Committed to empowering a brighter future.

MUFG Report
2024
Integrated Report

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MUFG Report 2024

What’sMUFG Way
Challenge and Agility
MUFG Way
PurposeCommitted to empowering a brighter future.

ValuesIntegrity and Responsibility

ValuesPurpose

VisionEvery employee will take on challenging
endeavors with a sense of ownership of the
MUFG Way with the new MUFG Value of“agility,” with all playing the leading role.

Professionalism and Teamwork
Challenge and Agility

VisionBe the world's most trusted financial group

Code of Conduct

So as to continuously be chosen by ourcustomers in an era of accelerating changes.

Code of Conduct

My WayMUFG Way

Individual
beliefs
and values

Company
Purpose /Values / Vision

Personal definitions of the MUFG Way
MUFG Way – Bringing it to life

MUFG Way serves as the basic policy in conducting our businessactivities, and provides guidelines for all group activities.
MUFG Way also is the foundation for management decisions, including
the formulation of management strategies and management plans, andserves as the core value for all employees.

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Editorial Overview
Editorial Structure

Information Disclosure System
Environmental

Officer in Charge of IR

SocialGovernance

Financial

Group CEO

Integrated Report
Group CFOGroup CSO

Sustainability Report
Financial Planning
Division

Corporate Administration
Division

Corporate Planning
Division• Collaborates on SR*2
• Collaborates on governancedisclosure

Office of the CFO

Investor Relations OfficeSustainability Office

TNFD
Report

TCFD
ReportTransition
White
Paper

Asia
Transition
White
Paper

Corporate
Governance
ReportHuman
CapitalReport• Collaborates on ESG

Collaborates on debt IR*1

Institutional investors, individual investors, publications• Response to institutional investors andanalysts• Response to rating agencies• Response to bond investors, debt IR• Overseas SR

Human
RightsReportClimateReport• ESG• Holding seminars• Response to individual investors,
holding seminars• Publications such as Integrated Reports

ESG Data Book
Annual Report*1 IR for bond investors *2 Shareholder Relations: Response to shareholders

Editorial Overview
To best explain our efforts to create sustained value to our investors and otherstakeholders, we, Mitsubishi UFJ Financial Group, or MUFG, have compiled thisintegrated report, MUFG Report 2024, with reference to such guidelines as theInternational Framework recommended by the IFRS Foundation as well as the
Guidance for Collaborative Value Creation issued by the
Ministry of Economy, Trade and Industry.
Further details on our financial status and sustainability
initiatives are available on our website. In addition, ourplans call for issuing the MUFG Sustainability Report 2024,
a publication detailing our response to sustainability
issues, in September 2024 or later.

Reporting Period
April 1, 2023 to March 31, 2024 (The report includes some information pertaining to activities undertaken up to July 2024.)
Disclaimer
This report contains forward-looking statements with regard to the expectations, forecasts, targets and plans of Mitsubishi UFJ Financial Group,
Inc. and its subsidiaries and affiliates. These forward-looking statements are based on information currently available to the Group and are statedin this document on the basis of the outlook at the time that this document was produced. In producing these forward-looking statements,
certain assumptions (premises) have been utilized that are subjective and may prove to be incorrect. Should any underlying assumption prove
to be incorrect, actual results in the future may vary materially from some of the forward-looking statements in this document. The Group has
no obligation or intent to update any forward-looking statements contained in this document. In addition, information on companies and otherentities outside the Group that is included in this document has been obtained from publicly available information and other sources. The
accuracy and appropriateness of that information has not been verified by the Group and cannot be guaranteed. All figures contained in thisreport are calculated according to generally accepted accounting principles in Japan, unless otherwise noted.

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CONTENTS

2 MUFG Way
3 Editorial Overview
4 CONTENTS

30 Building MUFG’s Economic Sphere in Asia

5253(2) Vibrant Society
Startup Support

Foundation Supporting
the Corporate Value
66 Foundation Supporting the Corporate Value
67 Messages from Outside Directors

Management Message
5 CEO Message
32 Asia x Digital Platform Supporting the MUFG
Economic Sphere

Strategies to Improve Corporate Value
13 A Guide to Quickly Understanding Where
MUFG Is Now
14 Regarding the Administrative Action by
the Financial Services Agency
15 Message from the CFO

MUFG’s Corporate Value
22 MUFG’s Corporate Value
23 Medium- to Long-Term Vision
24 Value Creation Model
25 Trajectory of MUFG’s Corporate Value
Enhancement
26 MUFG’s consolidated strength for Creating
Corporate Value
27 Business Portfolio Supporting MUFG Growth
28 Top Management Dialogue between MUFG
and Morgan Stanley

33 Strategies to Improve Corporate Value
34 Review of the Previous Medium-TermBusiness Plan (MTBP)
35 Medium-Term Business Plan (FY2024–FY2026)
36 Expand & Refine Growth Strategies
38 (1) Strengthen Domestic Retail Customer Base39 (2) Strengthen Corporate × WM Business40 (3) Evolve GCIB-GM Integrated Business Model
41 (4) Strengthen APAC Business and Platform
Resilience
42 (5) Contribute to Making Japan a Leading
Asset Management Center
43 (6) Support Value Chain in Green
Transformation (GX)
44 (7) Challenge to Build a New Business
Portfolio
45 Results by Business Group46 Drive Social & Environmental Progress
47 CSuO Message

48
49(1) Sustainable Society
Promoting Sustainable Business

50

Responses to Climate Change

54 (3) Resilient Society
55 Accelerate Transformation & Innovation
56 CHRO Message

58(1) Acceleration of Agility Transformation

5960(2) Enhance Human Capital(3) Enhance AI/Data Infrastructure6162(4) Increase System Development
Capability
Experienced Hire Round Table

65

Highlights of Transformation

69 Corporate Governance
77 Risk Management / Cyber Security
78 Compliance / Internal Audit
79 Initiatives for Practicing a Customer-Oriented
Approach
80 Ten-Year Summary of Major Financial Data
81 Performance Comparison with Competitors
82 Company Overview

Definitions of figures used in this document
Consolidated: Mitsubishi UFJ Financial Group (consolidated)
Non-consolidated: Simple sum of MUFG Bank
(non-consolidated) and Mitsubishi UFJ
Trust & Banking Corporation(non-consolidated)the Bank (consolidated): MUFG Bank (consolidated)
DS: Digital Service
R&C: Retail & Commercial Banking
R&D: Retail & Digital
CWM: Commercial Banking & Wealth Management
JCIB: Japanese Corporate & Investment Banking
GCIB: Global Corporate & Investment Banking
GCB: Global Commercial Banking
AM/IS: Asset Management & Investor Services
MUFG: Mitsubishi UFJ Financial Groupthe Bank (BK): MUFG Bank
the Trust Bank (TB): Mitsubishi UFJ Trust & Banking Corporation
the Securities HD (SCHD): Mitsubishi UFJ Securities Holdings
MUMSS: Mitsubishi UFJ Morgan Stanley Securities
MSMS: Morgan Stanley MUFG Securities
MS: Morgan Stanley
NICOS: Mitsubishi UFJ NICOSMUAH: MUFG Americas Holdings Corporation
MUB: MUFG Union Bank
KS: Bank of Ayudhya (Krungsri)
Bank Danamon (BDI): Bank Danamon Indonesia
FSI: First Sentier InvestorsMUFG Report 2024

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Management Message

CEO Message

Unleashing Potential,
Honoring Our Purpose
Hironori Kamezawa
President & Group CEOMUFG Report 2024

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Notice to Stakeholders: The Financial Services Agency
has taken administrative action regarding inappropriate
handling of customer information and solicitation
concerning MUFG Group’s banking-securities collaborative
business. We sincerely apologize for the inconvenienceand concern this has caused our stakeholders. We take thisadministrative action very seriously and have establishedan improvement plan focused on more effective andspecific measures to reinforce internal control systems.
Details appear on page 14. We will diligently execute theimprovement plan as a Group and implement measures
to prevent recurrence. Our priority is to restore any
compromised trust as swiftly as possible and remain fullycommitted to sustainable growth.

Has MUFG really changed?
“Mr. Kamezawa?”
As I was taking a walk in my neighborhood last autumn, a jogger
approached and ran past me. He then turned around suddenly
and called my name.
“I think MUFG has changed. I just wanted to tell you.”
It caught me off-guard and I wasn’t sure what he meant. But heexplained with a smile that he was a former MUFG employee
who now works for an overseas corporation. He was validating abelief I expressed in these pages last year: MUFG is changing forthe better – and people are noticing.
If a former employee familiar with our company observes fromoutside that we’ve evolved in a positive way, perhaps we truly have.
In fact, this was the third time something like this had recently
happened. Our speed of decision-making, the atmosphere of ourinternal discussions, the expansion of our overseas online network– all these elements and a number of others have been elevated at
MUFG. They seem to have translated into material improvementsthat our stakeholders notice.
However, we still get our share of negative feedback; some of itworks its way through the organization to reach me – but likely
just a small percentile. So as I resumed my walk, I found myself
wondering, has my own experience at MUFG changed
accordingly? My daily work life has a procedural rhythm. I arriveat the office about the same time on most days. My workstyle,meetings, interactions, even business dinners, all seem to fit afamiliar pattern. I have to wonder how much status quo remains
static throughout our company.
Organizational inertia is not unique to MUFG, but the fact is wehave too many meetings, including meetings to prepare formeetings. Some of our policies and procedures remain ossified.
Important aspects of our organization continue to move
forward, but the core is hard to budge.
I initiated fundamental reforms when assuming the role of CEO
four years ago – reforms in Culture, Business, and Process – topropel our transformation forward. Today, we see progress,
although in my estimation we’re considerably less than halfway
toward our goal – so the real work lies ahead if we are to set into
motion a virtuous cycle of perpetual improvement. This means
doubling down on our commitment to cultural reform at MUFG.
This commitment therefore pervades our new Medium-TermBusiness Plan (MTBP) that launched in April 2024. And in thefollowing pages, I wish to explain why and how, beginning withthe current environment and global economic trends.

Challenges arising from our environment
and economic trends.
First, our current environment. We live in an era of unprecedented
division among societal sectors, including nationalities,
economies, policies, cultures, communities, and individuals –divisions that can be traced in some cases to decentralization
caused by diversifying needs and values across the globe.
Nations witnessing the US and China locked in a historic power
struggle are adopting distinct and often unique positions on
global affairs, including the Middle East conflict and the war in
Ukraine. The international order is growing more fragmented
and chaotic, and its tensions will not be resolved soon. We mustfactor this into our business considerations.
Digital technology has fueled diversification in significant ways,
placing power in individual hands to instantly fulfill personalized
needs. This “power to the person” makes ultimate democracy
more than a theoretical possibility, and has even given rise tosuch movements as the Decentralized Autonomous Organization.
At the same time, despite divisions it helped create, digitaltechnology also makes it much easier for people to connect andcreate new virtual communities linked through shared values
that transcend borders of all kinds.
These complex developments – rife with contradictions – have
momentum that shows no end. Generative AI is making inroads
into everyday lives and will be a game-changer that transforms,

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Management Message

CEO Message

even upends, more than a few business models very soon.
Indeed, 2024 marks the advent of the generative AI era*1, an
inflection point on society’s path to a digitalized future. MUFG
must be a vital player in that future.
Regarding the global economy, as inflationary trends settle in
the US and Europe, monetary policy will ease and interest rates
will seek equilibrium. In Japan, a normalized interest-rateenvironment is emerging as the prolonged regime of low
interest, low inflation, and low wages finally abates. Businesses
will pursue higher returns and feel a stronger need for assetvalue growth to surpass inflation, assuming reasonable interest
payments and costs. And customers will have higher
expectations for asset formulation and investment returns.
This presents a significant opportunity for the Japanese economy,
which has been stagnant for three decades. I believe that asJapan’s largest financial institution, MUFG has a duty – and ability– to help restore a growth trajectory to its mother market.

Medium- to Long-term Vision*2
In developing our MTBP, we dove deeply into topics including
the macroeconomic environment, our strengths andweaknesses, our competitors’ activities, social trends, and our
vision for finance in five to ten years. We shared a rich variety ofperspectives at our Management Focus Meeting, a periodic
gathering of about 20 leaders we began a few years ago. Thisbody includes the C-Suite*3, business-group heads, and top
management from the Bank, Trust Bank, and Securities, andfunctions as my “Cabinet.”

Column 1

An Era of AI-Natives

With the emergence of generative AI, we’ve entered an era
that could be called the “DX of human thinking” marked byoutsourcing elements of human thought – essentiallyrelegating part of the process to digital “minds.” Working intandem with intelligent learning devices can deepen ourcomprehension, interactions, and productivity in ways
beyond our current imagination.

ability to write its own program to solve a proof problem shows
deductive reasoning capability – a genuine paradigm shift.

I’m not alone in envisioning a world on a fast-approachinghorizon where AI is incorporated into all manner of products
and services. As generative technologies become refined, andtheir costs decrease through intense competition, issues likeso-called machine “hallucinations” of false results will resolve,
and generative AI will become faster, safer, and more accurate– a game-changer not just for business but society as a whole.

Eventually – maybe soon – the primary difference between AI
and humans might be blood & bone, and emotions. Just as
people with no experience in a given field can master it bygleaning knowledge from a deep library of various media, aworld where AI can learn, grasp, and genuinely understandcomplex concepts seems just around the corner.

Let me put on my mathematical sciences hat for a moment,
to share how shocked I was recently to hear a university
professor specializing in artificial intelligence claim that
“Generative AI is now capable of deductive reasoning.”

In our immediate future, AI will touch virtually everything, andonly technology developed in tandem with AI will be able tomaintain a competitive pace of productivity. “AI native”
human resources will be required to integrate AI into allorganizational aspects touching human behavior.

This was stunning news. Generative AI has until now been
deemed capable only of inductive reasoning, analyzing
massive volumes of data to reach a probable conclusion using
the large-language model. It was considered incapable ofsolving mathematical problems requiring deductive reasoning.

With this sense of urgency, we’ve established an intelligenceteam at MUFG, charged with addressing this question: Howwill AI change the world?

But AI recently solved a proof problem in geometry by
combining a language model with a symbolic deductionengine that derives conclusions by applying logical rules tosymbols. Programming is a way of logical reasoning, so AI’s

Now more than ever, humans are required to deepen andwiden their cognition, comprehension, and capabilities of
capturing the substance of complex matters. MUFG mustride the crest of this wave.

*2 Medium- to Long-Term
Vision Page 23*3 Chief Officer for each area such as Strategy, Finance, and Risk

I always urge these participants to share honest opinions on*1 Enhance AI/Data
Infrastructure Page 60

In a column for our MUFG Report last year, I wrote that AI still
fell short of truly understanding topics discussed in pages likethese – but apparently over the past year, it has drawn closer
to upending that assumption.

And this: How must MUFG change accordingly?

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Management Message

CEO Message

bridges connecting our diverse stakeholder communities. With
these abilities, MUFG intends to play a cohesive societal role bybringing various stakeholder communities together throughfinancial empowerment.
This concept is central to embodying our Purpose through our
new MTBP.

market capital is likely to achieve a top-ten rank. I feel confident
the market appreciates our efforts.
Regarding shareholder return, we’ve maintained ourprogressive dividend policy and increased dividend-per-share
for FY2023 to 41 yen, up from 25 yen in FY2020 – a 64%
dividend growth. And we repurchased 1 trillion yen of shares
during the plan’s three years, exceeding 2.2 trillion yen in total
shareholder return.

Review of our previous three-year plan.*4
matters beyond their business areas and positions. The crossdynamic of their thoughts has become more robust with eachmeeting, and added depth to our discussions in forging the
new MTBP.
This process ultimately led us to reaffirm the significance of
our stated Purpose, to be “Committed to empowering abrighter future.” We concluded that the ideal state is for MUFG
to embody this Purpose, our ‘reason for being,’ and it should beconsistent across the mid- to long-term. The question was,how can we accomplish this through our next three-year plan?
Historically, societies have evolved with connections among
nations, entities, communities, and individuals, drawing them
together for prosperity and fulfillment.
With forces of division now threatening these bonds ofconnection, the ability to build and sustain bridges spanning
all manner of borders becomes more significant. A bridge
requires a trustworthy foundation – in our case, the trust
earned through our long heritage, our formidable customer
base, and the global reach of our network. MUFG groupcompanies also have the unique ability to build meaningful

During our previous MTBP, we defined our stated Purpose, shifted
our management focus to foster more colleague engagement,
and instigated cultural reform. We directed management
attention squarely toward return on equity. And we achieved
results related to each of the plan’s pillars: Corporate
Transformation, Growth Strategy, and Structural Reform.
Over three years – in a challenging environment – westrengthened the earnings power and resilience of our businessmodel. We substantially bolstered our risk-adjusted return by
improving profitability without increasing risk-weighted assets.
Our net operating profit increased by about 600 billion yen overthose three years, a multiple of approximately 1.5 times, primarily
in customer segments. And completing the sale of Union Bankin the US was emblematic of structural reform, a demonstrationof bold, decisive, swift, impactful action.
We repeatedly stated that ROE was our most significant
commitment, and in the final year of that previous MTBP, ROE
reached 8.5%, notably exceeding our 7.5% target. Share pricetripled in three years, outperforming other megabanks andmajor global financial institutions. And in the near future, our*4 Message From the CFO
Pages 15-21

Aspirations of our new three-year plan.
Building on successes of the previous plan, we position our
new MTBP as “three years to pursue and produce growth.” We
will deploy our growth strategies while addressing prominentsocial issues head-on, and speed our own transformation to
improve corporate value. Because our earnings power
improved during the previous plan and our business modelgrew more resilient, we’re deploying these strengths withsingular focus to speed growth over the next three years.
We’re becoming more assertive in seizing opportunities
presented by green transformation (“GX”)*5, digitaltransformation (“DX”)*6, and the normalized interest environment
in Japan as we undergo structural transformation.
In an intensely competitive and mercurial environment, successrequires assertive strategies – but also a solid foundation. To
draw an analogy from the game of Go, success builds on boldly
attacking an opponent’s territory while fortifying weak areas inyour own. In business terms, this means deploying aggressive
growth strategies while investing in human capital andinfrastructure such as IT systems, AI, and data platforms.

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Pillars of the new MTBP.*7
Our new MTBP consists of three pillars, Expand & Refine Growth
Strategies, Drive Social & Environmental Progress, and
Accelerate Transformation & Innovation.
We developed the first pillar, Expand & Refine Growth
Strategies, with analytics across areas of potential growth
based on products and channels, then articulating sevenstrategies for maximum competitiveness in each sector.
These strategies include:
1.	Enhancing our retail customer base to maximize LTV –lifetime value – and2.	Strengthening our succession business by accelerating the
Corporate & Wealth Management model, primarily togenerate growth in Japan.
Our overseas strategies include:
3.	Collaboration between GCIB and Global Markets to build
profit, and
4. Cooperation with partner banks for growth in Asia.
Our focus on
5. Asset Management and6. GX
is on social issues and fortifying both economic value and social
values as we
7.	Build a new business portfolio to drive medium- to longterm growth.
A few key examples:
Enhancing our retail customer base, in terms of strategy 1.*8
Deploying this strategy requires targeted efforts, including*7 Expand and Refine Growth
Strategies Pages 36-37

within our diverse portfolio and propose blends to match acustomer’s life stage. For instance, a customer with an MUFG
Bank deposit account at the core might choose an option toenhancing customer touchpoints with an optimal mix offace-to-face, remote, and digital channels. Business groups will
create seamless connections among products and services

Column 2

Taking Ownership of “Purpose”
As I entered young adulthood and began considering mylife’s path, that early inflection translated into a clear desire:to make a useful contribution to society. I majored inmathematics at university and graduate school, but foundmyself at a crossroads, a choice between pursuing math atan academic level or entering the real-world workforce.
Even now, the beauty of mathematics attracts me, but mydrive to contribute directly to society won out.

In developing our new MTBP, we discussed what toembody as a leading Japanese financial institution fromevery pertinent angle we could reasonably conceive. This
process led us to reaffirm the significance of our Purpose– to be “Committed to empowering a brighter future.”
This corporate Purpose serves as a unifying force among
diverse viewpoints in our leadership discussions. It is also
an abiding North Star for decisions and actions we takeevery day.

Whenever discussing ‘My Way’*9 with colleagues, I touchon the importance of personal interpretations of the MUFG
Way. ‘My Way’ encompasses individual beliefs and values,
whereas the MUFG Way reflects the company’s statedPurpose. An individual’s interpretation of the MUFG Way
represents the intersection where personal and corporate
values coalesce – and ideally, align.

To fully harness this ‘power of purpose’ at an organizational
level, the ideal is for each colleague to internalize apersonal interpretation of purpose through the lens of
one’s life work. This is why MUFG consistently offers andpromotes opportunities for colleagues to gather anddiscuss their own view of ‘purpose.’
When I share my view of what I call “My Way” – personalcore values and beliefs – I say it was likely shaped by timein a Catholic kindergarten, where I was exposed to the daily
practice of compassion and acceptance, and a natural
inclination toward objective observation. These caused anearly and lasting inflection point.

*8 Strengthen Domestic RetailCustomer Base Page 38

My personal definition of the MUFG Way involves providing
our colleagues, and our stakeholders across society, withtools they can use to empower a brighter future. It ismanagement’s responsibility to create a transparent andworker-friendly environment that encourages us all tomove forward. The more colleagues who process andapply the MUFG Way in a personal dimension, the stronger
our company and its contributions become.

*9 What’s MUFG Way Page 2
MUFG Way –Bringing it to life Page 65

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Management Message

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bundle products and services as varied as credit cards,
housing loans, and securities, while earning incentive points forchoosing MUFG services.
Creative collaboration with external partners is valuable fordeveloping fresh ideas to expand our customer base. Since
2022, MUFG has engaged in “Banking as a Service (BaaS)” toprovide financial functions through third parties. For example,
starting with “d smart bank” – a digital account-services
product jointly developed with NTT DoCoMo – we have also
promoted BaaS offerings such as asset-formulation support
through a synergistic platform called “Money Canvas” intandem with various corporations.
We have agreed on a capital and business alliance with
WealthNavi Inc. as well, involving a platform providing“comprehensive proposals on money” tailored to eachcustomer’s life stage. Collaborations like this, with partners
offering unique strengths, help our business grow with fresh
ideas and new technologies.
Cooperation with partner banks for growth in Asia, in termsof strategy 4.*10
Unlocking the potential of our second mother market – Asia
outside Japan – is key to our overseas growth strategy.
A decade has passed since we began investing in Asianpartner banks. These partners have since grown significantly
and helped us accrue business management expertisethroughout the ASEAN region and establish a conventional
financial platform in Asia. We now have the world’s largest
lending exposures in APAC outside of China and Hong Kong.
To build a unique economic zone for MUFG over the next	*10
• Building MUFG’s Economic
Sphere in Asia Pages 30-31• Strengthen APAC Businessand Platform Resilience
Page 41decade, we will consolidate the conventional platform with one
newly created through investments in businesses that offer
digital financial services. These investment targets will help us
address the social issue of financial inclusion in Asia, throughdigitalized services for customers with little or no access to
traditional financial tools.

These are some key examples, among others, of how our new
MTBP strategies will generate growth in Japan and capture theupside of growth overseas, starting with Asia – while beingsocially relevant by promoting solutions to issues confronting
the global community.

Supporting the government policy of “Promoting Japan asa Leading Asset Management Center,” in terms of strategy 5.*11
This policy is an ambitious project in which the government’s
goal is to connect excess capital – mainly from households,
concentrated in deposits and savings – with GX and DX
investments by large corporations, meeting funding needs ofstartups showing solid prospects. As this builds Japan’s overall
growth capacity, returns will be allocated to households, which
will in turn be connected to new growth investments,
completing a virtuous cycle.

The second pillar is to Drive Social &Environmental Progress.*12

This expansive project – not limited to Japan – will link
investment capital to opportunities globally, and allow MUFG
to contribute as a comprehensive financial services group,
offering direct and indirect financial functions, touchpoints fora wide range of customers, and the reach of a global network.
Finally, we have decided to make Mitsubishi UFJ AssetManagement a subsidiary of the holding company as the
fourth foundational MUFG cornerstone, joining the Bank,
Trust Bank, and Securities. We will enhance its capabilities
and double its assets under management by the end of
FY2029. We will also leverage revision of the Nippon
Individual Savings Account system to support flow of funds
from savings to investment, and promote financial literacy
efforts to help each new generation flourish through financial
and economic understanding.

	*11Contribute to Making Japana Leading Asset Management
Center Page 42

In developing this pillar, we identified ten priority issues under
the subheads Sustainable Society, Vibrant Society, andResilient Society.
Given society’s heightened interest in GX, serving economic
and social values in tandem has become an integral
component of building corporate value. To effectively build ourown prosperity, we should serve not only customers’ financial
value but also stakeholders’ social values.
For example, to achieve a carbon-neutral society, MUFG canserve social values by supporting technology emerging to
reduce CO2 emissions. This leads to new approaches being
more widely recognized and ultimately integrated acrosssociety, with the effect of promoting decarbonization – andexpanding economic value concurrently for customers andother stakeholders. Financial value, including interest and fees,
will then accrue to MUFG in return for our services. Helping
society move toward carbon neutrality will also build MUFG’ssocial value. As illustrated above, it is vital for us to maintain amindset of making connections among the economic andsocial values of MUFG and our stakeholders – not limited tocustomers – and enhance both forms of value synergistically.

	*12• Drive Social & Environmental
Progress Pages 46-54•C SuO Message Page 47

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Our previous MTBP business strategies focused on social
issues. Our new plan shifts into a higher gear with strongemphasis on social impact. We have set specific Key
Performance Indicators – KPIs – for priority themes and will
vigorously promote initiatives driving them.
Certain priority themes in our MTBP are especially pertinent:
Climate change measures, natural capital, and biodiversity
restoration.
Regarding climate change measures*13, MUFG issued a“Transition White Paper 2023” to promote understanding
among stakeholders – notably, Western policymakers – of ourinternal initiatives and targets outlined in our Carbon Neutrality
Declaration, and of Japan’s progress along its roadmap toward
carbon neutrality. We followed this with the “MUFG Climate
Report 2024” on our internal transition plan, including
processes for achieving our own targets.
The keys to MUFG’s transition plan are disciplined support fortransitioning, and monitoring progress toward our 2030 interim
targets. The report aims to promote various stakeholders’
understanding of our transitioning plan and initiatives.
In July 2024, I assumed the chair of the Glasgow Financial
Alliance for Net Zero (GFANZ)*14 Japan Branch – theorganization of financial institutions committed to accelerating
decarbonization – and from this vantage point I intend tocommunicate our commitment to act responsibly on the pathto carbon neutrality.
Natural capital and biodiversity restoration were also added toour priority themes. We published our MUFG Taskforce on
Nature-related Financial Disclosures Report*15 to promote*13
Promoting
Sustainable
Business
Page 49*14 A global alliance of financial
institutions to combat
climate change*15 Taskforce on Nature-related
Financial Disclosures

stakeholder understanding of our approach and the solutions
we offer customers in this sphere. Specifically, we will support
new technology with sustainability-related finance to the scaleof 100 trillion yen by 2030.
A vibrant society requires innovative startups and growthindustries that drive the economy. Accordingly, MUFG will
pursue transactions to fuel startups*16 that show strong growthpotential and are linked to solutions for social issues.
We have found that entrepreneurs today tend to establish
companies that address social issues, and have a keenawareness of social needs. They also make strong efforts toimprove corporate value and keep their enterprises on thattrack. Perhaps most important, their beliefs and sense of
purpose are reflected in their mission statements. We wish to
be their partner of choice in every stage of their growth,
providing support beyond financial services, such as helping
develop business strategies, in a spirit of genuine collaboration.

The third pillar is to Accelerate
Transformation & Innovation.*17
Cultural reform*18 is the core of corporate transformation. Our
previous MTBP emphasized what we call the MUFG Way – apledge of shared values – and efforts to drive transformation.
These included our headquarters building project, with its
sensitivity to contemporary workstyles; open-application
systems such as “MUFG SOUL”; CSR activities planned by
employees; and Spark X, a new-business incubator, whichamong other ideas has produced new “PROTHIRD” outsourcing
services for condominium Boards of Directors.

*16 Startup Support
Page 53*17 Accelerate
Transformation
and Innovation
Pages 55-61

A common thread among these efforts is how voluntarily andpassionately our colleagues engage in new projects. This indicatesthat a new mindset for welcoming challenges is taking root.
At the beginning of this message, I described encountering aformer colleague on a walk through my neighborhood. That
brief exchange supports a recent MUFG finding that close to
60% of our current colleagues feel that “the company haschanged for the better.”But much remains to be done. We must accelerate ourtransformation and focus more keenly on agility as an MUFG
cultural value that can strengthen customer trust. This is why
we revised how we express the MUFG Way by formally adding
Agility to our list of stated corporate values.
To embed its practice into our culture, we will categoricallyassess agility in performance evaluations, procedures, meeting
operations, roles, and authorizations, rigorously and without
exception. We aim to become a company where eachcolleague is expected – and equipped – to think independently,
make informed decisions, and act on them quickly.
It seems self-evident that colleagues are more engaged in aworkplace with transparent communication, where opinions areshared freely in an open and frank atmosphere regardless of title
or position, and – when assigned to a task – they can make quick
decisions that lead to subsequent appropriate action.
To support this environment, we place a high priority on
developing human capital*19. We intend to reward positive
outcomes from colleagues fulfilling their own sense of purpose
at work by encouraging them to take on new challenges, in linewith incentives in our revised personnel policies. Going*18 Experienced
Hire Round
Table
Pages 62-64

MUFG Report 2024

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12

Management Message

CEO Message

forward, we are dedicated to making substantial investments ina broad spectrum of human capital, which include offering our
employees opportunities for skill development. This meansaligning human-resources investments with businessstrategies, including an HR system geared toward enhancing
professional skills in the Bank, Trust Bank, and Securities; andexpanding education, training, and reskilling programs. We also
promote DEI*20, health, and productivity management for frankexchange of diverse opinions among colleagues.
Our fundamental commitment to the aims of this pillar is toimplement a range of corporate transformations for continued
sustainable growth, including software that supports the baseof all business activities, including cultural reform and humancapital investment; enhancing AI and data platforms; andstrengthening systems development resources.

Awakening our full potential.
Every January 1, I choose a single Japanese “kanji” logographic
character to represent a touchstone theme for the coming
year. This year, I chose:(‘Kaku’)This means ‘awaken’ and reflects my desire to embrace a newera – to refocus my own life philosophy on a personal level; andon a professional level to arouse the formidable capabilities of
MUFG as a positive force for change.
In January, I had the opportunity to host an interview session
with Mr. Shohei Ohtani*21, the Los Angeles Dodgers baseballsuperstar and longstanding MUFG spokesperson. I asked, “In*19• CHRO Message
Page 56• Enhancing Human
Capital Page 59

terms of mountain climbing, how far are you from your own
summit?” He said, “I’ve probably climbed 60 to 70% of the way.”
But he didn’t leave it at that; he went on to share his view thatthe projected height of a personal peak is aspirational andalways subject to change. “I’m not at my summit,” he said, “andI’d like to make it higher.”Ohtani was observing that those who actively seek growth are
different from those satisfied with the status quo. Alreadyhaving achieved so much, he still has not accepted limits andis recalibrating his potential ever higher.
Mr. Ohtani’s relentless pursuit of self-improvement is aninspiration to constantly challenge ourselves to grow,personally and professionally. He caused me to reaffirm mymission at MUFG – to awaken the full breadth and depth of ourvast capabilities for growth and for social contribution.
We will keep addressing social issues while evolving our growthstrategies, and press forward with our transformation into anentity that fully embodies our purpose of being “Committed toempowering a brighter future.”
I view our colleagues as the company itself. A team of
dedicated, skilled professionals who think independently,
communicate productively, and work together will by definition
form a strong organization. We want people who ask
themselves questions such as, What do I want to accomplish
at MUFG? What excites me about my work? What gives me asense of growth?

https://www.bk.mufg.jp/admin/modal/ohtani_special/index/crosstalk.html

does not require hidebound thinking in ossified organizations.
Instead, I envision MUFG as pursuing and producing vigorous
growth, committed to a bright, sustainable future, and unafraidof change in honoring these ideals.
Just as that neighborhood jogger professed to me in person
last autumn.
Thank you for your continued support as we strive toward
these goals.

Hironori Kamezawa
President & Group CEO

Financial institutions tend to be conservative – and there is deep
virtue in steadiness and stability. But being responsible financiers*20 Diversity, Equity, and Inclusion*21 Crosstalk
Mr. Shohei Otani ×
Mr. Hironori Kamezawa

MUFG Report 2024

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Management Message

A Guide to Quickly Understanding Where MUFG Is Now
Keyword

Location of relevant
topics touched onin CEO Message

Message summary

PurposePages 8, 9, 12

The ideal state is for MUFG to embody our purpose, and it should be consistent acrossthe mid- to long-term. We will promote achievement of the MTBP to “pursue and produce
growth,” and realize our purpose for sustainable improvement of corporate value.

Page 8During the previous MTBP period, we strengthened the earnings power and resilience ofour business model. In the final year of the previous MTBP, the ROE reached 8.5%, notably
exceeding the 7.5% target. We remain committed to improving the ROE in the new MTBP
and aim to achieve around 9% ROE in fiscal 2026.

CFO Message Page 16

Page 8Dividend per share for FY2023 was increased to 41 yen from 25 yen in FY2020. In
addition, we repurchased a total of 1 trillion yen shares during the previous MTBP period,
with the total shareholder return exceeding 2.2 trillion yen. We will continue to strive
for improvement in shareholder value through sustainable improvement of ROE withdisciplined capital management and the earnings per share.

CFO Message Pages 18-21

Pages 9-10

Based on the discussion on the areas of our competitiveness to achieve growth, sevenfocus strategies were formulated. We will generate growth in Japan and capture theupside of growth overseas, starting with Asia – while being socially relevant by promoting
solutions to issues confronting the global community.

Expand & Refine Growth
Strategies Pages 36-45

Pages 10-11

In developing this pillar, we identified ten priority issues under the subheads “Sustainable
Society,” “Vibrant Society,” and “Resilient Society,” and we set specific KPIs for priority
themes. We will work with our customers to contribute to solution of social issues andpursue improvement of economic and social values.

Drive Social & Environmental
Progress Pages 46-54

Pages 11-12

Cultural reform is the core of corporate transformation. A new mindset for welcoming
challenges is taking root, but much remains to be done. We will focus on agility and review
procedures and processes without exceptions. In addition, we will implement managementwith focus on human capital, including support for autonomous career development andpromotion of DEI.

Improving ROE

Capital Policy /Shareholder Returns

Expand & Refine
Growth Strategies

Drive social &environmental progress

Accelerate Transformation& Innovation

Locations of detailed
descriptions

MUFG Way Page 2
Medium- to Long-Term Vision
Page 23

Accelerate Transformation &Innovation Pages 55-61
Experienced Hire Round
Table Pages 62-64

MUFG Report 2024

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Regarding the Administrative Action by the Financial Services Agency
Summary of the Administrative Action by the FSA

MUFG’s Recognition and Measures for Preventing Recurrence*1

On June 24, 2024, the Financial Services Agency (“FSA”) announced that it has issued business
improvement orders to MUFG Bank and Mitsubishi UFJ Morgan Stanley Securities (MUMSS) under
Article 51, paragraph 2 and Article 51 of the Financial Instruments and Exchange Act, and orders
to submit reports to Mitsubishi UFJ Financial Group (MUFG) and MUFG Bank under Article 52,
paragraph 31-1 and Article 24, paragraph 1, of the Banking Act.

MUFG has been promoting collaboration among Group companies to meet diverse customer
needs leveraging on the Group’s collective strengths. However, we recognize that our management
systems were insufficient for the reality of banking-securities collaborative business and are deeply
aware that this situation was a catalyst for these incidents.

Reasons for the Administrative Action
MUFG Bank• Inappropriate sharing, etc., of customer information between MUFG Bankand MUMSS•P rohibition on securities–related business at a registered financial institution

Mitsubishi UFJ
Morgan Stanley
Securities• Inappropriate sharing, etc., of customer information between MUFG Bankand MUMSS• A situation where financial product transaction contracts are inappropriately
concluded after overlooking the prohibition of–or encouraging–securitiesrelated business at registered financial institutions

On July 19, 2024, MUFG, MUFG Bank, and MUMSS submitted reports, including business improvement
plans, to the FSA in accordance with the business improvement orders and orders to submit reports.

Based on the analysis of the background causes of these incidents, improvement measures havebeen developed to prevent recurrence. Specifically, we will strengthen internal control systems,
including management systems, legal and compliance systems related to banking-securities
collaboration, etc., and customer information management systems, centering on the five
improvement measures and the parent company’s improvement measures.
Improvement Measures[the Pillars of the Five Improvement Measures and the Parent Company’s Improvement Measures]
Thorough review of procedures and rules
based on specific cases

Strengthening the monitoring system by theSales and Risk Management Divisions

Strengthening more practical training

Strengthening the management systems

Review performance evaluation and reinforcethe
purpose of Group-based profitability

Parent company’s improvement measures

We sincerely apologize for the inconvenience andconcern caused to our customers and stakeholders.

Hironori Kamezawa
President & Group CEO of Mitsubishi UFJ Financial Group
Junichi Hanzawa
President & CEO of MUFG Bank
Makoto Kobayashi
President & Global CEO of Mitsubishi UFJ Securities Holdings
President & CEO of Mitsubishi UFJ Morgan Stanley Securities*1 Please refer to the link for more details

MUFG aimed to meet diverse customer needs and realize
customer-centric sales activities leveraging the Group’s
strengths. We recognize insufficient complianceawareness with the laws and regulations based on acorrect understanding and insufficient monitoring
systems regarding collaboration among Group
companies, which led to administrative action.
We are taking this situation very seriously and strive toregain trust by implementing our business improvement
plan for effective preventative measures againstrecurrence and realizing customer-centric sales activities.

https://www.mufg.jp/dam/pressrelease/2024/pdf/news-20240719-001_en.pdf

Hirofumi Nomoto
Outside Director(Lead Independent Outside
Director)
Koichi Tsuji
Outside Director(Chairperson, Audit Committee)

We are taking the administrative action very seriously.
MUFG, MUFG Bank, and MUMSS need to reaffirm its strong
awareness of customer-centric business principles and steadily
implement its business improvement plan by promoting compliancewith laws and regulations in collaboration among Group companies
and strengthening its monitoring system. The Board of Directors
and the Audit Committee will closely monitor and oversee whether
recurrence prevention measures have been established.

MUFG Report 2024

15

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Management Message

Message From the CFO
Review of Operating Results
FY2023 Results
In fiscal 2023, economic activities continued to normalize after COVID-19 was downgraded toClass 5 infectious disease status. However, uncertainties—from worsening geopolitical risks tocontinued high interest rates in Europe and the United States, ongoing yen depreciation, thelifting of the negative interest rate by the Bank of Japan, and the Nikkei Stock Average exceeding
40,000 yen for the first time—drastically reshaped our business environment.
Against this backdrop, gross profits rose substantially year on year despite the significant impactof the decrease in net interest income from the sale of MUFG Union Bank (“MUB”), supported byenhanced profitability management and U.S. Interest rate hikes that had a positive effect on foreigninterest income of loans and deposits. In addition, net fees and commissions were up, largely driven
by increases in fees related to foreign loans and the expansion of AM/IS and wealth managementbusinesses. Moreover, G&A expenses decreased from the previous fiscal year with the disciplined
cost control and sale of MUB, and consolidated net operating profits—an indicator of the earnings
power of our core business—increased by approximately ¥250.0 billion to a record ¥1,843.7 billion.

Committed to Pursuing Sustainable
Improvement of ROE and shareholder
value through Stable Profit Growthand investment for growth

Jun Togawa
Senior Managing
Corporate Executive Group CFOAmong items under net operating profits, total credit costs saw an increase due to an increase in theallowance for overseas credit losses, but ordinary profits increased significantly by approximately¥1,100.0 billion to ¥2,127.9 billion due to the impact of the change of the equity method accounting datefor Morgan Stanley*1 and the absence of valuation losses on loans and securities held by MUB. With theadditional impact of the absence of extraordinary cost for the structural reform in FY2022, the profits
attributable to owners of the parent was ¥1,490.7 billion, marking the highest profits in MUFG history.
As a result, FY2023 results exceeded the ¥1,300.0 billion target for profits attributable to theowners of the parent due to the steady growth of net operating profits—an indicator of theearnings capacity of our core business.
*1 In FY2023, the closing date of Morgan Stanley’s financial results when applying the equity method of accounting was changed
from Dec 31, 2023, to Mar 31, 2024. As a result of this change, MS’s financial results for the 15-month period, including results
for the quarter ended Mar 31, 2023, have been reflected in equity in earnings of equity method investees.

Consolidated Income Statement Summary
MUFG (consolidated) (Billions of yen)

FY2022

FY2023Results

Results

ChangeAfter adjustment of MUB*1

1

Gross profits*2

4,503.0

4,732.5

229.5

—

2

G&A expenses*2

2,908.7

2,888.7

–19.9

—

3

Net operating profits

1,594.2

1,843.7

249.4

—

4

Total credit costs–674.8–497.9176.9–217.05

Ordinary profits

1,020.7

2,127.9

1,107.2

372.1

1,116.4

1,490.7

374.2—

6 Profits attributable to owners of parent*1 Adjusted the valuation losses on assets held by MUB, which was reversed as extraordinary gains. Total credit costs: ¥393.9
billion, ordinary profits: ¥735.0 billion*2 Impact of the sale of MUB is approx. -¥380.0 billion on gross profits and -¥260.0 billion on expenses

MUFG Report 2024

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Management Message

Message From the CFO

Review of Operating Results
Previous MTBP (FY2021–FY2023)
Our foremost commitment under the previous Medium-Term Business Plan (“MTBP”), which started
in FY2021, was improving ROE; FY2023 result was 8.5%, exceeding the 7.5% target. (8.1% excluding
the impact of change of the equity method accounting date for Morgan Stanley*1)
We positioned profits, expenses, and RWAs*2 as the three key drivers that will enable us to achieve thisgoal. For profits, the numerator of the ROE calculation, we exceeded the targets for net operating
profits and profits attributable to owners of the parent as a result of the structural reform and enhancing
profitability. We captured the opportunities presented by the rise in interest rates overseas while
improving the domestic lending rate under the negative interest rate policy. As a result, net interest
income increased for loans and deposits, and commission fees increased in Japan and abroad.
Expenses also met the target of “a level below FY2020,” excluding the impact of foreign exchange.
The expense ratio improved to 61.0% (68.7% in FY2020) with the promotion of structural reform,
including the sale of MUB and the reduction of base expenses through disciplined cost control
while allocating expenses for business growth.

Improving balance sheet profitability and the seven growth strategies
The plan for net operating profit in FY2026, the final year of the MTBP, is to achieve ¥2.1 trillion,
which is about 30% increase from the FY2023 result of ¥1.6 trillion. We expect seven strategies
under one of the pillars of the MTBP, “Expand and Refine Growth Strategies,” to contribute about¥340 billion toward the goal.
For example, in the Asia business, which will drive the group-wide consolidated ROE, we are aiming
at about ¥130.0 billion increase in net operating profit from FY2023 (before internal adjustments).
We will capitalize on the growth of Asia, capturing the growth of partner banks*1 and digital financebusinesses that we invested in during the previous MTBP and leveraging synergies between them.
*1 Partner banks (PB): MUFG has positioned Asia as our second “home market” and has been proactively pushing ahead withinvestment with the aim of capturing opportunities arising from the region’s burgeoning economic growth. We have invested
in four commercial banks, Krungsri (Bank of Ayudhya, Thailand), Bank Danamon (Indonesia), VietinBank (Vietnam), and Security
Bank (Philippines), helping each PB enhance its corporate value and providing high value-added services through collaboration
to utilize the customer base and functions of PB effectively.

New MTBP Financial Targets

ROE

We also achieved the target of “a level at the end of March 2021,” excluding the impact of foreignexchange for RWA, which is related to capital and is the denominator for ROE, through resource
management considering the risk-adjusted return.
We believe our earning power increased, and the business model became substantially more
resilient during the previous MTBP period.
*2 Risk-Weighted Asset. The total monetary amount of risk volume calculated by reflecting the degree of risks associated with each
asset held by MUFG.

Overview of the new MTBP
New MTBP Financial Targets—Toward the Improvement of ROE
We remain committed to improving the ROE in the new MTBP. Profits, expenses, and RWAs willcontinue to be positioned as the three key drivers for achieving around 9% ROE by FY2026. In terms
of profits, we will aim at over ¥2.1 trillion in net operating profits and over ¥1.6 trillion in profits
attributable to owners of the parent through the implementation of the seven growth strategies andoptimizing the balance sheet. For cost control, we will reinforce discipline control both in terms ofratio and amount to reduce the expense ratio to around 60% by FY2026 while investing thenecessary resources for growth and strengthening infrastructure. For RWA, we will promote thereduction of unprofitable assets (-¥5 trillion) while increasing profitable assets (+¥12 trillion). We areconfident that we will be able to achieve a higher ROE through these initiatives.

CET1 ratio*2 (finalized and fully

implemented Basel III basis)

FY2023 result

FY2026 target

Medium- tolong-term targets

8.5% (8.1%*1)

Around 9%

9%–10%

10.1%

9.5%–10.5%*1 Excluding the impact of the change of the equity method accounting date for Morgan Stanley*2 Equity Tier 1 ratio. Estimated based on the regulation to be applicable from March 31, 2029.
Excluding net unrealized gains on AFS Securities

Breakdown of ROE Improving Factors (Logic Tree)
Expand & Refine Growth Strategies

Improvement in RORA*1

Strengthen
profitability

Resource allocations to seven growthstrategies (Net operating profits +¥340 bn)

Cost control

Increase the sophistication of expense control
Free up funds for growth investment by
reducing base expenses

Capital managementwith the target range of
the CET1 capital ratio

RWA control

Replace low profitable assets to highly
profitable assets

RWAs

Enhance further
shareholder returns

Aim for a dividend payout ratio of 40% via
progressive dividends
Flexibly execute share repurchases

Strategic
investments forsustainable growth

Invest in growth fields (Digital, Asia, Global
AM/IS, new businesses, etc.)

Profits attributableto owners of parent
Improvement in ROE
Profits
attributable toowners of parent
Shareholders’equityRWAs

Shareholders’equityRWAs / Shareholders’ equity
Reciprocal of CET1 capital ratio

Capital Management (Optimally allocate capital to improve ROE)

*1 Return on risk-weighted assets (an indicator suggesting capital profitability)MUFG Report 2024

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Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Management Message

Message From the CFO

We will also implement other strategies including strengthening of domestic retail customer baseand corporate x WM businesses, integrated GCIB-GM business model, enhancing cross-selling,
expanding AM/IS businesses to contribute to making Japan a leading asset management center,and challenging to build a new business portfolio. Through these efforts, we will empower
progress while achieving revenue growth.
In addition, stable profit growth is essential for optimizing the balance sheet in light of the change inthe business environment to achieve the MTBP financial targets. With the largest balance sheet
among private sector banks in Japan, MUFG is positioned to make the most of the normalized interest
environment, and the strategy for further improving profitability will become increasingly important.
In lending, we will continue profitability-focused management by replacing low-profitability assets
with highly profitable ones. At the same time, we will enhance risk-taking capability through event
financing, such as LBO*2, real estate-related areas, and green transformation, which will contributeto improving the ROE.
We will also focus on securing deposits by expanding services that meet the customers’ needs
and enhancing transaction banking products.
*2 Leveraged Buyout: A method of financing acquisitions secured by the target’s cash flow and assets.

The plan of net operating profits*1
Expand & Refine Growth Strategies +¥340 bn¥2.1 tn

Medium- to long-term growth also requires corporate transformation and investment in thecorporate infrastructure.
The development of corporate infrastructure will be promoted as part of one of the pillars of the MTBP,“Accelerate Transformation & Innovation.” This will include the enhancement of human resources that
support systems development and measures to strengthen AI and data infrastructure across thecompany by the newly established Digital Strategy Division. We will increase the systems investment
from the previous MTBP to ¥800 billion, with over 30% to be allocated to strategic and corporate
infrastructure projects. We will also enhance human capital investment.
Investment in corporate infrastructure and future growth must be achieved together with stable profit
growth, including through optimizing the balance sheet. We aim to achieve the MTBP and medium- tolong-term financial targets by creating a virtuous cycle of profit growth and strategic investment.
The result of the implementation of measures under the MTBP is shown in the below diagram ofcapital allocation and ROE by the Business Group. For the previous MTBP, issues remained regarding
the level of ROE for some Business Groups. The new MTBP reallocates capital, with the ROE forcustomer segment Business Groups excluding Retail & Digital Business Group to contribute to theachievement of consolidated ROE target. The Retail & Digital Business Group is in charge of retailcustomers (excluding WM). Its ROE will be relatively low during the MTBP due to the initial digital andinfrastructure investment. However, it is an important Business Group that supports MUFG’s balance
sheet, and we will steadily promote transformation and improve capital efficiency.
Capital allocation*1 and ROE*2 by Business Group (New MTBP basis, FY2023–FY2026)
ROE (%)

13.5% (+0ppt)

10.5% (–1.5ppt)

New MTBP
targets
Around 9%
ROE

NOP+¥500 bn

9% (+0ppt)

9% (+0.5ppt)• Lighter colors indicate FY2023
ROE and capital allocation on
new MTBP basis.
• Figures in brackets indicate achange in ROE compared to
FY2023

8% (+6.5ppt)
6.5% (+6.5ppt)

5.5% (–1ppt)¥1.6 tn
RD

Improving BS profitability
FY2023

Strengthen
Strengthen
domestic retail corporate x
customer base WM business

EvolveGCIB-GMintegrated
business
model*1 Managerial accounting basis. Local currency basis

Strengthen Contribute to Support value
APAC business making Japan chain in green
and platform a leading AM transformation
resilience
centerOthers

FY2026

CWM

JCIB

GCIB

GCB

AM/
IS

Global Markets
Capitalallocation*1 Estimated RWA on the finalized and fully implemented Basel III basis to be applicable from March 31, 2029 (R&D, CWM, JCIB,
GCIB, GCB) or economic capital (AM/IS and Global Markets)*2 Managerial accounting basis (Net profits basis.)MUFG Report 2024

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Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Management Message

Message From the CFO

Growth potential driven by rises in interest rates
The above-stated plan for increasing net operating profits assumes the policy rate in Japan willremain at 0.1%, the U.S. FF rate will decrease to around 3%, and the USD exchange rate will be in
the upper ¥120 yen range in FY2026, the final year of the MTBP. The plan demonstrates how muchgrowth MUFG can achieve through the strategies without depending on the favorable environment,
despite the downward pressure on revenue created by the depreciation of the yen.
On the other hand, an increase in the JPY interest rate is expected during the MTBP. The following
estimates indicate a positive net operating profit impact calculated based on certain assumptions. It
assumes a gradual positive impact with the rise in JPY Interest rates, and we will aim at further profit
growth by leveraging the strength of our balance sheet, which is the largest among Japanese
private sector banks.
Annual impact from rises in JPY
interest rates*1*2
(¥bn)

+150
+120
+85

Year 1

Year 2

Year 3*1 Estimates assuming financial indicators stated on the Financial
Highlights announced on May 15, 2024, with +0.15% parallel shiftof policy and market rates from April 2024 (immediate andsustained). The tracking rate for liquid deposits is assumed to be
the same level as when the Bank of Japan revised the policy rate
in March 2024.
*2 Assuming that the balance sheet as of the end of March 2024
does not change from the right diagram.

JPY balance sheet (as of the end of Mar. 2024)(¥tn)<Short term>
Increase in profit
linked to rises in
JPY interest rates<Mid- tolong-term>
Increase inre-lending yields<Short term>
Increase in profit
linked to rises in
JPY interest rates<Mid- tolong-term>
Expansion of
unrealized
losses, while
increase inreinvestment
yieldsMostly liquid
deposits,
curb theincrease indeposit rates

Loans
65
Investment
securities 50*2of held-tomaturity
securities 17

BOJ Current
Accountbalances

Others

Deposits
169

Marketfunding, etc.
35
Others

FY2024 target
Despite the uncertainty about the geopolitical situation, the global economy will start to expand
again at a moderate rate after a phase of further deceleration triggered by the cumulative effects
of monetary tightening in FY2024, the first year of the MTBP. A gradual recovery is expected for
the Japanese economy with the normalization of the interest rate trend. Although significant
change in the economy and markets can be expected, we set the target for profits attributable toowners of parent at record high ¥1,500.0 billion. We aim to achieve the MTBP target of “around 9%
ROE” early and promote steady profitability improvement. There is downward pressure on net
operating profits due to the impact of the appreciation of the yen from the end of the previous
fiscal year. However, the plan expects about ¥90.0 billion profit increase from the ¥1,406.6 billion
profits attributable to owners of the parent in FY2023 (excluding the impact of change of theequity method accounting date for Morgan Stanley) due to the accumulation of net operating
profits for the customer segments and increased capital gains through treasury operation.

FY2024 target*1
FY2023 Results

Consolidated (¥bn)

1

Net operating profits

before credit costs for trust accounts andprovision for general allowance for credit losses

YoY

1,843.7

1,950.0

106.3–497.9–400.097.9

3

Ordinary profits

2,127.9

2,150.0

128.2*2

4

Net profits

1,490.7

1,500.0

93.4*2

2

Total credit costs

FY2024 Target*1 Assuming the Japanese policy rate at 0.1% and the USD exchange rate around ¥140
*2 Excluding the impact of change of the equity method accounting date of MS (Ordinary profits: ¥106.1 billion, Net profits: ¥84.1 billion)

Capital Management
Basic Policy
We consider capital management to remain a matter of importance in terms of achieving the ROE
target under the new MTBP.
MUFG has been focused on capital management that achieves an appropriate balance amongthe “capital triangle” objectives, as illustrated below. Upholding this basic policy, we will endeavor
to maintain creditability and reliability, which are the indispensable traits of a financial institution
and largely dependent on its financial soundness. Accordingly, we will strive to improve ourcorporate value by steadfastly maintaining our financial soundness while further enhancing
shareholder returns as well as undertaking investment in growth fields to raise profitability.
Capital Triangle
Further enhancing
shareholder returns

MUFG’sCorporate
Value

Further enhancing
shareholder returns

Progressive
dividends

Consider• Performance progress /forecast and capital situation• Strategic investment
Flexible
opportunities
share• Market environment
repurchaseincluding share price• Maintain dividend payout ratio
at around 40%

Sharecancellation• Holding a maximum of
approx. 5% of the total
number of issued shares

Maintain solid equity capital• Expand the target range of CET1*1 ratio to 9.5%-10.5% to improve transparency of
capital management.

Maintain solid
equity capital

Strategic
investments forsustainablegrowth

*1 Estimated values based on the finalized andfully implemented Basel III basis applicable as ofthe end o March 2029. Excludes net unrealized
gains on available-for-sale securities

Strategic investments for sustainable growth• Continue to replace low-profitability assets with highly
profitable assets• Allocate to areas with high profitability expectations strategically•
Inorganic Investments Continue to focus on areas such as Asia, Digital, and Global AM/IS• Consider investments in new business areas
Organic investmentsMUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

19

Management Message

Message From the CFO

Maintain solid equity capital
We have set a target range for the CET1 capital ratio (CET1 ratio), which indicates financial
soundness, at 9.5% to 10.5% (finalized Basel III reforms basis, excluding net unrealized gains ofavailable-for-sale securities). This target range was determined by considering such factors as theresults of the multifaceted verification of the necessary stress buffer and the level of capital requiredof a financial institution deserving of the “A” rating granted by external rating agencies. Based on a
CET1 ratio stipulated by minimum regulatory requirements applied to MUFG (8.5%, excluding thecountercyclical capital buffer as a variable element), the bottom line of 9.5% was defined by adding
a 1.0% buffer. The target range was set with a breadth of 1.0%, resulting in the upper limit of 10.5%.

In Japan, we completed an investment in WealthNavi, the No.1 robo-advisor in the country.

For the new MTBP, we have raised the upper limit of the CET1 target range by 0.5% from 10.0%.
This aims to improve the transparency of capital management by reflecting the increased
volatility in the macro economy, including the market environment.

For the new MTBP, “new business” has been added to the key focus in addition to the three areas
above. We will consider strategic investments that can achieve the medium- to long-term target
ROE of “9% to 10%” with discipline and build an appropriate portfolio toward sustainable growthand improvement of corporate value.

Target Range for Capital Management*1 Current MUFG Pension & Market Services Holdings Limited (company name changed in 2024)*2 Includes investments to be executed from April 2024 (plan)(As of March 31,
2024)• Maintain: Progressive dividends• Implement: Additional shareholder returns
Strategic investments forsustainable growth

10.5%
10.1%

Target range

9.5%• Maintain: Progressive dividends• Consider: Additional shareholder returns
Strategic investments for sustainable growth
Accumulate capital within the target range• Consider: Stable dividends in line with the level of profits• Implement: Accumulate capital to improve CET1 capitalratio to the target range

CET1 ratio*1*1 Estimated on the finalized andimplemented Basel III basis.
Excluding net unrealized gains onavailable-for-sale securities

Strategic investments for sustainable growth
As discussed earlier, we consider undertaking strategic investments aimed at raising profitability
essential to securing sustainable growth and improving corporate value.
Under the previous MTBP, our key focus was on digital-related, Asia, and Global AM/IS. We
invested in Home Credit (Indonesia and Philippines), Akulaku (Indonesia), and DMI Finance (India)
as part of a multilateral endeavor to seize opportunities arising from the growth opportunities in
Asia and the growing need for digital financing by unbanked individuals. We also formulated new
funds focused on investing in startups in India and Indonesia and increased Mars Growth Capital’s
fund value to expand the scope of our investment in and financing for startups.
Moreover, in the field of Global AM/IS, we acquired AlbaCore Capital (Australia), which boasts
strength in private debt, a type of financing with strong growth potential. In May 2024, we also
completed a transaction announced in December 2023, the acquisition of Link Administration
Holdings Ltd. (Australia)*1, which has strength in pension administration and management, etc.

We made over ¥700 billion in strategic investments during the previous MTBP*2. They include
diverse investments ranging from projects that are not expected to make a profit contribution in
the short term but should grow significantly over the medium- to long-term to projects with stable
but gradual profit growth with high capital efficiency. Together, they will contribute to thediversification of future growth and revenue. We expect that the combined effect of thesestrategic investments and fund investments will eventually be translated into around 10%
improvement in consolidated ROE in the medium- to long-term.

Further enhancing shareholder returns
In line with our Basic Policies for Shareholder Returns, MUFG strives to enhance the content ofshareholder returns, with cash dividends defined as the primary means to this end, while giving
due consideration to achieving an optimal balance between shareholder returns, capitalsoundness, and growth investment. MUFG aims for stable and sustainable increases in dividends
per share through profit growth and maintains the dividend payout ratio at around 40%. At thesame time, we take a flexible stance toward executing share repurchases that take into accountperformance progress / forecast and capital situation, strategic investment opportunities, and themarket environment, including share prices, as share repurchases constitute a shareholder returnmeasure contributing to improvement in capital efficiency. Lastly, MUFG will cancel treasury
shares in excess of approximately 5% of the total shares outstanding.
In line with the above policy, we increased the full-year dividend for fiscal 2023 by ¥9 per shareyear on year to ¥41 per share. In addition, we made share repurchases amounting to ¥400.0 billion
annually. As shown in the diagram on the next page, over the course of the three years of the
MTBP, we have allocated approximately ¥2.25 trillion to shareholder returns, which comprised
cash dividends and share repurchases, from cumulative profits attributable to owners of parent
totaling around ¥3.7 trillion and additional capital created by the sale of MUB.
As for our dividend forecasts for fiscal 2024, we intend to pay a full-year dividend of ¥50 per
share, up ¥9 per share year on year. The dividend payout ratio is about 40%, excluding the positive
impact of the change of the consolidated closing period for the Bank of Ayudhya. We willcontinue to aim for a stable and sustained increase in dividends per share through steadyearnings growth and maintaining an approximately 40% dividend payout ratio.

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

20

Management Message

Message From the CFO

On share repurchase, with the CET1 ratio near the median of the target range, MUFG has madethe initial decision for the fiscal year to repurchase up to ¥100 billion shares in pursuit of an
optimal balance between equity capital accumulation and strategic investment for growth and todemonstrate continued disciplined capital management during the new MTBP.
We continue to believe that share repurchases will be an important option for achieving the ROE
target and improving the earnings per share. MUFG will maintain a flexible stance toward
executing share repurchases that considers performance progress / forecast and capital situation,
strategic investment opportunities, and the market environment, including share prices.
Result of Capital Allocation (FY2021–FY2023)
Additional capitalcreated by thesale of MUB

Breakdown of net profits during new
MTBP (concept)
Share repurchase
Based on the disciplined
capital management andcontribute to sustainable
ROE improvement

Share repurchase:
Approx. ¥1.0 tn

Dividends: Approx.
¥1.2 tn
Net profits:
Approx. ¥3.7 tn

Dividend
Aim for stable andsustainable increase byprofit growth and maintaindividend payout ratio at
around 40%

Strategic investment
Profit accumulation
Morgan Stanley
double-gearing
Terminated in FY2022:
Approx. ¥0.6 tn

Accumulation

Profits
attributableto ownersof parent

Investment for growth:
Inorganic
Utilize capital for businessexpansion and improving
profitability

Allocation

Implementing share repurchase of ¥150 billion in FY2021, ¥450 billion in
FY2022, ¥400 billion in FY2023
FY2021 DPS up by + ¥3, FY2022 + ¥4, FY2023 + ¥9
Capital utilization towards earnings growth mainly in Asia digital
Accumulating profits according to the outlook for the external environment
Impact of capital deductions due to the cancellation of special provisions
for investment in MS (ending in FY2022)

Investment for growth:
Organic
Accept to build up RWA toa certain level for increasing
highly profitable assets

Accumulation

Enhancement of Shareholder Value
For MUFG, enhancing shareholder value is an important management issue.
Looking at the recent trend in Total Shareholder Return (TSR*1), MUFG’s TSR over the past 10 years
has been lagging considerably behind that of some global competitors. Although our three-year
results for the previous MTBP have shown an upward trend, we believe that this is largely
attributable to growing market expectations regarding MUFG’s future growth in light of the resultsof key strategies under the previous MTBP, including those that led to a doubling of EPS over past
three years due to profit growth and disciplined capital management. Accordingly, we are acutely
aware of the importance of steadily meeting such expectations.
Price Book-value Ratio (PBR) has improved from the 0.4X range and has been trending close to
1.0X since the start of 2024, but still remains under 1X. We believe this is attributable to our ROE
falling short of the Cost of Capital. Looking at global banks and the relationship between their
PBRs and ROEs, as shown in the diagram below, some U.S. banks whose TSR has remained highover the past decade are appreciated by the market for their robust PBR, which results fromongoing improvement in ROE. This strong PBR, in turn, helps raise the stock prices of these banks
and enables them to achieve a constantly high TSR. (Next page: Global Comparisons of TSR)
*1 Total Shareholder Return

Relationships between PBR and ROE
1.8

MUFG

EuropeU.S.

(PBR)
Initiatives to Enhance Shareholder Value
Morgan Stanley

1.6

JP Morgan

Allocation
1.4

Results and Forecasts of Dividends per Common Stock and Earnings per Share (EPS)Dividends per common stock

25.5%

32.9%

Dividend payout ratio

61.0%

*1

41.3%

31.7%

35.3%

32.9%
(34.9%)*2

39.1%(39.6%)*3

74.55

66.91

Yearend

60.49

25

40.95

¥19

¥22

2017

2018

¥25
2019

¥25
2020

¥28

2021

¥32

2022

End of
Mar 2024

¥50

90.72

¥41
Interim

25

2023

2024

*1 Dividend payout ratio amounts to
37% when the impact of the
one-time amortization of
goodwill is excluded*2 Excluding the impact of thechange of the equity method
accounting date for Morgan
Stanley on FY2023 results*3 Excluding the FY2024 estimatedimpact of the change of theconsolidated closing period forKrungsri

Our recognition of issues

Wells Fargo

1.0

124.6488.44

Goldman Sachs

1.2

EPS (yen)

0.8Bank of
America
BNP Paribas

HSBC• Currently stagnant PBR is attributable to ourROE falling short of the cost of capital• Aim to enhance ROE through strategies for growth,
structural reforms and capital management
PBR = 1+Equity spread (ROE – Cost of Capital)*1

Santander

Cost of Capital – Growth rate

*1 Based on the Gordon Growth Model

0.6

Citigroup

0.4
4%

6%

Barclays
8%

(ROE)
10%

Source: Bloomberg (as of December 31, 2023)

12%

14%

16%

18%

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

21

Management Message

Message From the CFO

Initiatives to Enhance Shareholder ValueAs mentioned earlier, MUFG has positioned ROE at the core of business management based on arecognition that improving ROE is essential to enhancing shareholder value.
We are striving to improve ROE by executing key strategies (Expand & Refine Growth Strategies) as
well as practicing proper cost and RWA control and capital management. Details pertaining to theseendeavors are provided in the Breakdown of ROE Improving Factors featured on page 15. To achievea higher stock price with PBR of 1 time, which represents the bare minimum level, or higher, we must
stably achieve the MTBP target ROE of around 9%, and aim for 10%, which is within our target range
for the medium- to long-term. We also believe that, to improve ROE, it is important to practicedisciplined capital management even as we strive for steady and ongoing growth in profit. We
expect that achieving robust operating results backed by steady profit growth could positively
impact MUFG’s stock prices via an increase in PER.
In addition, we deem it important to allocate surplus in a well-balanced manner to both strategic
investment, which will be the source of growth in ten years, and shareholder returns. This must be donein a way that maintains disciplined capital management. The new MTBP added the TSR perspective
for the compensation system. We will continue to strive for improvement in shareholder value throughsustainable improvement of ROE with disciplined capital management and earnings growth.

Reduction of equity holdings
In line with our basic policy of reducing strategic equity holdings, we divested such holdings by anamount equivalent to ¥870.0 billion (on an acquisition-cost basis) over the six years from fiscal 2015 tofiscal 2020. During the previous MTBP, our divestment target for the three years was raised from ¥300.0
billion to ¥500.0 billion, and we exceeded the target by executing a divestment of ¥539.0 billion.
Equity holdings divestment is essential from the perspective of maintaining robust RWA control as
it frees up capital resources. It also helps reduce financial risk arising from share price fluctuations.
Therefore, MUFG’s stock prices may well be positively affected by the divestment of equity
holdings, resulting in reductions in volatility and the cost of capital.
Considering the above, we will further reduce our holdings during the new MTBP. The initial
reduction target under the new MTBP will be ¥350.0 billion, with aims to reduce strategic equity
holdings*1 to less than 20% of consolidated net assets*2 during the new MTBP.
Discussion on reviewing cross-shareholdings is an important theme for Japanese corporations involving
the restructuring of shareholders. As the environment changes drastically, we aim to further divest
equity holdings while engaging in dialogue with our corporate clients to secure their understanding.
*1 Market value basis. Including the balance of “Deemed holdings” *2 Net assets at the end of March 2024

Global Comparisons of Total Shareholder Return (TSR)

Dialogue with Shareholders and Other Stakeholders(Closing price as of March 31, 2013 = 100)
300

MUFG

275
Sumitomo Mitsui FG

250
225

Mizuho FG

200
175

HSBC Holdings
BNP Paribas

150

Deutsche BankJP Morgan

125Goldman Sachs
Morgan Stanley100

Barclays
Bank of America

75

As we aim to help our stakeholders gain a good overview of MUFG’s strategic endeavors employing
its unique and extensive business portfolio, we believe that providing them with accurate and timely
explanations of our operations is a matter of importance. Furthermore, the provision of sufficient
information to stakeholders will lead to the elimination of informational asymmetry between MUFG
and investors and could possibly result in reductions in the cost of capital. Accordingly, we are
striving to enhance the content of information disclosure, including non-financial information.
My “MUFG Way” is “to grow the company and myself to empower all stakeholders.”
Dialogue with our stakeholders, including shareholders, investors, and rating agency
representatives, often provides valuable opportunities and insights. Going forward, we will focus
on maintaining such dialogue, stepping up investor relations (IR) and shareholder relations (SR)engagement with those charged with exercising voting rights. Stakeholder opinions are shared
among Board members and given due consideration in the course of business operations andcapital management. We always welcome frank opinions about MUFG.

Citigroup50

2021/3

Source: Bloomberg

2021/92022/32022/92023/32023/92024/3

I will listen to everyone’s opinions and make MUFG and myself grow.
We ask for your continuous support in this endeavor.

22

MUFG’sCorporate Value
CONTENTS
Medium- to Long-Term Vision

23

Value Creation Model

24

Trajectory of MUFG’s Corporate Value Enhancement

25

MUFG’s consolidated strength for Creating
Corporate Value

26

Business Portfolio Supporting MUFG Growth27

Top Management Dialogue between MUFG and
Morgan Stanley

28

Building MUFG’s Economic Sphere in Asia

30

Asia x Digital Platform Supporting the MUFG
Economic Sphere

32

MUFG
KOGEI Project1

Tiles at the MUFG Bank Nagoya Building 1F ATM Corner
Combination of Tokoname ceramic tile and glass tile
depicts the light filtering into the interior of the building
Click for details about the MUFG KOGEI Project.

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

MUFG’s Corporate Value

Committed to empoweringa brighter future.

Medium- to Long-Term Vision

Become a force forconnecting the world

The ideal state is for MUFG to embody our purpose,and it should be consistent across the mid- tolong-term.
MUFG group companies also have the unique ability
to build meaningful bridges connecting our diverse
stakeholder communities. With these abilities, MUFG
intends to play a cohesive societal role by bringing
various stakeholder communities together throughfinancial empowerment.

23• Support morecustomers throughour businessBusiness
partners

Futuregenerations• Realize a sustainable
society• Asset and businesssuccession

This concept is central to embodying our purpose
through our new MTBP.

• Meet our customers’

needs and help themattain a prosperous life
(retail customers)• Resolve our customers’
management challenges
and help realize growth(corporate customers)• Create a workplace

MUFG

Customers

MUFG
Colleagues• Efforts for regional
revitalization• Cultivate industries by
supporting corporateclients

Communities
and society

Shareholders /Investors
Three-year period for
capturing “growth.”

FY2026 Target

Approx. 9% ROE
Medium- to- long-term target

9%-10% ROE

where employees
can thrive and grow
• Focus on holistic
well-being of
employees• Enhance corporate value
and shareholder value
through dialogueMUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

24

MUFG’s Corporate Value

Value Creation Model
Financial / non-financial capital

Value delivered to stakeholders

InputsOutcomes

Committed to empoweringa brighter future.

Financial capital• Deposits ¥224.0 trillion• Net assets ¥20.7 trillion

Results for fiscal 2023

• Profits attributable to owners of parent• ¥1.6 trillion or more (fiscal 2026)• ROE 8.5%
• Common Equity Tier 1 capital ratio 10.1%• About 9.0% (fiscal 2026)• Target range 9.5% to 10.5%¥1.49 trillion

Become a force forconnecting the world*1

Human Capital

Human Capital• Employees:

approximately 140,000(Overseas 63%)*1

Business
partners*1 Excluding part-time and temporary
employees

Futuregenerations

current status (fiscal 2026)• Evolving into a financial anddigital platform operator• Decision on investment of¥160 billion by AM/IS

MUFG

Customers

MUFG
Colleagues

Social and relationship capitalSocial and relationship capital• Number of users of internet banking
10.2 million (fiscal 2023)• A robust customer base,
Japan’s largest of its kind
(Approximately 34 million
individual customers and1 million corporate clients)• Total energy consumption• A level improved from thepartners

among financial institutions

Natural capital• Engagement score 73%• Strengthen collaboration with external• The broadest product lineup

approximately 1,600 bases
overseas)• 27% (fiscal 2026)

22.3%

Intellectual capital

MUFG’s unique strengths• (431 bases in Japan and• Ratio of women in management in Japan*2Intellectual capital

volume 771,086 MWh(fiscal 2022)

Targets and visions

Financial capital• Pursue the best mix offace-to-face and online
customer services• Number of branches (the Bank)
325 branches (fiscal 2023)• Over 450 online financial consultation
booths*3 across Japan

Communities
and society

Shareholders /Investors
Three-year period for
capturing “growth.”

FY2026 Target

Approx. 9% ROE
Medium- to- long-term target

9%-10% ROE

Improvement in corporate value and the enhancement of each capital category

Natural capital• Financed portfolio

Disclosure of interim targets for 2030
(respective targets for real estate, steel andshipping sectors)• Greenhouse gas (GHG) emissions fromown operations
Disclosure of interim targets for fiscal 2025
and 2026• Publication of MUFG Climate Report, MUFG
Transition White Paper, and TNFD Report• Net zero (fiscal 2050)• Net zero (fiscal 2030)*2 Scores from Group Employee Survey*3 Individual booths operated by telecube,inc. that can be used for online investment
consultations provided by MUFG BankMUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

MUFG’s Corporate Value

Trajectory of MUFG’s Corporate Value Enhancement
1656–

2005–

2012–

2021–

Hard-earned trust backed bya history spanning more than 360
years and a robust customer base

MUFG inaugurated
Strengthened investmentbanking operations

Enhanced our presencein the ASEAN region

Started to take on thechallenge of businessmodel reforms

1656

2005

2013

2021

• Konoike Exchange Bureau

opened in Osaka (Precursor of
Sanwa Bank founded in 1933)• MUFG inaugurated Mitsubishi UFJ Trust andBanking, Mitsubishi UFJ Securities inaugurated• Conversion of Bank of Ayudhya (Krungsri), a majorcommercial bank in Thailand, into a subsidiary• Established the MUFG Way (renamed from
Corporate Vision)• Launched the Digital Service BusinessGroup, transitioning to a seven-businessgroup structure• Announced the MUFG Carbon Neutrality
Declaration2022• Capital and operational alliance with Vietnam Joint

2006
Source: Konoike Limited Partnership Company

Stock Commercial Bank for Industry and Trade(VietinBank), a national bank in Vietnam• Bank of Tokyo-Mitsubishi UFJ(now MUFG Bank) inaugurated

1880

2007

2015

established by Yataro Iwasaki(Precursor of Mitsubishi Bank founded
in 1919)• Yokohama Specie Bank established(Precursor of The Bank of Tokyo
founded in 1946)

2008

2016

• Mitsubishi Exchange House• Moved to a “company with three committees” structure• Mitsubishi UFJ NICOS inaugurated• Sold MUFG Union Bank• Decided investment of approximately¥200 billion in digital finance field in Asia

2023

• Alliance 2.0-Enhancement of strategic
alliance with Morgan Stanley• Capital and business alliance with Security Bank

• Strategic alliance with Morgan Stanley

Corporation in the Philippines

2019• Conversion of Bank Danamon, Indonesia, into a subsidiary• Decided strategic investment in Global
AM/IS area (AlbaCore, Link)• UnionBanCal Corporation became a wholly
Source:The Mitsubishi
Archives

Source:Kanagawa Prefectural
Museum of Cultural
History

owned subsidiary of MUFG
• ACOM became a subsidiary of MUFG (JGAAP only)2010• Mitsubishi UFJ Morgan Stanley Securities,

Morgan Stanley MUFG Securities inaugurated

1927• Mitsubishi Trust established• Kawasaki Trust established1941• Tokai Bank established1959• Toyo Trust and Banking establishedSentier Investors into a Subsidiary

Domestic
83%

Overseas
17%
Fiscal 2006*1

Continued efforts toenhance corporate value

2020• Capital and business alliance with Grab Holdings Inc.

Trend in the profit balance between domestic and overseas

1948• Yachiyo Securities established• Conversion of Australia-based asset manager First

Domestic
67%

Domestic
44%
Overseas
33%

Fiscal 2013*1,*2

Fiscal 2023*1,*2

Overseas
56%*1 Managerial Accounting
Basis. Exchange rates
applied to each fiscal
year may differ*2 Including equity
earnings of MS as anequity method investee

25

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

26

MUFG’s Corporate ValueMUFG’s consolidated
strength for Creating
Corporate ValueMUFG is a comprehensive financial group
comprised of top-tier group companies invarious fields, such as commercial banking,trust banking, investment banking,securities, asset management, consumer
finance, and more.

au Kabucom
Securities

Commercial
banking

Group companies with high expertise andknowledge work together to provide ourcustomers with the best possible solutions.

Bank of Ayudhya(Krungsri)

Mitsubishi UFJ
Morgan Stanley
Securities

Investment banking,Sales & Trading,
Wealth management

Bank Danamon
Indonesia
Morgan Stanley
MUFG Securities

Mitsubishi UFJ
Securities
Holdings

VietinBank

MUFG Bank
Morgan Stanley*1
Advantage of functionality brought by
MUFG’s consolidated strength[High level of expertise and presence]<Project finance>*1• Global: No.1 • US: No.1 for 14 years in a raw<Project bond>• Global: No.1
<GCIB Americas and EMEA>• Sophisticated strategies under single
leadership<MS Alliance>• The only one strong partnership

Security Bank
Corporation

Mitsubishi UFJ
Financial Group(MUFG)
Mitsubishi UFJ
Asset
Management

ACOM[Various products and asset management
capability / one-stop service]<Top share in domestic>• Publicly offered equity
investment trust balance*2: No.1
• AuA*3: No.1
<Advantage in alternative AM such as
Top share in domestic infrastructure and PD*4>• First Sentier Investors• AlbaCore Capital Group*5*1 As of Dec 23 (source) PFI *2 excl. ETF *3 Assets under Administrationin the Master Trust Bank of Japan *4 Private Debt *5 Subsidiary of FSI*1 Strategic Alliance

Mitsubishi UFJ
NICOS

Mitsubishi UFJ
Trust andBanking

Trust andbanking, Assetmanagement,
Investor service
First Sentier
Investors

Credit card,
Consumer finance
MUFG Investor
Services
Holdings

MUFG Report 2024

27

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

MUFG’s Corporate ValueBusiness Portfolio Supporting MUFG Growth
MUFG’s advantage lies in a unique businessportfolio, which maximizes the comprehensive
strength of our group. In Japan, our largest
customer base and balance sheet will be
the source of our future competitivenessand profitability. Our exposure in the APAC
region is already the largest in the world. In
addition to concentrating our resources in
the wholesale business and continuing
steady profit growth, through Morgan
Stanley, we are also able to capture stable
growth of the U.S. economy as a whole.
We will further evolve this portfolio over the
next few years and grow in tandem with theglobal economy.

Japan

US

The largest domestic customer base and balance sheet
against the background of breaking away from deflationand normalization of the interest rate trend

Realize growth in the world’s largest economic zones
and capture stable size of the market through MS

RetailConcentrate resources in the wholesalearea and drive MUFG’s growth• 34 mn corporates
MUFG NOP + MS Equity in earningsof equity method investees*7• 1 mn accounts
Corporate • Domestic main bank research
No.1 for 11 years in a raw*1
(¥tn)
200

44%

29%

163
NOP in MUB

100

20

JPY deposit balance¥169 tn*2

150

NOP in Americas grows steadilyafter
the sale of MUB*5

21

22

23

26

Capturing US economic growth throughequity in earnings from MS
MS’s balanced business portfolio*6100

Mitsubishi UFJ
Financial Group(MUFG)50

MUFG

Domesticbank A

Domesticbank B

Projected GDP growth in 2025*3 (%)

22%

7*1 (source) “Corporate main bank” investigation issued by
Tokyo Shoko Research in 2023
*2 MUFG’s balance is sum of the Bank and the Trust Bank.
Other banks’ figures are calculated based on disclosuresof JPY or domestic deposit balances as at end of Mar 24*3 (source) IMF “World Economic Outlook Database, April
2024”*4 MUFG’s figures include PBs. Calculated based on eachbank’s disclosures as at end of Mar 24.
*5 FY20 result=100*6 Net profits before tax. ISG:Institutional Securities,
IM: Investment Management, WM: Wealth management(source) MS 234Q Strategic Update 24*7 as of FY23 excl. the impact of the change of closing
date in the equity method of accounting for MS

5

ISG

IM&WM

Exposures in APAC region(excl. China and Hong Kong)*4(USD Bn)
200
150

2

2

US

EU

100

1

50

India

ASEAN

(FY)

MUFG

Japan

Capture growth from various perspectives through investments in
ASEAN commercial banks and digital finance business

Asia

Foreign Foreignbank A bank B

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

28

MUFG’s Corporate Value

Top Management Dialogue between MUFG and Morgan Stanley

Alliance 2.0
Sixteen years have passed since MUFG and Morgan Stanley initiated their strategic capital alliance in 2008.
The top executives of both companies will discuss their journey so far and their outlook for the future.

Hironori Kamezawa

Mitsubishi UFJ Financial Group CEO

Edward (Ted) Pickaccounts for about 30% of MUFG’s annual profit in recent
years. We without a doubt have a powerful partner.
Pick: The relationship has evolved from the foundation built bypeople like Nagayasu-san*1, Hirano-san*2, and James Gorman,
to now a much broader one, with day-to-day touchpoints
across various areas and at multiple levels of seniority of eachfirm. This includes joint efforts on lending in connection with
M&A deals through the Loan Marketing Joint Venture (LMJV) in
the Americas, as well as achievements in Asia and Europe.
Kamezawa: In Japan, we established two joint venture entities
MUMSS and MSMS in 2010. Thanks to Morgan Stanley’s brandand expertise, MUMSS regularly ranks first or second in theJapanese Corporate M&A league tables. In global investmentbanking, we have realized several large-scale M&A deals
exceeding 1 trillion yen, with MS serving as the advisor andboth MUFG and MS providing the financing. I believe thisrepresents a unique value of our alliance that cannot be
replicated by other financial institutions. Also, in the wealthmanagement space, we have and continue to leverage
Morgan Stanley’s top-tier global insights to build our advisorybusiness and develop digital platforms, allowing us to enhance
the services we offer to our clients.
*1 Katsunori Nagayasu: Bank President from 2008 to 2012, Holding Company
President from 2010 to 2013.
*2 Nobuyuki Hirano: Bank President from 2012 to 2016, Holding Company President
from 2013 to 2019.

Morgan Stanley CEO

What’s the goal of ‘Alliance 2.0’?
How do you see the partnership and the journey
between Morgan Stanley and MUFG so far?
Pick: Our strategic alliance started in October 2008 during the
global financial crisis, when MUFG invested $9 billion in
Morgan Stanley. At that time, Morgan Stanley was in a difficult
place, and the investment from MUFG helped us pull through.
The alliance has been very beneficial to both of our firms, andour share price is now more than four times what it was at thetime of investment. We are deeply appreciative of MUFG’sinvestment decision; it’s a reason Morgan Stanley stands
stronger than ever today.
Kamezawa: I’d say our alliance is the most successful example
of a strategic alliance between two global financial institutions.
Through the partnership with Morgan Stanley, MUFG was able
to fundamentally strengthen our offerings to clients globally ininvestment banking. We are also benefiting from the growth of
the US economy. Morgan Stanley’s contribution to MUFG’s
consolidated net income cumulates to over 2.5 trillion yen
since 2013, more than 2.5 times our original investment. It

Kamezawa: Alliance 2.0 aims to deepen our existing collaborationand expand it into new areas for the next decade and beyond.
In July 2023, as part of this initiative, we announced newcollaborations in foreign exchange trading and Japaneseequity sales and research for institutional investors. I’m
pleased to say that both projects launched smoothly.
Pick: I feel the same way. In the foreign exchange tradingbusiness, our collaboration has allowed us both to enjoy thebenefits of greater scale and offer better service to our clients.
Kamezawa: Collaboration in Japanese institutional equityMUFG Report 2024

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29

MUFG’s Corporate Value

Top Management Dialogue between MUFG and Morgan Stanley

business including sales, research, and corporate access also
raised the momentum for further collaboration between the
joint venture entities in Japan. The combined operating net
income of MUMSS and MSMS for the fiscal year 2023 came insecond among all Japanese securities companies, just behind
Nomura Securities. With further collaboration between the twoentities, our aim is to be the top securities firm in Japan.
Pick: Alliance 2.0 expands upon an already historically successful
partnership by establishing new areas of collaboration. We willcontinue to explore opportunities to expand going forward.

relationship, it’s about building and disseminating the same levelof trust and relationship across all layers of the organizations. That
will become the foundation for our expanding collaboration.
Pick: That is accurate. The dinners we have alongside the GSC
always bring together a diverse group of people and is a great
opportunity to connect. Morgan Stanley remains committed toour alliance with MUFG. The respect that James held for MUFG
is something that I, along with all my colleagues at Morgan
Stanley, share. We aim to expand upon the partnership built byour predecessors in a manner that will carry on for generations.

Since Mr. Pick took over as CEO, have there been
any changes in Morgan Stanley’s business strategy
or top management relations with MUFG?

What are your prospects for the collaboration
between the two organizations?

Pick: Morgan Stanley’s business strategy remains largely
unchanged. Our Institutional Securities, Wealth Management,
and Investment Management businesses are all best in class.
The synergies between the businesses are our strength, butalso represent an immense opportunity. Building on thefoundation that James laid, we strive to continue growing in
all areas.
Kamezawa: Our executive teams have deepened
communications through the Global Steering Committee (GSC),
which meets face-to-face
twice a year, alternating
between Tokyo and New
York. The relationshipwith Morgan Stanley has
been deepened throughthese opportunities
across different levels ofmanagement, and welook to further deepen thisunder Ted’s leadership as
CEO. I’ve known Ted forover 20 years now andwhile we have a close

Pick: I visit Japan 3-4 times a year and absolutely love it here. I
feel that there is more energy in Japan now compared to a few
years ago. Having recently met with Prime Minister Kishida andGovernor Ueda of the Bank of Japan, I sensed that with the endof negative interest rates, the Japanese economy is on thebrink of a transformation it hasn’t seen in decades. Together
with MUFG, we want to be a force for growth in Japan.
Kamezawa: Hearing you say that is really encouraging. In
Japan, corporate governance reforms pushed by thegovernment and the Tokyo Stock Exchange have invigorated
M&A activities. We would like to seize this opportunity toincrease market share through the enhancement of MUMSS’s
investment banking capabilities. We would also like to continue
our discussions related to the national asset management
reinforcement plan.
Pick: A differentiated opportunity to expand Morgan Stanley’s
Wealth Management business outside the US lies right here in
Japan, with MUFG. The shift from ’savings to investment’ isaccelerating, especially with the new NISA, but it’s not just about
brokering stocks. There’s a growing demand for advisory inmanaging assets, and we’ll continue to focus onopportunities to expand in Wealth Management in Japan,
centered around our unique partnership.
Kamezawa: There is also a wide range of possibilities forcollaboration in areas such as Sales & Trading. We’ve also hadgreat advancements in knowledge-related collaborations, suchas in technology and support functions. We’ll continue toexplore various collaborations leveraging each other’s
strengths to seize future business opportunities.
Pick: Collaboration in global investment banking is acornerstone of our alliance. As we anticipate a recovery in the
US market, we look forward to continuing to build collaborative
successes and are excited about further expanding ourcollaboration to capture the growth in Asia.
Kamezawa: The foundation of our long-standing partnershiphas always been ’trust’. Since the beginning of our alliance,
MUFG has consistently sent secondees to Morgan Stanley,with the total number of dispatched employees reachingnearly 100. These employees, having gained on the groundexperience at MS and absorbed top-level industry knowledge,
have become a significant asset for MUFG. This spring, we heldthe ’Secondee Alumni Forum’ for former secondees to Morgan
Stanley, which was a great success. We believe that therelationships built through all levels, including the GSC, nurture
the trust at all levels, and will serve as the foundation that
supports our alliance in the future.
Pick: The sentiment is mutual. We remain committed to ouralliance with MUFG and are eager to take the next step
forward. Although the last
few years were marked byuncertain markets
globally, our partnershiponly grew stronger.
Looking ahead, I am
excited by what we willachieve in this new
chapter with our mostvalued partner, MUFG.

Alliance 2.0-Enhancementof strategic alliance with
Morgan Stanley

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

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MUFG’s Corporate Value

Building MUFG’s Economic Sphere in Asia
MUFG’s business in Asia

Building a conventional financial platform
Since investing in VietinBank (Vietnam) in 2013, MUFG has accelerated its investment in Asia andbuilt a conventional financial platform in Asia comprising four partner banks.
The combination of functions provided by MUFG and the partner banks enabled the provision ofcomprehensive solutions, allowing us to meet the needs of customers that could not be covered
by MUFG alone.

Yasushi Itagaki
Global Commercial Banking
Business GroupI managed Bank Danamon for four and a half years until April 2023. This allowed me toexperience the thrills and challenges of managing a local bank in Asia.

We have been deeply involved in the partner banks’ management from business and governance
perspectives, by sharing knowledge, exchanging personnel, and developing collaborations. Our
focus on enhancing corporate value boosted the significant growth of each partner bank, andthey now account for 14% of MUFG’s net operating profits.

To reflect on the history of MUFG’s business in Asia, it started with support forJapanese corporations expanding overseas as the Japanese economy recovered from
WWII. It grew as we increased business with local and Western corporations, while theU.S. and European banks contracted business around the time of the Asian currency
crisis and the collapse of Lehman Brothers. In 2013, we faced a significant turning
point in our strategy. We debated how MUFG should contribute to the growth of Asiaand concluded that the branch-based business platform was insufficient to support
the domestic demand from retail and SME customers, which will be the main driver forthe growth in the region. Thus, we decided to acquire or invest in superior local
commercial banks. We invested in VietinBank and acquired the Bank of Ayudhya,followed by investment and acquisition of commercial banks in the Philippines andIndonesia, establishing a traditional financial platform comprising four banks.

Building a digital financial platform

Now, we are at another significant crossroads. Digital finance is growing rapidly in Asia,
enabling the provision of services to people who don’t have sufficient access tofinancial services. We will take the lead in investing in Asian digital finance services
providers, capturing the growth of digital finance and contributing to driving social
progress in Asia with financial inclusion by focusing on providing services to morecustomers through broader channels.

In addition, we will promote collaboration and knowledge sharing among the investee digitalfinance services providers, partner banks, and MUFG group companies, aiming to build MUFG’s
unique digital economic sphere, which will also include external partners.

Recently, the need for digital financial services has grown rapidly in Asia against the backdrop of
the proliferation of the internet and smartphones. To capture the growth of consumer finance inAsia, which is expected to further digitalize, and to capture the future leader in the field, MUFG
has started strategic investment in digital finance services providers to build a foundation for thedigital financial platform.
Under the new MTBP, we will pursue strategic investment opportunities for digital finance services
providers under the “Asia x Digital” strategy. By focusing on supporting the growth of investees, wewill capture the development of digital financial services in Asia that could not be fully captured
through conventional financial services and contribute to financial inclusion in the region.

2016

2013

A decade has passed since our initial investment in Asia. Our partner banks havegrown substantially, and the collaboration with MUFG is developing further. In the next
decade, we will consolidate the conventional financing platform built around the four
partner banks with a new digital financial platform to be built by investing in digitalbusinesses to create an economic sphere for MUFG in Asia.

Digital Strategy

2013

2019

2020

2022

2022

2023

2024

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

MUFG’s Corporate Value

Building MUFG’s Economic Sphere in Asia

Collaboration between MUFG and partner banks

Promotion of “Asia x Digital” strategy

In our collaboration with partner banks, MUFG provided unique solutions and diverse services toresolve issues for our partner banks’ customers and the region. We also promoted providing highadded-value services to our corporate customers by effectively utilizing our partner banks’customer base and functions. More recently, successful projects between partner banks haveincreased, further solidifying the collaboration framework among MUFG and partner banks.

Under the “Asia x Digital” strategy, MUFG provides unique added value as a strategic investor indigital finance services providers. These include (1) collaboration with MUFG Group companies,(2) business opportunities with MUFG’s corporate customers, (3) provision of MUFG’s financial
solutions, and (4) access to the MUFG’s investee startup ecosystem, providing multifaceted
support for investee’s growth.

Example of collaboration in Syndicated Loan
On July 16, 2024, MUFG executed a syndicated loan agreement with PT Mega Central
Finance to support automotive lending in Indonesia. This was the first syndicatedloan working together at the same time with our partner banks, Bank Danamon and
Security Bank.

MUFG’s unique ecosystem: MODE (MUFG Openly-connected Digital Ecosystem)MUFG also focuses on accumulating consumer finance knowledge acquired throughinvestment in digital finance services providers, knowledge sharing, and synergy
creation among investees. This has led to the formulation of a unique ecosystem called
MODE (MUFG Openly-connected Digital Ecosystem). To enhance value for the wholeof the MUFG Group, we will further promote cooperation and collaboration among
entities within the MUFG ecosystem, including investees, partner banks, and MUFG
Group companies.

Motorcycles and automobiles are essential transport infrastructure for commuting inIndonesia. Auto loans play a vital role in helping low-middle income segment people
own motorcycles and automobiles, and the project contributes to promoting financial
inclusion in Indonesia.
The project is an example of a successful collaboration that combined MUFG’s
syndicate loan origination capabilities with the local business credit analysis expertiseof the partner banks. We are also aiming to obtain Second Party Opinion to classify thisloan as a social loan in the future. MUFG will continue to promote various collaboration
projects, including in the sustainable finance area.

Invitation

Arranger

In November 2023, the inaugural “MUFG Fintech Festival (MFF)” was held in Singapore
as the first MODE event. Over 100 participants from MUFG Group companies,
including fintech investees, attended and engaged in active networking. We areaccelerating our activities, such as by exhibitingat the Singapore Fintech Festival (SFF), one of thelargest fintech events worldwide, to communicate
MUFG’s initiatives.

Providing added value to investees: Four accesses

Syndicated loan

Participation

Auto loan(motorcycles / automobiles)
Retail customers

The scene of the signing ceremony

Access to MUFG
Group companies

Access to MUFG
customer baseAccess to MUFG’s
financial solutions

Access to the ecosystem
formulated by MUFG and
its investees
Top: Scene from MFF, bottom: Scenefrom SFF

31

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

32

MUFG’s Corporate Value

Asia x Digital Platform*1 Supporting the MUFG Economic SphereWe will capture the expanding financial needs of Asia and capitalize on the region’s growth through investments in digital finance and other areas.

ThailandIndonesia

Philippines

Vietnam

India

Corporates

Large
corporates
SMEs

Commercial
bank

High
Net-worthCommercial
bank

Commercial
bank

Commercial
bank

*2

Securities
company
Individuals

Non-bank

Non-bank

Auto loan

Middle-mass

E-Wallet

E-Commerce,
BNPL*4, etc.

Offline stores,
POS loans*5, etc.

On-demandtransport services,
food delivery, etc.

Non-bank,
POS loans*5, etc.

Unbanked*3
Finance to startups through AI based credit model (fintech)Startups

MUIP*6
Garuda Fund
Investment fund for startups

MUFG
Ganesha Fund
Investment in startups

Digital finance investments*1 As of the end of June 2024 *2 Name changed from Capital Nomura Securities *3 Customers without bank accounts *4 Buy Now Pay Later. Payment method in which the purchase price of a product is paid at a later date *5 Point of Sales loans. Installment loanoffered when purchasing a product at a durable goods store, etc. *6 MUFJ Innovation Partners

33

Strategies to
Improve
Corporate Value
CONTENTS
Review of the Previous Medium-Term Business Plan (MTBP)

34

Medium-Term Business Plan (FY2024–FY2026)

35

Expand & Refine Growth Strategies

36(1) Strengthen Domestic Retail Customer Base

38(2) Strengthen Corporate × WM Business39(3) Evolve GCIB-GM Integrated Business Model

40(4) Strengthen APAC Business and Platform Resilience41(5) Contribute to Making Japan a Leading
Asset Management Center

42(6) Support Value Chain in Green Transformation (GX)

43(7) Challenge to Build a New Business Portfolio

44

Results by Business Group45

Drive Social & Environmental Progress46

CSuO Message

47(1) Sustainable Society

48

Promoting Sustainable Business49

Responses to Climate Change

50(2) Vibrant Society

52

Startup Support

53(3) Resilient Society

54

Accelerate Transformation & Innovation

55

CHRO Message

56(1) Acceleration of Agility Transformation

58(2) Enhance Human Capital

59(3) Enhance AI/Data Infrastructure60(4) Increase System Development Capability

61

Experienced Hire Round Table

62

Highlights of Transformation

65

MUFG
KOGEI Project2

MUFG Bank Nagoya Building 10F Hall ceilingJapanese zelkova timber produced in Nagano Prefecture isused in a lattice pattern depicting Nagoya Yuzen textiles
Click for details about the MUFG KOGEI Project.

MUFG Report 2024

34

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Strategies to Improve Corporate Value

Review of the Previous Medium-Term Business Plan (MTBP)FY2015–2017
Basic
PolicyFY2018–2020

A Group-Driven Approach

FY2021–2023

Group-Integrated Operations

Maintain our focus on the Japanese market
while working to incorporate the growth of
the global market and evolving and reforming
our business model

Realize simple, speedy and transparent
group-integrated operations
Execute the MUFG Re-Imagining Strategy to swiftly and flexibly
respond to structural changes and thereby put the company ona growth track.

1. Customer perspective 2. Group-driven approach
3. Productivity improvements

Purpose-Driven Management

Strive to realize our Purpose, “Empowering a brighter
future.” beginning with addressing challenges eachstakeholder is now confronting and delivering ourstrategic solutions to such challenges
Position this period as “three years of new challenges andtransformation” in which we achieve significant growth based on
the close assessment of changes now taking place in society

Key
Strategies

Contribute to the revitalization of the Japanese economy and strengthen
the business foundations in Japan to support steady growth
Enhance and expand global businesses as a driving force for growthUpgrade and reform our business model and explore new business areasand customer segments
Maintain a strong capital base and improve ROE with sophisticatedfinancial and capital management
Build administration practices appropriate for Global Systemically
Important Financial Institutions (G-SIFIs)

Redefine business segmentation
Promote the effective and efficient utilization of the Group’s resources
Implement the “Eleven Transformation Initiatives”

Aim to be the “premier business partner that pioneers the future throughthe power of finance and digital services” by the development of abusiness model finely tuned to the evolving business environment
Three Strategic Pillars
Corporate Transformation—Change our modes of operation and businessexecution
Strategies for Growth—Strengthen profitability
Structural Reforms—Ensure business resilience

Results
Summary

Expanded our business platforms, including our commercial bank networkin the ASEAN region and global investor services functions

Made progress in the development of a group-wide, integrated management
structure and diversified profit sources by securing an extensive overseas
business portfolio consisting of a robust commercial banking platform in the
ASEAN region and global asset management operations

Achievements in corporate transformation, growth strategy, and structuralreform improved “earning capacity”

Failed to meet targets due to the emergence of disadvantageous external
trends, which included a negative interest-rate policy introduced by Bankof Japan (BOJ) that caused our operating results to stagnate in a way that
surpassed the effect of our organizational countermeasures

Major
achievements
Reasons for
not achieving
targets

Challenges

Promote the reform of our business model centered on traditionalcommercial banking operations in Japan
Update “group-driven management” to “group-based, integrated
management”

Failed to meet ROE and expense ratio targets mainly due to growing
costs arising from organizational expansion and the impact of the
COVID-19 pandemic
Strengthen revenue base for the domestic busines
Reshape global business (shift to improvement in “quality”)
Secure capabilities to swiftly respond to changes in the environment
Reshape a portion of our strategies under the “Eleven Transformation
Initiatives” to address shortfalls in their outcomes

Take the change in environment as an opportunity to
pursue and produce growth
Shift the gear for driving social and environmental
progress and clarify the relationship with and impact
on management strategies
In addition to employees’ increased willingness totake on new challenges, further focus on agility

New
MTBP

Financial Targets
Indicators

FY2015FY2016FY2017

Indicators

FY2018FY2019FY2020Indicators

FY2021

FY2022

FY2023

ROE

7.6%

7.2%

7.5%

ROE

6.4%

3.8%

5.6%

ROE

7.7%

7.0%

8.5%
(8.1%)*4

Net income¥951.4 bn¥926.4 bn¥989.6 bn

Net income¥872.6 bn¥528.1 bn¥777.0 bn

Net income¥1,130.8 bn¥1,116.4 bn¥1,490.7 bn

CET1 capital ratio*1

12.1%

11.9%

12.5%

CET1 capital ratio*2

11.4%

11.7%

11.9%

CET1 capital ratio*3

10.4%

10.3%

10.1%

*1 Common Equity Tier 1 capital ratio calculated on the basis of regulations applied at
the end of March 2019, including net unrealized gains on available-for-sale securities*2 Estimated Common Equity Tier 1 Capital ratio reflecting the RWA increase
calculated on the finalized Basel III reforms basis, including net unrealized gains onavailable-for-sale securities*3 Estimated Common Equity Tier 1 Capital ratio reflecting the RWA increase calculatedon the finalized Basel III reforms basis, excluding net unrealized gains on available-forsale securities*4 Excluding the impact of change of the equity method accounting date of MSMUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Strategies to Improve Corporate Value

Medium-Term Business Plan (FY2024–FY2026)

Drive Social &Environmental
Progress

New MTBP

Expand &Refine Growth
Strategies

PurposeCommitted to empowering a brighter future.

ValuesIntegrity and Responsibility, Professionalism and Teamwork, Challenge and Agility

VisionBe the world’s most trusted financial group—Three years to pursue and produce growth—

Fundamental Direction

Our management policy of focusing on ROE remains
unchanged. Profits, expenses and risk-weighted assets willremain drivers to achieve the ROE target. We will start byachieving the FY2026 target to realize the medium- to- longterm ROE target of 9% to 10%.

Overall picture of the new MTBP (FY2024–FY2026)

MUFG WayThe new MTBP period is positioned as “three years to pursue
and produce growth”, taking the opportunity offered by theenvironmental change surrounding MUFG. In addition to
expanding and refining our growth strategies, we will further
strengthen efforts to drive social & environmental progress, wewill accelerate corporate transformation to support these
activities to increase corporate value.

To serve our commitment to empowering a brighter future, we aim to fulfill ourunique potential to “bridge” the divided world, producing economic and social value.

Threepillars of
the MTBP

Expand &Refine Growth Strategies

Financial
Targets

Drive Social &Environmental Progress

Accelerate
Transformation & Innovation
FY2026 ROE: Approx. 9% / NOP: More than ¥2.1 tn

Accelerate Transformation & Innovation

Three drivers to achieve ROE target(1) Profits(2) Expenses(3) RWA• NOP: More than ¥2.1 tn• Profits attributable to owners ofparent: More than ¥1.6 tn• Expense ratio: Approx. 60%• Reduction of low profitability
RWA: ¥5 tn• Increase of high profitability
RWA: ¥12 tn

35

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

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Strategies to Improve Corporate Value

Expand & Refine Growth Strategies
Focus areas were selected for realizing growth during the next
three years, and seven growth strategies were formulated. We
will (1) enhance retail customer base to maximize the Life Time
Value (LTV) and (2) strengthen the succession business byaccelerating the Corporate x WM model, to generate growth inJapan. In overseas, (3) GCIB and Global Markets will collaborate
to improve profitability and we will (4) capture growth in Asia
through collaboration between MUFG and partner banks. In the(5) asset management and (6) green transformation area, we will
pursue both the solution of societal issues and improvement of
economic and social values, to (7) build a new business portfoliothat will drive MUFG’s growth in the medium- to long-term.

Scope

Aim

Domestic retail business(excluding the wealthmanagement)

Maximize “LTV (Life Time Value) x customer base”• Expanding customer touchpoint by optimally
mixing three channels: “Real (face-to-face) ×
Remote × Digital”• Deliver customers experience that makes
customers feel “I am glad I chose MUFG”

Corporate and retailbusiness with ownercompanies and families.

Capturing the entire ecosystem of ownercompanies through business and asset
succession originating from corporate andasset management, inheritance and real estatetransactions originating from individuals.

GCIB-GM integrated
operation for Global
Corporates / Financial
Institutions

Increase profits by cross-selling with improved
solution capability through GCIB-GM integrated
operation

P41

Retail banking business,wholesale banking business(Japanese / non-Japanese
corporate clients), andother businesses engaged
by the investees in APAC

Implement ambidextrous management• Enhance the profitability of existing
businesses by expanding their functionalities
and improving operational efficiency• Continue to explore investment opportunities(digital startups, etc.)(5) Contribute to
Making Japana Leading AssetManagement Center

Domestic and global AM/IS,
pension, investment advice
and financial literacy

Driving growth in entire AM market through ourapproach to the entire investment chain andmaking Japan a leading AM center

GX-related transactions forJapanese andnon-Japanese customers

Promoting GX investment and financing
through customer transition support

Create MUFG’s new
products and services• In addition to the existing
channels, envisionoffering products andservices via new channels

To secure medium to long-term growth of
MUFG and enhance corporate resilience andvalue by promoting new businesses
development and creating a portfolio of
high-growth and high-profitability ventures.

(1) Strengthen
Domestic RetailCustomer Base
P38(2) Strengthen
Corporate x WM
Business
P39(3) Evolve GCIB-GM
Integrated
Business Model
P40

Expand &Refine Growth
Strategies(4) Strengthen APAC
Business andPlatform Resilience
Drive Social &Environmental
Progress

P42

Accelerate Transformation & Innovation(6) Support Value
Chain in Green
Transformation

P43(7) Challenge to
Build a New
Business Portfolio
P44

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

37

Strategies to Improve Corporate Value

Expand & Refine Growth Strategies
The Plan of net operating profits*1

To expand and refine growth strategies, seven growthstrategies were formulated for “Products x Channel” inquadrants. Through the strategies, we will generate
growth in Japan and capture the upside of overseas
growth starting with Asia. Furthermore, we will contributeto solution of societal issues worldwide, and promote thegrowth strategies for the whole of MUFG. Prepare for thechange in interest rate environment and further optimize
the balance sheet to increase the net operating profit by¥500 billion in three years.

(1) Strengthen
Domestic RetailCustomer Base

Expand & Refine
Growth Strategies+¥340 bn
NOP+¥500 bn(2) Strengthen
Corporate x WM
Business

Position of each strategy
in Products x Channels quadrants
New Channels
Existing Products x
New Channels¥1.6 tn

FY
2023

Rises in
JPY interest rates*3+¥85 bn–¥150 bn(3) Evolve GCIB-GM
Integrated
Business Model

New Products x
New Channels(4) Strengthen
APAC Businessand Platform
Resilience(5) Contribute to
Making Japana Leading AssetManagement Center

New Products

Existing Products

Improving
Balance
Sheet
Profitability(6) Support value
chain in green
transformation(7) Challenge tobuild a new
business portfolio*2

Existing Products x
Existing Channels

New Products x
Existing Channels

Existing Channels

Improving Balance Sheet Profitability
others (treasury etc.)

FY
2026

¥2.1 tn*1 Managerial accounting basis. Local currency basis *2 Not including in FY2026 NOP growth *3 +15bbp. Please refer the detailMUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

1

Strategies to Improve Corporate Value

38

Expand & Refine Growth Strategies

Major KPI

Strengthen Domestic RetailCustomer BaseNo. of IB MAU

10 mn

Balance of financial assets
from retail customers

100 tnApprox. ¥Target / Strategy Aim
Committed to empowering our customers’ lives
Maximize the “Life Time Value (LTV) x Customer Base” by expanding
customer touchpoints through the optimal mix of face-to-face, remote, anddigital, and realizing customer experience that makes them feel “I’m glad I
chose MUFG”

As the domestic retail environment was drastically reshaped with the lifting of the negative interest
rate policy by the Bank of Japan and increased demand for asset management, we will aim to create
a new retail business under our purpose of “committed to empowering our customers’ lives.”
For retail customers, we will provide services at various touchpoints by optimally mixing theface-to-face, remote, and digital channels and meeting their needs from a medium- to long-term
perspective, delivering customer experience that makes them feel “I’m glad I chose MUFG.”
Through these efforts, we will maximize the “Life Time Value (LTV) x customer base.”
To become the financial institution of choice, we will further accelerate the Group integrated
operations leveraging the Group’s consolidated strength to meet various needs of the customers.

Summary of Key Measures
Expansion ofcustomer touchpoint
Enhancement of salesforce

Aggregation with other services
Credit card

Evolution of customer
experience(CX)
6
MAP*1: Personalized proposals
Product / Service

Online securities
QR code payment
MoneyCanvas

Loyalty program

Enhancementof products
andservices

Effective promotion
IncentiveP

Asset
management

Life insurance

PensionHome loanetc.

*1: Money Advisory Platform. A function to provide customers with optimal advice on financial products based on analysis ofcollected customer data.

Expansion of customer touchpoint: Approach the group of customers with less touchpoints
through BaaS, offering financial functions embedded in services provided by external partners.
We will also effectively enhance touchpoints by extending the business hours for the remotechannel and opening new branches based on foot traffic and market trends.
Effective promotion / incentive: Improve customer appeal with initiatives including theimplementation of group-based promotions and review of the points program to offer
consumer benefits.
Evolution of Customer experience (CX): Enhance internet banking to develop a highly
convenient application connected with Group companies. Collaborate with WealthNavi Inc., todevelop product proposal function that matches each customer’s needs. Build a long-termbusiness relationship with customers as a “daily use” financial institution.
Enhancement of salesforce: Increase sales activities and improve the quality with balanced
operation between front and back offices by reducing branch counter administration, using
data to capture the customers’ needs, and re-skilling the salesforce.
Enhancement of products and services: Develop appealing products, set attractive interest
rates, and improve service convenience to make customers choose MUFG for their life events.

MUFG Report 2024

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Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

39

Expand & Refine Growth Strategies

Strategies to Improve Corporate Value

Major KPI

Strengthen
Corporate × WM Business

Loan balance related tobusiness succession

1 tn

¥

Net operating profits

88 bn

¥

Target / Strategy Aim
We will contribute to the growth and development of our clients bycapturing the entire owner company ecosystem, including capital policies
and business succession originating from corporate and asset management,
inheritance and real estate transactions originating from individuals.

With increased interest in business and asset succession due to the aging of business owners, weestablished a strong business model by consolidating corporate and individual customers undersingle business unit to approach both corporate and individual needs. During the previous MTBP,
we provided ¥2 trillion in loans related to business succession.
We will capture the corporate needs for capital policy and business succession and individual
needs for asset management and inheritance on a group-wide basis to improve solution forbusiness and expand customer touchpoint, to further contribute to the customers’ growthand development.

Summary of Key Measures
Improve solutions for business and asset succession
Corporate
Business succession

Individual

Corporate to Individual

Family succession
M&A
PE Fund

Improve solutions for business and asset succession
We will strengthen the business and asset succession business for corporate and retailbusinesses, applying the ownership, business, and family viewpoints.

Asset management
Asset
management

Ownershipview

Inheritance(testamentary)Businessview

Family
view

Buy

Sell
Real estate

IPO

Individual to corporate
Corporate lending(business succession)

Lending

Individual & AM company(loans to WM individuals)

Family succession: Strengthen business and asset succession team in aspect of quality andquantity, and increase proposal activities to owners
Succession out of family: Strengthen the headquarter and front office deal capturing ability
by introducing the internal M&A certification system aimed to enhance the headquarters M&A
support team and deepening RMs’ M&A knowledge.
Family business: Expand touchpoints with customers by strengthening the organization andthrough study sessions in collaboration with academia.

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

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Strategies to Improve Corporate Value

40

Expand & Refine Growth Strategies

Major KPI

Evolve GCIB-GM Integrated
Business Model

GCIB-GM
ROE

8.3%

Syndication /DCM Wallet Rank

10

No.

(IG / Non-IG)

FIC Growth Rate
Growth Rate above

Peers

Target / Strategy Aim
Build a business group / entity-agnostic framework for GCIB-GM integrated
capital efficiency improvement
Accelerate the growth by reinforcing product competitiveness and thePrimary & Secondary value chain

GCIB and GM business groups started integrated operation during the previous MTBP to build aproduct-agnostic business operation and further improve capital efficiency by establishing sharedfinancial targets and KPIs. Improvement of balance sheet profitability by increasing fee income
through O&D / OtoD / cross-selling and promotion of institutional investor business has produced
steady results.
Under the new MTBP, we will aim for further growth by reinforcing Primary and Secondaryalignment and value chain centering on underwriting business, and further strengthening crossselling by reinforcing product competitiveness.

Summary of Key Measures
Corporates
Institutional
investors

GCIB

GM

Reinforce alignment & value chain• Reinforce Primary & Secondary alignment / value chain
Institutional
investors

Further strengthen cross-selling
Bank / Securities integrated platform*1
Collaboration in
Investment Banking

MS

Collaboration in
FX trading area

*1 Consider transferring overseas securities entities from MUSHD to MUBK excluding the U.S. (MUSA is already under MUAH andwill not be affected by this change)•

Corporates: Strengthen the platform by expanding business employees and products for
Credit S&T (HY and Leveraged Loan), while maintaining and improving the syndication / DCM
Wallet Rank.
Institutional investors: Strengthen debt solution capability through the integrated Bank /Securities operation. Accelerate O&D via further alignment of Bank / Securities sales.
Further strengthen cross-selling: Reinforce product competitiveness with collaboration in FX
trading area through MSMS (enhance pricing ability, expand product / service lineup). For
Derivatives, promote high-profitability business and high value-added products and enhancetransactions associated with customers’ business flows.

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Strategies to Improve Corporate Value

41

Expand & Refine Growth Strategies

Major KPI

Strengthen APAC
Business andPlatform Resilience

ROE*1

Over

10%

Net operating profits

600 bn¥*1 ROE after amortization of goodwill and intangible assets

Target / Strategy Aim
MUFG has positioned Asia as our second home market and has built a unique platform including
the four commercial banks in Thailand, Indonesia, Vietnam, and the Philippines (“Partner Banks:
PB”). More recently, we have striven to capture the expanding financial needs by investing indigital finance players and startups.

TargetConnecting APAC to empower a brighter future.
Driving MUFG’s aspirations by powering APAC’s growth.
Aim
Exploration and Exploitation: Continue to invest for growth while further
develop our existing business.

Under the new MTBP, we aim to contribute to Asia’s economic growth and social development bybringing Asia together as a region and connecting Asia with the rest of the world through thecapabilities of MUFG’s network and the combination of finance and digital technologies. In themarket expected to continue to demonstrate strong growth, we will strive to bolster profitability
by going deeper in existing businesses to drive group-wide ROE while continuing growthinvestment to steadily capture Asian growth over into the future.

Summary of Key Measures
Boost short-term profitability

Future profit sources

Expand customer base

Investment for future growth

2 Challenge ourselves in

new domains

3 Capitalize on thegrowth of India

Existing business
1

Capture recurring
revenue

5 Consolidate

business base /core competence

4 Cultivate

Asia x digital

Expand products
2

Challenge ourselves in
new domains

Capture recurring revenue: Utilize the “growth and governance” post-merger integration (PMI)
strategy to reinforce the PBs’ Platform and enhance businesses that consumes no / low RWAs
such as Cash / Trade.
Challenge in new domains: Contribute to achieve carbon neutrality in Asia and expand thetransaction banking product lineup including collaboration with PBs.
Capitalize on the growth of India: Support the growth of India in each segment by addressing
the funding needs of large corporates and boosting collaboration across platforms andthrough DMI Finance, a non-bank financial company with a focus on consumer digital lending.
Cultivate Asia x digital: Establish a new digital financial platform that stands alongside theexisting PB platform by strategic investment in digital finance services providers. Offer uniqueadded value to provide multi-faceted support for growth of investees.
Consolidate business base / core competence: Aim to enhance and streamline CC functions
by utilizing MUFG Global Service.

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Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

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Strategies to Improve Corporate Value

42

Expand & Refine Growth Strategies

Major KPI

Contribute to Making
Japan a Leading AssetManagement Center

Asset undermanagement

200 tn¥(FY2029)

BPO contracting
balance

100 tn¥(FY2029)

Target / Strategy Aim
Contribute to making Japan a leading asset management center to empower
people to build more prosperous lives.
Asset management [AM]Investor services [IS]Sales / consulting
Financial and economic education

AM Service beyond customers’ expectations
Pursue efficiency in AM industry
Contribute to expanding customer assets
Contribute to autonomous asset formulation foreach generation

As a global comprehensive financial services group, we will promote investment and support
asset formation through further enhancing our industry-leading asset management and investor
services and providing customer-centered professional investment advisory services, diverse
solutions, as well as financial and economic education. For AM, our goal is to be Japan’s number
one asset manager with a global presence by providing services beyond customers’ expectations
though enhancing our investment capabilities while strengthening the governance framework. In
IS, we will promote business process outsourcing (BPO) contracting to contribute to improving
the efficiency of the industry by providing an environment where asset managers canconcentrate on investing. In sales and consulting, we will contribute to increasing customer
assets through customer-oriented operations, improving the quality of advice, and expanding
customer touchpoints. On financial and economic education, we will contribute to promoting theshift from savings to investment and the development of future asset formulation customers by
reinforcing efforts to improve financial literacy of all generations.

Summary of Key Measures
Overview of the Investment Chain
Asset Management Industry
1 Strengthen
AM functions

Investor

Investee2 Expand customer assets
Distributor
Household /individual

Providefunding

Asset ownerDistributereturns

Asset manager
Investor service
provider3 Enhance
financial literacy

Domestic /globalcompanies

Strengthen AM functions: Consolidate expertise within the Group, incorporate inorganic
expertise, and utilize MUFG Global EMP*1 to develop a global high-performing asset
management team. In addition, we will provide an environment where asset managers canconcentrate on investing by promoting the industry’s first single-party net asset value
calculation service and BPO for middle and back office operations.
Expand customers’ assets: Create proposals for comprehensive solutions by taking goalsbased approaches. Furthermore, we will support the customers’ asset formulation by
expanding and enriching our digital platform including Mitsubishi UFJ Direct (Internet Banking),
promotion of the new NISA program, and providing online securities functions.
Enhance financial literacy: Provide an extensive lineup of services through both in-person and online
channels in accordance with customers’ attributes and needs. For example, we will expand thefunctions of the D-Canvas app aimed at defined contribution pension plan participants by supportingfor investment product selection depending on participants’ financial literacy. We will also promote
financial and economic education as a Group to develop future asset formulation customers.
*1: Emerging Managers ProgramMUFG Report 2024

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Strategies to Improve Corporate Value

43

Expand & Refine Growth Strategies

Major KPI

Support Value Chain inGreen Transformation(GX)

Number of co-created GX projects*1

50*1 Number of business co-creation through dialogue and engagement with customers

Target / Strategy Aim
Promoting GX investment and financing through customertransition support

Target
Aim

3

2
4

1

Support GX investment
in Japan
Develop and import overseas
clean energy / resources
Support Japanese
corporate’s overseas GX
business expansion
Support energy transition in
emerging countries throughpublic-private partnerships

Countries around the world are promoting establishment of relevant policies, laws and regulations
to achieve carbon neutrality by 2050. Awareness by the investors and consumers are changing,
and as the business environment drastically shifts, customers are striving to convert their businessmodels to prepare for the transformation of industrial structures and social systems towards
carbon neutrality (Green Transformation: GX).
Under this environment, MUFG aims to contribute to promoting GX and creating new business
opportunities through supporting customers’ transition. Our strategy includes supporting GX
investments in Japan, and while paying attention to global policy trends, support overseas clean
energy / resource development / import, overseas GX business development by Japanese
corporates, and energy transition of emerging countries with public-private partnerships.

Summary of Key Measures
Research & Advocacy
Engagement
Business
concept
development• Transition Whitepaper • Asia Transition Whitepaper etc.
• Support customers to develop transition stories

Origination • Collaboration with governments (Participate in national projects, etc.)(Value chain • Support emerging countries through public-private partnerships
oriented)• Value-chain approach (storage batteries, hydrogen, ammonia, etc.)

Acquisition ofbusiness opportunities• Provide finance smoothly to support clients‘ GX investments and lending activities

Strengthen the corporate infrastructure

Enhance employees’knowledge on GX and sustainability

We will promote engagement activities by leveraging our expertise accumulated through the
publication of the Transition Whitepaper and dialogue with various governments and relatedparties to support customers to develop transition stories. Considering the creation of new value
chains beyond conventional sectors due to the change in industrial structures with GX, we will
promote GX investments and loans by supporting the customers’ business concept development
and developing finance schemes for smooth financing.
Furthermore, we will enhance the GX and sustainability skills and expertise of employees, who willbe the foundation of our activities.

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Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Strategies to Improve Corporate Value

44

Expand & Refine Growth Strategies

Challenge to Build a
New Business Portfolio

Target / Strategy Aim
Group-based promotion of new business development
Develop a high-growth, high-profitability business portfolio
Enhance corporate resilience and value by achieving sustainable growth

The business environment for financial institutions is changing drastically, including the diversified
needs of the society and customers, change in industrial structures caused by technologicaldevelopment, and entry of other sector players into financial business. In addition to achieving
sustainable growth, the development of new products and services (new business) is becoming
increasingly important from the perspective of defending existing business. Accordingly, “Newbusiness development” has been added to our growth strategy for the new MTBP, to be promotedby the Group. The strategy will be implemented from a medium- to long-term perspective tocreate new added value beyond existing financial business, and will be applied to existing andnew channels. We will create new high-growth, high-profitability business portfolio that will be thepillar of MUFG business in the future to achieve sustainable growth, enhance MUFG’s resilience,and improve corporate value.

Summary of Key Measures
Assumed approachA

Entry into new industries

B

Evolution offinancial business model

Introduction ofC
non-financial business model
D

Technology innovation

Positioning of the initiatives
Case 3.
(Web3)New
ChannelCase 1.
(Space)Case 2.
(BaaS, etc.)

Existing
ChannelExisting Products

New ProductsSpace related business: Aim to expand MUFG’s business and pioneer new industries byconnecting all industries with the space as the node, through the utilization of cutting-edge
technologies including satellite data (geospatial information) leveraging insights gained fromfour strategic investments*1.
Expansion of customer touchpoint: In addition to offering the comprehensive asset
management service “MoneyCanvas” under Banking as a Service (BaaS) approach, we havedeveloped a BaaS platform for offering a full-banking application for external partners. We willcontinue to expand customer touchpoints with the partners and improve customer experience.
Web3 / digital currency: Aim to develop products and services using blockchain technology.
Currently we have started PoC*2 of a supply chain visualization service. Going forward, we aim
to provide supply chain-related trade flow data x financial services, including the realization of
the Unified Ledger proposed by BIS.
*1: Space One, Astroscale Holdings, Sierra Space Corporation, Satellite Data Services (SDS)*2: Proof of Concept.

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Strategies to Improve Corporate Value

45

Expand & Refine Growth Strategies

Results by Business GroupNet Operating Profits by Business Group*1

RD*3

CWM*3

JCIB

GCB

GCIB

Global Markets

AM/IS

(¥bn)
FY2026

230.0

250.0

515.0

350.0

380.0

300.0

145.0

2,100 ormore*2(The final year of the current MTBP)FY2023

200.0

205.0

515.0

255.0

(The final year of the previous MTBP)FY2020190.5

110.0 1,600*2

285.0

25.0

53.8

237.1

272.7

146.1

79.8 1,200*2

334.1

Seven Growth Strategies
Strengthen domestic retail customer baseStrengthen corporate x WM business
Evolve GCIB-GM integrated business model
Strengthen APAC business and platform
resilience
Contribute to making Japan a leading asset
management center
Support Value Chain in Green Transformation(GX)
Challenge to build a new business portfolio*4(The final year of the MTBP before last)

Retail & Digital Business Group (R&D)*3

Commercial Banking & Wealth Management
Business Group (CWM)*3

Japanese Corporate & Investment Banking
Business Group (JCIB)

Domestic retail

Corporate × WM

APAC businessLeading AM center

Leading AM center

GX value chain

Tadashi Yamamoto

Yutaka Miyashita

Seiichiro Akita

Group Head
R&D

Global Corporate & Investment Banking BusinessGroup (GCIB)

Group Head
CWM

Global Markets Business Group

Asset Management & Investor Services BusinessGroup (AM/IS)

GCIB-GM integration

APAC business

APAC businessLeading AM center

Leading AM center

GX value chain

Group HeadGCIB

APAC businessYasushi ItagakiGroup Head
JCIB

GCIB-GM integration

Fumitaka Nakahama

Global Commercial Banking Business Group (GCB)

Group Head
GCB

Please refer to the details ofeach business group below.

MUFG Investors Day 2024

Hiroyuki Seki
Group Head
Global Markets

Takafumi Ihara
Group Head
AM/IS

WebcastPresentation Material
Speech Script
Main Q&A*1 On a managerial accounting basis. Different exchange rates are applied to FY2020, FY2023, and FY2026. Accordingly, the increase in net operating profits from FY2020 to FY2023 includes the impact of foreign exchange *2 Including net operating profits for headquarters and other segments(FY2026: ¥(80.0) billion, FY2023: ¥(30.0) billion), FY2020: ¥(144.6) billion) *3 Business group structure was revised as of April 1, 2024, to further enhance the retail strategy. Digital Service Business Group became the Retail & Digital Business Group to be responsible for individual customers (excluding wealth management) Retail & Commercial Banking Business Group became the Commercial Banking & Wealth Management Business Group to be responsible for corporations and wealth management clients *4 Strategy undertaken by all business groupMUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Strategies to Improve Corporate Value

Drive Social & Environmental Progress
Pursuing economic and social values is the key to improving
corporate value. We identified ten priority issues under thesubheads “Sustainable Society,” “Vibrant Society,” and “Resilient
Society” and set specific targets as KPIs to strongly promote
initiatives for solution of social issues.

Sustainable
society

1. Achievement of carbon
neutral society

KPIs

Sustainable finance
2. Natural capital andbiodiversity restoration¥100 tn(total for FY2019–30)

3. Promotion of circular economy
P48

Startup market capitalization
1. Industry development andinnovation support

Vibrantsociety
Expand &Refine Growth
Strategies

2. Response to aging population& low birthrate

Drive Social &Environmental
Progress

3. Increasing access tofinancial services

P52

4. Management focusing on
human capital

1. Respect for human rights

2. Ensuring secure andsafe services

P54

Financial education provided toOver 500k people(total for FY2024–26)

Digital lending provided to

14 mn people

Accelerate Transformation & Innovation

Resilientsociety¥20 tn(FY2026)

3. Demonstration of robust
corporate governance(FY2026)

MUFG engagement score

Improved46

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Drive Social & Environmental Progress

CSuO Message
More importantly, MUFG positioned priority issues as one of
the three pillars of the MTBP, “Drive Social & Environmental
Progress,” in the management strategy itself. We clarified therole of MUFG by setting specific KPIs and promoting value
creation through the solution of social issues as the core ofour business. For example, the total sustainable finance target
for FY2019-30 increased significantly from ¥35 trillion to ¥100
trillion. We will meet the financing demand and promote theresulting solutions to the issues. Such initiatives lead to theembodiment of MUFG’s purpose and are deemed tocontribute to social wellbeing.

To become a financial institutionthat co-creates social value
with customers
Miyuki Zeniya Group CSuO

Making “Drive Social & Environmental
Progress” the axis of our MTBPMUFG has previously established priority issues in oursustainability management to realize a sustainable environmentand society (the “Priority Issues”). Under the previous MTBP, weaimed to embody our purpose by addressing the Priority Issues
to contribute to realizing sustainable “people, society and global
environment.” However, I felt that there was still room for further
integration of Priority Issues and business strategy.
In the course of discussions to develop the new MTBP, we
reviewed the Priority Issues by considering the global socialand environmental issues, stakeholder expectations, including
the requests for non-financial information disclosure, and thesignificance from both business opportunity and risk
perspectives. Consequently, we added circular economy,
respect for human rights, ensuring secure and safe services,and corporate governance issues, and established the threesocieties we aim for and ten Priority Issues.

Aspirations for the three societies
In developing the MTBP, we discussed the medium- to longterm vision for MUFG at the Board of Directors andManagement Focus Discussion meetings, incorporating
opinions from outside directors. The following three societies
represent the societies we aim for:A “Sustainable” society is one in which customers and future
generations can live healthy and safe lives. The World
Meteorological Organization (WMO) report published in Junestated that the average temperature rise will likely exceed theParis Agreement target in the next five years. To achievecarbon neutrality by 2050, we will accelerate our engagement
while expanding our business to promote the recovery of thenatural ecosystem in a critical state caused by the impact of
global warming and create a sustainable society through thecircular use of limited natural resources.
For a “Vibrant” society, we will aim to create a positive cycle
where everyone is fulfilling their abilities, cheerfully andpositively engaged, promoting innovation and growth insociety that leads to social development. This includes support
for startups, addressing the aging population and low birthrate,increasing access to financial services through digitalization,and investing in employee human capital.
Finally, a “Resilient” society is one that can quickly and accurately
respond to various risks and uncertainties in a rapidly changing

environment. This includes initiatives on respect for humanrights, a more profound response to digitalized society, andfurther enhancement of governance functions.
Addressing the ten Priority Issues will be critical for MUFG to
support essential social infrastructure and continue meetingcustomers’ expectations and trust as a necessary financial
institution in the unprecedented era of division.

MUFG Sustainability Driving Progress
Enhancing services provided by MUFG and supporting ourcustomers will lead to the growth of our customers and theimprovement of their corporate value, which will contribute to
the stability of the whole society. In addition, if MUFG’s social
initiatives lead to solutions to social issues, it will also
demonstrate the significance of our company. At the sametime, we believe that creating value through solving social
issues will provide an opportunity for not only our customers
but also our employees to reconfirm the meaning of working
at MUFG.
As each Group company fulfills its “connecting” functions,driving social and environmental progress and growing
together to improve corporate value, we will realize our aim to“Drive Social & Environmental Progress.”
Since I was appointed CSuO in October 2022, I have strived to“identify, without bias, what society requires” and haveengaged in sustainability management of MUFG from a diverse
perspective, leveraging my experience. Realization of my“MUFG Way” of “working together to play my role in building aprosperous society” will “drive progress.” Fully utilizing MUFG’svarious connecting functions to drive social and environmental
progress will achieve our purpose of being “committed toempowering a brighter future.” To do this, we will focus on thenext three years to realize the three societies envisioned in the
new MTBP that started in 2024.

MUFG Report 2024

Strategies to Improve Corporate ValueManagement Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Drive Social & Environmental Progress

Corporate Governance(1) Sustainable Society
We will promote responses to climate change
initiatives while aiming to realize a sustainable
society by restoring natural capital andbiodiversity and promoting a circular economy.
MUFG will aim to realize corporate and social carbon neutrality
by promoting and supporting funds circulation toward
corporations addressing climate change and green projects.
We are sending messages to society through publications,
including the “MUFG Transition Whitepaper,” which outlined thatnations working toward the common goal of carbon neutrality
may take different pathways and policy approaches, and the“MUFG Climate Report,” which stated MUFG’s transition plan
based on GFANZ guidance, the progress and record of ourdecarbonization initiatives, and the underlying approach.
In addition to climate change measures, we must address
natural capital and biodiversity issues. We recognize thatsustainable economic growth will be uncertain without
appropriate management and preservation of natural capital,
and we aim to realize a society that coexists with nature. From
this perspective, in April 2024, we published the MUFG TNFD*1
Report, which outlines our approach and policy on natural
capital and biodiversity and various solutions we can provide ourcustomers in line with the TNFD disclosure framework.

Society we aim for

Initiatives• Accelerating engagement and support forenergy transition.
> See “MUFG Climate Report 2024” fordetails.

Achievement ofcarbon neutral society• Get closer to realizing corporate
and social carbon neutrality bypromoting funds circulation tocorporations that address climatechange and green projects.

• Recommendations to domestic
and international policy makers
through “MUFG Transition
Whitepaper.”> See “MUFG Transition
Whitepaper 2023” and “MUFG
Asia Transition Whitepaper2023” for details.

Natural capitaland biodiversity
restoration• A society coexisting with nature will be
realized through appropriate management
and preservation of natural capital(forestry, water, soil, air, etc.), ensuring its
sustainable use and economic growth.

Promotion of
circular economy• Build an economic system that minimizes
resource consumption and reuses waste,achieving a stable supply of energy andresources, reducing environmental
impact, and achieving economic growthsimultaneously.

Furthermore, we will promote initiatives to realize a society that
reduces environmental impact and promotes economic growthsimultaneously, with an economic system that secures stableenergy and resources, minimizes resource consumption, andreuses waste.
*1 Taskforce on Nature-related Financial Disclosure• Providing solutions for reducing
dependency and impact on nature.
> See “MUFG TNFD Report”
for details.

• Supporting technology and investment
for the transition to circular economy.

48

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Drive Social & Environmental Progress

Promoting Sustainable Business

Capture things from various
angles, integrate information,and disseminate it– speak to customers with
united language –Daisuke Nishiyama

Head of Sustainable Business Division

Finance is the blood flow for the economy,
but blood won’t flow without blood vessels(businesses)
MUFG’s sustainable business lists “support of responsible
transition” as one of our visions, promoting activities centeredon customer dialogue. In FY2023, we engaged in dialogue withvarious government authorities and private sector corporations
through participation in COP28 held in Dubai and tours in
Europe, the U.S., and Singapore using the “MUFG Transition
Whitepaper 2023.” We felt the shift toward protectionism in the
global economy and the corresponding change in systems
and structures caused by the change in international affairs,
including COVID-19, the war in Ukraine, and conflicts in North
Africa and the Middle East. In addition, we observed that
installing climate change-related technologies throughregulation was not making steady progress due to the twotiered administrative structure and increased costs frominflation. In Japan, establishing strategies and road maps
focusing on the scarcity of resources and diversity of industry
made progress under collaboration between the public andprivate sectors. Supported by the policy foundation, initiatives
for the social implementation of new technologies will start.

For Japanese corporations to create business, overcoming “thewall of economic rationality (bankability) and technology”
without falling behind their global counterparts while avoidingpremature involvement before the market and technology
development, collaboration among industry, government,
academia, and financial services is required. The essence of
our activity is to design the business before pursuing scalewith finance and engaging in dialogue with customers.

MUFG’s Sustainable Business
Engagement(dialogue)

Customers

Overcome the wall of economic rationale and technology

Create businessRealize a decarbonized growth economy

MUFG’s role
Climate change-related measures are a global agenda that
requires a delicate sense of balance due to the need forenormous investment in developing cutting-edge technologies
and large-scale implementation. Each country is developing
technology to achieve carbon neutrality by 2050, but focusing
on just only one technology might result in losing sight of thewoods for a tree. Furthermore, transition does not occur
suddenly, unlike switching. Therefore, diversity and continuity
are critical. Banks support the entire society and economy byaccompanying the customers’ initiatives over the long term.
That’s why MUFG observe the world through a lens from various
perspectives, such as industry, region, policy, and systems.
In addition, we are required to interpret the information, byourselves with our own language, obtained through dialogue
with customers. We cannot provide financial support without
economic rationale. Government cannot subsidize losses
forever. That’s why, collaboration on technology (industry/
academia), policy (public), and finance (financial services) with
passion is precisely what is being called for at this moment.
MUFG would like to take that first step through with the MUFG
transition whitepaper initiatives.

Resolve for FY2024
Japan will start issuing the Japan Climate Transition Bond in
FY2024, providing around ¥20 trillion support. The funds will
first be applied to research, development, and production
expansion in storage batteries, hydrogen, and semiconductors.
MUFG will keep an eye on the development in the nextgeneration industry market and technology and support thecustomers’ transition from a financial perspective. In addition
to refining financial engineering for individual businesses andtechnology, we will promote activities “committed toempowering a bright future” through engagement (dialogue)
and by capturing the whole picture and considering aneffective structure for the whole with consideration to longterm vision of the customer and to social significance.

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Drive Social & Environmental Progress

Response to Climate Change
In May 2021, MUFG announced the MUFG Carbon Neutrality Declaration. To reach carbon neutrality, we have been pursuing various initiatives based on
three unwavering commitments: helping achieve the 1.5°C target, supporting a smooth transition to a decarbonized society, and creating a sustainable
society by fostering a virtuous cycle between the environment and the economy.
Among the priority issues for sustainability management, achievement of carbon neutral society is one of the top priorities. MUFG’s four main strategies
to achieve carbon neutrality are (1) reducing emissions from own operations, (2) engagement and support, (3) reducing emissions from our financed
portfolio, and (4) risk management and governance. The main initiatives under each strategy are as follows:
Krungsri*1(1) Reducing emissions from own operations
With the roadmap to net zero emissions by 2030 andmeasures to achieve the interim target for FY2026, we will
reduce GHG emissions in Japan and overseas through energy
efficiency & conservation, converting electricity contracted byother companies to renewable energy, purchasing non-fossil
fuel certificates, and achieving carbon neutrality for ourbusiness vehicles. In addition, we will realize various types ofbusiness co-creation in partnership with clients to reduce theimpact on the environment in the four priority areas: mobility,
office buildings, energy, and resources.

We have identified supporting the value chain in Green
Transformation (GX) as a key strategy for the new MTBP andincreased the target amount for sustainable finance to ¥100 trillion.

OthersReduction target and progress (Scope 1 and 2)(Thousand t-CO2e)336

MUFG Bank

Krungsri (Bank of Ayudhya)*1

232

Bank Danamon*1

Others

50% reduction
from FY2020

189

168

Net zero

0Acquired third-party
assurance

FY2020

FY2021

FY2022

FY2026

Results

carbon credits(negative emissions)Interim target

FY2030
Final target*1 Krungsri (Bank of Ayudhya) is an MUFG consolidated subsidiary in Thailand, Bank Danamon is an MUFG consolidated subsidiary in Indonesia(2) Engagement and support
MUFG will continue to identify new needs and issues throughthe solutions we provide while offering suggestions topolicymakers in collaboration with industries and government
agencies. As we deepen our relationships with clients, local
governments, and various industries through managementlevel executive forums to engage with clients and through theefforts of our specialized engagement team, we provide
valuable insights to both industries and government agencies
on emerging needs and issues related to decarbonization. We
are here to collaborate with our clients towards decarbonization
in a responsible manner.

Bank Danamon*1

Engagement approach
Policy suggestions in collaboration with industries and government agencies

Contribute to GX Policy formulation by collaborating with industries and government agencies through policy engagement

Building frameworks for transition financeTransition Whitepaper

Asia Transition Whitepaper

Promoting blended financing

Participating in initiatives in Japan and overseas

Activities for COP28

Enhancing our capability to provide solutions that support clients’ decarbonization in line with government policies and strategies

Strengthen our capability to provide solutions tailored to each market stage by leveraging the collective strengths of the MUFG Group and collaboratingwith external partners

GX value chain support

Sustainable finance promotion

Investment and innovation projects

Leveraging relationships with clients, local governments, and industry associations to identify new needs and issues

Provide feedback to industries and government agencies on new needs and issues identified through decarbonization support and link to policy suggestions

Executive Forum for dialogue with clients from a management standpoint

Specialized engagement team

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Drive Social & Environmental Progress

Response to Climate Change(3) Reducing emissions from our financed
portfolio
In addition to power, oil & gas, commercial real estate,residential real estate, steel, and shipping sectors for which wehave already set 2030 interim targets, we set the interim
targets for automotive, aviation, and coal sectors in April 2024,
fulfilling the commitment based on the NZBA guidelines.
MUFG has implemented a transition assessment framework, anda transaction screening process to provide managed transition
support, and also introduced a framework, including monitoring,to improve the effectiveness of the transition plan towardachieving our 2030 interim targets. We will target achieving our2030 interim targets with these operating frameworks.

(4) Risk management and governance

Progress of interim targets by sector
Reference value
Power (gCO2e/kWh)

328

313

156–192

84

81 (-5%)-15 – -28%

Commercial real estate (kgCO2e/m2)

65

56

44–47

Residential real estate (kgCO2e/m2)

27

25

23

Steel (MtCO2e)22

16 (-25%)-22%

Former standard
0.6%

New standard
Minimum 26.2%
Striving 30.9%

PCA≤0%

Automotive (gCO2/vkm) Set new target

169—-23 – -46%

Aviation (gCO2/RPK)

Set new target

130

—

71

Set new target

Approx. 3(approx. 12 for non-OECD countries)—

Zero(FY2040 for non-OECD countries)

Shipping (PCA score)*1

Coal (Billion yen)

*1 Portfolio Climate Alignment: An index of alignment that indicates the difference from the required level for an entire financed portfolio related to vessels. Calculated by a weighted
average of the Vessel Climate Alignment (VCA) of each vessel financed as a percentage of the loan portfolio.

Key initiatives

Risk
Management

Furthermore, we are building capability for sales teams tostrengthen client engagement.
See “MUFG Climate Report 2024” for details.
https://www.mufg.jp/english/csr/report/progress/index.html

FY2030 Targets

Oil & gas (MtCO2e)

We have established a system to properly manage climatechange-related risks based on the Risk Appetite Frameworkand the Top Risk Management.
In addition, we have established a governance structure thatenables appropriate decision-making through various
meetings aimed at achieving carbon neutrality under thesupervision of the Board of Directors.

FY2022 Results

GovernanceSee the following link for “disclosure based on TCFD.”
https://www.mufg.jp/english/csr/report/tcfd/index.html

Capability
building

Overview

Risk appetite
framework

Established a system to properly manage climate change-related risks and clarify MUFG’s
risk appetite.

Top risk management

Positioned risks arising from climate change as top risk in our integrated Top Risk
Management system.

Risk analysis by sector

Analyzed transition and physical risks of TCFD recommended disclosure sectors in a heatmap.

Governance structure

Established an effective decision-making governance structure with carbon neutral related
meeting bodies under the supervision of the Board of Directors

Compensation system

Reflect evaluation of ESG and sustainability initiatives, including climate change measures,in the executive compensation system

Capability building

Conducted training program for front office representatives of major companies to enhance
engagement skills (Total of about 2,000 participants in FY2023)

Fostering Culture

Held internal seminars and launched an internal social media platform to ensure that each MUFG
employee has basic knowledge on sustainability and awareness to take action on their own

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Strategies to Improve Corporate ValueManagement Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Drive Social & Environmental Progress

Corporate Governance(2) Vibrant Society
We aim to realize a vibrant society by drivingsocial and environmental progress throughindustry development and innovation support,
response to an aging population and low birthrate,and increasing access to financial services, as wellas and management focusing on human capital.

Society we aim for

Industry development
and innovation support

MUFG continues to tackle business incubation and support
innovation by creating growing industries, thriving venturebusinesses, and developing regional economies to securesustainable economic growth.
In response to the aging population and low birthrate, MUFG
will promote initiatives to enhance products and services
tailored to meet the needs of elderly customers and aim tocreate a society where all generations can facilitate smoothasset building and succession.
In addition, with digital technology making financial services
more accessible, we will contribute to improving the quality oflife and economic independence of many people.
MUFG continues to position human capital as one of the mostimportant types of capital to contribute to society andcustomers by making a positive social impact and fostering aculture where our employees thrive with their diversity andexpertise. We are promoting initiatives, including the revision of
the MUFG Human Resources Principles in April 2024 to reflect
our approach to human capital management. In addition, weestablished the DEI Statement to clearly communicate ourpolicy and vision on the promotion of diversity, equity, andinclusion (DEI). And we also announced the group-wide “MUFG
Declaration of Health Management” to maintain and improve
employee health, engagement, and productivity.

Response toaging population& low birthrate• Avoiding economic stagnation andsecuring sustainable growth throughthe creation of growing industries,
which are the drivers of economies,
thriving venture businesses, and thedevelopment of regional economies.

• Enhanceing financial products andservices tailored to meet the needs ofelderly customers.
• Realizing a society where financial
services facilitate asset building andsuccession for all generations.

Increasing access tofinancial services• Spread of digital technology provides all
people with access to basic financial
services, improving their quality of lifeand realizing economic independence.

Management focusing
on human capital• Contributing to society and customers bymaking a positive social impact andfostering a culture where our employees
thrive with their diversity and expertise.

Initiatives• Providing funding for growth andexpanding the scope of asset
management.
> See “Corporate infrastructureenhancement” (P61) for details.

• Supporting asset and businesssuccession and promote investment
and asset formulation.
> See “MUFG Sustainability
Report 2023” for details.

• Providing services linked to everyday
needs and contributing to financial
inclusion.
> See “Building MUFG’s Economic Spherein Asia” (P30) for details.

• Providing an environment where
employees thrive.
> See “Enhancement of human capital”(P59) for details.

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Strategies to Improve Corporate Value

Drive Social & Environmental Progress

Startup Support
Contribute to industrial development anddrive social and environmental progress
MUFG has used the group functions to provide various support
for domestic and overseas startups corresponding to their
growth stage and collaborated to develop new services.
Consequently, the total facility line, including through investment
in Asian digital companies and fund origination by Mars
Growth Capital, has expanded to approximately ¥900 billion.
In Japan, 2022 marked the first year of startup creation, with thegovernment’s announcement of the Startup Development
Five-year Plan, which increased attention.
Against this backdrop, we will accelerate various support forstartups’ value enhancement, such as business matching,leveraging MUFG’s domestic and international networks,
creating new business expansion opportunities throughoverseas expansion support, and providing financial support.
MUFG will support new startups that tackle industrial
development and drive social and environmental progress. Asa target for these activities, MUFG has raised the market cap ofstartups supported up to ¥20 trillion by FY2026.

MUFG initiatives for startups
Purpose

Early

MiddleNon-financial

Later

SupportEnhance support at
the startup stage

Accounts opening
Various services(Settlement / Credit cards, etc.)

Strengthen groupcollaboration

Expandfacility line,
up to approx.
¥900 bn

IPO
supportCocreation &collaboration

Open innovation
Growth area /businessdevelopment

In Japan, the MUFG group mainly provides services that
require specialist expertise, including investment by theventure capital Mitsubishi UFJ Capital, loan by MUFG Bank,
stock transfer agency services and DX support with MUFG
FUNDOOR (stock and business management platform) by
Mitsubishi UFJ Trust and Banking, and IPO support by
Mitsubishi UFJ Morgan Stanley Securities.
These efforts have been recognized, and MUFG ranked thehighest among financial services groups out of about 150
companies in the evaluation in the “Startup Friendly Scoring2023” released by the Japan Business Federation (Keidanren).
This scheme aims to change the behavior of large companies,
which make up a vital part of the startup ecosystem. MUFG
also received the highest “A-rank” in funding provision.
In May 2024, we released the MUFG Startup Kit website, which
provides a comprehensive list of available group services forstartup growth. Furthermore, the “MUFG Startup Summit,“ alarge event to support startup business expansion, will be heldin December 2024, inviting large business partners, universities,
government, and external partners. We will take a group-wide
approach to value enhancement.

MUFG Startup Kit Webpage
Financial

SeedGroup-wide approach to value enhancement

Loans
Investments

Business
Matching
Consultation
SupportingHR
Providecollaboration
services

Market cap of startups supported by MUFG up to ¥20 tn (FY2026)

Yutaka Miyashita
Group Head,
Commercial Banking &Wealth Management
Business Group

Collaborate with startups to drivesocial and environmental progress
There’s been a lot of attention on startups over the past
few years. I have had increased opportunities to meet
startup representatives who challenge to archive
purpose. They support future industrial development
and hold the key to resolving social issues.
MUFG has enhanced the framework to makestartup support one of the pillars of our businessby establishing the Startup Acceleration Strategy
Division as the group’s strategic hub.
We will apply the group expertise, such as global
and digital expertise, to contribute to increasing thecorporate value of startups.
MUFG Bank sends young employees to startups for HR
support, expecting the employees to transform thecorporate culture upon their return. Building a win-win
relationship with startups would be ideal for the sharedtarget of driving social and environmental progress.

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Drive Social & Environmental Progress

Corporate Governance(3) Resilient Society
We aim to realize a resilient society by
respecting human rights, ensuring secure andsafe services, and demonstration of robust
corporate governance.
Respect for human rights is a universal value that is common
to all humankind and is deeply linked to MUFG’s all priority
issues. We will contribute to a society where this is realized
throughout the supply chain. MUFG has reinforced our
initiatives related to respect for human rights and publishedthe “MUFG Human Rights Report” to communicate ourapproach and initiatives.
MUFG is well aware of its social responsibilities regarding
securing the assets entrusted to it by its customers and its
obligation to provide secure and stable financial services. We
implement initiatives to ensure the uninterrupted provision ofreliable financial infrastructure that supports a resilient andsustainable society.

Society we aim for

Initiatives• Strengthen human rights due diligenceacross the supply chain.

Respect forhuman rights

Ensuring secure andsafe services• Respect for human rights is realized
across the supply chain, and sustainability
is improved for the whole society.

• Reliable financial infrastructure that
supports a resilient and sustainableeconomy and society is provided.

Furthermore, each and every employee of the MUFG Group
acts with honesty and integrity, complies with laws andregulations in each country, and attaches importance totrends. We pay attention to the detection and prevention of
global financial crimes, and are dedicated to operating with acustomer-oriented, unified group approach.

Demonstration ofrobust corporate
governance• Honesty and integrity financial services
that support a resilient and sustainableeconomy and society are provided.

> See “MUFG Human Rrights Report2024” for details.

• Strengthening cybersecurity measuresand operational resilience.
> See “Cyber security” (P77) for details.

• Business operations that make every
effort to serve customers’ best interests.
> See “Customer-oriented undertakings”(P79) for details.

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Strategies to Improve Corporate Value

Accelerate Transformation & Innovation
Continuous “Transformation & Innovation” is the foundationthat supports the pillars of “Expand & Refine Growth Strategies”
and “Drive Social & Environmental Progress.”(1) Accelerate Agility
Transformation

We are committed to implementing corporate transformation,
including software that supports the base of all businessactivities such as cultural reform and human capital investment;enhancing AI and data platforms, and strengthening systems
development resources.

P58(2) Enhance human capital

Expand &Refine Growth
Strategies

Drive Social &Environmental
Progress• Become a new MUFG, adding “Challenge and Agility” to “Integrity andResponsibility” to lead the social change• Under the banner of the revised MUFG Way, accelerate the agility transformationand create a corporate culture in which people think, decide, and act for oneselfand do so swiftly• As part of working environment development, promote simplification ofprocedures and review of authorization and internal meeting protocol• Become a global financial group making a positive social impact and fostering aculture where our employees thrive• To enhance human capital, work on “employee enablement and progression,”“improvement in employee engagement,” “diversity, equity & inclusion (DEI)
workforce,” and “embedding a culture of healthy working,” and realize“strengthening business competitiveness” and “create an agile culture
empowering employees to tackle challenges”

P59

Accelerate Transformation & Innovation(3) Enhance AI/data
infrastructure• Enhance AI/data infrastructure for the widespread adoption and habituation of
AI/data utilization by all employees to realize data-driven management, increased
customer value, and improved productivity.
• Realize a new normal where AI is used in all business operations, including throughthe internal consulting function, and where all employees use Business Intelligenceon a daily basis
P60(4) Increase System
Development Capacity

P61• Invest ¥800 billion in systems development to increase the ratio of structural andinfrastructure investment for medium- to long-term growth• Strengthen the necessary systems development resources as a strategic pillar toachieve the above, and commit to key measures, including increasing IT
developers, enhancing collaboration between IT and business divisions, anddeveloping / securing expert talents

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Strategies to Improve Corporate Value

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Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Accelerate Transformation & Innovation

CHRO Message
Human Capital KPIs

Create an environment
where all employees cangenuinely thrive

OUTCOME(createdvalue)

VisionPillars ofhuman capitalmanagement

A global financial group capable of contributing to society
and customers by making a positive social impact andforesting a culture where our employees thrive
Strengthening businesscompetitiveness

Employee Holistic Wellbeing

Four key
initiatives

Kenji Horikawa

Employeeenablement
andprogression

Group CHRO

Progress*1(FY2023)

Target*1(FY2026)

Core DX
specialists

747

1,200

IT skillacquisition*2

70.9%

100%

Candidatepool for key
overseas
posts

3.6X

Maintain 3X
or moreEngagement score*3

73%

A levelimproved fromthe fiscal
2023 result

Ratio of female managers(Japan)*4

22.3%

27%

Ratio of eligible male
employees who tookchildcare leave*5

86.1%

100%

Female aspiration*6—

No set target

Inclusion score*3

75%

Maintain 75
or moreRatio of employment ofpeople with disabilities

2.72%

Maintainstatutory
employment
ratio or more

Absenteeism

0.96%

1% or lower

Presenteeism

17–18%

15% or lower

Human Capital KPIs

Digitalspecialists

Globalmanagement
resources

MUFG’s Approach to
Human Capital Management
With the start of the new MTBP, MUFG will maintain our humancapital management approach to strive to become a global
financial group making a positive social impact and fostering aculture where our employees thrive. Human capital management
will play an important role in directly and indirectly supporting
the three pillars of the new MTBP, “expand and refine growthstrategies,” “drive social and environmental progress,” and“accelerate transformation and innovation.”
Since last year, we have been working on the four key initiatives
for enhancing human capital, “employee enablement andprogression*1,” “improvement in employee engagement,”“Diverse, Equitable & inclusive (DEI) workforce,” and“Embedding a culture of healthy working.” We are also
promoting “strengthening business competitiveness” and“create an agile culture empowering employees to tackle
challenges” as two pillars of human capital strategy.

Improving MUFG’s corporate value in the medium- to longterm requires enhancement of HR framework, education, andtraining aligned with the business strategy. We also must makecontinuous appropriate investment in the foundation thatenables employees to work vibrantly and earn success, suchas promotion of DEI and health management. These initiatives
ensure employees find their jobs rewarding, resulting in
improved holistic wellbeing.

Create an agile culture
empowering employees totackle challenges

Improving
employeeengagement

INPUT /OUTPUT(investment
in / utilizationof humancapital)DEI
workforce*1 Revised from “nurturing professionals & reskilling”

Human Capital KPIs
Detailed human capital KPIs have been set to accelerate theabove four key initiatives, and the targets have been disclosed.
We will improve each measure by quantitatively assessing the
progress. We will continue to consider more effective KPIs andtargets flexibly, corresponding to their progress and changes inthe external environment.

Embeddinga culture ofhealthy
working*1 Total for the three main domestic subsidiaries (bank, trust bank, securities)*2 Participate in IT Passport e-learning, and acquire IT-related qualifications*3 Consolidated basis, including major overseas subsidiaries (engagement and inclusionscores are from Group Employee Survey)*4 37.6% progress (FY2023) on a consolidated basis, including major overseas subsidiaries*5 Real ratio of childcare leave usage reflecting the expiration date for the leave*6 Ratio indicating aspiration for higher positions among female employeesMUFG Report 2024

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Accelerate Transformation & Innovation

CHRO Message

Key Measures for Enhancing Human Capital
The significance and details of the three focus measures are
explained below:(1) Alignment of business and HR strategies
The external environment surrounding MUFG is changing
rapidly, causing substantial changes in the quality and quantityof human resources necessary for executing the businessstrategies. Timely understanding of the requirements,
development, and supply of necessary resources will become
increasingly important from an HR perspective.
We will continue prioritizing the alignment of business and HR
strategies, and reinforcing cooperation with business units. Byclarifying the necessary business skills and expertise for eacharea and building optimal recruiting systems and development
programs, we will accelerate the enhancement of professional
human resources. We will also promote human resource
development for growth areas such as global and digitalbusinesses from a group-wide perspective.
(2) Support for employees’ autonomous career development
We will create an agile culture empowering employees totackle challenges, where all employees upskill autonomously
for their career development, regardless of age or gender.
Various career paths will be developed and supported toenable employees to work vibrantly and earn success as
professionals in the vast field of MUFG, including establishingframeworks for career changes such as internal recruitment
and specialist career courses.

worldwide, and our workforce consists of employees withdiverse backgrounds and values. This diversity is ourgreatest strength. We will strive to create an environment
where the employees recognize and respect theirdifferences, fulfilling their potential and genuinely thriving.
Diverse values are the source of new ideas and new modesof behavior and, in turn, foster an open-minded corporate
culture and the creation of new value that transcends the
expectations of customers and society.
In terms of DEI workforce, we focus on increasing the Ratio of
female managers. We will accelerate the measures in Japan
which particularly face challenges, with the group target of
27% by FY2026. To increase management resources including
female managers, we will promote succession plans for key
positions with the business units and visualize the development
and promotion plans for core talents.

To Our Stakeholders
Under the new MTBP, we will continue to enhance humancapital through the above-stated focus measures to increase
MUFG’s corporate value in the medium- to long-term. In
addition, we will raise awareness of “agility,” which was added
to the MUFG Way Values.
This refers to faster decision-making and action by streamlining
procedures and processes and the agility to respond flexibly
to changes.
Agility transformation has two key elements.

(3) DEI workforce
MUFG has business locations in more than 40 countries

The first element is “proactiveness.” A resilient organizationis the sum of employees’ proactive initiatives. Moreemployees should act independently, taking ownershipand pride in their jobs.
The second element is “diversity.” “Inclusion” is especially
important in DEI. Establishing a culture where different ideas
across business areas are accepted and appreciated will
improve our ability to respond to change.
Lacking either will make true agility transformation difficult.
Improving proactiveness and diversity will create a strong
force, including through synergies. Taking the first step is
crucial. Accumulating small changes in awareness andbehavior in daily operation, such as making changes without
being constrained by precedents if an issue is identified or
accepting different opinions and considering them withoutbias, will become a strong force that changes the company.
My core belief (“My Way”) is to “always be cheerful and act
openly and honestly, and make others cheerful and vibrant.” I
strive to indirectly contribute to improving the proactivenessand diversity of people around me by maintaining awarenessabout what I say and do. As the Group CHRO, I hope toincrease contact with Group company employees andcontribute to improving MUFG’s proactiveness and diversity.
My primary mission is to establish and provide an environment
where employees with proactiveness and diversity can work
vibrantly towards realizing the purpose of MUFG Way: to be“committed to empowering a brighter future.” I aim for a world
where all employees can grow and earn success as
professionals and feel their well-being.

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Strategies to Improve Corporate Value

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Accelerate Transformation & Innovation

Major KPI

(1) Acceleration of
Agility Transformation“Agility” score*1

A level improved fromthe current status(71%)*1 Average of positive responses to the three questions regarding “Agility” in the annual MUFG employee survey

Target / Strategy Aim
Becoming a new MUFG: Infusing“Integrity and Responsibility” with
“Challenge and Agility”
Foster a culture of thinking, deciding, andacting for oneself and doing so swiftly tolead the change
Promotion ofchallenges

Speedy business
operation

To continue to be selected by the customers in a world that is changing
at an accelerating pace, we must be able to offer innovation and agility,
in addition to safety and security.
Our Agility Transformation creates a corporate culture in which people
think, decide, and act for themselves and do so swiftly. We strive totransform into a new MUFG equipped with “Agility” in addition to“Integrity and Responsibility”.

Agility Transformation with Everyone
as the Protagonist

Summary of Key Measures
Improving corporate value andemployee engagement

Opportunities
to practice

MindsetMUFG Way
revision

Challenge
andAgility

Agility principles

Reflect inperformance review
Strengthen
expertiseWorking environment
Simplify procedures and meeting protocol
Delegate authority / streamline reporting lines
Enhance business infrastructure

Hideaki Takase
Managing Corporate
Executive
Group CSOMUFG has established a framework for transforming corporate culture.
Achievements and issues are confirmed through the annual MUFG
Group employee survey and the Cultural Transformation Council.
During the previous MTBP period, we made progress in instilling thewillingness to take on challenges among the employees. On the other
hand, issues remain with “Agility,” particularly regarding the Byzantine
consensus-building process and the complexity of rules and procedures.
We are advancing Agility Transformation, utilizingthe framework.
Working environment: Started review of 70 procedures based on thevoice of employees, simplification of meeting protocol, and delegationof authority.
Mindset: Established the five “Agility” principles for managers, including“Agility over perfection: Focus on the key information needed to support
pragmatic decision making, adjusting actions as necessary along the way.”
Opportunity to practice: Added “Challenge and Agility” to theperformance review, and reflected the Agility Principles in the360feedback.

Spending hours and hours on discussions or
running around making coordination among
multiple stakeholders… This was a common sight at
MUFG. However, always doing this would lead to aloss of motivation and agility.
Providing safety and security is one of our mostimportant missions but being “committed toempowering a brighter future” in the coming era
also requires agility. With this in mind, we added“Agility” to MUFG Way Values.
When you hear “Agility,” you might think ofefficiency through top-down decision making.
However, we believe that “good communication
between professionals and the right people making
decisions” ultimately leads to agility andconsequently, better services.
Agility Transformation with participation by all.
Please stay tuned for MUFG’s new challenge.

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Strategies to Improve Corporate Value

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Accelerate Transformation & Innovation

Major KPIs

(2) Enhance
Human Capital

Engagement score

A level improved from(73%)*1
the current status

Ratio of female managers (Japan)

27.0% (22.3%)*1*1 FY2023 Result

Target / Strategy Aim
Become a global financial group making a positive social
impact and fostering a culture where our employees thrive
To enhance human capital, work on “employee enablement
and progression,” “improvement in employee engagement,”“diversity, equity & inclusion (DEI) workforce,” and“embedding a culture of healthy working,” and realize“strengthening business competitiveness” and “create anagile culture empowering employees to tackle challenges”

MUFG positions human capital as one of the most important types of capital and aims to become a global financialgroup making a positive social impact and fostering a culture where our employees thrive.
To realize our vision, we have been working on the four key initiatives for enhancing human capital, “employee
enablement and progression,” “improvement in employee engagement,” “ diversity, equity & inclusion (DEI) workforce,”and “embedding a culture of healthy working.” We also promote “strengthening business competitiveness” and “createan agile culture empowering employees to tackle challenges” as two pillars of human capital management (HCM).
Detailed human capital KPIs have been set to accelerate the key initiatives, and the targets have been disclosed. We will
improve various measures by quantitatively assessing progress. We will flexibly consider more effective KPIs andtargets corresponding to their progress and changes in the external environment to promote HCM.

Summary of Key Measures
MUFG’s Approach to Human Capital Management
Target

HCM corepillars

A global financial group capable of contributing to society and customers bymaking a positive social impact and fostering a culture where our employees thrive

Strengthening businesscompetitiveness

Create an agile culture
empowering employees totackle challenges

Employee Holistic Wellbeing
HCM Four key Initiatives
Employee enablement and progression: Employee & skills development
Reinvestment
in humancapitalImproving employee engagement: Career fulfillment
DEI workforce: Empowered & supported to succeed
Embedding a culture of healthy working: Physical, mental & emotional well-being

HCM foundation and structure

Embeddingthe desired
cultureEmployee enablement and progression: Enhance cooperation between business units and HR to clarify thenecessary business skills and expertise for each area, build optimal recruiting systems and development
programs, and accelerate the enhancement of professional human resources. Promote human resource
development for growth areas such as digital business with a group-wide perspective.
Improving employee engagement: Improving corporate value and employee engagement is critical for
improving corporate value in the medium- to long-term. We will implement ongoing employee return programs,
such as the stock compensation plan, and support autonomous career development for each employee.
DEI workforce: We will strive to create an environment where employees recognize and respect their differences,fulfill their potential, and genuinely thrive. We are primarily focused on increasing the ratio of female managers.
Embedding a culture of healthy working: We prioritize our employees’ physical and mental health. “MUFG
Declaration of Health Management” was announced in April 2024, and various measures are being promoted.

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Accelerate Transformation & Innovation

Major KPIs

(3) Enhance AI/Data
Infrastructure

Number of AI projects supportedOver

300 (accumulated)

Number of BI*1 users
Over

20,000*1 Business Intelligence. A framework for analyzing and visualizing enormous volume of data and utilizing it in the course of operational and management decision-making

Target / Strategy Aim
Widespread adoption and habituationof AI/data utilization for “realization ofdata-driven management,” “increasecustomer value,” and “improve
productivity”
A new normal where AI is used in all
business operations and all employees
use BI on a daily basis

We will enhance AI/data infrastructure for all employees’ widespread
adoption and habituation of AI/data utilization to realize data-driven
management, increased customer value, and improved productivity.
We will also explore and utilize advanced technology through broad
data collection with AI intelligence activities.
Major KPIs are (1) over 300 AI support projects (accumulated) and (2) over
20,000 BI users. For (1), the internal consulting function will support andpromote group-wide AI/data projects to improve business efficiency,
create new business opportunities, and enhance competitiveness. For (2),about 10,000 employees are currently using BI in business. We aim toincrease the number of employees who routinely use BI.

Summary of Key Measures
Widespread adoption andhabituation of AI/data utilization
AI intelligence

Internal consulting

Consolidate
group-wide
intelligence

Exploration andverification of newtechnology andhuman resources
exchange

Arrange specialized
employee in eachbusiness group andsupport group-wide
digitalization

AI/data infrastructure
AI infrastructure

AI development andfunctionality enhancement

BI infrastructure

Enhancement forgroup-wide utilization

Data infrastructure

Expand data coverage, cross entity collaboration,such as the Bank × NICOS, etc.

(1) AI/data infrastructure: We will increase the coverage of data
accumulated on AWS and enhance infrastructure to maximize AI
capabilities. This will improve data analysis quality and quantity,
improving services, profitability, and risk management.
(2) Internal consulting function: Dedicated staff responsible for
upstream DX promotion will cooperate with Business Groups anddepartments to propose projects, etc., and provide strong support
for digital measures using AI and BI.
(3) AI intelligence: Accelerate the use of AI by building a network with
innovative AI technology developers and research institutions
overseas to gather information and exchange information, including
its use with domestic and overseas financial institutions.

Tadashi Yamamoto
Managing Corporate
Executive
Group CDTO

Strongly promote AI utilization
AI and data utilization, digital-driven business creation,and functionality development are being enhanced byintegrating group-wide DX and data functions.
AI utilization is the most important initiative that will
determine the competitiveness of financial
institutions. We established a group-wide project
team*2 on ChatGPT and established theenvironment in each Group company, starting withthe use in MUFG Bank in May 2023. To increaseusage, we are considering a search function forinternal procedures, a support function for WealthManagement proposals, and the installation ofassistance functions in approval processes. We also
invited ideas from employees, resulting in over 200
use cases. We aim to increase use across the group.
We aim to create an environment where AI is usedin all business operations through these initiatives.
*2 MUFG Bank, MUTB, MUMSS, NICOS, ACOMMUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Strategies to Improve Corporate Value

Accelerate Transformation & Innovation

Major KPIs

(4) Increase System
Development Capability

Systems
investment

800 bnRatio of enhancement ofstrategies / infrastructure¥

Target / Strategy Aim
Increase system development
capability for medium- to long-term
growth and strategically invest resourcesin strengthening the infrastructure(Billion yen)

MTBP before
the previous

800

750

700

Systems development has significance for each of the three pillars of
MUFG’s new MTBP, “expand and refine growth strategies,” “drive socialand environmental progress,” and “accelerate transformation andinnovation.” Accordingly, systems investment will be expanded to¥800 billion in the new MTBP.

Over
30%

Previous MTBP

New MTBP

We will continue to make necessary investments to provide stablefinancial services, which is part of a social infrastructure. Strategic
investments will improve MUFG’s profitability and contribute to the new
MTBP’s ROE target. We will also invest in enhancing infrastructure, suchas for domestic retail and AI/data area, branch communication
environment, and internal IT, accelerating systems investment for
future growth.

Enhance strategy / infrastructure

Summary of Key Measures

Increase
IT developers• Increase capacity throughnew graduate andmid-career recruitment• Confirm systems
sufficiency• Instill skills

Enhancecollaboration
between IT
and businessdivisions

Develop /secure expert
talent• Developmentof human
resources
with expert
knowledge in
specific areas

Increase IT developers: New graduate and mid-career recruitment
will be strengthened to meet MUFG’s increasing need for systems
investment, and we will enhance systems development staff. In
addition, productivity in systems development will be improved by
actively incorporating AI into the development process.
Enhance collaboration between IT and business divisions: We willrealize high-quality systems development by building a framework forcollaboration between business divisions and the IT department fromthe early conceptual stage of systems development.
Develop / secure expert talents: We will enhance the developmentof highly skilled experts in specific areas, including large-scale andglobal developments and strategic proposals at the initial stage ofsystems development.

Over

30%

Infrastructure enhancement initiatives
Overview of the initiatives
A new framework for investing resources ininfrastructure enhancement has been built due toconcerns that our emphasis was on achieving shortterm results from investments in areas such as systems
development, and appropriate resources were notbeing allocated to areas that will have medium- tolong-term impact. We will accelerate our efforts toward
future growth by improving the speed, such as
streamlining the project approval process.
For example, we built a long-term relationship withcustomers based on trust by investing resources indeveloping effective promotions and incentives and an
app that makes personalized proposals on optimal
products for the “domestic retail customer base” project.

Resource investment
Domestic retailcustomer basePromotion point to the cost anddevelopment of an app for personalized
product proposals, etc.

AI/data
infrastructure

AI model development and use, data
platform enhancement towards standardized
data, R&D, etc.

Human capital

Training costs for reskilling, human resource
development, etc.

New businessportfolio

New business creation projects using newtechnologies, including those related to Web3IT
Infrastructure

Improve branch communication / equipment,
strengthen internal IT infrastructure, systems
architecture strategy, etc.

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Strategies to Improve Corporate Value

62

Accelerate Transformation & Innovation

Experienced Hire Round Table
Observations after joining MUFG

[Facilitator][Participant][Participant][Participant]Akiko Shikimori

Mami Mitsuji

Shoko Kuwatsuka

Eiji Shokatsu

Chief Corporate Branding Officer
Managing Director, Head ofCorporate Planning Division
Mitsubishi UFJ Financial
Group, Inc.

Assistant General Manager
Planning Department,
Human Resources Division
Mitsubishi UFJ Morgan
Stanley Securities

Senior Manager
Business Promotion Group
Sustainable Business
Division
MUFG Bank

Senior Manager
Bond & Hedge Fund
Investment Department
Investment ProductDevelopment Division
Mitsubishi UFJ Trust and Banking

Transforming Our Culture
How We’re Building a Proactive,
Challenge-Embracing Company Today
MUFG Champions Cultural Transformation, Aiming to Elevate Corporate Value in Times of
Change and Diversification.
A closer look at Progress and Outcomes through the Eyes of Three Mid-Career Hires
Engaged in a Frontline Discussion.

Shikimori: Let’s begin by asking about your career history
and current responsibilities.
Shokatsu: I was broadly engaged in asset management at alife insurance company, mainly investing the premiums
received from the customers. Leveraging on the market
expertise and know-how acquired, I’m currently responsiblefor identifying superior hedge funds and introducing them toour clients.
Kuwatsuka: I was in charge of financing at a department
engaged mainly in development and investment ininfrastructure projects such as electricity and water. I now
belong to the Sustainable Business Division and support ourcustomers’ sustainable growth by providing solutions forenvironmental and social issues.
Mitsuji: I worked in corporate sales and human resources at
an office equipment manufacturer. In human resources, I was
responsible for ensuring that the employees understood thehuman resources system, in addition to recruitment, humanresource management, and human resource system design.
Now, I work in the Planning Department, Human Resources
Division, overseeing employee benefits and pensions andemployee surveys.
Shikimori: I also worked for many years for an electronics
manufacturer and promoted corporate transformation
through corporate communications. Let’s move to the main
topic. Please tell us about the issues regarding MUFG you
identified after joining and how you are addressing them now.
Shokatsu: I felt that MUFG’s qualitative analysis was superior
for selecting hedge fund strategies and evaluating the hedge
funds themselves, but there were issues with quantitative
analysis. I have experience developing investment
decision-making models using statistical market analysis, so
I’m leveraging my knowledge to strengthen and enhancequantitative analysis.
Kuwatsuka: After joining MUFG, I noticed a positive feature:
the whole company supports taking on challenges. I felt thereMUFG Report 2024

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Accelerate Transformation & Innovation

Experienced Hire Round Table

was a deep-rooted culture of valuing people who proactively
identify issues and take on challenges.
Sustainable Business Division is engaged in cutting-edge
initiatives, so everyone quickly accumulates new expertise andknow-how. We must further improve productivity and creativity
by building an intellectual infrastructure utilizing digitaltransformation to share knowledge within the company.
Mitsuji: I felt that MUFG provides an excellent work
environment. In such an environment, some employees areengaged in work and willing to take on challenges, whileothers are more conservative, perhaps due to thecharacteristics of the financial services industry.
For the people and the organization to grow together, thecompany must have many employees who strive to lead thechanges rather than wait for the company to change. I wantto create a human resources framework that can provide
solid support for such actions.

MUFG’s challenges and valuable legacies
Shikimori: Next, I’d like to ask about MUFG’s work environment
and approach to work.
What I have often heard are concerns about procedures being
complicated and approvals or decision-making taking a longtime. In an era of rapid change, there is a recognition of theneed to offer customers value not only in terms of the safety

and security that have always been cherished but also in termsof innovation and agility. From this awareness of the issue, the
new medium-term business plan has identified “Agility
Transformation” as an important theme.
Mitsuji: To give an example using presentation materials, I
feel there are obstacles before obtaining approval, such as
requiring that the material be 100% completed before moving
to the next step.
However, there are signs of change, and my supervisor
recently told us to “share at 30%, discuss at 50%, and make adecision at 70% to move forward.” If everybody implements
this, the speed of progress will change significantly.
Kuwatsuka: I haven’t experienced a significant hurdle toapprovals and decision-making from such a perspective at
my division.
Shokatsu: I agree. My department works in new areas, so
nobody knows what 100% might look like. We try to movetowards the best possible option.
Shikimori: I see. So there are differences in mindset,
approach, and sense of urgency between existing divisions
and newly established ones. I’d like to share theseinter-divisional differences as challenges to be addressed inadvancing our Agility Transformation.
Kuwatsuka: I particularly appreciate the features of MUFG,
which are the customer base, human capital, and financial
strength. On the customer base, MUFG has a close
relationship with many Japanese companies and can engage
in a dialogue regarding management issues, sharing theperspective with the customers. On human capital, MUFG has
many employees willing to act, boosting progress throughjoint efforts. Significant financial strength is required to drive
businesses and industries, and MUFG has solid financial
resources to meet the demand. These factors interact tocreate MUFG’s consolidated strength.
Shokatsu: While specialists are joining MUFG as
experienced hires, other employees have resigned. One
reason seems to be that MUFG tends to require employees
to be capable in every area and appreciates generalists.

Now, a specialist career development route to pursue
expertise is being established.
Shikimori: That’s right. The whole of MUFG supports
specialist career development. We cannot build a strong
team unless we become a company that appreciates experts
more, where employees with various career backgrounds
can participate.
Kuwatsuka: The specialist aspect applies to my department,
too. In the sustainability area, the world is changing
significantly through regulatory revisions and technologicalinnovations. We must continue learning or risk being left
behind. There is a limit to what individual efforts can achieve,
so I’d like to create a company-wide framework to share andspread knowledge.
Shikimori: To enhance professionalism as a team, we mustbuild a platform for sharing necessary knowledge andexpertise and create an environment for mutual learning.
How about the Human Resources Division? What are your issues?
Mitsuji: In many companies, management and humanresources lead top-down initiatives to improve engagement.
I think MUFG has the same tendency. It’s not so much of anissue, but improving engagement in an organization with abottom-up approach isn’t easy.
Shokatsu: Is that so? A bottom-up approach is the basis of
my department.
Kuwatsuka: At my department, some initiatives arepromoted with a top-down approach, but at the same time,
we’re promoting a bottom-up approach. The frontline
employees who can capture the customers’ issues make

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Strategies to Improve Corporate ValueManagement Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Accelerate Transformation & Innovation

Experienced Hire Round Table

proposals to the management. In addition, everyone,
including younger employees, is given discretion. They seemto accumulate experience, stating opinions at meetings withcustomers and external partners and taking responsibility for
implementing measures.
Shikimori: I see. Through her involvement in employee
surveys, Ms. Mitsuji can see the reality of the top-down
approach applied in many departments. On the other
hand, some new departments promote various initiatives
with a bottom-up approach, creating a culture of taking on
new challenges.
Shokatsu: For example, if the supervisor is not very familiar
with hedge funds, those of us with knowledge must take abottom-up approach.
Shikimori: Regarding management, managers cannot fullyknow all the details of specialized business operations. In my
experience, as I was promoted to Chief Manager and then toGeneral Manager, I accepted that it was only natural that I
couldn’t micro-manage everything as my responsibilities
expanded. It’s important to try not to know everything,delegate where you should, and improve the team’s
performance together. Balancing the top-down andbottom-up approach is necessary.

Contributing to the reform
Shikimori: MUFG’s cultural reform still has a way to go. How
would you like to contribute to making MUFG a better company?
Kuwatsuka: Customers’ needs and issues will change, as willsocial and environmental issues. As my background was infunding projects that were difficult to finance, I’d like to pursue
solutions for the issues that customers and society face.
Shikimori: Customer engagement will be the key. It is acomplex theme but an important one.
Kuwatsuka: Yes. I am very empathetic to MUFG’s Purpose ofbeing “committed to empowering a brighter future.” It forms
the core of my belief. I want to make efforts to continue

Reflecting on the round table discussion

Now is the time for transformation,
towards a new MUFG

providing solutions to the needs of customers and society
through sustainable engagement.
Shokatsu: I’d like to improve the customers’ asset value andsatisfaction by improving investment performance. To that end,
I’d like to further enhance my ability to identify hedge funds.
If there’s an opportunity, I’d like to develop investment models
at a department involved in quants models and AI research toprovide value to the customers. Internally, I could contributeto knowledge sharing by explaining the quantitative analysis
method to other members.
Shikimori: It is frequently said that “to change a company,
human resources must change first.”
Mitsuji: At MUFG, personnel transfers across business units
and operations are possible. This creates numerous
opportunities to meet people with diverse perspectives andleads to new possibilities for the individual.
I want to expand my perspective beyond human resources
and take on many challenges with personal interest.
Changing workers’ awareness is the essence of corporate
reform. I’d like to leverage my experience and impact MUFG’svision from a human resources perspective.

In 2022, MUFG Bank launched “Beyond MUFG:
Empower the Experienced Hire as a Force of Change,”
an internal SNS community, with the hope that theideas and actions of the experienced hires would
become a driving force for cultural transformation at
MUFG. Many of the experienced hires note theextensive effort spent on inward-looking tasks at MUFG
but also appreciate the openness of the employees todiverse opinions and new working styles. I myself havebeen keeping a “Surprise Diary” since joining to keep
my perspective fresh and to turn the daily surprises
into opportunities for change. By further promoting
constructive dialogue between experienced hires andother employees, and creating an environment thatembraces diverse thoughts and mutual inspiration,
we can enable employees to make full use of thewonderful organization that is MUFG and makesignificant contributions to society. MUFG can truly
empower a brighter future of the society by creating
new values, centered around our core Purpose, leading
to employee-driven change, pride and engagement.
Communicating these actions and transformations to
the world, showcasing a new form of leadership in
financial services, that is the “MUFG Way in my own
terms”, and my goal is to spearhead a communication
strategy that not only advances corporatetransformation but also positively impacts society.

Akiko Shikimori
Chief Corporate Branding Officer
Managing Director, Head ofCorporate Planning Division
Mitsubishi UFJ Financial
Group, Inc.

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Strategies to Improve Corporate Value

65

Accelerate Transformation & Innovation

Highlights of Transformation
Through various measures, our employees’ willingness to take on new challenges is increasing. At the same time, we have advanced
reforms in our human resources framework to be able to support their challenges. We will continue our efforts to improve agility and further
strengthen our corporate infrastructure to accelerate corporate transformation. Our aim is to create a corporate culture where each andevery employee thinks, decides and acts for themselves and do so swiftly.

Examples of efforts to date
MUFG Way Employee Sessions

MUFG Way Boost PJ

Areas to be addressed
MUFG SOUL

Outreach to embed the MUFG Way

CSR activities planned by employees

Session within multinational teams

Introduce employees embodying the MUFG Way

Activity to support “Children’s cafeteria”

Leveraging “Integrity andResponsibility” and “Agility”• Development of corporate
culture “challenge × agility”

MUFG KOGEI Project

Support transformation to pass on traditions

DialogueStrengthening of the corporate
infrastructure for medium- tolong-term growth

Learn from kogei that keeps the tradition alive

Reform of the HR frameworks
Encourage employees to challenge

966
289
FY2021

FY2023

MUFG Park

Open up facilities and activate
dialogue with local communities

Outsourcing service for condominium
management association

Mr. Yuji Akimoto
Professor Emeritus(Tokyo Universityof the Arts)x
CEO Kamezawa

No. of Career Hires /No. of Hires by
Business Area

Spark X

New business incubation program

Launch of first businessunder the program approved

Opening ceremony

Many other activities in which employees play a leading role

No. of Applicant
for Job Challenge

2,303
FY2021

3,037

FY202381 branch managers appointed throughopen recruitment (FY2021–FY2023)

MUFG Headquarters Bldg. PJ
Headquarters building
project led by employees

Japan Rugby League One
Development of the next
generation with sports

Internal Financial
Results Presentation• Enhancement of human capital• Accelerating strategic
system development• Development of AI anddata infrastructure

Accelerate
Transformation & Innovation

Dialogues about purpose

66

Foundation
Supporting the
Corporate Value
CONTENTS
Messages from Outside Directors

67

Corporate Governance69

List of Directors

70

Evaluation Framework of the Working Practices of
the Board of Directors’ Operations

72

Global Advisory Board

73

Succession Plans and Selection Process for GroupCEO and Other Corporate Leader Candidates

74

Executive Compensation System

75

Risk Management / Cyber Security

77

Compliance / Internal Audit

78

Initiatives for Practicing a Customer-Oriented Approach

79

MUFG
KOGEI Project3

MUFG Bank Nagoya Building
5F Conference Room Area Partition
Steel used in a lattice pattern depicting Nagoya Yuzen textiles
Click for details about the MUFG KOGEI Project.

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Foundation Supporting the Corporate Value

Messages from Outside Directors
Musings on the formulation of
the MTBP by an outside director
Hirofumi Nomoto

Outside Director(Lead Independent Outside Director)
Chairman & Representative Director, TOKYU CORPORATION
Tenure as an Outside Director: Five years

in drafting the most important Group management plan anddeemed it problematic. There were additional requests tobroaden the discussion topics beyond the three-year MTBP
period, to consider the strategic direction for the financial
institution from a medium- to long-term perspective.
Based on these comments, the Board of Directors discussed the
MTBP in five meetings in the current process, getting involved
with the executives from the early stages. In August, wedeliberated the executives’ medium- to long-term hypothesis,
including the “future vision for the financial services group” inten years, reflecting on the changes in the macroeconomic
environment and customer behavior. The supervisory side wasinvolved in ongoing discussions to establish the new MTBP.
The MUFG Board of Directors engages in diverse discussions,leveraging the skills and experience of the outside directors. To
give an example, one key consideration in discussing the MTBP
was the clarity of the message for the Japanese and overseas
stakeholders. Firstly, the appropriateness of giving “drive socialand environmental progress” the same level of priority as“expand and refine growth strategies” was pointed out while
reviewing the Basic Policy of the MTBP. The possibility of raisingconcerns about compromising profitability was pointed out,
especially since the ROE and share price have not yet reachedthe medium- to long-term target. As a result, I believe theexecutives’ intention was expressed clearly in the message, “Wewill serve our commitment to empowering a brighter future forall stakeholders, producing economic and social value.”Preparation of the new Medium-TermBusiness Plan
To prepare the previous Medium-Term Business Plan (“MTBP”),
the executives had discussions throughout the year, whereas
the Board of Directors commenced deliberations only a month
before the resolution. We had to review a plan that was almost
finalized within a limited time. Some outside directors criticized
the lack of adequate time to incorporate external perspectives

Secondly, from the perspective of a corporate executive
including myself, we strongly argued that MTBP will only
become meaningful when effectively communicated to theemployees who implement it. MUFG has many employees, andI believe we were able to share the understanding thatsuccessful implementation of the MTBP requires having each
employee take ownership and reflect it on daily activities.
Consequently, a “commentary” summarizing the essence of the
MTBP was prepared and distributed to all employees. All officers
and General Managers are holding sessions to communicate
the MTBP to all subordinates in their own words. We had further

meaningful discussions, including the need for infrastructure
investment for IT and digital transformation and the approach toindividual KPIs for “driving environmental and social progress.”

Issues to be addressed by MUFG
MUFG is renowned for its consolidated strength, engaging invarious reforms and taking on many challenges under theleadership of CEO Kamezawa. While a positive cycle is being
created, I feel the full potential is yet to be realized. Issues notedfrom an outside director’s perspective include the culture andspeed reform, digital transformation, and promotion of humancapital and DEI. These all take time to address. The role of theBoard of Directors, including the outside directors, is to monitor
the status of execution in a timely and appropriate manner andencourage taking on challenges as necessary. I would like tocontinue to provide rigorous but kind supervision to sustainably
improve MUFG’s corporate value.

Small meeting with investors (March 2024)

Participants, including Directors Nomoto (center) and Watanagase (left),
discussed a wide range of topics, including assessing management’s
execution, the roles of the outside directors, and issues for MUFG.
https://www.mufg.jp/dam/ir/presentation/2023/pdf/
main_qa240322_en.pdf

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Foundation Supporting the Corporate Value

Messages from Outside Directors

Retired

Newly Elected

Newly Elected

Tarisa Watanagase

Hiroshi Shimizu

Mari Elka Pangestu

Period in office:June 2017 to June 2024

Period in office:June 2024 to the present

Period in office:June 2024 to the present

MUFG’s governance is making steady progress

Growth Strategy Centering on Agility

Aiming at further corporate transformation

MUFG’s Board governance evolved steadily over the seven years of
my tenure as an outside director. The Board structure is now morecompact, with outside directors as the majority, and the numberof female directors has also increased, promoting diversity.
Outside directors are effectively utilizing the opportunities forcandid exchanges with the Chairman and CEO and with top
executives of subsidiaries, which has further improved theBoard’s effectiveness.
The sale of MUB was a particularly memorable agenda item for
the Board. In making the decision, outside directors asked theright questions, raised concerns based on their skills andexperiences, and shared their advice. It was an example of a
successful transaction brought out by the Board andManagement working together.
The management made significant progress by reviewing thebusiness portfolio, focusing on driving growth in high-potential
business segments and regions, and further strengthening
MUFG’s financial and business foundation.
Management is also aware of the need to continue efforts toenhance important backbones supporting corporate activity,
such as IT systems, digitalization, HR including DEI initiatives,and corporate culture transformation. I look forward towatching over future growth.

I currently serve as the Representative Director and President of
Nippon Life Insurance Company, focusing on global financial
management. Previously, I have worked in areas including group
strategy planning, revenue management, product development,core systems integration, investment, and asset management.
In its new Medium-term Business Plan (“MTBP”), MUFG added“agility” as a new factor to its Values, which is one of thecomponents of the “MUFG Way.”
Strategies centering on the three pillars of the MTBP will bepromoted with a more proactive approach and sense of urgency.
I will contribute as an outside director to ensure that the market
recognizes MUFG as a company that can capture growth.
Customers’ demand for financial institutions has further
diversified. As the president of another financial group, I work
daily on “promoting customer-oriented business operations”
and “realizing a safe, secure, and sustainable society,” which
will be the foundation for growth.
I will leverage my experience and knowledge in the financial
industry to contribute to improving corporate value andrealizing MUFG’s Purpose of being “committed to empoweringa brighter future.”

After a career with the University of Indonesia and the Centre forStrategic and International Studies, Indonesia, I served as the
Minister of Trade and Minister of Tourism and Creative Economyof the Republic of Indonesia and subsequently became theManaging Director of the World Bank in charge of Development
Policy and Partnerships.
Under its Vision to “be the world’s most trusted financialgroup,” MUFG provides diversified financial services as a global
financial partner and in the domestic market.
It has actively undertaken corporate transformations to
respond to the digital economy and the social requirements
for sustainability. To meet these goals while achieving steady
growth, MUFG must continue undertaking transformations
with a sense of urgency.
I will leverage my experience in the areas of macro economy,
trade, finance, development, and sustainability to capture
economic growth, especially in MUFG’s second mother market
of Asia, and in meeting its sustainability and carbon neutrality
goals to contribute to increasing the corporate value over the
medium and longer term.

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Foundation Supporting the Corporate Value

Corporate GovernanceManagement Structure

Basic Policy

General Meeting of Shareholders

Mitsubishi UFJ Financial Group, Inc.
Oversight
Statutory Committees
Nominating andGovernance Committee

Board of Directors
Non-Executive Directors (11)Compensation
Committee

Executive Directors (5)Audit Committee

Board of Directors
The Board of Directors decides key management policies and is
responsible for management oversight. Decisions other thanmatters stipulated by laws and regulations shall, in principle, bedelegated to corporate executives.

Internal Directors

Outside Directors

Internal, Non-Executive Directors

Chairperson

Execution

MUFG’s Board of Directors consists of 16 directors equippedwith diverse knowledge and expertise. The composition of theoutside directors is focused on diversity in terms of nationality,
gender, and other attributes*1 .
*1 Agreeing with the “Challenge Initiatives for 30% of Executives to be Women by2030” led by the Nippon Keidanren, MUFG is proactively promoting inclusion anddiversity initiatives.

11/16

9/16
Female directors 4/16

56.3%

Foreign nationals 2/16
Non-Executive
Directors

GlobalAdvisory Board

Securing independence and diversity

U.S. Risk Committee*1*1 Established based on the U.S. Prudential Regulation

Executive Committee

Committees,etc.
Accounting
Audit

Officers in Charge
Business Groups

Officers in Charge

Officers in Charge

Corporate Staff
Units

Corporate Risk
Management UnitsMUFG Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Mitsubishi UFJ Securities Holdings Co., Ltd.,etc.

Independent
Outside Directors

Risk Committee

Reporting
Evaluation

President & Group CEO

Independence and Diversity of Directors

68.8%
66.6%

Independent Auditors

We have positioned properly developing and operating ourcorporate governance as one of the most important issues.
MUFG has built a stable and effective corporate governancestructure with an emphasis on external oversight. The holding
company adopted the “company with three committees”
structure to secure separation between supervision andexecution, thereby strengthening the oversight function of its
Board of Directors. Through these measures, we endeavor todevelop a more effective and efficient governance system thatwill enable us to gain the understanding of stakeholders.

* Independent Auditors appointed by each entity

Officers in Charge
Audit

ReportingInstruction

Internal Audit
Division

General Meeting of Shareholders

Board of Directors

Audit & Supervisory Committee

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Foundation Supporting the Corporate Value

Corporate Governance

Name

FemaleHirofumi Nomoto

Male

Mari Elka Pangestu

FemaleHiroshi Shimizu

MaleDavid Sneider

MaleKoichi Tsuji

Male

Kenichi Miyanaga

Male

Ryoichi Shinke

Male

Kanetsugu Mike

Male

Hironori Kamezawa

Male

Iwao Nagashima

Male

Junichi Hanzawa

Male

Makoto Kobayashi

Male: Chairperson of the Committee;: Committee member

Internal directors shall haveextensive knowledge of MUFG
Group’s business and the ability toappropriately perform managementof MUFG Group

Sustainability

Satoko Kuwabara

IT/digital

*1

Male

Global6

Sufficiently discuss matters reported or proposed by top
management executives, requesting supplementary explanation
where necessary and contributing their opinions

Kaoru Kato

Legal affairs

5

Engage in timely and appropriate decision making in the course ofdeliberating investment and other management judgments via
the careful examination of the reasoning behind the proposals
and other information presented to them

FemaleFinance &Accounting

4

Contribute to sustainable corporate development and mediumto long-term growth in MUFG’s corporate value

Keiko Honda

Finance3

Provide advice and other assistance to top management
executives based on their experience and expertiseInternal directors

2

Exercise the oversight of conflicts of interest that may occur
between MUFG and top management executives or MUFG andcontrolling shareholders

FemaleKnowledge, expertise and experience
Corporate
management

At MUFG, independent outside directors are expected to fulfill
the following six roles.

Mariko Fujii

Risk Committee

Roles Outside Directors Are Expected to Fulfill

Supervise executives’ duties from an independent and objective
standpoint

Current position at MUFG andcommittee-related duties*1
Audit Committee

For details, see “Annual Securities Report” P.86-88 “Board of Directors and the
Directors” (only in Japanese)

1

GenderCompensation
Committee

Outside directors

The Board of Directors identified themes requiring particularpriority and follow-up monitoring from among issues specified via
mapping that encompassed all agenda items to be handled by the
Board of Directors. At the same time, the Board operated effectively
and efficiently by continuing a PDCA cycle according to theannual schedule. For fiscal 2023, the Board of Directors supported
deeper discussions and decision making by the executive officers
by engaging in continued discussions and follow-up on the new
Medium-term Business Plan from early stages, confirming the
medium- to long-term strategic direction such as the “future
vision of the financial services group” based on the changes in themacroeconomic environment and customer behavior.

List of Directors

Nominating andGovernanceCommittee

MUFG’s directors have been selected with a view to ensuring awell-balanced composition and include individuals boasting
in-depth knowledge of its business operations, as well as
specialists in finance, financial accounting, risk management,
legal compliance, and other diverse areas of strength. In addition,
MUFG has secured human resources with experience in “global”
fields, “IT/digital,” and “sustainability,” all of which are deemed tobe matters of growing importance for its business operations.

MUFG Report 2024

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Foundation Supporting the Corporate Value

Corporate Governance
Type and Number of MUFG Shares Owned as of March 31, 2024 (Dilutive Shares: The number of corresponding vested points
in the stock compensation system using a trust structure.)
Attendance at Board of Directors Meetings (FY2023)

Outside directors

For career summary of outside directors, please see the website. https://www.mufg.jp/english/profile/overview/management/index.html

Mariko Fujii

Keiko Honda

Member of the Boardof Directors (Outside
Director)

Tenure as an Outside Director: Five years
Ordinary Shares: 09/9Former Ambassador Extraordinary andPlenipotentiary of Japan to the Republic of Latvia
Emeritus Professor of The University of Tokyo

Tenure as an Outside Director: Four years
Ordinary Shares: 09/9Former Chief Executive Officer of Multilateral
Investment Guarantee Agency, World Bank Group

Mari Elka
Pangestu(New)

Tenure as an Outside Director: Three years
Ordinary Shares: 0
9/9
Partner, Gaien Partners

David Sneider

Koichi Tsuji

Member of the Boardof Directors (Outside
Director)

Tenure as an Outside Director: One year
Ordinary Shares: 0
8/8*1
Attorney at law

Hirofumi
NomotoMember of the Boardof Directors (Outside
Director)

Tenure as an Outside Director: Five years
Ordinary Shares: 09/9Former President & CEO, NTT DOCOMO, INC.

Member of theBoard of Directors(Outside Director)

Ordinary Shares: 0–/–
President, Nippon Life Insurance Company

SatokoKuwabara

Member of the Boardof Directors (Outside
Director)

Hiroshi
Shimizu(New)

Member of theBoard of Directors(Outside Director)

Ordinary Shares: 0–/–
Former Managing Director, Development Policy &Partnership, THE WORLD BANK

Kaoru Kato

Member of the Boardof Directors (Outside
Director)

Member of the Boardof Directors (Lead
Independent Outside
Director)

Tenure as an Outside Director: Five years
Ordinary Shares: 25,000
9/9Chairman & Representative Director, TOKYUCORPORATION

Member of the Boardof Directors (Outside
Director)

Tenure as an Outside Director: Three years
Ordinary Shares: 0
9/9
Certified Public Accountant

Directors

Kenichi Miyanaga

Member of the Board of Directors
Audit Committee Member
Tenure as a Director: Three years
Ordinary Shares: 183,678
Dilutive Shares: 31,580
9/9

Ryoichi Shinke

Member of the Board of
Directors
Audit Committee Member
Tenure as a Director: One year
Ordinary Shares: 1,100
Dilutive Shares: 0
8/8*1

Kanetsugu Mike

Member of the Board of Directors
Chairman (Corporate Executive)
Tenure as a Director: Seven years
Ordinary Shares: 292,062
Dilutive Shares: 133,731
9/9
Outside Director of MITSUBISHI
MOTORS CORPORATION
Outside Auditor of Tokyo Kaikan
Co., Ltd.

*1 Attendance rate for Board of Directors meetings held since assuming office in June 2023.

Hironori Kamezawa

Member of the Board of Directors
President & Group CEO(Representative Corporate
Executive)
Tenure as a Director: Five years
Ordinary Shares: 69,639
Dilutive Shares: 410,951
9/9
Member of the Board of Directorsof MUFG Bank, Ltd.
Director of Morgan Stanley

Iwao Nagashima

Member of the Board of Directors
Tenure as a Director: Four years
Ordinary Shares: 129,081
Dilutive Shares: 333,291
9/9
President & CEO of Mitsubishi UFJ
Trust & Banking Corporation

Junichi Hanzawa

Member of the Board of Directors
Tenure as a Director: Three years
Ordinary Shares: 58,900
Dilutive Shares: 218,638
9/9President & CEO of MUFG Bank,Ltd.

Makoto Kobayashi

Member of the Board of Directors
Tenure as a Director: Two years
Ordinary Shares: 153,058
Dilutive Shares: 42,015
9/9
President & Global CEO of Mitsubishi
UFJ Securities Holdings Co., Ltd.
President & CEO of Mitsubishi UFJ
Morgan Stanley Securities Co., Ltd.

MUFG Report 2024

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Foundation Supporting the Corporate Value

Corporate GovernanceFiscal 2023 Initiatives Undertaken by
the Board of Directors

Evaluation Framework of the Working
Practices of the Board of Directors’ Operations(Number of meetings: 9, Attendance ratio (all directors): 100%,
Attendance ratio (outside directors): 100%)Every year since 2013, MUFG has retained external consultants
to evaluate the Board of Directors. These consultants conduct
questionnaire surveys and interviews with all of the Directors
regarding the purpose, composition/expertise, agendas/
discussions, and the promotion of reform of the Board, as well
as self-assessment of each Director. The results of thesequestionnaire surveys and interviews are reported to anddiscussed by the Nominating and Governance Committee andthe Board.

Agenda Items Discussed by the Board of Directors
Key Strategies under the Medium-Term Business Plan (MTBP)
Formulation of the Medium-term Business Plan for FY2024
Promotion of sustainability management
MUFG Climate Report 2024
Progress in corporate cultural reforms
Digital Transformation strategy
Wealth management
Asia business
Asset management business (global AM/IS)
Strengthening partnership with Morgan Stanley

The fiscal year 2023 evaluation confirmed that the effectivenessof the Board continues to be ensured as a result of continuing towork to improve its operations and frameworks, which were
issues that had been identified in the previous fiscal year. Also in
fiscal year 2023, the Board discussed important themes such as
mapped material issues and items requiring particular priority(such as the Medium-term Business Plan and Sustainability) andheld extensive discussions based on the knowledge, expertise

Financial

Progress in FY2023 annual business plan
Performance targets and capital policy
Management conscious of capital costs and stock prices

Governance

Reports from CRO, CCO and other C-Suite
Recognition of current risk status and initiatives undertaken in eachrisk field
Status of compliance-related initiatives, including the Code of Conduct
Measures to reduce strategic shareholdings
Evaluation of the Board of Directors’ effectivenessPresentations on agenda items

30
20

Fiscal 2022 evaluation

Evaluation

10
0

56%

44%
2018

Number of
9meetings
Length of 28:32
meetings

49%
46%

55%

61%

55%

39%

45%
2023 (FY)

51%

45%

2019

2020

2021

2022

10

10

10

10

9

38:14

25:41

31:23

25:57

24:36

MUFG has identified these efforts as being firmly connected to
improving effectiveness, and based on the determination thatthe existing framework will function as intended in the fiscal year
2024, will continue to work on improvements to further enhancefunctions of the Board.

Issues tobeaddressed

Fiscal 2023 initiatives

Fiscal 2023 evaluation

Efficiency of the Boardof Directors’ operations
has improved and theeffectiveness continued
to be ensured

Deliberation

54%

As specific initiatives for fiscal year 2023, we launched new
informal sessions limited to the Chairman, CEO and Outside
Directors, as well as held recurring meetings for opinion
exchange between the CEOs of the three major subsidiaries, theBank, the Trust Bank and Securities, and Outside Directors.
These efforts deepened mutual understanding through frankcommunication among Directors, and helped foster an
atmosphere for further enhancing effectiveness. We also
continued initiatives to further develop the monitoring functionof the Board by holding study sessions for Directors inviting
external experts.

Initiatives to Enhance the Effectiveness of the Board of Directors’ Operations

Length of Board of Directors Meetings(Hours)40

and experience of each Director, incorporating external
viewpoints, all of which enhanced the effectiveness ofmonitoring functions in the Board.

Room for more ongoing
improvement (Board
operations, systems, etc.)

Launched new informal sessions for opinion exchange
limited to the Chairman, CEO and Outside Directors.
Continued meetings for opinion exchange among theheads of the Bank, the Trust Bank and Securities, andOutside Directors
Improved feedback on discussions at Board of Directors
meetings of the Bank, the Trust Bank and Securities
Devising ways to explain agendas (revision of the agenda
item sheet) and making effective use of pre-briefing
sessions before meetings
Held study sessions for Directors inviting external experts(on the role of the Board of Directors in the monitoring model).

Evaluation

Facilitated frank, active communication andmutual understanding among directors,
fostering an atmosphere for further enhancing
the effectiveness of the Board
The quality of the Board of Directors’ discussions
has improved, and monitoring functioned
effectively in relation to important agenda items
such as the formulation of the next Medium-term
Business Plan, sustainability, and other issues
Confirmed that the Board is currently
sufficiently functioning effectively as a result ofyears of commitment to improve effectiveness

Issues tobeaddressed

Continuous improvement for further
enhancement of the Board functions(operations, systems, improving efficiency, etc.)MUFG Report 2024

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Foundation Supporting the Corporate Value

Corporate Governance

Outline of Committees and Their
Fiscal 2023 Initiatives
Nominating and Governance Committee(number of meetings held: 10; attendance ratio for all members:
100%; attendance ratio for outside directors: 100%)

Main Agenda Items
Proposals to be submitted to the General Meeting of Shareholders
with regard to the nomination of Director candidates
Matters related to candidates for major management positions in theholding company
Corporate governance policies and frameworks
Annual evaluation of the Board of Directors and Committees underthe Board of Directors, etc.

Compensation Committee

Global Advisory Board
Fiscal 2023 Activities
For Fiscal 2023, MUFG held its annual meeting in January. The
event, taking the form of an in-person & online hybrid meeting,
was attended by the Global Advisory Board members and
MUFG directors / executives. Main topics of discussion weregenerative AI and geopolitics, both which are global themes,
and various opinions were exchanged on the roles andmeasures to be taken by MUFG in the changing environment.
In the generative AI session, discussions ranged from
regulations concerning AI and coexistence of AI and humans.
In the geopolitics session, observations of U.S.-China

relationship from each country were discussed. In addition to
the annual meeting, small meetings were held and attended byrelevant members of the Global Advisory Board and MUFG toobtain timely advice on specific topics and regions. In thesmall meetings, deeper discussions were held on key themes
for promotion of MUFG’s management strategy, such as global
financial regulations, human capital strategy, Asia business,and geopolitics. As the environment surrounding MUFG ischanging significantly, MUFG will continue to operate the
Global Advisory Board in a flexible and effective manner toquickly respond to the changes.
Reference: Global Advisory Board
https://www.mufg.jp/english/profile/overview/advisory_board/index.html(number of meetings held: 7; attendance ratio for all members:
97%; attendance ratio for outside directors: 96%)

Main Agenda Items
Review of compensation systems for officers at the holding company
and major subsidiaries
Verification and review of policies for the determination of compensation
Compensation market status
Evaluation of bonuses for the President and CEO, etc. for fiscal year
2022 and setting of targets for fiscal year 2023
Individual compensation for Directors and Corporate Executives

Audit Committee(number of meetings held: 16; attendance ratio for all members:
100%; attendance ratio for outside directors: 100%)

Professor Merit E. Janow
Dean Emerita, School of International andPublic Affairs, Columbia University
Former Member of Appellate Body, World
Trade Organization

The
Americas

Main Agenda Items
Allowance for credit losses, asset impairment risks, financial reporting
processRisk management systems, crisis events, compliance risk events
Group/global internal control
Group/global internal audit systems
Independent auditors report (Key audit matters, etc.)

Mr. George Yeo
Former Singaporean Minister for Foreign Affairs

Asia

Mr. William Coen

Mr. Andrew Tung

Chairman, IFRS Foundation’s Advisory Council
Former Secretary General of the BaselCommittee on Banking Supervision

Managing Partner, QBN Capital
Former Chief Executive Officer, Orient Overseas
Container Lines

Ms. Virginia M. Rometty

Professor Emi Osono

Former Chairman, President and Chief
Executive Officer, IBM

Dean, Professor, Hitotsubashi Business School,
School of International Corporate Strategy

Risk Committee(number of meetings held: 4; attendance ratio for all members:
97%; attendance ratio for outside directors: 100%)

Main Agenda Items
Review of the Medium-term Business Plan and initiatives for the next
Medium-term Business PlanResponses to climate change
Restructuring of rating system
Implementation of framework on investment
Update on initiatives to ensure appropriate capital management
Reference: Overview of each committee
https://www.mufg.jp/english/profile/governance/committees/

Ms. Anne Le Lorier
Former First Deputy Governor at Banque deFrance (Central Bank of France)

Mr. Masamichi Kono
Japan

Former Deputy Secretary General of OECD
Former Vice Minister for International Affairs,
Financial Services Agency, Japan

EuropeMr. John M Flint
Chief Executive, UK Infrastructure Bank
Former Group Chief Executive, HSBC

Mr. Keishi Hotsuki
Former Chief Risk Officer, Morgan Stanley

MUFG Report 2024

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Foundation Supporting the Corporate Value

Corporate Governance

Succession Plans and Selection Process
for Group CEO and Other Corporate
Leader Candidates
At MUFG, the Nominating and Governance Committee is engaged
in ongoing discussion regarding ways of nurturing candidates
for major management positions at the holding company andits major subsidiaries. To this end, the Committee has defineddesirable traits for managements (e.g. desirable competencies,
skills, backgrounds and other attributes according to position).
Based on these traits, candidates are identified and grouped bygeneration. In nominating candidates for Group CEO and otherleading positions, the Committee examines candidates in termsof their personalities, executional skills, career records andperformance while referring to the 360-degree assessment
conducted by an external agency. Based on the findings ofthese examinations, the Committee deliberates on the aptitudeof each candidate. Lastly, the Committee interviews eachindividual and prepares proposals on the nomination ofcandidates that are, in turn, submitted to and finalized by the
Board of Directors.

Strategic Shareholdings Policy
Basic Policy and Examination of Significance and Economic
Rationale of Strategic Shareholdings
MUFG, the Bank, and the Trust Bank have adopted, in view ofshareholding risk, capital efficiency and international financial
regulations, a basic policy of reducing the amount of shares
held for the purpose of strategic investment, following sufficientconsultation with the relevant corporate business clients.
Strategic shareholdings will be examined for their significanceand economic rationale from the perspectives of our corporate
business clients’ growth and earnings and the strengthening ofbusiness relations. We shall proceed with divesting thoseshareholdings with insufficient rationale, after securing an
understanding of the relevant clients. Even where there issufficient rationale, we may sell those shares in accordance withour basic policy of reducing strategic shareholdings, taking into
account, the market environment and our business and financial
strategy. Some shareholdings in the past were categorized as“continue holding” even if they were judged to have insufficienteconomic rationale. From FY 2024, we will automatically categorize
them as “negotiate for sale” to accelerate the process.
Economic rationale is examined based on overall business RORA*1
target value, which is set based on MUFG’s capital costs. The
results of the March 31, 2023 examinations show that theoverall business RORA of all of the examinations targets
exceeded 2.1 times of the target value. 87% of the business
partners exceeded the target value on company number basis,the sum total of these shareholdings accounts for 93% onbook value basis and 89% on market value basis. Concerning
the corporate business clients which do not meet their target
values, we will consider selling their shares.
In FY 2023, we divested strategic shareholdings worth approx.
¥216.0 billion (simple sum of the Bank and the Trust Bank on an
acquisition-cost basis), bringing the cumulative total divestment
over the three-year period from FY2021 to FY2023 to approx.
¥539.0 billion, and achieved the divestment target of ¥500.0
billion under the previous Medium-term Business Plan (MTBP).
The target over the three-year period from FY2024 to FY2026 is

to divest strategic shareholdings worth ¥350.0 billion. Thistarget amount accounts for a similar proportion of the bookvalue at the beginning of the period compared to that of theprevious MTBP, and we will facilitate divestment further. In
addition, we will consider increasing the target amount inaccordance with the progress of consensus to divest and themarket environment. Also, during the period of next MTBP which
will begin in FY2027, we will aim to reduce the ratio of thebalance of strategic shareholdings to consolidated net assets on
a market value basis to below 20%
Standards with Respect to the Exercise of Voting Rights
We will make comprehensive decisions on every proposal for theagenda of a shareholders meeting after confirming the following
two points.
1. Will it increase the mid- to long-term corporate value and lead tocontinuous growth including ESG elements of the relevant
corporate business client?
2. Will it increase the mid- to long-term economic profits of MUFG,
the Bank and the Trust Bank?
Significant agenda*2 will be determined through communication
with the relevant corporate business client, etc. as necessary.
The status of the exercise of voting rights of the mostimportant strategic shareholdings will be reported to MUFG’s
Board of Directors.
For details, see: Corporate Governance Report, p2, “Strategic shareholdings policy”

Process of examination of significance and economic rationale of shareholdings
SufficientSignificant

Continue
holding*3

Examination ofsignificanceof shareholding

Examinationof economic
rationale
InsufficientNotsignificant

Negotiate
for sale*1 Overall business RORA (Return on RiskWeighted Assets) is calculated by dividing
Profit (Income from banking and trust banking
transactions with a concerned business partnergroup as well as stock dividends from the saidgroup – Expected loss – Expenses etc.) by risk
assets (total value of credits and shares) which
are based on the IRB approach in comply withthe capital adequacy requirements. In addition,risk asset shares are calculated based onmarket values.
*2 Agenda on disposal of surplus, election of
directors or corporate auditors, election ofoutside directors or outside corporate
auditors, retirement benefits for corporate
auditors, organizational restructure takeover
defense, etc.
*3 Even where there is sufficient rationale we
may sell those shares as stated above.

MUFG Report 2024

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Foundation Supporting the Corporate Value

Corporate Governance

Executive Compensation System

Overview of the Executive Compensation System

MUFG’s compensation system for Executives, etc. is not only
aimed at ensuring the achievement of short-term performancetargets but also intended to better motivate them to contributeto a medium- to long-term improvement in corporate value
and function as an appropriate incentive corresponding to theroles and responsibilities, etc., of each individual.

Type ofcompensation

Linkage withperformance

Annual basesalaryFixed

Performancebased range

Standards for payment

Weight• Paid based on positions, etc.
• Includes Director Allowance, Committee and Chair Allowance, Housing Allowance,
Overseas Representative Allowance, etc.

Nonperformancebased

Stockcompensation

Medium- tolong-term
performancebased

0-150%

Target attainment rate of indices below in MTBP
(1) Consolidated ROE(2) Consolidated expense ratio(3) ESG assessment• Reduction of GHG emissions from own company• MUFG Employee survey score• Ratio of women in management• Ratings granted by ESG rating agencies(4) TSRBaseamount byposition

Performance factor (competitor comparison evaluation)
Comparison of year-on-year growth rate of indices below
with competitors(1) Consolidated net operating profits(2) Profits attributable to owners of parent

Composition of Compensation
The executive compensation system has been revised in Fiscal
2024 based on the new MTBP.

Performance factor(quantitative evaluation factor applied to the Group CEO)Key revisions

Rate of year-on-year change and target attainment rate ofindices below(1) Consolidated net operating profits(2) Profits attributable to owners of parent(3) Consolidated ROE(4) Consolidated expense ratio

Proportion of the compensation

Raise theproportion of
performancebased
compensation

To enhance incentives for achieving the Medium-term
Business Plan, the proportion of the performancebased compensation (stock compensation and cash
bonuses) is raised, for Deputy President and otherrecipients with descending positions.
The President & CEO’s compensation already has asufficiently high proportion of the performance-based
compensation, and is maintained in the current
proportion of “annual base salary: performance-based
stock compensation : cash bonus = 1 : 1 : 1.”

Performance indicator for stock compensation
Consolidated
ROE andexpense ratio
ESG
assessment

TSR

To pursue both of “economic value” and “social value,”financial indices (consolidated ROE and expense ratio)
are newly set in accordance with the new Mediumterm Business Plan, and non-financial indices (ESG
assessment) are raised in evaluation weight, with new
own three indices (as shown in the figure to the right)
added to the ratings granted by ESG rating agencies.
In terms of medium- to long- term enhancement incorporate value and sharing interests with ourshareholders, TSR (Total Shareholder Return) is
newly employed.

Cash bonuses

Short-term
performancebased

0-150%

Baseamount byposition-

Monthly

Cash

<55%>
30%
10%
10%
(2.5%
each)

At the endof the MTBP

5%50% in shares
50% in cash

<45%>
25%
20%
<60%>

20%
10%
20%
10%

Annually

Cash

Status of individual execution of duties (qualitativeevaluation factor applied to Group CEO)• Improvement in customer-segment profitability• Risks handling• Enhancement of efforts on ESG• Evolution of sustainability management etc.

*

Payment
methodAt the time ofretirement ofexecutives

Base amount by position
Performance factor (MTBP achievement evaluation)

The compensation system is also developed with reference toexternal economic and social trends, the status of MUFG’soperating results, its financial soundness and regulations
enforced at home and abroad on compensation paid toexecutives and reviewed in an appropriate and timely manner,
while ensuring that our process for determining compensation
is highly objective and transparent.

Time ofpayment

will be explained in the next page

<40%>

Subject to malus (confiscation) and clawback (restitution claim)

Proportion of compensation by position
President & CEO

0%

20%
33.3%

Chairman, Deputy Chairman,
Deputy President

40%

30%

30%

Annualbase salary

Senior Managing Corporate Executive

42.5%

28.8%

28.8%

Stock
compensation

Managing Corporate Executive

45%

Corporate Executives, Executive Officers
Non-Executive Directors, Outside Directors

10%

30%

40%

50%
33.3%

60%

27.5%

50%

25%
100%

70%

80%
90%
33.3%

100%

27.5%

Cash bonuses

25%

Performance-based
compensationMUFG Report 2024

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Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Foundation Supporting the Corporate Value

Corporate GovernanceTo incentivize efforts to improve MUFG’s earnings power,
capital efficiency and profit structure, each of which isconsidered a management issue requiring the utmost priority,
the degree of achievement vis-à-vis target levels stipulated in
the Medium-Term Business Plan (MTBP) regarding consolidated
ROE and consolidated expense ratio is determined on an
absolute evaluation basis.
MUFG has set the reduction of Group/Global GHG emissions
from own operations, improvement of the employee survey
scores, and raising of the ratio of women in management as
unique ESG self-assessment metrics, to support the further
enhancement of sustainability management. Additionally, toassess the extensive initiatives toward ESG of MUFG from an
objective standpoint, a relative evaluation is carried out on the
degree of improvement (3-year) of third-party assessments by
the five major ESG assessment agencies (MSCI, FTSE Russell,
Sustainalytics, S&P Dow Jones and CDP).
MUFG will conduct relative (3-year) TSR assessments comparedto TOPIX (including dividends) and our major competitors.
Relative comparisons with competitors are made with
Mizuho Financial Group and Sumitomo Mitsui Financial Group.
ESG-related assessment items subject to qualitative evaluation
include contribution to the resolution of environmental andsocial concerns, the promotion of DEI and the strengthening
and upgrading of MUFG’s governance structure.
Image of Performance-Based Compensation(e.g., consolidated ROE)

Compensation for Directors and Corporate Executives(Millions of yen)

Total amount of compensation, etc. by compensation types
Classification

Total
compensation,etc.

Number ofrecipients

Cash bonuses

Cash

Cash

Non-performancebased

Performancebased

6

967

347

219

66

334

2,248

993

387

304

563

Outside directors

10

180

180

(Notes) 1. The figures represent the total amount of compensations, etc. paid by the holding company and consolidated subsidiaries, etc.
2. The compensation, etc. paid to corporate executives who concurrently serve as Members of the Board of Directors is described in the column of corporate executives.
3. On July 1, 2016, the Company introduced a performance-based stock compensation plan using a structure called Board Incentive Plan as Non-cash compensation. (Pleaserefer to “(i) Policy on Determination of the Amount or Calculation Method of Executive Compensation, etc.” for details of the stock compensation plan.)
Total stock compensation in the table above includes expenses associated with the right to receive shares granted under the plan and the amounts of compensation
provided during fiscal year 2023.
4. The targets and achievement ratio of each index of the performance-based stock compensation under the previous Medium-term Business Plan (from fiscal year 2021 to
fiscal year 2023) are as follows.

Targets for Indices Set under the Performance-Based Stock Compensation and the Ratio of Their Achievement
Achievement ratio
Type ofevaluation

Targetattainment
rate ofindices in
MTBP

Performance indices
Consolidated ROE(based on MUFG’s standard)
Consolidated expense reduction amount(excluding performance-linked expense)

WeightFiscal 2021

Fiscal 2022

Fiscal 2023: 7.5%

136%

15%

Fiscal 2023: A level below
the fiscal 2020 result

150%

5%

Fiscal 2023: A level
improved from the fiscal
2020 result

50%

25%
25%

Determined basedon comparisonswith competitors

Fiscal 2023

Per
Total
Per
Total
Per
Total
index evaluation index evaluation index evaluation

30%

Ratings grantedby ESG rating agencies

Comparison Consolidated net operating profits
withcompetitors Profits attributable to owners of parent

Targets, etc.

140%
120%

130%

140%
80%

110%

3 year
total

131%

80%
120%

100%

113%

(Note) 1. The evaluation indices of business performance for each previous fiscal year to determine the cash bonuses paid to the President during fiscal year 2021 to fiscal year 2023
are as follows. The evaluation method of the business performance of fiscal year 2023 is the same, in principle.

Performance Evaluation Conducted to Determine Cash Bonuses (Group CEO)Fiscal 2021 bonuses

Total evaluation

MTBP targets

Performancebased18

Performance indices50%

Non-cashNon-performancebased

Directors (excluding outside directors)

Limit:
150%
100%

Stock compensation

Corporate executives

Performance factor

0%

Annual base salaryFiscal 2022 bonuses

Fiscal 2023 bonuses

WeightFiscal 2020
achievement

Payment
ratio

Fiscal 2021
achievement

Payment
ratio

Fiscal 2022
achievement

Payment
ratio

112.5%

106.4%

125.0%

102.3%

112.5%

100%

113.9%

Quantitative evaluation(combination of four indices, including consolidated ROE)

60%

123.2%

117.3%

103.8%

Qualitative evaluation40%

100.0%

90.0%

100.0%(Notes) 1. Each quantitative evaluation indicator is determined by placing equal weight on the year-on-year increase (decrease) and the ratio of accomplishments vis-à-vis targets.
2. Qualitative evaluation is determined using an eight-grade rating system, while comprehensive evaluation (the combination of quantitative and qualitative evaluation) is
determined using a nine-grade rating system.
3. All evaluation results are determined solely by independent outside directors in the Compensation Committee.

MUFG Report 2024

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77

Foundation Supporting the Corporate Value

Risk Management

Cyber Security

Basic Policy
MUFG aims to strengthen its Group risk management throughthe diffusion of a risk culture that strengthens the structure ofGroup business management as well as enterprise risk
management. Our goal is effective risk governance that is
consistent across regions, subsidiaries and the holding company.

Risk Appetite Framework
MUFG clarifies its risk appetite (types and amount of risk that it
is willing to accept) to achieve its business strategy andfinancial plan. This is called the “Risk Appetite Framework,”
which is designed to increase management transparency andgenerate more profit opportunities in an environment whererisk is properly controlled.

Risk Management Framework
The Risk Committee under the Board of Directors comprises
outside directors and external experts. The committee
deliberates various matters related to risk management,
reports to the Board of Directors and submits
recommendations. Based on the deliberations at thecommittee, the Board decides management and operational
policies related to various risks. The holding company decides
basic policies for the entire Group, while each Group company
develops its own management systems and manages risks inline with these policies. The Group CRO reports to the Board of
Directors periodically regarding the status of risks and theGroup’s initiatives in various risk areas.

Enterprise Risk Management
Enterprise risk management is the framework of risk
management and operation to recognize the risk that emerges
in the course of business execution and assess themaccording to uniform criteria while maintaining businessstability and maximizing shareholder value. MUFG adopts threemain strands of enterprise risk management: the capital
allocation system, stress tests and top risk management.

Risk Management System

Risk Appetite Framework

For details, see Risk Management
https://www.mufg.jp/english/profile/governance/risk/index.html

Credit & Investment
Management Committee

Risk management
divisions• RORA• Expense ratio•C ommon Equity Tier 1
capital ratio, etc.
Business Strategy

Organic Correlation• Group businessstrategy

Risk Appetite• Capital allocation plan and RWA plan

Capital strategy and distribution based on risk

• Funding liquidity risk, etc.

Risk appetite for difficult-to-quantify risk

Risk Culture

Executive Committee

Credit Committee• Net operating profits• Net income• ROE

Business Plan

Risk Management Committee(including crisis management)

Cyber Security Management Structure
MUFG has established cyber security standards that refer tointernational guidelines and is engaged in the development ofrelevant strategies and organizational structures as well as theplanning and implementation of initiatives aimed at enhancing
its cyber security measures.

MUFG is also involved in collaborative activities withgovernment agencies, other companies in the financial
industry and security communities, including the Financials
ISAC Japan.

Financial Plan

Board of Directors

U.S. Risk Committee

MUFG is well aware of its social responsibilities regarding
securing the assets entrusted to it by its customers and its
obligation to provide secure and stable financial services.
MUFG has positioned risk and threats posed by cyber-attacks
and other relevant events as one of the Top Risks and enacted
the Cyber Security Management Declaration with the intentionof strengthening the cyber security measures under the directsupervision of top management.

Furthermore, MUFG has set up the MUFG-CERT as an umbrellaorganization to prepare for the occurrence of a cyber security
incident and act in cooperation with the Computer Security
Incident Response Teams (CSIRTs) of Group companies.

Holding Company(Mitsubishi UFJ Financial Group, Inc.)

Risk Committee

Basic Policy

Main Initiatives to Counter Cyber Security Threats
MUFG has set up a dedicated team focused on threat
intelligence to centralize such related activities as impact
analysis for vulnerabilities or cyber attacks, and remediation for
those impacts on a group-wide basis. In addition, the Cyber
Security Division participates from the early stages of systems
planning and design to realize both safety and innovation indigital transformation. To nurture security specialists that
support these initiatives, Cyber Security Division strives toenhance expertise of the team members and implement
group-wide education programs.
For details, see: Cyber Security
https://www.mufg.jp/english/csr/governance/riskmanagement/#jump02

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

78

Foundation Supporting the Corporate Value

Compliance
Basic Policy
We have established the MUFG Group Code of Conduct as aset of guidelines for how the Group’s directors and employees
should make decisions and act on a daily basis to realize the
MUFG Way. The Code of Conduct expresses our commitment
to complying with laws and regulations globally, to acting withhonesty and integrity, and to behaving in a manner that
supports and strengthens the trust and confidence of society.
In addition, as we expand the geographic scope of ourbusiness globally, we are committed to keeping abreast ofdevelopments in laws and regulations of the jurisdictions inwhich we operate, including anti-money laundering andantibribery rules as well as competition laws, while paying
close attention to trends in financial crimes.
Ensuring Thorough Compliance
We engage in ongoing efforts to ensure that each employee
embraces proper action principles in accordance with theCode of Conduct. These efforts include providing e-learning
for all employees, disseminating messages from management,
holding compliance training sessions that discuss case studies
of external compliance incidents and call employee attention
to real-life compliance issues, and implementing periodic tests
to confirm training results. In these ways, we strive to help
employees raise their compliance literacy and awareness. We
also assess the level of compliance awareness among ourworkforce via the annual Group Employee Survey and update
the content of the Code of Conduct every year with reference
to the results of this survey as well as changes in both internaland external environment. In fiscal 2024, we reviewed the main
text based on the revision of the MUFG Way (addition of“Agility” to our Values) and reflected initiatives on social issues(respect for human rights, human capital, DEI, and health andproductivity management) in our commentaries and columns.
We also implement communication measures and training at
the workplace in order to make employees to develop a senseof ownership regarding the Code of Conduct. The effects ofthese measures are confirmed via, for example, the annual
Group Employee Survey, and reported to the Board of
Directors. Through these ongoing efforts, we strive to ensure
thorough compliance.

Internal Audit
For details see: Compliancehttps://www.mufg.jp/english/profile/governance/compliance/index.html

Enhancement of Global Financial Crimes
Compliance Framework
MUFG has established the Global Financial Crimes Division(GFCD) to maintain a global framework to prevent, detect, anddeter financial crimes effectively across the firm.
Headquartered in New York, GFCD is responsible for Anti-Money
Laundering, Counter-Terrorist Financing, Sanctions
Compliance, and Anti-Bribery and Corruption efforts(collectively referred to as “financial crimes” or “FC”). Since its
inception in 2017, GFCD has supported consistent and efficient
operations through the creation of shared organizations(Centers of Excellence), investment in its FC experts, and, more
recently, the promotion of offshoring. In addition, GFCD is
upgrading its FC compliance systems and data warehouse tobolster MUFG’s FC compliance program. This enhancement
will help the Bank detect more complex and sophisticatedforms of financial crimes.
Further, MUFG, through the Bank, is a member of the Wolfsberg
Group,*1 and is proud to collaborate with other global financial
institutions to develop frameworks and guidance for FC risk
management. The membership also enables proactive
responses to evolving trends in global regulations andregulatory expectations.
We continue our efforts to enhance FC compliance andpromote societal trust and confidence by aligning with therequirements and expectations of international organizations,country-specific regulators, and the Financial Action Task Force(FATF)*2.
For more information : Global Financial Crimes
https://www.mufg.jp/english/csr/governance/financialcrimes/index.html*1	The Wolfsberg Group is an association of twelve global banks which aims todevelop frameworks and guidance for the management of financial crime risks.
*2	FATF: Financial Action Task Force on money laundering. Inter-governmental bodythat advocates for taking a coordinated international response in AML andcounterterrorist financing.

Basic Policy
The internal audit aims to evaluate the “timeliness”,“appropriateness” and “adequacy” of the internal control
framework including risk management and compliance toensure sound and appropriate management of the business.
Internal audit results are reported to senior management.
Additionally, internal audits suggest ways to help audited
departments improve or rectify any issues identified. We
adopted the “MUFG Internal Audit Activity Charter,” which
defines our basic policies for internal audits, including themissions to conduct audits that contribute to improve theGroup’s corporate value and realize the MUFG Way.
Implementing Effective and Efficient Internal Auditing
To ensure that internal audit processes use available resources
with optimal effectiveness and efficiency, the internal audit
divisions implement risk-focused internal audits in which thenature and magnitude of the associated risks are considered indetermining audit priorities and the frequency and depth ofinternal audit activities. At the same time, through the off-sitemonitoring, internal auditors attend key meetings, collectimportant internal control documents and implement othernecessary measures to assess any changes in risk status. In
addition, audit quality is being improved through audit reviews
conducted by a dedicated quality assessment/assurance teamcomprising of veteran auditors.
Conducting Group-wide, Cross-Regional Audits
As we strive to deliver solutions to our clients by leveraging ourfunctions across the Group, and to promote business operations
on a global basis, we pursue a group-wide, cross-regional approach
to raise the effectiveness and efficiency of internal audit.
We have a global resource exchange program and conduct
group-wide, cross-regional integrated audits in areas such asIT, cyber security, finance, and global financial crime, where
sophisticated specialist expertise is required. Through these
efforts, we are striving to unify our standards for audits andenhance audit quality.
For details, see: Internal Audi
https://www.mufg.jp/english/profile/governance/audit/index.html

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Foundation Supporting the Corporate Value

Initiatives for Practicing a Customer-Oriented Approach: Pursuing Customers’ Best Interests
Our commitments
Ourtocommitments
customers
to customers
considering
investment
considering investment

Basic Policy

Pursuing Customers’ Best Interests

With the aim of ensuring the thoroughgoing practice ofcustomer-oriented approach, the MUFG Group Code of
Conduct addresses the importance of “Customer Focus” in
Chapter 1, while the MUFG Basic Policy for Fiduciary Duties ispublicized to provide unified guiding principles for the Group.
In line with this policy, all Group entities are committed topracticing customer-oriented approach and endeavor to
improve their products and services.

Based on the MUFG Basic Policy for Fiduciary Duties, wedeclared our five commitments and engage in customeroriented asset management proposals.

For details, see the MUFG Basic Policy for Fiduciary Duties.
https://www.mufg.jp/english/profile/governance/fd/index.html

Operational Structure
MUFG works to strengthen its operational structure for
ensuring a customer-oriented approach by, for example,
holding periodic Fiduciary Duty Promoting Committee (“FDPromoting Committee”) meetings while pushing ahead withsharing best practices and other across-the-board endeavors
to improve its business operations on a group-wide basis. The
details are regularly reported, including to the Group
Executive Committee.
The FD Promoting Committee invites external advisors to
obtain proposals and advice from external perspectives.
Overall activities concerning customer-oriented approach arealso evaluated by the Compliance Division and Internal Audit
Division, promoting discussion from various perspectives. In
April 2023, the Investment Management Strategy Office wasestablished at the holding company level to ensure sounddevelopment of asset management, enforcement ofcustomer-oriented approach, and enhancement of ourgovernance structure. We are committed to further enhancing
governance by building a group-wide information-sharing
system and sharing the insights from the information gatheredwith group companies.
For details of specific initiatives, please see the following:https://www.bk.mufg.jp/kigyou/policy/pdf/status_initiatives.pdf*Japanese only

Five Commitments
Commitments
Commitment
Commitment

In addition, an internal guideline for the headquarters of MUFG
Group companies (“MUFG Policy”) was established in July 2023
to realize sound development, expansion, and growth of the
MUFG asset management business based on the MUFG Basic
Policy for Fiduciary Duties and the Investment Management
Advice Chain.

Commitment
Commitment2

We will strive toWewill strivethe
tounderstandunderstandthecustomers andcustomers
andpursue thepursuesolution
the“optimal”“optimal”
solutionforeach customer,
for each customer,

Furthermore, we are committed to pursuing our customers’
best interests by striving to improve their investment
performance while applying the “MUFG Investment
Management Advice Chain Model*1” to secure “discipline,”“transparency,” and “consistency,” which are critical to asset
management and providing value-added advice andappropriate information under the goals-based approach.

3

Focusing on medium- to long-term
Focusing
on mediumto long-term
diversified
investment
plans
diversified
plans
for stableinvestment
performance,
for stable performance,

Commitment
Commitment

1

To “save,” “increase,” “protect,”
Toand“save,”“increase,”“protect,”“inherit”
the customers’
andimportant“inherit” thecustomers’
assetswithwith
a important
long-term assets
perspective,
a long-term perspective,

Commitment
Commitment

5

Commitment
Commitment

4

Provide services
Provideservices
reflectiveof thereflectiveof thecompensationcompensation
received,
received,

Make proposals leveraging theMakeproposals
leveraging
theGroup’s
consolidated
strengthGroup’s
consolidated
strength
beyondthe customers’
beyondthe customers’
expectations.
expectations.

Reference: Five Commitments
https://www.bk.mufg.jp/tameru/pdf/unyou_yakusoku.pdf

Reference: MUFG Investment Advice Chain Model
Research and strategy

Product strategy(Product management)

Sales system(Advice model)

Follow-up on results

Establish the product strategy
based on the House View
Fund screening
Cost and return analysis,
suitability review

Create and instill the proposal
story for the advice based on theHouse View
Risk-based portfolio proposal
Provide information
corresponding to the change inenvironment, etc.

Product performance monitoring
Portfolio monitoring

House View

IPAT*2/product management
during the fiscal period

Promote product line-up, etc.

Portfolio management/risk control

Model Portfolio

Product governance

Portfolio proposal

Follow-up system

Establish the House View
Asset allocation based on theHouse View
Example:Establish the model portfolio

Platform
AdviceTechnology*1 A comprehensive framework incorporating research, investment strategy, product strategy, sales system, and follow-up in results. *2 Investment Product Analysis Team79MUFG Report 2024

80

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Data Section

Ten-Year Summary of Major Financial Data
(Billions of Yen)FY2014Currency exchange rate (US$/JPY) (yen)FY2015FY2016FY2017FY2018FY2019FY2020*1

FY2021

FY2022

FY2023120.17112.68112.19106.24110.99108.83110.71

122.39133.53151.41

4,229.0

4,143.2

4,011.8

3,854.2

3,725.7

3,986.3

3,920.9

3,964.0

4,503.0

4,732.5

Statement of income data:
Gross profits before credit costs for trust accounts
Net interest income

2,181.6

2,113.5

2,024.4

1,906.8

1,922.7

1,892.9

1,905.1

2,043.6

2,907.5

2,457.8

Trust fees excluding credit costs+Net fees and commissions

1,420.0

1,437.5

1,450.4

1,449.6

1,429.2

1,472.0

1,398.1

1,574.7

1,695.3

1,820.5345.5(100.0)

453.9

627.2

591.9

536.7

497.5

373.5

621.1

617.5

115.1

132.9

56.8

6.7

29.9

492.9

119.0

(140.4)(884.6)(450.7)

General and administrative expenses

2,584.1

2,585.2

2,593.5

2,621.4

2,647.1

2,801.8

2,672.5

2,747.2

2,908.7

2,888.7

Net operating profits before credit costs for trust accounts
and provision for general allowance for credit losses

1,644.9

1,557.9

1,418.2

1,232.8

1,078.5

1,184.4

1,248.4

1,216.7

1,594.2

1,843.7

Total credit costs(161.6)(255.1)(155.3)(46.1)(5.8)(222.9)(515.5)(331.4)(674.8)(497.9)

93.1

88.3

124.9

133.1

112.6

31.3

130.2

332.6

288.0

371.2
381.4

Net trading profits + Net other operating profits
Net gains (losses) on debt securities

Net gains (losses) on equity securities
Gains (losses) on sales of equity securities

97.9

113.6

127.4

140.1

125.9

92.1

138.3

343.8

303.9

Losses on write-down of equity securities(4.8)(25.3)

(2.5)

(7.0)

(13.3)(60.8)(8.0)(11.1)(15.9)(10.1)

Equity in earnings of equity method investees

159.6

230.4

244.4

242.8

284.3

277.2

321.7

441.5

425.8

531.8

Other non-recurring gains (losses)
Ordinary profits
Net extraordinary gains (losses)
Total taxes
Profits attributable to owners of parent
Earnings per share (EPS) (yen)(23.0)(82.0)(271.4)(100.3)(121.7)(34.2)(131.3)(121.9)(612.5)(120.9)1,713.0

1,539.4

1,360.7

1,462.4

1,348.0

1,235.7

1,053.6

1,537.6

1,020.7

2,127.9(98.2)(40.7)(57.5)(53.0)(202.7)(406.3)(11.5)(47.7)

549.1(77.8)

467.7

460.2

342.1

313.4

195.5

220.8

185.0

283.4

369.6

478.3

1,033.7

951.4

926.4

989.6

872.6

528.1

777.0

1,130.8

1,116.4

1,490.7

73.22

68.51

68.28

74.55

66.91

40.95

60.50

88.45

90.73

124.65

Balance sheet data:
286,149.7

298,302.8

303,297.4

306,937.4

311,138.9

336,571.3

359,473.5

373,731.9

386,799.4

403,703.1

Loans and bills discounted

109,368.3

113,756.3

109,005.2

108,090.9

107,412.4

109,114.6

107,183.0

110,426.2

109,146.2

116,825.6

Securities

73,538.1

69,993.8

59,438.8

59,266.1

64,262.4

65,555.1

77,122.0

79,560.5

86,746.9

86,878.5

Total liabilities

268,862.2

280,916.1

286,639.0

289,642.3

293,877.2

319,715.6

341,757.2

355,743.6

368,526.6

382,956.1

Deposits

153,357.4

160,965.0

170,730.2

177,312.3

180,171.2

187,623.5

211,521.2

215,427.2

213,609.5

224,035.0

Total net assets

17,287.5

17,386.7

16,658.3

17,295.0

17,261.6

16,855.7

17,716.2

17,988.2

18,272.8

20,746.9

Total assets*1 From the beginning of the fiscal year ended March 31, 2022, expenses related to credit cards, which were previously recorded as general and administrative expenses,
are recorded as fees and commissions expenses.
Accordingly, the financial information for the fiscal year ended March31, 2021 have been retroactively restated.

MUFG Report 2024

81

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Data Section

Performance Comparison with Competitors*1
Market Capitalization

Credit Ratings*2(Trillionsof yen)

S&P
HoldingCompany
Ratings

100
90

A-

80
70

Japanese Firms
MUFG

SMFG

MizuhoFG

BBB+

U.S. Firms

European Firms

JP Morgan

Bank of
America

HSBC

Goldman
Sachs

Citigroup

Barclays

60

BNP
ParibasDeutsche
Bank

BBB
50

BBB-

40
30

Moody’s

20

HoldingCompany
Ratings

10
0

JP Morgan

Bank of
America

HSBC

Goldman
Sachs

MUFG

Citigroup

BNP
ParibasSMFG

MizuhoFG

Barclays

Deutsche
Bank

A1

MUFG

SMFG

MizuhoFG

U.S. Firms
JP Morgan

A2

Goldman
Sachs

A3

Citigroup(Calculated based on data available as of March 31, 2024. Source: Bloomberg)*1: Overseas competitors used for performance comparisons are European and U.S. firms subject to a G-SIB buffer(announced in 2023) of 1.5% or more

Japanese Firms

European Firms

Bank of
America

HSBC
BNP
ParibasBaa1

Barclays

DeutscheBank

Baa2(Ratings as of May 2024, based on data disclosed by each firm)*2: BNP Paribas and Deutsche Bank: Non-preferred senior ratings.
Others: Issuer ratings or long-term foreign currency denominated debt ratings.

MUFG Report 2024

Management Message MUFG’s Corporate Value Strategies to Improve Corporate Value Foundation Supporting the Corporate Value Data Section

Data Section

Company Overview
Company Information (As of March 31, 2024)

Main Subsidiaries and Affiliates (As of March 31, 2024)

Company Name

Mitsubishi UFJ Financial Group, Inc.

Mitsubishi UFJ Financial Group, Inc.

Head Office7-1, Marunouchi 2-Chome,
Chiyoda-ku, Tokyo 100-8330, Japan

Commercial Bank

Date of Establishment

April 2, 2001

MUFG Bank, Ltd.

Amount of Capital¥2,141.5 billion

Bank of Ayudhya Public Company Limited

ACOM CO., LTD.

Common Stock (Issued)

12,337,710,920 shares

PT Bank Danamon Indonesia, Tbk.

Kanmu, Inc.

Stock Listing

Tokyo Stock Exchange,
Nagoya Stock Exchange,
New York Stock Exchange

au Jibun Bank Corporation

JACCS CO., LTD.

Ticker Symbol Number

Number of Shareholders

8306 (Tokyo Stock Exchange,
Nagoya Stock Exchange)
MUFG (New York Stock Exchange)
1,329,155

Consolidated subsidiary

Vietnam Joint Stock Commercial Bank for Industry and Trade
Security Bank Corporation

Trust Bank

Securities:

5.77%

National and local
governments:

0.03%

11.70%

33.87%

17.94%

Mitsubishi UFJ Asset Management Co., Ltd.
Mitsubishi UFJ Real Estate Asset Management Co., Ltd.
Mitsubishi UFJ Asset Management (UK) Ltd.

MUFG Investor Services Holdings Limited

Mitsubishi UFJ Baillie Gifford Asset Management Limited

Mitsubishi UFJ Investor Services & Banking (Luxembourg) S.A.

MUFG Lux Management Company S.A.

Mitsubishi UFJ Securities Holdings Co., Ltd. (Securities Holding
Company)
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
au Kabucom Securities Co., Ltd.

MUFG Securities EMEA plc
MUFG Securities Asia Limited
Morgan Stanley MUFG Securities Co., Ltd.
Morgan Stanley

Individuals
and others:

Asset Management

Mitsubishi UFJ Alternative Investments Co., Ltd.

MUFG Securities (Canada), Ltd.
Foreigninstitutions, etc.:

Mitsubishi UFJ NICOS Co., Ltd.

The Master Trust Bank of Japan, Ltd.

Mitsubishi UFJ Trust International Limited

Corporations:Credit Cards / Consumer Finance / Installment Credit

Mitsubishi UFJ Trust and Banking Corporation

Securities
Ownership and Distribution of Shares*1

Equity method investee

First Sentier Investors Holdings Pty Ltd

Leasing
BOT Lease Co., Ltd.
Mitsubishi HC Capital Inc.

OthersJapan Digital Design, Inc.
MUFG Innovation Partners Co., Ltd.
Human Resources Governance Leaders Co., Ltd.
Mitsubishi UFJ Real Estate Services Co., Ltd.
Japan Shareholder Services Ltd.
PT Mandala Multifinance Tbk.

Financial
institutions:

WealthNavi Inc.

30.69%

Mitsubishi Research Institute DCS Co., Ltd.

*1 Excludes treasury shares and fractional shares

WebsiteFor more detailed information, please refer to our website.
URL: https://www.mufg.jp/ (Japanese) URL: https://www.mufg.jp/english/ (English)82

Committed to empoweringa brighter future.
In these unprecedented times,
companies worldwide are constantly
navigating the rapidly changing environment
to transition to the next stage of growth.

At MUFG, we will make every effort
to help realize these goals.
This will be our unchanging purpose now,and into the future.

Mitsubishi UFJ Financial Group, Inc.
7-1, Marunouchi 2-Chome, Chiyoda-ku, Tokyo 100-8330, Japan
Telephone: +81-3-3240-8111
URL:https://www.mufg.jp/english/