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Mitsubishi UFJ Financial Group Inc (MUFG)
<8306.T> on Wednesday forecast a modest pullback in profit for
the business year that began in April.
Japan's biggest lender by assets will be buoyed by a greater
overseas reach than the other two "megabanks," analysts said,
underscoring the difficulty facing banks 17 months after Prime
Minister Shinzo Abe took office on a pledge to end 15 years of
deflation with loose-money stimulus policies.
Mizuho Financial Group Inc <8411.T> and No. 3 lender Sumitomo
Mitsui Financial Group Inc (SMFG) <8316.T> both forecast
double-digit relapses in profit this business year.
"The Abenomics effect - rises in stock prices driven by low
interest rates - comes first," Mizuho President Yasuhiro Sato
told reporters. "The link to increased funding demand comes from
here on."
MUFG said net profit rose 15.5 percent last business year to
984.8 billion yen ($9.63 billion), above the 944.1 billion yen
mean estimate of 19 analysts polled by Thomson Reuters.
But for this year, MUFG - which owns about one-fifth of Morgan
Stanley <MS.N> - expects profit to slip 3.5 percent to 950
billion yen, still above the analyst forecast of 907.6 billion
yen.
Mizuho's net climbed 23 percent to 688.42 billion yen, beating
the analyst estimate of 664 billion yen. The bank expects profit
to fall 20 percent this business year to 550 billion yen, near
the market estimate of 558.2 billion yen.
SMFG booked a 5.2 percent profit rise to 835.36 billion yen,
above the 799.8 billion yen consensus, but expects a pullback of
19 percent to 680 billion yen, near the market view of 689.7
billion yen.
Japan's Nikkei 225 Stock Average <.N225> rose 20 percent last
fiscal year but is off 3 percent so far this business year as
investors grow impatient that Abe will introduce the hard
structural reforms to the word's third-biggest economy that are
considered essential for sustainable growth.
MUFG, which aspires to be a top 10 U.S. bank by 2016, paid about
$5 billion in December for 72 percent of Thailand's Bank of
Ayudhya PCL <BAY.BK>, adding 2 trillion yen to MUFG's overseas
loan book.
The purchase will start boosting MUFG's profit in earnest this
year, said analyst Nana Otsuki at Merrill Lynch Japan Securities
before the results. Considering the profit relative to the
amount of capital, however, MUFG's advantage is not particularly
strong, Otsuki said.
($1 = 102.2250 Japanese Yen)
(Writing by William Mallard; Editing by Christopher Cushing)
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