Mitsubishi UFJ Financial Group Inc. reported its highest nine-month profit since its founding, as rising global interest rates boosted lending income and fee businesses showed strong growth.
Net income surged 35% to ¥1.75 trillion ($11.1 billion) in the nine months through December from ¥1.3 trillion a year earlier, the Tokyo-based lender said in a statement Tuesday. The bank has already achieved 99% of its full-year target with one quarter remaining.
Net interest income jumped 21% to ¥2.17 trillion, driven by improved lending margins and overseas acquisitions. The bank’s loan-deposit spread widened to 0.78% from 0.77% a year ago in domestic operations.
The megabank saw robust growth across its business segments, with customer-facing divisions posting a 30% increase in operating profits. Global commercial banking revenue rose sharply on strong performance from units including Bank of Ayudhya in Thailand.
Non-interest income also showed strength, with fees and commissions increasing 19% to ¥1.41 trillion. The bank benefited from gains on equity holdings sales of ¥488.1 billion as it continues reducing cross-shareholdings.
Expenses rose 15% to ¥2.41 trillion due to overseas expansion and inflationary pressures. The bank’s credit costs remained contained at ¥251 billion.
The results highlight how Japanese banks are finally seeing profits improve after years of ultra-low rates squeezed margins. Last month’s interest rate hike by the Bank of Japan could provide additional lift going forward.
