(Bloomberg) — Mitsubishi UFJ Financial Group Inc.’s profit jumped in the third quarter, beating estimates and wrapping up a strong earnings season by Japan’s biggest banks.
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Net income at the country’s largest lender rose 32% from a year earlier to ¥490.7 billion ($3.2 billion) in the three months ended Dec. 31, according to Bloomberg calculations based on nine-month results released on Tuesday. That exceeded the ¥322.2 billion average of four analysts’ estimated compiled by Bloomberg.
Japanese banks are benefiting from rising interest rates following more than a decade of ultra-easy monetary policy. Profits are also being boosted by gains from offloading shareholdings in client companies as part of efforts to boost corporate governance.
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Tokyo-based MUFG virtually reached its full-year profit goal with a quarter to spare, earning a record ¥1.749 trillion in the nine months. It left the ¥1.75 trillion annual goal unchanged.
MUFG expects “steady growth in customer segments and progress in the sale of equity securities” in the fourth quarter. Gains from sales of stockholdings will help the bank take steps to enhance future profitability, such as rebalancing its bond portfolio, it said. It plans to adjust its foreign bond holdings in the three months, including disposing of notes with paper losses.
Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. earlier reported third-quarter profit that also beat analysts’ estimates and left them on track for record annual earnings.
Like its rivals, MUFG gave estimates for how much extra income it expects to earn from the Bank of Japan’s rate increases. For example, the lender expects the latest hike conducted last month will add about ¥100 billion in the first 12 months.
Shares of MUFG climbed 0.8% at the close of trading in Tokyo before the announcement. The stock last month touched the highest price since its 2001 listing.
Before the results were released, MUFG’s Chief Financial Officer Jun Togawa said the bank needs to continue to invest in the business to sustain profit growth and attract global investors.
“We need to make growth investment constantly,” Togawa said in an interview. “We will do that considering the balance with shareholder returns.”
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