Mitsubishi UFJ Financial Group (MUFG), Japan’s largest banking group, has unveiled a strategic target to achieve a net profit of at least 1.6 trillion yen ($10.2 billion) by fiscal 2026, Nikkei reported. This target was announced ahead of their detailed earnings presentation set for Wednesday, marking a significant rise from the previous goal set through fiscal 2023.
The new profit objective positions MUFG just behind Toyota Motor in terms of profitability among Japanese corporations, and ahead of major trading houses like those backed by Warren Buffett’s Berkshire Hathaway. The ambitious goal is in response to the favorable shifts in interest rates, with MUFG’s consolidated assets totaling 397 trillion yen at the end of December, substantially more than its local competitors.
As Japan moves away from negative interest rates, MUFG is poised to benefit significantly. The bank has also diversified its investments, including stakes in a non-bank financial institution in India and several fintech ventures across Southeast Asia, expecting these markets to drive future growth.
MUFG’s plan includes a proactive approach to fostering corporate capital expenditure, especially in initiatives supporting decarbonization. The bank will also focus on social impact, aiming to extend financing to 14 million people in Asia through digital platforms, including microloans targeted at lower-income demographics.
Further emphasizing sustainability, MUFG has updated its environmental and social sustainability goals, now aiming for 100 trillion yen in relevant investments and financing from fiscal 2019 to 2030, a significant increase from the previously set goal of 35 trillion yen.
MUFG President and Group CEO Hironori Kamezawa expressed a shift from the prior cost-cutting strategies to an aggressive growth-oriented approach over the next three fiscal years. This includes new investments in the retail and asset management sectors and potential innovations in physical banking branches to enhance customer engagement.
The bank has also streamlined operations, reducing the number of branches and shedding less profitable businesses, thus improving business efficiency. However, MUFG faces increasing competition not only from traditional banks but also from tech firms like Rakuten Group and KDDI in the evolving financial landscape.
This strategic overhaul reflects MUFG’s commitment to leverage higher interest rates and technological advancements to secure a leading position in the global financial arena.
