REGISTERED BANKDISCLOSURE STATEMENT
30 SEPTEMBER 2019

MUFG BANK, LTD.
AUCKLAND BRANCHTABLE OF CONTENTS
Disclosure Statement

Page

1.

Corporate Information

1

2.

Recognition and Priority of Claims of Creditors or Classes in the Event of Insolvency

1

3.

Excess of Assets Over Deposit Liabilities

1

4.

Guarantee Arrangement

1

5.

Directorate

1

6.

Auditors

3

7.

Conditions of Registration

3

8.

Credit Rating

3

8.

Credit Rating (Continued)

4

9.

Other Material Matters

4

10. Financial Statements of the Registered Bank and the Overseas Banking Group4

11. Directors’ and Managing Directors Auckland Branch’s Statement

5

Condensed Interim Financial Statements
Condensed Statement of Comprehensive Income

6

Condensed Statement of Changes in Equity

7

Condensed Statement of Financial Position

8

Condensed Statement of Cash Flows9

Notes to Condensed Interim Financial Statements
1.

Statement of Significant Accounting Policies

112.

Profit Before Income Tax Expense

133.

Property, Plant and Equipment

14

4.

Loans and Advances

145.

Deposits

14

6.

Total Liabilities of the Branch Net of Amounts Due to Related Parties

14

7.

Provision for Impairment Losses

15

8.

Other Liabilities

16

9.

Commitments and Contingent Liabilities

16

10. Related Party Disclosures

17

11. Concentration of Credit Risk

18

12. Concentration of Funding

24

MUFG Bank, Ltd.
Auckland BranchTABLE OF CONTENTS
Notes to Condensed Interim Financial Statements
13. Interest Rate Risk

25

14. Maturity Analysis for Assets and Liabilities

26

15. Fair Value of Financial Instruments

27

16. Liquidity Risk Management29

17. Profitability and Size

30

18. Asset Quality30

19. Exposures to Market Risk

32

20. Capital Adequacy

33

21. Insurance Business34

22. Non-Consolidated Activities

34

23. Securitization, Funds Management, and Other Fiduciary Activities

34

24. Risk Management Policies

34

25. Financial Support

34

26. Subsequent Events

34

Auditor’s Review Report

MUFG Bank, Ltd.
Auckland Branch

Disclosure Statement
For the Six Months Ended 30 September 2019
This Disclosure Statement contains information as required by the Registered Bank Disclosure Statements(Overseas Incorporated Registered Banks) Order 2014 (as amended) (‘the Order’).

1.

Corporate Information
The ‘Overseas Banking Group’ includes all entities consolidated for the purposes of public reportingin Japan including MUFG Bank, Ltd., its subsidiaries, and associated companies.
The Disclosure Statement and Condensed Interim Financial Statements are for the Auckland Branch(the ‘Branch’) of MUFG Bank, Ltd. It is the only member in the ‘Banking Group’ in New Zealand.
The Ultimate Holding Company of MUFG Bank, Ltd. is Mitsubishi UFJ Financial Group, Inc.
incorporated in Japan.
Since the balance date of the last full year Disclosure Statement, there has been no change in the
Ultimate Holding Company and no material changes in regulations, legislation, or other restrictions ofa legally enforceable nature that may materially inhibit the Ultimate Holding Company from providing
material financial support to the Banking Group.

2.

Recognition and Priority of Claims of Creditors or Classes in the Event of Insolvency
Since the balance date for the last full year Disclosure Statement there have been no material changes
in any material legislative or regulatory restrictions in Japan that, in the event of a liquidation of theRegistered Bank, subordinate the claims of any class of unsecured creditors of the Branch on the assetsof the Registered Bank to those of any other class of unsecured creditors of the Registered Bank.

3.

Excess of Assets Over Deposit Liabilities
There have been no material changes in any statute that requires the Registered Bank to hold in New
Zealand an excess of assets over deposit liabilities since the balance date of the last full year
Disclosure Statement.
There have been no material changes in any regulatory or legislative requirements in Japan that require
the Registered Bank to maintain sufficient assets to cover an ongoing obligation to pay deposit
liabilities in Japan since the balance date for the last full year Disclosure Statement.

4.

Guarantee Arrangement
The obligations of the Banking Group are not guaranteed under any guarantee (including government
guarantee and cross guaranteeing arrangements) as at the date of signing this Disclosure Statement.

5.

Directorate
5.1

Directors of MUFG Bank, Ltd. as of 30 September 2019:
Name

Occupation

Residence

Kiyoshi Sono
Kanetsugu Mike

ChairmanPresident & CEO

Japan
Japan

1
MUFG Bank, Ltd.
Auckland Branch

Disclosure Statement
For the Six Months Ended 30 September 20195.

Directorate (continued)
Akihiko Nakamura
Kenji Yabuta
Naoki Hori
Hironori Kamezawa
Masato Miyachi
Muneaki Tokunari
Takayoshi Futae
Muneya Taniguchi
Masakazu Ikeda
Naomi Hayashi
Masahiro Kuwahara
Shigeru Yoshifuji
Junichi Hanzawa
Hiroki Kameda
Hiroshi Mori
Nobuyuki Hirano
Akira Hamamoto
Masahito Monguchi
Kenji Matsuo
Tadayuki Matsushige
Shigeo Ohyagi
Naoto Hirota
Hiroaki Fujisue
Fumikazu Tatsumi
Shinichi Koide
Toshifumi Kitazawa

Deputy President
Deputy President
Deputy President
Deputy President
Deputy President
Senior Managing Executive Officer
Senior Managing Executive Officer
Senior Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director

Japan
Japan
Japan
Japan
U.S.A.
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan

The following changes in Directors of MUFG Bank, Ltd. since the last full year DisclosureStatement were:
Hidekazu Fukumoto resigned as Deputy President on 31 May 2019.
Eiichi Yoshikawa resigned as Deputy President on on 25 June 2019.
Masamichi Yasuda resigned as Senior Managing Executive Officer on 1 April 2019.
Kazuto Uchida resigned as Managing Executive Officer on 10 June 2019.
Nobuhiro Matsumoto resigned as Director on 24 June 2019.
Shuzo Sumi resigned as Director on 26 June 2019.
Kiyoshi Sono appointed as Chairman on 1 April 2019.
Naoki Hori appointed as Deputy President on 1 April 2019.
Hironori Kamezawa appointed as Deputy President on 1 April 2019.
Masato Miyachi appointed as Deputy President on 1 April 2019.
Masahiro Kuwahara appointed as Managing Executive Officer on 26 June 2019.
Shigeru Yoshifuji appointed as Managing Executive Officer on 26 June 2019.
Junichi Hanzawa appointed as Managing Executive Officer on 26 June 2019.
Hiroki Kameda appointed as Managing Executive Officer on 26 June 2019.
Hiroshi Mori appointed as Managing Executive Officer on 26 June 2019.
Takayoshi Futae appointed as Senior Managing Executive Officer on 26 June 2019.
Muneya Taniguchi appointed as Senior Managing Executive Officer on 26 June 2019.
Nobuyuki Hirano appointed as Director on 1 April 2019.
Toshifumi Kitazawa appointed as Director on 26 June 2019.
Akira Hamamoto appointed as Director on 26 June 2019.

2
MUFG Bank, Ltd.
Auckland Branch

Disclosure Statement
For the Six Months Ended 30 September 20195.

Directorate (continued)

5.2

6.

Signatories who have signed the Disclosure Statement. Responsible Person signing on behalfof Directors and New Zealand Chief Executive Officer:
Name

Occupation

Residence

Hideki Nakashiro

Managing Director,
Australia
Head of Oceania,
Head of Sydney Branch(Responsible Person on behalf of the Directors)

Takamitsu Murakami

Managing Director,
Head of Auckland Branch(New Zealand Chief Executive Officer)

New ZealandAuditors
Name and Address of Auditor whose report is referred to in this Disclosure Statement:
Deloitte Limited
Deloitte Centre
80 Queen Street
Auckland 1010
New Zealand7.

Conditions of Registration
There has been no change to the conditions of registration since the last Disclosure Statement as at 31
March 2019.
The Branch has complied with all conditions of registration over the six months accounting period
ended 30 September 2019.

8.

Credit Rating
The Registered Bank has the following long term credit ratings which are applicable to the Banking
Group in New Zealand.
Current RatingStandard & Poor’s
Moody’s
Fitch

A
A1
A

Previous Rating(if changed in theprevious two years)
A+-

Date of Change

29-Nov-2017-

3
MUFG Bank, Ltd.
Auckland Branch

Disclosure Statement
For the Six Months Ended 30 September 20198.

Credit Rating (Continued)

Rating scales are:
Credit Ratings

S&P’s

Moody’s

Fitch

Highest quality/Extremely strong capacity to pay interest and principal

AAA

Aaa

AAA

High quality/Very strong capacity to pay interest and principal

AA

Aa

AA

Upper medium grade/Strong capacity to pay interest and principal

A

A

A

Medium grade (lowest investment grade)/Adequate ability to pay interest andprincipal

BBB

Baa

BBB

Predominantly speculative/Less near term vulnerability to default

BB

Ba

BB

Speculative, low grade/Great vulnerability

B

B

B

Poor to default/identifiable vulnerability

CCC

Caa

CCC

Highest speculations

CC

Ca

CC

Lowest quality, no interest

C

C

C

Defaulted on obligations

D

-

D

Standard & Poor’s and Fitch – Ratings are modified by the addition of a plus (+) or minus (-) sign toshow relative standing within the major rating categories.
Moody’s – A numeric modifier is applied to each generic rating category from Aa to B, indicating thatthe counterparty is (1) in the higher end of its letter-rating category, (2) in mid-range, (3) in lower end.
9.

Other Material Matters
There are no matters relating to the business or affairs of the Registered Bank and its Banking Group
that are not contained elsewhere in the Disclosure Statement, and would, if disclosed, materially affectthe decision of a person to subscribe for debt securities of which the Registered Bank or any member of
its Banking Group is the issuer.

10.

Financial Statements of the Registered Bank and the Overseas Banking GroupThe most recent publicly available Disclosure Statement for the Banking Group can be accessed via the
Branch’s website: www.nz.bk.mufg.jp. Copies of the most recent publicly available DisclosureStatement for the Banking Group will be provided within two working days at no charge to any person
who requests a copy.
The most recent publicly available Financial Statements of the Registered Bank and the Overseas
Banking Group may be accessed via the Bank’s global website: www.mufg.jp. In addition, Financial
Statements are also prepared and filed with the United States Securities and Exchange Commission,
Washington, D.C.

4
MUFG Bank, Ltd.
Auckland BranchCondensed Interim Financial Statements
For the Six Months Ended 30 September 2019
Condensed Statement of Comprehensive Income

Note

Six Months ended
30 September 2019

Six Months ended
30 September 2018

Unaudited

Unaudited

NZD

NZD

Interest income
Interest expense
Net interest income

22

68,344,391(54,631,191)
13,713,200

64,076,829(53,255,050)
10,821,779

Fees and commission income
Net (losses) / gains on financial instruments

2
2

12,938,804(1,141,641)
11,797,163

9,915,928
247,511
10,163,439

Occupancy expenses
Personnel expenses
Auditor’s remuneration
Administration and other expenses
Profit before credit impairment losses andincome tax expense

2
2
2
2

(61,171)(2,229,949)(78,250)(527,139)(149,619)(1,865,646)(75,291)(401,999)

22,613,854

18,492,663

Expected credit losses
Profit before income tax expense

7155,287
22,769,141

125,293
18,617,956

Income tax expense(4,562,087)(3,040,789)

Profit from continuing operations

18,207,054

15,577,167

1,162,351

5,477(325,458)(1,534)

Other comprehensive income, net of tax

836,893

3,943

Total comprehensive income, net of tax

19,043,947

15,581,110

Other comprehensive income
Items that may be reclassified subsequently
to profit or loss
Debt instruments measured at FVOCI- Profit arising during the year
- Income tax (expense) on
Debt instruments measured at FVOCIThe 30 September 2019 results reflect the adoption of NZ IFRS 16, using the modified retrospective approach. Under thisapproach, comparative information is not restated and the cumulative effect of initially applying NZ IFRS 16 is recognised
in retained earnings at the date of initial application. Prior period comparatives have not been restated. Refer to Note 1 fordetails of the changes to accounting policies.

The condensed interim statement of comprehensive income is to be read in conjunction with the accompanying notes to andforming part of the condensed interim financial statements.

6
MUFG Bank, Ltd.
Auckland Branch

Condensed Interim Financial Statements
For the Six Months Ended 30 September 2019
Condensed Statement of Changes in Equity

Unaudited
NZD

Retained Earnings

Investment
Revaluation
Reserve

Total

83,000,000

80,863,956

219,747

164,083,703

Changes on initial application of NZ
IFRS 9-(953,570)-(953,570)

Profit from continuing operations-

15,577,167-

15,577,167

Other comprehensive income, net of tax

-

-

3,943

3,943

Total comprehensive income, net of tax-

15,577,167

3,943

15,581,110

Balance at 30 September 2018

83,000,000

95,487,553

223,690

178,711,243

Balance at 1 April 2019

83,000,000

105,535,132

473,394

189,008,526

Profit from continuing operations-

18,207,054-

18,207,054

Other comprehensive income, net of
tax

-

-

836,893

836,893

Total comprehensive income, net of tax-

18,207,054

836,893

19,043,947

83,000,000

123,742,186

1,310,287

208,052,473

Balance at 1 April 2018

Balance at 30 September 2019

Head
OfficeCapitalThe 30 September 2019 results reflect the adoption of NZ IFRS 16, using the modified retrospective approach. Under thisapproach, comparative information is not restated and the cumulative effect of initially applying NZ IFRS 16 is recognised
in retained earnings at the date of initial application. Prior period comparatives have not been restated. Refer to Note 1 fordetails of the changes to accounting policies.
The condensed interim statement of changes in equity is to be read in conjunction with the accompanying notes to andforming part of the condensed interim financial statements.

7
MUFG Bank, Ltd.
Auckland Branch

Condensed Interim Financial Statements
For the Six Months Ended 30 September 2019
Condensed Statement of Financial Position
As at
30 September
2019

As at
30 September
2018

As at
31 March
2019

Unaudited

Unaudited

Audited

NZD

NZD

NZD

336,811,716
337,832,634
239,996,337
365,994,635
4,662,957,720
6,743,181
97,772,710
2,423,927
459,714
1,617,974

200,955,279
43,099,805
254,417,075
128,334,379
4,478,428,154
11,976,819
34,377,076
2,160,694
3,828,053
94,511

164,910,622
63,875,439
254,427,482
153,761,423
4,691,064,914
9,206,162
42,670,980
2,794,599
491,828
77,6086,052,610,548

5,157,671,845

5,383,281,057

4,850,750,499
870,589,067
6,743,181
4,741,073
102,171,364
9,562,891

4,515,916,228
411,502,528
11,976,819
36,186,843
3,378,184

4,425,224,966
704,823,913
9,206,162
735,642
45,673,529
8,608,319

5,844,558,075

4,978,960,602

5,194,272,531

83,000,000
123,742,186
1,310,287

83,000,000
95,487,553
223,690

83,000,000
105,535,132
473,394

208,052,473

178,711,243

189,008,526

Total Liabilities and Equity

6,052,610,548

5,157,671,845

5,383,281,057

Total Interest Earning and Discount Bearing
Assets5,881,022,884

5,062,958,344

5,265,128,777

Total Interest and Discount Bearing
Liabilities

5,708,350,935

4,916,788,355

5,121,157,637

NoteAssetsCash and short term liquid assets
Amounts due from related parties
Amounts due from other financial institutions
Investment in debt instruments
Corporate loans originated by the Bank
Acceptances of customers
Derivative instruments
Other assets
Deferred tax asset
Property, plant and equipment

10

4

3

Total Assets
Liabilities
Amounts due to related parties
Deposits
Acceptances
Current tax payable
Derivative instruments
Other liabilities

10
5

8

Total Liabilities
EquityHead Office capital
Retained earnings
Investment revaluation reserve
Total Equity

10

The 30 September 2019 results reflect the adoption of NZ IFRS 16, using the modified retrospective approach. Under thisapproach, comparative information is not restated and the cumulative effect of initially applying NZ IFRS 16 is recognised
in retained earnings at the date of initial application. Prior period comparatives have not been restated. Refer to Note 1 fordetails of the changes to accounting policies.
The condensed interim statement of financial position is to be read in conjunction with the accompanying notes to andforming part of the condensed interim financial statements.

8
MUFG Bank, Ltd.
Auckland Branch

Condensed Interim Financial Statements
For the Six Months Ended 30 September 2019
Condensed Statement of Cash FlowsSix Months ended
30 September 2019
Unaudited
NZD

Six Months ended
30 September 2018
Unaudited
NZD

Cash Flows from Operating Activities
Interest income received
Commission fees & trading income
Interest paid
Payment to suppliers, employees and others
Tax paid

65,930,812
14,723,019(56,068,401)(4,198,364)(850,000)

61,750,505
10,617,547(50,811,628)(3,254,834)-

Net cash flows from operating activities before changes inoperating assets and liabilities

19,537,066

18,301,590

27,405,223(934,349,062)

14,431,145(207,800,025)(273,957,195)
2,119,872(14,964,152)
1,040,477
10,528,385
44,627(437,800,980)(937,699,725)

164,733,826
427,994,073(2,482,400)

65,278,534
1,007,755,497
326,968

590,245,499

1,073,360,999

171,981,585

153,962,864

Payment for property, plant and equipment--

Net cash flows used in investing activities--

Remittance to the Overseas Bank
Capital injection
Lease payment(80,491)-

Net cash flows from financing activities(80,491)-

Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year

171,901,094
164,910,622

153,962,864
46,992,415

Cash and cash equivalents at end of the period

336,811,716

200,955,279

Cash and short term liquid assets

336,811,716

200,955,279

Closing cash and cash equivalents

336,811,716

200,955,279

Net (increase) / decrease in operating assets:
Net decrease / (increase) in corporate loans originated by theBank
Net decrease / (increase) in amounts due from other financial
institutions
Net (increase) / decrease in investment in debt instruments
Net (increase) / decrease in amounts due from related parties
Net decrease in other assets
Net increase / (decrease) in operating liabilities:
Net increase in commercial paper and deposits
Net increase in amounts due to related parties
Net (decrease) / increase in other liabilities

Net cash flows from operating activities
Cash Flows from Investing Activities

Cash Flows from Financing Activities

Net Change in Cash and Cash Equivalents

Reconciliation of Closing Cash and Cash Equivalents

The condensed interim statement of cash flows is to be read in conjunction with the accompanying notes to and forming partof the condensed interim financial statements.

9
MUFG Bank, Ltd.
Auckland Branch

Condensed Interim Financial Statements
For the Six Months Ended 30 September 2019
Condensed Statement of Cash Flows (continued)

Six Months ended
30 September 2019

Six Months ended
30 September 2018

Unaudited

Unaudited

NZD

NZD

Reconciliation of profit from continuing operations to
net cash flows from operating activities
Profit from continuing operations
Decrease / (increase) in corporate loans
Decrease / (increase) in due from other financial
institutions(Increase) / decrease in investment in debt instruments(Increase) / decrease in due from related parties
Decrease / (increase) in other assets
Increase in certificate of deposit(Decrease) / increase in deposits
Increase in due to related parties
Increase in other liabilities(Decrease) in provision for expected credit losses
Movement in tax provision and deferred tax
Non-Cash items:
Depreciation of property, plant and equipment
Other

18,207,054
28,334,246

15,577,167(936,301,845)

14,431,145(211,070,862)(273,957,195)
370,671
222,675,137(56,909,982)
425,525,534
721,149(155,287)
3,712,087(14,964,152)
666,937
10,528,385(484,043)
4,006,000
61,259,190
1,010,212,262
727,815(125,293)
3,040,789

108,511(10,623)

22,043(202,391)

Net cash flows from operating activities

171,981,585

153,962,864

The condensed interim statement of cash flows is to be read in conjunction with the accompanying notes to and forming partof the condensed interim financial statements.

10
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 20191.

Statement of Significant Accounting Policiesa) Reporting entity and Statement of Compliance
MUFG Bank Ltd., Auckland Branch (“The Branch”) operates in Auckland, New Zealand and the Registered
Bank is incorporated in Japan. The Branch is profit-oriented and is an FMC Reporting Entity under the Financial
Markets Conduct Act 2013. The condensed interim financial statements of the Branch incorporated in thisDisclosure Statement have been prepared in accordance with Generally Accepted Accounting Practice in New
Zealand (“NZ GAAP”) and comply with requirements of NZ IAS 34 Interim Financial Reporting and theRegistered Bank Disclosure Statements (Overseas Incorporated Registered Banks) Order 2014 (as amended).
These condensed interim financial statements also comply with IAS 34 Interim Financial Reporting. The
condensed interim financial statement should be read in conjunction with the financial statements for the year
ended 31 March 2019.
The condensed interim financial statements were authorised for issue by the directors on the date of signing thisDisclosure Statement.

b) Basis of preparation
The condensed interim financial statements are presented in New Zealand dollars.
The condensed interim financial statements have been prepared on the historical cost basis, except for therevaluation of certain non-current assets and financial instruments.
Cost is based on the fair-value of the consideration given in exchange for assets.

c) Changes in accounting policy
There have been no material changes in accounting policies since the last financial statements for year ended 31
March 2019 except as disclosed below.
The following new standards relevant to the Branch have been adopted from 1 April 2019 and have been appliedin the preparation of these interim financial statements.
New Zealand equivalent to International Financial Reporting Standard 16: Financial Instruments (“NZ
IFRS 16”)
NZ IFRS 16 was issued in February 2016 and is effective for periods beginning on or after 1 January 2019. The
Branch has adopted NZ IFRS 16 retrospectively from 1 April 2019, and has not restated comparatives for the2018 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications
and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1
April 2019
On adoption of NZ IFRS 16, the Branch recognised lease liabilities in relation to leases which had previously
been classified as operating leases under the principles of NZ IAS 17 Leases. These liabilities were measured at
the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of
1 April 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on 1 April
2019 was 1.70%. The Branch has elected to use the practical expedient in that the Branch is not required toreassess whether a contract is, or contains, a lease at the date of initial application.
In addition, by electing the practical expedient, the Branch removed the requirement in having to recognise rightof use assets and liabilities for leases with less than 12 months of lease term. Right-of use assets were measured at
the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating
to that lease recognised in the balance sheet as at 31 March 2019. There were no onerous lease contracts thatwould have required an adjustment to the right-of-use assets at the date of initial application.

11
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 20191.

Statement of Significant Accounting Policies (continued)

NZ IFRS 16 impact
NZD
Operating lease commitments at 31 Mar 2019
Short-term leases and leases of low-value assets
Effect of discounting the above amounts
Adjustments as a result of different treatment of extension
Adjustments of lease payment not previously included in operating lease commitment
Lease Liabilities recognised at 1 April 2019

511,551(37,975)(10,251)
1,175,849
9,703
1,648,877

The recognised right-of-use assets relate to the following types of assets:
As at
30 September 2019
Unaudited
NZD

As at
31 March 2019
Unaudited
NZD

Right-of-use assets
Offices
Equipment
Total-

1,548,832
7,092
1,555,924

1,639,174
9,703
1,648,877

The change in accounting policy affected the following items in the balance sheet on 1 April 2019:
Right-of-use assets (included with property, plant and equipment) – increase by $1,648,877
Lease liabilities – increase by $1,648,877
The net impact on retained earnings on 1 April 2019 was nil.
Until the 2019 financial year, leases of property, plant and equipment were classified as operating leases.
Payments made under operating leases (net of any incentives received from the lessor) were charged to statementof comprehensive income on a straight-line basis over the period of the lease.
From 1 April 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which
the leased asset is available for use by the Branch. Each lease payment is allocated between the liability andfinance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic
rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated overthe lease term on a straight-line basis.

d) Comparative figures
There has been re-statement on comparatives figures for these financial statements.
The balance sheet impact of the adoption of NZ IFRS 9 has been updated after the half year disclosure statement
due to the update calculation of provision for ECL on loan and the addition calculation of provision for ECL on
financial guarantee and commitments.

12
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 20192.

Profit Before Income Tax Expense

Operating revenue(a) Interest income
Corporate loans and other accounts
Related parties(b) Fees and commissions income
Fees and commissions income(c) Gains less losses on financial instruments
Net (loss) / gain on interest rate derivatives
Net (loss) / gain on currency derivatives
Net gain on foreign currency
Other income

Six Months ended
30 September
2019
Unaudited
NZD

Six Months ended
30 September
2018
Unaudited
NZD

68,291,281
53,11064,076,829-

68,344,391

64,076,829

12,938,804
12,938,804

9,915,928
9,915,928(944,346)(209,090)
10,909886(1,141,641)
80,141,554

215,458
10,472
21,581
247,511
74,240,268

65,805,545
2,538,846-

62,743,269
1,333,559-

12,938,804(1,396,705)
254,178886
80,141,554

9,900,433(569,361)
816,872
15,496
74,240,268

10,000,711
44,630,480
54,631,191

4,619,877
48,635,173
53,255,050

54,631,191
54,631,191

53,255,050
53,255,050

61,171

149,619

4,136
9,953
1,469
92,953

5,213
15,361
1,469-

78,2502,191,076
38,873
418,628(155,287)
2,741,222
22,769,141

75,291
1,836,819
28,827379,956(125,293)
2,367,262
18,617,956

Total interest income derived from financial assets:
At amortised cost
Investment in debt instruments (FVOCI)
Designated at fair value through profit or loss
Total fee income derived from financial assets that are not at fair value
through profit or loss
Net unrealised (loss) on financial assets/liabilities (FVTPL)Net realised gain on financial assets/liabilities (FVTPL)Other fee income
Other income
Expenses(a) Interest expense
Deposits and other accounts
Related parties
Total interest expense was derived from financial liabilities:
At amortised cost(b) Other operating expenses
Occupancy expenses
Depreciation
Furniture, fixtures and fittings
Office equipment
Motor vehicles
Lease
Auditors' remuneration
Audit fees
Other non-audit services
Salaries
Staff related cost
Net losses from the disposal of fixed assets
General administration and other operating expenses
Provision for credit impairment
Profit before income tax expense

Total income excluding any net loss for six months ended 30 September 2019 is NZD 81,294,990 (six months ended 30 September 2018 : NZD 74,240,268)

13
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 20193.

Property, Plant and Equipment
During the six months ended 30 September 2019 the Branch did not acquire property, plant and equipment* (sixmonths ended 30 September 2019: Nil; twelve months ended 31 March 2019: NZD 5,363).
During the six months ended 30 September 2019 the Branch did not dispose of any property, plant and equipment(six months ended 30 September 2019: Nil; twelve months ended 31 March 2019: NZD Nil).
There was no impairment loss for property, plant and equipment recognised during the six months ended 30
September 2019 (six months ended 30 September 2018: Nil; twelve months ended 31 March 2019: Nil).
* Right-of-use assets included with property, plant and equipment, refer to note 1.

4.

Loans and Advances

Corporate loans originated by the Bank
Less: collective impairment allowance
Total net loans

5.

As at
30 September 2018
Unaudited
NZD

As at
31 March 2019
Audited
NZD

4,663,695,004(737,284)
4,662,957,720

4,479,251,611(823,457)
4,478,428,154

4,692,029,250(964,336)
4,691,064,914

As at
30 September 2019
Unaudited
NZD

As at
30 September 2018
Unaudited
NZD

As at
31 March 2019
Audited
NZD

300,458,531
11,583,662
265,301,819
59,723,230
233,521,825
870,589,067

164,551,992
10,213,951
42,882,836
92,213,146
101,640,603
411,502,528

221,647,440
8,667,402
43,883,264
203,635,003
226,990,804
704,823,913

Deposits

Retail deposit bearing interest
Retail deposit not bearing interest
Certificate deposit
Call deposit
Term deposit

6.

As at
30 September 2019
Unaudited
NZD

Total Liabilities of the Branch Net of Amounts Due to Related Parties

Total Liabilities
Less: total amounts due to related parties(Note : 10)
Total liabilities net of amounts due to relatedparties

As at
30 September 2019
Unaudited
NZD

As at
30 September 2018
Unaudited
NZD

As at
31 March 2019
Audited
NZD

5,844,558,075

4,978,584,949

5,194,272,531(4,917,584,323)(4,530,902,991)(4,461,360,497)

926,973,752

447,681,958

732,912,034

14
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 20197.

Provision for Impairment Losses

Financial assets and credit commitmentsCollective provision for doubtful debts measured on a
12 months ECL
Provision for doubtful debts for assets measured on alifetime ECL
Collective provision for doubtful debts for assets notcredit impaired
Collective provision for doubtful debts for credit
impaired assets
Individual provision for doubt debts for credit impaired
assetsTotal provision for impairment losses

Residential
mortgages

Corporate exposures

Other
exposures

Total credit
exposures-

1,178,177-

1,178,177

-

-

-

-

-

-

-

-

-

-

-

-

-

1,178,177-

1,178,177

The following table reconciles the opening balance to the closing balance of provision for impairment losses and shows the
movement in opening balance where financial assets have transferred between provision stages during the reporting
period.

Corporate exposures
Balance at beginning of period 1-Apr-19
Charge to income statement excluding transfer between
ECL stages – Stage 1
Movement to the opening balance due to transfer
between ECLTransferred to collective provision 12 months ECLTransferred to collective provision lifetime ECL not
creditTransferred to collective provision lifetime ECL credit
impairedTransferred to individual provision lifetime ECL credit
Impact on period end ECL of exposures transferred
between stages during the period
Total provision for impairment losses

Collective
provision 12
months ECL

Collective provision
lifetime ECL not
credit impaired

Collective
provision
lifetime ECL
credit impaired

Total

1,333,464--

1,333,464(155,287)--(155,287)

-

-

-

-

-

-

-

-

-

-

-

-

1,178,177--

1,178,177

15
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 20198.

Other Liabilities
As at
30 September 2019
Unaudited
NZD

As at
30 September 2018
Unaudited
NZD

As at
31 March 2019
Audited
NZD

172,846
2,729,102
4,451,269

122,040
2,686,292-

125,665
1,924,077
4,451,269

440,893
1,568,386
200,395
9,562,891

375,653
194,199
3,378,184

369,128
1,738,180
8,608,319

As at
30 September 2019
Unaudited
NZD

As at
30 September 2018
Unaudited
NZD

As at
31 March 2019
Audited
NZD

2,527,287,960

2,035,536,653

1,878,177,793

15,109,556
74,860,723
25,782,097
115,752,376

14,145,995
65,142,753
17,326,390
96,615,138

14,418,925
92,177,221
20,075,089
126,671,235

Provision for employee entitlements
Unearned income
Management fee charged by related parties
Provisions for ECL on financial guarantee andcommitment
Lease liabilities
Others9.

Commitments and Contingent Liabilitiesa) Other commitments
Undrawn facility commitmentsb) Contingent liabilities
Guarantees given
Performance related contingencies
Trade related contingencies

The Branch provides guarantees in its normal course of business on behalf of its customers and there are threeprincipal types of guarantee:Guarantee given – a financial guarantee that is an agreement by which the Branch agrees to pay anamount of money on demand on behalf of a customer to a third party during the life of the guarantee.

Performance related contingencies – a guarantee given by the Branch that undertakes to pay a sum ofmoney to a third party where the customer fails to fulfil certain terms and conditions of a contract.



Trade related contingencies – contingent liabilities arising from trade-related obligations secured against
an underlying shipment of goods to make a payment to a third party if a counterparty fails to perform acontractual non-monetary obligation.

The credit risk involved in issuing guarantees is essentially the same as that involved in extending loan facilities tocustomers. Apart from the normal documentation for a facility of this type, the customer must also provide theBranch with a written indemnity, undertaking that, in the event the Branch is called upon to pay, the Branch will befully reimbursed by the customer.
The Branch has no financial assets that have been pledged as collateral for liabilities or contingent liabilities.

16
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201910.

Related Party Disclosures
The Auckland Branch is a branch of an overseas company, MUFG Bank, Ltd., which is incorporated in Japan andis the ultimate parent bank.
Related party transactions are unsecured and entered into in the normal course of business. During the period
there have been dealings between Auckland Branch, other overseas branches and Head Office. Amounts due from
related parties are only related to settlement account which is due on demand. Amounts due to related parties aremainly term deposits which are due in accordance with an agreed date. The maturity analysis for these balances
are presented in Note 14. The interest rate risk analysis for these balances are presented in Note 13. No related
party debts have been written off or forgiven during the reporting period.
Derivative instruments with related parties are used to manage interest rate and currency exposures and include
foreign exchange forwards, interest rate swaps and currency options.
Six Months
ended
30 September
2019
Unaudited
NZDA) Balances
AssetsAmounts due from related parties
Derivative instruments
OthersLiabilities
Amounts due to related parties
Derivative instruments
Other
EquityHead Office capital
Off Balance Sheet
Guarantee given
Performance related contingencies

B) Transactions
Interest income
Interest expense
Net (loss) from derivative instruments
Fees and commissions income
Management fee expense

Six Months
ended
30 September
2018
Unaudited
NZD

Twelve Months
ended
31 March
2019
Audited
NZD

337,832,634
39,451,476
1,080
377,285,190

43,099,805
21,271,260
301
64,371,366

63,875,439
13,882,460
964
77,758,863

4,850,750,499
62,382,555
4,451,269
4,917,584,323

4,515,916,228
14,986,763
4,530,902,991

4,425,224,966
31,684,262
4,451,269
4,461,360,497

83,000,000

83,000,000

83,000,000

1,677,860
2,020,279
3,698,139

714,299
1,400,000
2,114,299

987,229
1,836,827
2,824,056

53,11044,630,480(4,702,661)
2,687-

48,635,173(2,028,913)
2,953
-

4,026
98,629,458(24,731,636)
4,734(4,451,269)

The Branch’s Head Office capital comprises of funds provided by the overseas bank to support the Branch’s daily
operation and to fulfil local thin capitalisation requirements. It is non-interest bearing and there is no fixed date forrepatriation. The capital of the registered bank is managed by the overseas bank. The Branch does not separately manage
capital other than for the purpose of the Reserve Bank of New Zealand’s requirements as disclosed in Note 19 and Note
20.
Other transactions like sundry administrative charges are not material to the results and are therefore not disclosed
separately.

17
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201911.

Concentration of Credit Risk
Credit risk is the risk of loss to the Branch arising from the failure of a counterparty to repay principal and/orinterest under a commitment entered into with the Branch. Credit risk arises from the lending, treasury and tradefinance activities of the Branch. Credit risk also arises from the possibility that the counterparty to a derivative
financial instrument will not adhere to the terms of the contract with the Branch when settlement becomes due.
Corporate loans originated by the Bank are secured partially by following collateral/credit enhancements:i.
financial guarantee by either third parties or customer’s parent company
ii.
deposit assignmentiii.
asset assignment such as aircraft
Concentration of credit risk is determined by management to be by industry sector, geographical location andcustomer credit rating. Industry sectors are determined by reference to the categories in the RBNZ Bank Balance
Sheet Survey. The geographical locations reflect the primary location of the underlying borrower.
The following table details the Branch’s maximum credit risk exposure without taking account of any
collateral/credit enhancement held of recognized financial assets and derivative financial instruments as at thereporting date.

As at
30 September 2019
Unaudited
NZD

As at
30 September 2018
Unaudited
NZD

On Balance Sheet
Cash and short term liquid assets
Amounts due from related parties
Amounts due from other financial institutions
Investment in debt instruments
Corporate loans originated by the Bank*
Acceptances of customers
Other assets
Total

336,811,716
337,832,634
239,996,337
365,994,635
4,663,695,004
6,743,181
2,363,369
5,953,436,876

200,955,279
43,099,805
254,417,075
128,334,379
4,479,251,611
11,976,819
2,104,061
5,120,139,029

Off Balance Sheet
Guarantee given
Performance related contingencies
Trade related contingencies
Undrawn facility commitments
Total

15,109,556
74,860,723
25,782,097
2,527,287,960
2,643,040,336

14,145,995
65,142,753
17,326,390
2,035,536,653
2,132,151,791

97,772,710

34,377,076

Notional Principal

Fair value
Derivative instruments* Total gross loans, excluding provision. Refer to Note 4

18
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201911.

Concentration of Credit Risk (continued)i.

Concentration of Credit Risk by Customer Industry Sector
As at
30 September 2019
Unaudited

As at
30 September 2018
Unaudited

NZD

NZD

200,752,418
213,725,007
60,053,590
1,034,833,292
1,979,477,262
76,626,611
505,056,283
108,299,553
148,561,108
318,698,337
124,936,399
30,171,700
738,151,449
405,798,203
8,295,664
5,953,436,876

30,037,647
68,889,853
879,930,843
1,320,802,042
98,100,900
943,920,062
149,329,463
121,916,689
282,962,731
126,660,297
708,483,830
380,266,092
8,838,580
5,120,139,029

99,071,429
73,290,651
571,101,113
351,198,139
30,000,000
755,310,989
178,020
26,662,971
189,325,982
3,220,287
97,692,428
131,445,137
154,757,421
132,766,633
27,019,136
2,643,040,336

138,642,858
182,583,579
750,189,156
330,640,733
9,973,704
236,232,639
4,343,02
3,656,126
177,353,408
109,182,225
132,326,390
32,627,600
24,400,353
2,132,151,791

Notional principal
On Balance Sheet
Agriculture
Communications
Construction
Education
Electricity, gas and water
Finance
Fishing
Food manufacturing
Forestry
Health care & social assistance
Other manufacturing
Property and business services
Retail Trade
Transport and storage
Wholesale trade
Wood and paper manufacturing
Total

Notional principal
Off Balance Sheet
Communications
Construction
Electricity, gas and water
Finance
Fishing
Food manufacturing
Forestry
Health care & social assistance
Other manufacturing
Property and Business Services
Public administration and safety
Retail trade
Transport and storage
Wholesale trade
Wood and paper manufacturing
Total

19
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201911.

Concentration of Credit Risk (continued)

Fair value
Derivatives
Construction
Electricity, gas and water
Finance
Fishing
Food manufacturing
Forestry
Other manufacturing
Transport and storage
Wholesale trade
Wood and paper manufacturing
Total

ii.

599,361
24,254,077
43,482,094
5,008,618
4,372,340
16,512
10,674,563
6,536,770
1,095,659
1,732,716
97,772,710

504,080
3,124,790
24,053,594
1,101,257
1,811,573
1,217,392
1,344,47
685,556
534,356
34,377,076

Concentration of Credit Risk by Customer Geographical Location
As at
30 September 2019
Unaudited
NZD

As at
30 September 2018
Unaudited
NZD

Notional principal
On Balance Sheet
New ZealandJapan
Australia
U.S.A.
Total

5,061,673,376
414,677,282
477,086,218
5,953,436,876

4,437,055,074
266,890,220
382,778,580
33,415,155
5,120,139,029

2,636,001,754
3,698,139
3,340,443
2,643,040,336

2,080,827,739
2,114,299
49,132,001
77,752
2,132,151,791

57,471,757
39,655,398
645,555
97,772,710

11,088,317
21,934,662
1,354,097
34,377,076

Off Balance Sheet
New ZealandJapan
Australia
Other
Total
Fair value
Derivatives
New ZealandJapan
Australia
Total

20
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201911.

Concentration of Credit Risk (continued)iii.

Concentration of Credit Risk by Customer Credit Rating

The following tables set out the credit quality information for balances which are neither past due nor impaired.
Please refer to Note 18 for impaired assets.
30 September 2019
Unaudited

Notional principal

Credit Rating

S&P Rating

1-2
3-7
8-9
Not rated**A- and above
B- to BBB+
CCC+/- and below

On balance Sheet
2,105,302,463
3,510,300,699
337,833,714
5,953,436,876

30 September 2018
Unaudited

Off balance Sheet
821,063,865
1,818,278,332
3,698,139
2,643,040,336

Derivative financial
instruments
10,272,511
47,454,967
593,756
39,451,476
97,772,710

Notional principal

Credit Rating

S&P Rating

1-2
3-7
8-9
Not rated**A- and above
B- to BBB+
CCC+/- and below

On balance Sheet
2,372,058,807
2,704,980,116
43,100,106
5,120,139,029

Off balance Sheet
786,255,475
1,343,782,017
2,114,299
2,132,151,791

Derivative financial
instruments
1,811,839
10,280,625
1,013,352
21,271,260
34,377,076

There is no period end aggregate exposure equal to or exceeding 10% of the global equity of the Overseas
Banking Group.
**The ‘not rated’ exposure is related to inter-branch exposure.

Collateral and other credit enhancements
The general nature and amount of collateral or other credit enhancements taken to mitigate the credit risk of eachfinancial asset class are summarized as follows:a.

Cash and short term liquid assets
These exposures are mainly to relatively low risk banks (rate A+, AA- or better). These balances are notcollateralised.

b. Amounts due from related parties
These exposures are generally considered to be low risk due to the nature of the counterparties. There are
typically no collateral or other credit enhancements obtained in respect of amounts due from related parties.
c.

Amounts due from other financial institutions
The balance is short term deposit to other financial institutions. Collateral is not generally sought on thesebalances as exposures are considered to be of low risk.

21
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201911.

Concentration of Credit Risk (continued)
d. Investment in debt instruments
These exposures are with the New Zealand government. Collateral is not sought directly with respect to these
exposures.
e.

Derivative instruments
The Branch is exposed to credit risk on derivative contracts, which arises as a result of counterparty credit
risk. This credit risk from derivatives is mitigated where possible through master netting agreements
whereby derivative assets and liabilities with the same counterparty can be offset. A master netting
agreement provides the contractual framework within which dealing activities across a range of over-thecounter products are conducted and contractually binds both parties to apply close-out netting across all
outstanding transactions covered by an agreement if either party defaults or other predetermined eventsoccur. There have been no amounts set off in the statement of financial position for derivative assets andderivative liabilities as at 30 September 2019 (2018: Nil).
Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements.

As at 30 September 2019
NZD

Derivatives

Gross amounts ofrecognized financial
assets(a)Gross amounts ofrecognized financial
liabilities set off inthe statement offinancial position(b)

Net amounts offinancial assets
presented in thestatement offinancial position(c) = (a) – (b)Related amounts notsetoff in thestatement offinancial position(d)

Net amount(e) = (c) – (d)97,772,710-

97,772,710

1,588,535

96,184,175

As at 30 September 2018
NZD

Derivatives

Gross amounts ofrecognized financial
assets(a)Gross amounts ofrecognizedfinancial liabilities
set off in thestatement offinancial position(b)

Net amounts offinancial assets
presented in thestatement offinancial position(c) = (a) – (b)Related amounts notsetoff in thestatement offinancial position(d)

Net amount(e) = (c) – (d)34,377,076-

34,377,076

1,089,947

33,287,129

22
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201911.

Concentration of Credit Risk (continued)
Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements.
As at 30 September 2019
NZD

Derivatives

Gross amounts ofrecognized financial
liabilities(a)Gross amounts ofrecognized financial
assets set off in thestatement offinancial position(b)

Net amounts offinancial liabilities
presented in thestatement offinancial position(c) = (a) – (b)Related amounts notsetoff in thestatement offinancial position(d)

Net amount(e) = (c) – (d)102,171,364-

102,171,364

1,588,535

100,582,829

Gross amounts ofrecognized financial
liabilities(a)Gross amounts ofrecognized financial
assets set off in thestatement offinancial position(b)

Net amounts offinancial liabilities
presented in thestatement offinancial position(c) = (a) – (b)Related amounts notsetoff in thestatement offinancial position(d)

Net amount(e) = (c) – (d)36,186,843-

36,186,843

1,089,947

35,096,896

As at 30 September 2018
NZD

Derivatives

Collateral is obtained against derivative assets, depending on the creditworthiness of the counterparty. There has
been no collateral obtained against derivative assets for the six months ended 30 September 2019 (2018: Nil).
f.

Acceptances of customers and other assets
Collateral is generally not sought on these balances. For acceptances of customers, similar credit review
processes as corporate loans originated by the Bank are performed.

g.

Corporate loans originated by the Bank
The Branch assesses the integrity and ability of counterparties to meet their contracted financial obligation
for repayment. Principal collateral types for corporate loans include:i. Cash (usually in the form of a charge over a deposit)
ii. Guarantee received from third parties
iii. Charges over business assets such as real estate, aircraft and ships
In other instances, a client’s facilities may be secured by collateral with value less than the carrying amount of
the credit exposure. These facilities are deemed secured, partially secured or unsecured.
The Branch lending is generally to large corporate counterparties of strong financial standing, the majority ofwhich borrow on unsecured terms. If there is collateral received during loan drawdown, the value of thecollateral will be checked against the agreement to ensure that it is either equal to or over the agreed value.
The total collateral value as at 30 September 2019 is over NZD 1,102,159,064 which is based on guarantees
received from third parties, the current unaudited financial accounts, and market value of business assets.

On Balance Sheet

Maximum Exposure

As at
30 September 2019
Unaudited
NZD%
4,663,695,004 100.00

As at
30 September 2018
Unaudited
NZD%
4,479,251,611
100.00Collateral classification
SecuredPartially secured
Unsecured

1,102,159,064
3,561,535,940

1,197,459,972
3,281,791,639

23.63
76.37

26.73
73.27

23
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201911.

Concentration of Credit Risk (continued)
h. Undrawn facility commitments and contingent liabilities
The Branch applies the same principle for off balance sheet risk as it does for its on balance sheet risks.
In the case of undrawn facility commitments, counterparties will be subject to the same principle as corporateloans and collateral may be sought depending on the strength of the counterparty and the nature of thetransaction.
Off Balance Sheet

12.

Maximum Exposure

As at
30 September 2019
Unaudited
NZD%
2,643,040,336
100.00As at
30 September 2018
Unaudited
NZD%
2,132,151,791
100.00Collateral classification
SecuredPartially secured
Unsecured359,934,448
2,283,105,888

248,922,622
1,883,229,169

13.62
86.38

11.67
88.33

Concentration of Funding
Concentration of funding is determined by management to be by counterparty type and geographical location.
The geographical locations reflect the primary location of the underlying depositor.
As at
30 September 2019
Unaudited
NZDa) Category analysis
Customer deposits
Due to related partiesb) Counterparty analysis
Agriculture
Constructions
Electricity, gas and water
Finance
Food Manufacturing
Forestry
Education
Insurance
Other Industries
Other Manufacturing
Professional, Scientific and Technical Services
Property and business services
Public administration and safety
Transport and Storage
Wholesale Trading
Wood and Paper Manufacturing

As at
30 September 2018
Unaudited
NZD

870,589,067
4,850,750,499
5,721,339,566

411,502,528
4,515,916,228
4,927,418,756

101,134,084
85,852
5,137,756,820
55,809,909
437,217
4,506,408
25,017,052
1,518,001
76,192,410
1,002,471
120,059,732
137,668,799
53,615,429
6,535,382
5,721,339,566

133,597
40,713,586
5,012,135
4,633,673,056
23,693,181
458,644
12,028,558
30,033,801
613,1448,899,534
4,661,980
1,368
86,523,274
76,517,787
4,455,111
4,927,418,756

3,969,957,047
856,289,519
821,829,141
59,899,904
13,363,955
5,721,339,566

3,471,167,428
409,986,332
951,439,508
94,825,488
4,927,418,756c) Geographical analysis
Australia
New ZealandJapan
SingaporeFiji

24
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201913.

Interest Rate Risk
Interest rate risk is the risk of loss to the Branch arising from movements in interest rates thereby having anadverse effect on the net interest earnings of the Branch in the current reporting period and in future years.
The following table represents the interest rate sensitivity gap of the Branch as at the reporting date. It analyses
the Branch’s assets and liabilities into relevant maturity groupings based on the earlier of residual contractual
maturity or interest repricing date. One of the major causes of the mismatches is timing differences in therepricing of the assets and liabilities. These mismatches are managed by the Sydney Branch as part of the overallrisk management process conducted in accordance with strict policy guidelines.

30 September 2019
Unaudited

Up to 3 months
NZD

Over 3 months
and up to 6
monthsNZDOver 6 months
and up to 1
year
NZD

Over 1 year
and up to 2
years
NZD

Over 2years
NZD

NON INTERESTSENSITIVE
NZD

TOTAL
NZD

WEIGHTED
AVE. EFF.
RATE%

ASSETSCash and short term liquid assets

336,811,716

-

-

-

-

-

336,811,716

0.50%

Amounts due from related parties
Amounts due from other financial
institutions
Investment in debt instruments
Corporate loans originated by theBank
Acceptances of customers
Property, Plant and Equipment
Other assets

274,525,192

-

-

-

-

63,307,442

337,832,634

1.32%

239,996,337--

256,216,341

109,778,294--

239,996,337
365,994,635

1.40%
2.38%

4,460,764,256-

134,585,552-

25,524,355-

10,598,339-

32,222,502-(737,284)
6,743,181
1,617,974
100,656,351

4,662,957,720
6,743,181
1,617,974
100,656,351

2.35%

Total assets

5,312,097,501

134,585,552

281,740,696

120,376,633

32,222,502

171,587,664

6,052,610,548

Amounts due to related parties
Deposits
Liability for Acceptances
Other liabilities

4,754,791,807
764,458,203-

62,347,547
81,183,246-

13,363,956-

11,637,776-

20,568,400-

1,404,969
11,583,662
6,743,181
116,475,328

4,850,750,499
870,589,067
6,743,181
116,475,328

Total liabilities

5,519,250,010

143,530,793

13,363,956

11,637,776

20,568,400

136,207,140

5,844,558,075

Over 1 year
and up to 2
years
NZD

Over 2years
NZD

LIABILITIES
1.50%
2.09%

30 September 2018
Unaudited
Over 3months andup to 6monthsNZD

Up to 3 months
NZD

Over 6months andup to 1 year
NZD

NON INTERESTSENSITIVE
NZD

TOTAL
NZD

WEIGHTED
AVE. EFF.
RATE%

ASSETSCash and short term liquid assets

200,955,279

-

-

-

-

-

200,955,279

Amounts due from related parties
Amounts due from other financial
institutions
Investment in debt instruments
Corporate loans originated by theBank
Acceptances of customers
Property, Plant and Equipment
Other assets

-

-

-

-

-

43,099,805

43,099,805

1.25%

254,417,075-

50,854,092-

77,480,287--

254,417,075
128,334,379

1.97%
2.06%

4,244,541,891-

187,604,859-

9,122,530-

1,772,201-

36,210,129-(823,457)
11,976,819
94,51140,365,823

4,478,428,153
11,976,819
94,51140,365,823

2.75%

Total assets

4,699,914,245

238,458,951

9,122,530

79,252,488

36,210,129

94,713,501

5,157,671,844

Amounts due to related parties
Deposits
Liability for Acceptances
Other liabilities

4,338,585,918
401,288,577-

140,056,526---

36,857,334-

416,450
10,213,951
11,976,819
39,565,027

4,515,916,228
411,502,528
11,976,819
39,565,027

Total liabilities

4,739,874,495

140,056,526--

36,857,334

62,172,247

4,978,960,602

LIABILITIES
2.28%
2.07%

At 30 September 2019, assuming that all other variables held constant, if interest rates had been 50 basis points
higher, post-tax profit for the year would have been NZD 0.4 million lower (2018: NZD 0.2M higher) due todecrease in interest income. It is due to the funding from Equity. If interest rate had been 50 basis points lower
with all the variables held constant, post-tax profit would have been NZD 0.4 million higher (2018: NZD 0.2M
lower) due to increase in interest income as a result of the funding gap. The impact of interest rate movement on
pre-tax profit is immaterial due to the back to back transactions with Sydney Branch to minimize any long terminterest rate risk.

25
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201914.

Maturity Analysis for Assets and Liabilities
The tables below analyse the Branch’s financial assets and liabilities, as required by NZ IFRS 7 “Financial
Instruments: Disclosures”, in relevant maturity groupings based on the remaining period at the reporting date to
the contractual maturity date. The tables have been drawn up based on the undiscounted cash flows of financial
assets and liabilities based on the earliest date on which the obligation is crystallised. There is no expectation thatthe principal or interest will be repaid or received earlier than the obligation. The table includes both interest andprincipal cash flows. Therefore, they may differ to the carrying amounts on the condensed statement of financial
position.

30 September 2019
Unaudited
On Demand
NZD

1 to 3MonthsNZD

To 1 Month
NZD

3 to 12Months
NZD

1 to
5 Years
NZD

Over 5
Years
NZD

Total
NZD

ASSETSCash and short term liquid assets
Amounts due from related parties
Amounts due from other financial
institutions
Investment in debt instruments
Corporate loans originated by theBank

336,811,716
63,307,443

199,506,942

75,018,250

-

-

-

336,811,716
337,832,635-

75,000,000
3,750,000

165,000,000
3,000,000

256,750,000

106,000,000-

240,000,000
369,500,000
4,907,620,356

463,985,757

197,882,197

62,884,056

539,494,810

3,482,742,251

160,631,285

Acceptances of customers-

5,634,645

1,108,535---

6,743,180

Derivative instruments-

3,446,954

6,741,336

23,623,406

100,037,881

26,686,458

160,536,035

864,104,916

1,755,145
486,975,883

607,186
314,359,363

1,038
819,869,254

3,688,780,132

187,317,743

2,363,369
6,361,407,291

371,765,424
2,527,287,960
2,899,053,384

2,857,365,896
193,889,765
5,634,645
3,451,885
13,938150,000
10,000,000
3,070,506,129

1,508,463,347
9,560,868
1,108,535
6,732,476
27,936
10,208,745
1,536,101,907

71,901,841
95,175,655
24,309,254
126,689
12,441,833
41,818,825
25,782,097
271,556,194

432,162,100
199,750,000
83,890,684
742,625
1,142,996
12,833,153
730,521,558

23,802,520
657,198
1,374,727
25,834,445

4,869,893,184
870,141,712
6,743,180
142,186,819
1,568,386
2,527,287,960
15,109,556
74,860,723
25,782,097
8,533,573,617

1 to 3Months
NZD

3 to 12Months
NZD

1 to
5 Years
NZD

Over 5
Years
NZD

Total
NZD

Other assets

LIABILITIESAmounts due to related parties
Deposits
Acceptances
Derivative instruments
Lease liability
Gross loan commitment
Guarantee given
Performance related contingencies
Trade related contingencies

30 September 2018
Unaudited
On Demand
NZD

To 1 MonthNZDASSETSCash and short term liquid assets
Amounts due from related parties
Amounts due from other financial
institutions
Investment in debt instruments
Corporate loans originated by theBank

200,955,279
43,099,805

-

-

-

-

-

200,955,279
43,099,805-

105,000,000
1,125,000

150,000,000-

52,375,000

77,250,000-

255,000,000
130,750,000
4,827,483,160

234,507,626

9,539,679

262,433,688

582,824,057

3,425,952,594

312,225,516

Acceptances of customers-

11,976,819

-

-

-

-

11,976,819

Derivative instruments-

3,526,474

5,148,118

20,194,182

63,121,967

9,302,292

101,293,033

478,562,710

1,532,650
132,700,622

497,704
418,079,510

63,671
655,456,910

3,566,324,561

321,527,808

2,094,025
5,572,652,121

266,979,089
2,035,536,653
2,302,515,742

2,142,598,282
101,627,605
11,976,819
3,533,999
20,658150,000
4,165,000
2,264,072,363

2,210,851,991
43,185,692
4,971,418
30,46410,000,000
2,269,039,565

144,312,485
22,841,211
137,088
12,359,020
50,977,753
17,326,390
247,953,947

32,483,267
70,101,776
382,184
662,112103,629,339

15,873,674
974,863
16,848,537

4,530,246,025
411,792,386
11,976,819
117,322,078
570,394
2,035,536,653
14,145,995
65,142,753
17,326,390
7,204,059,493

Other assets

LIABILITIESAmounts due to related parties
Deposits
Acceptances
Derivative instruments
Lease commitment
Gross loan commitment
Guarantee given
Performance related contingencies
Trade related contingencies

26
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201915.

Fair Value of Financial Instruments

Quoted market prices, where available, are used to estimate the fair value of financial instruments. However, quoted
market prices are not available for a substantial portion of financial instruments and fair value for such financial
instruments is estimated using discounted cash flow models that utilise prices from observable current market transactions
or other valuation techniques. The summary table shows the carrying amounts and estimated fair values of financial
instruments as at the reporting date. The methodologies and assumptions used to estimate the fair value of the financial
instruments are:a.

For those assets or liabilities that are short term in nature, the related carrying value is equivalent to their fair value.

b.

For floating rate loans and deposits, the carrying amount in the statement of financial position is considered areasonable estimate of their fair value after making allowances for impairment. For fixed rate loans and deposits, fairvalue is estimated using discounted cash flow models based on current market rates. The differences between
estimated fair value of loans and deposits and carrying value reflect the difference between observable market interest
rates and customer rates on day one and changes in interest rates since loans and deposits origination.

c.

The fair values of derivative instruments are calculated using the discounted cash flow model. Swap transactions aremeasured at the present value of future cash flows estimated and discounted based on the applicable yield curves
derived from observable interest rates. Foreign currency forward contracts are measured using observable forward
exchange rates and yield curves derived from observable interest rates matching maturities of the contracts.

d.

The fair values of investment of debt instruments are derived from quoted prices in the active market.

30 September 2019
Unaudited

Note

FVTPL

FVOCI

NZD
AssetsCash and cash equivalents
Amounts due from related parties
Amounts due from other financial
institutions
Investment in debt instruments
Corporate loans originated by the
Bank
Other assets
Total financial assets
Liabilities
Amounts due to related parties
Deposits
Other liabilities
Total financial liabilities

NZD

Amortised
cost

Other
Amortised Cost

Total Carrying
AmountFair Value

NZD

NZD

NZD

NZD

a
a

-

-

336,811,716
337,832,634-

336,811,716
337,832,634

336,811,716
337,832,634

a

-

-

239,996,337-

239,996,337

239,996,337

d-

365,994,635--

365,994,635

365,994,635

b

-

-

4,662,957,720-

4,662,957,720

4,665,185,406

c, a

97,772,710
97,772,710

365,994,635

8,151,541
5,585,749,948-

105,924,251
6,049,517,293

105,924,251
6,051,744,979

b
a, b
c

102,171,364
102,171,364--

4,850,750,499
870,589,067
6,743,181
5,728,082,747

4,850,750,499
870,589,067
108,914,545
5,830,254,111

4,855,419,371
880,203,197
108,914,545
5,844,537,113

27
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201915.

Fair Value of Financial Instruments (continued)

30 September 2018
Unaudited

Note

FVTPL

FVOCI

NZD
AssetsCash and cash equivalents
Amounts due from related parties
Amounts due from other financial
institutions
Investment in debt instruments
Corporate loans originated by the
Bank
Other assets
Total financial assets
Liabilities
Amounts due to related parties
Deposits
Other liabilities
Total financial liabilities

NZD

a
a

-

a
d

Amortised
cost

Other
Amortised Cost

Total Carrying
AmountFair Value

NZD

NZD

NZD

NZD

-

200,955,279
43,099,805-

200,955,279
43,099,805

200,955,279
43,099,805--

254,417,075-

254,417,075

254,417,075-

128,334,379--

128,334,379

128,334,379

b

-

-

4,478,428,154-

4,478,428,154

4,480,747,889

c, a

34,377,076
34,377,076

128,334,379

14,081,234
4,990,981,547-

48,458,310
5,153,693,002

48,458,310
5,156,012,737

b
a, b
c

36,186,843
36,186,843--

4,515,916,228
411,502,528
11,976,819
4,939,395,575

4,515,916,228
411,502,528
48,163,662
4,975,582,418

4,524,884,201
411,502,528
48,163,662
4,984,550,391

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fairvalue, grouped into Level 1 to 3 based on the degree to which the fair value is observable.


Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identicalassets or liabilities.



Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 thatare observable for the asset or liability for substantially the entire term of the instrument, either directly (i.e. as prices)or indirectly (i.e. derived from prices).

Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or
liability that are not based on observable market data (unobservable inputs).
30 September 2019
Level 1
Level 230 September 2018
Level 1
Level 2Derivative financial assets
Interest rate swaps
Currency swaps
Currency options
FX forwards
Total derivative financial assets-

58,947,065
28,368,504
10,457,141
97,772,710-

Derivative financial liabilities
Interest rate swaps
Currency Swaps
Currency Options
FX forwards
Total derivative financial liabilities-

63,017,130
28,690,240
10,463,994
102,171,364--

15,799,352
7,134,919
67,58013,184,992
36,186,843

365,994,635-

128,334,379-

Investment in debt instruments-

13,998,584
7,134,919
60,807
13,182,766
34,377,076

Financial assets and financial liabilities, other than the items on the above table, are carried at amortised cost. Their fairvalue is represented by level 2 fair value measurements.
There were no financial assets and liabilities carried at fair value categorised under Level 3 in this period.

28
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201916.

Liquidity Risk Management
Liquidity risk is the risk that the Branch will not have sufficient funds to meet its financial obligations. The Branch
has policies to ensure that sufficient funds are available to meet its obligations as and when they fall due, and tomaintain a prudent level of liquidity buffer to meet unexpected demands for funds under adverse market conditions.
To achieve this objective, the Branch adopts a set of liquidity management strategies which limits the liquidity risk
to acceptable levels. The compliance of such internal limits are being independently monitored and regularly
reported to the Regional Head for Oceania. A contingency plan has been developed in the event of a major liquidity
problem. The operations of the Branch are subject to these policies.
The Branch measures its liquidity requirements by undertaking scenario analysis under the following two scenarios:
Going-concern – which refers to the normal behaviour of cashflows in the ordinary course of business and would
form the day-to-day focus of the Branch’s liquidity management.
Bank-specific (“name”) crisis – which covers the behaviour of cash flows where there is some actual or perceived
problem with the Branch.
The Branch is committed to raising its liabilities from a wide range of institutional and corporate lenders. This
reduces dependence upon certain lenders and the possibility that a large portion of the deposit base will bewithdrawn with little notice. As part of its liquidity management policies, the Branch maintains a portfolio of readilyliquid assets and has established committed funding arrangements from other institutions. Liquidity is managed by
the Treasury Department of the Sydney Branch under the supervision of the Oceania Region Asset and Liability
Management Committee. Reports on liquidity are reviewed by the Regional Head for Oceania, sent to the Parent
Bank weekly and presented to the Oceania Region Asset and Liability Management Committee monthly.
The Branch holds the following liquid assets in order to manage its liquidity risk:
As at
30 September 2019
Unaudited
NZD
Cash and short term liquid assets
Amounts due from related parties
Amounts due from other financial institutions
Investment in debt instruments

336,811,716
337,832,634
239,996,337
365,994,635
1,280,635,322

As at
30 September 2018
Unaudited
NZD
200,955,279
43,099,805
254,417,075
128,334,379
626,806,538

29
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201917.

Profitability and Sizea)Profitability

The Overseas Banking GroupSix Months
ended
30 September 2019
JPY(000’s)
Net Profit After Tax
Net Profit After Tax over the previous 12 months
period as a percentage of average total assetsb)403,611,000

423,823,000

0.25%

0.27%

Size
Six Months
ended
30 September 2019
JPY(000’s)

Total Assets% Change in total assets over the previous 12 months

18.

Six Months
ended
30 September 2018
JPY(000’s)

Six Months
ended
30 September 2018
JPY(000’s)

252,317,367,000

248,199,039,000

1.66%

5.67%

As at
30 September 2019
JPY(000’s)

As at
30 September 2018
JPY(000’s)

Asset Quality(i)

The Overseas Banking Group

Total individually impaired assets (before
allowances for credit impairment loss and net ofinterest held in suspense)

861,588,000

777,777,000

Total individually impaired assets expressed as apercentage of total assets

0.34%

0. 31%

167,597,000

212,235,000

19.45%

27.29%

368,848,000

356,194,000

Total individually credit impairment allowance
Total individually credit impairment allowance
expressed as percentage of total individually
impaired assets
Total collective credit impairment allowance30
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201918.

Asset Quality (continued)(ii)

MUFG Bank, Ltd., Auckland Branch.

The provision for impairment is based on NZ IFRS 9’s impairment model which requires the Branch torecognised expected credit losses (ECL) based on unbiased forward looking information. The Branch will
incorporate all available information which is relevant to the assessment including information about past events,
current conditions and reasonable and supportable forecasts of economic conditions at the reporting date.
The Branch does not have any individually impaired assets that have been recognized, any individual credit
impairment allowances, and any assets that are less than 30 days past due; at least 30 days but less than 60 days
past due; at least 60 days but less than 90 days past due; and at least 90 days past due but not impaired as at 30
September 2019 (30 September 2018: Nil).
The Branch did not charge or credit to the condensed statement of comprehensive income for any increase or
decrease in individual credit impairment allowances during the half year accounting period ended 30 September
2019 (30 September 2018: Nil).
The total interest income recognized on impaired assets over the half year accounting period ended 30 September
2019 is Nil (30 September 2018: Nil).
There is no undrawn balance on lending commitments to counterparties for whom drawn balances are classified
as individually impaired. There are no other amounts under administration.
The Branch does not have any financial assets designated as at fair value through profit or loss on which there
have been changes in fair value that are attributable to changes in credit risk of the financial asset.
Movement in balance of collective credit impairment allowance:
The following table reconciles the opening balance to the closing balance of provision for impairment losses:
As at
30 September 2019
Unaudited
NZD
Balance at beginning of the period

1,333,464

The charge to the statement of comprehensive income
for an decrease in loss allowance
Amounts written off
Recoveries of amounts written off in previous periods
Reversals of previously recognised impairment losses
Balance at the end of the period(155,287)-

1,178,177

Impacts of changes in gross financial assets on credit impairment allowance:
The following table reconciles the opening balance to the closing balance of the pre-allowance corporate loans
originated by the Bank:
As at
30 September 2019
Unaudited
NZD
Balance at beginning of the period
Additions
Amounts written off
Deletions
Balance at the end of the period (Note 4)

4,692,029,250
806,959,616(835,293,862)
4,663,695,004

31
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201919.

Exposures to Market Risk

Aggregate market risk exposures of MUFG Bank, Ltd., Auckland Branch havebeen derived in accordance with Schedule 9 of the Reserve Bank Order.
Six Months ended
30 September 2019
Unaudited
NZD(000’s)Six Months ended
30 September 2018
Unaudited
NZD(000’s)(1) Aggregate Interest Rate Exposure(a)Notional Capital Charge*

3,173

3,990

(b)

Implied risk weighted exposure

39,66349,875* The Notional Capital Charge is calculated in accordance with Capital Adequacy Framework (Standardized
Approach) BS2A.

Peak End of Day
Ending30 September 2019
Unaudited
NZD(000’s)Peak End of Day
Ending30 September 2018
Unaudited
NZD(000’s)(2) Aggregate Interest Rate Exposure(a)Notional Capital Charge**

7,693

4,195

(b)

Implied risk weighted exposure

96,16352,438** The peak end of day Notional Capital Charge has been derived by determining the maximum over the period
at the close of each business day derived in accordance with Capital Adequacy Framework (Standardized
Approach) BS2A.

(3) Aggregate Foreign Currency Exposure

MUFG Bank, Ltd., Auckland Branch does not have any significant foreign currency exposures.
(4) Aggregate Equity Exposure

MUFG Bank, Ltd., Auckland Branch does not have any equity exposures.
By entering into foreign exchange transactions, interest rate swap transactions, currency swap transactions andlong term fixed interest deposits with the Sydney Branch, the Branch does not hold any significant foreignexchange exposure and long term interest rate exposure. Under this arrangement, the Branch is exposed tolimited market risk which is immaterial.

32
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201920.

Capital Adequacy
The capital adequacy guidelines adopted by the Financial Services Agency (FSA) in Japan that are applicable to
Japanese bank holding companies and banks with international operations closely follow the risk-weighted
approach introduced by the Basel Committee on Banking Supervision of the Bank for International Settlements.
Basel II, as adopted by the FSA, has been applied to Japanese banks since 31 March, 2007. Certain provisions ofBasel III have been adopted by the FSA for Japanese banking institutions with international operations conducted
through their foreign offices and became effective 31 March 2013. As a result, the minimum capital required by
FSA is at least equal to Basel II.
The Financial Stability Board identified the Overseas Banking Group as a global systematically important bank,or G-SIB, in its most recent annual report published in November 2017.
Effective 31 March, 2016, the FSA’s capital conservation buffer, countercyclical buffer and G-SIB surcharge
requirements became applicable to Japanese banking institutions with international operations conducted throughforeign offices. As a result, starting from 31 March 2016, Overseas Banking Group is required to maintain acapital conservation buffer of 0.625% and a G-SIB surcharge of 0.375% in addition to the 4.50% minimum
Common Equity Tier 1 capital ratio. As of the same date, no countercyclical buffer is applicable. When fully
implemented on 31 March, 2019, the Overseas Banking Group will be required to maintain a capital conservationbuffer of 2.5%, a countercyclical buffer of up to 2.5%, and a G-SIB surcharge of 1.5%, assuming the Overseas
Banking Group will be in Bucket 2 of the G-SIB list.
The table below presents the minimum consolidated risk-based capital ratios from 31 March 2019:

Minimum Common Equity Tier 1 ratio
Capital Conservation Buffer
Countercyclical Buffer
G-SIB Surcharge
Total
Minimum Tier 1 ratio
Minimum Capital ratio

2019
4.50%
2.50%
0.04%
1.50%
8.54%
10.04%
12.04%

Both the Overseas Banking Group and the Overseas Bank met those requirements at the reporting date.

Overseas Banking Group

Capital ratios:
Common Equity Tier 1 capital
Tier 1 capital
Total capital

Overseas Bank

Capital ratios:
Common Equity Tier 1 capital
Tier 1 capital
Total capital

As at
30 September 2019
Unaudited

As at
30 September 2018
Unaudited

11.39%
13.01%
15.13%

10.50%
12.01%
14.04%

As at
30 September 2019
Unaudited

As at
30 September 2018
Unaudited

12.48%
14.31%
16.49%

11.28%
12.99%
15.08%The most recent publicly available information in relation to capital adequacy framework implemented by theoverseas bank and overseas banking group are disclosed under the ultimate holding company’s annual reportwhich can be accessed via the Bank’s global website: www.mufg.jp.

33
MUFG Bank, Ltd.
Auckland BranchNotes to the Condensed Interim Financial Statements
For the Six Months Ended 30 September 201921.

Insurance Business
MUFG Bank, Ltd., Auckland Branch does not conduct any insurance business in or outside New Zealand.

22.

Non-Consolidated Activities
MUFG Bank, Ltd. does not conduct any insurance business or non-financial activities in New Zealand outside
MUFG Bank, Ltd., Auckland Branch.

23.

Securitization, Funds Management, and Other Fiduciary Activities(a) MUFG Bank, Ltd., Auckland Branch is not involved in any establishment, marketing, or sponsorship of trust,custodial, funds management or other fiduciary activities.
(b) MUFG Bank, Ltd., Auckland Branch is not involved in any origination of securitized assets or in themarketing or servicing of securitization schemes.
(c) MUFG Bank, Ltd., Auckland Branch is not involved in the marketing and distribution of insurance products.

24.

Risk Management Policies
The risk management policies and procedures of the Branch conform to those of the ultimate parent bank, MUFG
Bank, Ltd. (“the Parent Bank”).
The Branch's application of risk management systems is subject to review by the Parent Bank Internal Audit Office
on a regular basis.
There have been no material changes to the risk management polices since publication of the previous DisclosureStatement.

25.

Financial Support
The Auckland Branch is part of MUFG Bank, Ltd. The assets of the Branch are legally available for thesatisfaction of debts of the entire company, not solely those appearing in the accompanying statement of financial
position, and its debts may result in claims against assets not appearing thereon.

26.

Subsequent Events
There has not been any matter or circumstance, other than that referred to in the financial statements or notes
thereto, that has arisen since the six months ended 30 September 2019, that has significantly affected, or may
significantly affect, the operations of the Branch, the results of the operations, or the state of affairs of the Branchin future financial years.

34
MUFG Bank, Ltd.
Auckland Branch

INDEPENDENT REVIEW REPORTTO THE SHAREHOLDERS OF MUFG BANK, LTD. AUCKLAND BRANCH

We have reviewed pages 6 to 34 of the Disclosure Statement of MUFG Bank, Ltd. Auckland Branch (‘theBranch’), which consists of the condensed interim financial statements of the Branch and the
supplementary information required to be disclosed under Schedules 5, 7, 9, 10, 12 and 14 of theRegistered Bank Disclosure Statements (Overseas Incorporated Registered Banks) Order 2014 (asamended) (the ‘Order’).
The condensed interim financial statements comprise the statement of financial position of the Branch as
at 30 September 2019, and the statement of comprehensive income, statement of changes in equity andstatement of cash flows for the six months ended on that date, and a summary of significant accounting
policies and other explanatory information.
This report is made solely to the Branch’s shareholders, as a body. Our review has been undertaken sothat we might state to the Branch’s shareholders those matters we are required to state to them in areview report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Branch’s shareholders as a body, for our engagement, for thisreport, or for the opinions we have formed.
Directors’ Responsibilities
The Board of Directors (the ‘Directors’) are responsible for the preparation and fair presentation of thecondensed interim financial statements, in accordance with NZ IAS 34 Interim Financial Reporting and IAS
34 Interim Financial Reporting and for such internal control as the Directors determine is necessary toenable the preparation and fair presentation of the condensed interim financial statements that are freefrom material misstatement, whether due to fraud or error.
The Directors are also responsible for the preparation and presentation of supplementary information
which fairly states the matters required to be disclosed under Schedules 3, 5, 7, 9, 10, 12 and 14 of theOrder.
Our Responsibilities
Our responsibility is to express a conclusion on the condensed interim financial statements and the
supplementary information based on our review.
Our responsibility is to express a conclusion to you whether, on the basis of the procedures performed byus, anything has come to our attention that causes us to believe that:•the condensed interim financial statements presented by the Directors (excluding the
supplementary information), taken as a whole, are not prepared and do not present fairly thematters to which they relate, in all material respects, in accordance with NZ IAS 34 Interim
Financial Reporting and IAS 34 Interim Financial Reporting.

•the supplementary information presented by the Directors (excluding the supplementary
information relating to credit and market risk exposures and capital adequacy) does not fairly state
the matters to which it relates in accordance with Schedules 5, 7, 10, 12 and 14 of the Order.

•

the supplementary information presented by the Directors relating to credit and market risk
exposures and capital adequacy is not, in all material respects, disclosed in accordance with
Schedule 9.

We conducted our review in accordance with NZ SRE 2410 Review of Financial Statements Performed by
the Independent Auditor of the Entity (NZ SRE 2410). As the auditor of the Branch, NZ SRE 2410 requiresthat we comply with the ethical requirements relevant to the audit of the annual financial statements.

A review in accordance with NZ SRE 2410 is a limited assurance engagement. The auditor performs
procedures, primarily consisting of making enquiries, primarily of persons responsible for financial andaccounting matters, and applying analytical and other review procedures.
The procedures performed in a review are substantially less than those performed in an audit conducted inaccordance with International Standards on Auditing (New Zealand). Accordingly we do not express anaudit opinion on those financial statements, or supplementary information.
Other than in our capacity as auditor, we have no relationship with or interests in MUFG Bank, Ltd.
Auckland Branch.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that:•the condensed interim financial statements on pages 6 to 34 (excluding the supplementary
information) have not been prepared and do not present fairly, in all material respects, thefinancial position of the Branch as at 30 September 2019 and its financial performance and cash
flows for the six months ended on that date in accordance with NZ IAS 34 Interim Financial
Reporting and IAS 34 Interim Financial Reporting;•the supplementary information disclosed in accordance with Schedules 5, 7, 10, 12 and 14 of theOrder does not fairly state the matters to which it relates in accordance with those Schedules; and•the supplementary information disclosed on pages 32 to 33 relating to credit and market risk
exposures and capital adequacy as required by Schedule 9 of the Order is not, in all material
respects, disclosed in accordance with Schedule 9 of the Order.

Emphasis of Matter
The Branch is part of MUFG Bank, Ltd. As described in Note 25, the assets of the Branch are legallyavailable for the satisfaction of debts of the entire company, not solely those appearing on theaccompanying condensed statement of financial position and its debts may result in claims against assets
not appearing thereon. Our conclusion is not qualified in respect of this matter.

22 November 2019
Chartered Accountants
AUCKLAND, NEW ZEALAND

This review report relates to the unaudited condensed interim financial statements of MUFG Bank, Ltd. Auckland Branch for the six months
ended 30 September 2019 included on the Branch’s website. The Branch’s Board of Directors are responsible for the maintenance andintegrity of the Branch’s website. We have not been engaged to report on the integrity of the Branch’s website. We accept no responsibility
for any changes that may have occurred to the unaudited condensed interim financial statements since they were initially presented on
the website. The review report refers only to the unaudited condensed interim financial statements named above. It does not provide an
opinion on any other information which may have been hyperlinked to/from these unaudited condensed interim financial statements. If
readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the publishedhard copy of the unaudited condensed interim financial statements and related review report dated 22 November 2019 to confirm theinformation included in the unaudited condensed interim financial statements presented on this website. Legislation in New Zealandgoverning the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.