(Aug 3): Mitsubishi UFJ Financial Group Inc’s profit rose more than analysts anticipated, capping another bumper quarter for Japan’s biggest banks.

Net income climbed 48% from a year earlier to ¥809.4 billion (RM21.14 billion) in the three months ended June 30, Japan’s largest lender said Monday. That exceeded analysts’ ¥633.4 billion average estimate and put the firm on course for another record year. All its business units performed, led by global markets and corporate and investment banking business.

Lending income jumped, as MUFG joined its peers in benefiting from rising domestic interest rates and robust loan demand. The firm also got a boost from its position as the largest shareholder in Morgan Stanley, whose profit jumped thanks to a boom in equity trading and wealth management.

MUFG kept its forecast for net income to reach an all-time high of ¥2.7 trillion in the year ending March 31. Last week, Sumitomo Mitsui Financial Group Inc and Mizuho Financial Group Inc also reported results that exceeded analysts’ expectations. Mizuho, the third-largest lender, raised its annual profit forecast and expanded a share buyback programme.

A weaker yen has also been pushing up the value of the banks’ earnings generated abroad, although the currency has gained in recent days as US and Japanese authorities coordinated their first joint intervention in 15 years.

Return on equity, a gauge of how well the company uses investors’ capital, climbed to 14.4% from 10.8% a year earlier, MUFG said in a presentation.

The results were also lifted by income from offloading shares held in client companies, at a time when Japanese stocks touched a record. Its gains on sales of equity securities more than tripled from a year earlier to ¥98.9 billion.

Rising interest rates and geopolitical risks have yet to make a sizeable dent in credit quality. Bad-loan costs totalled ¥72 billion in the quarter, well within the Tokyo-based bank’s full-year projection of ¥350 billion.

Shares of MUFG closed 0.1% lower in Tokyo before the results, slightly paring this year’s gain to 43%. Japanese bank shares have surged since the Bank of Japan ended its negative interest-rate policy in March 2024, letting them charge more for loans.

Led by CEO Junichi Hanzawa, MUFG has revived a goal of becoming one of the world’s most valuable banks. The lender last month briefly overtook Toyota Motor Corp as the biggest Japanese company by market capitalisation.

Morgan Stanley accounted for more than a quarter of MUFG’s net income in the period. The Japanese bank took a stake in the Wall Street firm at the height of the global financial crisis in 2008, and the companies jointly operate a pair of securities ventures in Tokyo.

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