problem shows deductive reasoning capability a genuine paradigm shift.In a column for our MUFG Report last year,I wrote that AI still fell short of truly understanding topics discussed in pages like these but apparently over the past year,i
54、t has drawn closer to upending that assumption.Eventually maybe soon the primary difference between AI and humans might be blood&bone,and emotions.Just as people with no experience in a given field can master it by gleaning knowledge from a deep library of various media,a world where AI can learn,gr
55、asp,and genuinely understand complex concepts seems just around the corner.In our immediate future,AI will touch virtually everything,and only technology developed in tandem with AI will be able to maintain a competitive pace of productivity.“AI native”human resources will be required to integrate A
56、I into all organizational aspects touching human behavior.With this sense of urgency,weve established an intelligence team at MUFG,charged with addressing this question:How will AI change the world?And this:How must MUFG change accordingly?Now more than ever,humans are required to deepen and widen t
57、heir cognition,comprehension,and capabilities of capturing the substance of complex matters.MUFG must ride the crest of this wave.An Era of AI-Natives*3 Chief Officer for each area such as Strategy,Finance,and Risk*1 Enhance AI/Data Infrastructure Page 60*2 Medium-to Long-Term Vision Page 23MUFG Rep
58、ort 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section07Management Messagematters beyond their business areas and positions.The cross-dynamic of their thoughts has become more robust with each meeting,and added depth
59、to our discussions in forging the new MTBP.This process ultimately led us to reaffirm the significance of our stated Purpose,to be“Committed to empowering a brighter future.”We concluded that the ideal state is for MUFG to embody this Purpose,our reason for being,and it should be consistent across t
60、he mid-to long-term.The question was,how can we accomplish this through our next three-year plan?Historically,societies have evolved with connections among nations,entities,communities,and individuals,drawing them together for prosperity and fulfillment.With forces of division now threatening these
61、bonds of connection,the ability to build and sustain bridges spanning all manner of borders becomes more significant.A bridge requires a trustworthy foundation in our case,the trust earned through our long heritage,our formidable customer base,and the global reach of our network.MUFG group companies
62、 also have the unique ability to build meaningful Review of our previous three-year plan.*4bridges connecting our diverse stakeholder communities.With these abilities,MUFG intends to play a cohesive societal role by bringing various stakeholder communities together through financial empowerment.This
63、 concept is central to embodying our Purpose through our new MTBP.During our previous MTBP,we defined our stated Purpose,shifted our management focus to foster more colleague engagement,and instigated cultural reform.We directed management attention squarely toward return on equity.And we achieved r
64、esults related to each of the plans pillars:Corporate Transformation,Growth Strategy,and Structural Reform.Over three years in a challenging environment we strengthened the earnings power and resilience of our business model.We substantially bolstered our risk-adjusted return by improving profitabil
65、ity without increasing risk-weighted assets.Our net operating profit increased by about 600 billion yen over those three years,a multiple of approximately 1.5 times,primarily in customer segments.And completing the sale of Union Bank in the US was emblematic of structural reform,a demonstration of b
66、old,decisive,swift,impactful action.We repeatedly stated that ROE was our most significant commitment,and in the final year of that previous MTBP,ROE reached 8.5%,notably exceeding our 7.5%target.Share price tripled in three years,outperforming other megabanks and major global financial institutions
67、.And in the near future,our Aspirations of our new three-year plan.market capital is likely to achieve a top-ten rank.I feel confident the market appreciates our efforts.Regarding shareholder return,weve maintained our progressive dividend policy and increased dividend-per-share for FY2023 to 41 yen
68、,up from 25 yen in FY2020 a 64%dividend growth.And we repurchased 1 trillion yen of shares during the plans three years,exceeding 2.2 trillion yen in total shareholder return.Building on successes of the previous plan,we position our new MTBP as“three years to pursue and produce growth.”We will depl
69、oy our growth strategies while addressing prominent social issues head-on,and speed our own transformation to improve corporate value.Because our earnings power improved during the previous plan and our business model grew more resilient,were deploying these strengths with singular focus to speed gr
70、owth over the next three years.Were becoming more assertive in seizing opportunities presented by green transformation(“GX”)*5,digital transformation(“DX”)*6,and the normalized interest environment in Japan as we undergo structural transformation.In an intensely competitive and mercurial environment
71、,success requires assertive strategies but also a solid foundation.To draw an analogy from the game of Go,success builds on boldly attacking an opponents territory while fortifying weak areas in your own.In business terms,this means deploying aggressive growth strategies while investing in human cap
72、ital and infrastructure such as IT systems,AI,and data platforms.CEO Message*4 Message From the CFO Pages 15-21*5 Green Transformation*6 Digital TransformationMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Sec
73、tion08Management MessageOur new MTBP consists of three pillars,Expand&Refine Growth Strategies,Drive Social&Environmental Progress,and Accelerate Transformation&Innovation.We developed the first pillar,Expand&Refine Growth Strategies,with analytics across areas of potential growth based on products
74、and channels,then articulating seven strategies for maximum competitiveness in each sector.These strategies include:1.Enhancing our retail customer base to maximize LTV lifetime value and2.Strengthening our succession business by accelerating theCorporate&Wealth Management model,primarily to generat
75、e growth in Japan.Our overseas strategies include:3.Collaboration between GCIB and Global Markets to buildprofit,and4.Cooperation with partner banks for growth in Asia.Our focus on 5.Asset Management and6.GXis on social issues and fortifying both economic value and social values as we 7.Build a new
76、business portfolio to drive medium-to long-term growth.A few key examples:Enhancing our retail customer base,in terms of strategy 1.*8Deploying this strategy requires targeted efforts,including C o l u m n 2In developing our new MTBP,we discussed what to embody as a leading Japanese financial instit
77、ution from every pertinent angle we could reasonably conceive.This process led us to reaffirm the significance of our Purpose to be“Committed to empowering a brighter future.”This corporate Purpose serves as a unifying force among diverse viewpoints in our leadership discussions.It is also an abidin
78、g North Star for decisions and actions we take every day.To fully harness this power of purpose at an organizational level,the ideal is for each colleague to internalize a personal interpretation of purpose through the lens of ones life work.This is why MUFG consistently offers and promotes opportun
79、ities for colleagues to gather and discuss their own view of purpose.When I share my view of what I call“My Way”personal core values and beliefs I say it was likely shaped by time in a Catholic kindergarten,where I was exposed to the daily practice of compassion and acceptance,and a natural inclinat
80、ion toward objective observation.These caused an early and lasting inflection point.As I entered young adulthood and began considering my lifes path,that early inflection translated into a clear desire:to make a useful contribution to society.I majored in mathematics at university and graduate schoo
81、l,but found myself at a crossroads,a choice between pursuing math at an academic level or entering the real-world workforce.Even now,the beauty of mathematics attracts me,but my drive to contribute directly to society won out.Whenever discussing My Way*9 with colleagues,I touch on the importance of
82、personal interpretations of the MUFG Way.My Way encompasses individual beliefs and values,whereas the MUFG Way reflects the companys stated Purpose.An individuals interpretation of the MUFG Way represents the intersection where personal and corporate values coalesce and ideally,align.My personal def
83、inition of the MUFG Way involves providing our colleagues,and our stakeholders across society,with tools they can use to empower a brighter future.It is managements responsibility to create a transparent and worker-friendly environment that encourages us all to move forward.The more colleagues who p
84、rocess and apply the MUFG Way in a personal dimension,the stronger our company and its contributions become.Pillars of the new MTBP.*7enhancing customer touchpoints with an optimal mix of face-to-face,remote,and digital channels.Business groups will create seamless connections among products and ser
85、vices within our diverse portfolio and propose blends to match a customers life stage.For instance,a customer with an MUFG Bank deposit account at the core might choose an option to CEO MessageTaking Ownership of“Purpose”*7 Expand and Refine Growth Strategies Pages 36-37*9 Whats MUFG Way Page 2MUFG
86、Way Bringing it to life Page 65*8 Strengthen Domestic Retail Customer Base Page 38MUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section09Management Messagebundle products and services as varied as credit card
87、s,housing loans,and securities,while earning incentive points for choosing MUFG services.Creative collaboration with external partners is valuable for developing fresh ideas to expand our customer base.Since 2022,MUFG has engaged in“Banking as a Service(BaaS)”to provide financial functions through t
88、hird parties.For example,starting with“d smart bank”a digital account-services product jointly developed with NTT DoCoMo we have also promoted BaaS offerings such as asset-formulation support through a synergistic platform called“Money Canvas”in tandem with various corporations.We have agreed on a c
89、apital and business alliance with WealthNavi Inc.as well,involving a platform providing“comprehensive proposals on money”tailored to each customers life stage.Collaborations like this,with partners offering unique strengths,help our business grow with fresh ideas and new technologies.Cooperation wit
90、h partner banks for growth in Asia,in terms of strategy 4.*10Unlocking the potential of our second mother market Asia outside Japan is key to our overseas growth strategy.A decade has passed since we began investing in Asian partner banks.These partners have since grown significantly and helped us a
91、ccrue business management expertise throughout the ASEAN region and establish a conventional financial platform in Asia.We now have the worlds largest lending exposures in APAC outside of China and Hong Kong.To build a unique economic zone for MUFG over the next decade,we will consolidate the conven
92、tional platform with one newly created through investments in businesses that offer digital financial services.These investment targets will help us address the social issue of financial inclusion in Asia,through digitalized services for customers with little or no access to traditional financial to
93、ols.Supporting the government policy of“Promoting Japan as a Leading Asset Management Center,”in terms of strategy 5.*11This policy is an ambitious project in which the governments goal is to connect excess capital mainly from households,concentrated in deposits and savings with GX and DX investment
94、s by large corporations,meeting funding needs of startups showing solid prospects.As this builds Japans overall growth capacity,returns will be allocated to households,which will in turn be connected to new growth investments,completing a virtuous cycle.This expansive project not limited to Japan wi
95、ll link investment capital to opportunities globally,and allow MUFG to contribute as a comprehensive financial services group,offering direct and indirect financial functions,touchpoints for a wide range of customers,and the reach of a global network.Finally,we have decided to make Mitsubishi UFJ As
96、set Management a subsidiary of the holding company as the fourth foundational MUFG cornerstone,joining the Bank,Trust Bank,and Securities.We will enhance its capabilities and double its assets under management by the end of FY2029.We will also leverage revision of the Nippon Individual Savings Accou
97、nt system to support flow of funds from savings to investment,and promote financial literacy efforts to help each new generation flourish through financial and economic understanding.These are some key examples,among others,of how our new MTBP strategies will generate growth in Japan and capture the
98、 upside of growth overseas,starting with Asia while being socially relevant by promoting solutions to issues confronting the global community.In developing this pillar,we identified ten priority issues under the subheads Sustainable Society,Vibrant Society,and Resilient Society.Given societys height
99、ened interest in GX,serving economic and social values in tandem has become an integral component of building corporate value.To effectively build our own prosperity,we should serve not only customers financial value but also stakeholders social values.For example,to achieve a carbon-neutral society
100、,MUFG can serve social values by supporting technology emerging to reduce CO2 emissions.This leads to new approaches being more widely recognized and ultimately integrated across society,with the effect of promoting decarbonization and expanding economic value concurrently for customers and other st
101、akeholders.Financial value,including interest and fees,will then accrue to MUFG in return for our services.Helping society move toward carbon neutrality will also build MUFGs social value.As illustrated above,it is vital for us to maintain a mindset of making connections among the economic and socia
102、l values of MUFG and our stakeholders not limited to customers and enhance both forms of value synergistically.CEO MessageThe second pillar is to Drive Social&Environmental Progress.*12 *11Contribute to Making Japan a Leading Asset Management Center Page 42 *10 Building MUFGs Economic Sphere in Asia
103、 Pages 30-31 Strengthen APAC Business and Platform Resilience Page 41 *12 Drive Social&Environmental Progress Pages 46-54 CSuO Message Page 41MUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section10Management
104、MessageOur previous MTBP business strategies focused on social issues.Our new plan shifts into a higher gear with strong emphasis on social impact.We have set specific Key Performance Indicators KPIs for priority themes and will vigorously promote initiatives driving them.Certain priority themes in
105、our MTBP are especially pertinent:Climate change measures,natural capital,and biodiversity restoration.Regarding climate change measures*13,MUFG issued a“Transition White Paper 2023”to promote understanding among stakeholders notably,Western policymakers of our internal initiatives and targets outli
106、ned in our Carbon Neutrality Declaration,and of Japans progress along its roadmap toward carbon neutrality.We followed this with the“MUFG Climate Report 2024”on our internal transition plan,including processes for achieving our own targets.The keys to MUFGs transition plan are disciplined support fo
107、r transitioning,and monitoring progress toward our 2030 interim targets.The report aims to promote various stakeholders understanding of our transitioning plan and initiatives.In July 2024,I assumed the chair of the Glasgow Financial Alliance for Net Zero(GFANZ)*14 Japan Branch the organization of f
108、inancial institutions committed to accelerating decarbonization and from this vantage point I intend to communicate our commitment to act responsibly on the path to carbon neutrality.Natural capital and biodiversity restoration were also added to our priority themes.We published our MUFG Taskforce o
109、n Nature-related Financial Disclosures Report*15 to promote stakeholder understanding of our approach and the solutions we offer customers in this sphere.Specifically,we will support new technology with sustainability-related finance to the scale of 100 trillion yen by 2030.A vibrant society require
110、s innovative startups and growth industries that drive the economy.Accordingly,MUFG will pursue transactions to fuel startups*16 that show strong growth potential and are linked to solutions for social issues.We have found that entrepreneurs today tend to establish companies that address social issu
111、es,and have a keen awareness of social needs.They also make strong efforts to improve corporate value and keep their enterprises on that track.Perhaps most important,their beliefs and sense of purpose are reflected in their mission statements.We wish to be their partner of choice in every stage of t
112、heir growth,providing support beyond financial services,such as helping develop business strategies,in a spirit of genuine collaboration.Cultural reform*18 is the core of corporate transformation.Our previous MTBP emphasized what we call the MUFG Way a pledge of shared values and efforts to drive tr
113、ansformation.These included our headquarters building project,with its sensitivity to contemporary workstyles;open-application systems such as“MUFG SOUL”;CSR activities planned by employees;and Spark X,a new-business incubator,which among other ideas has produced new“PROTHIRD”outsourcing services fo
114、r condominium Boards of Directors.A common thread among these efforts is how voluntarily and passionately our colleagues engage in new projects.This indicates that a new mindset for welcoming challenges is taking root.At the beginning of this message,I described encountering a former colleague on a
115、walk through my neighborhood.That brief exchange supports a recent MUFG finding that close to 60%of our current colleagues feel that“the company has changed for the better.”But much remains to be done.We must accelerate our transformation and focus more keenly on agility as an MUFG cultural value th
116、at can strengthen customer trust.This is why we revised how we express the MUFG Way by formally adding Agility to our list of stated corporate values.To embed its practice into our culture,we will categorically assess agility in performance evaluations,procedures,meeting operations,roles,and authori
117、zations,rigorously and without exception.We aim to become a company where each colleague is expected and equipped to think independently,make informed decisions,and act on them quickly.It seems self-evident that colleagues are more engaged in a workplace with transparent communication,where opinions
118、 are shared freely in an open and frank atmosphere regardless of title or position,and when assigned to a task they can make quick decisions that lead to subsequent appropriate action.To support this environment,we place a high priority on developing human capital*19.We intend to reward positive out
119、comes from colleagues fulfilling their own sense of purpose at work by encouraging them to take on new challenges,in line with incentives in our revised personnel policies.Going The third pillar is to AccelerateTransformation&Innovation.*17CEO Message*16 Startup SupportPage 53*18 Experienced Hire Ro
120、und TablePages 62-64 *13Promoting Sustainable BusinessPage 49*14 A global alliance of financial institutions to combat climate change*15 Taskforce on Nature-related Financial Disclosures*17 Accelerate Transformation and InnovationPages 55-61MUFG Report 2024Management MessageMUFGs Corporate ValueStra
121、tegies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section11forward,we are dedicated to making substantial investments in a broad spectrum of human capital,which include offering our employees opportunities for skill development.This means aligning human-resources investm
122、ents with business strategies,including an HR system geared toward enhancing professional skills in the Bank,Trust Bank,and Securities;and expanding education,training,and reskilling programs.We also promote DEI*20,health,and productivity management for frank exchange of diverse opinions among colle
123、agues.Our fundamental commitment to the aims of this pillar is to implement a range of corporate transformations for continued sustainable growth,including software that supports the base of all business activities,including cultural reform and human capital investment;enhancing AI and data platform
124、s;and strengthening systems development resources.Every January 1,I choose a single Japanese“kanji”logographic character to represent a touchstone theme for the coming year.This year,I chose:(Kaku)This means awaken and reflects my desire to embrace a new era to refocus my own life philosophy on a pe
125、rsonal level;and on a professional level to arouse the formidable capabilities of MUFG as a positive force for change.In January,I had the opportunity to host an interview session with Mr.Shohei Ohtani*21,the Los Angeles Dodgers baseball superstar and longstanding MUFG spokesperson.I asked,“In terms
126、 of mountain climbing,how far are you from your own summit?”He said,“Ive probably climbed 60 to 70%of the way.”But he didnt leave it at that;he went on to share his view that the projected height of a personal peak is aspirational and always subject to change.“Im not at my summit,”he said,“and Id li
127、ke to make it higher.”Ohtani was observing that those who actively seek growth are different from those satisfied with the status quo.Already having achieved so much,he still has not accepted limits and is recalibrating his potential ever higher.Mr.Ohtanis relentless pursuit of self-improvement is a
128、n inspiration to constantly challenge ourselves to grow,personally and professionally.He caused me to reaffirm my mission at MUFG to awaken the full breadth and depth of our vast capabilities for growth and for social contribution.We will keep addressing social issues while evolving our growth strat
129、egies,and press forward with our transformation into an entity that fully embodies our purpose of being“Committed to empowering a brighter future.”I view our colleagues as the company itself.A team of dedicated,skilled professionals who think independently,communicate productively,and work together
130、will by definition form a strong organization.We want people who ask themselves questions such as,What do I want to accomplish at MUFG?What excites me about my work?What gives me a sense of growth?Financial institutions tend to be conservative and there is deep virtue in steadiness and stability.But
131、 being responsible financiers does not require hidebound thinking in ossified organizations.Instead,I envision MUFG as pursuing and producing vigorous growth,committed to a bright,sustainable future,and unafraid of change in honoring these ideals.Just as that neighborhood jogger professed to me in p
132、erson last autumn.Thank you for your continued support as we strive toward these goals.Awakening our full potential.https:/www.bk.mufg.jp/admin/modal/ohtani_special/index/crosstalk.htmlHironori KamezawaPresident&Group CEO*21 CrosstalkMr.Shohei Otani Mr.Hironori Kamezawa *19 CHRO MessagePage 56 Enhan
133、cing Human Capital Page 59*20 Diversity,Equity,and InclusionManagement MessageCEO MessageMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section12KeywordLocation of relevant topics touched onin CEO MessageMessa
134、ge summaryLocations of detailed descriptionsPurposePages 8,9,12The ideal state is for MUFG to embody our purpose,and it should be consistent across the mid-to long-term.We will promote achievement of the MTBP to“pursue and produce growth,”and realize our purpose for sustainable improvement of corpor
135、ate value.MUFG Way Page 2Medium-to Long-Term Vision Page 23Improving ROEPage 8During the previous MTBP period,we strengthened the earnings power and resilience of our business model.In the final year of the previous MTBP,the ROE reached 8.5%,notably exceeding the 7.5%target.We remain committed to im
136、proving the ROE in the new MTBP and aim to achieve around 9%ROE in fiscal 2026.CFO Message Page 16Capital Policy/Shareholder ReturnsPage 8Dividend per share for FY2023 was increased to 41 yen from 25 yen in FY2020.In addition,we repurchased a total of 1 trillion yen shares during the previous MTBP p
137、eriod,with the total shareholder return exceeding 2.2 trillion yen.We will continue to strive for improvement in shareholder value through sustainable improvement of ROE with disciplined capital management and the earnings per share.CFO Message Pages 18-21Expand&Refine Growth StrategiesPages 9-10Bas
138、ed on the discussion on the areas of our competitiveness to achieve growth,seven focus strategies were formulated.We will generate growth in Japan and capture the upside of growth overseas,starting with Asia while being socially relevant by promoting solutions to issues confronting the global commun
139、ity.Expand&Refine Growth Strategies Pages 36-45Drive social&environmental progressPages 10-11In developing this pillar,we identified ten priority issues under the subheads“Sustainable Society,”“Vibrant Society,”and“Resilient Society,”and we set specific KPIs for priority themes.We will work with our
140、 customers to contribute to solution of social issues and pursue improvement of economic and social values.Drive Social&Environmental Progress Pages 46-54Accelerate Transformation&InnovationPages 11-12Cultural reform is the core of corporate transformation.A new mindset for welcoming challenges is t
141、aking root,but much remains to be done.We will focus on agility and review procedures and processes without exceptions.In addition,we will implement management with focus on human capital,including support for autonomous career development and promotion of DEI.Accelerate Transformation&Innovation Pa
142、ges 55-61Experienced Hire Round Table Pages 62-64Management MessageA Guide to Quickly Understanding Where MUFG Is NowMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section13We sincerely apologize for the incon
143、venience and concern caused to our customers and stakeholders.MUFG aimed to meet diverse customer needs and realize customer-centric sales activities leveraging the Groups strengths.We recognize insufficient compliance awareness with the laws and regulations based on a correct understanding and insu
144、fficient monitoring systems regarding collaboration among Group companies,which led to administrative action.We are taking this situation very seriously and strive to regain trust by implementing our business improvement plan for effective preventative measures against recurrence and realizing custo
145、mer-centric sales activities.We are taking the administrative action very seriously.MUFG,MUFG Bank,and MUMSS need to reaffirm its strong awareness of customer-centric business principles and steadily implement its business improvement plan by promoting compliance with laws and regulations in collabo
146、ration among Group companies and strengthening its monitoring system.The Board of Directors and the Audit Committee will closely monitor and oversee whether recurrence prevention measures have been established.Reasons for the Administrative ActionMUFG Bank Inappropriate sharing,etc.,of customer info
147、rmation between MUFG Bank and MUMSS Prohibition on securitiesrelated business at a registered financial institutionMitsubishi UFJ Morgan Stanley Securities Inappropriate sharing,etc.,of customer information between MUFG Bank and MUMSS A situation where financial product transaction contracts are ina
148、ppropriately concluded after overlooking the prohibition ofor encouragingsecurities-related business at registered financial institutionsImprovement Measures the Pillars of the Five Improvement Measures and the Parent Companys Improvement MeasuresThorough review of procedures and rules based on spec
149、ific casesStrengthening the monitoring system by the Sales and Risk Management DivisionsStrengthening more practical trainingStrengthening the management systemsReview performance evaluation and reinforcethe purpose of Group-based profitabilityParent companys improvement measuresHironori KamezawaPre
150、sident&Group CEO of Mitsubishi UFJ Financial GroupJunichi HanzawaPresident&CEO of MUFG BankMakoto KobayashiPresident&Global CEO of Mitsubishi UFJ Securities HoldingsPresident&CEO of Mitsubishi UFJ Morgan Stanley SecuritiesHirofumi NomotoOutside Director(Lead Independent Outside Director)Koichi Tsuji
151、Outside Director(Chairperson,Audit Committee)Regarding the Administrative Action by the Financial Services AgencyMUFG has been promoting collaboration among Group companies to meet diverse customer needs leveraging on the Groups collective strengths.However,we recognize that our management systems w
152、ere insufficient for the reality of banking-securities collaborative business and are deeply aware that this situation was a catalyst for these incidents.Based on the analysis of the background causes of these incidents,improvement measures have been developed to prevent recurrence.Specifically,we w
153、ill strengthen internal control systems,including management systems,legal and compliance systems related to banking-securities collaboration,etc.,and customer information management systems,centering on the five improvement measures and the parent companys improvement measures.On June 24,2024,the F
154、inancial Services Agency(“FSA”)announced that it has issued business improvement orders to MUFG Bank and Mitsubishi UFJ Morgan Stanley Securities(MUMSS)under Article 51,paragraph 2 and Article 51 of the Financial Instruments and Exchange Act,and orders to submit reports to Mitsubishi UFJ Financial G
155、roup(MUFG)and MUFG Bank under Article 52,paragraph 31-1 and Article 24,paragraph 1,of the Banking Act.On July 19,2024,MUFG,MUFG Bank,and MUMSS submitted reports,including business improvement plans,to the FSA in accordance with the business improvement orders and orders to submit reports.MUFGs Recog
156、nition and Measures for Preventing Recurrence*1Summary of the Administrative Action by the FSA*1 Please refer to the link for more details https:/www.mufg.jp/dam/pressrelease/2024/pdf/news-20240719-001_en.pdfMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate Value
157、Foundation Supporting the Corporate ValueData Section14FY2023 ResultsIn fiscal 2023,economic activities continued to normalize after COVID-19 was downgraded to Class 5 infectious disease status.However,uncertaintiesfrom worsening geopolitical risks to continued high interest rates in Europe and the
158、United States,ongoing yen depreciation,the lifting of the negative interest rate by the Bank of Japan,and the Nikkei Stock Average exceeding 40,000 yen for the first timedrastically reshaped our business environment.Against this backdrop,gross profits rose substantially year on year despite the sign
159、ificant impact of the decrease in net interest income from the sale of MUFG Union Bank(“MUB”),supported by enhanced profitability management and U.S.Interest rate hikes that had a positive effect on foreign interest income of loans and deposits.In addition,net fees and commissions were up,largely dr
160、iven by increases in fees related to foreign loans and the expansion of AM/IS and wealth management businesses.Moreover,G&A expenses decreased from the previous fiscal year with the disciplined cost control and sale of MUB,and consolidated net operating profitsan indicator of the earnings power of o
161、ur core businessincreased by approximately 250.0 billion to a record 1,843.7 billion.Among items under net operating profits,total credit costs saw an increase due to an increase in the allowance for overseas credit losses,but ordinary profits increased significantly by approximately 1,100.0 billion
162、 to 2,127.9 billion due to the impact of the change of the equity method accounting date for Morgan Stanley*1 and the absence of valuation losses on loans and securities held by MUB.With the additional impact of the absence of extraordinary cost for the structural reform in FY2022,the profits attrib
163、utable to owners of the parent was 1,490.7 billion,marking the highest profits in MUFG history.As a result,FY2023 results exceeded the 1,300.0 billion target for profits attributable to the owners of the parent due to the steady growth of net operating profitsan indicator of the earnings capacity of
164、 our core business.Committed to Pursuing Sustainable Improvement of ROE and shareholder value through Stable Profit Growth and investment for growthMUFG(consolidated)(Billions of yen)FY2022FY2023ResultsResultsChangeAfter adjustment of MUB*11Gross profits*24,503.04,732.5229.52G&A expenses*22,908.72,8
165、88.719.93Net operating profits1,594.21,843.7249.44Total credit costs674.8497.9176.9217.05Ordinary profits1,020.72,127.91,107.2372.16Profits attributable to owners of parent1,116.41,490.7374.2Message From the CFOManagement MessageReview of Operating Results*1 In FY2023,the closing date of Morgan Stan
166、leys financial results when applying the equity method of accounting was changed from Dec 31,2023,to Mar 31,2024.As a result of this change,MSs financial results for the 15-month period,including results for the quarter ended Mar 31,2023,have been reflected in equity in earnings of equity method inv
167、estees.*1 Adjusted the valuation losses on assets held by MUB,which was reversed as extraordinary gains.Total credit costs:393.9 billion,ordinary profits:735.0 billion*2 Impact of the sale of MUB is approx.-380.0 billion on gross profits and-260.0 billion on expensesConsolidated Income Statement Sum
168、maryJun TogawaSenior Managing Corporate Executive Group CFOMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section15Previous MTBP(FY2021FY2023)Our foremost commitment under the previous Medium-Term Business Pla
169、n(“MTBP”),which started in FY2021,was improving ROE;FY2023 result was 8.5%,exceeding the 7.5%target.(8.1%excluding the impact of change of the equity method accounting date for Morgan Stanley*1)We positioned profits,expenses,and RWAs*2 as the three key drivers that will enable us to achieve this goa
170、l.For profits,the numerator of the ROE calculation,we exceeded the targets for net operating profits and profits attributable to owners of the parent as a result of the structural reform and enhancing profitability.We captured the opportunities presented by the rise in interest rates overseas while
171、improving the domestic lending rate under the negative interest rate policy.As a result,net interest income increased for loans and deposits,and commission fees increased in Japan and abroad.Expenses also met the target of“a level below FY2020,”excluding the impact of foreign exchange.The expense ra
172、tio improved to 61.0%(68.7%in FY2020)with the promotion of structural reform,including the sale of MUB and the reduction of base expenses through disciplined cost control while allocating expenses for business growth.We also achieved the target of“a level at the end of March 2021,”excluding the impa
173、ct of foreign exchange for RWA,which is related to capital and is the denominator for ROE,through resource management considering the risk-adjusted return.We believe our earning power increased,and the business model became substantially more resilient during the previous MTBP period.New MTBP Financ
174、ial TargetsToward the Improvement of ROEWe remain committed to improving the ROE in the new MTBP.Profits,expenses,and RWAs will continue to be positioned as the three key drivers for achieving around 9%ROE by FY2026.In terms of profits,we will aim at over 2.1 trillion in net operating profits and ov
175、er 1.6 trillion in profits attributable to owners of the parent through the implementation of the seven growth strategies and optimizing the balance sheet.For cost control,we will reinforce discipline control both in terms of ratio and amount to reduce the expense ratio to around 60%by FY2026 while
176、investing the necessary resources for growth and strengthening infrastructure.For RWA,we will promote the reduction of unprofitable assets(-5 trillion)while increasing profitable assets(+12 trillion).We are confident that we will be able to achieve a higher ROE through these initiatives.Improving ba
177、lance sheet profitability and the seven growth strategiesThe plan for net operating profit in FY2026,the final year of the MTBP,is to achieve 2.1 trillion,which is about 30%increase from the FY2023 result of 1.6 trillion.We expect seven strategies under one of the pillars of the MTBP,“Expand and Ref
178、ine Growth Strategies,”to contribute about 340 billion toward the goal.For example,in the Asia business,which will drive the group-wide consolidated ROE,we are aiming at about 130.0 billion increase in net operating profit from FY2023(before internal adjustments).We will capitalize on the growth of
179、Asia,capturing the growth of partner banks*1 and digital finance businesses that we invested in during the previous MTBP and leveraging synergies between them.New MTBP Financial TargetsFY2023 resultFY2026 targetMedium-to-long-term targetsROE8.5%(8.1%*1)Around 9%9%10%CET1 ratio*2(finalized and fully
180、implemented Basel III basis)10.1%9.5%10.5%*1 Excluding the impact of the change of the equity method accounting date for Morgan Stanley*2 Equity Tier 1 ratio.Estimated based on the regulation to be applicable from March 31,2029.Excluding net unrealized gains on AFS SecuritiesBreakdown of ROE Improvi
181、ng Factors(Logic Tree)*1 Return on risk-weighted assets(an indicator suggesting capital profitability)RWAs/Shareholders equity Reciprocal of CET1 capital ratioCapital Management(Optimally allocate capital to improve ROE)Expand&Refine Growth StrategiesImprovement in ROEProfits attributable to owners
182、of parentShareholders equityImprovement in RORA*1Profits attributable to owners of parentRWAsCapital management with the target range of the CET1 capital ratioRWAsShareholders equityIncrease the sophistication of expense controlFree up funds for growth investment by reducing base expensesCost contro
183、lResource allocations to seven growth strategies(Net operating profits+340 bn)Strengthen profitabilityReplace low profitable assets to highly profitable assetsRWA controlAim for a dividend payout ratio of 40%via progressive dividendsFlexibly execute share repurchasesEnhance further shareholder retur
184、nsInvest in growth fields(Digital,Asia,Global AM/IS,new businesses,etc.)Strategic investments for sustainable growth*1 Partner banks(PB):MUFG has positioned Asia as our second“home market”and has been proactively pushing ahead with investment with the aim of capturing opportunities arising from the
185、regions burgeoning economic growth.We have invested in four commercial banks,Krungsri(Bank of Ayudhya,Thailand),Bank Danamon(Indonesia),VietinBank(Vietnam),and Security Bank(Philippines),helping each PB enhance its corporate value and providing high value-added services through collaboration to util
186、ize the customer base and functions of PB effectively.Message From the CFOManagement MessageReview of Operating ResultsOverview of the new MTBP*2 Risk-Weighted Asset.The total monetary amount of risk volume calculated by reflecting the degree of risks associated with eachasset held by MUFG.16MUFG Re
187、port 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData SectionWe will also implement other strategies including strengthening of domestic retail customer base and corporate x WM businesses,integrated GCIB-GM business model,e
188、nhancing cross-selling,expanding AM/IS businesses to contribute to making Japan a leading asset management center,and challenging to build a new business portfolio.Through these efforts,we will empower progress while achieving revenue growth.In addition,stable profit growth is essential for optimizi
189、ng the balance sheet in light of the change in the business environment to achieve the MTBP financial targets.With the largest balance sheet among private sector banks in Japan,MUFG is positioned to make the most of the normalized interest environment,and the strategy for further improving profitabi
190、lity will become increasingly important.In lending,we will continue profitability-focused management by replacing low-profitability assets with highly profitable ones.At the same time,we will enhance risk-taking capability through event financing,such as LBO*2,real estate-related areas,and green tra
191、nsformation,which will contribute to improving the ROE.We will also focus on securing deposits by expanding services that meet the customers needs and enhancing transaction banking products.Medium-to long-term growth also requires corporate transformation and investment in the corporate infrastructu
192、re.The development of corporate infrastructure will be promoted as part of one of the pillars of the MTBP,“Accelerate Transformation&Innovation.”This will include the enhancement of human resources that support systems development and measures to strengthen AI and data infrastructure across the comp
193、any by the newly established Digital Strategy Division.We will increase the systems investment from the previous MTBP to 800 billion,with over 30%to be allocated to strategic and corporate infrastructure projects.We will also enhance human capital investment.Investment in corporate infrastructure an
194、d future growth must be achieved together with stable profit growth,including through optimizing the balance sheet.We aim to achieve the MTBP and medium-to long-term financial targets by creating a virtuous cycle of profit growth and strategic investment.The result of the implementation of measures
195、under the MTBP is shown in the below diagram of capital allocation and ROE by the Business Group.For the previous MTBP,issues remained regarding the level of ROE for some Business Groups.The new MTBP reallocates capital,with the ROE for customer segment Business Groups excluding Retail&Digital Busin
196、ess Group to contribute to the achievement of consolidated ROE target.The Retail&Digital Business Group is in charge of retail customers(excluding WM).Its ROE will be relatively low during the MTBP due to the initial digital and infrastructure investment.However,it is an important Business Group tha
197、t supports MUFGs balance sheet,and we will steadily promote transformation and improve capital efficiency.Capital allocation*1 and ROE*2 by Business Group(New MTBP basis,FY2023FY2026)FY20231.6 tn2.1 tn*1 Managerial accounting basis.Local currency basisStrengthen domestic retail customer baseStrength
198、en corporate x WM businessEvolve GCIB-GM integrated business modelStrengthen APAC business and platform resilienceContribute to making Japan a leading AM centerSupport value chain in green transformationOthersFY2026Expand&Refine Growth Strategies+340 bnImproving BS profitabilityNOP+500 bn*1 Estimate
199、d RWA on the finalized and fully implemented Basel III basis to be applicable from March 31,2029(R&D,CWM,JCIB,GCIB,GCB)or economic capital(AM/IS and Global Markets)*2 Managerial accounting basis(Net profits basis.)New MTBPtargetsAround 9%ROERDJCIBGCIBGlobal Markets Lighter colors indicate FY2023 ROE
200、 and capital allocation on new MTBP basis.Figures in brackets indicate a change in ROE compared to FY2023CWMGCBAM/ISCapital allocationROE(%)5.5%(1ppt)9%(+0ppt)8%(+6.5ppt)9%(+0.5ppt)6.5%(+6.5ppt)13.5%(+0ppt)10.5%(1.5ppt)*2 Leveraged Buyout:A method of financing acquisitions secured by the targets cas
201、h flow and assets.The plan of net operating profits*1Message From the CFOManagement MessageMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section17Growth potential driven by rises in interest ratesThe above-st
202、ated plan for increasing net operating profits assumes the policy rate in Japan will remain at 0.1%,the U.S.FF rate will decrease to around 3%,and the USD exchange rate will be in the upper 120 yen range in FY2026,the final year of the MTBP.The plan demonstrates how much growth MUFG can achieve thro
203、ugh the strategies without depending on the favorable environment,despite the downward pressure on revenue created by the depreciation of the yen.On the other hand,an increase in the JPY interest rate is expected during the MTBP.The following estimates indicate a positive net operating profit impact
204、 calculated based on certain assumptions.It assumes a gradual positive impact with the rise in JPY Interest rates,and we will aim at further profit growth by leveraging the strength of our balance sheet,which is the largest among Japanese private sector banks.FY2024 targetDespite the uncertainty abo
205、ut the geopolitical situation,the global economy will start to expand again at a moderate rate after a phase of further deceleration triggered by the cumulative effects of monetary tightening in FY2024,the first year of the MTBP.A gradual recovery is expected for the Japanese economy with the normal
206、ization of the interest rate trend.Although significant change in the economy and markets can be expected,we set the target for profits attributable to owners of parent at record high 1,500.0 billion.We aim to achieve the MTBP target of“around 9%ROE”early and promote steady profitability improvement
207、.There is downward pressure on net operating profits due to the impact of the appreciation of the yen from the end of the previous fiscal year.However,the plan expects about 90.0 billion profit increase from the 1,406.6 billion profits attributable to owners of the parent in FY2023(excluding the imp
208、act of change of the equity method accounting date for Morgan Stanley)due to the accumulation of net operating profits for the customer segments and increased capital gains through treasury operation.Basic PolicyWe consider capital management to remain a matter of importance in terms of achieving th
209、e ROE target under the new MTBP.MUFG has been focused on capital management that achieves an appropriate balance among the“capital triangle”objectives,as illustrated below.Upholding this basic policy,we will endeavor to maintain creditability and reliability,which are the indispensable traits of a f
210、inancial institution and largely dependent on its financial soundness.Accordingly,we will strive to improve our corporate value by steadfastly maintaining our financial soundness while further enhancing shareholder returns as well as undertaking investment in growth fields to raise profitability.Con
211、solidated (bn)FY2023 ResultsFY2024 TargetYoY1Net operating profitsbefore credit costs for trust accounts and provision for general allowance for credit losses1,843.71,950.0106.32Total credit costs497.9400.097.93Ordinary profits2,127.92,150.0128.2*24Net profits1,490.71,500.093.4*2*1 Assuming the Japa
212、nese policy rate at 0.1%and the USD exchange rate around 140*2 Excluding the impact of change of the equity method accounting date of MS(Ordinary profits:106.1 billion,Net profits:84.1 billion)Consider Performance progress/forecast and capital situation Strategic investment opportunities Market envi
213、ronment including share price Expand the target range of CET1*1 ratio to 9.5%-10.5%to improve transparency of capital management.Organic investmentsInorganic Investments Continue to focus on areas such as Asia,Digital,and Global AM/IS Consider investments in new business areas Holding a maximum of a
214、pprox.5%of the total number of issued shares Maintain dividend payout ratioat around 40%*1 Estimated values based on the finalized and fully implemented Basel III basis applicable as of the end o March 2029.Excludes net unrealized gains on available-for-sale securities Continue to replace low-profit
215、ability assets with highly profitable assets Allocate to areas with high profitability expectations strategicallyFurther enhancing shareholder returnsProgre-ssivedividendsSharecancella-tionFlexiblesharere-purchaseMaintain solid equity capitalStrategic investments forsustainable growthFurther enhanci
216、ng shareholder returnsMaintain solid equity capitalStrategic investments for sustainable growthMUFGsCorporateValueCapital ManagementMessage From the CFOManagement MessageAnnual impact from rises in JPY interest rates*1*2 JPY balance sheet(as of the end of Mar.2024)Mostly liquid deposits,curb the inc
217、rease in deposit ratesIncrease in profit linked to rises in JPY interest ratesIncrease in re-lending yieldsIncrease in profit linked to rises in JPY interest ratesExpansion of unrealized losses,while increase in reinvestment yieldsLoans65BOJ CurrentAccountbalancesDeposits169Market funding,etc.35Othe
218、rsOthersInvestment securities 50*2of held-to-maturity securities 17*1 Estimates assuming financial indicators stated on the Financial Highlights announced on May 15,2024,with+0.15%parallel shift of policy and market rates from April 2024(immediate and sustained).The tracking rate for liquid deposits
219、 is assumed to be the same level as when the Bank of Japan revised the policy rate in March 2024.*2 Assuming that the balance sheet as of the end of March 2024 does not change from the right diagram.Year 1+85Year 2Year 3+120+150(bn)(tn)FY2024 target*1Capital TriangleMUFG Report 2024Management Messag
220、eMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section18Maintain solid equity capitalWe have set a target range for the CET1 capital ratio(CET1 ratio),which indicates financial soundness,at 9.5%to 10.5%(finalized Basel III reforms basis,exclu
221、ding net unrealized gains of available-for-sale securities).This target range was determined by considering such factors as the results of the multifaceted verification of the necessary stress buffer and the level of capital required of a financial institution deserving of the“A”rating granted by ex
222、ternal rating agencies.Based on a CET1 ratio stipulated by minimum regulatory requirements applied to MUFG(8.5%,excluding the countercyclical capital buffer as a variable element),the bottom line of 9.5%was defined by adding a 1.0%buffer.The target range was set with a breadth of 1.0%,resulting in t
223、he upper limit of 10.5%.For the new MTBP,we have raised the upper limit of the CET1 target range by 0.5%from 10.0%.This aims to improve the transparency of capital management by reflecting the increased volatility in the macro economy,including the market environment.Strategic investments for sustai
224、nable growthAs discussed earlier,we consider undertaking strategic investments aimed at raising profitability essential to securing sustainable growth and improving corporate value.Under the previous MTBP,our key focus was on digital-related,Asia,and Global AM/IS.We invested in Home Credit(Indonesia
225、 and Philippines),Akulaku(Indonesia),and DMI Finance(India)as part of a multilateral endeavor to seize opportunities arising from the growth opportunities in Asia and the growing need for digital financing by unbanked individuals.We also formulated new funds focused on investing in startups in India
226、 and Indonesia and increased Mars Growth Capitals fund value to expand the scope of our investment in and financing for startups.Moreover,in the field of Global AM/IS,we acquired AlbaCore Capital(Australia),which boasts strength in private debt,a type of financing with strong growth potential.In May
227、 2024,we also completed a transaction announced in December 2023,the acquisition of Link Administration Holdings Ltd.(Australia)*1,which has strength in pension administration and management,etc.In Japan,we completed an investment in WealthNavi,the No.1 robo-advisor in the country.We made over 700 b
228、illion in strategic investments during the previous MTBP*2.They include diverse investments ranging from projects that are not expected to make a profit contribution in the short term but should grow significantly over the medium-to long-term to projects with stable but gradual profit growth with hi
229、gh capital efficiency.Together,they will contribute to the diversification of future growth and revenue.We expect that the combined effect of these strategic investments and fund investments will eventually be translated into around 10%improvement in consolidated ROE in the medium-to long-term.For t
230、he new MTBP,“new business”has been added to the key focus in addition to the three areas above.We will consider strategic investments that can achieve the medium-to long-term target ROE of“9%to 10%”with discipline and build an appropriate portfolio toward sustainable growth and improvement of corpor
231、ate value.Further enhancing shareholder returnsIn line with our Basic Policies for Shareholder Returns,MUFG strives to enhance the content of shareholder returns,with cash dividends defined as the primary means to this end,while giving due consideration to achieving an optimal balance between shareh
232、older returns,capital soundness,and growth investment.MUFG aims for stable and sustainable increases in dividends per share through profit growth and maintains the dividend payout ratio at around 40%.At the same time,we take a flexible stance toward executing share repurchases that take into account
233、 performance progress/forecast and capital situation,strategic investment opportunities,and the market environment,including share prices,as share repurchases constitute a shareholder return measure contributing to improvement in capital efficiency.Lastly,MUFG will cancel treasury shares in excess o
234、f approximately 5%of the total shares outstanding.In line with the above policy,we increased the full-year dividend for fiscal 2023 by 9 per share year on year to 41 per share.In addition,we made share repurchases amounting to 400.0 billion annually.As shown in the diagram on the next page,over the
235、course of the three years of the MTBP,we have allocated approximately 2.25 trillion to shareholder returns,which comprised cash dividends and share repurchases,from cumulative profits attributable to owners of parent totaling around 3.7 trillion and additional capital created by the sale of MUB.As f
236、or our dividend forecasts for fiscal 2024,we intend to pay a full-year dividend of 50 per share,up 9 per share year on year.The dividend payout ratio is about 40%,excluding the positive impact of the change of the consolidated closing period for the Bank of Ayudhya.We will continue to aim for a stab
237、le and sustained increase in dividends per share through steady earnings growth and maintaining an approximately 40%dividend payout ratio.*1 Current MUFG Pension&Market Services Holdings Limited(company name changed in 2024)*2 Includes investments to be executed from April 2024(plan)Message From the
238、 CFOManagement Message*1 Estimated on the finalized and implemented Basel III basis.Excluding net unrealized gains on available-for-sale securities Maintain:Progressive dividends Implement:Additional shareholder returnsStrategic investments for sustainable growth Maintain:Progressive dividends Consi
239、der:Additional shareholder returns Strategic investments for sustainable growth Accumulate capital within the target range Consider:Stable dividends in line with the level of profits Implement:Accumulate capital to improve CET1 capital ratio to the target rangeCET1 ratio*19.5%10.5%(As of March 31,20
240、24)10.1%Target rangeTarget Range for Capital ManagementMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section19 MUFG Europe U.S.Implementing share repurchase of 150 billion in FY2021,450 billion in FY2022,400
241、billion in FY2023FY2021 DPS up by+3,FY2022+4,FY2023 +9Capital utilization towards earnings growth mainly in Asia digital Accumulating profits according to the outlook for the external environmentImpact of capital deductions due to the cancellation of special provisions for investment in MS(ending in
242、 FY2022)Net profits:Approx.3.7 tnAccumulationAllocationShare repurchase:Approx.1.0 tnDividends:Approx.1.2 tnStrategic investmentProfit accumulationMorgan Stanley double-gearingTerminated in FY2022:Approx.0.6 tnAdditional capital created by the sale of MUBBreakdown of net profits during new MTBP(conc
243、ept)Result of Capital Allocation(FY2021FY2023)AccumulationAllocationShare repurchaseBased on the disciplined capital management and contribute to sustainable ROE improvementDividendAim for stable and sustainable increase by profit growth and maintain dividend payout ratio at around 40%Investment for
244、 growth:InorganicUtilize capital for business expansion and improving profitabilityInvestment for growth:OrganicAccept to build up RWA to a certain level for increasing highly profitable assetsProfits attributable to owners of parentResults and Forecasts of Dividends per Common Stock and Earnings pe
245、r Share(EPS)*1 Dividend payout ratio amounts to 37%when the impact of the one-time amortization of goodwill is excluded*2 Excluding the impact of the change of the equity method accounting date for Morgan Stanley on FY2023 results*3 Excluding the FY2024 estimated impact of the change of the consolid
246、ated closing period for KrungsriDividends per common stockDividend payout ratioEPS(yen)*1201719222525283241Interim25Year-end255074.5520182019202025.5%32.9%61.0%41.3%31.7%35.3%32.9%(34.9%)*239.1%(39.6%)*3202120222023202466.9140.9560.4988.4490.72124.64Relationships between PBR and ROEMorgan StanleyGol
247、dman SachsEnd ofMar 2024CitigroupBarclaysBNP Paribas6%4%0.48%10%12%14%16%18%SantanderWells FargoBank ofAmericaHSBCJP Morgan(ROE)(PBR)0.60.81.01.21.41.61.8Source:Bloomberg(as of December 31,2023)Initiatives to Enhance Shareholder Value Currently stagnant PBR is attributable to our ROE falling short o
248、f the cost of capital Aim to enhance ROE through strategies for growth,structural reforms and capital management*1 Based on the Gordon Growth ModelOur recognition of issuesPBR=1+Equity spread(ROE Cost of Capital)*1Cost of Capital Growth rateOn share repurchase,with the CET1 ratio near the median of
249、the target range,MUFG has made the initial decision for the fiscal year to repurchase up to 100 billion shares in pursuit of an optimal balance between equity capital accumulation and strategic investment for growth and to demonstrate continued disciplined capital management during the new MTBP.We c
250、ontinue to believe that share repurchases will be an important option for achieving the ROE target and improving the earnings per share.MUFG will maintain a flexible stance toward executing share repurchases that considers performance progress/forecast and capital situation,strategic investment oppo
251、rtunities,and the market environment,including share prices.For MUFG,enhancing shareholder value is an important management issue.Looking at the recent trend in Total Shareholder Return(TSR*1),MUFGs TSR over the past 10 years has been lagging considerably behind that of some global competitors.Altho
252、ugh our three-year results for the previous MTBP have shown an upward trend,we believe that this is largely attributable to growing market expectations regarding MUFGs future growth in light of the results of key strategies under the previous MTBP,including those that led to a doubling of EPS over p
253、ast three years due to profit growth and disciplined capital management.Accordingly,we are acutely aware of the importance of steadily meeting such expectations.Price Book-value Ratio(PBR)has improved from the 0.4X range and has been trending close to 1.0X since the start of 2024,but still remains u
254、nder 1X.We believe this is attributable to our ROE falling short of the Cost of Capital.Looking at global banks and the relationship between their PBRs and ROEs,as shown in the diagram below,some U.S.banks whose TSR has remained high over the past decade are appreciated by the market for their robus
255、t PBR,which results from ongoing improvement in ROE.This strong PBR,in turn,helps raise the stock prices of these banks and enables them to achieve a constantly high TSR.(Next page:Global Comparisons of TSR)Enhancement of Shareholder Value*1 Total Shareholder ReturnMessage From the CFOManagement Mes
256、sageMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section20Global Comparisons of Total Shareholder Return(TSR)Message From the CFOManagement MessageInitiatives to Enhance Shareholder ValueAs mentioned earlier
257、,MUFG has positioned ROE at the core of business management based on a recognition that improving ROE is essential to enhancing shareholder value.We are striving to improve ROE by executing key strategies(Expand&Refine Growth Strategies)as well as practicing proper cost and RWA control and capital m
258、anagement.Details pertaining to these endeavors are provided in the Breakdown of ROE Improving Factors featured on page 15.To achieve a higher stock price with PBR of 1 time,which represents the bare minimum level,or higher,we must stably achieve the MTBP target ROE of around 9%,and aim for 10%,whic
259、h is within our target range for the medium-to long-term.We also believe that,to improve ROE,it is important to practice disciplined capital management even as we strive for steady and ongoing growth in profit.We expect that achieving robust operating results backed by steady profit growth could pos
260、itively impact MUFGs stock prices via an increase in PER.In addition,we deem it important to allocate surplus in a well-balanced manner to both strategic investment,which will be the source of growth in ten years,and shareholder returns.This must be done in a way that maintains disciplined capital m
261、anagement.The new MTBP added the TSR perspective for the compensation system.We will continue to strive for improvement in shareholder value through sustainable improvement of ROE with disciplined capital management and earnings growth.In line with our basic policy of reducing strategic equity holdi
262、ngs,we divested such holdings by an amount equivalent to 870.0 billion(on an acquisition-cost basis)over the six years from fiscal 2015 to fiscal 2020.During the previous MTBP,our divestment target for the three years was raised from 300.0 billion to 500.0 billion,and we exceeded the target by execu
263、ting a divestment of 539.0 billion.Equity holdings divestment is essential from the perspective of maintaining robust RWA control as it frees up capital resources.It also helps reduce financial risk arising from share price fluctuations.Therefore,MUFGs stock prices may well be positively affected by
264、 the divestment of equity holdings,resulting in reductions in volatility and the cost of capital.Considering the above,we will further reduce our holdings during the new MTBP.The initial reduction target under the new MTBP will be 350.0 billion,with aims to reduce strategic equity holdings*1 to less
265、 than 20%of consolidated net assets*2 during the new MTBP.Discussion on reviewing cross-shareholdings is an important theme for Japanese corporations involving the restructuring of shareholders.As the environment changes drastically,we aim to further divest equity holdings while engaging in dialogue
266、 with our corporate clients to secure their understanding.As we aim to help our stakeholders gain a good overview of MUFGs strategic endeavors employing its unique and extensive business portfolio,we believe that providing them with accurate and timely explanations of our operations is a matter of i
267、mportance.Furthermore,the provision of sufficient information to stakeholders will lead to the elimination of informational asymmetry between MUFG and investors and could possibly result in reductions in the cost of capital.Accordingly,we are striving to enhance the content of information disclosure
268、,including non-financial information.My“MUFG Way”is“to grow the company and myself to empower all stakeholders.”Dialogue with our stakeholders,including shareholders,investors,and rating agency representatives,often provides valuable opportunities and insights.Going forward,we will focus on maintain
269、ing such dialogue,stepping up investor relations(IR)and shareholder relations(SR)engagement with those charged with exercising voting rights.Stakeholder opinions are shared among Board members and given due consideration in the course of business operations and capital management.We always welcome f
270、rank opinions about MUFG.I will listen to everyones opinions and make MUFG and myself grow.We ask for your continuous support in this endeavor.Reduction of equity holdingsDialogue with Shareholders and Other Stakeholders*1 Market value basis.Including the balance of“Deemed holdings”*2 Net assets at
271、the end of March 20242021/35075100125150175200225250275300(Closing price as of March 31,2013=100)2021/92022/32022/92023/32023/92024/3Source:BloombergSumitomo Mitsui FGMizuho FGHSBC HoldingsBNP ParibasDeutsche BankJP MorganGoldman SachsMorgan StanleyBarclaysBank of AmericaCitigroupMUFGMUFG Report 202
272、4Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section212324252627283032MUFGsCorporate ValueCONTENTSMedium-to Long-Term VisionValue Creation ModelTrajectory of MUFGs Corporate Value EnhancementMUFGs consolidated strength for
273、 Creating Corporate ValueBusiness Portfolio Supporting MUFG GrowthTop Management Dialogue between MUFG and Morgan StanleyBuilding MUFGs Economic Sphere in AsiaAsia x Digital Platform Supporting the MUFGEconomic SphereTiles at the MUFG Bank Nagoya Building 1F ATM Corner Combination of Tokoname cerami
274、c tile and glass tile depicts the light filtering into the interior of the building1MUFGKOGEI ProjectClick for details about the MUFG KOGEI Project.22Become a force forconnecting the worldCommitted to empoweringa brighter future.BusinesspartnersFuturegenerationsMUFGFY2026 TargetApprox.9%ROEMedium-to
275、-long-term target9%-10%ROEThree-year period forcapturing“growth.”MUFGColleaguesShareholders/InvestorsCommunitiesand societyCustomers Support more customers through our businessEnhance corporate value and shareholder value through dialogueRealize a sustainablesociety Asset and business succession Eff
276、orts for regional revitalization Cultivate industries by supporting corporate clients Create a workplacewhere employeescan thrive and growFocus on holistic well-being of employees Meet our customers needs and help them attain a prosperous life(retail customers)Resolve our customers management challe
277、nges and help realize growth(corporate customers)Medium-to Long-Term VisionMUFGs Corporate ValueThe ideal state is for MUFG to embody our purpose,and it should be consistent across the mid-to long-term.MUFG group companies also have the unique ability to build meaningful bridges connecting our diver
278、se stakeholder communities.With these abilities,MUFG intends to play a cohesive societal role by bringing various stakeholder communities together through financial empowerment.This concept is central to embodying our purpose through our new MTBP.MUFG Report 2024Management MessageMUFGs Corporate Val
279、ueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section23MUFGBusinesspartnersFuturegenerationsMUFGColleaguesShareholders/InvestorsCommunitiesand societyCustomersFY2026 TargetApprox.9%ROEMedium-to-long-term target9%-10%ROEThree-year period forcapturing“growth.”Bec
280、ome a force forconnecting the worldCommitted to empoweringa brighter future.Financial capitalFinancial capitalHuman CapitalIntellectual capitalSocial and relationship capitalNatural capital Deposits 224.0trillion Net assets 20.7trillionIntellectual capitalMUFGs unique strengthsHuman CapitalEmployees
281、:approximately 140,000(Overseas 63%)*1Social and relationship capitalA robust customer base,Japans largest of its kind(Approximately 34 millionindividual customers and 1 million corporate clients)Improvement in corporate value and the enhancement of each capital categoryRatio of women in management
282、in Japan22.3%Engagement score73%*227%(fiscal 2026)A level improved from the current status(fiscal 2026)Evolving into a financial and digital platform operator Strengthen collaboration with external partners Decision on investment of160billion by AM/IS Pursue the best mix of face-to-face and online c
283、ustomer services Number of users of internet banking10.2million(fiscal 2023)Number of branches(the Bank)325branches(fiscal 2023)Over450 online financial consultation booths*3 across JapanNet zero(fiscal 2050)Net zero(fiscal 2030)Results for fiscal 2023Targets and visions Profits attributable to owne
284、rs of parent1.49trillion ROE8.5%Common Equity Tier 1 capital ratio*110.1%1.6trillion or more(fiscal 2026)About 9.0%(fiscal 2026)Target range 9.5%to 10.5%Financial/non-financial capitalInputsValue delivered to stakeholdersOutcomesNatural capitalTotal energy consumption volume 771,086 MWh(fiscal 2022)
285、*2 Scores from Group Employee Survey*3 Individual booths operated by telecube,inc.that can be used for online investment consultations provided by MUFG Bank*1 Excluding part-time and temporary employees The broadest product lineup among financial institutions(431 bases in Japan and approximately1,60
286、0basesoverseas)Financed portfolioDisclosure of interim targets for 2030(respective targets for real estate,steel and shipping sectors)Greenhouse gas(GHG)emissions from own operationsDisclosure of interim targets for fiscal 2025 and 2026 Publication of MUFG Climate Report,MUFGTransition White Paper,a
287、nd TNFD ReportMUFGs Corporate ValueValue Creation ModelMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section242013 Conversion of Bank of Ayudhya(Krungsri),a major commercial bank in Thailand,into a subsidiary
288、 Capital and operational alliance with Vietnam Joint Stock Commercial Bank for Industry and Trade(VietinBank),a national bank in Vietnam2015Moved to a“company with three committees”structure2016 Capital and business alliance with Security Bank Corporation in the Philippines2019Conversion of Bank Dan
289、amon,Indonesia,into a subsidiary2021 Established the MUFG Way(renamed from Corporate Vision)Launched the Digital Service Business Group,transitioning to a seven-business group structure Announced the MUFG Carbon Neutrality Declaration2022Sold MUFG Union BankDecided investment of approximately 200 bi
290、llion in digital finance field in Asia2023 Alliance 2.0-Enhancement of strategic alliance with Morgan Stanley2005 MUFG inaugurated Mitsubishi UFJ Trust and Banking,Mitsubishi UFJ Securities inaugurated2006 Bank of Tokyo-Mitsubishi UFJ(now MUFG Bank)inaugurated2007 Mitsubishi UFJ NICOS inaugurated200
291、8Strategic alliance with Morgan Stanley UnionBanCal Corporation became a wholly owned subsidiary of MUFGACOM became a subsidiary of MUFG(JGAAP only)2010 Mitsubishi UFJ Morgan Stanley Securities,Morgan Stanley MUFG Securities inaugurated1656MUFG inauguratedStrengthened investment banking operationsEn
292、hanced our presence in the ASEAN regionStarted to take on the challenge of business model reforms Decided strategic investment in Global AM/IS area(AlbaCore,Link)200520122021 Conversion of Australia-based asset manager First Sentier Investors into a Subsidiary2020Capital and business alliance with G
293、rab Holdings Inc.Overseas56%*1 Managerial AccountingBasis.Exchange rates applied to each fiscal year may differ*2 Including equity earnings of MS as an equity method investeeFiscal 2006*1Fiscal 2013*1,*2Trend in the profit balance between domestic and overseasOverseas33%Overseas17%Domestic44%Domesti
294、c67%Fiscal 2023*1,*2Continued efforts to enhance corporate value Domestic83%Source:Konoike Limited Partnership CompanySource:The Mitsubishi ArchivesSource:Kanagawa Prefectural Museum of Cultural History1656 Konoike Exchange Bureau opened in Osaka(Precursor of Sanwa Bank founded in 1933)1880 Mitsubis
295、hi Exchange House established by Yataro Iwasaki(Precursor of Mitsubishi Bank foundedin 1919)Yokohama Specie Bank established(Precursor of The Bank of Tokyo founded in 1946)1927 Mitsubishi Trust established Kawasaki Trust established1941 Tokai Bank established1948 Yachiyo Securities established1959 T
296、oyo Trust and Banking establishedHard-earned trust backed by a history spanning more than 360 years and a robust customer baseTrajectory of MUFGs Corporate Value EnhancementMUFGs Corporate ValueMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Sup
297、porting the Corporate ValueData Section25CommercialbankingMitsubishi UFJAssetManagementACOMMitsubishi UFJNICOSMUFG InvestorServicesHoldingsau Kabucom SecuritiesMitsubishi UFJTrust andBankingInvestment banking,Sales&Trading,Wealth managementTrust and banking,Asset management,Investor serviceCredit ca
298、rd,Consumer finance*1 Strategic AllianceBank DanamonIndonesiaSecurity Bank Corporation VietinBankMitsubishi UFJSecuritiesHoldingsMorgan StanleyMUFG SecuritiesMitsubishi UFJMorgan StanleySecuritiesMorgan Stanley*1Bank of Ayudhya(Krungsri)MUFG BankFirst SentierInvestorsMitsubishi UFJ Financial Group(M
299、UFG)MUFGs consolidated strength for Creating Corporate ValueMUFGs Corporate ValueMUFG is a comprehensive financial group comprised of top-tier group companies in various fields,such as commercial banking,trust banking,investment banking,securities,asset management,consumer finance,and more.Group com
300、panies with high expertise and knowledge work together to provide our customers with the best possible solutions.Advantage of functionality brought byMUFGs consolidated strengthHigh level of expertise and presence*1 Global:No.1 US:No.1 for 14 years in a raw Global:No.1 Sophisticated strategies under
301、 single leadership The only one strong partnership Various products and asset management capability/one-stop service Publicly offered equity investment trust balance*2:No.1 AuA*3:No.1 First Sentier Investors AlbaCore Capital Group*5capability/one-stop service*1 As of Dec 23(source)PFI *2 excl.ETF *3
302、 Assets under Administration in the Master Trust Bank of Japan *4 Private Debt *5 Subsidiary of FSIMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section26USRealize growth in the worlds largest economic zonesa
303、nd capture stable size of the market through MSConcentrate resources in the wholesale area and drive MUFGs growthNOP in Americas grows steadilyafter the sale of MUB*5Capturing US economic growth through equity in earnings from MSMSs balanced business portfolio*6NOP in MUB(FY)2010021221632326IM&WMISG
304、JapanThe largest domestic customer base and balance sheetagainst the background of breaking away from deflationand normalization of the interest rate trendRetail 34 mn corporatesCorporate 1 mn accounts Domestic main bank researchNo.1 for 11 years in a raw*1MUFGDomesticbank ADomesticbank B(tn)(%)2001
305、5010050JPY deposit balance169 tn*2AsiaProjected GDP growth in 2025*3Exposures in APAC region(excl.China and Hong Kong)*4Capture growth from various perspectives through investments in ASEAN commercial banks and digital finance businessMUFGForeignbank AForeignbank B(USD Bn)20015010050India7ASEAN5US22
306、EUJapan1MUFG NOP+MS Equity in earningsof equity method investees*744%29%22%Mitsubishi UFJ Financial Group(MUFG)MUFGs Corporate ValueBusiness Portfolio Supporting MUFG GrowthMUFGs advantage lies in a unique business portfolio,which maximizes the comprehensive strength of our group.In Japan,our larges
307、t customer base and balance sheet will be the source of our future competitiveness and profitability.Our exposure in the APAC region is already the largest in the world.In addition to concentrating our resources in the wholesale business and continuing steady profit growth,through Morgan Stanley,we
308、are also able to capture stable growth of the U.S.economy as a whole.We will further evolve this portfolio over the next few years and grow in tandem with the global economy.*1 (source)“Corporate main bank”investigation issued by Tokyo Shoko Research in 2023*2 MUFGs balance is sum of the Bank and th
309、e Trust Bank.Other banks figures are calculated based on disclosures of JPY or domestic deposit balances as at end of Mar 24*3 (source)IMF“World Economic Outlook Database,April 2024”*4 MUFGs figures include PBs.Calculated based on each banks disclosures as at end of Mar 24.*5 FY20 result=100*6 Net p
310、rofits before tax.ISG:Institutional Securities,IM:Investment Management,WM:Wealth management(source)MS 234Q Strategic Update 24*7 as of FY23 excl.the impact of the change of closing date in the equity method of accounting for MSMUFG Report 2024Management MessageMUFGs Corporate ValueStrategies to Imp
311、rove Corporate ValueFoundation Supporting the Corporate ValueData Section27Pick:Our strategic alliance started in October 2008 during the global financial crisis,when MUFG invested$9 billion in Morgan Stanley.At that time,Morgan Stanley was in a difficult place,and the investment from MUFG helped us
312、 pull through.The alliance has been very beneficial to both of our firms,and our share price is now more than four times what it was at the time of investment.We are deeply appreciative of MUFGs investment decision;its a reason Morgan Stanley stands stronger than ever today.Kamezawa:Id say our allia
313、nce is the most successful example of a strategic alliance between two global financial institutions.Through the partnership with Morgan Stanley,MUFG was able to fundamentally strengthen our offerings to clients globally in investment banking.We are also benefiting from the growth of the US economy.
314、Morgan Stanleys contribution to MUFGs consolidated net income cumulates to over 2.5 trillion yen since 2013,more than 2.5 times our original investment.It accounts for about 30%of MUFGs annual profit in recent years.We without a doubt have a powerful partner.Pick:The relationship has evolved from th
315、e foundation built by people like Nagayasu-san*1,Hirano-san*2,and James Gorman,to now a much broader one,with day-to-day touchpoints across various areas and at multiple levels of seniority of each firm.This includes joint efforts on lending in connection with M&A deals through the Loan Marketing Jo
316、int Venture(LMJV)in the Americas,as well as achievements in Asia and Europe.Kamezawa:In Japan,we established two joint venture entities MUMSS and MSMS in 2010.Thanks to Morgan Stanleys brand and expertise,MUMSS regularly ranks first or second in the Japanese Corporate M&A league tables.In global inv
317、estment banking,we have realized several large-scale M&A deals exceeding 1 trillion yen,with MS serving as the advisor and both MUFG and MS providing the financing.I believe this represents a unique value of our alliance that cannot be replicated by other financial institutions.Also,in the wealth ma
318、nagement space,we have and continue to leverage Morgan Stanleys top-tier global insights to build our advisory business and develop digital platforms,allowing us to enhance the services we offer to our clients.Kamezawa:Alliance 2.0 aims to deepen our existing collaborationand expand it into new area
319、s for the next decade and beyond.In July 2023,as part of this initiative,we announced new collaborations in foreign exchange trading and Japanese equity sales and research for institutional investors.Impleased to say that both projects launched smoothly.Pick:I feel the same way.In the foreign exchan
320、ge trading business,our collaboration has allowed us both to enjoy the benefits of greater scale and offer better service to our clients.Kamezawa:Collaboration in Japanese institutional equity*1 Katsunori Nagayasu:Bank President from 2008 to 2012,Holding Company President from 2010 to 2013.*2 Nobuyu
321、ki Hirano:Bank President from 2012 to 2016,Holding Company President from 2013 to 2019.How do you see the partnership and the journey between Morgan Stanley and MUFG so far?Whats the goal of Alliance 2.0?Sixteen years have passed since MUFG and Morgan Stanley initiated their strategic capital allian
322、ce in 2008.The top executives of both companies will discuss their journey so far and their outlook for the future.Alliance 2.0Hironori KamezawaMitsubishi UFJ Financial Group CEOEdward(Ted)PickMorgan Stanley CEOTop Management Dialogue between MUFG and Morgan StanleyMUFGs Corporate ValueMUFG Report 2
323、024Management MessageMUFGs Corporate ValueStrategies to Improve Corporate ValueFoundation Supporting the Corporate ValueData Section28collaboration in areas such as Sales&Trading.Weve also had great advancements in knowledge-related collaborations,such as in technology and support functions.Well con
324、tinue to explore various collaborations leveraging each others strengths to seize future business opportunities.Pick:Collaboration in global investment banking is a cornerstone of our alliance.As we anticipate a recovery in the US market,we look forward to continuing to build collaborative successes
325、 and are excited about further expanding our collaboration to capture the growth in Asia.Kamezawa:The foundation of our long-standing partnership has always been trust.Since the beginning of our alliance,MUFG has consistently sent secondees to Morgan Stanley,with the total number of dispatched emplo
326、yees reaching nearly 100.These employees,having gained on the ground experience at MS and absorbed top-level industry knowledge,have become a significant asset for MUFG.This spring,we held the Secondee Alumni Forum for former secondees to Morgan Stanley,which was a great success.We believe that the
327、relationships built through all levels,including the GSC,nurture the trust at all levels,and will serve as the foundation that supports our alliance in the future.Pick:The sentiment is mutual.We remain committed to our alliance with MUFG and are eager to take the next step forward.Although the last
328、few years were marked by uncertain markets globally,our partnership only grew stronger.Looking ahead,I am excited by what we will achieve in this new chapter with our most valued partner,MUFG.business including sales,research,and corporate access also raised the momentum for further collaboration be
329、tween the joint venture entities in Japan.The combined operating net income of MUMSS and MSMS for the fiscal year 2023 came in second among all Japanese securities companies,just behind Nomura Securities.With further collaboration between the two entities,our aim is to be the top securities firm in
330、Japan.Pick:Alliance 2.0 expands upon an already historically successful partnership by establishing new areas of collaboration.We will continue to explore opportunities to expand going forward.Pick:Morgan Stanleys business strategy remains largely unchanged.Our Institutional Securities,Wealth Manage
331、ment,and Investment Management businesses are all best in class.The synergies between the businesses are our strength,but also represent an immense opportunity.Building on the foundation that James laid,we strive to continue growing in all areas.Kamezawa:Our executive teams have deepened communicati
332、ons through the Global Steering Committee(GSC),which meets face-to-face twice a year,alternating between Tokyo and New York.The relationship with Morgan Stanley has been deepened through these opportunities across different levels of management,and we look to further deepen this under Teds leadershi
333、p as CEO.Ive known Ted for over 20 years now and while we have a close relationship,its about building and disseminating the same level of trust and relationship across all layers of the organizations.That will become the foundation for our expanding collaboration.Pick:That is accurate.The dinners we have alongside the GSC always bring together a diverse group of people and is a great opportunity