Mitsubishi UFJ reports $2.6 billion annual loss

[May 19, 2009]  TOKYO (AP) -- Mitsubishi UFJ Financial Group Inc. sank into losses for the fiscal year ended March 31, battered by write-downs on securities amid a market plunge, but Japan's top bank said Tuesday it expects to return to profit this fiscal year.

Last week, Japan's two other megabanks, Mizuho Financial Group Inc., and Sumitomo Mitsui Financial Group Inc., said they tumbled into steep annual losses, hit by bad loans and plunging share prices set off by the global financial crisis. They are also expecting to turn a profit this fiscal year.

Tokyo-based Mitsubishi UFJ reported a group net loss of 256.95 billion yen ($2.6 billion) for the fiscal year ended March 31, a reversal from 636.62 billion yen profit in the previous year. It was the group's first red ink since its launch in 2005, from the merger of Japanese banks.

The result was in line with the bank's revised projection announced earlier this month, when it lowered its forecast to losses from a small profit.

Mitsubishi UFJ said it expects a 300 billion yen profit for the fiscal year through March 2010.

Revenue for the fiscal year ended March sank 11.2 percent to 5.677 trillion yen, as the bank lost money in securitized products and related investments, and fees from commissions and other businesses also declined, it said.

Although Japanese banks have weathered the U.S. subprime mortgage crisis with smaller losses then their Western counterparts, they have been hurt as the global slowdown gathered momentum.

Cross-shareholding arrangements with Japanese companies for fostering business ties have hit the banks' results because of a drop in stock prices. Bad loans have also been growing amid the hard times.

Mitsubishi UFJ stock rose 4.2 percent to 617 yen. Earnings were announced after trading ended in Tokyo.

[Associated Press]

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